Thread: Request For Comments

Quips,

Welcome to the fun house. Have you met DaveM yet - you both have similar type strategies.

Yes, everyone now thinks bonds are heading lower - that may be the reverse surprise for August. I think the Fed has a market surprise waiting in the wings- one more hike and then the pause. If that happens - buckle up. August has the potential to be down right explosive - looking ahead to a 5% GDP without inflation.

Thanks Dave, ou81200, GALLO1, Birch, Spaf and Quipsand all
I'm doing fine Dave and Spaf thanks for your well thought out response.
I gathermostwould only attach a minor significanceto the historical trend here in the
Seasonality Chart

You are much more bullish than most. Most are figuring on a 3 to 3.5% increase in GDP.

In my opinion there will be no pauses in the Fed's rate. I see 0.25% rate increases until rates are at 4.5%. I base that on the real estate market and its valuations and financings. It is pretty crazy in Florida.

The increase in interest rates may produce an inverted curve or at least a flat line between short and long terms. I don't think Greenspan will pause on the measured pace of iinterest rate ncreases just for a legacy of his departure.

I plan to renew my subscription to a market timing newletter after the start of 2006. Until then I see no big change coming; only better than gradual growth in equity funds.

Wonder Woman wrote:

Request For Comments >
Should TSP Participants Stay Out of Stocks for August & September?
Please share your thoughts and insights with me.

Is this like an IETF RFC? Do we need to number them, i.e. RFC 1?

Quips,

The preliminary GDP for the second quarter came in at 3.4% - that was minus the inventory numbers. If one includes inventory the GDP was close to 5.8% unadjusted. The preliminary figure more than likely will be adjusted upward. The third quarter may come in at 5% with low inflation.

I routinely have never trusted the Fed - they are no friends of mine. Even if they keep increasing at the .25% pace they are close to being done. The rates over time are putting in lower highs - this bull market recognizes the strength that is on the horizon and will act accordingly - big point moves are on the way - be ready.

rokid wrote:

Wonder Woman wrote:

Request For Comments > Should TSP Participants Stay Out of Stocks for August & September? Please share your thoughts and insights with me.

Is this like an IETF RFC? Do we need to number them, i.e. RFC 1?

I know Rokid it gets so confusing. I can barely figure it out
^{You know once Birch gets involved one never knows where things are going to go!}

I believe oil prices will have more to do with economic growth from here forward rather than the Fed. I believe the Fed will keep on increasing it overnight leading rate by 0.25% until it gets to 4.25 - 4.5%.

Greenspan is still the inflation hawk; if oil prices drop to $55 a barrel, things will pick up in the economy. It willa high enough interest rateto off-setany drag such increases would have on real estate and construction and other reasons for borrowing. Greenspan keeps on talking about how strong the economy is; that is his justification for further interest rate increases.

The market so far has reponded favorable to modest job growth. This Friday another report will come out. It is my hope that the pace of its growth will continue. It will be bad news in the short term if it reflects an upward spike to correct lower inventory level.