DOW Jones und Nasdaq Abwärtsrisiko : 50% in den nächsten 6 Monaten! - 500 Beiträge pro Seite

[peter.wedemeier1]

War and the Markets
Steve Saville
20 January, 2003

Here is an extract from commentary posted at www.speculative-investor.com on 19th January 2003:

Overview


In summary, in January of 1991 valuation and sentiment were conducive to the start of a bull market. Today, they are conducive to the continuation of the major bear market that began almost 3 years ago. In our opinion the market has downside risk of around 50% over the coming 6 months versus upside risk of around 15%, so the risk/reward ratio is lousy. That risk/reward ratio is not going to improve if a war breaks out, although the commencement of a war would certainly result in huge volatility and quite likely a surge in the major stock indices and plunge in the prices of gold stocks. These moves would, however, be short-lived because bear-market conditions would still be in place for the stock market and bull-market conditions would still be in place for the gold market (the bull market in gold is a result of the bear market in the US$ and this, in turn, relates to the US current account deficit and the perceived inability of dollar-denominated investments to provide substantial returns over the next few years). These moves would, however, be short-lived because bear-market conditions would still be in place for the stock market and bull-market conditions would still be in place for the gold market (the bull market in gold is a result of the bear market in the US$ and this, in turn, relates to the US current account deficit and the perceived inability of dollar-denominated investments to provide substantial returns over the next few years).
http://www.321gold.com/editorials/saville/saville012003.html

[Don-Bren]

Mit einer Abwärtsbewegung rechne ich auch, aber 50 %? Immer locker bleiben!

[Fata_Morgana]

Ein Kursrückgang von 50 % dürfte realistisch sein. Ein Aufschwung am Markt ist Utopie. Die Baisse wir noch mindestens neun Jahre dauern.

[sheeponstocks]

Ich seh uns schon wieder die Höhlen bewohnen

[peter.wedemeier1]

"the market has downside risk of around 50% over the coming 6 months versus upside risk of around 15%, so the risk/reward ratio is lousy."

Der Autor meint, das der Markt bereits in 6 Monaten um 50% tiefer stehen kann. Nicht unrealistisch. Wenn er ins Rutschen gerät, dann rutscht er gewaltig. Das risk/reward ratio ist lausig. In Deutschland und Europa sieht es nicht besser aus!

Gruß

[sheeponstocks]

Sorry, aber wenn sich ein Goldlastiger Info-Dienst stark bearish zu Aktienäußert nehme ich das - obwohl selbst Bär - nicht besonders ernst...

Grüße
sheep

[peter.wedemeier1]

From Martin Weiss--Safe Money Report


Dear Subscriber,



Yesterday, the market tried to rally but failed miserably -- AGAIN!

The S&P 500 Index slid 14 points, smashing below key support at 900. The Dow plunged through the important 8500 level.

The damage is so bad that sell stops are now being triggered in Japan`s Nikkei, Germany`s DAX, France`s CAC 40, and London`s FTSE. Global stock markets are getting hit hard.

It was more bad earnings news that helped trigger the collapse. Citigroup started it off with a $1.55 billion loss -- a 36% plunge -- in earnings. The main culprits: loans gone bad and legal settlements.

In Japan, giant Mizuho Holdings, the world`s largest bank, warned of a $16 BILLION loss -- NINE times the size of its earlier estimate and the WORST LOSS EVER by a Japanese company.


And this morning, just a few hours ago, JP Morgan Chase, this country`s second largest bank, announced a $387 million loss in the fourth quarter.


All this on top of slashed earnings and forecasts from Microsoft, DuPont, Intel, IBM, and dozens more companies. This is turning the staunchest bulls into panicky sellers! Here`s what we see coming next ...


Next stop: Dow 8200. When that gives way, look for Dow 7500 and then, a plunge back below 7200 to new lows!


This is the season for reporting fourth quarter earnings AND 2003 forecasts.

But as Citigroup, JP Morgan, Microsoft, Intel, DuPont, and others are already proving, it ain`t gonna be pretty.

