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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: hobo who wrote (2860)	1/4/2001 2:45:47 PM
From: Robert Douglas	Read Replies (2) of 3536

Another dark economic cloud: Today's factory orders, although up, are still down over the last three months. More ominous however, is that factory inventories were still rising sharply - up .5% in Nov. after a .7% rise in October. This will be the second consecutive quarter of rising inventories and could lead to a real nasty inventory liquidation in the first quarter. The is standard economic stuff - real textbook. As inventories swing from accumulation to liquidation you get a huge change in production. This will result in factory slowdowns and layoffs, which if allowed, will roll like waves through the economy. The only way to stop this is massive interest rate cuts. I have been looking for a 4% funds rate by summer. I may have to drop my projection to 3 1/2%.

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