DEFLATION ANYONE?

This morning we learn that August consumer prices FELL. According to AM news accounts, this decline was "unexpected." (Other "unexpected" developments include: falling house prices, slowing economic growth, weakening consumer spending, etc etc). We are eagerly awaiting the day when the economics fraternity gets something right, BUT WE ARE MOST ASSUREDLY NOT HOLDING OUR BREATH. That would likely prove fatal.

Actually, the near-perfect batting average for the economics fraternity -- i.e., near ZERO -- can be a VERY USEFUL CONTRARY INDICATOR. Act on the basis of economists getting it all wrong, from the macro-trend to sundry micro-trends, and you'll probably get a pretty accurate read. This applies equally to those economists, ex-economists, and would-be economists who occupy the "policymaking" bridge of the FED ship.

For the purposes of the astute investor -- for whom the following is hardly news -- the apparently limitless nature of human stupidity and the puissance of the herd instinct can always be counted upon. You can take them to the bank. (Oops).