-- Posted Tuesday, 28 February 2006 | Digg This Article | Source: GoldSeek.com

Add Pimco’s Steve Rodofsky to the list of institutional heavies who aren’t buying “Helicopter Ben” Bernanke’s rosy outlook for the economy. “We’re concerned about the lag effect of the tightening,” said Rodofsky, senior vice president of portfolio management in charge of U.S. Treasury trading at Pimco. “Our overwhelming concern – more than the introduction of the 30-year bond – is the outlook for the consumer in 2006 and 2007.”

The remarks were reported in Investment News, a weekly publication geared toward financial advisors. Not long before, Bernanke had told Congress that his main concern was inflation, not an economic slowdown. At the time, he projected 3.5% growth this year and next. He also said later that there would probably be two more rate hikes between now and May 10.

But Pimco believes Bernanke will soon recognize signs of an economic slowdown and change course. Accordingly, the firm has been buying short-term paper in anticipation of a possible easing rather than tightening by year-end. In the interest of helping the Fed chief see the gathering clouds, we proffer the chart below, from our friend Bob Bronson at Bronson Capital Market Research. It shows a housing boom that is clearly spent and starting to roll down. Our bet’s on Pimco.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com

-- Posted Tuesday, 28 February 2006 | Digg This Article | Source: GoldSeek.com

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