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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (911)	7/31/1998 1:08:00 PM
From: Les H	Read Replies (1) \| Respond to of 3339

Dow/S&P have been trading between 28-day EMA and lower trading band; roughly 8850 to 9050.

To: Moominoid who wrote (911)	7/31/1998 2:38:00 PM
From: Les H	Read Replies (2) \| Respond to of 3339

Looks like money flows will be constrained... Americans' savings rate falls further By Caren Bohan WASHINGTON (Reuters) - The savings rate of American consumers, already minuscule by the standards of other developed nations, has shriveled to almost nothing, according to new figures released Friday by the Commerce Department. The department's report on gross domestic product showed the savings rate of U.S. consumers fell to 0.6 percent in the second quarter from 1.2 percent in the first quarter. The report also showed a stronger-than-expected 1.4 percent gain in Gross Domestic Product in the second quarter. While the savings rate has been falling in recent years, the recent levels appear even smaller because the first-quarter number was revised down from 3.6 percent reported earlier. The savings rate for all of 1997 was revised to 2.1 percent from a previously stated 3.9 percent, bringing it to the lowest level since the Great Depression -- the rate was actually negative during 1932 and 1934. But the revisions do not necessarily mean Americans are suddenly that much more spendthrift. A change in method of calculating the savings rate is largely to blame for the downward revisions, although under both the new and old methods savings have been falling steadily in recent years. The Commerce Department tallies the savings rate by subtracting consumer spending from disposable -- or after-tax -- personal income. The figure used for personal income has in the past included wages and salaries as well as income from other sources, such as dividends. The new figures, however, exclude some of that other income, notably certain types of mutual fund distributions. The department now distinguishes between mutual fund payments from dividends and from capital gains. Only the dividend payments are counted in personal income. The savings rate looks lower, but the overall national savings rate -- considered by many economists to be a more meaningful gauge -- is not affected because the capital gains from funds are counted as "business savings." Robert Parker, chief statistician at the department's Bureau of Economic Analysis, said the change makes the savings rate a more precise figure because the treatment of fund capital gains is now consistent with the way the department defines other capital gains. "The number is now more specific as to what it includes and what it does not include," Parker said. But Commerce officials said it would be useful also to look at data on wealth to assess whether the measure gave an accurate picture of how much money Americans are putting away, now that Americans put a greater percentage of their savings in mutual funds and stocks through 401Ks and other retirement programs. Alan Ruskin, economist with the private firm 4Cast in New York, said changes to the savings measure made it a "purer" gauge. "It highlights where the savings are actually coming from," Ruskin said. But he said it underscored the vulnerability of many Americans' nest eggs should the stock market suffer a sharp decline.