Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (35131)	4/1/2001 11:33:37 PM
From: davidcarrsmith	Read Replies (1) \| Respond to of 65232

Jim - Actually, in Pittsburgh, I believe that property hadn't been re-evaluated / priced in a long time and they've only just gotten around to doing it - much to the relief of new buyers who have paid based on their sales price. Dave

To: Jim Willie CB who wrote (35131)	4/10/2001 9:32:50 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Fed's Economy Wins Mixed Reviews Tuesday April 10, 5:53 pm Eastern Time By Caren Bohan <<WASHINGTON (Reuters) - The efforts of Federal Reserve officials to paint a positive economic picture even amid gloom on Wall Street has received mixed reviews from private economists. Some analysts give the central bank credit for trying to shore up consumer confidence at a time when a drumbeat of news about falling stock prices and corporate layoffs might prompt Americans to shut their wallets abruptly. But those who fear the economy could be headed for serious troubles fret that the Fed may be out of touch with the risks. ``Policymakers seem to have suddenly put on rose-tinted spectacles and they are viewing the world through them,'' said John Ryding, senior economist at Bear Stearns in New York. ''It's a strategy that could backfire if people think they are too complacent.'' The Bear Stearns' research department, headed by former Fed Governor Wayne Angell, has been vocal in stressing that the Fed should be cutting interest rates more aggressively. But some economists, such as Anthony Chan, chief economist at Banc One Investment Advisors in Columbus, Ohio, said the Fed has the economic situation well under control. He agreed with those at the central bank who think growth could pick up soon. ``Some people argue that the economy is collapsing but that is just not showing through in the numbers,'' Chan said. PLAYING DOWN RECESSION THREAT Last week, Atlanta Fed President Jack Guynn held out hope that the worst may already be over for the U.S. economy. ``My sense is that the rate of deterioration has slowed,'' Guynn said, adding that there are signs the economy may be ''close to bottom.'' He delivered much the same message on Tuesday in Albany, Ga., saying he was optimistic ``that solid and sustainable growth will return, hopefully by the end of this year.'' Several officials have predicted a rebound in the second half of the year. The latest was St. Louis Fed President William Poole who said Tuesday that the chances of a recession, or a two-quarter contraction, were just 25 percent. ``From those numbers, the chance of a recession is ... one in four,'' Poole told a student group in Tennessee, adding that he did not think a recession was a ``best bet.'' He said the economy stands a 50 percent chance of a gradual increase in growth as 2001 progresses. But he later added: ``a recession scenario is not necessarily off the table.'' The St. Louis Fed chief, a voting member of the central bank's policy-setting Federal Open Market Committee (FOMC) this year, forecast gross domestic product growth for the first three months of the year at ``around'' 1 percent. A common thread in comments from Fed officials, including those of Fed Chairman Alan Greenspan, has been an emphasis on the overhang of inventories piling up at U.S. businesses as a major source of economic weakness. If inventories are the main problem, presumably the slump might be short-lived if companies get their stocks of goods back into line with demand quickly. They would then be set to ramp up production again. This is a less serious problem than production overcapacity, which the Fed raised for the first time in the statement issued after its March 20 rate cut. One Fed official with a more somber message was Dallas Fed President Robert McTeer. In an interview with the television network CNBC on Monday and in comments to reporters on Friday, McTeer left open the possibility that first quarter gross domestic product could decline. ``There's no question, we're on the edge here,'' McTeer told CNBC but he noted that the Fed had already cut interest rates ''pretty aggressively.'' The Fed has reduced rates three times since Jan. 3 in moves that have totaled 1.5 percentage points. Some experts believe the central bank could trim rates again sometime before its regular meeting on May 15 but several said McTeer's comments seemed to suggest it would depend on upcoming data. Economists suspected that McTeer's more blunt economic message was colored by the release of the government's March employment report, which sent shivers through Wall Street and revived worries about a recession. Payrolls fell by a steep 86,000 in March while the jobless rate rose a notch to 4.3 percent from 4.2 percent. But when asked about the employment numbers on Friday, McTeer played down the weakness, saying the drop was ``moderate'' compared to what it could have been. COUNTING ON CONSUMERS But for many economists, the loss of jobs was a worrisome sign for the future. As businesses grapple with the inventory problem and cut back sharply on spending for capital equipment such as new computers, much of the burden for keeping the economy going rests with consumers. Their spending held up fairly well in January and February, an especially good sign since consumer spending drives two-thirds of economic growth. But analysts worry that if the job market worsens substantially, consumers' disposable income will suffer and they will stop shopping. Christopher Low, chief economist at First Tennessee Capital Markets in New York, disagreed with those who believe the Fed is out of touch with the economic risks. ``The Fed's interest is in turning the economy around,'' he said. Low noted there are two ways of doing that: ``One is through policy. The other is to try to inject confidence by trying to talk the economy up.'' He said that the Fed comments lately have been aimed at Main Street but officials have been careful to make clear to Wall Street that they are prepared to do what's needed to keep the economy going. There is a risk to the Fed's strategy, Low said. ``If there is a recession and the Fed has denied it for months on end, they look a little bit less omniscient.''>>