Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: e. boolean who wrote (21694)	10/15/1998 3:56:00 PM
From: Jan Crawley	Read Replies (3) \| Respond to of 164684

Just turned on CNBC, supposedly Fed is aware that many fund managers were shorting S&P going into tomorrow.... Panic short-covering on S&P today?

To: e. boolean who wrote (21694)	10/15/1998 6:52:00 PM
From: Gary Walker	Respond to of 164684

Fed is frightened just like many of us.....but what choice did it have? A cut in the discount rate during a time of low unemployment is a risky move, but so is ignoring a credit crunch and it's potential long-term impact on the economy. Historically, the Fed seldom lowers interest rates during good times. They did it in '87 after the crash to prevent liquidity from drying up and really causing an economic crisis. But unemployment was much higher in '87, something like 7.5% if memory serves me correct. The odds of stirring up inflation was rather slim then. As with today it's a balancing act, and the Fed did the right thing today. The concern by investors will quickly move from deflation to inflation as scarce labor demands higher pay. Wage push inflation is the historical norm under those conditions. It's won't take long for investors to wake up to this. The strike at GM is just the start of labor problems. My business has already seen salaries for some jobs go through the ceiling. Quality people are tough to find and when we do find them we pay through the nose. Eventually, this either cuts Corporate profits or ends up in the prices we pay. The Fed knew the PPI was up last month, but chose to ignore a one month increase since it has been down all year. They were uttering the "d" word and several of them know what happened to the world in 1929-1945. Possible inflation or armagendon? It's not a burden most of us could handle. There's no easy out of this problem. Good luck to all... gw