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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (91198)	10/28/1999 9:31:00 PM
From: Felix Appolonia	Read Replies (1) \| Respond to of 186894

Paul, Mr Greenspanker sent you this Felix Greenspan sees market forces slowing growth Fed chairman leaves door open for more rate hikes By Rex Nutting, CBS MarketWatch Last Update: 7:33 PM ET Oct 28, 1999 See: Bond Report BOCA RATON, Fla. (CBS.MW) -- Alan Greenspan hasn't made up his mind yet. In a speech Thursday evening to a group of chief executives, the Federal Reserve chairman tackled the toughest question now facing Fed policy-makers -- how long will the high-tech productivity boom keep inflation under wraps? -- but did not come up with a definitive answer. Nor did he definitively answer the toughest question now facing the markets: Will the Fed raise rates in three weeks? Greenspan raised all the usual warning flags about the limits of growth, but he also suggested that market forces (read: higher interest rates and the stock-market correction) may already be at work to bring demand back to a sustainable pace. A text of the Fed chairman's speech was pre-released in Washington. Containment under way? Once the limits of labor-force growth and the ability to finance imports are reached, he warned, "market pressures must eventually emerge that work to contain such unsustainable growth." But here's the good news: "The process of containment may already be significantly advanced." Strong demand for capital has forced interest rates higher, especially for corporate debt. And higher rates have reduced "the ratio of net worth to income for the average household," he said In other words, the market sank. "Market pressures" ought to contain consumer demand, Greenspan said, although he admitted that he doesn't really know how long it'll take. Something for everyone Those urging tighter policy from the Fed on Nov. 16 will certainly find passages in the text to bolster their arguments. But Greenspan gave equal or greater solace to those who argue that the economy has entered a long-term era of high growth fueled by historic levels of innovation. "Although it still is possible to argue that the evident increase in productivity growth is ephemeral, I find such arguments hard to believe," Greenspan said. And then, in the very next sentence, he dropped the other shoe: "But how long can we expect this remarkable period of innovation to continue?" It may be, he said, that we have only begun to exploit the new technologies and that the boom will last 25 years or more, as IBM's (IBM: news, msgs) Lou Gerstner has argued. Nevertheless, the crucial issue for the Fed is not the length of the productivity boom but its pace relative to consumer demand. "The rate of growth of productivity cannot continue to increase indefinitely," he said, quickly pointing out that the data do not yet show "evidence of a downward bend point in productivity growth." If productivity were to "plateau" in an environment of tight labor markets, "unit costs would likely rise, pressuring profit margins and prices," he said. Using data from the revised gross domestic product released earlier Thursday (see related story), Greenspan figured that productivity in the nonfinancial corporate sector has averaged 4 percent in the past two years, more than double the figure in the 1970s and 1980s. "Moreover, the acceleration in productivity appears reasonably widespread among nonfinancial corporate firms beyond the high-tech industries themselves, even though gains in output per hour in the advanced technology companies have verged on the awesome," Greenspan said. Rex Nutting is Washington bureau chief for CBS MarketWatch.

To: Paul Engel who wrote (91198)	10/28/1999 9:35:00 PM
From: Fred Fahmy	Read Replies (2) \| Respond to of 186894

Paul, re: <Intel was QUITE BULLISH !> Indeed..... uncharacteristically so. Of course given their products (current and future), their talent, their resources, and a technology based global economy centered around their CPU's...I'd say they have plenty to be bullish about. FF

To: Paul Engel who wrote (91198)	10/28/1999 10:18:00 PM
From: greg s	Read Replies (2) \| Respond to of 186894

Paul, Amy, & John Hull re:Intel was QUITE BULLISH ! Intel execs. did an excellent job in addressing, point-by-point, all of the FUD that has been circulating recently ... Y2K, Taiwan, mfg. issues (yes, it IS demand), strength across market and geography boundaries ... all laid to rest! Add to that, clear excitement about 2000 and new products. Intel even addressed individual segments such as networking, communication, & services (as Amy wanted to hear at the earnings cc). Well done and much needed! I'm excited to see Intel take such a factual/aggressive approach. Greg.