These are some of the biggest companies around -- and their earnings and share prices are getting pummeled with body punches. Even when they report relatively GOOD earnings, they STILL get socked because of their dire forecasts for the rest of the year.

There are going to be a lot more earnings disasters ahead. Anyone who bought into the bear market rally since late last year is going to dash for the exits.

The next level of support for the Dow is at 8200. Expect that to be hit soon. When that gives way, you`re looking at 7500, then 7200 and lower.

[peter.wedemeier1]

Martin Weiss--Safe Money News
Dear Subscriber,

Wall Street and Washington have been searching in vain for any
possible way to goose up the markets and to make investors
believe that the economy is in full recovery mode. They`ve cut
taxes, cut interest rates, written fradulent research reports,
and touted this as "The Year of Stocks" on CNBC.

But the latest disasters in the Dow are stark evidence that
investors are not buying it! Instead, they are suddenly becoming
aware of what we`ve been warning you about for months -- D-DAY

This is D-day for debts -- the day that the debts come home to
roost. You can see it yourself. You can see banks suffering the
worst surge in bad loans in many years. You can see the worst-
ever number of personal bankruptcies. You can see the most-ever
foreclosures on home mortgages. You can see largest ever
corporate bankruptcies.

This is D-day for deflation -- the day that deflation hits home.
Did you see The New York Times this past Sunday? It described,
in great detail, a new kind of deflation that has retailers and
manufacturers in a state of shock -- deflation AT THE CASH REGISTER.
Department stores. Grocery stores. Even toy stores and fast food
chains. This deflation is ripping apart every industry and every
company it touches, and it has barely begun.

This is D-day for deficits -- the day that investors finally start
noticing how big they are, how dangerous they are. Just last week,
Mr. Bush`s budget director confessed, for the first time, that the
deficit will be $200 billion this year and $300 billion next year.
But this is just their first confession -- not the first VERSION
of the first confession. Wait till you see the next round of
confessions. Soon they`ll be talking $400 billion and $500 billion,
and they`ll STILL be understating the real deficit.

These are right here and now, and are having a huge impact
on the stock markets, the dollar, and the economy overall.

Just take a look at the other factors adding to investor distrust
of Wall Street and Washington ...

* A cover-up in the making. Lynn Turner, former chief accountant
for the SEC lambasted the new rules the SEC has put in place which
are supposed to help investors and prevent the type of shenanigans
we witnessed from Enron. In a recent New York Times article, she
said, "This is very disappointing. We`ve had Enron, Tyco, WorldCom.
We`ve had the most tumultuous year ever in corporate America. And
despite all of that, the commission is softening, rather than
toughening, the rules in favor of the attorneys and auditors to
the great detriment of investors. To me, it`s just amazing."

* Earnings at major banks have gotten hammered! Citigroup and JP
Morgan Chase reported worse-than-expected earnings this week. Both
banks were slammed by the fines they had to pay for abusing
investors as well as their part in the Enron debacle. Both banks
have nobody to blame but themselves for those losses. And beyond
that, the banks are staring at a lit fuse that`s ready to blow up:
Risky derivatives, growing nonperforming loans, and an over-inflated
real estate bubble. Bottom line: The bad earnings reports aren`t
over for these banks; they`re just beginning.

[paule2]

Das wäre ja schauderhaft!

Mir reicht es, wenn der S&P 500 auf ca. 650 fällt, dann wieder bis 770 steigt und erst 2004 auf ca. 450 abschmiert.

Man will ja auch was am Salami-Crash verdienen!

[peter.wedemeier1]

THE GREATEST THREAT: DOLLAR COLLAPSE

We constantly read that the U.S. economy, though weakened, is nevertheless in better shape than the rest of the world. We vehemently disagree. America’s extraordinary borrowing and spending excesses have created a thoroughly false impression of the economy’s health and strength simply because they created more GDP than in other countries.

