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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (5461)	6/10/1998 9:46:00 PM
From: Kirk ©	Respond to of 42834

Re Interest rates, this is interesting: Hinchey: The fact is real interest rates are inordinately high and making it difficult to deal with the Asia crisis. Greenspan: The ultimate test of whether interest rates are too high is whether interest-sensitive areas of the economy are under stress. It's hard to find that at this stage. Certainly housing demand has really been quite impressive. Indeed it's stronger than we would have expected by any of the models we pick up. And interest rates are crucial in that regard. Passenger cars and truck sales are also related, so we do have a number of areas in the economy of quite significant importance which one would assume would be markedly restrained if interest rates were grabbing. I see very little evidence of that at this particular stage. My take on it all is excellent gains in the stock market have made us flush with "wealth" and some of it is being converted and spent which is picking up the slack from having interest rates too high relative to inflation. I, for one, resemble that statement. regards and thanks for the Greenspan links Kirk out

To: Justa Werkenstiff who wrote (5461)	6/11/1998 12:46:00 PM
From: Investor2	Read Replies (1) \| Respond to of 42834

Re: "How significant does inflation have to be now in order to tighten? Is this a temporary policy based upon current events in SEA? " To answer your second question, first, I'm guessing that the Fed's inaction is based upon current events in SEA. I think the Fed is quite worried about the direction of global economy. To answer your first question, I'm guessing that the Fed will not tighten before the SEA impact is fully evident in the U.S. Based on recent changes in the balance of trade, I believe the U.S. economy will slow progressively over the next few months, at a minimum. The above remarks are only guesses on my part. Best wishes, I2