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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Zeev Hed who wrote (2768)	12/29/2000 12:52:25 PM
From: Robert Douglas	Read Replies (1) of 3536

People have short memories, until the consumer confidence index drops back well under 100 (it used to hover for a long time in the 70), the consumer is still overconfident. I think the more important thing at this time will be the direction and not the level. It's true that a reading near 100 is historically high - when 100 was passed in early 97 it was the first time since the 60s that it had been there - but the sharpness of the decline will give the Fed pause. In 1990, the Michigan index was reading about 80 when we entered the recession. By the time we bottomed out, it was below 60. It's very possible, even if we have a recession now, that the index will not go below 90. This will be 20 points from its high and would be a sufficient loss in confidence to spell recession.

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