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Astonishing New Discovery!

Posted By Barry Ritholtz On April 20, 2005 @ 3:49 pm In Economy,Investing,Markets | Comments Disabled

I’m listening to CNBC’s discussion of today’s sell off, and I am astonished to learn that there is Inflation and a Slowing Economy!

Of course, those topics have been discussed in these pages for nearly a year now. The issue with these macro-economic concerns is ALWAYS one of timing. Why? You cannot trade off of macro-economics unless you have a  v e r y  long time horizon. It takes months, quarters and sometimes years for economic issues to work their way thru to the kinda-sorta-eventually-mostly efficient markets. Thats why mating technicals to macro-economics gives you a glimpse into both the longer and shorter term events.

As to today’s issues:  I hate to be blunt, but if on April 20, 2005, you are first discovering that this economy has inflationary pressure –  more than 2 years after the CRB rally [1] began — then Lucy, you have some splainin’ to do.

Just discover GDP has been slowing? (duh) Follow the numbers [2]: Q3 ’03=7.4% (originally reported as almost 9%), Q4 ’03 4.2% (orig 6+%), then 2004 Q1-4 data: 4.5, 3.3, 4.0, 3.8.

I plan on addressing the problems investors face when trying to balance these competing, and often contradictory, time frame issues.


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2005/04/astonishing-new-discovery/

URLs in this post:

[1] CRB rally: http://stockcharts.com/def/servlet/SC.web?c=$CRX,uu[l,a]daclyyay[df][pb50!b200][vc60][iUb14!La12,26,9]&pref=G

[2] numbers: http://online.wsj.com/documents/bbgdp.pdf

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