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To: Oeconomicus who wrote (132467)10/3/2001 4:26:27 PM
From: GST  Read Replies (1) | Respond to of 164684
 
Bob: I share your dislike for target-specific stimulus. Target neutral stimulus in small quantities is symbolic and not likely to do anything unless the intention is mainly aimed at sentiment -- and today that seemed to be working to some extent. What do you think about the prospects for deflation? I suspect that we would have a more positive impact from stimulus if we do overdo it - although I feel a little crazy saying that. Lets see what happens on the jobs front. Have you noticed the stream of job cuts being announced? All the "good news" from companies seems to be from cutting prices -- great. But think about margins. AAnd think about the impact on price structures -- people quickly get into the thinking that spending should only be done if somebody is willing to sell at a loss -- we could call it the AMZN economy <g>. A V bottom is a great concept. Deflation is not known for creting V bottoms. This is the "liquiidity trap" -- did you see that article?