Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: puborectalis who wrote (102733)	6/19/2000 9:28:00 AM
From: Lane Hall-Witt	of 120523

The scary thing about the interest-rate environment, so far as the overall economy is concerned, is that the last 75-100 points probably haven't even worked through the economy and had a discernible effect yet. Interest rates don't have an immediate impact on the economy: they tend to show up in the economic numbers after a considerable time lag. Also, I'm becoming increasingly worried that the economic slowdown is actually going to be accompanied by inflation: in the last few weeks, an astounding number of companies have started talking about the fact that they have pricing power for the first time in years. Companies like AT&T and Kimberley-Clark, in addition of course to the oil companies. Are they planning to use that pricing power? You bet! We are going to see higher prices even with the drawdown of the money supply and the slowdown in the broader economy. The whole situation could deteriorate in a hurry if the Fed misunderstands the pricing-power phenomenon and decides that it must continue to raise interest rates, even in the face of a slowdown in the real economy: recipe for stagflation--.

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