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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Frederick Langford who wrote (8668)	2/1/2001 7:44:35 AM
From: Sharck	Respond to of 37746

Hi FL, "...rate increases, intended to slow the economy, that put us where we are. So it's hard to imagine the cuts won't reverse it..." Of course you are correct here, Greenspans actions should turn things around, but the question is when, 1-1.5 years out, may be sooner, maybe later. The recent two deep cuts and about face from tighten bias does make the Feds look like amateur economist playing follow the economy rather then leading it. (Imagine if he had given us the .75 as many had suggested and as you know still might as he stated a continued rate cut bias). Stocks would have spiked up, but I believe many investors would then say Gee, is it really THAT bad, which from his bias, suggests it is, causing further selling. At present his hands were tied and as I (and most here suggested), he went for the half point. Remember US doesn't live in a vacuum. Economies are tied together on a global scale. Yes it is not an understatement to say the US is the engine that drives the global economy, and so far at least we in Canada are still humming along in good shape, but I would predict that we and the rest of the US trading partners will be dragged down into a slowdown of our own, before these cuts take their desired effect. BTW last week Martin, Canandas Finance Minister, did drop rates by .25.....

To: Frederick Langford who wrote (8668)	2/1/2001 9:41:04 AM
From: velociraptor_	Read Replies (2) \| Respond to of 37746

Fred....there are more problems that the FED wants to admit, and we are only seeing the beginning of the slowdown. Rate cuts will help to reverse things, but it often takes about 6 months for the rate effect to trickle through the system. Also, I don't think a 1% rate cut is enough.. Our economy was on a fast train that needed to be slowed, but the problem was that we needed a lot of brakes to stop the train. All those rate increases helped, but now we have the problem of an overinflated economy coming back to earth. It's like throwing a ball in the air. Once it starts coming back down it takes more and more force to slow the decent. I also think there are a lot more problems than what simple rate decreases can fix easily.