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To: Les H who wrote (37655)	1/19/2000 4:00:00 PM
From: Haim R. Branisteanu	Respond to of 99985

And there is NO INFLATION Construction and Real Estate A persistent shortage of available homes in the New York City area is buoying prices but limiting sales volume, while land and labor shortages appear to be constraining new construction. Housing permits in New York and New Jersey rebounded somewhat in November, after falling in the two prior months, but are still somewhat below the high levels that prevailed for most of 1999. New Jersey's housing market is still reported to be tight, with homebuilders indicating a "surprising amount of traffic" in the final two weeks of December. One industry contact describes new home sales as robust but observes that they would be stronger if not for land and labor supply constraints. Both the new-home and resale markets are said to be "bereft of inventory." Long lags in construction have prompted builders in northern New Jersey to do more speculative building, largely to satisfy the relocation market-incoming business executives who cannot wait nine months for a home. New York State realtors report that the market for existing homes remained firm in November, with less of a seasonal slowdown than usual--possibly due to unseasonably mild weather. Unit sales were up 3 percent from a year earlier, while prices continue to run 6-7 percent ahead of a year ago. In general, unit sales have strengthened in upstate New York, but weakened in and around New York City. Conversely, prices have been mostly flat upstate but have risen at a double-digit rate downstate, again reflecting a supply shortage in and around New York City. Separately, a major New York City realtor reports that "the real estate frenzy continues," with co-op and condo prices up 10-15 percent from a year ago, and total volume up 35-40 percent. A shortage of apartments on the market, though not as severe as a year ago, is still prompting some bidding wars in Manhattan.

To: Les H who wrote (37655)	1/20/2000 10:36:00 AM
From: Les H	Respond to of 99985

FOMC TO ROUTINELY TELL CONSENSUS ON'BALANCE OF RISKS' --Retransmitting Story Initially Headlined 15:00 EST Wednesday --Risk Announcement to Apply Beyond Intermeeting Period --New Procedures to Take Effect as of February FOMC Meeting By Steven K. Beckner Market News International - The Federal Reserve's policymaking Federal Open Market Committee Wednesday announced a new set of procedures for revealing its interest rate predispositions -- which will continue to reveal its monetary policy tilt with new language but do so with less emphasis on the period between FOMC meetings. Beginning with its February meeting and continuing routinely after every meeting, the FOMC will immediately disclose the committee "consensus" on the "balance of risks" in the economy for "the foreseeable future." An announcement will be made whether or not this assessment of risks changes and regardless of whether or not it is considered "major," as the Fed said when it first designed to announce its policy bias early last year. The FOMC made clear that this language is specifically designed not to refer to the intermeeting period but to "an interval extending beyond the next FOMC meeting." The length of time intended to be conveyed by "the foreseeable future" will be "necessarily elastic," the FOMC said in its new disclosure policy statement. The FOMC further said intermeeting policy changes remain "possible" in "exceptional circumstances." The FOMC's directive to the New York Fed will no longer contain a sentence about future policy direction, since the new language will make no reference to the federal funds rate or to the intermeeting period, the FOMC said. The new disclosure template, which will be included in the minutes and summarized in the actual announcement, is as follows (with bracketed words showing the committee's options): "Against the background of its long-run goals of price stability and sustainable economic growth and the information currently available, the Committee believes that the risks are [balanced with respect to prospects for both goals] [weighted mainly toward conditions that may generate economic weakness] in the foreseeable future." The new procedures were adopted at the Dec. 21 FOMC meeting pursuant to the recommendations of a task force known as the "Working Group on the Directive and Disclosure Policy" formed last August and chaired by Federal Reserve Board Vice Chairman Roger Ferguson. In explaining the changed procedures, an FOMC statement said the practice of disclosing "major" shifts in policy bias, first implemented with a tightening bias last May, had "caused some unanticipated confusion." The public was "uncertain about the interpretation of the language used to characterize possible future developments, about the time period to which it applied and about the extent to which the announced changes in that language represented major shifts in the committee's assessment." Hence, "the announcement of a directive biased toward tightening seemed to exaggerate the responses of financial markets to subsequent information bearing on the likely course of interest rates and monetary policy." To resolve the problem, the FOMC decided to make announcements both routine and somewhat more vague. First, it announced, "the FOMC will issue a statement to the public immediately after every meeting ... . (A) statement thus will accompany every change in the Committee's view of prospective developments, whether or not the change is major, and a statement also will be issued even when the Committee does not change its policy stance or its view about the future." Second, the FOMC adopted new language that "will provide the FOMC's assessment of the risks to satisfactory economic performance... ." This assessment will no longer be couched in terms of the most likely direction of the federal funds rate during "the intermeeting period." The FOMC explained that, in the past, the committee "often intended the time frame to encompass a longer period -- another potential source of confusion." Now, the directive will refer to the balance of risks over "the foreseeable future" so as to "convey a length of time extending beyond the next FOMC meeting," but it added "this concept is necessarily elastic, given that the relevant horizon may depend on economic conditions." "Because the sentence about the future no longer explicitly refers to either the federal funds rate or the intermeeting period, it will be removed from the directive to the Federal Reserve bank of New York and will henceforth appear only in the announcement and the minutes," the FOMC announced. The FOMC also said it is "not altering its practices regarding changes in the stance of policy between FOMC meetings; such changes remain possible but, as in recent years, would occur only in exceptional circumstances." Announcements "will be patterned on those that have been made after FOMC meetings in recent years, which typically have contained a few explanatory sentences," the FOMC stated. "If the Committee has taken no policy action and its views have remained essentially unchanged, then the announcement may be perfunctory." The FOMC said its new language is "designed to express the Committee's sense of the risks to the attainment of its long-run goals of stable prices and sustainable growth." The phrase "weighted mainly toward" in the sample above is meant to "underscore that in balancing the two separate types of risks, the Committee in some cases may view both risks as being present but one type of risk as outweighing the other." "A committee view that the risks are unbalanced would not necessarily trigger either a current or a subsequent policy move, given the inherent uncertainty about future developments," the FOMC continued. "Policy actions often importantly depend on the flow of new information and the FOMC's judgment about its implications."

