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 (40589)	8/25/2001 2:24:35 PM
From: stockman_scott	Respond to of 65232

CEOs Hail Cut, but Hold Capital Spending... biz.yahoo.com Best Regards, Scott

To: Jim Willie CB who wrote (40589)	8/25/2001 2:37:15 PM
From: stockman_scott	Respond to of 65232

If the Fed Is Bearish, Is It Time to Get Bullish? Northern Trust Economic Commentary August 22, 2001 I laughed out loud on the train this morning when I read that the stock market tanked yesterday afternoon because the FOMC's statement accompanying its 25 b.p. funds rate cut gave no indication that this august group in August saw an economic rebound on the horizon. When has the Fed ever been right at turning points? Not often in recent years, as illustrated by the chart below. Plotted in this chart is the 6-month annualized growth in the LEI and the FOMC's fed funds target. Back in the second half of 1993, the LEI clearly was signaling stronger economic growth ahead. But it wasn't until February 1994 that the Fed responded with a rate hike. By the end of 1994, the LEI was flashing a big yellow caution sign of economic trouble ahead, yet the FOMC continued to raise rates into February of 1995. Fast forward to late 1998. The LEI was foreshadowing a surge in economic growth as the FOMC cut rates aggressively to bail out LTCM's creditors. If anyone had bothered to take a look at the sharp deceleration in LEI growth by the end of 1999, the slowdown in economic growth in the second half of 2000 would have come as no surprise. But the Fed kept raising the funds rate through May of 2000 and kept it at an elevated level throughout the second half of last year with a tightening bias in place until December. And, of course, the FOMC dropped the funds rate another quarter point yesterday even as the LEI is sending a recovery signal. Maybe it is different this time. Maybe the LEI is a mis-leading indicator. Maybe the economy and the stock market are not poised for a recovery. But to make that assessment on the basis of the Fed's implicit economic outlook would be foolhardy. In fact, given that the Fed has a long history of being asleep at the switch at turning points, it is likely that the FOMC will overdo it on the easing side this time, which would be all the more bullish for the stock market, at least until the higher inflation sets in. 2000 Current Account Deficits vs. GDP: Argentina -3.1%; US -4.5% Everyone is worried about Argentina's ability to service its external debt. But despite the fact that Argentina has a smaller current account deficit relative to GDP than does the US, there has little concern expressed about the US' ability to service its external debt. Why not? Well, of course, the Argentine economy is in much worse shape than that of the US. But there is another factor to consider. Both Argentina and the US have most of their external debt denominated in US dollars. But whereas Argentina can't create dollars, figuratively out of thin air, to service its external debt, the US can. So the US has an option in lieu of default that Argentina does not - inflate. The US has the largest amount of external debt of any country in the world. When the going gets tough, debtors seek relief through inflation. Higher inflation eases the real debt servicing burden. The going is getting tough for us now and we are a nation of debtors. There is likely to be increasing political pressure on Greenspan to inflate. Could it be that the drift down in the dollar and the drift up in gold prices since early July is reflecting the market's growing expectations that the Fed is going to do its best to ease its constituents' real debt burdens? Paul L. Kasriel Director of Economic Research Northern Trust Company The information herein is based on sources which The Northern Trust Company believes to be reliable, but we cannot warrant its accuracy or completeness. Such information is subject to change and is not intended to influence your investment decisions.

To: Jim Willie CB who wrote (40589)	8/25/2001 3:05:42 PM
From: stockman_scott	Respond to of 65232

Could the Weaker Dollar Save Greenspan...? biz.yahoo.com Best Regards, Scott

To: Jim Willie CB who wrote (40589)	8/25/2001 7:03:49 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

JW: A Greenspan Article Just For You <G>... Message 16260239 Best Regards, Scott

To: Jim Willie CB who wrote (40589)	8/27/2001 10:54:02 AM
From: abstract	Read Replies (4) \| Respond to of 65232

All right Mr. Wordsmith, tell me what the following says, please. Existing-Home Sales Fell in July Aug 27 10:09am ET WASHINGTON (Reuters) - Sales of U.S. existing homes fell 3 percent in July, a real estate trade group said on Monday, as the slowing economy reduced the demand for homes. The National Association of Realtors said sales of previously owned homes fell last month to a seasonally adjusted annual rate of 5.17 million units from a rate of 5.33 million in June. The July sales rate was 7.3 percent above July of last year but below analysts' expectations for a 5.29-million-a-year pace.