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To: red_dog who wrote (55875)	8/13/1999 11:39:00 PM
From: kendall harmon	Read Replies (1) \| Respond to of 120523

Padinha on Inflation. He has been relentless--and right--all year. thestreet.com for non subscribers to tSC some excerpts: The core intermediate-goods index rose 0.4% last month (compared with an average monthly decrease that rounds to nil over the past year) and has now posted five straight increases for the first time in more than four years. That leaves it falling at a 0.1% year-on-year rate, which marks an acceleration of 1.7 percentage points on its January trough. The core crude-goods index rose 2.3% last month (compare with an average monthly decrease of 0.9% over the past year) and has now posted three straight increases for the first time in more than two years. That leaves it falling at a 6.6% year-on-year rate, which marks an acceleration of 9.4 percentage points on its December 1998 trough.... Greenspan is known to love the NAPM numbers, and the price index in particular has historically served as a good policy-tightening tell. The NAPM price index has posted seven straight increases since December to land at 54.7%, its highest level in almost two years. It now sits 2.5 percentage points above the level at which G. Love [=Greenspan]pushed through the June tightening, 0.9 point shy of the level at which he pushed through the March 1997 tightening, and 4.2 points shy of the level at which he embarked on the 1994 tightening cycle. And so for as long as those comparisons look like that, the core finished-goods index can plunge 10% every month and not mean thing one for policy.... The commodity-price crush that sent the Producer Price Indices plunging to begin with came as a result of both financial crises and a (not-unrelated) stagnation in worldwide demand. Growth in the East Asian crisis countries fell a whopping 8.0% between 1997 and 1998, and world gross domestic product growth sank to 1.8% from 3.2% as a result. Now the world is recovering. The fact that world growth will accelerate only modestly this year is not nearly as important as the fact that we have already hit bottom -- that we will not see growth decelerate by a full 1.4 percentage points again this year. So why is it that some folks expect the very kind impacts of the shocks we've seen to keep repeating themselves over and over, on out into the future -- why is it that some folks behave and talk and write and forecast as if the impacts have gone from exception to rule -- now that the shocks are gone?