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

To: pater tenebrarum who wrote (90860)	4/6/2001 10:57:13 AM
From: ild	Read Replies (2) \| Respond to of 436258

Harmony is very weak today. Any reason? Any news about gold? Thanks.

To: pater tenebrarum who wrote (90860)	4/6/2001 10:58:45 AM
From: Andrew G.	Read Replies (1) \| Respond to of 436258

Cracks in the corp bond market ? biz.yahoo.com Thursday April 5, 4:46 pm Eastern Time US Corp Bonds - Up with stocks, yet junk doesn't soar

To: pater tenebrarum who wrote (90860)	4/6/2001 11:13:01 AM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 436258

The Roach gets some headline ink, says recession starting this (second) quarter: quote.bloomberg.com 04/06 00:01 Morgan Stanley's Roach Still Predicting Recession -- Only Later By Al Yoon New York, April 6 (Bloomberg) -- Stephen Roach, chief economist at Morgan Stanley Dean Witter & Co., admits he was wrong three months ago when he said the U.S. was in a recession. Now he says the recession will start this quarter. ``The preponderant thrust has been toward weakness and not toward strength, he said. Roach said statistical ``wiggles'' helped the economy squeak through with one more quarter of expansion -- rising, by his estimate, 0.5 percent. Among the wiggles were stronger-than- expected auto sales, helped by warm weather and pricing incentives, he said. The firm predicted gross domestic product will fall 1.4 percent in the current quarter and drop 0.8 percent in the third. The standard definition of a recession is two successive quarters of GDP decline. Roach says the odds are two-in-three in favor of his recession forecast. Roach refuses to subscribe to the predictions of Federal Reserve officials that the economy will rebound from near-zero growth later this year once companies have sold off excess inventories. He expects unemployment to rise to almost 5 percent later this year, from 4.3 percent in March, and move toward 6 percent in 2002. It hit a 30-year low of 3.9 percent in September. As people lose jobs, consumer spending will be crippled. That combined with the loss of wealth from 13 months of falling stock prices is a recipe for a multi-year economic malaise, he said. Roach's own prediction for the fourth quarter is for 2.2 percent growth, though a Morgan Stanley research assistant says the firm is poised to revise its numbers lower. `Denial' ``The consumer is truly amazing in denial, and that shows that the income effect is much more powerful than the wealth effect,'' he said. ``Employment is the last thing to go, and we're very close to that point right now,'' he said. Economic reports showing stronger than expected job creation, housing and auto sales so far this year haven't fazed him, Roach says. Auto sales fell to a 17.1 million annual rate last month from 17.5 million in February, which if unchanged through December would still make this the second best year on record after 2000. Those bright signs are canceled out by the stock declines, slower growth in business investment and weakening economies overseas that will take a toll on U.S. exports, he said. Resident Bear The ``resident bear'' at the U.S.'s third-largest securities firm, Roach said he's become a sounding board for people to ``pour their hearts out because they're feeling pain from the stock market,'' he said. What's more are the parade of chief executives and Morgan Stanley clients with decades of experience who voice their shock at the speed of the slowdown, he said. As he did in January, Roach said the Fed's moves won't be enough to revitalize consumer spending and the job market. Gross domestic product slowed to an annual 1 percent pace in the fourth quarter last year, down from 2.2 percent annual growth in the previous quarter and 5.6 percent in the April-June 2000 period. The Federal Reserve responded with three half-point interest- rate cuts this year, taking its target for overnight lending between banks down to 5 percent. Investors are clinging to the notion that the economy will rebound in the second half, putting a crimp on the bond market rally that had taken two-year Treasury yields to their lowest levels since October 1998, he said. The 10-year Treasury note price has fallen 1 5/8 point in the past two weeks. Alone People think ``the Fed is going to underwrite economic recovery,'' he said. Comments from Fed officials painting a brighter economic picture later this year continued yesterday. Lower interest rates this year ``will likely help shore up confidence, providing the foundation for a rebound in spending, particularly in the second half of the year,'' said Cathy Minehan, president of the Federal Reserve Bank of Boston. ``But so many imbalances have built up from negative savings, capital spending excesses and record levels of debt, and the only real answer is to go through a protracted period of sluggish growth, Roach said. ``Very few people are willing to believe that's a possibility. We're pretty much alone in that,'' he said. Based on his forecasts ``there's plenty of scope for further reduction in bond rates, and downside risk for stocks.'' No one can say Roach doesn't stick to his guns. He needn't worry...he's got lots of company in the CFZ...