Ralph
01.01.2001, 11:12
Den nachfolgenden Artikel habe ich auf CNBC gefunden ..... ob sich den die FED auch durchlesen wird !?!
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Brusca: Economic History Lesson
By Robert Brusca
Chief Economist, Ecobest Consulting
Dec 31, 2000 09:00 AM
More evidence of a slowdown piled up last week, but Alan Greenspan's admonishment (it's not like 1998) still rings in our ears.
Consumer spending on durable goods has slowed most sharply, a tried-and-true slowdown precursor. Consumer confidence has now dropped sharply, much as it did in 1998 and in previous downturns -some of them of the more severe variety. But jobless claims, while elevated, have plateaued after a spike.
How much worsening is to come? Existing home sales have continued to rise, but other forward-looking housing indicators are losing luster fast.
Although it's not 1998 again (all respects to H.G. Wells) there are other eerie familiarities. It's not hedge funds with problems this time, but unhedged funds invested in dying dot-coms and other high-tech losers. Many of the nouveaux technology firms are being shunted from the capital markets. It's not the international junk market (as in 1998) but the junkyard next door that's in trouble. And to make matters worse, this junkyard contains all things shiny and new.
The Nasdaq's fall from darling to Dracula has sucked the lifeblood out of prospects for the entire economy, like some misbegotten hedge fund from Connecticut. So it's not the same, but it's not that different, either. In 1998, the Fed chopped and cut and sliced the funds rate three times in rapid succession to save the economy from the looming threat from...well, from Connecticut, of all places. So don't dismiss the impact of the techs and dot-coms.
It's Not 1994-95, Either: No, history doesn't repeat itself. But it gives us antecedents and precedents to ponder, lessons to learn.
In 1994, near the end of a period of rate hiking, the Fed ratcheted the funds rate up by 75 basis points in one fell swoop, waited a couple of months, gave the economy one last 25-basis-poitn shove toward the abyss and stopped. But the now-fabled soft landing was created by the capital markets more than by the Fed. Capital-markets rates peaked in November 1994 with the Fed's outsized rate hike; they totally ignored the Fed's last 25-basis-point hike of February 1995.
It took the Fed longer to come to the economy's rescue with actual rate cuts back then. In 1995, had the economy been Nell (tied to the train tracks by the villainous Snidely Whiplash) with the Fed in the role of Canadian Mounty do-gooder Dudley Dooright, Dudley would have been looking for a good micro surgeon.
Fortunately, Dudley had a helper back then, Mr. Market (Mr. Bond Market to be exact). The Fed seems to have learned a lesson at that time, as by 1998, it was moving more quickly in the face of crisis, albeit a crisis of a different sort.
We, at the threshold of the real new millennium, have something in common with this 1994-95 episode, too, as market rates are moving lower very quickly, especially in the mortgage market. Treasury rates are falling, too. But mortgage yields are down to just a smidgen above the 7% level and not too far off the rate lows of, well, 1998. Remember, one common element in 1995 and 1998 was that the Fed did eventually move.
It's Not 1990! In 1990, some thought the Fed had avoided a recession by starting to cut rates well ahead of the emergence of severe weakness. But the Fed wound up just having cut rates some months before the actual recession started, rather than successfully averting the recession itself. And then the downturn was exacerbated by the Gulf War.
The Fed learned at that time that starting to cut rates early isn't enough. It must cut them sufficiently to inspire boldness in the markets. Recession was baked in the 1990 cake by the time the Fed began to move. The Fed's slow and tortured rate cuts of that cycle's downturn phase led the economy to a slow start and to a steady rise in unemployment and a very slow economic recovery. That "recovery" helped to unseat George Bush (senior) as president.
No it's not 1990, as George Bush isn't being denied office this time. Now, George W. Bush is set to occupy the White House -- and guess who still is there at the Fed?
This Time Will Be Different: True statement or famous last words? The Fed seems prepared to move -but will it act strongly enough? U.S. labor markets are much tighter than they were in the earlier episodes of slowing. Of course, inflation seems more under control, certainly in terms of its momentum if not by its outright pace.
The Fed has a unique judgment to make in balancing this all-too-typical tradeoff. And this slowdown (or worse) has many trappings of the 1998 episode, as it is a financial one precipitated by the stock market - or at least by a segment of it. It isn't a typical liquidity-inspired credit crunch, but something rather unique, in which the stock market's demise created valuation uncertainty that shut off or severely damped the flow of credit to a key sector of the economy.
If anything, the financial aspects of this episode should lead the Fed to be more accommodative, as history tells us that episodes like this can be the worst and the hardest to reverse if they are not arrested early. So yes, this time things will be different. But, different from what?
