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To: Perspective who wrote (107233)	6/7/2001 12:40:15 PM
From: Mike M2	Respond to of 436258

BC, consumer spending was boosted by unsustainably high returns from the stock market ( esp. 1994-2000). IMO stabilizing the markets at lofty levels will not suffice. The mere absence of the wealth effect will eventually compel consumers to boost their savings enough to have a big impact on consumption. While there are legitimate issues with the computation of savings rate it is a consistent set of economic data with a message. Capital gains from the stock market? I know several people heavily weighted in tech who have seen 6-7 figure portfolios more than cut in half since April 2000 - there ages range from 30s- 60s. Mike

To: Perspective who wrote (107233)	6/7/2001 12:50:07 PM
From: Ken98	Read Replies (2) \| Respond to of 436258

BC, I am looking at retail sales, restaurant and home sales figures (in that order) to see if the next wave you are referring to is coming. Based on May retail sales and info I am hearing from people in the restaurant biz, it might be coming sooner than people think. As for home sales, they have not slowed meaningfully but inventories are beginning to rise which could lead to price slippage later. Part of the reason for the lag might be that many people that have been laid off the last few months have fairly generous severance packages to draw down, as well as 401(k) funds they can tap into. Another reason might be the use of credit cards as savings accounts, see (scroll down): scottburns.com <<Retailers Report Slipping Sales Nation's Largest Retailers Report Disappointing Sales for May>> biz.yahoo.com

To: Perspective who wrote (107233)	6/7/2001 2:11:05 PM
From: NOW	Respond to of 436258

Those indicators are too late to be useful for us are they not? The dollar should tell the truth...g, ng

To: Perspective who wrote (107233)	6/8/2001 8:51:35 AM
From: Earlie	Read Replies (1) \| Respond to of 436258

BC: Excellent comments as far as I am concerned. Your comment that the Fed can do precious little about corporate cap ex spending is right on the money. Although it is difficult to prove, I think as you do, that he recognizes this and has decided to concentrate all his efforts on a last ditch stand based on continued frenetic consumer borrowing/spending. I also agree with you that he knows he has to TRY to keep the stock markets from imploding, as once the markets tank, consumers descend into their underground bunkers. Good luck to Uncle Al on this little chore. While we share the same point of view as to what the Fed is up to and why, I just don't see how a collapse is avoided. If it were not for the massive lay-offs, Greenspan might be able to slow the plunge, but they just keep coming, so I expect consumer spending to continue to dry up. Here too, momentum will be the key, as once a wave of this type gets underway, it tends to acquire critical mass fairly quickly. In spite of Greenspan's efforts, the consumer is slowly but surely cutting back already. Worse (and seemingly not really on many investors' radar screens as yet), there is a far more insidious problem to be dealt with and that is "saturation",....... as in "saturated end markets". When the vast majority of folks who can afford a particular item have already bought two of them, it is hard to get them to buy a third. Many individual end markets have reached this point. Obviously, companies that supply those saturated markets have to cut back production dramatically (with obvious lay-off consequences) or end up in bankruptcy proceedings. "The spiral tightens". I also think that the staggering sums of debt sloshing around the globe have created a situation where dominos will fall with increasing frequency and that one of those will start a chain reaction. Not sure where or when but Greenie doesn't have enough fingers to plug the holes already showing up in that dam. Personally, I think we limp into the fall, but if (as I expect) the fall selling season starts to shape up as a clanger, then I think the stock market pros move from "distribution" mode to "dump" mode and the exits close. Man, I sure hope I am wrong on this but if the lay-offs and consumer borrowing numbers continue to deteriorate as the summer progresses, I am going nuclear into the fall. Thanks for a very perceptive posting. Best, Earlie