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Strategies & Market Trends : Market Direction Predictions and BS guesses

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To: New Economy who wrote (146)6/4/2000 10:28:00 PM
From: New Economy  Read Replies (1) of 234
 
We are in a "New Economy" with its own Business Cycles.
Interesting finding: Monetary policy will have a moderate affect on slowing down an expanding economy. One reason suggested was the de-regulation of the mortgage industry in the U.S. In the past when the Fed raised interest
rates...housing startups were affected immediately.
The authors also argue that there much more severe recession in this New Economy because of poor balance sheets of both consumers and business.
Everybody is leveraged to the limit and when things slow down BANG !!! Ripple affect Economy wide.

The Fed should read this report out by Goldman Sachs Jan. 1997:
"The Brave New Business Cycle: No Recession in Sight,"
William C. Dudley and Edward F. McKelvey, U.S. Economic Research (Goldman Sachs, Jan. 1997)
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