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Strategies & Market Trends : Making Money is Main Objective

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To: Softechie who wrote (689)2/5/2001 12:42:34 PM
From: Softechie   of 2155
 
CSFB Economics Digest 2/5/01

Sudden Impact
The same technologies that gave rise to the late 1990s' productivity boom and supply-chain management revolution are now triggering an abrupt production-side response to the Y2K slowdown in demand. If significant layoffs are a byproduct of that response, then consumer confidence could plunge.
The good news is that policymakers appear alert to the downside risks for confidence. That formed a key part of Chairman Greenspan's rationale for easing policy more aggressively in the month of January than ever before during his tenure. Also welcome—perhaps essential—are news reports of widening political support for a 2001 tax cut. If macroeconomic policy can sustain consumer confidence through the storm, the groundwork would be laid for a decent recovery once the excess inventory is cleared.

Data this week: Fourth quarter productivity probably slowed, bringing year-over-year growth rates closer to our 2.5-3% estimate for sustainable productivity
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