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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Return to Sender who wrote (6315)	10/19/2002 7:42:55 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 95427

RTS In today's New York Times there is a front page article in the business section concerning the Federal Reserve with more relevant information than what you posted. Fed Mood Seems to Be Shifting Against a Rate Cut By EDMUND L. ANDREWS WASHINGTON, Oct. 18 — The Federal Reserve, which flooded the economy with money by sharply lowering interest rates last year as growth collapsed, appears much more unwilling to fend off another potential tailspin today. In the last few days, a host of senior Fed officials have made clear that they think the economy is more robust than it appears to most Americans. Industrial production may be down; job growth may be almost nonexistent; and corporations may be too nervous to invest in new factories and equipment. But at least for the moment, the message out of the Fed seems to be that the anxiety is overdone and that there is no compelling need to juice up the economy by reducing interest rates yet again. "If we could all just settle down — both the public and the private sector — and try to get the uncertainty level diminished, the markets will take care of themselves," William McDonough, president of the New York Federal Reserve Bank and the most important of the 12 regional bank presidents who help set monetary policy, said at a conference in Manhattan on Thursday. Jack Guynn, president of the Federal Reserve Bank of Atlanta, declared earlier this week that lower interest rates have "nothing at all" to do with the readiness of companies to start investing in new factories and adding more workers. And other members of the Federal Reserve's monetary policy committee have echoed the view that the economic recovery, while still fragile, is nonetheless clearly under way. "I think the probability of a so-called double-dip recession is relatively low," Gary Stern, president of the Federal Reserve Bank of Minneapolis, said in a speech on Tuesday. The tone of those remarks contrasts strongly with the impression left after the most recent meeting of the Federal Open Market Committee, on Sept. 24. At that meeting, 2 of the 12 voting members publicly dissented from the majority and argued that the weak economy was in need of a lift in the form of even lower interest rates. In a nod to pessimists, the Federal Reserve also took heed of the "considerable uncertainty" and said the risks were "weighted mainly to the conditions that may produce economic weakness." Many analysts say the meeting hinted at a deep disagreement within the Federal Reserve. But a growing number say the debate is not just between those who want easier money and those who do not. The board may also have another camp, whose members want to take a firmer line, actually discouraging hints that a rate cut is likely if conditions deteriorate much more. Rarely have analysts and investors been as divided and uncertain as they are now about the prospects for the economy. Most analysts and government officials say the economy grew rapidly in the quarter that ended Sept. 30, perhaps at an annual rate of 4 percent. The growth was powered by low interest rates. Homeowners refinanced their mortgages at lower rates, often taking out home equity loans to buy cars and furniture. Construction of new homes surged, as did the housing prices in general. But most analysts say they believe that growth will be slower in the last quarter of this year, because both corporations and consumers have become more nervous. William C. Dudley, chief United States economist at Goldman, Sachs, argues that the economy is far weaker than most people expected a few months ago and that the Fed must cut rates. Mr. Dudley, who predicted in early August that the Fed would cut rates in the near future, says he is staying with his prediction. "I would say the economy since then has evolved more closely to our view of the world," he said. Janet Yellen, professor of economics at the University of California at Berkeley and a former adviser to President Bill Clinton, said deep uncertainty provides a good case for cutting rates. "The decline in the stock market and the impact of corporate accounting scandals is taking a huge toll on the economy," she said. "Some people say the Fed should save its ammunition for later. I think that is completely erroneous." Other analysts argue that the economy is in much better shape than the mood of corporate executives would suggest. Just as the Federal Reserve was early in supplying money when things began to look bad, it is now early to recognize that conditions are getting better. "There is good reason to think that the stage is set for the most unbelievable performance," said James Glassman, economist at J. P. Morgan. By not acting, he said, the Fed will look as if it had the courage to sit tight when everybody else was panicking. But the most important decision maker is Alan Greenspan, the chairman of the Federal Reserve Board, and he has been conspicuously silent since the meeting last month.

To: Return to Sender who wrote (6315)	10/19/2002 9:07:40 PM
From: Cary Salsberg	Read Replies (1) \| Respond to of 95427

I hope most investors take John Mauldin seriously. Why not? I would rather compete against E.Podunk High than against the Lakers!

To: Return to Sender who wrote (6315)	10/20/2002 11:02:23 AM
From: Terry D	Read Replies (2) \| Respond to of 95427

RtS - It is wrong to dismiss the arguments for a secular bear - we are overdo for one and it is not logical to believe that the largest financial instrument inflationary bubble can be resolved with a 3000 point correction. But the problem with Maudlin is his lack of rigor. His a priori: "For new readers, let me once again make an important point: there is no long-term connection between the growth of the stock market and the growth of the economy." The facts back him up - selectively - but then he states "Secular bear market cycles are characterized by more frequent and more serious recessions than their bullish cousins. With each recession, investors become more disillusioned and more conservative. They become less willing to project earnings growth into the far future. By the end of the cycle, rather than looking out ten years, they are barely willing to look out ten months." And "Typically, the bull cycles are driven by some innovation like railroads, electricity, computers, etc. which foster great optimism. "This time," investors think, "things are truly different." A period of growth and seeming stability becomes the order of the day. Normally sane men project this economic climate into the far future. Business builds too much capacity, then prices and profits drop, employment sags, and it takes a decade or two to work through the excesses of the boom. But those excesses always get worked through. There is no new bull market until the excesses are dealt with. When that happens, the base is formed for a new cycle that we call a secular bull market." Makes reading the rest pointless - to me at least.