The secretary is moving back to New York. Long live the secretary.
One of the hallmarks of
career as secretary of the
was his strong dollar policy. Not long into his tenure in 1995, he was instrumental in an intervention on behalf of a beleaguered greenback by the central banks of the U.S., Japan and Germany. It marked the end of a decade-long decline in the dollar and, because currency strength is a natural inflation fighter, allowed the
to let the economy perk along without raising rates too often.
Back when he was an academic, deputy Treasury secretary
sometimes argued that what the U.S. needed was a weaker dollar. It's been a long time since he's said such things, and speaking to reporters at the meeting of finance ministers at the
Asia-Pacific Economic Cooperation
forum on Sunday, he made it clear that when he takes over the reigns from Rubin this July, the strong dollar policy will continue. "Secretary Rubin and I have seen this in the same way for many years," he said. "A strong dollar is very much in America's interest."
Meanwhile, Rubin, speaking on
"This Week" on Sunday, said he believes the U.S.' strong-growth, low-inflation environment will continue -- easing some of the fears created by Friday's unexpectedly strong
consumer price index
. Of course the real thing people want to know is if Rubin's weekly breakfast partner,
, shares those views.
Rubin also sounded one of his perennial themes -- that budget reduction, not a hefty tax cut, is what the U.S. economy needs to remain strong. Here we know that his breakfast partner is in complete accord. In closing, when asked what his plans were for when he returned to New York, Rubin said he was going fly fishing.
On the corporate front this weekend, there were a number of reports essentially confirming what
told viewers on Friday -- that
are talking merger.
The combined company would be something of a rival for giants
. Any merger announcement Monday might help the market ignore all its interest-rate tensions. But with the
Federal Open Market Committee
meeting on Tuesday, any such distraction probably won't be very long-lasting.
unit said that it will buy the $11 billion U.S. commercial loan portfolio of failed Japanese bank
Long-Term Credit Bank
. GE chairman Jack Welch has often said he sees good bargains in Japan. With GE Capital continuing to snap up Japanese assets, it's apparent Welch's money is where his mouth is.
In international news, Russian president
managed to prolong his tenure a bit longer. Though Yeltsin has few friends anymore, the
vote to impeach came to naught Saturday. With voting either for or against impeachment both carrying great risks, many in the legislature stayed away. Others turned in blank or defaced ballots.
International Monetary Fund
said he is ready to work with the new Russian parliament.
, the unusually forthright head of the
Economic Planning Agency
, said he suspects the economy contracted again in the June-March period. That would be the sixth-straight quarter of negative growth.
In The Papers
takes the time to chat with
Salomon Smith Barney
drug stock analyst Jason Kolbert, who thinks that drug stocks have been beaten down a bit much lately. With the Baby Boomers getting older, Kolbert sees the drug makers continuing to mint profits.
The funny thing is, Salomon Smith Barney equity strategist John Manley, who was early to call the cyclical rally, has lately been negative on drug stocks, believing that they will continue to underperform value stocks for some time.
, Alan Abelson waxes on an on about Rubin's departure. There's nothing investable here. But then he sings the praises of a hedge fund manager
. Pace has a couple of stock picks --
Fusion Medical Technologies
. Both are small caps. Identix has a price-to-earnings ratio of 491. Fusion doesn't have a P/E ratio -- because there's no E.
When little stocks like this get hyped like this, it's no surprise that they usually shoot higher. It is surprising to see Abelson doing the hyping, though.