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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Thomas J. Smith who wrote (30192)	5/15/1999 4:50:00 PM
From: Will Lyons	Read Replies (1) \| Respond to of 70976

Re the Fed and interest rates Too bad that we have to have a crash to control inflation because we have eliminated fiscal policy and manage our economy only with interest rates. Keeping interest rates low encourages investment that helps productivity. Fiscal policy could control inflation without the market crash, unemployment, and depression that most likely follow a tight money policy. To be sure some of us may pay a higher tax rate, but may still be much better off than paying a lower rate on a reduced income, or no income. And of course with a market crash capital gains taxes would also be avoided! Those who ignore history may live to repeat it! Will Lyons

To: Thomas J. Smith who wrote (30192)	5/17/1999 2:33:00 PM
From: Sun Tzu	Read Replies (3) \| Respond to of 70976

I think the good news is alredy in the stock. To make good money from here on in AMAT, you have to be a good trader, IMO over the next 4 months or so. I posted on the the Art of Investing thread that I've been in 40% junk bond, 40% cash, and 20% stocks for almost a week now. This is mostly because when I notice my stocks are not going anywhere, and I can't figure the market out with good conviction, I choose to stay out. We don't have to be doing something in the market everyday. As for the general market, I don't expect a Fed tightening soon (so this may give a short term boost to the bonds and the stocks). But I don't expect the interest rates to fall much either. There are 3 major cases for the bond yields to rise: First the global healing means that the interest rates don't have to be artifacially low. Second, as the stock market moves higher, bond yields will have to rise as well because fewer and fewer investors will be willing to put their money in the bond market (besides me, is anyone else here invested in bonds? I doubt there are many out there). Third, on the whole the global crisis has been very good for the US (Gottfried, I have not fully read the article that you posted, so I don't know if my reasons are the same as the author's. They are probably close). So the foriegn markets are now more of a competition for US, than they have been in the past two years. So all in all, I expect the interest rates to remain high (unless the market crashes or there is another global crisis) and the market to be rocky at best. Now if I knew much more details than I do, I would be having a big position rather than staying on the sidelines <g>. Sun "almost there" Tzu