Atlanta Constitution column-June 30, 2004

After a year of soaring stock prices, investors have been marking time since the beginning of this year.  For example, a group of 186 closed end diversified equity funds experienced a 16 percent gain in their net asset values during the last six months of 2003.  In the first six months of 2004, the gain has been 1.8 percent. 

 

Atlanta Constitution column-June 23, 2004

In a video presentation to a
London banking audience two weeks ago, Federal Reserve Chairman Alan Greenspan stated that the Federal Reserve would be ready to move more rapidly if inflation began to surface.  He then outlined the areas of concern, from commodity markets, to the seepage of oil prices into everyday costs, and the rise in labor costs per unit of production that would suggest inflation is bubbling. 

 

Atlanta Constitution column-June 16, 2004

After observing a plunge in the value of Putnam on his watch, the former head receives a $78 million pension as he gets pushed out the door.  Most of the dispute between Grasso and Spitzer is on the size of the pension Grasso received.  A year before almost everyone involved in the program left the company, Delta created a $25 million pension program that will prevail even if the company does not. 

 

Atlanta Constitution column-June 9, 2004

At the end of May, prices received by farmers were the highest since monthly statistics began to be accumulated in 1910.  They also were 99 percent of parity. 

 

Part of this increase in prices is the result of the strong gains in world economic activity.  With India’s economy surging 10 percent in the past quarter and
China’s economy 9.7 percent above previous year levels, the number of people not able to afford an adequate diet has plummeted. 

 

Atlanta Constitution column-June 3, 2004

A popular variation of the famous George Santayana quote is that “those who forget history are doomed to repeat it.”  In 1994, the Federal Reserve began increasing their federal funds target from 3 percent to a high of 6 percent by early 1995.  Most of Wall Street believes this was a mistake.  A look at the historical record suggests otherwise. 

 

The asset bubble at the end of the 1980s was in real estate.  Unfortunately, many banks made loans against asset values that proved to be far too high.  When defaults developed, the very foundations of the banking system were in doubt.  (This bubble and its consequences, not the Gulf War, were the real causes of the 1990-1991 recession.)