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To: Robin Plunder who wrote (116066)	3/27/2002 1:43:13 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 152472

got your 1929 facts a little confused in 1929 the Federal Reserve tightened heavily they responded to other New Economy based on automobiles they didnt ease on rates for 4 years !!! in 1999 Fed tightened heavily they kept the tight rates for way too long evidence was an inverted yield curve all autumn 2000 long the Fed should have begun to ease in Oct2000 they didnt in January they panicked with rapid cuts you mislabel the current situation BUSINESS CYCLE recession is characterized by higher price inflation, higher interest rates, and shortages of goods STRUCTURAL CYCLE recession is characterized by price deflation, falling interest rates, excess debts (public and private), excess capital equipment, excess goods this is a STRUCTURAL correction, a part of a larger cycle which contains several business cycle corrections within it that is why lower rates are not prompting the stock market indexes higher that is why the recovery didnt happen in 2ndHalf 2001 lower rates only encourage now instead, we will have a weak recovery, followed by a sharp and long recession / jim

To: Robin Plunder who wrote (116066)	3/27/2002 1:45:47 PM
From: Jim Willie CB	Respond to of 152472

got your 1929 facts a little confused in 1929 the Federal Reserve tightened heavily they responded to other New Economy based on automobiles car ownership tripled in a couple of years the Fed wanted to nip such fast growth in the bud wrong concept of price inflation causes then, wrong again now they didnt ease on rates for 4 years !!! in 1999 Fed tightened heavily they kept the tight rates for way too long evidence was an inverted yield curve all autumn 2000 long the Fed should have begun to ease in Oct2000 they didnt in January they panicked with rapid cuts and historically unprecedented money supply increases you mislabel the current situation BUSINESS CYCLE recession is characterized by higher price inflation, higher interest rates, and shortages of goods STRUCTURAL CYCLE recession is characterized by price deflation, falling interest rates, excess debts (public and private), excess capital equipment, excess goods this is a STRUCTURAL correction, a part of a larger cycle which contains several business cycle corrections within it that is why lower rates are not prompting the stock market indexes higher that is why the recovery didnt happen in 2ndHalf 2001 lower rates only encourage more improper allocation of capital into consumptive spending lower rates are failing to encourage more business expansion the economy is nowhere near ready for more expansion now instead, we will have a weak recovery, followed by a sharp and long recession with even more debt weighing it down in 2002 than in 2000 you now have $30 billion more household debt from 2001 refi's the entire Q4 spending growth came from credit card debt the bubble is bigger every month GreenSnot only moved the bubble's location from Naz tech stocks into real estate / jim