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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (11183)	8/31/2004 9:49:35 AM
From: zonder	Respond to of 116555

This is from another piece he wrote a couple of days ago. Yes, he's been getting very bitter, that guy -g- ------------------------------------------------- Everyone laughs at the Fed and the economists for focusing on the core inflation measures as opposed to the overall indices—of course, food and energy are important, but often reflect more supply than demand factors and what is of paramount importance is whether increases in these two areas filter through into other sectors and also begin to affect inflation expectations—the second-round impact, as we saw in the 1970s, is the real key (today, however, core inflation is 1.8% and total is 3% as opposed to both flirting with doubledigits). But alas, as I walk down the fixed-income trading floor I can still hear the mutterings—"tell Rosenberg that if we excluded everything from last month's CPI, the number would have been flat'". Well, when you've been doing this for 17 years, you develop a pretty thick skin (or you better, if you want to survive in this business). But if truth be told, it isn't just the traditional economists that believe the core is the key, but so do traders and investors! We ran some regressions and found that over the past decade, the statistical correlation between core CPI and the 10-year T-note yield is 58% but the same relationship between total CPI inflation and the 10-year note is only 37%. Not only that, but this gap in terms of relative importance has been widening over time. So take that! ---------------------------------------------- Aww, watch that blood pressure, David :-) I spoke to him a couple of weeks ago. Asked him how come he can't see inflation is rising in the US. He said "I didn't say there is no inflationary trend, but I did say there is no inflationary breakout". We disagreed a bit, but in a much nicer and courteous way than your average SI disagreement - being a client has its advantages -g-

To: mishedlo who wrote (11183)	8/31/2004 10:02:51 AM
From: orkrious	Read Replies (1) \| Respond to of 116555

I'm shocked ML published that. They must be reading Roach <g>

To: mishedlo who wrote (11183)	8/31/2004 2:52:35 PM
From: GraceZ	Respond to of 116555

[Is that a good thing? Only when you look at history. Older established industries follow the path of employing fewer and fewer people (or fewer and fewer Americans) to do more and more. It's new industries, some of which start out as a single individual working in the basement, which create new jobs. Some of the biggest corporations that are around today came from exactly this process of people creating their own jobs when there were none to be had. A lot of the people working on an out-sourced basis are former employees creating a business out of doing something that a corporation thinks it can't do efficiently in house or some aspect of the business that the big corporation doesn't wish to enter. Imagine for a minute if IBM had decided to write it's own OS for the PC instead of out-sourcing it to a couple of college dropouts. Mighty oaks from little acorns grow. Other industries like my own are almost completely comprised of self-emloyed individuals and small corporations. My clients do far better than their "employed" counter parts by almost every measure. Working for myself, I make five times what I'd make working for someone else doing the same thing even when I account for the fact that I pay for my own benefits. Also, looking at the various corporate clients I have kept for years and years, I've outlasted almost everyone who ever hired me. I'd get a gold watch if there was anyone left there who was around long enough to know I've done their work on an "out- sourced" basis for 25 years or more. Now that is what I call job security. I outlasted them all by never getting hired as an employee.