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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (780)	3/17/2001 4:50:06 PM
From: MrGreenJeans	Respond to of 10065

Pete Like FED rate hikes, cuts normally take 12-15 months to impact the economy. I understand the reasoning but the rate cut impact may be felt much quicker this time. I put forth the following reasons to those worthy enough to read the following<g>: These rate cuts unlike others in the past twenty years are much swifter and much deeper, that is, assume the rate cut on Tuesday is going to be 1/2 a point, we will have seen a 1.5 basis drop in interest rates over a period of 2.5 months. I am also assuming at least another cut of similar proportions sometime after Tuesday as well for a total of a full 2 basis point drop in rates. I believe your statement while generally correct applies to more moderate rate cuts of the quarter point variety taking place over a longer period of time. I believe this will be the difference. It is very much like throwing a lighted match at an exposed oil barrel. The rate cuts, the match, is being thrown at two trillion dollars plus-cash on the sidelines, the oil barrel, and an explosion is pending. (Or at least this is what the patient next to me is whispering in my ear!)