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To: AllansAlias who wrote (8187)	8/2/2000 7:58:14 PM
From: patron_anejo_por_favor	Respond to of 436258

Nice finish to The Rap today: Belly up to the dove bar. . . At first it was difficult to figure out why we had a rally today. I thought it might be some of the underwriters goosing the futures to make sure they got all their IPOs done. Then I think I found the source of the frivolity. None other than Fed dove William Poole was on the tape this morning flapping his beak and patting himself on the back with both wings. According to a story that passed on Bloomberg today: The U.S. economy is benefiting from "low and stable inflation giving Federal Reserve policy makers room to experiment with faster growth than previously thought possible," St. Louis Fed bank President William Poole said. "We have the luxury of being able to be patient about this," Poole said in an interview Tuesday, suggesting he doesn't see inflation as enough of threat right now to force the Fed to raise interest rates to keep the economy from overheating. Poole sputtered on about some other things, like how well the PCE deflator has behaved but not mentioning the CPI, etc., but I think you get the gist -- although I do have to share one more paragraph: The inflation picture today is "more benign, more stable," than in previous years, Poole said, and crude oil prices, which doubled in the last year and a half, are down about 9 percent from their late June peak. That shows the rise in oil appears to be "shaking out and settling downward," he said. Lets just move the goal posts. . . Ordinarily I would give you my two cents on Poole's two cents, but in this case an e-mail I got from my buddy Colin Negrych who said it better than I would have: Every time one of the FOMC goons predicts lower oil prices it's a near-term bottom for oil prices. This goon especially. Greenspan started the process of directing people's attention away from core CPI to the PCE deflator. This is the logical second step after folks have been told to ignore headline CPI. Of course, inflation ex-inflation is zero. When the PCE deflator starts to rise the Fed will either change the way it is calculated or designate some other lower measure as "key." Flapping his beak and patting himself on the back with both wings? ROTFL!