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To: gdichaz who wrote (15002)	9/14/1998 11:33:00 AM
From: marginmike	Respond to of 152472

is anyone concerned that G* will request more equity imput, or re-financing by the Q and others? Is there any effect on Handset deliveries? Is it possible a delay will be made as with the korean delay? I am concerned that G* blowup(no pun)will cause a delay or write down for Q this quarter?Any comments. Greg are you still alive?

To: gdichaz who wrote (15002)	9/14/1998 12:30:00 PM
From: Jon Koplik	Respond to of 152472

Chaz - regarding ...I am highly skeptical that reductions in interest rates stimulate the economy ... Just remember, if you are the treasurer of some big, dumb, huge corporation, chances are that some meaningful portion of the liabilities that are being carried on the corporation's balance sheet will be short-term. The assets against which these debts are supporting are things like factories, inventory, etc. If money market interest rates go down because our central bank makes them go down, the cash flow of the corporation increases as each short-term debt instrument matures, and is "rolled over" into a new short-term debt obligation. (Floating rate debt would re-set immediately). Since the factories and inventory and other stuff should be more or less the same both before and after the interest rate cut, this sounds like "money dropping out of a helicopter" into the hands of all short-term borrowers. BUT, time for "flow of funds" analysis. (Have you ever once heard anyone on CNBC (or the equivalent) discuss flow of funds implications of interest rate changes?) For every borrower, there is a lender. The lenders now receive less money (if interest rates now lower). I am not going to answer anything regarding flow of funds stuff. When I worked (briefly) at Salomon Brothers (in the Bond Market Research Dept.) (summer of 1979), there was a guy there who was described to me as "one of maybe 2 or 3 people in the entire United States who has a good understanding of flow of funds stuff." I would suspect he has retired since then, as he was not a young guy. Whan Maurice (and others) start "spouting off" about money supply and liquidity, and I say "forget it, no one understands this stuff," flow of funds is just one of many reasons I personally just give up trying to really understand these things. Getting back to your main thought, my own real world observations have been -- lower interest rates do help "soothe" the economy and businesses. Jon.