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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: flickerful who wrote (19982)	9/5/1998 4:25:00 AM
From: IQBAL LATIF	Read Replies (3) \| Respond to of 50167

I would think a very balanced statement, the words ''international deflation and domestic inflation '' speak a lot, it is domestic inflation in back of his mind and therefore he thinks ''he was as inclined to cut interest rates as to raise them.'' It will interesting to see how bonds will react to it, this is going to put some pressure on the bond market, short term market rates already include a rate cut.. if inclination is equal and the domestic economy has inflationary wage pressures we will be looking at different kind of expectations from what market has built in, this is have been our point of view for long time..

To: flickerful who wrote (19982)	9/5/1998 4:35:00 AM
From: IQBAL LATIF	Respond to of 50167

Leading Indicators (July) Bounce Due To GM Restart, But Momentum Still Waning.. Sept. 1, 1998 The Leading Indicator Index bounced up 0.4% mo/mo after the 0.2% monthly decline in June. Both of those months were distorted by the GM strike - which pushed up initial unemployment claims and took 0.2% off the June figure, only to decline sharply and add 0.2% to July. As usual, the best way to deal with such skewing is to average the two months - which results in an 0.1% increase per month, or a 1.2% annual rate. As the top chart shows, even using an annual rate of the past 3 months, the momentum of the Leading Indicators has slowed significantly. This index is still somewhat more oriented to the manufacturing economy, so this deceleration is not a complete surprise, but it is sharp enough to get one's attention. We would suggest readers look at 1994, however, when a slowdown just like this one occurred, and the Fed kept right on raising rates. It was not until the Leading Indicators reached a (-3%) annual rate in late spring 1995 that they eased. Six of the 10 Leading Indicators rose, led by initial claims (which dropped - a good sign). There was also 0.1 points each added by orders for consumer goods and by common stock prices. We already know that stock market signal won't repeat. The Coincident Indicators also showed the effects of GM as the industrial production decline, offset gains in employment and personal income. For that reason the deceleration in the 3 mo. annual rate shown on the middle chart is still suspect - i.e., we doubt the real activity of the overall economy has slowed that much. It will take a few more months to be certain. Finally, the Lagging Indicators slipped 0.1%, which allowed the Ratio of Lagging to Coincident Indicators to inch up just a hare. If real trouble is to develop in the economy, this series is usually pretty reliable - as in 1989 and 1994. Not there yet. David Orr, Chief Capital Markets Economist