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Strategies & Market Trends : Recession Investing, Business,& Politics, -- Ignore unavailable to you. Want to Upgrade?

To: Alfred W. Post who wrote (198)	3/20/2002 11:37:46 AM
From: richardred	Respond to of 247

Fred: Some good thoughts on your part. > In my opinion it might be a good idea to compare the level of interest rates with the growth in GNP >past experiences tell us that an increase in interest rates is bad for the stock market. OR IS IT?? Fred: I do have some opinions on your thoughts, but first I'll give you a basis on how I reached my opinions. Second, I'm not an economist, or even college educated for that matter. I'm a tradesman (pressman), but much interested in economics and markets. I'll try, and not ramble on to much . One might have to realize in todays economy, technology has improved they way American companies do business. I think todays technology has made comparisons of the past more difficult to gauge future economic activity. In general, what I'm talking about are companies having better control over inventories, labor , and costs. In my opinion inventories can be maintained at much lower levels now due to JUST IN TIME MANUFACTURING. IMO- Labor costs are now better kept under control by out sourcing manufacturing when possible, and cost effective. Building plants overseas,buying companies overseas, or turning to global plants outside the US, constructed to serve their American and global customers. Powerful unions of the past are continuing on the decline. This IMO due to the American consumers appetite for the choice of globally offered goods, priced to their liking, to fill their needs. For consumers looking for American goods. The now, on decline label, that once read Made In America, should now read, Owned by an American Company, or made with American technology. On the cost control side. American companies now have capable global suppliers to purchase and stock commodities, when cost effective. We now have this thing call the internet to get competitive pricing for purchases. Both by businesses and consumers. Todays newer Manufacturing equipment is built to be efficient, and less labor intensive. With all this in mind. I like your opinions. I have never myself correlated the movement of interest rates with GNP growth. I would find it very interesting to go over past history, chart it, and tie it all into the stock markets movements. I believe in time, the stock market always adjusts to the interest rate environment, as well as consumer confidence. It's the period of adjustment that's hard to call, till after the fact. I remember past markets moving up with interest rates rising. Corporate profits were rising at the time, and so was inflation, if I remember right. It was that feeling at the time, the current rise was the peak. Markets sometimes do climb on walls of worry. Interest rates rising, are but one worry! GITY-GOOD INVESTING TO YOU RR