Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: t36 who wrote (7485)	11/9/1997 11:30:00 AM
From: studdog	Read Replies (3) \| Respond to of 18056

Great discussion of possibility of Fed tightening. I think there is a scenario where the Fed may actually lower rates. Usually tightlipped AG has just pointed out that our low inflation is even lower. This I think is due to the inability of companies to raise prices and in fact they are constantly lowering them (i.e. CPQ). This is necessitated and abetted by global competition and overcapacity (part of the deflation scenario). How do you difuse deflation and help out Latin AMerica and Asia currencies at the same time? Lower rates!!! Lowering rates will boost the economy, increasing demand, sopping up excess inventory and capacity, thereby counteracting deflation. The only reason not to lower rates is the fear of inflation. But, AG just told us inflation is not only benign it is more benign than we even thought. This could be the political cover for lowering rates. One problem I just thought of for the Fed is that lowering rates would would cause a market rise and get us into even more dangerous valuation territory. However if the economy is revved up enough increased earnings might bring things more into balance. I don't have any firm conviction here, I'm just outlining a scenario and would appreciate any thoughts. It will sure be interesting. Karl

To: t36 who wrote (7485)	11/10/1997 8:41:00 AM
From: Cynic 2005	Read Replies (1) \| Respond to of 18056

t36, you asked me about the market for the week and then ended your note with << thank you sue>> Gee, that scared me! Sue, I will offer my opinion only if you don't sue me if I am wrong. -g- I think we will be up marginally for the day and down big, I mean BIG (~4%), for one day during the week. Overall, the week should be down big. I have no basis for this forecast. Just gut feel. Take it for what it's worth. Of course, I reserve the right to be wrong and change it at my whim. -g- -Mohan