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

To: MrGreenJeans who wrote (339)	7/18/2000 2:44:15 PM
From: T Bowl	Read Replies (1) \| Respond to of 10065

MrGreenJeans - *I'll start by saying I am defn not anything even close to an expert in this field. I am just passing on thoughts I have about the current situation. They may be extremely naive, silly or down right incorrect* Sorry I did not state the obvious. I thought I was basically doing so when I mentioned the false positive weakness of the indicator. Of course the quandry is that the FIG index is trying to predict potential inflationary pressures, but it is being watched by those who are trying to prevent them, by reacting to the results of the index(and others like it). So, false positives are going to be part of the problem if the FOMC is successful. It's kind of like trying to change the future without really knowing the end results of what you've done until it's happened. We won't really know if the FED has been successful until we see the results. I guess that's what keeps this game interesting, otherwise the conclusions would be known in advance and this would be awfully boring. My point, which obviously wasn't clear enough, was that the talking heads out there that are screaming "there are no inflation indications out there" don't have enough info yet. The FED was reacting to these inflation pressures that were seen out there with the leading indicators. There hasn't been time yet to see whether they got it right or not. IMO, the next several CPI/PPI releases are the key to whether the FED has been successful. Never, in either one of my posts did I say inflation was inevitable, I merely stated that we will know much more in the next coming months. It is too early to make the call. The fact of the matter is however, that during the last few months: 1) the Core CPI YTY trend has reversed it's 6 year downtrend. This is the most worrying aspect of all of this to me. 2) Even given the tightening policies of the last year, the FIG index is still up 10%+ YTY. I thought we might be seeing a reverse of the trend when the May data was released, but the June data showed it tick back up(but still below the high) 3) The interm and crude goods inflation data is still dark and gloomy. Once again, the June data showed that what we thought was a promising May report, may have been a temp slow down in the increase. 4) Core PPI is trending upwards during the last 6 months. (It's extremely volatile, so I don't put much emphasis on it, but the fact is that there are no indications that the FED has made a big impact on this) Fundamentally I have seen absolutely nothing out there that makes me comfy with what we are heading into. Given the above, I personally am not willing to take a risk of a long position in the market. todd