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Strategies & Market Trends : The Thread II -- Ignore unavailable to you. Want to Upgrade?

To: Smart_Money who wrote (2563)	6/22/2001 2:16:37 PM
From: If only I'd held	Respond to of 9026

Well, if it happens, it sure won't be based on valuations as far as I can tell. Have a good weekend all.

To: Smart_Money who wrote (2563)	6/22/2001 3:37:36 PM
From: Lane Hall-Witt	Respond to of 9026

Smart_Money: The CPI increased 3.6 percent from May 2000 to May 2001, so the real Fed funds rate would be slightly below zero if the Fed were to cut by 50 basis points to 3.5 percent. We still have a way to go before we hit a Japan-style liquidity trap. Japan can't even give away money because its banks and corporations are too heavily in debt and its individual consumers are too risk averse. U.S. debt levels are high right now, but not even close to Japan's, and of course few American consumers hesitate to take on debt. However, where the U.S. and Japan are similar, IMO, is in the fact that we both have fundamental economic problems that probably can't be solved through central-bank management of the money supply.