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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (14910)	6/29/2000 11:53:00 AM
From: Wally Mastroly	Respond to of 15132

This guy thinks the Greenman may have already overdone it.... No-change Fed Rate Hike Decision May be Too Little, Too Late, According To Martin Capital Advisors PR Newswire Wednesday June 28 4:09pm AUSTIN, Texas, June 28 /PRNewswire/ -- The following was released by Martin Capital Advisors: The Fed Open Market Committee's vote to leave the fed funds target unchanged today may be too late. With the half-point rate hike six weeks ago, it may have repeated its mistake of 1994-1995, when excessive rate hikes aggravated an already slowing economy. "By raising rates then, after a slowdown was already clearly evident, jobs were needlessly sacrificed, production cut and income lost. The real risk of the current tight monetary policy is not recession but rather sub-optimal long-term economic growth and reduced corporate earnings for companies such as CitiGroup (NYSE: C), American Express (NYSE: AXP), Corning (NYSE: GLW), General Electric (NYSE: GE), Dell (Nasdaq: DELL) and Cisco Systems (Nasdaq: CSCO)," said Martin Capital Advisors' economic director, Alston Boyd. "The Federal Reserve's stated purpose in raising the Fed Funds rate is to prevent excessive inflation by slowing economic growth. As these rates go up, banks must pay more money to borrow money they then lend. They pass on the higher cost, making it more expensive for businesses to expand and reducing profits. This slows economic growth. Six to nine months usually pass, however, before growth visibly slows," he said. Key economic data such as housing starts and home sales are the first to reflect the slower growth. That lag of half a year and more makes a campaign of successive rate hikes a less-than-precise art. Imagine trying to drive a big, heavy truck at a constant speed with a 30-second lag in your accelerator and brakes. Then imagine doing it up and down hills. And your speedometer only tells you how fast you were going 200 yards back. That's pretty much the way it is with the Fed's interest rate policy and economic data. Recent data show that the Fed's early rate hikes have taken effect and the economy is already slowing. Building permits are down 10.2% in the past three months and retail sales were down two months in a row. The danger now is that the most recent rate increase, whose effect won't be seen for at least four more months, will excessively slow the economy. It is still possible that Alan Greenspan and the rest of the Open Market Committee will overreact as they fight the Fed's holy war against inflation, and continue to raise rates into an already slowing economy. In today's world, the increases in productivity brought by the high-tech revolution are profoundly deflationary. "Our economy can grow faster now without igniting unacceptable inflation; the Fed doesn't need to be so restrictive in fighting inflation, because it has rising productivity working on its side," Boyd said. "At worst, excessive tightening is a recipe for recession. At best, economic growth is stunted. A reduction in growth of a mere fraction of a percent makes a big difference over a 10- or 20-year period. For the typical investor putting hard-earned dollars into an IRA or 401K, it potentially means thousands of dollars less at retirement," he said. Martin Capital Advisors (http://www.martincapital.com/) is a registered investment advisor managing approximately $100 million in both private and institutional portfolios. In addition to its private and institutional portfolios, Martin Capital manages the no-load Austin Opportunity and U.S. Opportunity Funds and a private equity investment fund. Martin Capital Advisors, LLP, is located at 816 Congress Ave., Ste 1540, Austin, TX 78701. Contact Jeff Phillips (jeff@martincapital.com) or toll-free, 1-877-477-7036 ext. 104. *Results audited 1991 through 1999 by Carpenter and Langford, P.C., Certified Public Accountants. Total Annual Performance, net of commissions, fees and expenses, of all Martin Capital Advisors flexible investment portfolios. Total compounded return, including reinvestment of dividends and interest. 1991-1999 annualized return. Source: Martin Capital Advisors

To: Justa Werkenstiff who wrote (14910)	6/29/2000 5:34:00 PM
From: Wally Mastroly	Respond to of 15132

Minutes of the May FOMC meeting: bog.frb.fed.us

To: Justa Werkenstiff who wrote (14910)	6/30/2000 9:15:43 AM
From: Wally Mastroly	Read Replies (1) \| Respond to of 15132

Income, spending slow Report shows May personal income increased twice as fast as spending June 30, 2000: 8:40 a.m. ET NEW YORK (CNNfn) - Personal income and spending growth slowed in May, coming in close to analysts' expectations. The Commerce Department reported Friday that personal income rose 0.4 percent in the month, slightly more than forecast. A survey by Briefing.com forecast that personal income would show a 0.3 percent rise. Personal spending gained 0.2 percent, in line with the expectations. Both numbers are well off the gains posted in April, when income climbed 0.7 percent and spending increased 0.4 percent. - Some details: Personal spending rose 0.2 % in May, the same as a month earlier and the smallest gain in 1 1/2 years- bloomberg.com