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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (15113)	5/12/2004 5:45:55 AM
From: Jess Beltz	Read Replies (1) \| Respond to of 95865

<Unless of course productivity is strong which it has been> However, while productivity is strong, it hasn't increased from former levels, which was much more characteristic of the "wealth gains" of the 90's bull market when compared to earlier less technologically sophisticated productivity regimes. <Energy and food prices are usually stripped out of the inflation numbers by economists to get a truer measure of inflation without the more unstable components distorting the measure.> Ture, the government looks at both, but is also concerned with both, and I suspect that aggregate inflation counts at least as much as so-called core-inflation. <One last thought, I have worked as an energy economist for more years than I will admit too and I suspect the world is awash in oil from select OPEC countries producing above their quotas. I suspect the spike in oil prices is more political than fundamental and expect oil prices to fundamentally move lower in the months ahead. (Famous last words.)> I'm not so sure about this one. As I understand the argument (and certainly there are others on the oil patch thread that could talk more authoritatively on this than me) the problem is not so much one of aggregate output (although that surely must play into it) as it is one of refining capacity. For years major oil companies have simply avoided even maintaining current refining capacity levels, let alone add new capacity to stay abreast of increasing demand. Add to that fact (a) increased numbers of drivers and (b) the shift to SUVs and you have a dramatic increase in demand for gasoline over what is a relatively static supply. I think it's a lesson in Econ 101 that ends up looking like a conspiracy theory. I do agree that the market has seemed to react with nearly hyper sensitivity to "a perceived monetary policy regime change" that the Fed has done its best to assure is considerably down the road. I suspect that investors are extremely skittish because of the generally upset international situation. As mentioned earlier, that scene, particularly the threat of a major terrorist "event" ala 9-11 makes equities a dangerous place to be, and rising interest rates makes debt instruments a dangerous place to be, leaving "investors" without a safe port in the capital markets. I think the market has been throwing a tantrum about it. Jess.