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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (56817)2/23/2002 4:10:10 PM
From: Skeet Shipman  Read Replies (1) of 94695
 
YEARS AT RECESSION LEVELS
From 1997 through the third quarter of 2000, investment in equipment and software was adding roughly a point to the gross domestic product growth every year. It was responsible for roughly a quarter of all the growth. Starting in the fourth quarter of 2000 all the way through 2001, it has actually been a drag on economic growth. It has gone from roughly adding a point of GDP growth to knocking nearly a point off GDP growth. This is going to make it very difficult to come out of this recession. The real investment expenditures, which were funded by long-term capital, represented “basic” investment in the economy. There is a multiplier effect on subsequent expenditures and periods of growth. Considering this, the economy will remain at recession levels for an extended period of time. There is no magic cure that will replace that rate of investment in communications, software and equipment in the US.
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