Show gaufMOItvjMUMirgiin B 5 If US Can Learn From ’29 It Can Weather ’87 Crash By James Russell Knight- - Ridder Newspapers 1929 — a date that lives in economic infamy 1987 — the year of the sharpest big factor in the unhappy events of the 1930s something he suggested can't happen today because of deposit insurance and other safe- crash in history In the aftermath of October unpleasantness comparisons of the two years have become popular conversational topics Will a depression follow 1987 as a depression followed 1929? Throw that question out today and you’ll stir up a lively discussion There is evidence to support a pro or a con argument All too often however only the parallels between 1929 and 1987 are cited ‘‘The similarities between those two years are numerous but the major differences are as numerous” said Eric Miller chief investment officer of the Wall Street firm of Donaldson Lufkin and Jenrette The similarities include overvalued stocks that went into a free-fajg)d heavy speculation by stock buyers a) mg to get rich quick In the lgte 1920s the gambling casino aspects of the market were abetted by £ person’s ability to buy a dollar's worth of stock with 10 cents down Today half the purchase price ifiust be in cash But gambling instincts can be exercised by buying options and betting whether a specif ljj stock or the general market is going up or down Studies of the 1929 crash and the Repression that followed often focus on governmental policies and the abduce of a broad economic safety net as principal causes of the hard times JJ the 1930s For example: — There was no Social Security — There was no unemployment insurance I — There was no federal insurance ijn bank deposits “ — There was no government regulation of the securities markets I — There was no federal pension Insurance Nobel economist George Stigler recently said that the (pllapse of the banking systejn was a stock-mark- ll -- Prize-winnin- g guards In both 1923 and 1987 there were reactions by political leaders to the market collapses President Hoover insisted the US economy was fundamentally sound after the market break President Reagan was saying essentially the same thing in 1987 dismissing it with remarks about how everything was fine Concentration of wealth is a reality that economists cite in both 1929 and 1987 Since the biggest individual buyers of stocks and bonds are people of means it's only natural that their wealth would increase in the bull market that prevailed from August 1982 until October 1987 But what went up slowly went down rapidly and the concentration is not nearly so great now The richest man in America discount store magnate Sam Walton saw his wealth shrink by a couple of billion dollars when his Wal-Mastock hit the skids Unlike the 1920s an enormous amount of the stock accumulation of the 1980s has been by pension funds and mutual funds whose assets are for the benefit of millions of Americans Before the crash pension fund assets were estimated to be around $1 trillion while mutual funds held more than $800 billion Miller of Donaldson Lufkin suggested one critical difference in the two crash years that reflects poorly on 1987 behavior He said the Hoover administration in 1929 initially “moved quickly and decisively” to deal with the crisis The president and Congress in 1987 he said are perceived to be unable to “make obvious policy decisions forcefully and directly” to cope with the recent crash Later Washington in the 1930s bePollyana-is- h rt gan making “grievous errors” Miller added So there’s still time to do it right this time — if US leadership can learn from history Restaurants Deliver Microwave Foods To Boost Revenues NEW YORK (UPI) — Some US grocery companies that also own restaurants are drawmg from both areas to aid the sluggish restaurant industry which has been slowed by sales of microwaveable foods a marketing newsletter said General Mills Inc the parent company of Olive Garden Italian restaurants and York steakhouses recently launched “Order In” a service that delivers microwaveable dinners to homes and offices near its Minneapolis headquarters The Lempert Report said Pillsbury Co also of Minneapolis and owner of Burger King USA and Godfather's Pizza is another company reportedly seeking ways to ease the slack in its restaurant sales which has occurred since the invasion of the microwave oven The impetus behind these moves is that more Americans are eating microwaveable dinners at home and in the office While sales of take-ofoods from fast-fooand ethnic restaurants remain solid figures from the International Foodservice Manufacturers Association show that total restaurant sales are expected to grow by only 37 percent in 1988 to $1327 billion Services such as “Order In” may have little effect on sales at supermarkets mostly because they offer a ut d wider variety of microwaveable meals at a fraction of the cost However these services are expected to do well in the workplace where microwave ovens are increasingly becoming a fixture the newsletter said ’88 Jeep Cherokee f4X4 of the Year’ DETROIT (UPI) — The 1988-modJeep Cherokee has been named “4x4 of the Year” for the second time editors of 4Wheel & Off Road Magazine announced Monday The Cherokee built by the Jeep unit of the former American Motors Corp took top honors in 1984 Its competitors this year were offerings from Ford Chevrolet Isuzu Mazda Toyota and Range Rover Chrysler Corp acquired AMC and its Jeep operations last summer The Salt Lake Tribune Sunday December 13 1987 F9 Crash May Help Farmers Analyst Says By Don Kendall Associated Press Writer WASHINGTON — The stock market plunge on Black Monday Oct 19 has thrown many financial analysts into a tizzy over what may he ahead but an Agriculture Department analyst says it could mean some benefits for farmers Some analysts have suggested a recession is likely in 1988 although it is too early to make an accurate assessment according to Ralph Monaco of the department's Economic Research Service “It is likely that economic growth nationally will be lower in 1988 than expected a few months ago” he said “Somewhat surprisingly however agriculture may find itself facing better credit terms and stronger export demand in 1988 even if these are accompanied by slightly weaker domestic demand” Monaco said the farm economy “may improve because the earliest effects of the stock market decline most a full percentage point “If lower interest rates continue they ought to prop up interest-sensi- tive sectors of the economy — housing consumer durables and busi-- ' ness plant and equipment” he said “On balance it is bard to predict how much the expansion effects of falling' interest rates will offset the contraction effects of lower consumer have included a sharp drop in interest rates and in the value of the do- llar” Whether the economy will sag into a recession next year depends on consumer spending he slid The decline in stock market wealth probably will mean some reduction in 1988 consumer spending but that alone probably would not cause a recession “A consumer slowdown however could reduce business confidence bringing down capital spending and further reducing overall activity” Monaco said “The confidence factor is intangible and hard to assess but if enough confidence is lost a recession is more likely” Monaco said lower interest rates could offset an erosion of confidence noting that in the wake of the Oct 19 plunge the Federal Reserve increased the liquidity of the financial system to avoid a more general crash Interest rates dropped by al ' " wealth” Monaco in a new outlook report said the decline in the value of the dollar against foreign currencies has also added uncertainty Lower interest rates in the United States “could cause capital to leave the country in search of a higher return elsewhere leading to a drasti- cally lower dollar” he said “When capital leaves domestic interest rates are forced up — unless the Federal Reserve supplies more credit” Monaco said “If too much credit is supplied however inflation could be rekindled" v ‘ ' 3 Models Sold Out Price Reductions To 24 Below Market Rates 2400 East 3900 South Grand Townhomc A 2911 Finished Square Feet Circular Staircase serving Three Levels Three Fireplaces Twin Master Suite with Third Bedroom Walkout Finished Lower Level to Waterscape Double Garage the great giveaway Marketing by The Ramsey Group 467-668- or 8 272-887- 6 Rjmc and pnces subject to change wfchuut notice Official Porsche Racing 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