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To: ~digs who wrote (181)	2/26/2004 10:11:16 AM
From: Bucky Katt	Read Replies (1) \| Respond to of 1338

Greenspeak?>> Interest rate deja vu: In 1994 and early 1995, the Federal Reserve jerked short-term interest rates higher, in seven consecutive increases that sent the bond market into a swoon and left stock prices nearly unchanged. Economist Susan Sterne at Economic Analysis Associates in Greenwich, Conn., spotted eerie similarities between recent remarks by Greenspan and some he made just before the Fed launched its interest rate hikes 10 years ago. On Jan. 31, 1994, the Fed chief said, "In the labor market, firms' efforts to restructure and improve productivity are continuing to restrain hiring, and concerns about job security persist." On Wednesday, Greenspan said, "Overall, the economy has lately made impressive gains in output and real incomes, although progress in creating jobs has been limited." Ten years ago, the Fed chief said, "Currently, we have the difficult task of assessing the appropriate time to move away from an extended period of monetary accommodation. ... Short-term interest rates are currently abnormally low in real [inflation-adjusted] terms. At some point, we will need to move them to a more neutral stance." On Feb. 11, 2004, Greenspan said, "Evidence indicates clearly that such [an accommodative] policy stance will not be compatible indefinitely with price stability and sustainable growth; [interest rates] will eventually need to rise toward a more neutral level." Separately, Greenspan told the committee "progress in creating jobs has been limited," despite "vigorous expansion" in the economy. He declined to forecast when job growth might pick up. "We have been making commitments without focusing on our capability of meeting them," Greenspan said. "And I think it is terribly important to make certain that we communicate to the people who are about to retire what it is they are going to have to live with. And if we promise more than we can actually physically deliver, I think it will be a major blot on our whole fiscal process." Greenspan did not buy into Democratic plans to repeal some of Bush's tax cuts. Instead, he urged reducing the deficit mainly through spending cuts. Usually, Fed chairmen do not like to become embroiled in political debates, especially when Congress is likely to do little about Social Security until at least after the election. But Greenspan, who will be 78 next month, derives clout and independence from his reputation in financial markets. Bush has said he will renominate him as Fed chairman when his current four-year term expires in June.

To: ~digs who wrote (181)	5/3/2004 3:55:52 AM
From: ~digs	Read Replies (2) \| Respond to of 1338

Buffett Say Berkshire Feels Inflation Monday May 3, 12:09 AM EDT ; By Philip Klein OMAHA, Nebraska (Reuters) - Warren Buffett, the world's second-wealthiest man, said some businesses in his Berkshire Hathaway Inc. holding company were starting to feel the pinch of inflation as energy and commodity prices rise. Soaring steel prices have hurt Berkshire's MiTek unit, which makes steel connectors for roofs, Buffett told reporters on Sunday. MiTek has increased its prices, but the move has not kept up with the metal's rising cost, he said. "Once the ball gets rolling, it's hard to stop," Buffett said of the inflation threat, a day after Berkshire Hathaway's annual shareholders' meeting. "Once prices start increasing, it's contagious." Carpet-maker Shaw Industries and brick producer Acme Building Brands were also being affected by higher oil and natural gas prices, Buffett said. Zinc and lumber prices have also risen. Coca-Cola Co., he noted, would be hurt if aluminum prices were to go up significantly, because the beverage maker uses the metal for its cans. However, Buffett said so far that has not been a problem. Berkshire is Coke's largest shareholder and Buffett is a member of its board of directors. BUMPY RATE RIDE Interest rates are going to rise, Buffett also said, but it is not clear to him whether it will be a sudden rise, as in 1994, or a gradual transition. "I wouldn't bet on it being smooth, but I'm not saying it can't go the other way," he said. "We're prepared for it not to be smooth." Buffett said he was concerned about the United States' ballooning trade deficit and warned it could cause a "severe disruption" in financial markets at some point in the future. "I don't think it's sustainable," he said of the deficit. Berkshire has put $12 billion in five major foreign currencies, betting the U.S. dollar will decline over time as a result of the deficit. He would not specify the currencies. As for investing in companies overseas, Buffett said he would be open to it, but it is harder to find companies he understands in foreign countries. While he did invest in Chinese oil company PetroChina, he felt familiar with the oil business. He said Berkshire would love to buy companies outright in Germany, France or Britain, but that businesses over there that are looking to sell tend not to think of Berkshire. "I hope we have more luck," Buffett said. "But I'm not going to campaign for it." Berkshire ended 2003 with a stockpile of $31 billion in cash, making it increasingly difficult for Buffett to find places to invest. Berkshire's acquisitions of food distributor McLane and manufactured housing company Clayton Homes last year totaled about $3 billion, but Buffett said he wants to buy a much bigger business. "What we'd really like to find is something that's five, 10 or $20 billion." finance.myway.com