January 24, 2003
Tomorrow beginning at 9:30am you can watch some pretty
amazing real-world athletic competition right here in our home town!
Our Louisville Lions Wrestling Team is hosting the Louisville Invitational
event at the school and our local grapplers are super this year!
Go see what all the Fuss is about, and Support Louisville Wrestling!!
Thanks to contributions from Jean Mueller, we have more
historic photos that will be added to the permanent archives in the History
Section of our Community Website.
Take a look at Jean's latest contribution, Click HERE:
See if you can guess who the kids are in the last photo! By the way, go
ahead and take the 2 Louisville History Quizzes in the History Section:
Jaycees are On the Job!
Planning has begun in earnest for this years Louisville Daz
event! That should put a warm smile and memory
on even the chilliest snow-shoveling Louisvillian. By sure to contact the Jaycees
and tell them you would like to get involved this year.
A Plea from Lynn Berner:
"WE NEED ADDITIONAL LISTINGS!! WE HAVE PRE-APPROVED
BUYERS LOOKING FOR HOMES IN AND AROUND THE LOUISVILLE AREA. PLEASE GIVE LYNN
234-2190 IF YOUR ARE CONTEMPLATING SELLING YOUR HOME."
As always, the folks at the city make the minutes from recent
City Council Meetings available HERE
for all Louisvillians to review.
editorial from Louisville
2003 Market and Economic Letter January 9, 2003
by Louisville's own Mark Leibman
I am increasingly optimistic that the worst is over in
U.S. equity markets. I think economic policy has now shifted into high gear
with additional tax cuts likely and interest rates very low.
The economy is in decent shape and will, in my opinion, grow strongly this
year. That said, 2002 was a tough year for equities, with the Dow down
16.8%, the S&P 500 down 23.3% and the NASDAQ down 31.5%. But I think the
foundation for sustained economic growth is in place and 2003 will be a much
First, it is important to note that the economy was not all that bad in
2002. Real GDP grew at an annualized rate of 3.4% over the first three
quarters of the year (we do not have the data for the fourth quarter yet).
That is much stronger than the first three quarters of the 1991 recovery
where GDP rose only 1.8%. Employment has yet to recover, down 15,000 jobs
over the first 11 months of 2002. But employment is always sluggish early in
recoveries as businesses work to control costs and rebuild profits.
After the first 11 months of the 1991 recovery employment was down 253,000.
In that recovery the unemployment rate continued to rise through mid 1992
hitting 7.8%. This time around the unemployment rate appears to me to be
peaking at 6%. The combination of flat employment and rising GDP has yielded
soaring labor productivity. Over the last four quarters, productivity growth
for workers at all non-financial corporations has risen a whopping 6.6%, the
fastest rate of increase since 1959. For investors rapid productivity is
important because it helps control business costs and increase profits. For
workers it is important because it helps stabilize employment and increase
wages. For all of us it is important because rising productivity is the fuel
for a higher standard of living.
Inflation has remained very well controlled. Despite high oil prices, the
Consumer Price Index is up only 2.3% over the last 12 months and the
Producer Price Index is up only 0.9%. The upturn in producer prices is a
good thing because last year there was some concern about continued
deflation and the potential impact of falling prices on corporate earnings.
Gradually rising producer prices coupled with very tight cost controls and
rising output should, in my opinion, allow corporate earnings to rebound
significantly. The Thomson First Call analyst consensus for S&P 500
earnings in 2003 forecasts a 14% rise. That strikes me as very cautious, but
analysts have turned cautious these days.
Economic policy is now, in my opinion, strongly promoting growth. For fiscal
policy the Bush Administration is proposing a substantial package of
additional tax cuts to stimulate the economy. The President is proposing
bringing forward tax cuts previously scheduled for 2004 and 2006, ending the
tax on stock dividends and other tax cuts and credits. There already is
considerable debate in Congress over the details of his proposal and it will
likely be modified, but I have little doubt that a sizable new round of tax
cuts will be enacted this year. Monetary policy, in my opinion, has also
shifted to stimulus with the November
2002 cut in the fed funds rate to 1.25%. That cut has affected interest
rates at longer maturities allowing longer-term fixed mortgage interest
rates to fall below 6%. Also, bank lending is growing at a healthy 6.2%
rate, whereas in the 1992 recovery bank lending was still falling.
All this leads me to expect a stronger economy in 2003 with companies
returning to profitability. I am looking for GDP growth in the 3% to 5%
range with employment starting to rise again. I do not expect a significant
rise in inflation, which may temper any tendency for substantial interest
rate increases. Consumer spending and housing appear to be strong, while
business spending has yet to accelerate. But I think that higher profits
will help restart business capital spending.
To be sure there are risks and threats we all must face. The global war on
terror is far from won and war with Iraq still appears likely. The North
Korean effort to resume production of nuclear weapons is a significant
threat that has yet to be addressed. However, some problems closer to home
have been dealt with. It appears to me that the scandals of biased Wall
Street equity research and crooked accounting practices by a number of
companies has ended. Straightening out the books required substantial
charges and huge write-offs in 2002 that substantially, but in my opinion
only temporarily, depressed reported earnings. I think cleaning up this mess
promptly rather than allowing it to fester should be a positive for
financial markets going forward.
We all realize that the last three years have been very painful and
frustrating. It is not possible to say with certainty that we have seen the
bottom and equity prices will rise going forward. I certainly expect
continued volatility as various risks buffet the market. But I do believe
that in the long-term the economy and the stock market move together and
that the economy is moving higher on a sustained basis. I think that it is
important now more than ever before to stay with a well-diversified
portfolio that takes account of your risk tolerance, but also is positioned
to take advantage of an equity market recovery as it develops.
Please feel free to call me with any questions or concerns you may have.
Mark Leibman, President
Leibman Financial Services, Inc.
Securities offered through Linsco/Private Ledger,
a registered broker dealer and investment advisor. Member NASD/SIPC
Be sure and check out all the Local Discussion by going to:
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