a few pondering thought on that cpi in usa weds

Fwiw just my mullings whilst doing a bit of gardening.

Will those US housing rental costs be higher next time around for the CPI ? Surely rents will be up and not down over the next months. Interest rates are higher and construction of housing is slowing. So surely, if those renters didn’t buy when rates were low then they aren’t going to be buying now, are they ?

Therefore, with less house purchasing being bought buy owners and speculators alike, those wanting to rent will find less available rented property on the market. Plus, higher interest rates are a more attractive option for investors with no risk. So the way I see it, those housing figures in yesterdays US CPI data are more dangerous than first thought. They look like getting worse and not better ? The other data has not settled yet. Oil and of course plastics, metals, and food will all more likely be up than down anyway. What we don’t know either, is whether the CPI was .3 or 2.51 or 3.49. Expectations were .2 and we got .3. That’s 50% more or was it 24.50% or .74.50%. Berney wants to wait until the picture is clearer. I think he’s right to do so. Not even he knows really what‘s going to happen 3 months down the track.

A lot of the costs from oil and metals (apart from transport, read plastics, packaging, kitchen ware and toys etc here) will not have reached company’s bottom lines until well into 2007. Watch very carefully those AGM’s towards the Ozzy Spring and into Summer for the CEO’s ‘quick mention’ of ‘pressures being felt’. Roger Corbet (Woolies) - didn’t he say just days ago that ‘you ain’t seen nothing yet’. Didn’t the market act negatively to figures yesterday or the day before ? Didn’t he say he thought the RBA should refrain from putting up rates because it was bally tough on the high street ? If he’s mixed up then why not berney, me and just about everyone else out there. I’ll remain the bear albeit nowhere near as bearish as I was. That DOW yesterday was without doubt impressive. To TA experts and anyone else, that was a very strong rally suggesting to me that anyone ‘who must be in the market and isn’t’ should get back in. Here I’m talking of Instutional Pension Funds and alike. For Jo Bloggs, there will be better opportunities to move back in with less risk but I feel it will well advisable to join berney and wait for a while until we get a clearer picture. We do still have China and Europe wishing to get things more in line with growth v rates. Either, or of course both, could just derail things more than we would like. At least berney has got his dollar a bit weaker. All his deficits have shown improvement above expectations over the past two months so he’s getting somewhere at present. He’ll not give up for a long time. He’s too much to put right.

I haven’t seen what’s happening atm, apart from the dow up 8. With more digesting, like I’ve done, things might cool a bit. I cannot see the DOW hitting new highs for a while but if berney has things going well enough for him, plus China and Europe get soft landings then new highs over the Xmas / New Year period are not impossible. In honesty though. I don’t think it will be as easy as it looks so I remain firmly in the camp of this being a bear market extrordinaire. And note, any left field event is not allowed for here. I have not allowed for assassinations, berney on the missing persons list, a big battle in the M E with oil being greatly effected etc. I do not expect Sr Bush to get involved in the M E this side of congressional elections either. He’s had enough warnings from his electorate.

Anyway, for anyone reading this, these are my thoughts pondering in the garden rather than sitting in this stuffy study this morning. I needed a fresh look at things. I’ll pop out for mi cafe con leche now and deal with the markets when I get back. Oh and hey, I love to see folks get a big winner. I sincerely hope Wayne doesn’t let any of you stickers down.

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