Commentary on inflationary environment or lack there of:
nytimes.com
The main reason is that oil plays a shrinking role in the economy. These
days, spending on oil products is equal to only 3 percent of gross
domestic product, which is the total dollar value of all of the nation's
output of goods and services. That 3 percent share is down from 8.7
percent in the 1970s.
And oil consumption, currently 19.9 million barrels a day, is barely above
the 18.8 million recorded in 1978. "That, in essence, is why oil does not
have the impact on the Consumer Price Index that it once did," said
Larry Goldstein, president of the Petroleum Industry Research
Foundation.
Workers, on the other hand, are in short supply. But instead of
demanding higher wages, forcing companies to raise prices to cover
higher labor costs, workers are settling for very small raises. The old
militancy is gone, wrung out of the work force through 20 years of union
setbacks, downsizing and corporate migration to cheaper labor markets.
Commentary on the markets:
nytimes.com
Q. Are you among the many folks who worry about the threat that
rising interest rates seem to pose to technology stocks?
A. Whenever interest rates become an issue, it lasts for a few days, and
then it is back to buying. What would worry me in terms of a big
compression in price-earnings multiples is if there were a lot of other
really compelling investment alternatives for people. Absent that, I don't
worry too much.
Q. What sorts of companies do you like now?
A. The types of companies we have been most interested in lately are
those that provide underlying e-commerce technology and photonics
companies, those who make equipment to move data on lasers. In
general, we have avoided the dot-com names. That has made us a little
less volatile and allowed me to sleep better at night. I think we will
continue that way. |
