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To: Les H who wrote (192427)	9/17/2002 4:47:49 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 436258

That article is so incredibly moronic that it's hard to know where to begin. "Insufficient liquidty?!" ROTFLMAO! So, with all these positive recovery factors showing up, why haven't we witnessed a recovery in stocks, which appear to be significantly undervalued? For the first time in interplanetary history, a recovery in stocks is lagging a recovery in the economy. What gives? Money gives. The biggest single concern at this stage of the recovery is the absence of sufficient liquidity to finance businesses and a stock-market recovery. Corporations want and need fresh cash to cover large debt accumulated prior to the recession, and risk-averse investors are not bailing them out. The problem is there are no productive uses for additional liquidity. Borrowers are loaded to the gills with debt and don't want more (except for those that are uncreditworthy). Consumers are finally exhausted with debt. Liquidity will only make the problem worse, it will take time and savings to solve the problem. There is no other way (well, maybe hyperinflation but you get my drift). If the Federal Reserve understood this, they would be pumping high-powered cash into the economy at a minimum 10 percent annual rate. However, in the past six months monetary-base growth has slipped to 6 percent annually from a 14 percent pace in the prior period. As I've pointed out before, the way for the Federal Reserve to get the money moving where it's needed is to deregulate the fed funds rate — basically, the Fed should let the key interest rate rise and fall naturally as the market dictates. If this were the case now, the fed funds rate would drop, allowing the Fed to buy back tons more Treasury bills. The Fed would pay for that purchase with newly created high-powered cash that would flow to the corporations in need. Total BS. Lower interest rates will solve NOTHING! See above. The real interest rate is now well below zero...and it ain't helping. All lowering it further will accomplish will be to further inflate the housing bubble and the mortgage debt bubble...NOT a productive use of capital at this point (and ultimately dangerous as employment and credit quality continue to slide). I don't have a problem with the tax cut idea, EXCEPT that the Federal deficit is already exploding, and will eventually pressure long rates and/or the dollar.

To: Les H who wrote (192427)	9/17/2002 5:04:28 PM
From: reaper	Read Replies (1) \| Respond to of 436258

Les, stop posting that chit here <g> i don't even know where to begin with that editorial. yeah, ACF is dying due to a lack of liquidity from the Fed. LOL! frankly, all that really needs to be said about Kudlow is that he's the one who told us in 1998 how dollarizing their economy had saved Argentina from the emerging markets meltdown. the guy can't even buy a clue, let alone have one. Cheers