Gekko 64 Letter from Al

Gekko

IT’S getting harder and harder for the bulls on the economy to justify their enthusiasm. The consumer finally seems to have decided that he is overextended, and he’s cutting back on his spending even as the government’s personal-income numbers stay up. The positive numbers out there, such as production in the third quarter, were kept up by businesses building their inventories and following through on their capital-spending plans. As they notice that the inventories aren’t moving the way they were supposed to, they’re going to cut back on production and capital spending. Remember that the consumer is about two-thirds of the economy, and he has kept going in large part through his willingness to build up his credit-card debt. That could be ending now.

PL

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Priscilla L. Buckley

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Gekko

IT’S getting harder and harder for the bulls on the economy to justify their enthusiasm. The consumer finally seems to have decided that he is overextended, and he’s cutting back on his spending even as the government’s personal-income numbers stay up. The positive numbers out there, such as production in the third quarter, were kept up by businesses building their inventories and following through on their capital-spending plans. As they notice that the inventories aren’t moving the way they were supposed to, they’re going to cut back on production and capital spending. Remember that the consumer is about two-thirds of the economy, and he has kept going in large part through his willingness to build up his credit-card debt. That could be ending now.