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

To: KevinMark who wrote (65140)	12/23/2000 10:44:54 PM
From: Casaubon	Respond to of 99985

they can't afford to pay dividends because their product is no longer competetive or cost effective. Growth occurs with 5% loans or 6% loans. If your "growth" business is so adversely affected by these meager changes in interest rates perhaps your growth rate was not as good as advertised. Lowering rates is an inducement to borrow. It does not cause growth. Growth is caused by necsssity and demand. If one is only going to buy something because the "inducement" is great enough it really doesn't fit the criteria of growth. When people can't get by without your product then you will have growth, whether interest rates are 5%, 6%, or even 7 or 8%. The federal reserve is merely playing the same word game they play on the way up the rate curve. Growth is stymied by bad debt and vice versa You're right. And low interest rates induce excessive use of debt/margin. Which, of course, leads to bad debt.