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To: MythMan who wrote (6075)	9/16/1998 8:54:00 AM
From: Joseph G.	Read Replies (1) \| Respond to of 86076

<<''Mr. Greenspan has boxed himself into a corner. If he doesn't hint at lower rates, the market will turn vicious,'' said Westfalia Investments research director Peter Cardillo. Cardillo predicted Greenspan will reiterate the comments he made on September 4, when he said the U.S. cannot remain an ''oasis of prosperity'' in a world experiencing greatly increased stress. Those words were widely interpreted in the market as a hint the Fed would lower rates if the global situation worsened. Since that speech, there has been growing speculation G7 nations may be planning some sort of concerted rate reduction. But German central bank President Hans Tietmeyer poured cold water on that idea Tuesday when he said economic conditions around the globe were too varied for a coordinated rate cut. >> The Euro people said they're not gonna do it, British said they're just not gonna do it, GSpam PR guy has said they are not gonna do it - but the coordinated effort of sucker guides keep suckering the suckers with pipe dreams ... I think there are 10 born every second, FWIW ...

To: MythMan who wrote (6075)	9/16/1998 9:47:00 AM
From: Defrocked	Respond to of 86076

The Greenspan Fed will not lower rates Sep.29. As suggested by the respected Robert Parry of SF Fed, housing is good, employment is high and economic growth satisfactory. Lower rates would be irresponsible. Greenspan may say today global risks have changed the posture to one of neutrality and the Fed always is ready to perform the role as lender of last resort; current conditions do not,however, warrant an easing of policy at moment IMO. bloomberg.com Germany is actually thinking of RAISING rates, not lowering. bloomberg.com There is an economic school of thought lead by Robert Lucas that believes business cycles are caused by the misalignment of expectations between the Fed and the market. Unexpected money growth can, for example, cause temporary real growth before inflation catches up with a lag. In contrast, unexpected monetary contraction can create recessions before deflation occurs with a lag. It appears to me that the market now believes and hopes for a rate cut which will not appear. Moreover, this misalignment of expectations, here and abroad, can push us further on the path to a slowdown in real economic activity. The original push came from Asia in the form of asset devaluations destroying loan and bank credits, which was also a form of unexpected monetary contraction. IMV, the full extent of the Far East, Russian and Lat.Am. contractions has yet to hit here. But given existing PE's I believe surprises remain on the downside and do not feel excesses here have been reduced such that a bottom has been achieved. FWIW.