But the final result of all those borrowing and spending excesses is an unprecedented vulnerability of the economy and above all of its financial system. Saying this, we think in particular of the dollar. There is an unbelievable complacency about its inbred strength, yet in the 1980s, it crashed under far more favorable conditions both on trade and capital account.

The biggest negative difference in the dollar between then and today is the astronomic size of foreign dollar holdings, having accumulated during the 1990s to $8,000-$9,000 billion. This compares with foreign dollar asset holdings of about $200 billion during the 1980s.

It is nightmarish to think of the possibility that U.S. capital inflows will increasingly lag the stubbornly high trade deficit. Plainly, it is in process, though in slow motion. Nevertheless, it is progressively weakening the dollar, in particular against the euro. Yet considering the extremely low interest rates and the poor corporate profits that America has to offer to investors, we are mystified that capital inflows are apparently continuing at a high level.

In the past, these negatives for foreign investors were largely or even more than offset by gains on the rising dollar. Now, however, substantial and growing dollar losses in the United States come on top of very poor investment returns. We would have expected a virtual capital flight by now. Instead, large, though receding capital inflows continue. This has but one reasonable explanation: longer-term expectations for the U.S. economy and the dollar remain optimistic.

For us, the whole U.S. economy and its financial system remain a bubble waiting for the needle that will prick it. That needle will probably be gross disappointment of the general, rosy expectations for economic recovery in 2003 and the associated return of the bull market in stocks.

For Subscription Information Contact:

THE RICHEBACHER LETTER
808 St. Paul Street
Baltimore, MD 21202
Or call 1-800-433-1528

[peter.wedemeier1]

www.investmentrarities.com/ "The best of Kurt Richebacher"
BEST OF KURT RICHEBACHER
January 24, 2003

TO REPEAT: A PHONE RECOVERY

Literally nothing in this recovery has been normal. It was unusually slow and, above all, of a most unusual pattern. Extraordinary strength in consumer spending, fueled by the housing bubble, coincided with persistent, extraordinary weakness in capital spending. Never before has the consumer spent with such reckless abandon in a recession. While his income growth slowed to a sluggish annual rate of little more than 2%, his rate of new borrowing accelerated to 9% and higher.

During the third quarter of 2002, private households added a record annualized sum of $770 billion to their debts. For comparison, 1998 was the first year in which they added an annual debt load of more than $400 billion. Total consumer incomes, on the other hand, increased overall by just $294.2 billion, of which only $89.9 billion were from salaries and wages.

In actual fact, however, it was a consumer spending boom only in light of drastically diminished expectations. Compared to the preceding years and compared above all to the norm of postwar cyclical recoveries, it was sub-par growth even in consumer spending, and for an obvious reason: America had its first jobless economic recovery in postwar history.

Yet the decisive failure of the recovery shows in the protracted weakness in business fixed capital investment. Policymakers had hoped for its prompt rebound, making the recovery self-sustaining. Sharp rises in business fixed investment, particularly in equipment, have been typical of all cyclical recoveries in the past. This time, in diametric contrast, it has continued to fall, though at a slower pace than before.

Most importantly, however, it was a profitless recovery. Profits of corporations in the nonfinancial sector were down to $321 billion in the third quarter of 2002, compared with $358.7 billion in the same quarter a year ago. Declining profits during an economic recovery is another unprecedented experience.

STILL MORE BUBBLE TROUBLE

What went wrong exactly with the U.S. economic recovery? We see several major failures, of which one ranks top in our view. That is the current account deficit’s continuous surge. We have to emphasize this again and again because the consensus among policymakers, economists and investors in America discards it as the harmless counterpart of foreigners wishing to invest in America, involving no damaging effects of any sort for the U.S. economy. Although the strong dollar was obviously hurting manufacturing, this damage is supposed to be greatly outweighed by the positive effects on prices and the financial markets.

Considering that this deficit is approaching $500 billion, or almost 5% of GDP, this complacency about its economic implications is perplexing. During the four quarters until the third quarter of 2002, it has been up a stunning $120 billion, or 38%, from $312.6 billion, at annual rate, to $432.6 billion. This net increase in imports resulted from a rise in imports by $149.6 billion and a rise in exports by only $29.6 billion.

