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To: DaveMG who wrote (14978)	9/14/1998 8:23:00 AM
From: Jon Koplik	Read Replies (2) \| Respond to of 152472

Dave - regarding ... Well first of all, as I'm sure you're aware, a reduction from 0.5% to 0.25% is in fact a 50% reduction, albeit from a very low rate. Seems they have their backs to the wall in this regard. Along the same vein then, what makes people think that a reduction from a fed rate of 5.5% to 5% or 4.5% will be enough to reinvigorate those economic juices if we start to slow dramatically along with everybody else? The point to consider with the 0.25%, down from 0.50% is how many J-Yen does it cost to finance that whatever. Yes, it is 50% lower than previously, but either before or after the rate cut, it is almost sure NOT to be a factor in deciding whether or not to undertake an investment project in Japan. Don't talk percentages. They could cut now to 0.0625%, and it would be a 75% reduction in short-term interest rates. Re : The U.S. -- my own opinion is that if and when Fed Funds are down to 4.75% or whatever, they will merely be in line with the whole rest of the financial world here, which is already operating with an interest rate structure assuming 5.5% Fed Funds are just wrong, and only a temporary irritant. The "invigoration" should be happening right now already, and we are not the country with years of un-economic capital investments that need to be "healed," so maybe don't lose sleep (yet) worrying about a collapse in the U.S. Jon.