Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: hlpinout who wrote (89318)	1/29/2001 11:23:48 AM
From: Windseye	Read Replies (1) \| Respond to of 97611

'Morning hio, I recognize more validity in AG's take on how fast rate cuts/increases affect the market... if the analysts were any good he could listen to them and obviously do better. It's a very complex model, and I'm sure not all the variables in the mental nor mathematical equations are weighted properly and consistently, and the margin of error are extremely high... take for example the perceived necessity of the 1/2 point cut in December. It was unprecedented. WHy? Because they had no handle on the lever from March on as the rate cuts took effect and the ship steered widely off course. As I was watching CNBC that AM I noted silently that he had played it too severely, that because the lag effect of raises and cuts is so dependent on what ever stage of the economy we''re in that they are merely only guessing about how much to do when. I suspect the Fed was a little frightened by how big the dot com bubble was getting and how seemingly impervious to the indirect push against them that the rate increases were... so the Fed simply overreacted, maybe even by 2-3 rate increases during the year, and didn't catch the full effect until December. WHat does this protend for the future? Guiding space ships in space or large boats in water takes gentle nudges, timed perfectly, or steady incremental shifts. But then market participants in space and sea don't have consciousness, so THAT factor has to be incorporated in the Fed nudges! Perhaps he's better off by publishing a proposed rate schedule of upcoming changes so that EVERYONE knows the intent over the next 12 months. With a statement that each month they would publish an adjusted schedule for the NEXT 12 months then the market as a whole has the same data(projections) and the relative merits and demerits of the Fed's future moves can be discounted in the current market performance. Eh? Doug