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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (25482)	9/17/1998 12:47:00 AM
From: bob zagorin	Read Replies (2) \| Respond to of 32384

the main thing a rate cut would do, and this was referenced by rubin in testimony, is help stem capital outflow from other countries toward u.s.

To: Skeeter Bug who wrote (25482)	9/17/1998 2:46:00 AM
From: aknahow	Read Replies (2) \| Respond to of 32384

Skeeter, yeah it's that simple. The excess capacity argument makes no sense. It's the financial institutions that need a lower short term cost on their deposits, (liabilities) to cover their losses or become stronger. A cut in short term rates is how these institutions are helped. Longer term rates are already low and it does not seem like there are many being incented to build more capacity because of this. In fact many think a cut in short term rates may cause longer term rates to move up a notch, as inflation fears gain some credence if short term rates are cut. Short term rates that are higher than medium and long term rates cause pain in financial institutions. The market normally corrects this by an increase in long term rates. When market conditions make a move up in long term rates, it's time for the fed to cut the F.F. rate and I still think they will.