As we have repeatedly stressed, the most important effect of the huge and soaring U.S. trade deficit is that higher spending on imports is implicitly at the expense of domestic business revenues, and thus ultimately at the expense of profits. In essence, it is an income leakage, impacting both consumers and businesses. In order to offset its massive drag on the domestic income circulation, it needs ever larger domestic credit creation.

Continuous profit carnage is the U.S. economy’s one major problem; gross distortions in its demand growth is the other. It is hard to imagine an economic recovery that could be more ill-structured in its pattern. During the four quarters of the U.S. economy’s recovery until the third quarter of 2002, overall U.S. GDP increased in current dollars by $406 billion. This had three main sources: personal consumption (+$376 billion), government spending (+$130 billion) and inventories (+$75 billion).

Together, they would actually have made a boom-like recovery, if it had not been for two subtractions from GDP growth. The one came from declining private fixed investment, both residential and non-residential, subtracting $55 billion, and the other one came from the exploding current-account deficit, subtracting another $120 billion from GDP growth.

The fact is that policies and economic forces in the United States are not at all working toward balance, but toward worsening imbalance. Mr. Greenspan is desperately fighting the recession with still more consumer borrowing and spending excesses.

THE GREATEST THREAT: DOLLAR COLLAPSE

We constantly read that the U.S. economy, though weakened, is nevertheless in better shape than the rest of the world. We vehemently disagree. America’s extraordinary borrowing and spending excesses have created a thoroughly false impression of the economy’s health and strength simply because they created more GDP than in other countries.

But the final result of all those borrowing and spending excesses is an unprecedented vulnerability of the economy and above all of its financial system. Saying this, we think in particular of the dollar. There is an unbelievable complacency about its inbred strength, yet in the 1980s, it crashed under far more favorable conditions both on trade and capital account.

The biggest negative difference in the dollar between then and today is the astronomic size of foreign dollar holdings, having accumulated during the 1990s to $8,000-$9,000 billion. This compares with foreign dollar asset holdings of about $200 billion during the 1980s.

It is nightmarish to think of the possibility that U.S. capital inflows will increasingly lag the stubbornly high trade deficit. Plainly, it is in process, though in slow motion. Nevertheless, it is progressively weakening the dollar, in particular against the euro. Yet considering the extremely low interest rates and the poor corporate profits that America has to offer to investors, we are mystified that capital inflows are apparently continuing at a high level.

In the past, these negatives for foreign investors were largely or even more than offset by gains on the rising dollar. Now, however, substantial and growing dollar losses in the United States come on top of very poor investment returns. We would have expected a virtual capital flight by now. Instead, large, though receding capital inflows continue. This has but one reasonable explanation: longer-term expectations for the U.S. economy and the dollar remain optimistic.

For us, the whole U.S. economy and its financial system remain a bubble waiting for the needle that will prick it. That needle will probably be gross disappointment of the general, rosy expectations for economic recovery in 2003 and the associated return of the bull market in stocks.

For Subscription Information Contact:

THE RICHEBACHER LETTER
808 St. Paul Street
Baltimore, MD 21202
Or call 1-800-433-1528

[peter.wedemeier1]

What the Hell can one do................
From Martin Weiss---who else!

Dear Subscriber,


The 10% beating that stocks took in the last two weeks is setting the stage for one of the worst traps in many years:

There will be a small bounce in the Dow.

Wall Street will jump on it, claiming (AGAIN!) that the worst is behind us.

And then, just when they are starting to breathe a sigh of relief, WHAMMO! The whole house of cards will start crashing down, with Dow declines of up to 500 points in a SINGLE DAY.

This is Larry`s prognosis, and when he speaks, I listen.

Indeed, he and I make a great team. I watch the fundamentals behind the economy -- the collapsing companies, the accounting shenanigans, deflation, and more.

