The Justa and Lars Honors Bob Brinker Investment Club Thread Message Board

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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread

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Nov 7 4:00 PM EST

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To: Justa Werkenstiff who wrote (2)	7/2/2000 3:22:03 AM
From: Dave-in-MarinCa	Read Replies (1) of 10065

Justa: Good work on setting up the moderated thread. Your site and those who post considered opinions and info have been an excellent resource for me and I appreciate your efforts the past few weeks to keep it functional and in operation. Regarding Federal Reserve Bank of Cleveland president Jerry Jordan's speech, I get the feeling the FOMC is taking a lot of heat these days. Unlike Rubin, certainly, Summers isn't helping. And I don't think their work is finished. I keep rereading Paul McCully/PIMCO's May piece on NAIRU, productivity and the feds funds rate <http://www.pimco.com/bonds_commentary_fedfocus_recent_index.htm>. I realize McCully is selling bonds, however, his write up and the bumps in the curve on Figure 1 certainly support Bob's January call on equities. McCulley refers to economist Robert J. Gordon/Northwestern and the Gordon/Blinder rule. In May, I came across another work by Gordon at <http://faculty-web.at.nwu.edu/economics/gordon/334.pdf> questioning the whole computer/internet productivity story. I didn't give it much credence until I saw McCully refering to Binder. And then, NTRS economist Paul Kasrial comes out with his historical look at productivity growth <http://www.ntrs.com/economic_research/us_reports/pos2000/pos_econ_22may.html> and also questions the significance of the productivity numbers over the past 5 years. If these guys are correct, then Greenspan's reliance on continued productivity improvements keeping inflation in check and supporting a lower NAIRU come into question. Some other major economic factor restraining inflation will have to come into play or the feds funds rate will continue to rise in the quarters ahead as the FOMC fights inflation. It is unlikely to be lower import prices as Asia and Europe recover/grow. Do we have a triple bubble (high equity and dollar valuations and now productivity) <http://www.cepr.net/double_bubble.htm>. Any other thoughts/info on this topic? Got Rydex trades? Thanks for a great site. Dave

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