Business Daily ...

Hmmm... market surges on news US not to have (W) double-dip recession so what the .... ?????????

Date 07/08/2002

*****************************************
>From the desk of the Australian's Robert Gottliebsen...host of
Business Daily.
*****************************************

Suddenly there is a desperate cry in the US slash interest rates or we are doomed.

A month ago Australian Reserve bank Governor Ian Macfarlane almost certainly planned to raise rates in August but the plan has been mothballed.

In Europe there will be enormous pressure on the central bank to follow any US rate cut.

The US rate cut pressure is lead by market players, Lehman Bros, and Goldman Sachs who predict that the US Federal Funds rate will fall from 1.75 per cent to one per cent by Christmas.

That sent Wall Street jumping, but for such a dramatic rate fall to be contemplated, the US economy must be in deep in trouble, which will cripple American profits.

In Australia the central bank does not want the residential property market to rise again.

But he does not want to crunch it. Like all central bankers Macfarlane needs to manage the economic after shocks likely as a result of the big falls in global share markets.

There's another snag.

The Australian Government's budget forecast 3.75 per cent growth in the year ahead on the back of strong global growth.

That simply won't happen.

In the US Alan Greenspan is still publicly optimistic but
he is alone."

***************************************



This is only my view ... read the red stuff.