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To: GVTucker who wrote (121374)	12/8/2000 3:19:26 PM
From: Mary Cluney	Read Replies (1) \| Respond to of 186894

GVTucker,<<<, but they cannot keep a recession from happening. A big piece (the major piece, IMO) in what is happening this year in the equity markets is an unwinding of massive imbalances in capital investment, both in the private and public markets. >>> It seems intuitively obvious to me that those rate cuts were very aggressive and intended to influence the economy in some meaningful way. Did that have anything to do with reducing capital investments and massively accellerating the economic slow down? Mary

To: GVTucker who wrote (121374)	12/8/2000 3:27:10 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

GV, I asked a banker friend of mine, how do you think the Fed has more influence, by manipulating interest rates or by manipulating liquidity (money supply). He didn't have an answer, do you? John

To: GVTucker who wrote (121374)	12/8/2000 3:44:01 PM
From: Hightechhooper	Respond to of 186894

GV, I have 8 years of very expensive education and 20 years of practicle work experience that must respectfully disagree with you. Rather than have a lengthy debate I would boil it down to this simple statement....supply vs demand....when the money supply is increased the excess has to go somewhere and the easiest place for it to flow is into financial markets. Real asset investments will get theirs but financial assets will get the lions shares. This is what happened for Y2K. The fed added too much liquidity to the system and it had to go somewhere and the stock market was the recipient. Now they have dramatically reduced that liquidity and look where we are. Do you think the actions of the FED (and other worldwide monetary policy boards) in late 1998 and 1999 did nothing to head off that world recession and shoot the world into the high growth mode of 99-00? It sure looked effective to me. As long as nominal rates are not close to zero (aka Japan) lower rates will always lead to higher real asset and financial asset investment. Just my opinion