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To: KeepItSimple who wrote (112828)	12/16/2000 5:18:24 AM
From: Mark Fowler	Read Replies (1) \| Respond to of 164684

Inflation Mild As Industry Output Sags By Caren Bohan Dec 15 5:17pm ET WASHINGTON (Reuters) - U.S. inflation remained mild in November as the industrial sector showed further signs of softness, bolstering expectations that the Federal Reserve may start cutting interest rates in the new year. The Consumer Price Index, the nation's main inflation gauge, rose a moderate 0.2 percent in November for the second month in a row, the Labor Department said on Friday. Tobacco prices and airfares boosted the closely watched ''core'' CPI, which strips out food and energy costs. That index rose a slightly stronger 0.3 percent but economists said the underlying trend for prices would offer comfort to Fed officials, who will meet Tuesday to deliberate interest rates. But amid the reassurance on the inflation front, a report that the Fed itself issued on Friday underscored concerns that the economy is rapidly downshifting. TOO MUCH SLOWING? ``The famous economic slowdown is under way,'' said Robert Dederick, economic consultant at Northern Trust Co. in Chicago. ``Rather than inflation, the main issue for the Fed right now is whether the economy is going to slow more than they would like it to,'' he added. In its monthly report on industrial activity, the Fed said production by the nation's factories, mines and utilities fell 0.2 percent in November after a 0.1 percent drop in October. It was the first time since June and July of 1998 -- when factories were buffeted by a global financial crisis -- that industrial output has recorded back-to-back monthly declines. President-elect George W. Bush, in a briefing with reporters, singled out the factory sector as an area to watch as he highlighted the economic slowing as a justification for his proposed tax cuts. ``I think there is concern about some of the manufacturing base,'' Bush said. The Fed, which raised interest rates six times between mid-1999 and May of this year, had sought to cool the then-booming economy to prevent it from overheating and spurring inflationary pressures. For several months, the U.S. central bank has officially maintained a position that economic risks were weighted toward higher inflation. Many analysts believe it will abandon that position on Tuesday in favor of a view that judges inflation and an economic downturn to be equal threats to the economy. That could pave the way for interest rate cuts sometime in the new year. Depending on the economic data, particularly figures on holiday spending by consumers, some economists think a rate cut could come as early as Jan. 30-31, the first Fed policy-setting meeting of 2001. The overall CPI gain in November matched the expectations of U.S. economists in a Reuters survey. But the core rate slightly exceeded the forecasts for a 0.2 percent rise. That troubled the inflation-sensitive bond market, where prices dipped in early trading but later regained some ground. Neither the CPI nor the industrial production data had much direct impact on the U.S. stock market, which suffered big sell-offs. The Nasdaq composite index ended down 75.53 points, or 2.77 percent, at 2,652.98, according to the latest data, while the Dow Jones Industrial average sank 240.03 points, or 2.25 percent, to 10,434.96. Economists worry sliding stock prices could exacerbate the slowing in the economy as they put a dent in consumer confidence and crimp the ability of companies to invest in new plants, equipment and technology. The CPI report showed that tobacco prices surged 3.6 percent in November, which was a major reason for the strength in the core CPI. But the tobacco costs are related to the settlement of lawsuits against cigarette companies and are not seen as a symptom of inflation in the broader economy. A SQUEEZE FOR COMPANIES Most major CPI components were benign. Food costs were flat and energy prices, which have rocketed 16 percent over the past year, gained only 0.1 percent in November. Housing prices and medical care costs both edged up 0.2 percent, while apparel prices sank 0.4 percent. Although the latest inflation figures were tame, on an annual basis the CPI has been running at the upper end of where many Fed officials would like to see it. In the 12 months ended in November, the CPI was up 3.4 percent, pushed higher by surging energy costs. The core CPI was up 2.6 percent. Fred Breimyer, chief economist at State Street Bank in Boston, said inflationary pressures will subside as the economy slows, ``although they will still be there to some degree.'' He added: ``I think what's happening is that firms are going to face a squeeze as their costs continue to rise. They are seeing higher energy prices and in some cases higher labor costs. But they are finding this difficult to pass along to consumers.'' siliconinvestor.com

To: KeepItSimple who wrote (112828)	12/16/2000 11:20:55 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 164684

keeps, housing is essentially excluded from inflation (nearly 40% of my take home). energy is excluded from inflation (3% of take home). thank god they include the cost of eggs in the calculation (0.001% of take home).

