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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (65001)	12/22/2000 7:17:30 AM
From: Crimson Ghost	Read Replies (2) \| Respond to of 99985

Zeev: Hopefully you will be right about the Fed. What is going on here I think is that Wall Street is putting heavy pressure on Greenie to cut and cut fast. The usually sober NY Times columnist Floyd Norris advocated aggressive interest rate cuts this morning. Of course the dollar is a key factor here. If Greenie caves now, the greenback could really get trashed.

To: Zeev Hed who wrote (65001)	12/22/2000 1:12:52 PM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 99985

Good thinking Zeev. I agree with you. I also had to reevaluate my previous thinking that a rate cut was in order last Tuesday. That's because I thought Bush would never get his tax cut through Congress. In fact we don't know that for sure. So, Alan G. just finished with great effort quieting down an " exuberant market ", but now GWBush is getting ready to stimulate it again with a large cut, 1.3 trillion. Even though I agree with the need to cut taxes, I think that Alan G. is definitely going to wait until Jan 31 before considering cutting rates because he will want to see which way Bush and Congress are blowing. If Bush lowers taxes, then definitely he will not cut rates until more data are in. This will renew anxieties, consternation in the market especially when they see their new and improved inflationary Health Insurance Contracts ( with more on the way, much more, ). So, we are going down again, at least to retest the lows or possibly lower until all the high PE's go . The Bear will not be denied the Final Washout, capitulation, TA ========================== Message #65001 from Zeev Hed at Dec 21, 2000 11:24 PM George, of course, that could be, but by January, I doubt that there will be a clarity of Bush tax cuts intentions, and I doubt the feds are going to reduce rates in conjunction with a massive tax cut, that will send te market into another bubble which the feds have been trying to restrain. I think that the feds are going to have to see at least two months or more of unemployment above 4.5% before they even start and think about putting new pressures on labor markets, and average job creation dropping consistently under 30,000 before they fear a recession. Getting the economy growth rate declining to 2.5% is exactly what the fed's consider "soft landing". It will take more than two months for that to be evident, thus my own suggestions that the earliest cut would be during the March meeting not before. If we get a financial accident (a market crash for instance) then the fed may react much faster, but an "orderly" decline will not precipitate Fed's action IMHO.