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To: MikeM54321 who wrote (4352)	6/10/1998 1:37:00 PM
From: Michael Sphar	Respond to of 9980

Mike, or anyone, extrapolating on the early warnings coming from tech companies, what do you think the impact of continued and probably increasingly poor results being reported in Q2 and Q3 will have on Fed policy in the July, Aug, Sept time frame ?

To: MikeM54321 who wrote (4352)	6/10/1998 4:34:00 PM
From: don pagach	Read Replies (1) \| Respond to of 9980

MikeM, I think what Greenspan meant is that whenever inventories are growing faster than sales at some point someone is going to markdown the inventory to sell it which leads others to markdowns which obviously hurts corporate profits. I will try to get EPS growth and inventory growth rates for the last couple of quarters. Best, Don

To: MikeM54321 who wrote (4352)	6/10/1998 5:45:00 PM
From: Bill Ounce	Read Replies (1) \| Respond to of 9980

re: rising inventories (what did Greenspan say?) There are a few ways to get rid of rising inventories: (1) hope for the best -- the economy will speed up and take care of it. (2) discount to get rid of it -- This is what computer hardware vendors have been doing lately to maintain market share. (3) idle production -- this is what happens when the economy slows down. Lots of companies simultaneously doing this results in recession. I personally belive the most efficient way to "abruptly slow" an "unsustainable rise in inventories" is to idle production. This makes me think that a FED rate increase is unlikely because one of the first signs of a cooling economy is a rise in inventories.