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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: dijaexyahoo who wrote (23786)	8/17/2006 12:32:07 AM
From: Kirk ©	Read Replies (3) \| Respond to of 42834

I DID recently point out that we got a benign inflation report today, for the second straight day. That seems quite significant to me, in light of the fact the bashers have been ridiculing brinker for some time for his belief that high oil prices would not have a significant effect on core inflation. Your reporting skills are rusty... or you are spinning like a top to change what Brinker has said about inflation. Where did you get this extra spin "not have a significant effect?" He was quite clear saying "higher priced oil DOES NOT CAUSE INFLATION." He's wrong. Your spinning for him is all the proof we need.... but I'll continue. Core inflation came in at 2.7%, well above what is considered benign. If it wasn't for the price of oil being stable or even falling a bit, it could be much worse. Brinker is dead wrong about inflation. It has been higher than the Fed wants and it is due to higher oil prices as this clearly shows. Brinker has been WRONG because he says higher priced oil doesn't cause inflation. This graph PROVES he is wrong. There is a DIRECT LINK. I can't see how anyone can look at that data and say higher CPI is not partially due to higher oil prices. Brinker has been dead wrong on this. If you say pretty please, I bet Honey will tell you what post number has the transcript of Brinker's exact words over at her Bob Brinker Beehive Buzz where he told "millions of listeners" how much smarter he is than the Fed chairman.

To: dijaexyahoo who wrote (23786)	8/17/2006 11:20:57 AM
From: EQ	Respond to of 42834

I DID recently point out that we got a benign inflation report today, for the second straight day. That seems quite significant to me, in light of the fact the bashers have been ridiculing brinker for some time for his belief that high oil prices would not have a significant effect on core inflation. Dija, one month data points on PPI and CPI do not a trend make. IMO, Brinker is all wet on his "rising energy prices do not cause inflation" theory. And, frankly the "benign inflation" data points are subject to debate (and of course further revisions downstream.) I also think the market is all wet as regards the "Irrational Exuberance" exhibited in the last two days (perpetuated by individual investors on Tuesday, and perpetuated by individual and institutional investors on Wednesday Here is an interesting commentary as regards the latest CPI report: *********************************************** Data Watch Jul CPI Brian S. Wesbury and Bill Mulvihill Date: 8/16/2006 The Consumer Price Index (CPI) rose 0.4% in July after a 0.2% increase in June. The CPI has increased 4.5% at an annualized rate in the past three months and 4.1% in the past year. Energy prices jumped 2.9% in July, reversing the 0.9% decline in June. Food and beverage prices increased 0.2% last month. Excluding food and energy, the "core" CPI was up 0.2% in July. The "core" CPI is up an annualized 3.2% in the past six months and 2.7% in the past year – the fastest YOY gain since 2001. Implications: Price pressures at the consumer level remain widespread, with the 12-month change in the "core" CPI rising at a post recession high of 2.7% in the past year. Of the 17 CPI components we track (see table), all but two are rising above the Fed’s "comfort zone" of 1%-2%. This blows a hole in the notion that the buildup in inflation is just an energy phenomenon. Even the most recent excuse for inflation, that a slowing housing market is artificially raising owners’ equivalent rent in the CPI, doesn’t hold water. The "core" CPI excluding owners’ equivalent rent has risen an annualized 2.1% in the past three months, 2.4% at an annual rate in the past six months, and 2.2% in the past year – again, all higher than the Fed’s "comfort zone." While inflation is not out of control by historical standards, it has clearly been on an upswing. The $64,000 question for the Fed and investors is whether inflation will continue to rise. On one side, gold and commodity prices are up this year, while the dollar is down. These market-based indicators, along with the fact that real interest rates remain very low, suggest that inflationary pressures will continue to build. These forward-looking indicators have a strong historical record of forecasting inflation, including the current bulge over the last three years. The other side forecasts slower growth in the second half of this year that will contain inflation. This forecast is built on a Phillips Curve model that has been proven inaccurate time and time again.** We obviously believe the market-based indicators are correct and expect inflation to continue to rise until the Fed reaches neutral. ftadvisors.com