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To: Archie Meeties who wrote (46176)12/11/2000 2:35:34 PM
From: eddieww  Read Replies (1) | Respond to of 436258
 
"The fed would rather the dollar to gradually move one direction or another..."

In fact, they and Treasury have repeatedly said that the dollar must appreciate vs others, or at least maintain it's strength. This is easier to want during an expansion. If there is a bubble and the pin has just entered, wouldn't it be wiser to bow to the inevitable very quickly?

"...when would you exit the markets relative to fed easing?"

Conventional wisdom is that you enter the market when the Fed is going to ease. In the scenario I proposed, and if you thought the market was overvalued, you might assume that stock price appreciation would not provide a risk premium vs inflation and look for an economy that was starting the process we started in 1995. No?



To: Archie Meeties who wrote (46176)12/11/2000 2:36:10 PM
From: GraceZ  Read Replies (1) | Respond to of 436258
 
You forgot one important element and that is one of the reasons that corporate profits were down sharply is because of the strong dollar and or weak worldwide currencies. It would be good for the US multi-nationals for the dollar to back off and the Euro to firm up. Many corporations would have had earnings that were up in Europe except they got screwed on the conversion.