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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: James Strauss who wrote (8443)	9/7/1998 11:25:00 AM
From: Amigo Mike	Read Replies (1) \| Respond to of 29382

Hi Jim, Had to throw my .02 in too. I think AG will hint around at a decrease in interest rates and stand pat. The economy is still buzzing along ...... just now beginning to slip a little. But it is slipping from an overheated condition (IMO) and is slipping back to a more normal economy. Americans are now spending more than they make ...... ZERO savings being put away. It will be healthy to STOP this pattern and begin spending less. Of course this will lower corporate profits .... albeit just lower the rate of growth on earnings. THe markets tend to be ahead of the curve by several months ..... so IMO this could be the largest reason for the correction. I expect to see less consumer spending & confidence sometime after the first of the year. Amigo Mike

To: James Strauss who wrote (8443)	9/7/1998 3:17:00 PM
From: Sergio H	Read Replies (1) \| Respond to of 29382

<A picture of where we've been does have an impact on interest rate decisions that helps us try and figure out where we are going... If I were the FED chairman and I saw a declining market and declining world economies that could eventually affect my markets, I'd strongly consider reducing interest rates...> When we first started our discussion, I posed to you that the current market slide has more to do with profit taking than world economic problems. I also asked you to review our current market conditions, because that is what the Fed must do in determining what the short term interest rate should be. The following measures are reviewed: The Index of Leading Economic Indicators Industrial Production Paper Production Steel Production Aluminum Production Mfg. Capacity Utilization Construction Spending Consumer Price Index Producer Price Index Unemployment Treasury Bills, Notes and Bonds Shearson Bond Index Fed Funds Rate The difference between the 90 day T Bill rate and the Federal Discount Rate M2 Money Supply Free Reserves held by the banking system Which one of these measures is forecasting that we need to lower interest rates now ? If you review the stats you would come to the same conclusion. We won't be solving the problems in Asia by lowering our short term interest rates and our economy does not need the rate cut. Sergio