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To: fedhead who wrote (91038)	1/14/2000 3:57:00 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 164684

Greenspan explained it very clearly I thought. I posted his transcript.

To: fedhead who wrote (91038)	1/14/2000 5:09:00 PM
From: KeepItSimple	Read Replies (1) \| Respond to of 164684

>Why is the yield up to 6.69 if the CPI and PPI numbers were benign ? Because the bond market consists mainly of sophisticated traders, and they don't believe the gov. statistics at all. All you need to know about the worthlessness of the gov figures is one example: The housing price inflation component only measures the cost of RENTING a house in a given collection of demographic areas, it does not measure the actual cost of buying a house. The cost of buying a house increased at a rate of 30% annualized over the last 3 months. But there isnt an official gov statistic that keeps track of that. That statistic is provided by the private sector. Then throw out the price of energy and food, and you've got an inflation index that measures ridiculous things like tobacco and the cost of 1 yard of processed rayon fabric. Nobody with a brain thinks there is no inflation. Only people long stocks, or looking to sell stock to the public. IE- all of wall street.

To: fedhead who wrote (91038)	1/14/2000 5:51:00 PM
From: GST	Respond to of 164684

<Why is the yield up to 6.69 if the CPI and PPI numbers were benign ?> Capital markets are global -- you must see these rates in the context of the global economy which is growing now. Rates dropped in the past too ultralow levels as the world went into severe recession. In a robust world economy, and with the tightness in markets of all kinds in the US, expect higher rates as a trend -- this is the ultimate kiss of death for the stock market -- the trend. I am betting that we get a fools rally and I make money before the fools reverse course -- right now it is working.