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To: The Prophet who wrote (69366)	2/17/2001 11:22:14 AM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 99985

Prophet, but doesn't an increase in PPI always precede by 2 - 3 months an increase in CPI? So don't we have to wait for another PPI or 2 before the trend to a rising CPI is denied? It takes 2 -3 months for increases in Producer Prices to pass that on to the consumers, TA

To: The Prophet who wrote (69366)	2/17/2001 11:36:12 AM
From: Kemo Sabe	Read Replies (1) \| Respond to of 99985

Prophet: Is your view that AG should cut based upon the economic environment, or your current position? Personally, I believe it would be highly irresponsible of AG to cut rates right here. His job (should) centers more around controlling inflation/disinflation than managing the equity markets. The things causing inflation right now are (by in large) issues for business & fed/state gov'ts to work together to resolve. A few months ago everyone was talking about the fact that Americans are now net disinvestors (i.e. as a whole they're spending from savings, reducing total savings). This was considered a bad thing by most folks (that's my view, too). Now that folks are spending less, the general assumption would be that they are 'saving' more. Isn't this a good thing? I think so. So by lowering rates, we go back to 'spending' more & saving less, correct? Now that's a bad thing, right? This whole situation is a little more complicated than just a simple rate cut, IMHO. Just thinking out loud. Best wishes! Kemo Sabe

To: The Prophet who wrote (69366)	2/17/2001 12:00:24 PM
From: Paul Shread	Read Replies (1) \| Respond to of 99985

I agree that an intermeeting cut seems likely at this point. AG was trying to talk the economy out of recession last week and wound up looking as out of touch as he did in December. If consumer confidence is as important as he says it is, he has no choice, PPI or not. The Conference Board's consumer confidence survey comes out on the 27th, but I'm not sure if he'll wait that long. If it's still falling after two rate cuts, he has to cut again. Good call.