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To: Bobby Yellin who wrote (39086)	8/16/1999 6:16:00 AM
From: Alex	Respond to of 116895

THERE'S LIES, DAMN LIES, & GOV'T INFLATION STATISTICS By JOHN CRUDELE ------------------------------------------------------------------------ IF you look deep enough into Friday's inflation numbers and ask just the right questions, you will find this out: For the month of July, gasoline prices rose an astonishing 12.7 percent and crude oil was up 10 percent. That was on top of big increases the previous months. And that rise was in addition to large price increases since the latest government survey was taken. None of this should have come as a surprise to anyone since both these prices are easily monitored by anyone who says "fill 'er up." Those are the government's own figures, given to me by one of the economists in place last Friday to answer the myriad questions that people undoubtedly had and which were probably all variations of: "Are you guys kidding?" The government spokespeople said, in fact - with very straight faces - that the producer price index for July rose a very tame 0.2 percent. And when you exclude the costs of food and energy - which, naturally, everyone does when figuring the family budget - the producer price index was unchanged. Wall Street loved it. Stock prices soared. And interest rates achieved their biggest one-day drop in recent months, although they are still much, much higher than nine months ago because of persistent inflation worries. The thinkers on Wall Street quickly got back to the position that the Fed will be satisfied with just one interest rate increase, and not a number of them. The thinkers should think again. The funny thing about inflation is that it can't be covered up. If it's there, it is there. And the folks inside the government can nip and tuck their statistics all they want - inflation will still be there for everyone to see. In past decades Wall Street would have gone nuts if the price of gasoline or crude oil had a double-digit rise in one month. And that's a very appropriate reaction. These days, however, the financial community is in protect-the-bubble mode - and doing a very good job at it - so things like inflation need to be ignored and talked away. So how'd the government turn a huge increase in energy costs (up 3.4 percent when all forms of energy are included) into an overall inflation figure that wasn't just neutral for investors but downright wonderful? Energy costs, it seems, are given very little weight in the government's producer price index. All forms of energy count for just 11 percent of the whole PPI, and half of the energy segment is taken up by electricity costs. Food, on the other hand, makes up a very large piece of the producer price index. And despite the drought in much of the country, the government says that the prices paid to producers of food products dropped 0.9 percent last month. I'm not saying that anybody did anything underhanded in calculating these figures. What I am saying is that the figures themselves are skewed - screwed up, in layman's lingo. And they are horribly unreliable.Will Alan Greenspan decide to take the inflation numbers at face value? He's more likely to give inflation the benefit of the doubt considering - as I said on Friday - that raising interest rates could destroy his legacy of creating the perfect economy. But inflation right now is so visible that the credit markets, which are international and not influenced by Washington cheerleading, are likely to punish the U.S. if Greenspan doesn't at least make some effort to contain costs. That's exactly what happened last year when the Fed chairman took his eye off inflation and went contrary to his organization's mandate by bailing out Wall Street firms. If food costs stay down, then the credit markets might - but just might - ignore the booming cost of energy. The rationale is that if one pricing segment is going up while another is coming down, the two neutralize themselves. The problem is that food costs aren't likely to drop any more. In fact, because the drought is affecting many farmlands, the price of agricultural goods is already climbing. The savior in all this has been that America's heartland has received a more-than-adequate amount of rain. Even so, the average price of both agriculture products and meats are up more than 12 percent over the last month. Will Washington be able to wish away this spate of food inflation? My prediction: Friday's inflation number bought Alan Greenspan some time. That time could be up when tomorrow's consumer inflation numbers are released. nypostonline.com

To: Bobby Yellin who wrote (39086)	8/16/1999 6:27:00 PM
From: Rarebird	Respond to of 116895

