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To: Sarmad Y. Hermiz who wrote (8941)	5/7/2004 11:29:15 AM
From: willcousa	Respond to of 13403

OT - Samad has this right. But the underlying problem stems from 9/11 and the public's pulling in of its' horns in reaction to it. Friends and I spend two weeks in the Caribbean every winter and travel around in the process. We meet a lot of locals and discuss serious topics with them. Believe me when I say that no one, be it from the US, France or Timbuktu, is traveling down there and they are really hurting. Whether an island is French, Dutch, Independent does not matter. Many serving the tourism industry are now doing something else. There is fear throughout the civilized world. Has John Q Public ever come back into the stock market? I don't see it. Will

To: Sarmad Y. Hermiz who wrote (8941)	5/7/2004 3:20:06 PM
From: Sam Citron	Read Replies (1) \| Respond to of 13403

OT Sarmad, First it was good corporate earnings that was bad for the market. Now good employment news is bad for the market. When does this perverse "good news is bad news for the market" come to an end? Ed Yardeni says maybe when the Fed begins to tighten. biz.yahoo.com I hope he and you are right. I used to see the market through a narrow economic prism until the '87 crash forced me to consider the psychological forces influencing the market. At some point, the stock market is a reflection of the confidence we have in the future. Regardless of the apparent cyclic upswing in the economy, there seems to some doubt about the course we are presently on. But democracy has a self-correcting mechanism every four years, and that is the good news. Sam

To: Sarmad Y. Hermiz who wrote (8941)	5/16/2004 6:41:19 PM
From: Sam Citron	Read Replies (1) \| Respond to of 13403

OT CPI according to Abelson [excerpted from Barrons] THE CONSUMER-PRICE INDEX IS truly one of the wonders of the world. It's very much like a ruler that does everything but measure (good for tapping overly frisky kids on the knuckles, at least, which is more than you can say for the CPI). From time to time, we've mused on the absurdities embedded in the index, as, by way of example, the use of "imputed rent" in figuring houses prices. The poor thing's chronic inability to register the movement of prices in the real world has been particularly evident in the past six months, when the cost of everything from gasoline to groceries has been resolutely rising, a gathering trend that virtually eluded the index's ken. But even investors, who've tended to go along with the comforting no-inflation readings of the CPI, are showing signs of doubt. As witness their plainly skeptical reaction Friday to the ostensibly favorable report on April's consumer prices. Comes now Stephanie Pomboy, the proprietor of the feisty and rewarding MacroMavens, with the news that the Federal Reserve Bank of Atlanta is the source of a major revelation, to wit: The sharp decline in the "core" CPI in 2002 and 2003 that prompted all the hissing and moaning about deflation was the result of lower financing costs, not lower prices. Dig that? As Stephanie explains it: "The good statisticians at the Bureau of Labor Statistics concluded that an increase in the price of a good was not inflation so long as you could finance it cheaply. So, as mortgage rates came down and 0% auto financial schemes became all the rage, 'inflation' in the housing and auto components declined, too." Alone, those two components accounted for 1.1% of the 1.6% decline in the core CPI during the 2002-2003 stretch. "This isn't exactly startling news for those of us who reside outside the hedonically white-washed walls of the Federal Reserve," she sniffs. And adds sardonically, "The decline in the housing component of the CPI at a time when home prices were rising 8%-plus a year always smelled a tad fishy." Sure smelled that way to us, too, Stephanie. online.wsj.com