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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (2070)	11/12/1998 11:24:00 AM
From: Justa Werkenstiff	Respond to of 15132

Blinder on Rate Cuts From today's NYT. Have to agree with Blinder. Focus should be on the credit spreads: "The best case for easing is made by Professor Alan Blinder of Princeton, a former vice chairman of the Fed. Blinder concedes that the Fed's two earlier rate cuts this year have calmed financial markets. A measure of investor fear -- the gap between interest rates that investors charge risky corporate borrowers and safe government borrowers -- has shrunk since Greenspan by word and deed told investors he would not allow the economy to starve for credit. But the gap, Blinder says, remains well above the historical norm for an economy that continues to grow respectably. Blinder focuses on the "real" federal funds rate, which subtracts the expected rate of inflation from the interest rate that banks charge each other for overnight loans. Today, the real funds rate is, by Blinder's analysis, quite high, in excess of 2.5 percent. "That puts a mild tug on growth," he said. The tug made sense when the economy was roaring along. But "now that the economy is visibly slowing," Blinder said, "it is appropriate to turn the Fed's mild tug on the economy into at least a neutral stance whereby monetary policy is no longer holding the economy back." Still, Blinder is not calling on the Fed to do anything bold. He notes that there is a risk of too much monetary ease, primarily in the fueling of a still-overheated stock market."

To: Justa Werkenstiff who wrote (2070)	11/12/1998 7:10:00 PM
From: marc ultra	Read Replies (2) \| Respond to of 15132

Justa, re:small caps etc. I've been watching the relative performance closely but can't get too excited yet. For example today S&P500 down 0.25% while Russell 2000 down 0.32%. On other things so far it looks like I would have been Asysted if I said to hell with domestic tranquility and justa went with the bigger potential. When you said triple you forgot to say you were talking about weeks. By the way a WSJ negative front page article on ENMD blasted me out of the water today. I got to remember to stick with what I don't know like semi equip than with biotech which I think I know Marc

To: Justa Werkenstiff who wrote (2070)	11/14/1998 1:27:00 PM
From: marc ultra	Read Replies (1) \| Respond to of 15132

Justa,re:<<I wonder if the renewed concern over liquidity (read Greenspan and interest rates) has caused the small caps to underperform the past few days to the downside as opposed to the large caps. I have noticed that as the big day approaches for the good Doctor, liquidity in smaller cap stocks has again begun to dry up. >>> Your observation has continued to prove true. I guess we'll get our best read of this in the days and weeks after the Fed meeting this week. If the Fed should cut and we're still stalled I guess I may have to reconsider my overweighting of the small caps. If the Fed doesn't cut then we'll just have to see how lousy they do Marc