The traditional bad for economy are missing in today's environment..<Looking ahead, traditional prosperity killers such as high inflation, rising tax rates, overbearing government regulation and commerce-stopping trade protectionism are nowhere in sight. Indeed, the war against terrorism is producing a sea change in federal economic policies that will better promote recovery through more stimulative fiscal and monetary actions. >
The good for stock markets and economy are abound <The Greenspan Fed is also doing its part. It has already added $70 billion in new bank reserves, with more coming. Its policy target rate will probably drop 50 basis points this week to 3 percent, and another 50 to 2.5 percent in early October. For 18 months, the economy has suffered from a shortage of liquidity -- now that problem looks to be remedied.
Over at the SEC, chief Harvey Pitt has announced that the securities regulator will provide stock-market liquidity by making it easier for companies to buy back their own shares. This is a big plus for investors who will reap new profits at a lower capital-gains tax rate.
More liquidity, lower taxes, declining interest rates, near-zero inflation, a stronger defense posture -- these are all pro-growth policies that will fuel stock-market gains and economic recovery. >
Overall postive.
Iqbal Latif
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