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Technology Stocks : ADI: The SHARCs are circling! -- Ignore unavailable to you. Want to Upgrade?

To: Scrapps who wrote (2632)	1/30/2001 5:10:56 PM
From: WTSherman	Read Replies (1) \| Respond to of 2882

I think that a 75 basis point cut would trigger a sharp, but short, rally. This would be followed by a great deal of FUD about what the Fed knew and when it knew it. If we get a 75 point cut,watch out. Something's not well...

To: Scrapps who wrote (2632)	1/30/2001 5:12:56 PM
From: Bosco	Respond to of 2882

<ot>Hi Scrapps - fundamentally, I agree with you. As a matter of opinion, I would like to see another 100 basis point cut this year, to bring the total cut to 150 basis points for the whole of 2001, which is the amount raised in 1999 and 2000. However, I think the 75 basis point cut at one time may inadvertently send a wrong msg, i.e., something is really really bad coming down the pike, the Fed knows but the public doesn't yet. It may not be true, but never underestimate the power of paranoia <G> Instead, if the Fed does a 50, that is a 100 basis point in a month, not a small amount. This should filter into the mkt in 6 to 12 months. More important, it will achieve the psychological impact, i.e., the Fed knows what is going on and the public knows it too. The Fed is lowering the land gear for a soft landing and more to come. While the energy problem is real, consumer confidence is what Chmn Al worries about. And you don't want to spook the consumer. Look at Japan, it was in a near zero interest environment for the better part of 1990s, it is still struggling b/c consumer is scared. So, sometimes more is not better. best, Bosco