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

To: Steve Lee who wrote (40507)	3/13/2002 2:23:55 PM
From: Sully-	Read Replies (2) \| Respond to of 99280

Greenspan urges more U.S. saving for economic health (UPDATE: Adds details) WASHINGTON, March 13 (Reuters) - Federal Reserve Chairman Alan Greenspan repeated on Wednesday that U.S. economic activity was improving, and urged a greater emphasis on savings to improve the long-term vitality of the expansion. Speaking to the Independent Community Bankers of America in Honolulu, the U.S. central bank chief said a rising retiree rate ahead and the need to ratchet down current account deficits meant more savings were needed. A text of his remarks was issued in Washington. Greenspan repeated recent testimony he had made to Congress, citing ``increasing signs that some of the forces restraining the economy over the past year are starting to diminish and that activity is beginning to firm.'' He foresaw only gradual recovery in business investment and said a stronger labor market was central to the outlook for consumer spending. ``Layoffs diminished noticeably in January and employment turned up last month,'' he added, referring to February's 66,000-job gain reported by the Labor Department last week. RELYING ON FOREIGN CAPITAL Greenspan noted that over the past six years, about 40 percent of growth in U.S. capital stock has been financed by foreign investment, increasing America's reliance on others and running up mounting deficits that need to be controlled because it means a growing share of interest payments are sent abroad. ``Countries that have gone down this path invariably run into trouble, and so would we,'' he said. ``Eventually, the current account deficit will have to be restrained,'' he said. With a growing population of retirees ahead as Americans born in the ``baby boom'' years after World War Two end their working careers, keeping productivity or output per worker on a rising trend will be vital for maintaining rising living standards. ``Because of the near certainty of a major rise in the retiree-to-worker ratio in the next few decades, we now face the pressing need to set policies for the enhanced productivity growth that will be necessary,'' Greenspan said. Boosting savings is essential even though it does not affect the number of people in the workforce. ``But it surely affects capital investment, which it finances, and the productivity that it engenders,'' Greenspan noted. biz.yahoo.com

To: Steve Lee who wrote (40507)	3/13/2002 2:42:34 PM
From: LTK007	Read Replies (2) \| Respond to of 99280

Thread is balanced in evening hours:) greenspan speech was really interesting in that he on the one hand was being spirited by saying(not verbatim!,sorry just brain record here,i capture the essence:) " even a slow recovery, in view of past events of severe equity loss of value and the tragic event of 9/11, should be viewed as a triumph" " The recovery will have to be led by business spending and NOT consumer spending" He goes back and back again to the issue that consumers must SAVE, this has become a repetitive theme with Greenspan. He said that the inventory build up need be met by final side demand and one need be quite cautious on that matter.And he again stresses the demand need come from Cap-Ex and NOT from the consumer. He went on to talk about the boomer generation aging and the huge pressures this will start putting on the economy come 2009 area. He said do NOT look for any repetition of a recovery as in 98 into 2000 as that was caused by extraordinary circumstances, and named preparation for Y2K as but one of those factors. He used the the terms if and but often. In brief he was putting out many asides to be cautious. (in Greenspeak that means "I am DAMNED worried about what happens after this inventory replenishment so PLEESE read beyond my positive statements, i am trying to tell you something without getting rocks thrown at me":) He did also say there are indications the labor market is getting better and did not say anything beyond that regards the labor market. i am typed out:) max p.s. the text was on the most positive side a view that there will be a SLOW recovery and to the most negative when considering if Cap-Ex does not grow and consumer spending slowdown. Also he said the remarkable strength in homebuilders should not be expected to last.(that i am pretty sure he said--he didn't say it would collapse, just don't expect it to maintain this level)