Why markets see a Goldilocks year ahead

[DanielLCharts]

Re: Why markets see a Goldilocks year ahead

For your reading pleasur, I dug up a bunch of articles to show just how "current" the soft landing criers of Q3 and Q4 of 2000 seem (my full blog entry is here: http://blog.myspace.com/index.cfm?fu...1-5fac5b8ed66f ). Time will tell if today's experts are prematurely calling for a soft landing once again:



Dec, 2000 by Charles R. Yengst

It Looks Like We're Getting The Soft Landing We Were Hoping For

The question is; are we going into a period of soft landing or a death spiral toward a deep bottom in the market? As an observer of the North American economy for nearly 30 years, I would have to venture that this slowdown is one of the most gentle I have seen.


Sept, 2000

The U.S. Economy is headed for a soft landing - predict economists

A growing number of analysts are convinced that the Federal Reserve has administered the right dosage of interest rate increases to slow economic growth just enough to keep inflation at bay while averting a recession. Recent economic reports provide the evidence that growth is slowing down, and that a slowdown can be sustained for at least the year ahead without an acceleration of inflationary pressures.


Sep 11, 2000 by Avrum D. Lank

`Soft-landing scenario' plays well for economy

The soft-landing scenario is playing as scripted," Bruce Steinberg, chief economist for Merrill Lynch & Co., wrote recently.


"Our panel sees a soft landing for the economy," Richard B. Berner, chief U.S. economist for Morgan Stanley Dean Witter, agreed. Berner made the comment while releasing a survey of members of the National Association for Business Economics, of which he is also a vice president.


Aug 24, 2000 by Ray Carter

Bank One economist predicts `soft landing'

(Anthony Chan, managing director and chief economist for Banc One Investment Advisors) believes the lack of action by the Federal Reserve opens the door for a "soft landing" in the economy that will slow the rate of growth.


Jul 21, 2000 by Philip Thornton

Greenspan raises hopes of soft landing

Wall street gained ground last night with both shares and bonds posting strong gains after Alan Greenspan, the man charged with setting interest rates, hinted he was happier with the state of the economy.

[tree]

Re: Why markets see a Goldilocks year ahead

jk writes: " 'our brave new world' lays out their case that everything is more rosy than anyone on this board thinks. it's worth reading because they do point to some interesting phenomena. e.g. a 'platform' company such as apple will contract out manufacturing to the cheapest source in asia. the manufacturer will show big production numbers which will pump up the gdp of the nation in which the manufacturer resides, but apple itself will have a far higher profit margin while retaining only the design, marketing and finance functions.'

Recently a major D.C. think tank invited me to a press conference for a report by three academics who'd surveyed big companies and found they preferred now to send r&d, marketing, finance, etc., in addition to manufacturing, out of the U.S.

And not because of lower costs but thanks to superior brain power to be found there.

I found it curious that the press conference was given on a Friday morning, and the email announcing it went out Thursday, ensuring that few reporters would attend and little if no coverage would result.

I once interviewed the second-generation (Republican) owner of a family-owned tool & dye (the machines that make the machines) business in Rockford, Ill. He explained to me how General Electric and Wal-Mart had ruined his industry in America. He said: "Jack Welch should be tried for treason."

Where does this end? How does it end?

[jk]

Re: Why markets see a Goldilocks year ahead

re: the soft landing in 2000.

in 2000 the ECONOMY did have a soft landing by most official measures, i.e. a very shallow recession. the stock market, on the other hand, had a fairly hard landing. if the eocnomy "lands" harder this time, we will get to see if the stock market makes a crash landing.


re: the outsourcing of r&d, finance, marketing, etc

gavekal does indeed also discuss the eventual outsourcing even those higher margin functions. they are all thrilled by the prospect- see the excerpts posted by PeterM above. this is all part of the levelling of global economy - living standards are definitely rising in the 3rd world, while they stagnate in the developed world. let's hope it's no worse than that.