gloomsters' treat

Carl Remick carlremick at hotmail.com
Sat May 5 21:16:33 PDT 2001



>From: Doug Henwood <dhenwood at panix.com>
>
>Greenspan Hopes U.S. Spends Its Way Out (Reuters)
>If Federal Reserve Chairman Alan Greenspan is counting on the
>consumer to bail out the ailing American economy, his chances of
>success would appear slim to none.
>For the full story, go to:
>http://dailynews.yahoo.com/h/nm/20010505/bs/stocks_week_dc_1.html

Re excerpt: "The betting in some quarters is the Fed may not be able to keep the Great American Spending Machine fired up forever because the jobs market is scaring a lot of people."

There has been some (not nearly enough) media discussion of this emerging recession as being the first in a long time to be a "business-led" one. In other words, while consumers continue to heed every exhortation to Do the Right Thing, keep a cool head and continue to pump borrowed money into the US economy, the business community hits the panic button early and hard -- laying off workers, deferring investments and otherwise cutting spending wherever possible -- thus aggressively undermining consumer confidence and contributing directly to lower total demand.

In this and other ways, business shows a remarkable ability to malign individual consumers and investors for engaging in irrational, short-sighted behavior that business, itself, is ever more quickest to resort to. In times of extreme market volatility, e.g., I believe that it is the market professionals who are increasingly the first to be afflicted by the madness of crowds.

Carl

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