B.S. DURING 1965
The Merril Iymch, Pierce, Fenner & Smith Inc. Guide for Investors contained the following in its Latest issue:
"hile forecasters pre virtually unanimous in taking an optimistic view of the short-term prospects of the economy, many anticipate a slowdowm or a mild recession sometime in 1965. ‘Their case rests on a number of “considerations;
"A year from now, the tax-cut stimulus will have largely spent itnelf; furthermore, the reduced withholding rates are inadequate for 211 but the lower income brackets, and many taxpayers next April will owe a sizable lomp-sum payment - possibly as much as 2 billion dollars.
" Capital spending in 1965, expected to be atorsclose to a peak, will meke little or no contribution to further production grins; new capecity, which up to now has kept one step ahead of gains in sutput, will be coming on stream next year at & rapid rate, with consequent pressure on prices and profit margirzs.
"Profits and profit margins are further threatened by an apparent slowing in the rate of productivity increase, by intensified pressure for Hisher wares (even without an inflationary wage settlement in the auto industry), and by other cost increases, For example, industrial materials prices rose % between July 1964 and July 1964,
"New housing starts apparently reached a cyclical peak last fall; total new construction tay have réached its pesk this spring.
“ Throe years of record or near-record sales of autos and other durable foods have lifted consumer debt into new high ground, and installment repayments are now teking 14% of after-tax income; many analysts consider = slowdown in debt expansion overdue.
" Federal spending will provide little or no further lift to the econemy.."
i recession in the U.S. will add considerably to the economic difficulties facing which ever party wine the election in Britain.