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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (2)	7/1/2000 11:41:42 PM
From: Gary D	Read Replies (2) \| Respond to of 10065

Response to a post on the old thread: Message 13981556 dale sinor, re: "I did a brief analysis of USPIX going back to the beginning of the year and I found that it did better (less) than 2x on NDX up days and very close to 2x on NDX down days. So in general it was a very good way to hedge WITH 1 EXCEPTION. April 18. This was a big NDX down day but the USPIX did not keep up." My analysis looking at USPIX between two specific dates shows a big deficiency: QQQ: 2/4 and 5/22 values: 97.1562; 81.625 (down 16%) USPIX: 2/4 and 5/22 values: 38.74, 41.44 (up 7%) USPIX should have been up roughly 30%, so it was not a good way to hedge between those two dates. I did not check to see whether this was caused by poor performance on just several days, or it is more distributed among days. But it does not matter to someone who held through the entire period: the end result is what counts. Gary (apologies for the redundancy to those who read my previous post on this subject--but more specifics given here) Justa: I like this place already! I hope you can 'lock' the old thread so that it cannot be grafitti'd.

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

To: Justa Werkenstiff who wrote (2)	7/2/2000 5:34:25 PM
From: Wally Mastroly	Read Replies (2) \| Respond to of 10065

June Jobs Report to Keep Fed on Watch: U.S. Economy Preview By Monee Fields-White and Alex Tanzi Washington, July 2 (Bloomberg) -- The Labor Department's report on June employment will show more Americans held jobs and earned more than in May, giving another reason for Federal Reserve policy-makers to keep a foot close to the brakes, analysts said. The nation's unemployment rate probably fell in June to 4 percent -- close to a 30-year low -- from 4.1 percent in May, according to forecasts. At the same time, companies probably created 260,000 jobs, excluding temporary hiring for the census. The economy shed 116,000 jobs in May. Hourly earnings are likely to have risen 0.4 percent after a 0.1 percent gain in May. The Fed's Federal Open Market Committee specifically mentioned the ``unusually high level'' of demand for workers when it warned this week about the risk of accelerating inflation. ``The Fed still has some anxieties about the economic environment,'' said William Sullivan, senior economist at Morgan Stanley Dean Witter in New York. ``If we do get the snapback in June, it would just confirm the Fed's suspicion that the slowdown that has been evident is temporary.'' The Labor Department's report will be released Friday. Although they warned about inflation, the central bankers left the overnight bank loan rate unchanged at a nine-year high of 6.5 percent after their two-day meeting. The FOMC had already raised rates six times since June 1999. Its next scheduled meeting is Aug. 22. Labor Department figures on initial jobless claims for the week ended July 1 also are likely to show demand for labor isn't easing much as well, analysts said. That report will be issued Thursday. Signs of Slowdown Higher borrowing costs do appear to be cooling other areas of the economy, such as manufacturing. The National Association of Purchasing Management's factory index -- due out Monday -- probably fell to 53 in June from 53.2 in May, analysts said. While a reading above 50 still indicates expansion, the drop would mark the fourth straight decline and result in the lowest reading since April 1999. The prices-paid index will be another key indicator in the factory report because it will tell whether manufacturers are paying more for raw materials. Forecasts suggest the index rose to 67.5 in June from 65.8 in May. The index reached a five-year high of 79.8 in March. ``Manufacturing is continuing to expand but at a fairly moderate pace,'' said Scott Brown, an economist at Raymond James & Associates in St. Petersburg, Florida. ``Price pressures are still there, but they are not as severe are we saw earlier in the year.'' The Conference Board's monthly index of leading economic indicators for May will also hint to an economic slowing. The index -- considered a gauge of economic performance for the next six months -- probably fell 0.2 percent in May after a decline of 0.1 percent in the previous month. In other reports: -- Commerce Department figures on Monday will probably show construction spending fell 0.2 percent in May following a 0.6 percent decline in April. -- The number of U.S. houses finished in May probably fell 2.9 percent to an annual rate of 1.61 million units. That's following a 3.8 percent drop in April and would be the second straight monthly decline. The Commerce Department issues that report on Wednesday. -- Factory orders probably rose 3.5 percent in May after a 4.3 percent decline in April that was the steepest drop in almost a decade. The Commerce Department will release that report on Thursday. Bloomberg Survey Date Time Period Indicator BN Survey Prior 7/3 10:00 May Construction Spending -0.2% -0.6% 7/3 10:00 June NAPM 53.0 53.2 7/3 10:00 June NAPM-Prices 67.5 65.8 7/5 10:00 May Housing Completions 1.61M 1.67M 7/5 10:00 May Leading Indicators -0.2% -0.1% 7/6 8:30 7/1 Initial Jobless Claims 303K 306K 7/6 10:00 May Factory Orders 3.5% -4.3% 7/7 8:30 June Avg. Hourly Earnings 0.4% 0.1% 7/7 8:30 June Change Nonfarm Jobs 250K 231K 7/7 8:30 June Change Nonfarm ex Census 260K -116K 7/7 8:30 June Unemployment Rate 4.0% 4.1% Federal Reserve, Treasury Wednesday, July 5 New York: U.S. Treasury Secretary Lawrence Summers delivers remarks to the United Nation's Economic and Social Council. Friday, July 7 Seoul: Federal Reserve Bank of New York President William McDonough speaks on banking issues to a symposium commemorating the 50th anniversary of the Bank of Korea. By satellite. - P.S. - Good luck with the new thread!