Treasury notes
Interview: Martin Associates---Martin, Preston---Chairperson of the Board
>> Welcome back. treasury notes fell on speculation that the federal reserve will say economic growth is accelerating, boosting expectation it is may raise interest rates in the coming quarters. our next guest has been inside the fomc meetings. he is a former federal reserve vice chairman and chairman of martin & associates. he joins us from san diego, california. thanks for being on the program.
>> thank you.
>> take us inside one of those meetings, if you l.what is likely to go on tomorrow and ultimately what do you think the fed will say?
>> well, inside one of those meetings one has all 12 of the federal reserve bank presidents and all seven of the members of the board of governors and 10 or a dozen staff members in that palatial building that f.d.r. and echols built in the 1930’s. it’s a gorgeous place. it takes a big room for that kind of a meeting. and the difference between chairman―really it’s sir alan greenspan and his predecessors is he goes around the big room and asks practically every one of the committee members, you know, all 19 of them―he doesn’t ask all 19 -- but most of them, what do they think of the refinancing of housing, what do you think about the swiss national bank going in for retphraeugs. he goes around the room. and then with a policy move that he already had in his mind when he walked in the palace, the palatial room, then he says ladies and gentlemen, here’s% -pwhere we stand. will you vote on this?
>> is there much heated disagreement or is it too dignified an affair for that kind of thing?
>> both of these. dignified disagreement. i never used any swear words when i was dissenting from paul volker about every year i served. if any of your viewers would like to understand fed speak more in english, get my book, “the complete idiot’s guide to the federal reserve.” >> what is the fed likely to say about the economy? let’s turn to those matters.
>> the fed is likely to say tomorrow what they have already said in greenspan’s mid july testimony to the house finance committee, namely that the economy is recovering, that there is no substantial sign of inflation across the board with a few little exceptions. and that there is no need to raise interest rates for quite a long time in the future.
>> we have had unemployment over 6% for three months in a row now based on the july numbers that came out. that is a level we haven’t seen since 1994, until the last three months. you are here to say that you think jobs are going to come hoe hard will it be for schwarzenegger or larry flynt? tell us how bad their troubles will be if a new person is put in as governor?
>> again, since every problem is an opportunity, if an intelligent person does become the next governor in california, then what you need to do is what i did as a brand new savings and loan commissioner. i changed the savings and loans in california going to the state legislature and pointing out the problems and what we had to do about it. ‘ right person is governor, he or she will walk those things through that legislature and look out, new york, look out, arizona, here comes california.
>> do you think arnold will win, quickly in the last seconds?
>> i’m one of those financial guys. i’m a numbers guy. i used to be an economist. i don’t know.
>> we are out of time. creston martin, thank you for joining us, chairman of martin & associates. back after this break.
>> fedex is delivering packages in iraq. they’re providing service to baghdad, mosul and basra. the service began august 4 through the company’s air cargo delivery unit. they hired falcon express a closely held contractor for the iraq service. they’ll wear fedex uniforms. fedex makes deliveries in 215 countries. shares reached a 52-week high today, up 1.25%. asian computer-related stocks may be among companies to watch following the nasdaq gains today. we go to our tokyo burrow for a preview of tuesday’s trading day.
>> the rally at oracle may help asian technology shares. futures expiring in september pulled higher in chicago compared with singapore. an indication that traders expect stocks to open higher when tokyo trading begins. bank of new york japan rose and bank of new york korea rose. merrill lynch was forecast pickup in oracle sales may point to a recovery. a manager of $6 million in san francisco says we should see a follow through of the rally in japan after upgrades in the u.s. software industry. companies that do most of their business in japan may move. japan’s gross domestic product probably rose .2% in the second quarter. economists surveyed by bloomberg say companies like sharp and japan’s largest mobile phone operator while seven-eleven japan is the largest convenience store chain.
>> consumer sentiment is weakening as the unemployment rate remains high. not only do the unemployed not spend but also people with a job tighten their purse strings. also japan hasn’t resolved structural problems such as deflation. i don’t think we’ll see a recovery any time soon.
>> the central bank kept its assessment unchanged saying the economy remains virtually flat. bob?
>> i want to ask about tech earnings that came out in japan after the markets closed yesterday. what did investors make from the tech news they got?
>> well, it cut its full-year forecast after the markets closed yesterday. underscoring concerns of a recovery in the industry this year. the biggest maker of ceramic compass tors used to regulate tpoebl phones fell. back to you.
>> cathy yang, thanks for that. global coverage from tokyo continues with “bloomberg international” live at 6:00 p.m. new york time and 3:00 p.m. california time, about 11 minutes from now. acor plans to add nine hotels in china next year. the paris-based company says it is opening four this year and five next year. accor has 209 of 4,000 hotels in asia. they say china is the fastest growing market. they are expected to overtake france as the leading destination by 20 2k0 according to the world tourism organization. it’s in fifth place right now. well, britain’s trade deficit unexpectedly widened in june to the biggest in seven months. exports to countries outside the european union plunged 13%. the u.s. accounted for a quarter of the decline of exports
