So they say... Featured

9:48am EDT July 22, 2002

Indeed, 1999’s domestic economy turned out pretty much as expected, with the economy growing at a robust pace and profits landing at a reasonably good level for the year.

So says Daniel Laufenberg, vice president and chief U.S. economist at American Express Financial Advisors. The significance of that review is that he expects roughly a “repeat performance” next year in many regards.

Laufenberg and his top colleagues shared their economic forecasts recently with business owners in Pittsburgh and across the country via live satellite feed.

The economy is going to grow, but at a slightly slower pace,” he says. “It’s going to get a lot of help in the trade sector. And inflation will move higher.”

He suggests that profits will be buoyed by operations overseas and he expects the Federal Reserve to drive interest rates (particularly short-term rates) up a bit early in the year before lowering them again later in the year once it succeeds in slowing the economy.

“It’s important that the Federal Reserve remain vigilant against inflation,” Laufenberg says.

Joe Barsky, vice president of mutual fund equities at American Express, says the economy this past year has been experiencing a “stealth bear market,” which he predicts will end next year, with little help from interest rates or inflation. The good news about this year’s stock market: NASDAQ, emerging markets, technology stocks and telecommunications companies. The bad: the Russell 2000, electricity companies, banks and health care.

Among his prognostications for 2000: A stronger global economy, with less liquidity; earnings growth of around 10 percent; and a focus on value, smaller, global, and cyclical stocks.

And let’s not forget about Internet stocks. Says John Faig, an equity analyst at the Minneapolis-based financial services company: “As the IPO pace dwindles, the IPO pipeline will shrink a little bit because of some blow-ups. There won’t be huge opportunities on the table.”

So he says.

Daniel Bates

In this high-tech world ... Why trust still matters

Even as e-commerce eliminates the need for person-to-person contact in many situations, the one thing new e-commerce companies must never forget is the value of trust.

That’s what Jeffrey Ritter, an attorney with Pittsburgh law firm Kirkpatrick & Lockhart who works largely with young high-technology companies, told attendees at a recent MIT Enterprise Forum program that featured local e-commerce start-up

So often, he says, high-tech companies get caught up in the technology and the market, forgetting about this fundamental business premise.

The four elements of trust, he says, are:

1. Predictability — That means no surprises that leave customers wondering what to expect next.

2. Certainty — “It has to happen every single time,” Ritter says.

3. Accountability — Since there’s no face-to-face contact, you have to let your customers know who they’re doing business with and that, if a problem occurs, you will accept responsibility.

4. Recourse — You have to let customers know how to seek help and satisfaction when something does go wrong. “If you give a guarantee,” he says, “how will you make it right?”

Says Ritter: “Without trust, you’re dead.”

Daniel Bates