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To: Mohan Marette who wrote (121645)	5/2/1999 2:16:00 PM
From: Ian@SI	Read Replies (2) \| Respond to of 176387

Interesting article. If I remember correctly, 4Q GDP was 5.9%. During 4th quarter the biggest concern was an impending recession with the threat of sever deflation. The fed believes that the CPI overstates inflation by at least 1%. i.e. - it does a poor job of accounting for increased quality, function and reliability of a new device compared to that in the CPI base - especially true for any electronic equipment. Now we have a slower GDP growth and growth rate; continued evidence that there is no inflation for all practical purposes; and some bond traders who are still driven by the fear of inflation. I guess until we go through a period of spiraling deflation, they'll continue to fight the last war. As they seem to focus only on the last data point announced, religiously excluding the bigger picture and every other data point available, it is extremely difficult for me to understand how they've acquired a reputation for being omniscient; or for that matter, brighter than a run of the mill moron. JMHO, Ian.

To: Mohan Marette who wrote (121645)	5/2/1999 2:28:00 PM
From: Lee	Respond to of 176387

Hey Mo,..Re:.OT-->Hormats (Goldman Sachs) on GDP growth I think we might have seen the bottom since the NAPM last month reported more orders for export items. See latest news & resources then ROB, (report on business). Though it appears that the manufacturing economy is growing, the continuing softness in commodity prices assures us that inflation is not an immediate concern." Export Orders are reported stronger, and appear to have reversed the downward trend that first surfaced in December 1997. napm.org I don't know if commodity prices are turning or not but June Cu has moved up nicely for the last few weeks and it's a commodity bought by SE Asia in good times. tfc-charts.w2d.com Also, if you remember Abby's speech recently at some eco forum where she explained that we needn't worry too much about the trade deficit as we're buying low margin, low cost, labor intensive manufactured items and exporting high margin, high cost services. The low costs imports help to keep our consumer costs down which enables more spending! <G> So all this combined with improving manufacturing numbers should bode well for the 2nd quarter. Maybe exports won't subtract so much from GDP growth in Q2! <Vbg> Thanks for the article, Lee