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Market euphoria excessive?

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Bernard Thomas

Nov 17, 2004, 4:31:32 PM11/17/04

Reads this carefully: > Futures market handles higher than expected
CPI data (total +0.6% and core +0.2% vs consensus of +0.4% and 0.1%,
respectively) with a sense of aplomb as they show inflation at the
consumer level remains well-contained.... In fact, both the futures
market and 10-yr note have improved since the CPI release, underscoring
the comfort with today's number

So numbers 50% and 100% higher than expected are now cause for a "relief
rally". What, us worry? They say in a bull market, stocks rally on bad
news and in a bear market they tank on good news. Well, guess which we
now have. And what's so great that stock prices need to go higher? One
month, maybe 2 in a row of decent employment numbers? A "recovery"
that's now getting pretty darned long in the tooth (believe it or not,
it's 3 years old)? Massive pump priming (i.e. tax cuts and record low
interest rates) that has pretty much uwed up its effectiveness? Out of
control budget and trade balance deficits? A war costing hundreds of

The one bit of honest good news I can see is the possibility that we may
finally be about to do something about our silly tort law that allows
whole industries to be shut down (and all their employees put out of
work and their stockholders'--none of whom did anything
wrong--investments vaporized). But even that is still just a growing
possibility--not a certainty.


Nov 17, 2004, 5:46:31 PM11/17/04
From what I understand (and my thinking may be flawed but I doubt it!) most businesses have been borrowing cheap, spending little or nothing on production facilities or hiring and building up cash reserves. Inflation IS good news for them at least. It allows them to raise prices as they see fit, helps them increase their off-shore presence and in general make more profit/stick it to the working class.

"Bernard Thomas" <> wrote in message news:%23KO9PzO...@TK2MSFTNGP11.phx.gbl...

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