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To: Hollywood who wrote (15753)	10/27/1998 3:03:00 PM
From: Patrick Slevin	Read Replies (2) \| Respond to of 17305

I don't wish to put forth the impression that I know all there is to know about the bond markets however generally speaking I think the Fed is always primarily concerned with that market to a greater degree than stocks but that the two are intertwined enough that equilibrium has to be the watchword when tinkering is afoot. In other words, when the Fed messes around with one the other has to be contained and controlled as to it's reaction. This 3% stuff may or may not be true but it sounds deflationary to me. If you look at Japan they tried to "fix" their markets by dropping rates and have never recovered. If you look at the U.S. after the Depression it was an era of low rates and economists still don't know how we worked out of it unless it was World War II. I'm not trying to make a case for Depression just deflation. I don't think dropping rates is the only answer. So 3% seems a bit extreme to me but then no one is paying me for my thoughts on it as people pay Jim Cramer so I would think his opinion is more valid than mine. But mine is that a reduction in rates will lead to lower prices both in bonds as well as equities short term because it's a deflationary tactic.....summing up in a short sentence. DISCLAIMER. My educational background is in Engineering. If there is a Economics pro out there I absolutely would welcome a contrary opinion. I'd love to know what I'm missing.