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To: Sully- who wrote (47238)	1/30/2002 8:45:24 AM
From: stockman_scott	Respond to of 65232

Fed Unlikely to Cut Rates By Glenn Somerville Wednesday January 30, 5:16 am Eastern Time WASHINGTON (Reuters) - Federal Reserve policymakers, faced with mounting evidence the U.S. economy is shaking off a recession, were expected to announce on Wednesday that no more interest-rate cuts were needed for now. But economists believe the U.S. central bank's policy-setting Federal Open Market Committee will retain its warning that economic weakness, not inflation, remains the real economic threat, meaning that rates could be cut yet again if the economy founders. Interest rates are now the lowest in 40 years. Fed Chairman Alan Greenspan told Congress last week that the world's largest economy, in recession since last March, was ''at this particular point turning, as best I can judge.'' While the Fed chief warned that the recovery likely would be less robust than some on Wall Street had expected, his comments were more optimistic than an assessment made two weeks earlier, when he said the economy faced ``significant risks.'' After last week's more-upbeat prognosis, financial markets that had anticipated a 12th straight interest-rate reduction in just over a year reversed and instead decided the influential Fed chief was signaling the aggressive round of cuts was over. After 11 cuts in 2001, the bellwether Fed Funds rate charged for overnight loans ended the year at 1.75 percent -- fully 4.75 percentage points lower than when 2001 began. Analysts said with an economic revival apparently setting in, the Fed must now shift its focus to the inevitable day that it will have to start raising rates once more to keep in check price pressures -- not currently a worry. While rate rises are unlikely to begin before late this year, the first step will be to stop cutting interest rates. ``The more they keep easing now, the more they're going to have to unwind later on, a year or two down the road,'' said economist Mark Zandi of Economy.com in West Chester, Pennsylvania. ``I foresee the Fed now being on hold for several months.'' The FOMC began its first of eight scheduled 2002 policy sessions on Tuesday afternoon and was slated to resume the two-day gathering at 9 a.m. EST (1400 GMT) on Wednesday. HOTLY AWAITED DECISION A decision, as hotly awaited in foreign financial markets as at home, typically comes at 2:15 p.m. EST (1915 GMT). The two-day meeting gives policymakers an opportunity to toss around ideas before Greenspan delivers his semi-annual address on the state of the economy to Congress in coming weeks. U.S. bond markets firmed on Tuesday ahead of Wednesday's FOMC meeting, confident a period of stable rates lay ahead. Bonds also got a boost from stomach-churning losses in stock markets beset by earnings worries and fears about the soundness of corporate America's accounting practices after the collapse of energy trader Enron Corp. . Recent industry and government economic data showing a resurgence in consumer confidence during January and a pickup in orders for durable goods in December have bolstered the case for a modestly paced climb out of recession this year. Fed officials will have another piece of data to chew on as of Wednesday when the Commerce Department releases the first reading of fourth-quarter gross domestic product, the broadest measure of U.S. economic activity. While fourth-quarter GDP is expected to contract at a 1.0 percent annual rate, analysts are already looking forward to a resumption of growth in the current quarter. White House economic aide Glenn Hubbard said last week that he expects the economy to show modest growth in the first quarter, followed by more robust expansion in the second half -- a forecast seconded by many analysts. Dick Berner, an economist with Morgan Stanley Dean Witter in New York, also forecast a small gain in first-quarter GDP. ``I think the recovery is under way now. The question is how strong and long-lasting will it be,'' Berner said. ``I think that we are going to start slowly, but gather steam, and that, to me, means that it will be lasting.''

To: Sully- who wrote (47238)	1/30/2002 8:52:35 AM
From: stockman_scott	Respond to of 65232

Video shows Enron employee asked if Lay was on crack WASHINGTON, Jan 30 (Reuters) - A video broadcast on Wednesday of an Enron staff meeting, held as the former energy giant began to unravel, showed its former chief Kenneth Lay under fire from employees, one of whom demanded to know if he was on crack. ``I would like to know if you are on crack. If so that would explain a lot, if not you may want to start because it's going to be a long time before we trust you again,'' was one written comment Lay read out at the meeting, held on Oct. 23. ``I think that's probably not a very happy employee and that's understandable,'' Lay said in response. Enron Corp -- once the world's largest energy trader and a Wall Street darling -- made the largest bankruptcy filing in U.S. history on Dec. 2. Damning allegations of insider trading and financial misdeeds evaporated investor confidence, threw thousands out of work and wiped out workers' retirement savings. The staff meeting, aired on Wednesday on NBC's ``Today'' show, happened just days after Enron reported its first quarterly loss in over four years after taking charges of $1 billion on poorly performing businesses. In the video Lay, who last week quit as Enron's chairman and chief executive officer, apologized to his workers and promised to get back money they lost when the company's share price plummeted. ``Let me say right up front, I am absolutely heartbroken about what's happened both over the last few months and more importantly the last several days,'' he told glum-faced employees. ``Many of you, who were a lot wealthier six to nine months ago, are now concerned about college education for your kids, maybe the mortgage on your house, maybe your retirement and for that I am incredibly sorry. But we're going to get it back.'' Earlier this week Lay's wife Linda said her family lost its fortune when Enron, the once-proud linchpin of the Houston economy and national energy market, collapsed. ``There's nothing left. Everything we had mostly was in the one stock... Other than the home we live in, everything else is for sale.. We are fighting for liquidity,'' she said. But NBC said they had found at least 10 homes or lots, owned by the couple, that were not listed for sale and were worth about $10 million. The network said Lay was entitled to a severance package of $25 million. And as of Jan. 1, the former-Enron chief owned more than $5 million in two companies -- with 340,724 shares in the No. 2 personal computer company Compaq and 20,220 in drugmaker Eli Lilly.

To: Sully- who wrote (47238)	1/30/2002 9:27:58 AM
From: stockman_scott	Respond to of 65232

GDP growth & phantom numbers... Message 16982461

To: Sully- who wrote (47238)	1/30/2002 11:00:57 AM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

WorldCom shares tumble on debt downgrade rumors biz.yahoo.com NEW YORK, Jan 29 (Reuters) - Shares of U.S long-distance phone company WorldCom Inc. (NasdaqNM:WCOM) fell to 7-1/2 year lows on Tuesday on market rumors that debt rating agencies were about to downgrade the company's debt, although Standard & Poor's denied it was about to take such an action. ``Investors are reacting to rumors that there may be potential debt downgrades,'' said George Rodriguez, head of trading at investment firm Guzman & Co. Shares of WorldCom were off 17.3 percent, or $2.08, at $9.92, their lowest level in nearly seven and a half years. S&P said the rumor it may downgrade WorldCom to junk status was ``nonsense.'' ``The rumors are unsubstantiated,'' said Rosemarie Kalinowski, an S&P director who follows the No. 2 U.S. long-distance telephone company. ``It's nonsense.'' Standard & Poor's rates WorldCom's senior unsecured debt ``BBB-plus,'' three notches above ``junk'' status, with a stable outlook. Moody's Investors Service said it rates the debt ``A3,'' four notches above junk status, also with a stable outlook. That agency was not immediately available for comment. News that fellow telecommunications provider Global Crossing Inc. (GBLXQ) filed for bankruptcy on Monday, reduced outlook from Qwest Communications International Inc. (NYSE:Q) and disappointing earnings from fiber-optic network builder Level 3 Communications Inc. (NasdaqNM:LVLT) also weighed on WorldCom's stock.