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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Boplicity who wrote (33933)	10/27/2000 8:30:16 PM
From: RocketMan	Read Replies (2) \| Respond to of 54805

I agree. But it takes 12-18 months for rates to flow through, and we still have a lot to go from that last half point hike. If they eased when we went negative, the market would react kneejerk, but the economy would keep slowing for another quarter or two. After six months of slowing sales, what do you thing would happen to stocks with 100 p/e's? The Fed has lost sight of the lead time it takes for their actions to take effect. You see that when they changed their announcement of bias from what it was last cycle (the way it used to be) to immediate announcements. They did not wait sufficiently for the effect of repeated 1/4 point hikes to take effect before they made the 1/2 point hike. Now they are still in an upward bias mode, while the economy is coming to a screeching halt. I have seen this before, in the 70s and the 80s. I remember silicon valley and other tech centers going from boom to bust, homes going from millions to whatever someone would offer. I'm not saying this will happen, just that it has happened before, and it may happen again.