Well we know where we're goin'
But we don't know where we've been
And we know what we're knowin'
But we can't say what we've seen
And we're not little children
And we know what we want
And the future is certain
Give us time to work it out
- Road to Nowhere, Talking Heads (1985)
Actually, I think this lyrics should be the opposite when it comes to current government policy. We don't know where we are going (although we say we do) and we do know where we've been (we're just ignoring it).
That's as political as I want to get in this blog. Ben Bernanke glossed over the very obvious and very incendiary reality of rising food prices in his speech yesterday. How many times do we have to debunk the concept of "core inflation?" It's like ignoring breathing and heartbeat to declare someone is alive when they're clearly dead but otherwise intact.
3 comments:
Michael,
I just love your last line.
It's going in my quote file.
Normand
I'm not dead yet.
- Monty Python
http://www.youtube.com/watch?v=grbSQ6O6kbs
Michael, you are hitting new lows...seriously, you don't see a difference between a heartbeat of a human and food/energy price component of inflation? When the hearbeat stops, everything else stops. Can you say that of food/energy price inflation?
This is why technicians shouldn't try fundamentals. Technicians love to trash fundamentals, and yet can't resist quoting the fundamental numbers all the time. Why do you care, if they mean nothing?
The only reason people take out energy/food inflation from the total to determine the core is due to the volatile nature of food/energy. If food and energy prices are persistently rising, the inflation in them will feed into the rest of the sectors, but fortunately, they don't persist. These spikes are temporary most of the time, though persistence cannot be ruled out entirely.
For week or day-traders, I suppose you don't care much about persistence. You get need to get your jollies frequently.
Your day will come - just wait it out. You've been bearish for a couple of years, being dragged kicking and screaming into the bullish camp once in a way, but your day will come. Even a broken clock is right twice a day.
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