To: Les H who wrote (37655)	1/20/2000 10:37:00 AM
From: Les H	Read Replies (2) \| Respond to of 99985

US NOV TRADE DEFICIT ANOTHER RECORD -$26.5B, IMPORTS +$1.5 B --Imports +$1.5B; Autos +$0.5B, Computer-related +$0.6B --Exports +$0.6B: Nonmonetary Gold +$0.6B, Small Offsets Elsewhere --Asia:China Gap -$6.5b, Japan -$6.4b, NICs -$3.0b;Germany record -$3.0b By Joseph Plocek Washington (MktNews) - The U.S. November trade deficit came in at $26.5 billion, yet another record, compared with a revised $25.6 billion in October as a wide variety of imported foreign goods continued to fill domestic demand. The November result will cut into U.S. GDP growth in 4Q. The October-November average trade gap is -$26 billion, versus -$24.5 billion on average in 3Q, showing a bigger subtraction from growth. The November trade gap was also wider than the -$26 billion median estimate in a Market News International poll of economists. Imports from the NICs, Western Europe, and Canada set records in November. Imports were up $1.5 billion, due to autos advancing $0.5 billion and computer-related items rising $0.6 billion (includes telecommunications, computer and semi-conductor categories). Other consumer categories were up also. Total imports of $91.1 billion were a record. Exports gained $0.6 billion, with almost the entire gain due to nonmonetary gold. The latter could be for industrial or financial use the Commerce Department said. The Asia region continues to be a problem. The November trade gap with Japan was $6.4 billion NSA, compared with -$7.2 billion in October. The gap with China was -$6.5 billion versus -$7.2 billion. The gap with the Newly Indistrialized Countries was -$3.0 billion, up from -$2.2 billion in October. A new wrinkle in November was the rising trade imbalance with Europe. The $3 billion November trade gap with Germany was a record, as imports surged after the start of the new auto model year. The trade gap with Germany was just $2.3 billion in October.