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To: Diamond Jim who wrote (72574)	10/16/1998 12:02:00 PM
From: Rif Kamil, M.D	Read Replies (2) \| Respond to of 176387

Rate Cuts ... more pontification.... I think that that the sudden reduction in rate cuts is reflective of the American banks/investment houses being heavily involved as lenders to the various hedge funds which have lost gobs of money. The "crisis in liquidity" may be more a function of banks having to seriously curtail their immediate and near-future lending patterns. If that happens we are almost guaranteed some sort of recession. The FED is moving to forestall this specific concern. Overall I agree that the reasons are as outlined in your writing. I am just wondering if the Fed does know more about the magnitude of losses absorbed by the banks as lenders to hedge funds. Thoughts?