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To: Mannie who wrote (30288)	8/23/2000 1:28:59 AM
From: Mannie	Respond to of 35685

“That's the litmus test,” Ford's Pipas said. “The mere fact that we've got inventories under better control means recessions are apt to be shallower,” Richards said. Technology, especially information systems, allows companies to feel the pulse of customer demand. Inventory isn't allowed to swell, so workers don't have to be laid off. Pipas says we didn't see that much volatility in the past decade. “The ultimate test for whether you're managing inventories to (meet) demand is if you have volatility in the market. I can't say that hasn't been a big concern at Ford.” Will we see Fed rate hikes trigger the next recession, as they have in the past? Fed actions have less impact on the economy now than they did 50 years ago, Wainwright's Ranson says. The Fed's impotence accelerated in the 1990s after decades of more subtle decline. More and more firms are turning to capital markets, not to banks, for funds. Many firms carry a much smaller debt burden as they find funding through stock offerings. In the 1950s, Ranson says, 100 basis points were enough of a rate hike to create a recession. The number of basis points it takes today has gone up. It can take as many as 750 basis points, he says. And that's just not realistic. “That means no more recessions created by Fed policy,” Ranson said.