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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (6314)	1/28/2004 9:00:01 AM
From: russwinter	Read Replies (2) of 110194

Fed continues to just ignore their own inflation data. Empire State survey released 1/15, see page 3: ny.frb.org Prices paid index: Dec 12.50 Jan 28.16 Prices received: Dec -0.96 Jan 3.88 So let's do a dot connecting. If you're in business, and the prices you pay far outstrip the prices you receive, what do you do? 1. try and increase prices received, clearly happening, but will demand hold up. 2. If demand fails to respond (pricing power), cut costs (i.e labor), and 3. if all else fails refi <g>, then go out of business. Maybe inventories and durable goods orders refuse to grow, because it's unprofitable (cost more than prices received) to build them? What does this mean for 1Q earnings?

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