Fed's Kohn on Crack. See's Inflation Moderating

makloda · Feb 27, 2008

Quote from der_kommissar:
You guys act as if you are smarter than the market at all times, it's truly pathetic.
More...

Why don't you listen to the markets. 10y bonds - 10y TIPS forecast 10y avg. CPI of 2.44%. The market sees no inflation over the next 10 years. Until that changes, keep wearing your tinfoil hats.

Ivanovich · Feb 27, 2008

LONDON (Thomson Financial) - Oil turned lower after US inventory data showing a slightly larger than expected increase in crude oil stocks gave players an excuse to take profits from record high prices.

The US Energy Information Administration said crude oil stocks rose by 3.2 mln barrels last week, leaving them in the middle of the average range for this time of year. Markets were expecting stocks to rise by 2.1 mln barrels.

Although the data also showed a decline of 2.5 mln barrels in distillates, which include heating oil, the fall was roughly in line with calls for a 2.1 mln barrel drop.

As such, players were prompted to take profits after betting the crude up to record levels earlier, amid worries over rising inflation, worsening US economic prospects and a weakening dollar.

'(This) may be an example of easier fundamentals showing up in data forcing the market to take profits and retrace gains,' said New Edge analyst Antoinne Halff.

At 4.06 pm, New York's WTI crude for April delivery was down 27 cents at 100.64 usd per barrel. Earlier, it set a fresh all-time high of 102.08 usd.

Meanwhile, in London, Brent crude for April delivery was down 26 cents at 99.23 usd per barrel, having earlier risen to a new record of 100.53 usd.

Prices surged in earlier trades as the dollar held near record lows against the euro, with players fretting over a recent spate of weak US economic data, including durable goods, consumer confidence and housing data.

A weak dollar tends to boost dollar-priced oil by making it cheaper for holders of foreign currency.

In addition, poor economic readings are for now also underpinning oil as players are betting the Fed will continue cutting rates as it remains focused on growth over inflation.

Such moves should weaken the dollar further, boosting oil. Crucially however, lower interest rates mean inflation could worsen, tempting funds to pile into commodities as an inflation hedge.

'US inflation is now running at a whopping 7.4 pct on a year-over-year basis. Combine that with GDP growth readings for the last quarter of 0.6 pct, (and) we see an economic backdrop... of rising inflation and low growth, also known as stagflation,' said MF Global analyst Ed Meir.

'We should note that in this type of environment, commodities do quite well, since participants turn to hard assets to protect themselves against eroding purchasing power.'

Elsewhere, prices are being underpinned by persistent cold weather in the US Northeast -- the world's largest heating-oil market -- and by expectations OPEC will not raise production at its output meeting.

The cartel is set to meet in Vienna on March 5 to set output quotas, with most analysts expecting it will resist calls to raise output because it is worried that oil demand will slow going forward.

In addition, analysts say the declining value of the dollar is also weighing in on OPEC's decision, with some even mooting the possibility the cartel will unofficially crimp back output.

'Another concern is that OPEC will unofficially trim back supplies, while leaving official quotas unchanged at the March 5th meeting,' said MF Global analyst Mike Fitzpatrick.

'Apparently, participants expect OPEC supplies to remain tight enough to offset the prospects of sagging US demand,' he added, in reference to bets crude demand will wane should US economic growth slow further.
More...

Landis82 · Feb 27, 2008

Quote from makloda:

Why don't you listen to the markets. 10y bonds - 10y TIPS forecast 10y avg. CPI of 2.44%. The market sees no inflation over the next 10 years. Until that changes, keep wearing your tinfoil hats.
More...

That's just it.
These guys that just keep repeating the same old Mantra refuse to even look at what the bond market is saying.

As for my market calls on ET, they have been pretty well documented BEFORE the fact:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=101689&highlight=SPX

But thanks for asking Mr. Kommeessar!

Landis82 · Feb 27, 2008

Quote from der_kommissar:

"tinfoil hats". What a bunch of b.s. artists these guys are. Hey Makloda and Landis, why don't you two guys pull up a couple of charts of ANY commodity, be it grains, metals, crude, etc, etc and tell us their performance from August of last year thru today.

You guys act as if you are smarter than the market at all times, it's truly pathetic.

More...

You could use a course in "Reading Comprehension".
I never said that commodities haven't been rallying strongly since August.
And I certainly have never asserted that the markets are WRONG.

If you believe in the INFLATIONARY case then go ahead ( as Makloda and I have suggested ) and put your money where your mouth is and buy the metals, the grains, and crude oil RIGHT HERE, RIGHT NOW.

Post your trades ( screen-shots ) whatever and let's see how you do by the end of Q2.
Lot's of tough "talk" here on ET these days . . .

ASusilovic · Feb 27, 2008

Tough talk on ET ? I think some guys didnÂ´t undergo good old "tough school"...

But hereÂ´s a video for beginners :

<object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/0U4EBXrh7V8&rel=1"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/0U4EBXrh7V8&rel=1" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>

makloda · Mar 17, 2008

Quote from Landis82:
If you believe in the INFLATIONARY case then go ahead ( as Makloda and I have suggested ) and put your money where your mouth is and buy the metals, the grains, and crude oil RIGHT HERE, RIGHT NOW.

Post your trades ( screen-shots ) whatever and let's see how you do by the end of Q2.
Lot's of tough "talk" here on ET these days . . .
More...

To all the economy PHDs here on ET preaching rampant inflation... hows that inflation hedge trade doing? Long Sugar, Long Copper, Long Gas, Long Oil, Long Coffee, Long Cocoa, Long Cotton?

Getting nervous anyone?

Log in or Sign up

Fed's Kohn on Crack. See's Inflation Moderating

makloda

Ivanovich

Landis82

Landis82

ASusilovic

makloda