China devaluation still on menu: LONDON, (Reuters) - China's latest trade figures have done little to change overseas analysts' view that Beijing will devalue the yuan, but the big question is still in the timing. Although focusing on the good news -- sharply higher export growth -- rather than a depleted trade surplus, most analysts still expect China to devalue next year in a bid to stimulate the sluggish economy. Some see it acting even sooner. ''Clearly the fact that exports did pick up is a positive sign, but it's early days yet,'' said Kevin Grice, senior economist at American Express Bank in London. ''You need a period of several months' good data and significant rises before you can say the risk of devaluation has been significantly reduced.'' Asian markets have recently been unnerved by the latest in a long series of scares that China is about to devalue the yuan and set off a spiral of rival devaluations across the region. Technically the yuan, also called the renminbi, is held in a managed float system, but in practice China has kept it firmly pegged around 8.28 to the dollar while virtually all nearby countries have seen their currencies weaken sharply. Official figures on Wednesday showed the trade surplus for January-July dwindled to only $11.3 billion yuan against $26.71 billion in the same period last year. But exports climbed by 7.5 percent year-on-year in July, the fastest rise since April 1998. ''It doesn't mean China definitely won't devalue ever, but it supports our view that it won't devalue this year,'' Steve Brice of Standard Chartered in Singapore told Reuters Television. The thinking that devaluation would combat deflation and boost waning economic growth -- still 7.1 percent last quarter but well below the double digits of the early 1990s -- by pushing up domestic prices and making exports more competitive. ''There's no way the external situation is going to force the Chinese into a devaluation, because they've got so many reserves,'' said Nick Douch, emerging market currency strategist at Barclays Capital in London. ''What matters is whether they believe an easing of monetary policy, including a devaluation, would actually get the economy going. That's why we think they will devalue next year.'' Analysts who rule out devaluation during 1999 say China may wait to give existing economic stimulus policies a last chance to work before taking a final decision. Chinese officials have pledged not to devalue this year, and although central bank governor Dai Xianglong caused a stir last month when he stopped short of repeating the ''no-devaluation'' mantra, going back on the pledge would mean losing face. The war of words between China and neighbouring Taiwan has churned the devaluation rumour-mill, yet many analysts doubt Beijing would devalue while cross-strait relations are so tense. Grice at American Express takes a slightly different view, forecasting a one-off devaluation of around 20 percent to 10 per dollar within the next six months. Some analysts suggest China could be considering moving to a more loosely managed currency float, or pegging the yuan to a trade-weighted currency basket, but others say a single downward shift in the value of the currency is more likely. One thing nearly everyone agrees is that fears of currency chaos after a Chinese devaluation may be exaggerated. Unlike Russia or Brazil, which failed to hold devaluations within initially prescribed limits, China has ample foreign reserves and capital controls to fend off speculative attack. ''A yuan devaluation may even prove constructive for the rest of the region,'' J.P. Morgan said in a research report. ''If a cheaper currency allows China to reflate, and in turn support economic recovery, Hong Kong, Korea, Singapore and Taiwan would likely only see temporary weakness in exports to China.''

To: Bobby Yellin who wrote (39086)	8/27/1999 5:44:00 PM
From: goldsnow	Respond to of 116895

OT Amazon knows too much Amazon.com's purchase cricles show who is buying what Amazon.com, the online bookseller, has run into controversy over its plans to publish "purchase circles", detailing which books are most popular among customers living in certain towns or working for certain large companies. Critics say the plans raise privacy concerns, and could make people more wary of using the Internet. But Amazon believes it is part of its service to encourage people to buy more books - as well as CDs and videos, which are also sold on the site. We're taking chances, we're innovating here," said Amazon spokesman Paul Capelli. "This program is building community and adding a unique feature that never could have existed before the Internet." The chief executive of the trade group to which Amazon belongs, the American Booksellers Association, had a different view. "This is outrageous," said Avin Mark Domnitz. "One of the things that people are afraid of with computers is that they are so powerful, [that] they collect extraordinary amounts of information about individuals. We could create an environment where people are afraid to go online." 'Data mining' the web The controversy demonstrates the power of retailers on the Internet to delve deeply into the pattern of individuals' lives. The new feature, which already appears on Amazon.com's website, allows customers to find out what other people are buying - whether they work for the same company, live in the same home town, or have attended the same university. The company compiles the information from zip code information, domain names on customer e-mail addresses, and other information submitted by customers. It also allows comparisons between cities and companies. The top selling book for Microsoft, not surprisingly, is "Business @ the speed of thought" by Bill Gates. And it may be not much a surprise that among the top ten books purchased by employees at DaimlerChrysler is "The German Way: Aspects of Behavior, Attitudes and Customs in the German Speaking World." But it may be more puzzling that among the best sellers at National Semiconductor is "101 Nights of Grrreat Sex". Or that the best selling music CD at Federal Deposit Insurance Corporation is "Zoot Suit Riot: The Swingin' Hits of the Cherry Poppin' Daddies". Or that the top book purchased at online broker Charles Schwab is "Memoirs of a Geisha." Privacy concerns With Amazon's 10 million customers, there is a lot of data around. When you buy a book, the company already suggests related books you might be interested in purchasing. It is all part of the personalised approach to marketing which Amazon says is "fun" and may encourage when they see others like themselves making similar purchases. But others are not so sure. "In addition to being bad practice from a privacy perspective, I think it's probably bad business," said David Sobel of the Electronic Privacy Information Center. "This could upset businesses who are concerned about what employee purchases might tell people about them," added Deirdre Mulligan of the Center for Democracy and Technology. Amazon has now added a feature to allow customers to opt out of the anonymous data compilation. But it is also encouraging people to suggest more categories of purchase groups that they would like to be members of. news.bbc.co.uk