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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: tradermike_1999 who wrote (498)	11/1/2000 6:56:57 PM
From: michel ciambra	Respond to of 74559

Maybe but imho i think they should.

To: tradermike_1999 who wrote (498)	11/1/2000 9:31:49 PM
From: Andrew G.	Respond to of 74559

Yes.Tight Labor Market+High Energy Cost+Credit Crunch/Bonds= NO RATE BREAK The FED may take comfort that signs of slowing are occurring (eg manufacturing) but construction of non-residential kind is still booming and consumer spending is still high despite decreased savings. These are precarious circumstances. Businesses want to: • increase earnings • increase profitability • increase capacity • reduce expenses These forces are contravened by: • the FEDs maintenance of current rates • high fuel charges • strong Dollar to Euro • tight labor market So what do businesses do to increase profitability and stay ahead ? • Raise prices (if they can) • Lay off workers • Reduce capital spending It's Econ101 ! Business really has little alternative until the pendulum swings in favor again. Because the FED is very keen on inflationary indicators, businesses have no recourse but to lay off workers and reduce capital spending until things improve. And lay offs don't occur until earnings decline, which is exactly what we have been witnessing. Granted, not all businesses will experience simultaneous declines, and some may continue to improve, but the Economy as a whole is seeing this happen and the earnings reports are revealing it in no uncertain terms. Where we go from here is anybody's guess, but this is the state of affairs in a nutshell IMO.