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To: Chuzzlewit who wrote (89443)	1/15/1999 1:13:00 PM
From: kemble s. matter	Respond to of 176387

Chuzz, Hi!!! *********OT********* Avoid NYC as if there was a plague there...the area we live in is still somewhat bucolic...but, the secret is out...many have moved in during the last twenty years...more and more are commuting the hour and half to the city...Grew up in suburban Philadelphia...love this country scenery and views of the Adirondack foothills...of course it is a breathtaking scene looking out of a window from a home on Puget Sound and viewing those huge mountains...hard to beat that anywhere! Best, Kemble.

To: Chuzzlewit who wrote (89443)	1/15/1999 1:36:00 PM
From: JRI	Read Replies (5) \| Respond to of 176387

Don't know if you are watching CNBC....they are showing a speech & Q&A with Abbey Joseph Cohen and SF Fed Gov.. Abbey raised some interesting points: (1) U.S. banks have somewhere between 1/5 to 1/10 the exposure to Brazil in comparison to 5 years ago (2) In her opinion, and the opinion of the SF Fed governor, the Brazil "crisis", in its current state, is a minor occurence (for the US), nothing more (3) Stocks prices have increased over the past few years because their EVA has increased....the value of output- the cost of inputs (capital)...EVA...has increased over the last few years for many U.S. corporations......The current bull run (1990's) actually started with the corporate restructings which took place at the end of the 1980's/early 1990's when corporations ended tying up capital (and labor) in low-return opportunities ("restructuring")...since 1993..we have seen phase two, the reallocation of this capital (and labor) to higher-growth (return) opportunities..hence, the large of no. of new job created over the past 6 years, etc...Abbey noted, that Japan has actually had a negative EVA over the past few years...the problem has not been low cost of inputs (capital) or liquidity....rather, it has been the allocation of this (ample) capital to low or negative return ventures (ARE YOU LISTENING LUCRETIUS! GET A CLUE!) and perhaps the most intriguing point(s).. (3) Exports only comprise 13% of total GNP...so, when looking at the US economy, and thus US corporate profits, and thus stock prices, internal demand is considered much more important (than exports)...internal demand is really the key...and that appears to remain strong (looking forward) for Cohen and the gov. (4) Because of the nature of U.S. exports have changed in the last decade, ie., technology, as a share of exports, have risen to 3 times the (%) level of the U.S. total exports as before (in only the last 7 years)...we have seen a dramatic shift from U.S. exports formerly consisting (primarily) of commodities and low-value added items......to, now, a much larger share consisting of high-tech exports...This is important, because Abbey clarifies that high-tech exports are (much more) immune to changes in exchange rates (than commodity exports)...ie., small/moderate changes in exchange rates become mostly irrelevant, and large changed muted...This explains Abbey's continuous bullish call over the last two years -despite the past (recent) crises of the last couple years...To repeat:Because of the "insensitivity" (of demand) of high-value added exports, making less relevent the less-favorable exchange rates with those economies (Asia, LA) experiencing trouble over the last couple years....and strong internal demand for goods and services... Stock market prices have continued to go higher.... Note: Abbey estimates that high-tech exports are around 1/4 as sensitive to changes in exchange rates as commodity or low-value added exports... The future: Cohen's (and the Fed governor's forecast) for 1999 and 2000 for the U.S economy....more of the same (including low interest rates)! Sorry for any run-on sentences all Now, go take your cat nap now <gg> You still have a lot of lives left...