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Pastimes : Ask da_cheif -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (7841)	1/15/2002 12:22:02 PM
From: Chip McVickar	Read Replies (1) \| Respond to of 8150

Roberto, Your commentary presents the major view of wall street at this time. >>I think this recession is better described as a unilateral inventory selloff that coincided not only amongst many sectors but also globally.<< >>I think it is probable that the economic resumption and growth could easily be as unilaterally positive and global in impact as well. After all interest rates have gone down globally as well. << This view is also in keeping with the general view: >>As stability becomes acknowledged - our digital revolution will become necessary to be competitive for all businesses.<< I've got two things to add. #1... The government is way behind the private sector in taking advantage of the technology revolution that provided such major changes in cost control and inventory practices found within the private sector. If the government were smart, they'd up this spending now rather then fool around with back-pocket tax refunds to the wealthy. When this eventually happens we should see significant governmental expenditures in this area, bringing on even smaller government and improved allocation of our tax dollars. In may ways this is the purest form of supply economics so loved by Lindsay and the republicans. And so embraced by Rubin, Greenspan, Gindrich and eventually Clinton. #2.... This concept of a double-dip. >>I think it is probable that the economic resumption and growth could easily be as unilaterally positive and global in impact as well. After all interest rates have gone down globally as well.<< If Greenspan is right it's time to buy bonds and actively trade and not hold securities for the long haul quite yet. The WSJ has an article today exploring the possibility of a "Double-Dip" in the economy. "This would involve an early rebound, as inventories fall to levels requiring firms to lift production to meet demand, then a renewed leg down later in the year, as weak consumer and business spending fails to sustain that production." Because bonds of all lengths are priced for the Quick Recovery they are a good buy at this time and will bring strong returns as the second dip hits later in the year. [paraphrase] IMHO I don't believe the Fed will be able to start tightening any time soon and the yield curve will begin to fall going forward. To much remains unknown here in Jan (terrorist activity) and also the many problems that remain with the consumer spending (it was patriotic, but will it continue).., so to predict anything at this time is rather "Iffy" for either a recovery or a double-dip. Furthermore the political climate may return to the polarity and acrimony apparent before Sept 11 as the elections heat up, and further accenting the political climate in Washington will be the Enron journey from favorite son to the woodshed son. I remain a skeptical investor. Chip