Wayne Ayers Quotations

We're seeing on an almost daily basis signs across all sectors that this recovery is for real, and this trade number is confirmation of that. We've seen a pick-up in imports, indicative that the economy has turned the corner.

I find it strange that we had one of the biggest declines in employment in almost two years and no one noticed, and I'm sure they're thinking the same way over there at the Fed.

From the Fed's point of view we've had head-fakes before -- I think they want to see a more stable environment for financial markets before they call it a day. I don't expect that's going to happen overnight. We will see a sustainable slowdown, but it may not happen right away.

I don't think anyone has seen this happen so quickly. I don't think Alan Greenspan has seen it happen so quickly. So he's taking out an insurance policy for himself. My best guess is that they (The Fed) are running scared. At this point we've seen such pronounced weakness across all areas of the economy that I think they're fearful this downturn is going to be very different than any in the past.

We're nowhere close to the Japanese example. When you have real deflation as they have in Japan, consumers expect prices to be lower, and they defer purchases, which makes the spiral worse. That's not an apt description of what the American consumer has been doing.

I suspect they will not have a neutral bias; they will indicate risks are on the downside. I think we will, on the production side, see better numbers in the second half of this year, but I don't expect any convincing improvement in the labor market before early next year.

It came in a little higher than expected, but I take it as more of the same -- consumers are hanging in, but they're not showing robust enthusiasm.

It is a genuine shocker... I don't think anyone anticipated a decline of this magnitude.

I think their desired stance is to stand pat for an extended period of time rather than cut rates, unless they are confronted with an external shock to the global financial system.

I think you would be hard-pressed to find an economist, aside from the supply-siders, who would argue against the idea that deficits matter.

I think the general message here is that despite the fears about a low savings rate, the consumer continues to hang in there, and that's essentially the only thing that's going to keep the economy on track.

I think (Fed Chairman) Alan Greenspan has made it all but official, we'll get another rate cut in June, but my guess is a quarter point rate cut, principally because of what we're seeing on the inflation report. The CPI and PPI have been trending up over the last two years.

I think if you take those two things together, there is some hope.

The anecdotal evidence of the beige book seems to confirm what all these economic reports have been saying.

We'll probably have a moderate-paced recovery. I couldn't agree more with the Greenspan's forecasts that it would be a sub-par recovery.

We are not going to see the strong increases in productivity that we've become accustomed to and I think we're at that point now and that's the message in these numbers.

To me, the business cycle is working as it always does, absent an external shock. Inventory liquidation means firms have to increase production, and they're already doing that. They're also increasing the length of the work week and hiring temporary workers. All these things support income and spending.

Firms in the past year have continued to invest in equipment and technology to improve productivity. And with good reason -- the cost of capital is below the cost of labor.

Firms are still pretty cautious, given the experience of the past couple of years. But if firms are going to maintain market share, they will have to be competitive in terms of the goods they offer.

The good news is that this is going to go directly to the corporate bottom line. That's a real plus for profits, which means a real plus for corporate spending and the recovery going forward.

The second half will show some better growth. Will that be sustained past the second half? For that, two things have to happen: we have to see a pickup in business spending, and the labor market has to stabilize and improve, creating permanent employment. We don't expect to see that until year-end.

Productivity growth helps keep inflation at bay and allows real incomes to grow, but it makes businesses even slower to hire than usual.

Productivity always slows as the economy slows. If labor and wage costs are still on the rise and productivity slows, either corporate profits decline or prices increase.

They'd just as soon sit on the sidelines in an election year, but they will do what they have to do, and they have moved in other election seasons.

This is the third decline in the last four months. Again, it's worrisome, but not surprising.

This liquidation has been so sharp, so severe, not just in this last quarter, but over the past year, that even with a modest pickup in demand, production is almost bound to increase as we move through the balance of this year.

They're acknowledging reality. They're saying, 'We'll do what we have to do if future events warrant,' but I still don't think they plan on doing anything anytime soon.

There's already a lot of stimulus in the pipeline, and there's more to come. So there appears to be an ever-growing amount of fiscal stimulus, which means any recession will be fairly shallow.

At labor market turning points, the household survey does better because it picks up self-employed workers and others not reflected in the business survey. But I'm still not convinced the labor market is quite as strong as the household data say it is.

It's unclear what lower rates would do. If it's really true that productivity and structural changes are causing labor market weakness, it's not clear that another cut in rates would be helpful to the labor market.

They've got more room to move, and they will move. That's what they've always done in past recessions and what they'll do again.

Inventories are at rock-bottom levels -- even if economic growth slows in the fourth quarter, those inventories will have to be rebuilt, otherwise businesses risk losing business.

Certainly those auto incentives were helpful in giving us that growth in the fourth quarter. But we have to remember that even outside of autos, the consumers have really hung in there. I don't think it's entirely a fluke. I don't think it accounts for the ongoing strength of the consumer.

He's instantly recognizable in financial circles and has international stature.

You can't read too much into any one number, but it's a sharp rebound from the lows of October. Given that and a few other things, the bond market's more recent expectation is that the Fed, if it's not finished, is close to being finished.