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

To: studdog who wrote (7486)	11/9/1997 1:29:00 PM
From: Mark Nelson	Respond to of 18056

Karl, A year ago Barron's had a piece that was calling for the Fed to lower rates based on a cash flow arguement (ie. cash flow was so low relative to interest expense). I agree with your position re: lowering rates. The cash flow issue may just be a background factor. Re: lower rates causing market rise I think that the Fed accepts that their primary responsibility is managing inflation. Market pricing is subordinate. Mark

To: studdog who wrote (7486)	11/9/1997 4:01:00 PM
From: bearshark	Respond to of 18056

Karl: I have been trying to get an idea of the Fed's thinking for Tuesday. However, there is something else to think about for this week. The PPI comes out on Friday. If it goes up more than expected, then the perception would be for for future inflation. However, what if the PPI is down? In the past, no one cared much about a declining PPI number. However, with everyone talking about deflation, will a decline now be perceived as bad news? Maybe we will find out on Friday.