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

Who is Voting for Sanjaya?

If you know who Sanjaya is, you know what he has been doing on American Idol. News Corpation (NWS), owner of FOX, which televises The American Idol would be a great stock to consider for your portfolio as your media pick. It is leading the media stocks this year, and had a fantastic year last year with over a 30% return. That is more than real money. And at $25, it is pretty cheap too. Sanjay may be a big joke, but this stock is offering solid gains. What do you think?

What is Apple doing with the Iphone?

Apple Inc. (Nasdaq: AAPL) has done a superb job of becoming the strongest tech company in the world. It has created a true environment of market dominance with its Ipod Music and Media Players. With a great product like the Ipod, and Apple's know-how marketing strategies, the Ipod has been either a product that you own, or someone very close to you has one. And be honest, even if you don't have one, you want one. Apple, many years ago now, placed their Ipod into the world market. And as with any new product, consumers didn't quite know what to do with it. That didn't last long. For argument's sake, I am going to say that Apple got it right with its first Apple Ipod version. If they didn't, the modern day consumer would have screamed from the rooftop that the Ipod is a piece of junk and to stay away. However, as with all other Apple Innovations, they made a great product with great utility. And unlike their mac computers, the Ipod would be the standard, not something only designer and developers use. Even pc users would flock to buy the Ipod. But now, now that Apple has sold their Ipods, and sometimes more than one to consumers, it was time to attack another market.

Why shouldn't your Ipod not play and organize music video, movies and t.v.? Why shouldn't it be your daily organizer, phone number collector,and yes, your telephone.

Now born is the Apple Iphone. Let us very soon send this new product out into the world and become a dominant force in the cellular phone industry. But wait, Cingular, now the new AT&T (NYSE:T)has exclusive rights to be the only provider of the new Iphone. Don't get me wrong, I am not underestimating AT&T's super strength as a telecommunications powerhouse. However, there are still many of us that simply cannot get AT&T to sign us up. Contrary to what AT&T would like you think, they are not everywhere. That means, that the Apple Iphone cannot not be had by all for many years to come. Well at least four. And who knows, maybe AT&T will own all other companies in the nere future and this won't be an issue. But don't count on. That would be bad on many levels. So why would Apple, a leader of tech innovation accept that its new offering cannot possibly be available to all consumers? This seems a bit contrary to any market domince plan.

One theory is that this was the plan, lets see how people will react to the Iphone. Will they flock to it is much as we think they will/ Heck, from reading many articles about it, and looking at the pictures, the Iphone is certianly different. There are no physical buttons. Everything is controlled by touch screen, and that is pretty cool, but maybe the average consumer won't like it. They have perhaps decided to test the market. And the market that AT&T can provide is quite extensive.

Or perhaps Apple has created something that is not completely whole. Meaning, perhaps there are still a lot of bugs to work out. Think about, with a worldwide telecommunications systems engaging different technologies, there are many variables that may just need to fall into place with actual consumer use. So maybe version 1 will suck, Apple knows this, and not making it a offering to all will lower their exposure and perhaps their embarrassment too. The Iphone in New Hampshire, may react differently to an Iphone being used in Washington State. (but don't count on using it in most of New Hampshire just yet) The U.S. is well behind Europe and the developed countries in Asia when it comes to mobile phone technology.

People, and the markets are waiting to see what Apple will do next. Recently, Apple has been a victim of its own success. We expect Apple to make new cool computers. This is nothing new. We expect Apple to come out with a new, cooler version of the Ipod. The old one worked well, and still works. Why do I need to buy the new one? I know, there are lots of reasons. But are they strong enough reasons. And yes, for some it has been. But with the Iphone, you are truly getting something different.

Now we need to find out if this different product is a good product.

Will it work?

This is where emerging money will go after the Chinese Market corrects itself

4 blue-chip values

Despite the recent market runup, you can still find cheap blue chips with above-average investment potential.

By Michael Sivy, Money Magazine editor-at-large

February 6 2007: 7:43 AM EST

NEW YORK (Money) -- The stock market has gained about 15 percent over the past five months. As a result, shares of some of the top-performing companies now look expensive.

Nevertheless, you can find blue chips that are still cheap and also offer above-average potential for long-term gains.

Three stock groups look underpriced on a statistical basis.

Banks and shares of other financial companies have traded at price/earnings ratios below 13 for a long time. Stocks like Citigroup (Charts) and J.P. Morgan Chase (Charts) offer earnings growth of at least 10 percent and yields above 2.5 percent.

Drug stocks are also cheap. They don't have good growth prospects right now because of the tremendous changes taking place in the industry, including the rising competition from generics. But it's not hard to imagine a stock like Wyeth (Charts), now trading at a P/E below 15, launching some new products and recovering to the point that it can again offer double-digit growth.

The third group that is statistically cheap are the oil stocks. But their long-term returns depend largely on what happens to the price of oil. And there's no guarantee that oil prices will rebound to new highs. In fact, oil seems likely to remain below last year's peak prices.

I've written about those three sectors lots of times over the past year, and the key issues are well known. The more interesting bargains, in my view, are stocks that are cheap for their own unique reasons.

Here are four that merit a closer look, based on their current dividends and their projected earnings growth:

Burlington Northern

Burlington Northern is one of the leading U.S. railroads. After years of chronic problems, the rails are rapidly improving their performance. They are more energy-efficient than other forms of transportation. They benefit from increasing shipments of coal and ethanol, and also from increasing global trade.

And they are becoming more profitable as computers and other technology greatly increase their operating efficiency. Trading at 14.2 times estimated earnings for 2007, Burlington Northern (Charts) has a projected total return of more than 15 percent annually over the next five years.

Caterpillar

Caterpillar shares have fallen over the past nine months because investors fear that the weak housing market and an economic slowdown will badly hurt the construction business in the U.S.

Cat (Charts) posted a small earnings gain in the fourth quarter. And the company has projected more substantial gains in 2007 thanks to overseas sales and demand from the oil & gas industry. Trading at less than 12 times estimated 2007 earnings, Cat's projected long-term return is more than 15 percent a year.

Home Depot

Home Depot (Charts) declined in the first half of last year because of fears that the deteriorating housing market would undercut growth at home-improvement retailers. I recently recommended the stock in Money Magazine as a contrarian buy, and the stock rebounded after the company's controversial CEO departed.

The more important fact is that the home-improvement business is doing better than expected. And some analysts think the worst is over for the housing market. At a 14.4 P/E with 12 percent projected annual earnings growth and a 2.2 percent yield, Home Depot still looks undervalued to me.

Illinois Tool Works

Illinois Tool Works (Charts) is a diversified companies that makes a variety of fasteners, packaging and industrial products. The shares have underperformed for most of the past year because of weakness in of ITW's markets, particularly housing and automotive.

But the company beat expectations in the fourth quarter and analysts now project a profit gain of more than 10 percent this year. One reason: ITW generates a lot of free cash flow, which has been used to buy back stock and to acquire more than 50 small companies over the past year.