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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: LTK007 who wrote (7711)	11/23/2001 4:37:19 PM
From: Softechie	Respond to of 99280

It seems now we have global recession...1:10 (Dow Jones) Europe has now "joined the U.S. and Japan in outright recession," with Euro-area GDP seen contracting in 4Q, and in 1Q 2002, JP Morgan economic strategist David Mackie says. A decline in inflation to less than 1% should prompt ECB to cut interest rates to 2% by mid next year, from current 3.25%. (JNP)

To: LTK007 who wrote (7711)	11/23/2001 4:38:14 PM
From: Softechie	Respond to of 99280

Recession? Official Dating Of Business Cycle Is Tricky 23 Nov 14:30 By John McAuley Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Everyone of us can believe something is true, but it's not official until the so-called "experts" say it is. That's the case with the U.S. recession, which the financial markets - and the public at large - are treating as a given. They are certainly behaving as if that's the case. But just like waiting for the fat lady to sing before deciding that things are over, it's necessary to await official word from the Business Cycle Dating Committee of the National Bureau of Economic Research to designate a month as a business cycle peak to begin measuring the length and depth of a recession. Attention has suddenly turned to the committee Friday, because the Wall Street Journal reported that it is holding a telephone conference call at 1:00 p.m. EST. Some observers are speculating that the discussion could lead to an official announcment to date the start of the recession. The NBER is a private, nonprofit research organization founded in 1920 and headquartered in Cambridge, Mass. dedicated to providing a better understanding of how the U.S. economy behaves. Ever since two founders of the NBER - Wesley Clair Mitchell and Arthur F. Burns - published their seminal work, "Measuring Business Cycles," in 1946, the NBER's BCD committee has been the official designator of the start and end of U.S. recessions. Currently, there are six members of the BCD committee. Robert Hall, professor and senior fellow at the Hoover Institution of Stamford University is the chair of the group. Martin Feldstein, president of the NBER and a professor at Harvard University is also a member. Other members include: Ben Bernanke, professor at Princeton University; Jeffrey Frankel, professor at Harvard; Robert Gordon, professor at Northwestern University; and Victor Zarnowitz, consultant to the Conference Board and professor emeritus at the University of Chicago. The committee posted a memo on Nov. 9 on the NBER's web site and noted then that "this memo will appear monthly on the NBER's website during the period of uncertainty about the state of the economy." Thus, one interpretation of Friday's telephone conference is that the committee is simply using it as an opportunity to compare their conclusions two weeks ago to conditions today and prepare the next monthly memo, which won't be released until December. After all, academics don't rush to conclusions. Goldman Sachs economists Richard Crump and Ed McKelvey, on the other hand, believe a recession announcement could be imminent. More intriguing, they say, is the question of which date they will choose as the starting point, given some stark contrasts in some conflicting data. In a research note this week, Crump and McElvey argued that "although it seems clear the U.S. economy has entered its tenth recession of the post World War II era, the committee faces a tough choice in saying just when this happened." They noted that of four variables evaluated by the committee, the favored one, nonfarm payroll employment, points to either February or March as a peak in the expansion, and thus the start of the recession. But two other indicators with narrower coverage, industrial production and real manufacturing and trade sales, suggest a peak in either October or November of 2000, "implying that the economy is now entering its second year of recession," Crump and McKelvey wrote. And yet a fourth indicator, real personal income less transfer payments, is yet to reach its peak. This fourth measure is important because, like employment, it "covers the entire economy rather than just the goods sector," according to Crump and McKelvey. This holdout element could prove a deterrent to the announcement of a starting date after Friday's phone conference. Still, others have argued that the NBER can ignore the personal income number. "Personal income failed to go down at all in five out of nine of the past recession," Anirvan Banerji, research director at the Economic Cycle Research Institute, told Dow Jones Newswires in June. "The fact that it hasn't gone down yet is not important, it usually hasn't in recessions." -By John McAuley, Dow Jones Newswires, 201-938-4425; john.mcauley@dowjones.com (END) DOW JONES NEWS 11-23-01 02:30 PM