To: Tom M who wrote (19585 ) 8/28/1998 2:45:00 AM From: IQBAL LATIF Read Replies (2) | Respond to
Tom-- I totally agree -- Fed should keep out of this-- these very same people months back were worried about Gold prices slightly picking up, most of the hard core economists like Krugman are more worried about inflation than deflation-- it is neither inflation nor deflation it is the worries of the market, the leverage factor of the new economy is working ruthlessly, in case of other economies a fall in stock market creates pressure on its currency and the fate of the country is sealed once the two start falling together, on the other hand imagine US we have this huge 20% correction from 1200 on S&P and we see $ stronger, the $ assets are new haven or the new gold rather we see long bond much lower flattening of the yield curve showing that markets will be the prime benefactors. The problem willl come if we see mass unemployment, low industrial production, a sharp drop in capacity utilisation, lower NAPM and depressed consumer demand ,none of these things is evident, in absence of what I have mentioned that markets will do exactly when element of fear is taken out what they have doing for last 4 years.
