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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (32747)	9/23/1998 10:14:00 PM
From: kahunabear	Respond to of 132070

William, I agree with you. It will be interesting to see how far this round of buying takes us. I don't see how cutting interest rates will magically take us to new highs. Rates are already very low for high quality debt, while rates with any associated risk have gone up. Junk bonds and REITS where crashing just a week ago (they have come back somewhat). Its hard for me to see any rush of new borrowing regardless of what the fed does. With all of the international problems, I think banks will be hesitant to make loans. Bad loans have helped fuel this bubble domestically and internationally and hopefully the bankers now see that this is dangerous. I think we will see belt tightening everywhere. Long term that's great, but it will be painful short term for the economy and the market. I think fear and uncertainty will lead to a major slowdown. If for some reason the rate cut does spur expansion we may be in even bigger trouble. Adding to all of the excess capacity and inflating the stock market seems like a bad idea to me. Its hard for me to see that happening. I just think there are excesses that have to be worked out one way or another. BWDIK, WS