Larry is the chart analyst and trader. He watches the zigs and zags in the market every day drawing lines on the charts, looking for parallels to the past, and checking the most reliable mathematical models to better pinpoint the timing of market moves. He reads charts all day like a cardiologist reads EKGs. And he`s uncanny at it.

Now, look again at Larry`s latest chart of the Dow. It has absolutely shattered key support at 8200! Even if it rallies back to that line, it`s abundantly clear that the next MAJOR leg down has ALREADY begun. So any rally now is going to be a great trap.

Dow 8000 is going to disappear into the sunset. Blue chips are going to test the October low at 7200, and when that gives way, you`ll be looking at 6600 and lower.

Meanwhile, I can tell you flatly: The economy stinks. Just this morning, the Commerce Department announced that December orders for durable goods -- items like washing machines, refrigerators, and the like -- rose a tiny 0.2%, just ONE FOURTH of what was expected.

That`s more proof the economy is sliding into an abyss. Nearly every fundamental stat on the economy is looking absolutely terrible.

Don`t get caught in this market. Get out. If you are a new subscriber to Safe Money Report and still hold shares (other than Larry`s gold recos, which are doing great, and the recommended Enerplus Fund), sell them NOW.

[peter.wedemeier1]

House Of Horror

Dear Subscriber

While the Dow is taking a short breather, look at all the DIRT that`s pouring out ...

"WORLDCOM SALES DROPPED FASTER THAN REPORTED." (Today`s New York Times, front business page.) There they are, with new "honest" management, and they`re still lying through their teeth, right under the nose of the bankruptcy judge, telling the public that sales are just fine -- when an internal spreadsheet reveals that sales have plunged by 81% in the fourth quarter. Unbelievable!

"FRAUD SUIT NAMES KPMG AND PARTNERS. SEC SAYS FIRM HELPED XEROX INFLATE PROFITS." (Also today`s New York Times.) Four years of inflated profits, they say. And the industry pundits thought Arthur Anderson was the only one?! Hah! Now we have TWO of the Big Five that have been accused of fraud! And I have provided evidence to Congress that ALL five have blessed major accounting irregularities.

"AOL TIME WARNER POSTED A 2002 LOSS OF $98.7 BILLION AFTER TAKING A $45.5 BILLION CHARGE." (Today`s Wall Street Journal, front page.) Another huge earnings collapse! Ted Turner jumping ship, on the heels of Case, who jumped two weeks ago! No plan for getting back on track, no forecast of recovery. This company could be going down for the count, just like the rest of them.

"GATEWAY SAID THAT THE SEC IS CONSIDERING CIVIL CHARGES." (Today`s Wall Street Journal.) More scandal. More losses.

"WASHINGTON VS. SKEPTICS ON STATE OF THE ECONOMY." (Today`s New York Times, front page business.) Consumer confidence lowest in 9 years. Investor confidence plunging even more quickly. And Washington says the economy is OK? Even the Pollyanna Wall Street economists are beginning to wonder what the heck they`re smoking inside the Beltway.

I`ve been watching the markets for more than 30 years. If you consider the years I used to hang around the office with my father, it`s more like 45 years. And I can tell you flatly: I have never seen anything like this in my entire lifetime. I`ve heard stories from Dad about the 1930s. I`ve read books. But with my own eyes? No. This is the first time.

This is it. The Dow, the Nasdaq, the dollar, bonds, the economy, factories, the consumer -- everything is going down. If you have some stocks left over, and you get a little pause or bounce in the market like you`ve had in the last couple of days, consider yourself lucky. Use it to get the heck out of the market. Please, please do not wait one more instant.



Martin Weiss

[peter.wedemeier1]

Noted technician sees gruesome sell-off ahead
10:42 a.m. 01/31/2003 By Thom Calandra

SAN FRANCISCO (CBS.MW) -- A pioneering market technician says a fresh bout of intense stock market selling is on its way.

` Paul F. Desmond is revered for his examinations of supply and demand forces that shape stock market activity. His work on identifying bear-market bottoms and new bull markets coined the term "90-90 downside days" and won the prestigious Charles Dow award.

