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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (28557)	10/16/2000 11:14:39 AM
From: LLCF	Read Replies (2) \| Respond to of 436258

Oil patch take on the Fed [The Oklahoman]: "But I think the stock markets are sending him a message: Tap on the gas." LOL: Fed heads in wrong direction 10/15/2000 Charles Crumpley Business Editor UNTIL this week, I was growing a bit concerned about the fate of the economy. But this week, I escalated from chin-rubbing concerned to nail-chewing worried. Are we headed for a recession? I don't know how you feel, but I don't feel good about the answer to that question. Take a look at the stock markets. They are good harbingers for the economy, and they've been getting a serious shin-kicking for months. Despite the remarkable stock surge on Friday, the Dow Jones Industrial Average is down 14 percent since its top in January. The Nasdaq is off 35 percent since its high in March. The central problem is that it appears the Federal Reserve and Chairman Alan Greenspan -- who is the real driver of our economy -- may have taken a wrong turn. Or two. The Fed's got a tricky job. It drives a crazy car with delayed reactions. Imagine stepping on the gas, and the car accelerates six months later. Step on the brake, and the car slows four or five months later. For 17 months now, the Fed has been tap-tap-tapping the brakes of our economy. I think it tapped once or twice too often. Problem is, the real slowdown from all that tapping may yet be felt. We need a tap or two on the accelerator for this economy. The Fed met 12 days ago and could have done so. It did nothing. The inaction was bad enough. But here's what was most alarming about that meeting: The Fed strongly implied that it might step on the brake again soon. Why? Because the spiraling prices of oil and other fuels pose the risk of "raising inflation expectations." That's scary because the Fed has a sorry history of doing the wrong thing when energy prices rise. It confuses rising energy prices with rising inflation, and it tends to step on the brake when it should step on the gas. Remember recessions in 1973, 1980 or 1990? They were marked by the Fed's stubborn refusal to step on the gas when energy prices were rising. In an article in the Wall Street Journal last week, economists Alan Reynolds and Brian Wesbury pointed out that inflation seems kind of high now. But if you factor out the effect of oil prices, inflation is fairly benign. In other words, the Fed should be thinking about stepping on the gas now, and stop thinking about stepping on the brakes. "The lesson of 1990, 1980 and 1973 is that it is critically important for central bankers to avoid confusing a surge in world oil prices with a broader pattern of accelerating inflation," the authors wrote. Greenspan has done a terrific job for years of keeping our economy humming. I'm grateful for -- and sometimes in awe of -- his overall track record. Lots of people think Greenspan is the best driver the Fed has ever had. But I think the stock markets are sending him a message: Tap on the gas. DAK

To: pater tenebrarum who wrote (28557)	10/16/2000 11:30:09 AM
From: hunchback	Read Replies (1) \| Respond to of 436258

speaking of cycles...the CyclePro dude is calling it quits Over the past 2 years, CyclePro has experienced rollercoaster readership waves. Our biggest 1-day hit count was over 6000. Currently, CyclePro is barely able to maintain a count of 1500 readers per week. At this rate it hardly seems worthwhile to keep up the long hours devoted to CyclePro Outlook -- particularly since I have been extremely accurate for the past 11 weeks. While I have threatened to shut down this website a few times in the past, this time I am afraid it will be final. The readership count is only one of many in a list of reasons I need to shut down -- perhaps it is the unauthorized use of copyrighted, original CyclePro material by subscription-based websites that is most annoying. I will attempt to keep Cyclepro Outlook running with weekend updates through the end of 2000 (except for a few planned vacations). geocities.com