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To: ild who wrote (60391)	1/22/2001 1:02:55 PM
From: NOW	Respond to of 436258

Bad news being ignored need not be bullish: sometimes, it can also be very foolish...

To: ild who wrote (60391)	1/22/2001 1:35:33 PM
From: pater tenebrarum	Respond to of 436258

re. rate cuts, one has to keep in mind that the currently U-shaped yield curve indicates short rates (i.e. the FF rate)should fall dramatically this year. the only circumstance that would argue for such a dramatic decline in short rates is the economy tanking much more than anybody now suspects, or alternatively a systemic problem developing. i'm still looking for a rally to begin after the current selling has run its course, and the next rate cut should be the trigger for it. i agree it's generally bullish when a market ignores bad news - but look at the case of INTC and MU. at the time they were hitting ATH's last year, prices for DRAM and CPUs had already begun to collapse. so the bad news was ignored, until it wasn't anymore. ignoring bad news is always based on the premise that the news won't get any WORSE.