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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Whist who wrote (283352)	8/2/2002 5:01:54 PM
From: jlallen	Read Replies (1) \| Respond to of 769667

Liberals lie, mislead and like to scare old folks and kids. Its a fact. JLA

To: Mr. Whist who wrote (283352)	8/2/2002 5:10:56 PM
From: moby_dick	Respond to of 769667

is that fat f**k still around?

To: Mr. Whist who wrote (283352)	8/2/2002 7:37:26 PM
From: Karen Lawrence	Respond to of 769667

Forbes Newsletter Watch Double-Dipping Into Deflation? John Dobosz, 08.01.02, 4:26 PM ET NEW YORK - Going on two and a half years, this is already the longest running bear market since the Great Depression. The amount of wealth this bear has wiped out is a staggering $7 trillion--more than the entire value of the U.S. stock market just six years ago. Now, a year into an economic recovery, stocks should be advancing broadly, but they're not, suggesting the economy could experience another recessionary dip. Renewed weakness in consumer confidence and manufacturing activity add further to the case for a "double-dip" recession. Sign up for Forbes' Free Investment Guru Weekly e-mail. All of this has newsletters warning of the possibility that a deflationary spiral could wreak havoc on asset prices, including more sharp declines in stocks and even erosion of real estate values. Jim Stack of Whitefish, Mont.-based InvesTech Research devoted an entire issue of his letter to discussing the likelihood of a "deflationary accident" following the bursting of the speculative stock bubble of the late '90s. Stack points out that "the backside of a popped bubble is a very slippery slope." For investors, the loss of stock market wealth translates into lost confidence and less spending. For corporations, less consumer spending means retrenchment, layoffs and diminished capital spending, which further diminishes business activity and puts more of a drain on consumer spending...and the downward cycle feeds on itself. Stack is not convinced--but he is concerned--that the Federal Reserve has lost control of the situation. "If confidence is falling and interest rates have already been cut to 40-year lows, there are not many tricks left in the bag," he says. Stack is troubled that the stock market has continued to hit new lows this far into a supposed recovery--something it hasn't done in 80 years. "Either today's stock market has detached from historic reality, or it suggests the U.S. economy is heading back into a deeper and more prolonged recession," says Stack. Chris Temple, editor of The National Investor, agrees that the U.S. could end up with something similar to the funk that has enveloped Japan for more than a decade. But we're not there yet. Says Temple, "In Japan, the long process of deflating share prices soon led to deflation elsewhere. Most conspicuous among the casualties has been commercial real estate, which is selling for, on average, one-fifth of its peak value. Residential property in formerly high-priced areas has also come down substantially. I believe the same patterns will follow here; the only question is the degree." Temple points out that deflation doesn't mean we'll be "cooking on wood-burning stoves and using candles for light." In fact, there would still be attractive investment opportunities in well-run companies that provide the essentials. "We're going to be forced to be less materialistic and more sensitive to those things in life we truly need and can't do without: food, electricity, water, insurance, a good home, gasoline and health care." Jude Wanniski, editor of Supply Side Investor, has been an outspoken critic of the floating dollar and argues that inflationary and deflationary cycles would be eliminated by a return to the gold standard. Wanniski says the first wave of deflation to hit the U.S. was a result of the currency crisis in Thailand that spread to the rest of Asia in 1997 and severely affected U.S. commodity producers like hog farmers and oil drillers. Now, he says, it's catching up with the rest of the economy.