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To: Zeev Hed who wrote (2765)	12/28/2000 9:26:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 3536

Wow!! You're TOUGH Zeev.. :0) No rate decrease until March? But please remember that I'm not saying we'll get a rate decrease, but I think we deserve to get one since AG was overly aggressive in the first place. He needs to reset the tone from economic lock-up (panic?), as seems to be where we're currently heading (are?) to one of pulling 1/4 point back and remaining inclined to neutral or to further reduce, maintaining a bit of flexibility there. Again, my whole premise is that we're rates are too high for business to feel inclined to forecast anything but recession in the next year. So if they believe the Fed is trying to induce a recession, they will plan accordingly and create one, if only as a result of a self-fulfilling prophecy. I just hate the way the Fed uses monetary policy as an all or nothing economic weapon. It's either, "spike the punch bowl or close down the bar", with the Fed playing a "Mutt and Jeff" game with the economy. If they want to use psychological coercion to decrease the wealth effect, then they should be just as willing to throw us a bone from time to time to show us they're not jacking us around and are serious about not putting us in recession. Especially when high interest rates only add to the increasing cost of production being caused by higher energy costs... Costs which are the result of Clinton/Gore's absolute idiocy in terms of energy policy. Btw, a bartender I know was telling me that Tony Cuehlo was seen giving Bill Richardson an "ear full" the other night over these energy price spikes. Seems Tony represents a bunch of investment bankers out west who's companies are straining under the high electricity costs. Energy costs constitute just as much of an impact on the economy as high interest rates. So we obviously have MORE slowing than the Fed expected and the potential for a systemic lock-up if consumer confidence fails to steady. And once the consumer psychology is lost, it may be difficult to retrieve. Regards, Ron

To: Zeev Hed who wrote (2765)	12/29/2000 7:01:17 AM
From: Henry Volquardsen	Read Replies (2) \| Respond to of 3536

agree and disagree. I agree that it is very unlikely we will get a rate cut before the next meeting. However I'll bet you a nickel grin we get a cut before the March FOMC. I suspect employment will be a lagging indicator this time around and the Fed knows it. With all the difficulty in hiring recently I believe a lot of businesses will hold onto employees as a scarce resource longer than in past downturns. Therefore unemployment will lag. The Fed knows this and will put more emphasis on other factors. Also one cut does not mean a campaign. One cut would help stabilize confidence and does not mean that much on the margin. The Fed won't start a campaign until they see a meaningful rise in unemployment. Henry