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To: PnclNk who wrote (51596)	9/5/1998 12:49:00 PM
From: Gersh Avery	Respond to of 58727

In the long term a cut in the Fed rate will cause the markets to drop further. The reason for this, is that it will cause the value of the dollar to fall. When that takes place foreign investors will pull their investment out of the US to preserve their gains. When they do this it causes the dollar to fall more leading to more foreign investors getting out leading to more drop in the dollar ......... Greenspan is indeed walking a tightrope. Please note that in the 1930's the US had interest rates that had dropped a long way down v/s the 1920's. Look at the interest rates in Japan. Think .. do lower interest rates really help stock markets? Gersh

To: PnclNk who wrote (51596)	9/5/1998 1:08:00 PM
From: Paxb2u	Respond to of 58727

PN, I think he just told us he wasn't going to lower interest rates, that our economy is turning down, and the US will not lower rates to help out the rest of the world. Just my opinion, but that doesn't sound like support for a rally. Peter :o)

To: PnclNk who wrote (51596)	9/5/1998 2:05:00 PM
From: Darth Trader	Respond to of 58727

AstroEcon on cutting rates, "As good as bonds have done the long rate really is still much higher than fundamentals would have you believe it should be. WHY??? Because bond traders are the smartest traders in the world and they don't trust Clinton as far as they can throw him (and he is heavy). Right now the yield curve is inverted which says we have a deflationary problem and all the fed can do is make little comments about maybe rates are too high?? They know the instant they indicate they are no longer concerned about inflation there will be lines (like in Russia) to cash in all those long bonds scattered all over the world. If the fed cuts rates it could actually CAUSE a big increase in market rates AND a drop in the dollar at the same time. Now that would be unproductive wouldn't it? We will see who blinks first the Fed or bond traders. Bullish sentiment in the bond pits is about 98.6% can they all be right? end astroecon.com