Desmond`s work demonstrates that severe downside days, in which 90 percent of all volume and total points gained and lost on the New York Stock Exchange(NYA)are in the red, must precede a bear-market bottom.

Essentially, Desmond says the three-month party is almost certainly over for stock-market optimists.

None of the rallies that lifted the spirits and net worth of investors in September 2001, and July and October of last year, followed a series of intense selling days, he says. "Downside days serve to exhaust the desire to sell, and drive prices down to the kind of bargain levels that attract sustained investor demand," Desmond says.

"It looks like we are in for a new round of 90 percent downside days," Desmond tells me.

Buying demand, an indicator that measures the so-called breadth of the stock market, last week sank to its lowest point in almost six years. Just as ominous: Selling pressure -- when investors become frustrated "with a prolonged lack of gains and begin to aggressively dump stocks in a desire to beat everyone else to the exit" -- is soaring.

Investors -- and fat-cat executives -- eyeing their "disgust meters," need look no farther than entertainment company AOL Time Warner(AOL). If I owned the shares -- and I don`t -- I would by now be wondering if this 1990s wunderkind is the next WorldCom, or Enron, or Tyco.

"I am struck by the stubbornness of the various analysts quoted in today`s Wall Street Journal Heard on the Street column," Bernie Schaeffer oftold me Friday morning. "There is certainly a parallel here to WorldCom, on which most of Wall Street did not bail until the stock plunged below $5."

Schaeffer, a longtime market technician who catalogs investor sentiment, the options market and the financial press, says the popular AOL theme seems to be, " `AOL is a value as long as there are no more shocks to the system.` This is despite a reported loss larger than the GDP of Chile and the tried-and-true cockroach theory on Wall Street that negative revelations beget further negative revelations."

Slowly, market observers are beginning to see AOL as it should be seen, as not as the flash-in-the-pan might want to be seen in Harry Potter`s Mirror of Erised.

"If a company that has both `Harry Potter` and `The Lord of the Rings` in its arsenal of properties can`t figure out how to make a profit, and how to clean itself up, then it suggests that something more than bad management and bad decisions is afoot," says Joseph Duarte, a Dallas fund manager andon stock-market strategy. "Ted Turner`s resignation suggests that all is not well, and that it could be worse than anyone expects it to be."

[peter.wedemeier1]

Reuters
Stocks Retreat Dashes Investors` Hopes
Saturday February 1, 11:08 pm ET
By Martha Graybow


NEW YORK (Reuters) -

http://biz.yahoo.com/rb/030201/bizinvestors_2.html

[peter.wedemeier1]

Economic Malady
Dear Subscriber,

The government reported Thursday that the gross domestic product
(GDP) grew a measly 0.7% in the fourth quarter -- way, way down
from the 4% growth seen in the third quarter. Clearly, the economy
has taken a turn for the worse!

What`s most significant is that consumer spending posted the weakest
gain since the first quarter of 1993. For an economy that relies on
consumers to drive two-thirds of its growth, that`s ominous news.

And the fact is that all the signs say that this trend will continue.
Consumer confidence just fell for the second month in a row, plunging
to its lowest level in 9 years. Consumer expectations of a better
job market, improving business conditions, rising incomes, and a
turnaround in the overall economy have collapsed.

Can you blame them? The unemployment rate has risen to 6% and job
creation is dismal. Many prominent businesses have reported lackluster
earnings and expect continued poor results. And while personal income
and savings are generally higher, investments have fallen flat.

Plus, consumers are drowning in debt. Personal bankruptcies are
soaring, and home foreclosures have reached their highest level in
the past 30 years.

And credit market debt now equals 295% of GDP -- that`s even higher
than it was during the Great Depression, when credit market debt was
264% of GDP. That`s an outrageous amount of debt outstanding in
relation to the growth of the economy!

These poor fundamentals alone will drive the economy down deeper --
no matter what the Administration or the Fed does to try to stop it.

