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To: Stephen who wrote (56727)	10/30/1998 11:26:00 AM
From: James Strauss	Read Replies (3) \| Respond to of 58727

Stephen: I hope we get a pullback on Monday, it would be healthy... The major reason for the FED rate cuts was fear of bank sector liquidity problems... That hasn't changed yet... Many banks seemed to be in the hole with bad international debt receivables that was becoming worthless... Exotic leveraged investments were going against some of these financial institutions to the tune of Billions of Dollars... Until this turns around the FED will continue easing... As long as the FED is in an accommodative stance the markets will go up because investment returns will be higher than fixed income returns... Jim

To: Stephen who wrote (56727)	10/30/1998 11:29:00 AM
From: Lee	Read Replies (1) \| Respond to of 58727

Hi Stephen,..Re:but with the market this strong and the domestic economic data also looking stronger than expected, I seriously doubt that AG & co will fuel this by cutting interest rates again. If I may offer an opinion, Jim already stated why the Fed would continue to lower rates and it doesn't have a lot to do with the state of the economy. This can be verified by the lack of reaction in the bond market to the recent strong ECI and Q3 GDP. Jim stated The FED will continue to do whatever it has to do to avert a banking liquidity crisis. and I agree that the liquidity crisis has more troubling short term implications than strong economic data. Regards, Lee