Limtex, actually, I disagree with your assessment of AG's "performance", I believe that waiting with rate cuts and just supporting the market with "words" is the right thing to do right now. If he cuts rates here, without a real economic problem, he runs the risk of reinflating the bubble. The naz is still well over long term historic valuations (as well as the S&P) and his job is to prevent inflation and major recessions. There is yet no danger of a major recession, but reinflating the economy to a growth rate of 5% or so when labor is tight, would not be wise. The fact that oil is coming back down to more rational levels is the equivalent of a small tax cut, and that should eventually counteract the mild decline in end demand and GDP.
Actually, Bush/Cheney are making a major effort to "talk the economy down" as early in their term as possible to get a roaring economy in the last two years of their term. I doubt twey will put pressure on Greenspan to reflate here, since by early 2004, we will then once more be faced with the need to debubble the bubble, a painful process which will not help their reelection. I, for one, am of the opinion that "Bush's Friends" in the oil industry engineered the rise to $35/barrel, to reduce the "good feeling" economy that was supporting the opposition's candidate. They have succeeded, and now, they are engineering the decline they need to prop some weak points in the economy. In short, we have been had (g).
Zeev |
