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To: GRANOLA who wrote (80489)	11/15/1998 7:40:00 PM
From: JRI	Read Replies (3) \| Respond to of 176388

Granola- I am basing my decision on watching Greenspan's speech to the Investor Organization (I forget the name) that recently met in Boca Raton (shown live on CNBC), and Rivelin's comments in several interviews in the last 10 days.. In both cases, a great deal of emphasis was placed on the subject of credit spreads, as well as forward-looking statements concerning a slow-down in the U.S. economy.....Additionally, there was recognition of the "uniqueness" (my word) of the current situation, and the "risk" (my word) of inaction... As a layman, Greenspan and co. would look silly if there is not a rate cut this Tuesday....this would make the action 3 weeks ago look knee-jerk...(Or, as some like to say, Greenspan "bailing out his banking buddies")...After all, if he is not going to move on Tuesday, why wouldn't they have just waited (3 weeks ago) and cut at this meeting (as opposed to 3 weeks ago)..Have we already solved (the international crisis) that caused him to take the (nearly unprecedented) step of the intermediate cut in 3 weeks? It wouldn't make sense to me that Greenspan would think (in these terms).. He thinks longer-term, and acts accordingly...the imbalances that caused this mess are still largely in place, (although things have improved some) and the fire is still getting closer to home...He knows this..So, the Fed fireman are turning on the liquidity firehose (at a now deliberate pace) The Street has gotten nervous because some of the October data came in (looking pretty good)...IMO, Doesn't matter......The Fed looks forward, not back....Had you seen Greenspan's speech a week ago, you would have been impressed with his understanding of the (potential gravity of the current crisis for the U.S. economy (if we do nothing more)...At least I was. Of course, if I'm wrong here, I'm going look pretty stupid...And the market is going to take a hit (short-term) that's for sure...Don't bet on it.