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To: Cynic 2005 who wrote (6892)	9/24/1998 12:09:00 AM
From: Mike M2	Respond to of 86076

MMV, if AG is concerned about irrational exurberance he should not lower rates yet. However, if the Fed is not as independent as they would like us to believe we get the rate cut in Sept.. My advice to AG is no rate cut yet and he can always hope that the futures ferry will save the mkt on a severe down day. rescue packages for hedge funds -they must have some powerful clients -g- MM

To: Cynic 2005 who wrote (6892)	9/24/1998 9:33:00 AM
From: Defrocked	Read Replies (2) \| Respond to of 86076

Tuesday's cut, if one, might only be 25 bps. Let's say its 50 bps as market anticipates: The news is already discounted. Now even if Fed cuts rates, willing borrowers must show up. I'll check this later but Fed borrowings are probably low and free reserves high. Thus all the Fed is doing is following the market not through supply increases but by simply matching the existing market rate that reflects the falling demand for credit. I continue to believe the key is earnings, which will decline. This belief remains at odds with the SP500 P/E of 25 embedded in equity expectations. Yesterday's quantum jump in internet stocks also tell me excesses have yet to be rung out of the US market.