***********************************************************
Ralph
***********************************************************
Brusca: Economic History Lesson
By Robert Brusca
Chief Economist, Ecobest Consulting
Dec 31, 2000 09:00 AM
More evidence of a slowdown piled up last week, but Alan Greenspan's admonishment (it's not like 1998) still rings in our ears.
Consumer spending on durable goods has slowed most sharply, a tried-and-true slowdown precursor. Consumer confidence has now dropped sharply, much as it did in 1998 and in previous downturns -some of them of the more severe variety. But jobless claims, while elevated, have plateaued after a spike.
How much worsening is to come? Existing home sales have continued to rise, but other forward-looking housing indicators are losing luster fast.
Although it's not 1998 again (all respects to H.G. Wells) there are other eerie familiarities. It's not hedge funds with problems this time, but unhedged funds invested in dying dot-coms and other high-tech losers. Many of the nouveaux technology firms are being shunted from the capital markets. It's not the international junk market (as in 1998) but the junkyard next door that's in trouble. And to make matters worse, this junkyard contains all things shiny and new.
The Nasdaq's fall from darling to Dracula has sucked the lifeblood out of prospects for the entire economy, like some misbegotten hedge fund from Connecticut. So it's not the same, but it's not that different, either. In 1998, the Fed chopped and cut and sliced the funds rate three times in rapid succession to save the economy from the looming threat from...well, from Connecticut, of all places. So don't dismiss the impact of the techs and dot-coms.
It's Not 1994-95, Either: No, history doesn't repeat itself. But it gives us antecedents and precedents to ponder, lessons to learn.
In 1994, near the end of a period of rate hiking, the Fed ratcheted the funds rate up by 75 basis points in one fell swoop, waited a couple of months, gave the economy one last 25-basis-poitn shove toward the abyss and stopped. But the now-fabled soft landing was created by the capital markets more than by the Fed. Capital-markets rates peaked in November 1994 with the Fed's outsized rate hike; they totally ignored the Fed's last 25-basis-point hike of February 1995.
It took the Fed longer to come to the economy's rescue with actual rate cuts back then. In 1995, had the economy been Nell (tied to the train tracks by the villainous Snidely Whiplash) with the Fed in the role of Canadian Mounty do-gooder Dudley Dooright, Dudley would have been looking for a good micro surgeon.
Fortunately, Dudley had a helper back then, Mr. Market (Mr. Bond Market to be exact). The Fed seems to have learned a lesson at that time, as by 1998, it was moving more quickly in the face of crisis, albeit a crisis of a different sort.
We, at the threshold of the real new millennium, have something in common with this 1994-95 episode, too, as market rates are moving lower very quickly, especially in the mortgage market. Treasury rates are falling, too. But mortgage yields are down to just a smidgen above the 7% level and not too far off the rate lows of, well, 1998. Remember, one common element in 1995 and 1998 was that the Fed did eventually move.
It's Not 1990! In 1990, some thought the Fed had avoided a recession by starting to cut rates well ahead of the emergence of severe weakness. But the Fed wound up just having cut rates some months before the actual recession started, rather than successfully averting the recession itself. And then the downturn was exacerbated by the Gulf War.
The Fed learned at that time that starting to cut rates early isn't enough. It must cut them sufficiently to inspire boldness in the markets. Recession was baked in the 1990 cake by the time the Fed began to move. The Fed's slow and tortured rate cuts of that cycle's downturn phase led the economy to a slow start and to a steady rise in unemployment and a very slow economic recovery. That "recovery" helped to unseat George Bush (senior) as president.
No it's not 1990, as George Bush isn't being denied office this time. Now, George W. Bush is set to occupy the White House -- and guess who still is there at the Fed?
This Time Will Be Different: True statement or famous last words? The Fed seems prepared to move -but will it act strongly enough? U.S. labor markets are much tighter than they were in the earlier episodes of slowing. Of course, inflation seems more under control, certainly in terms of its momentum if not by its outright pace.
The Fed has a unique judgment to make in balancing this all-too-typical tradeoff. And this slowdown (or worse) has many trappings of the 1998 episode, as it is a financial one precipitated by the stock market - or at least by a segment of it. It isn't a typical liquidity-inspired credit crunch, but something rather unique, in which the stock market's demise created valuation uncertainty that shut off or severely damped the flow of credit to a key sector of the economy.
If anything, the financial aspects of this episode should lead the Fed to be more accommodative, as history tells us that episodes like this can be the worst and the hardest to reverse if they are not arrested early. So yes, this time things will be different. But, different from what?
***********************************************************
Ralph