BULLS HAVE IT WRONG!

below by Dean Galbreath

Even before the hurricane, however, changes in the national economy were complicating the Fed's decision on whether to raise interest rates further, Yellen said.
Among Yellen's chief concerns before Katrina were the rising costs of gas and housing, the continued reluctance of businesses to spend money on expansion, the growing trade deficit and the long-term ramifications of the budget deficit.
But Katrina has further complicated matters by threatening to bring slower growth together with higher inflation.
Yellen said the high fuel prices sparked by Katrina's disruption of the nation's energy supplies could slow the growth of the gross domestic product by forcing both consumers and businesses to pull back on spending.
"A common estimate is that (Katrina) will depress national real GDP growth by around one-half to three-quarters (of a percentage point)," she said.
The Fed's typical response to slow growth would be to lower the interest rate in order to stimulate the economy.
But Katrina could also fuel inflation by pushing the price of building materials and transportation costs higher. "Higher oil prices may be partly passed through to core inflation, at least for a time," Yellen said.
Yellen said she has not yet decided what advice she will give regarding interest rates next Tuesday.
"I intend to go into the meeting with a fully open mind and listen to what the other members say," she said.

**Now BEAR with me, the market rallied in face of disaster because A) it's GOOD for business B) Fed will stop raising rates C) won't effect business activity D) Consumers will never slow spending

However, I offered the broken window fallacy argument. The stimulus and HOUSING BUBBLE PROFITS are behind us, high gas prices have consumers cutting back spending, WMT has already said it "be aggresive in pricing this XMAS" so profits will be effected at many levels.

I feel SPX projections are TOO HIGH, this market is set up for dissapointment. 4 and 6 year cycles are DOWN HARD into 2006.

Idiots back into GOOG and BIDU. 70 CONDO projects were being planned for Gulf Region, as FLA had become overbuilt....this even while 2003 and 2004 were worst 2 years of storms in region in some time.

BBY (best buy) dropped a jaw dropping $5 plus TUES on "good news" sales up 25%

FNM below support of $48 a PRIME LENDER for housing market....ignored!!!!

Rise in prices coming on lagging momo and breadth weaker MACD.

Merging of longer term trend lines 200 and 400 WK, hasn't been seen since near beginning of 80's bull market IGNORED.

Understanding of WHY 2003 POPPED brings us to record complacency.

ALL the while FED raises rates they flush markets with near worthless FIAT, more than 2 sides to their mouths.

RECORD trading in BB stocks in share volume.....and rampant speculation.....2000-2003 already forgotten. SO....???? PHASE II of bear is out there.break of 10K one oiece of puzzle, SO MUCH BULLISHNESS already spent, less likely a break of even the 2005 highs registered BACK in JAN !!! but we'll keep open mind

Duratek