Vince Farrell on Economic Recovery Timeline
THIS IS A RUSH TRANSCRIPT.  THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED. DEBORAH MARCHINI, CNN ANCHOR: Well, on the economic front, investors are puzzling over the Fed's rate cut campaign. They'll hear from the horse's mouth this afternoon. At 2:00 p.m. Eastern, the Fed releases minutes from its June 27 meeting. The minutes will be more closely watched this time around because the Fed snipped interest rates by just a quarter point. Most economists had been expecting a half point cut. Also out this morning, weekly jobless claims. They've remained fairly low considering all the layoff announcements. The four-week moving average last week fell to its lowest level since mid-March. This week, expect a slight increase in the number of new faces on the unemployment line. In corporate earnings news, a healthy combination of shopping, doughnuts and wrestling. Krispy Kreme, just crossing the wires moments ago, it earned a dime a share in the second quarter, a penny better than expectations. In the same period a year ago, the doughnut maker earned 7 cents a share. Companies reporting this morning include Barnes & Noble and the WWF. After the bell, we'll get results from Barnes & Noble rival Borders as well as VA Linux and Novell. Well yesterday we saw quite a rally on Wall Street one day after a sell off. Vince Farrell is Chairman of Victory SBSF Capital Management and he's here to tell me what he makes of yesterday's rally.</s>VINCE FARRELL, CHAIRMAN, VICTORY SBSF CAPITAL MANAGEMENT: Unfortunately, Deb, I don't make too much of it. You know we're still trying to figure out whether the March-April lows will hold. Now I think they will even though the earnings estimates have fallen off a cliff and stocks are actually more expensive now on a p/e basis than they were then at roughly comparable prices. We're that much closer to an economic recovery. Story just before this you mentioned the 25-basis point cut, some were expecting 50. The thing that I admire about Greenspan is that he stays the course. He did 25 the last time, another 25. I think he fully anticipates that the past will be the prologue to the future, that interest rate moves take one year to work their way through the economy. I don't know where people get the idea it was six months, it's always been one year. January of 2001 is when he started to lower rates, I think the economy will start to recover in the first quarter next year. He anticipates this and I think it's actually a vote of confidence in that program that it was a 25 basis point cut. So I do think the economy is going to recover. Stock prices typically lead a recovery. We're not there yet. They're not ready to lead so we're still slogging through it.</s>MARCHINI: OK, Vince Farrell, we'll be back to you shortly. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com