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To: yard_man who wrote (10060)	11/2/1998 12:50:00 PM
From: Cynic 2005	Respond to of 86076

As of: Nov 02, 1998 @ 12:44 pm ET Last 5.215 Change +0.072 Currency USD % Change +1.40% Last check $ down 1.37% against yen and 0.22% against Mark.

To: yard_man who wrote (10060)	11/2/1998 12:51:00 PM
From: Cynic 2005	Respond to of 86076

M2 growth exploded in September, but don't expect anyone to care. Much of the huge gain in M2 was due to a surge in money market funds as money was shifted from stocks to money funds in the wake of the recent market correction. Excluding money market funds, M2 was up a much more subdued -- though still strong -- 9.6%. Money funds have in fact been responsible for a good chunk of M2 growth over the past year. Year/year M2 growth is an impressive 8.0%, but it is just 5.4% excluding money funds. This is notable because money funds are fundamentally different than "money." Money is created by banks making loans funded by deposits. Money funds are not the creation of banks. They are a liquidity measure rather than a money measure. The 5.4% year/year M2 increase ex-money funds is the better indication of true money growth. Month M2 Level Growth mo/mo Growth vs Base Fed Target Sep $4297.1B 16.8% 8.2% 1%-5% Aug 4242.0 8.7 7.3 Jul 4212.7 4.9 7.1 Jun 4196.1 5.5 7.4 May 4177.5 3.0 7.7 Apr 4167.2 10.1 8.6 Mar 4133.9 8.8 8.3 Feb 4105.0 10.2 8.1 Jan 98 4071.8 7.8 7.3 Dec 4046.4 7.0 5.8 1%-5% Nov 4023.6 7.5 5.7 Oct 3999.3 6.3 5.6 Sep 3979.0 6.7 5.5 Aug 3957.4 10.3 5.3 Jul 3925.2 4.6 4.7 Jun 3910.5 5.0 4.7 May 3894.5 1.0 4.7 Apr 3891.2 6.9 5.4 Mar 3869.7 5.1 5.1 Feb 3853.8 4.1 5.1 Jan 97 3840.8 4.7 5.6 Dec 3826.1 7.0 4.7 1%-5% Nov 3804.5 6.0 4.5 Oct 3786.0 3.7 4.3 Sep 3774.6 4.0 4.4 Aug 3762.3 2.8 4.4 Jul 3753.5 3.3 4.6 Jun 3743.4 5.5 4.8

To: yard_man who wrote (10060)	11/2/1998 12:52:00 PM
From: Cynic 2005	Read Replies (2) \| Respond to of 86076

NAPM Highlights The NAPM index fell to 48.3% in October from 49.4% in September. The price index rose to 35.8% from 34.4%. The orders index fell to 45.7% from 50.1%. Key Factors The NAPM index posted an expected decline, making it five straight sub-50% readings for the index. This was consistent with the message sent by key regional indexes such as Philly and Chicago. The most worrisome sign in the October report was the decline in the orders index to 45.7% from 50.1%, marking the first sub-50% reading for the orders index since March 1996. As this is the most forward looking of the NAPM components, its weakness is significant and most likely indicates that we are entering a second and more serious phase of manufacturing weakness. The price index rose slightly in October, but this should hardly be a concern, as the September reading was the lowest since July 1949. At 35.8%, the price index still indicates that prices are falling. Big Picture There is no doubt that weakness abroad continues to hit the manufacturing sector, and that weakness at home is now hitting as well. The October orders index indicates that the deterioration is now becoming more severe. The initial decline of the manufacturing sector was due almost entirely to Asia. Another wave of weakness is now beginning, triggered by falling demand at home, due to declining corporate profits and excess capacity, and further problems abroad, with the global crisis having recently spread to Canada and Latin America. Annual NAPM PMI Levels 1997: 55.0%. 1996: 50.1%. 1995: 49.5%. 1994: 57.8%. 1993: 52.5%. 1992: 52.6%. 1991: 47.1%. 1990: 46.5%. Month Index Employ. Prodctn Orders Deliv. Invntry Export Prices Oct 48.3% 45.0 52.6 45.7 50.0 49.8 42.0 35.8 Sep 49.4 45.5 53.4 50.1 51.5 42.3 45.8 34.4 Aug 49.4 46.9 50.3 50.9 50.6 45.3 44.1 38.4 Jul 49.1 44.4 49.2 53.2 50.4 43.7 45.0 38.0 Jun 49.6 47.8 50.7 52.0 51.3 40.8 47.0 38.4 May 51.4 51.0 54.1 52.1 51.2 43.7 47.5 41.1 Apr 52.9 49.8 53.4 56.8 52.3 46.6 49.7 41.2 Mar 54.8 52.5 57.6 57.3 53.4 46.8 48.0 44.4 Feb 53.3 50.9 55.3 55.9 52.1 46.9 47.9 45.8 Jan 98 52.4 50.1 53.3 55.2 52.0 46.7 45.0 44.7 Dec 53.1 50.9 55.8 53.9 54.0 46.5 50.6 50.8 Nov 54.5 53.3 58.5 55.1 55.2 44.3 52.6 53.2 Oct 55.9 52.5 59.6 58.4 55.0 47.0 51.9 55.5 Sep 54.6 51.1 58.4 56.1 55.5 46.2 51.2 54.1 Aug 56.4 51.6 61.2 60.4 55.6 43.4 55.1 53.4 Jul 57.5 51.1 62.5 62.9 54.8 45.8 55.3 51.8 Jun 55.6 52.2 56.7 61.2 54.9 44.1 54.4 48.3 May 56.4 52.0 57.4 62.7 54.6 46.1 55.0 48.6