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To: The Ox who wrote (12691)12/4/2003 8:43:30 PM
From: Sarmad Y. Hermiz  Read Replies (1) | Respond to of 95531
 
>> we're overheating and the FED will have to act quickly".

Michael,

I think the fear is that when rates rise, even 1/4 of a %, then re-financing will stop completely, which will shut-off the additions to disposable income, which have helped retailers and auto makers through the recession.

It is NOT the fear that new business borrowing will be derailed.

And for the market, the fear is that once rates begin to rise, people will be more willing to keep funds in interest bearing accounts and certificates, mortgage backed securities, bonds, etc..., instead of stocks.

Are these fears justified ? That's what makes a market.

Sarmad