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Also those foreign institutions that hold debt in US dollars get some relief as
well.
Harley
Earl Adamy wrote:
> Lower interest rates equals:
>
> 1) money looks for higher rates elsewhere (dollar declines) but if everybody
> cuts then stalemate
>
> 2) spendthrift consumers spend more because credit is cheaper
>
> 3) savers get whacked by lower interest income
>
> 4) over-extended financial institutions have credit costs reduced (see
> savers - #3)
>
> 5) mortgages are cheaper so consumers refinance getting monthly windfall to
> spend on more stuff
>
> 6) alternative (non-debt) investments appear more attractive e.g. the
> TBill/EarningsYield model used by many quants places increased value on same
> earnings.
>
> 7) the Fed, which cut rates on same day that core PPI was up .4% and new
> applications for unemployment remained at low levels indicating robust
> economy , is scared sh__less of financial meltdown so don't get too carried
> away.
>
> Earl
>
> -----Original Message-----
> From: charles meyer <chmeyer@xxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: Thursday, October 15, 1998 3:40 PM
> Subject: GEN: CURRENCIES AND ECO.101?
>
> >Group:
> >
> >Would someone be kind enough to refresh my memory on what
> >today's move by the Fed will do for(to?) the dollar and the various
> >foreign currencies? Lower interest rates equals..........? Thanks
> >for any postings.
> >
> >Charles
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