Jim, I dumped all my index positions yesterday, and you know I went long the day before, I just didn't like the early reaction to the FED move, but today I got in, had to pay more, natch.
I think the 2 day theory we were talking about is valid.
I don't feel the FED can see much of anything, they are out of ammo.
The reason is simple, the core rate of inflation, according to the govt. is 2.50%, the FED funds rate is now 3.75%, which is 1.25% above what they figure the core rate to be.
I don't believe we really have a 2.50 inflation rate, I think it is more like 3.50-3.75%
So, in my mind they have already run rates down to a real world zero.
The FED is out of real world gas, maybe they have one more 1/4 point move, and that is it.
You can look at long term rates and see a problem developing. The bond guys are jittery. And banks can start making real stupid loans all over again. Throw in some more quarters of negative productivity growth and I can see all of this ending in a messy way.
In the meantime, let us enjoy the rally, muted as it is....
I am glad I changed direction with respect to ORCL. |
