ISI Economy, Money and Markets

Dear Equity,

Good morning,

Much like the Yankee's last night, there are some signs the economy may
pull out a bottom of the ninth inning win. Our surveys are up to just
about where they were before 9/11, the auto survey is strong on incentives
and is now joined by the retail survey, M3 has surged $158 billion, the
market is up about 11% from 9/11, and now Tom Gallagher and Andy Laperriere
expect the new stimulus package to be as much as $100 billion.

The EMM today highlights the positives and of course the negatives as well.
The three main concerns: falling commodity prices, a surge in layoff
announcements, and corporate earnings (or lack thereof). But we still
expect inflation to slow quite a bit, and this coupled with oil and rates
falling, plus very low inventories should make for a good 2002. I would
say that we are basically looking for a "lower case 'v.'"

In the political report, look for more on why Tom and Andy expect $100
billion in new stimulus, versus $75b. This brings the total stimulus to
$225 billion in 2002. Also, don't miss the "in depth" section on
Healthcare. There is a good possibility the Medicare drug benefit never
happens.

Finally, I resisted all last week and I just can't hold back any longer. I
would like to congratulate Ed, who received top ranking for the 22nd
straight year from Institutional Investor. Nancy was also mentioned, and
very exciting, our political research group took number one for the first
time. Congratulations. And thank you! They couldn't have done it without
the fans.

Have a great week.

TABLE OF CONTENTS

p.3....ISI COMPANY SURVEYS BOUNCE BACK

p.6....2002 Inflation Slowdown Is the "Highest
Probability Aspect" Of Our Forecast

p.7....2002 GROWTH LIKELY TO SURPRISE
(From A Lower Base)

p.11...4th Week For End-Of-Recession,
Liquidity Driven, S&P Strong Advance.

p.13...Weak Commodity Prices Suggest Weak 4Q Earnings

p.15...Nominal GDP May Be Contracting

Please click below for the entire ECONOMY, MONEY & MARKETS report.

http://www.isigrp.com/isip/lib21/1455/31632/10-22emm.html

If you have problems working with PDF files integrated in your browser,
then click below to access the link in a way that will let you save the
file to disk before viewing or printing it.

http://www.isigrp.com/isip/down/1455/31632/10-22emm.pdf

All the best,

Freddy Victoria
212/446-9413