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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (15577)	2/24/2002 2:25:16 PM
From: Ilaine	Respond to of 74559

>>Enriched by Working Class, Wal-Mart Eyes BMW Crowd<< nytimes.com

To: Ilaine who wrote (15577)	2/24/2002 3:01:08 PM
From: hdl	Respond to of 74559

we didn't have two quarters of negative gnp

To: Ilaine who wrote (15577)	2/24/2002 5:42:44 PM
From: Maurice Winn	Respond to of 74559

Hooray for Uncle Al, the greatest human the planet has ever seen. He has once again saved the world from the Black-Scholes of financial implosion. Well, he might not be the absolute greatest human, because Irwin Jacobs created CDMA and made it available so he is as great. But Green$pan is still pretty good! Thanks for the link. Watch for the early interest rate rises [my guess is as early as March - half a point just to make people realize the collapse is over and not to go nuts on more credit because he has got more increases where that comes from]. Mqurice PS: Uncle Al "printing money" = poetic license for "credit creation via US$" = increase in money supply, not that there are literally more US$100 notes blowing around the streets of Washington. /snip...<Federal Reserve chairman Alan Greenspan gives his semi-annual state of the economy report to Congress Wednesday morning. When he speaks, markets around the world listen. His message this week will largely affirm the chorus of analysts who uniformly agree that the recession is over and a recovery is starting, if not already well under way. He bids farewell to the shortest, mildest recession since economic score-keeping began at the end of World War II. That begs the question of why the recession wasn't worse. The entire economy virtually shut down in the days following the Sept. 11 terrorist attacks. The nation's manufacturing sector has been depressed, and U.S. industry has had no overseas help: Europe's economy is not growing, and Japan has been in a deep recession for a decade. And the ever-stronger dollar has stymied whatever trade opportunities American business might have had. Against that backdrop, Greenspan and his colleagues at the Federal Reserve's Open Market Committee took a swing. "The No. 1 factor is the Fed's aggressive rate-cutting," said Martin Regalia, chief economist for the U.S. Chamber of Commerce. The National Bureau of Economic Research, the designated arbiter of recessions has concluded that the 2001 recession started in March. At that point unemployment was at 4.5 percent and manufacturers were just beginning to shutter plants and lay off workers by the tens of thousands. But by March 20, the Fed had already made three half-point cuts in the federal funds rate, reducing it from 6.5 percent to 5 percent. "Even the Fed might say they were a little slow off the mark. But then, right off the bat, boom, boom, boom," Regalia said, referring to the historically aggressive string of 11 rate cuts voted last year. By December, the Federal funds rate had been sliced to 1.75 percent. But now with unemployment hovering around 6 percent, retail sales rebounding and companies beginning to restock depleted inventories, the only outstanding question is how robust the recovery is. Greenspan will no doubt face questions about the need for a new round of tax cuts. He thought they were a good idea a year ago, and Congress and theBush administration responded with an ambitious, 10-year, $1.3-trillion tax cut. This year, he's switched his tune. The economic stimulus was a good idea five months ago; it isn't as necessary now....contd.. >

To: Ilaine who wrote (15577)	2/24/2002 6:00:04 PM
From: Don Lloyd	Read Replies (3) \| Respond to of 74559

CB - Greenspan to affirm recession's end... This pales in importance compared to how much of the economy goes through the windshield when AG begins to tap the brakes. As a template for any good, including stocks, whose utility is largely in the future, the discounted present value of any infinite series of constant nominal cash flows will halve every time the discount rate doubles. This means that the lower interest rates are, the more risk is inherent in any future oriented good as interest rates increase. Regards, Don