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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Yorikke who wrote (3194)	1/26/2001 7:50:31 PM
From: Moominoid	Read Replies (1) \| Respond to of 33421

Greenspan was a major force behind Clinton raising taxes on the rich. He thinks tax cutsa re good now because the surplus is growing so much. This was a signal IMO that he thinks the recession will not be severe and growing surpluses can be expected. Tax cuts to the rich will have less economic stimulus than to the poor so they are a good idea. If the recession was really severe you'd want to give cuts to the poor.... I'm puzzled by all the talk of wanting to keep the dollar high combined with a coming recession. A high dollar is a bad idea in a recession....Lower interest rates will lower the dollar, stimulate export demand and divert some domestic consumption to domestric production instead of imports. Sure, a lower dollar means US residents are poorer but it benefits US production activity.

To: Yorikke who wrote (3194)	1/26/2001 9:38:59 PM
From: Hawkmoon	Respond to of 33421

Didn't you find it kind of funny that AG wants the total US debt to remain at around $1 Trillion in order to permit some means of maintaining the Feds influence through repos? If the US government pays down all of its debt, it will be the only one able to quickly influence monetary policy through deficit spending (issuing debt). The Fed would no longer be able to enter the treasury markets and do it repurchase actions, which immediately inject liquidity to the economy. They would only be able to influence the economy through rate cuts or hikes. If I'm not mistaken, this would serious weaken the Fed as an institution. So the question is, would $1 Trillion in outstanding debt suffice? Regards, Ron

To: Yorikke who wrote (3194)	1/29/2001 3:36:54 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

So Far the Nikkei Average is holding above it's low of early 1999. It's a bit early to know if this is a double bottom, and also part of a longer term bottoming formation but the sentiment is very negative on Japan. futures.tradingcharts.com Many Japanese are among the most bearish. Mori says full economic recovery in place : Speaking over the week end Japanese PM Mori said his country was "now putting in place a structure that will ensure full economic recovery and clear the negative legacy of the bubble economy". He went on to say FY2001 growth is forecast to rise to the "point just short of a full recovery of potential growth ability." whatever that means. Putting the political rhetoric aside we would note that today's consumer confidence data showed negative income growth for the first time in 2-years whilst employment conditions fell for the first time in a year and a half. This followed last week's data showing a much larger than expected 5.4% y/y drop in large scale retail sales, a lower than expected -0.2% m/m contraction in Jan Tokyo CPI. Japan is still in the grips of deflation and its getting worse. IF the Fed engineers a soft landing there is a hope for Japan, if not radical action will be called for, options are very limited and largely confined to printing money.