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To: Dan3 who wrote (86322)	8/3/2002 1:05:09 PM
From: milo_morai	Respond to of 275872

<font color=red>BARTON UPDATE as well as some Fab updates hwsw.hu

To: Dan3 who wrote (86322)	8/3/2002 1:36:33 PM
From: kapkan4u	Respond to of 275872

<I don't see that happening absent a fear of inflation - which doesn't seem to be an imminent problem! Are there other mechanisims you see raising long term rates? A collapsing dollar? Balance of trade crisis?> It doesn't have to be a real inflation, just a fear of it can keep the high rates were they are. The major mechanism that can push the long rates higher would be the escalation of state and federal budget deficits. Also in a depressed economy corporate debt rates would rise significantly, providing plenty of competition for the government bonds. Kap

To: Dan3 who wrote (86322)	8/3/2002 4:48:21 PM
From: tejek	Respond to of 275872

The 3/4 percent rate cut will not move the 10 and 30-year T-bond or mortgage rates. The long rates may even go higher. I don't see that happening absent a fear of inflation - which doesn't seem to be an imminent problem! Are there other mechanisims you see raising long term rates? A collapsing dollar? Balance of trade crisis? Dan, I think the real fear is deflation. Everything I have ever read suggests that while inflation is bad for an economy, deflation is the kiss of death. It leads to a downward spiral that's difficult to stop.......just look at Japan. Any fear of inflation currently has to do with the falling dollar; that we will pay higher and higher prices for imported goods. However, past studies have shown that as the dollar drops in value so does the import of finished products. The real danger is our consumption of oil. However, OPEC's continued ineffectiveness and Russia's growing oil exports may neutralize that effect. ted