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To: LLCF who wrote (182489)	7/23/2002 2:55:06 PM
From: stan_hughes	Read Replies (1) \| Respond to of 436258

The whole problem in a nutshell - 2:36pm 07/23/02 Market in uncharted waters: Bridgewater By Julie Rannazzisi Analysts at research and money management firm Bridgewater Associates point out that this is the first time since 1930 that the stock market has fallen in the face of aggressive Fed easing. "In that sense, we are in uncharted waters. Clinically speaking, a recession is an economic contraction brought on by tightening and ended by easing. A depression is a self-reinforcing economic contraction, perpetuated by debt liquidation in which central bank easing is impotent to reverse the contraction. Recent market action is symptomatic of depression," Bridgewater said. The firm notes that consumer-sensitive sectors of the market have recently begun to crack. "The question is whether the falling stock market shocks the system to the point that credit creation is impaired," Bridgewater said. The Fed continues to hold steady as economic growth remains modestly positive, but Bridgewater claims that argument will fade if consumers stop spending.