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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (1040)	11/9/2001 4:09:15 PM
From: David Jones	Read Replies (2) \| Respond to of 306849

I find no truth in any of that article. It's a self serving piece of crap. I submit for your review the following. biz.yahoo.com Greenspan has been right on rates - Friedman ROME, Nov 6 (Reuters) - Influential U.S. economist Milton Friedman believes Federal Reserve Chairman Alan Greenspan has made all the right monetary policy decisions since the September 11 attacks and says the U.S. economy could even rebound soon. Countering recent criticism of the Fed chairman, who has cut interest rates aggressively since the attacks and is poised to do so again on Tuesday, Nobel-prize winner Friedman said Greenspan had done the right thing. ``What he has done is without precedent (and) he has acted with anticipation,'' he told Il Sole 24 Ore newspaper in an interview published on Tuesday. ``He could even achieve his goal of a soft landing... The elements for a rebound are already there and maybe even in the second quarter of next year we will see the results,'' he said. Friedman said the key to avoiding recession was pumping more dollars into circulation, which the Fed had done by buying bonds and other market operations. He estimated there had been a 10 percent increase in money supply since the start of the year. ``It's true that the unemployment rate could rise to 6.0-6.5 percent, but we shouldn't forget that unemployment is a lagging not a leading indicator of negative conditions. I don't think we'll hit 8.0 percent as in other recessions,'' he said. biz.yahoo.com U.S. not facing long recession, Nobel economist says FRANKFURT, Nov 1 (Reuters) - The U.S. economy is not plunging into a long recession and will recover on the strength of investment and spending, Nobel prize-winning economist Robert Mundell said in a newspaper interview published on Thursday. ADVERTISEMENT ``We are not on the edge of a long and difficult recession. This won't be worse than the one at the beginning of the 1990s, in any case,'' Mundell told the Frankfurter Allgemeine Zeitung. U.S. growth contracted for eight consecutive months from July 1990 to March 1991 in its only recession of the decade. Recovery will be underpinned by investment and spending, which ``look pretty good, thanks to stable housing construction, and the reason for that is low interest rates,'' he said. U.S. borrowing costs have been slashed this year to their lowest level since 1962 by the Federal Reserve in its efforts to protect growth. Asked about the causes of the recession, Mundell said U.S. monetary policy had been too tight in the period leading up to the growth slowdown: ``Greenspan did not act very wisely''. But he said that the main reason was the bursting of the speculative financial bubble in the technology sector. Mundell said the U.S. government's tax cut plans were incorrectly laid. ``Instead of cutting income tax, a reduction of the corporate income tax rate to 20 percent from 35 percent now would have been appropriate.'' EURO WEAKNESS Mundell also lent his support to the argument that the euro may come under selling pressure ahead of the launch of euro cash as foreign holders of euro zone currencies buy dollars. European central banking officials have consistently poured cold water on this theory, saying that the volume of cash holdings was minor and insufficient to influence foreign exchange levels on currency markets. Asked how low the euro might sink in the event of a long recession in Europe, Mundell replied: ``If the euro were to fall under $0.85, it would be a disaster. It would cause immense damage to the whole European economy.'' ``I would advocate holding the dollar and euro in a band range of $0.85-$1.15.'' He was also critical of the European Central Bank's two-pillar monetary strategy, which follows both monetary supply as well as real economy indicators, which Mundell characterised as ``schizophrenic.'' But he had some sympathy for the task of ECB President Wim Duisenberg, who is much criticised in the media for weak communication skills. ``Duisenberg is not worse than (Fed chairman) Alan Greenspan. He doesn't have as much experience in dealing with the public. But his task is also more difficult, he has to battle with 12 different countries,'' Mundell said