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To: Jim Willie CB who wrote (17260)	5/2/2000 9:38:00 PM
From: Mannie	Read Replies (1) \| Respond to of 35685

Inflation Is A Little Deal By Lawrence Kudlow On the surface, Alan Greenspan's favorite inflation index -- the personal consumption deflator -- took a nasty move upward to 3.2% in the first quarter GDP report, following a 2.5% quarterly rise in Q4. So the market buzz has now shifted to predictions of a 50 basis-point hike in the fed funds rate at the next meeting on May 16. Below the surface, however, the core consumer spending deflator rose only 1.9% at an annual rate, about the same as the fourth quarter. Meanwhile, the four-quarter change of the core PCE price index stands at an historically low 1.6%, only teensy weensy slightly barely above its low point of 1.2% in early 1998. So, really, there's not much happening on the basic inflation front. The core GDP deflator registered a measly 1.7% four-quarter rise, while the GDP chain-price index came in at 1.8%. All this is a little deal, not a big deal. A high-class problem. At the cutting-edge margin of the new economy, the year-to-year change for information processing technology investment (including the Commerce Department's inadequate software accounting) rose 24% over the past four quarters, including a 34% annual rise in Q1. Meanwhile, the info tech deflator fell at a 4% rate over the past year, including a 3.3% annualized rate of decline in Q1. Though the Justice Department won't admit it, Intel, Dell, Hewlett Packard, Microsoft, et al continue to benefit consumers with product breakthroughs at lower prices. Microprocessor advances and bandwidth power and Internet appliances are driving this economy, not temporary oil shocks that momentarily spill over into higher prices for gasoline and airfares. Technology advance is deflationary, not inflationary. Phillips curvers who believe that strong growth causes rising inflation are gasping for air as they bellow at the Fed to raise rates. Just below our office windows we can see Phillips curvers marching down Seventh Avenue, chanting "Raise rates, raise rates." They shouldn't be allowed on the streets -- very bad for public moral and spirit -- but, after all, it's a free country. With their blinders on, the Phillips curvers never see the decline in gold or the rise of the dollar. Nor do they ever look at money. If they ever did, they'd see that the Fed is tight enough. The central bank has drained liquidity big-time so far this year, offsetting last year's Y2K-related monetary excess. Year-to-date, the level of the monetary base has dropped over $40 billion, while adjusted bank reserves have fallen by $35 billion. The Fed put in too much money last year, overreacting to a Y2K threat that never materialized. This year they have righted that wrong. Problem is, all this has created a good deal of business cycle instability. That's always the consequence of Fed fine-tuning. Two rights could make the wrong worse. Future Fed rate hikes will only serve to tax money by raising its cost. If they go too far, then they risk reducing money demand, along with investment and production in the economy. Fortunately, the collapse of the Euro is overcoming the Fed by raising dollar demand. So the central bank's actions have thus far done very little harm. But Greenspan & Co. should go slowly from here. Monetary actions affect the economy with long lags. Weak gold and a strong dollar are telling the Fed no more tightening is necessary. So are the monetary aggregates. History teaches us that strong growth, low unemployment and prosperity are solutions, not problems. Today's good stock market performance in the face of strong numbers is another positive market indicator. Markets are smarter than Phillips curves. The Fed should let them guide policy. If it ain't broke, don't fix it.

To: Jim Willie CB who wrote (17260)	5/3/2000 12:22:00 AM
From: LBstocks	Respond to of 35685

Visteon and Samsung - Providing World-Class 'Connectivity' to Drivers BOSTON, May 2 /PRNewswire/ -- Visteon continues to create innovative technology that links automobile drivers to the world around them -- and is affiliating with an industry leader in telecommunications to provide powerful telematics products for 2002 model year automotive applications. Visteon is working with Samsung Electronics Co., Ltd. to develop fully integrated, low cost, high quality telematics products that give vehicle manufacturers and their consumers the best of what both companies have to offer -- world-class connectivity while on the road. Samsung is a leading provider of CDMA (Code Division Multiple Access) technology. "We selected Samsung because of its leadership in the convergence of multimedia and CDMA communications technology," said John Slosar, director, Advanced Electronics and Telematics at Visteon. The association between the companies will allow Visteon to incorporate Samsung's CDMA Voice and Data Module into a variety of Visteon telematics products to meet timing for the 2002 automotive model year and beyond. This technology -- crucial because it is the wireless link that allows connectivity -- will enable Visteon to continue to provide its customers with exciting solutions for consumers who wish to stay connected while in their vehicle. Using this multimode technology, consumers will have the ability to gain access to information, entertainment, communication and security through a variety of devices and the leading nation-wide CDMA network providers. "We are very pleased to be working with Visteon to provide the most competitive solutions to our customers around the world," said S.J. Park, vice president of Wireless Terminals, Samsung Electronics Co., Ltd. Visteon Corporation is a leading full-service supplier that delivers consumer-driven technology solutions to automotive manufacturers worldwide and through multiple channels within the global automotive aftermarket. Visteon has a global delivery system of more than 130 technical, manufacturing, sales, and service facilities located in 23 countries. It has 81,000 employees working in three core business segments: Dynamics and Energy Conversion; Comfort, Communication and Safety; and Glass. Samsung Electronics Co., Ltd. with 1999 sales revenue of US$22.8 billion is a world leader in the electronics industry. The Korea-based concern has operations in about 50 countries with 54,000 employees worldwide. The company consists of three main business units: Digital Media; Semiconductors; and Information & Communications Businesses. For more information, please visit Samsung's Web site at samsungmobile.com SOURCE Visteon Corporation /02/2000 13:34 EDT prnewswire.com