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Hey Val:
I don't want to sound flip but I don't pay much (if any) attention to the
fed anymore... just seems to get in the way of my focus on what the market
is doing.
Technically, I don't much care for the market, but with commodities falling
the way they are it's impossible to be outright short for anything other
than a trading turn. I have been telling my institutional clients to come
in on the curve and to become more defensive (I began telling them this on
the way to the high). Anyway, I have felt for the last year that there was
a good chance that the high of this rally would be the high for several
years and that if I saw ending action that I would really become cautious.
October certainly appeared to be a buying climax and I suspect that the
high of this rally will prove to be the high of the secondary test (leading
to a sign of weakness).
My general view on commodities is that they are bottoming (note that the
Dollar is generally weakening) but I will need to see thrust higher before
I can comfortably recommend shorting large bond positions.
Anyway, beyond monitoring the related markets (Dollar, CRB and so on) for
clues the fundamentals just give me a headache and get me even more
confused than I normally am.
At any rate, for whatever its worth, that's what I think right now, but as
always, the daily and weekly charts and the price action will dictate what
I do and recommend.
Good Trading,
Stewart.
At 05:20 PM 12/10/98 -0500, you wrote:
>Stewart,
>Yep, that exactly how it is.
>I was wondering what your opinion is on the current outlook
>and future outlook as far as Fixed / Bonds vs Equities / Stocks.
>I was surprised last time the Fed lowered; my analysis told me
>that the Fed saw some trouble on the horizon... Whos gonna
>lower if bonds yields are about same as Fed funds - cant be better
>for them and the market is back from 7000 to 9000: tells me it
>was sort of emergency?
>Former Fed Lindsey mentioned today that now the economy
>is fueled by spending ( as usual ) but spending by the stock market
>( not salaries ) - not a good sign. And then there is the internet
>revolution... where soesers drive the stocks up to $200
>on 100 -300 share lots....
>Val.
>
>
>
>
>Stewart Taylor wrote:
>
>> Someone else weigh in here, particularly if I am off base (as I frequently
>> am).
>>
>> I'm not sure how the dictionary defines disinflation and deflation.
>> Frankly I have to admit that I have never looked. Working in the industry
>> and having always had an emphasis on the fixed-income markets I have always
>> used the definition that I presented earlier.... As far as I can tell...
>> most of the street (at least those portions of it that I had regular
>> contact with) consider it to be disinflation when the overall inflation
>> rate is above 0 (and falling)and deflation when the overall inflation rate
>> is below 0 (and falling).
>>
>> Does anyone else have some input? Have I spent years using the wrong
>> definition? Help me....
>>
>> Stewart.
>>
>> At 03:49 PM 12/10/98 -0500, Val Clancy wrote:
>> >Dictionary of Financial Terms, 3rd edition by Barrons
>> >Deflation: decline in prices of good and services;
>> >not to be confused with disinflation which is slowing down in
>> >the rate of price increases.
>> >So if the prices are going up but the rate of that
>> >is decreasing - disinflation.
>> >
>> >Disinflation:
>> >Price: 20, 30, 39 ,47, 54, 60, 65, 69, 72, 74, 75 -
>> >Rate: 10, 9, 8, 7, 6, 5, 4, 3, 2, 1
>> >
>> >Deflation:
>> >Price: 75, 74, 73....70
>> >Rate: does not matter.
>> >Val.
>> >
>> >Roger Fortier wrote:
>> >
>> >> Anyone care to tell me what is the difference between deflation and
>> >> disinflation? I thought these were the same but I often hear people talk
>> >> about them as if they were seperate.
>> >
>> >
>> >
>> >
>> Stewart Taylor
>> Taylor Fixed Income Outlook
>> Voice: 501-219-9774
>> Fax: 501-228-0963
>> E-Mail: staylor@xxxxxxx
>> Web Site: http://www.cei.net/~staylor/
>
>
>
>
Stewart Taylor
Taylor Fixed Income Outlook
Voice: 501-219-9774
Fax: 501-228-0963
E-Mail: staylor@xxxxxxx
Web Site: http://www.cei.net/~staylor/
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