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To: Archie Meeties who wrote (36966)	6/2/2000 1:16:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 77400

The bear case, however, is that inflation persists despite a slowing economy. Given the net loss of non-government non-farm jobs this past month (heading into the summer no less!) and the increase in unemployment and wages coming under pressure (THIS IS KEY TO YOUR CPI/PPI ARGUMENT AND THE TARGET OF THE FED) I would suggest that the fed's attention is now on keeping from burying the ecomony. CPI and PPI are less volatile and therefore a poor indicator of how past rate increases are working into the economy. Furthermore because they are less volatile they have yet to take into count reduced labor costs due to lower wage increases. The danger of overshooting (and the impact) is far greater than undershooting. I had guessed that the fed might go a quarter point in June... but now I'm 50/50... they may not raise at all. My point - regardless of CPI and PPI - unemployment is up and wage growth has slowed - housing starts are down when it should be up (pre-summer) - and so the fed will act accordingly. NAZ 2200 is a very bold guess. I don't think we go there. I think we set a higher low on any retrace - the worst is over. Greenspan doesn't want to be known as the guy that killed the greatest economy in US history. BTW: Oil alone is simply that.. It will be factored out. OG

To: Archie Meeties who wrote (36966)	6/2/2000 1:31:00 PM
From: michael97123	Read Replies (1) \| Respond to of 77400

Arch, You are looking thru the rear view mirror. Slower housing,employment,auto sales etc. will neutralize inflation moving forward. Mr. G is no dope. Recession is the strategic enemy. War on inflation is merely tactical in order to prevent boom and bust cycle from returning. Thats where shorts went wrong(2200 naz is laughable) as well as longs who bailed last week for that matter. They underestimate the man with the capital S on his shirt.