Week Oct 1-5

The S&P 500 rose 2% to 1557.57 and set the record high on Friday. In less than a month, the market condition changed 180 degree. The labour department revised August payroll # from from the original -4,000 to +89,000. The revised stat shows that the credit crunch wasn't as severe as what many people thought. It hasn't spread to the general economy yet. It looks like the Fed now has much less evidence to justify another rate drop, which reinforce my view about his 50 bp drop for the rate. Let's hope that the Fed is not going to embarrass itself when the inflation goes out of hand.