I DON'T KNOW ABOUT YOU,

but I've been feeling great about the economy and the stock market lately. I feel as rich as

and as energetic as

.

This may have something to do with the fact that I own Energy Select Sector SPDRs and Newmont Mining. The gains on these holdings could pay for at least two weeks of heating oil this winter. And my incredible investing acumen will surely keep me warm the rest of the time.

The rest of America is apparently keeping its savings elsewhere, because consumer sentiment deflated faster than the president's approval ratings after a couple of tank-fulls of $3 unleaded.

Energy speculation grew so heated in August that even lasting hurricane damage to several indispensable refineries has proven something of a letdown. So now that an oil barrel costs only $15 or so more than what the crudest of the crude bulls were predicting a year ago, we can all act hugely relieved.

Wall Street traders played the part convincingly on Friday, helping the Dow recoup some recent losses. But if those traders really thought oil had jumped the shark, they were nuts to pay a 2% premium for Exxon Mobil.

And if crude was selling off because a global slowdown will sap demand, Friday's buyers may yet regret Friday's buying. Economic slowdowns have been known to squeeze profits. Economic slowdowns in combination with interest-rate hikes and runaway deficit spending are a leading cause of mortality among aging bulls.

The three-year-old specimen currently grazing on Wall Street had better do some running soon, before its time runs out. The poor beast has never lived up to expectations. The Dow rallied 83 points Friday and still fell short of its close on April 22 of 1999. By midday Monday, it was 75 points lower still.

Maybe Alan Greenspan will find some stirring words tomorrow, but I wouldn't be counting on that. The Federal Reserve is likelier to raise rates again, while pledging vigilance against inflation, the housing bubble and whatever other hazards it cares to tackle during Greenspan's last few hectic months.

The maestro was already muttering darkly about low risk premiums and the potential for lower home prices right before Katrina hit. Now he faces the double whammy of an oil-induced supply shock, to be followed by a highly inflationary outburst of reconstruction spending. Gas prices are up, cement prices are up, chemicals and equipment prices are up as giants such as Caterpillar and DuPont force through price increases. On the margin, this price-hiking orgy will require higher interest rates to keep inflation from soaring. On the margin, Greenspan doesn't have much of an error margin any more.

So why do I remain 100% invested in equities in my 401(k) plan? I guess it's because the mutual funds I hold are not trapped in a trading range. My diversified foreign fund is riding Asia's much more convincing bull market. And the energy-intensive small-cap value fund is also working out rather well.

Some financial planner would doubtlessly consider my two stocks and two funds an awfully lopsided investment portfolio. Diversification is important, don't you know. But I already have plenty of exposure to the domestic economy and rising energy costs. This is a great time to seek out a good hedge.

Q:

Say, aren't you the idiot who was peddling an especially

back in February?

A:

Yes, that was me, and bless you for bringing it up, Sunshine. I'd like to thank you with some complimentary Vioxx and a hot tip to accumulate Delta shares.

Friedman Billings Ramsey

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