Inflation is under control and Greenspan is saying we only have a 30% chance of a u.s. economic recession. and he is saying that asian markets are pretty safe too.

i would say that cautious optimism is still the name of the game.

Key inflation measure holds steady

Prices for wholesale goods other than food and energy flat for second straight month as inflation pressures below forecasts.
By Chris Isidore, CNNMoney.com senior writer
May 11 2007: 10:09 AM EDT

NEW YORK (CNNMoney.com) -- Wholesale prices rose in April but excluding food and energy they stayed in check for the second straight month, the government said Friday in a report showing a key inflation reading below Wall Street forecasts.

The Producer Price Index, which measures the price of goods at the wholesale level, rose 0.7 percent last month, down from a 1.0 percent gain in March, the Labor Department reported. Economists surveyed by Briefing.com had forecast a 0.6 percent rise.

But the more closely watched core PPI, which strips out volatile food and energy prices, showed no rise after also coming in unchanged in March. Economists had forecast a 0.2 percent increase.

The report showed that energy prices jumped 3.4 percent in the month, while food prices rose 0.4 percent. Both were down from the increases posted in both February and March.

The overall PPI is now up 3.4 percent over the last 12 months, while the core PPI is up only 1.6 percent over the same period. The Federal Reserve is generally believed to want to see core inflation readings in the range of a 1 to 2 percent increase on an annual basis.

Wednesday the Fed left interest rates unchanged, although its statement said core inflation remains elevated and that its major concern was "the risk that inflation will fail to moderate as expected."

Mark Vitner, a senior economist with Wachovia, said the PPI report has some readings that justify the Fed's concern. The overall and core PPI is for finished goods such as bread but prices for crude goods such as wheat and intermediate goods like flour are also measured. Prices for intermediate goods jumped 0.9 percent, while prices for crude goods excluding food and energy climbed 0.4 percent, pointing to inflation pressures in the pipeline.

"The Fed is not going to say 'We have to cut rates because consumer spending was weak in April,'" Vitner said. "They're right that inflation is still higher than they'd like. The best way the Fed can keep higher energy prices from spilling over is to hold the line on rate cuts."

The inflation reading comes ahead of Tuesday's report on the Consumer Price Index, the government's main inflation gauge. Economists are forecasting that CPI rose 0.5 percent, down from the 0.6 percent increase in March, while core CPI is expected to edge up 0.2 percent after a 0.1 percent increase in March. Top of page
Retail sales washed out in April

Greenspan: Odds of a U.S. recession 1 out of 3

Former Federal Reserve chairman says he still believes there's a one-third chance that economy will fall into recession in 2007.
May 11 2007: 6:40 AM EDT

SINGAPORE (Reuters) -- Former Federal Reserve Chairman Alan Greenspan said on Friday he still believed there was a one-third chance that the U.S. economy would slip into recession this year, reiterating a statement made in March.

Greenspan shook markets in February when he said it was possible the U.S. economy might fall into recession by the end of the year. He later said he saw a one-third chance of a recession.

"My arithmetic says if there's a one-third probability of a recession, then there's a two-thirds probability there won't be a recession," Greenspan told a closed-door Merrill Lynch investor forum, according to an official at the U.S. investment bank.

The United States economy grew at a tepid 1.3 percent annualized rate in the first quarter -- the weakest pace in four years.

Greenspan said he had not changed his view on the health of the world's biggest economy but conceded that some might say he had changed his mind, the official quoted him as saying.

Greenspan spoke via a satellite link from Washington. His remarks contrast with those of Ben Bernanke, the Fed's chairman, who has played down the risk of a recession.

Commenting on the strength of the Chinese currency, the yuan or renminbi, Greenspan said China, the world's fourth-largest economy, would bear the brunt of its artificially weak currency and that money supply was growing too rapidly.

"It's in China's self-interest to allow the renminbi to move up faster," he was quoted as saying.

"There is an undue fear of allowing the exchange rate to rise. It's a mistake not allowing it to rise."

Greenspan said he doubted that unemployment would rise in China, should a stronger currency hit exports, adding that the country's labor market was "very sophisticated."
No repeat of 1997

He said the impact of any slowdown in the economy on Southeast Asia would be mitigated by high savings rates and domestic consumption.

"Any slowdown will be somewhat offset," Greenspan said, adding that he saw no repeat of the 1997 Asian financial crisis due to strengthened central bank foreign currency reserves.

"The chance of '97 happening again is virtually non-existent."

The fundamental reason for the yen carry trade -- borrowing the low-yielding currency to invest in high-yielding assets in other currencies -- was ultra-low Japanese interest rates, he said.

So, I was wrong.

the numbers were not right. i wasn't thinking about inflation worries. but it still was a great day.

my sweet heart today was Titanium Metals Corp. (TIE)!!!!

AFter the Fed

After the fed announces that it will do nothing to interest rates, and it will signal that the economy shows signs of life, the DOW will rise and close 120 up, the Nasdaq will close up 15 and the S&P will close up 7-8.

let's see how the day plays out.

giulio

An Efficiently Value Orientated Bull Market

Mark my words. This Bull Market as all Bull Markets will end, hopefully many years from now with a crash. However, this Bull Run has the chance of being the most value orientated run in history. People will look for bargains. They will buy up stocks that has a good earnings outlook. Growth stocks will not, and should not fuel this market. However, unfortunately, the trend has been of late that growth stocks are outperforming their value counterparts. This was the downfall of the last crash. Reward a profitable company, not one with a speculative future.

When investors see that a stock is trading way above its earnings, sell, and look for the next value. For then, the stock that was a value, will have a chance of becoming a value again. This could truly be a self regulating market. Let us fuel our market not with the hope for huge gains, but with the realization that we can make some money and not loose a lot in the end.

Think globally too. One market is connected by another nowadays. Global markets have been helping our own for a while now. There are some great stocks and deals overseas. Look for them. Diligent research overturns some fantastic buys.

Remember, do not follow the herd. Because the herd is usually running from something that wants to eat it. Be different. Look for value in different places. You may not look cool now, but you'll probably be, where others wish they were.

giulio

Warren Buffet may be Bullish

Warren Buffet is usually the first person to leave a market when he sees that stocks are overpriced. He will leave a bull market much earlier than others. He will also swoop in and go on a buying spree during a bear market.

Warren Buffen recently told cnbc:

“I don’t look at the stock market at all as ridiculously overpriced,” Buffett said. “If you told me I had to buy a 20-year bond or make a 20-year investment in the stock market, I’d rather buy the stock market. It’s not cheap, but it’s not ridiculous.”

This is about as forward as the oracle gets. He will invest in the market for twenty years, meaning the outlook is pretty good for the long run. I think Warren is saying that the bulls are running!!!

The Beginning of a new Bull Market

I think that we may be in the beginning of a bull market. My generation has never seen the beginning of a bull run. We got in at the back end of the last bull run, and then we got side swiped by the crash earlier this decade. Then we have seen the market languish in its bearish tendencies of lingering in the same place. With every gain, it would just turn around and lose it. I think cautious optimism should be the name of the game, but with the push into newly uncharted territory, we just may be experiencing the beginning of a bull market.

We will see. Here is the chart to depict what i am saying