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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (19105)	7/30/1998 9:44:00 AM
From: Lee	Read Replies (1) of 50167

Hello Ike,..Re: Now markets have been applying the monetary tightening without even Fed interfering. These longterm rates are free from all controls and are better indicator of how market perceives the economy. Excellent observation Ike and one that many fail to take into account. This seems like a good sign for earnings and growth going forward by saying that the slowing economy that everyone is so worried about isn't on the horizon for the next 6 months or so. Also, the S&P made good gains during the first quarter when rates were several times above 6%. Plus Q4 97 also had rates above 6%. chart1.bigcharts.com:80/report?r=chart&onbad=badsymbol&country=us&time=7&freq=1&compidx=aaaaa%3A0&ma=4&maval=9&uf=7168&lf=1&type=2&style=3&size=2&symb=TYX&comp=&sid=11421&sec=x&xyz=11608984&s=7752 bigcharts.com The only problem I have to see lower rates going forward is that the US doesn't have an available work force to continue expanding the economy much above 3%. And finally, the ECI came in at 0.9% which translates to a 3.5% annual rate. Even if the wage pressures are not distributed evenly between manufacturing and services, the pressure on earnings is just more noticeable in the tech/services industries. Regards, Lee

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