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To: AllansAlias who wrote (4106)	6/3/2001 10:49:58 PM
From: velociraptor_	Read Replies (2) \| Respond to of 209892

Allan, I have been reading your debate on bearforum with interest and it appears that your opponent's main argument is that interest rate cuts will eventually kick in and help the market. A perfectly valid argument if it weren't for a few oversights.....Currently the interest rates have only affected short term rates through which banks primarily loan to each other. In fact, longer term rates through which over 90% of consumer and corporate loans are made, have not been affected, even after 5 FED rate cuts, and remain flat to slightly higher. There is no stimulus for additional loans. Throw on top the fact that many consumers and corporations are up to their ears in debt, and it won't make any difference whether interest rates are 10% or 2%. If they are maxed out they won't be able to take on new loans or pay on them anyway and even if they did, it's an artificial means of stimulus that still has its ramifications down the road. Piling on more debt is not the solution.