Rick's Picks
Thursday, September 9, 2004
For investors who'd rather be smart than lucky
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More Gardening Tips
From Mr. Greenspan
Interviewer: Mr. Chairman, do you think that we can stimulate growth through temporary incentives? "
[Long pause]
Alan Greenspan: As long as the roots are not severed, all is well. And all will be well in the garden.
Interviewer: I see. Then, what your saying is that as long as we don't do anything to upset the recovery, a period of strong growth lies ahead?
Greenspan: Yes. Exactly.
Finnegan's Wake
I should have guessed. I was on my way out the door this morning for a meeting and didn't have time to see what had caused bond prices to soar following a relatively weak opening. Two words: "Tepidly optimistic." That was how the news media parsed the Fed Chairman's testimony before Congress on Wednesday. Bond traders familiar with Cirlot's Dictionary of Symbols and Finnegan's Wake were quick to seize on Mr. Greenspan's speech as good reason to be pessimistically optimistic about the economy over the next few months. Moreover, judging from the way Treasury futures shot up, the traders are clearly optimistically pessimistic about a possible slowing of further increases in administered interest rates.
Meanwhile, Mr. Greenspan, true to his bizarre but politically astute notions about the statistical economy, seems to regard July's improvement in consumer spending as a hopeful sign. Some observers took this to heart, noting that an economy that has moved from a "soft patch" to one warranting tepid optimism speaks to the crucial concern of sustainability. The current "recovery" is nothing if not sustainable, since it would look little different to the working man if it were officially declared a recession.
Bleeding from Chevy Ads
The signal improvement in consumer spending for the month of July seems to have come from auto sales, even if they turned weak again in August. July's numbers would have been music to the Fed chairman's ears, August's letdown a refreshing and altogether necessary pause. Any guy who believes, as Mr. Greenspan does, that inflated home prices offer Americans a way to build wealth presumably must also believes that $7,500 discounts on every Chevy Suburban sold will contribute to a huge increase in household savings. For its part, GM has been doing its patriotic best to stimulate more such savings, blasting the airwaves with a high-decibel sales pitch that could make one bleed from the ears if one's trigger finger is just a second too slow on the zapper.
Interviewer: Do you realize that more people will be watching you today, than all those who have seen theater plays in the last forty years?
Greenspan: Why?
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Rick Ackerman
September 9, 2004
Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents © 2004, Rick Ackerman. All Rights Reserved. www.rickackerman.com
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