To: KeepItSimple who wrote (112828)	12/16/2000 5:11:03 PM
From: Victor Lazlo	Respond to of 164684

It doesn't measure inflation in the way that people really live, that's for sure.

To: KeepItSimple who wrote (112828)	12/16/2000 7:58:44 PM
From: H James Morris	Respond to of 164684

Hey Kis, sing this in Palo Alto.LOL >The Day the NASDAQ Died Humble Pie (sung to the tune of American Pie) A long, long week ago I can still remember how the market used to make me smile What I'd do when I had the chance Is get myself a cash advance And add another tech stock to the pile. But Alan Greenspan made me shiver With every speech that he delivered Bad news on the rate front Still I'd take one more punt I can't remember if I cried When I heard about the CPI I lost my fortune and my pride The day the NASDAQ died So bye-bye to my piece of the pie I poured my paycheck into Datek Now my cash account's dry It's just two weeks from a new all-time high And now we're right back where we were in July We're right back where we were in July Did you buy stocks you never heard of? Q COM at 150 or above? 'Cos your plumber told you so Now do you believe in Home Depot? Can Wal-Mart save your portfolio? And can you teach me what's a P/E ratio? Well, I know that you were leveraged too So you can't just take a long-term view Your broker shut you down No more margin could be found I never worried on the whole way up Buying dot coms from the back of a pickup truck But Friday I ran out of luck It was the day the NAAAASDAQ died I started singin' Bye-bye to my piece of the pie I poured my paycheck into Datek Now my cash account's dry It's just two weeks from a new all-time high And now we're right back where we were in July Yeah we're right back where we were in July Now for ten days, we've been on our own And E-trade won't pick up the phone But that's not how it used to be When investors snapped up EMC With cash they borrowed easily And a quote that flashed up permanently green Oh, and just as things were turning 'round Joel Klein slapped Mister Softee down The courtroom was adjourned A guilty verdict was returned And while Gilder read a book on quarks Buffet smirked and Greenspan barked The bulls were eaten by the sharks The day, the NASDAQ died I started singin' ... Manic panic, it's just like the Titanic Unsinkable and now under the Atlantic We're at four thou and falling fast All at once the bottom-fishers pounced But that just caused a dead-cat bounce 'Cos Mister Softee, from the sidelines, preannounced Now the graph-lines showed complete collapse While the margin calls were coming fast We all were forced to sell Our Apple, E-Bay and Intel Then the bear funds moved to take the field And the long bond shed a point of yield Was Glass-Steagall ever really repealed? The day, the NASDAQ day We started singing... Oh, and suddenly we're underwater Millionaires all hot and bothered With no cash left to buy again So come on, Fed be anxious, com-pen-sate By lowering the discount rate 'Cause easy money is a bubble's only friend Oh, and as I watched the index fall I received the dreaded margin call No broker born in hell Could make me want to sell But as my gains fell fast into the crash E-Trade began demanding cash The talking heads were talking trash The day, the NASDAQ died They were singing... I met an analyst for Micromuse I asked him for their earnings news But he just smiled and turned away I logged on to the trading floor Where I made my fortune weeks before But they demanded to see cash before I played And on T.V. the ticker streamed Kudlow cried and Barton dreamed Not a bullish word was spoken The daytraders were choking And the three stocks I acquired last AMAT, Dell and Infocast Couldn't catch a bid and faded fast The day, the NASDAQ died And they were singing.... Bye-bye to my piece of the pie I poured my paycheck into Datek Now my cash account's dry It's just two weeks from a new all-time high And now we're right back where we were in July Yeah we're right back where we were in July