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To: MulhollandDrive who wrote (8216)	9/5/2001 2:40:03 PM
From: smolejv@gmx.net	Respond to of 74559

here two truths - or self-evident facts - which I started to doubt long ago. a) "the interest cuts work their way through in six months." First of all, given the cause of XX basis points drop, nobody ever said exactly what the effect to observe would be. Let's assume most probably a pick up in GNP is meant (alternative of the stock market does not apply 'due to point b' - see further). If its six months for US, would it be 1 month for Bananistan, given the relative sizes of their GNPs? Were US double the size (lets say NAFTA size) would it take twice as long? What defines the dynamics of this process in such a way that the magic 6 months come out? Etc Etc - see comment at the end of diatribe. b) "the market reflects the situation half a year ahead of today". Same argument, same questions, same idiocy. Comment: I saw a lot of cases where a statement "will not happen for at least six months" turns slowly into "will end within six months". I for myself can try to explain the six-month myth halfway by a) next two quarters of projected earnings having a lower margin of error ("I mean, its not FACTORS anymore") and b) the drooling market discounts the projected earnings right away (i.e. on a running basis)

To: MulhollandDrive who wrote (8216)	9/5/2001 8:43:24 PM
From: TobagoJack	Read Replies (2) \| Respond to of 74559

Hi Mrs. Peel, You have me at an advantage given you are my (and a gazillion other guys) favorite character on TV :0) Here, it is official, the economy will pick up after having never fallen down ... Chugs, Jay breakingnews.scmp.com QUOTE Thursday, September 06, 2001 5:20 am (GMT+8) Treasury's O'Neill says U.S. economy to pick up U.S. Treasury Secretary Paul O'Neill, pictured in May, said on September 5 the U.S. economy will probably grow over the next few months. REUTERS/Win McNamee U.S. Treasury Secretary Paul O'Neill said on Wednesday the U.S. economy is set to pick up in coming months but added that it cannot be the sole engine for global growth and that Japan must take "decisive action" to fix its woes. "Our economy is sound, and I look forward to a rising growth path in the months ahead and through 2002," O'Neill said at a news conference at the Treasury Department as he prepared to leave for a trip to China and Japan. "But it isn't enough for the U.S. economy to be the only engine of economic growth in the world," he said, adding it was time for Japan to take "decisive action" to spur its moribund economy out of a decade-long slump. O'Neill told reporters that his views on growth tallied with those of most private forecasters, who foresee the U.S. economy expanding by about 2.5 to 3 percent in 2002. That was slightly lower than a figure of 3.2 percent used by the White House's Office of Management and Budget in August. But under later questioning, O'Neill gave a slightly different 2002 growth projection of 2.5 to 3.5 percent. DOLLAR POLICY UNCHANGED He rebuffed reporters' questions about whether foreign exchange was likely to be on the agenda for discussion in Tokyo, instead repeating his support for a strong U.S. dollar and adding there was no intent to change U.S. currency policy. "Strong dollar policy. Good. Continuous," O'Neill said. "The policy's the same. There's no intent to change." His reaffirmation pushed the greenback up to two-week highs against the yen. Japanese government officials have indicated concern that the yen's appreciation against the dollar recently has hindered efforts to boost their economy and said they had been in contact with other members of the G7 industrial countries on foreign exchange gyrations. A higher-valued yen makes Japanese exports more expensive in foreign markets, so Tokyo has an interest in not letting its value rise too high. The G7 comprises the United States, Britain, Canada, France, Germany, Italy and Japan. Finance ministers from those countries are set to meet in Washington on Sept. 28 on the fringes of the annual meetings of the International Monetary Fund and World Bank. O'Neill will participate in weekend meetings of the 21-nation Asia-Pacific Economic Cooperation group in China before travelling to Tokyo at the middle of next week. He meets business leaders from U.S. high-technology industries in San Francisco on Thursday, en route to Asia. "Global growth and greater access to global markets are fundamental to world prosperity," the U.S. Treasury chief said, adding that he expected discussions about issues ranging from intellectual property protection to efforts to curb global overcapacity in steelmaking. 'PIRATES' AT WORK U.S. firms frequently complain about "pirating" of their products by Chinese and other Asian companies that copy computer software and other products and sell them without paying royalties or other compensation. O'Neill said it was important not only for the United States, but also for Europe and Japan to ensure that their economies grow at something close to their potential expansion pace, but Japan has been sluggish for a decade. He said that, judging by statements from Japanese Prime Minister Junichiro Koizumi, "they are very serious about taking action and I'm obviously hopeful they'll do that." But he added that it would be helpful if Japan set a timetable for achieving specific reforms so that the rest of the world could gauge its progress. The outspoken O'Neill vowed soon after being named Treasury Secretary that he would not mirror practices of his counterparts in the former Clinton administration, who regularly lectured Japan that it had to do more to spur domestic demand and keep its economy growing. Japanese gross domestic product numbers, due out Friday, are expected to show the economy contracted in the second quarter. Japan's banking system, heavily burdened by bad loans, is one of its economy's weakest sectors and the IMF has urged Tokyo to let it have a role in monitoring the country's banks. The Washington-based lender has expressed concern that the extent of Japanese banking woes may not be fully known. In response to a question, O'Neill said he had only read about the IMF initiative but said that "as a central principle, transparency, however you get there, is helpful." UNQUOTE