Take a look at some of the other recent developments in the economy ...

* Accounting scandals still pervade the markets. The SEC filed
charges against KPMG, one of the four remaining "independent"
audit firms in the U.S. The SEC alleges that KPMG, as lead auditor
for Xerox, looked the other way from 1997 through 2000 as Xerox
pad! ded its earnings with accounting tricks. The SEC`s lawsuit
comes too little, too late for investors who`ve watched Xerox`s
share price plunge over the past few years. But it reminds us
that perhaps Arthur Andersen wasn`t the only auditor out there
covering up earnings lies.

* Corporate earnings just get worse! AOL Time Warner recorded the
largest loss in U.S. corporate history for 2002 -- $98.7 BILLION!
The company had two of the largest write-downs in U.S. history in
2002 -- $54 billion in the first quarter and $45.5 billion in the
fourth quarter. Only JDS Uniphase came close to that when it wrote
down $50.1 billion in 2001 -- until this year, JDS Uniphase held
the dubious distinction of having the largest loss in U.S. corporate
history -- its loss was a mere $56.1 billion!

* Consumer confidence continues to plunge. The Conference Board`s
Consumer Confidence Index dropped to 79.0 in January. That`s the
second month in a row the index has fallen, and the lowest the
index has been in nearly a decade. Consumers are uncertain about
the future: War, the economy, and the stock markets are all BIG
QUESTION MARKS in their minds. And when consumers are uncertain,
they begin slamming shut their wallets.

* Among the thousands of bond funds in the United States, the funds
with the very best overall performers last year were the American
Century Target Maturity Trusts -- precisely the ones recommended in
Safe Money. And among all the thousands of stock mutual funds in the
United States, the funds with the very best performance were those
that invested in senior gold mining shares that do not hedge in the
futures markets -- precisely the same investment category recommended
in Safe Money.

Martin Weiss

[peter.wedemeier1]

Frank Barbera, is "extra bearish" and expects Dow 5000 in the first half of the year. In addition, he explains why the high COT short interest in gold is a confirming indicator. He also names some of his favorite longs and shorts. LISTEN

http://www.marketviews.tv/

[peter.wedemeier1]

Arch Crawford -who went on a sell signal on 1-21-03- believes the worst has yet to come, next key date: 2-16-03.

http://www.marketviews.tv/

[peter.wedemeier1]

I expect the DOW will fall well below the 7200 lows of October 9th. Maybe as far as 5000 or lower. Sure there will be mini-bull rallies along the way. Remember, Europeans and Asians are still holding massive amounts of US equities. How much longer will they hold as this bear market takes the US markets and the US dollar down. When they sell, the market will panic for sure. There will be a flight for safety.

As for me, I will invest in the only bull market trend I see for right now. Gold is definitely in a primary bull market and gold shares will follow.

http://messages.yahoo.com/bbs?.mm=FN&action=m&board=7079148&…

[peter.wedemeier1]

From Chris Curran/Trade winds,

"Another critical area to keep tabs on is the cash levels at mutual funds. As reported in Barron`s last week, the average cash level at mutual funds in the U.S. stands at 4.2%, the lowest level ever recorded. Historically, low cash levels have been a good contrarian indicator of market tops, while high cash levels (in the 10-13% range) have been present with market bottoms. The logic behind this is simple. If funds are already invested, there is not much capital available to put to work to enable stocks to work higher. On the contrary, if mutual funds have a lot of cash at hand, the necessary fuel is available to drive the markets higher. There is also an air of desperation for many fund managers, whose jobs are on the line after 3 losing years. Furthermore, when cash levels are low, it leaves funds in a very vulnerable position of being forced to sell positions to meet any increase in redemptions. And when funds are forced to sell with little regards to price, it creates a sharp selling environment. So, regardless of how the Iraq situation turns out, it will not magically increase cash levels at mutual funds, and any rally in the near-term will still be of the bear market variety."

[peter.wedemeier1]

Market timers foresee imminent crash for stocks
11:43 a.m. 02/03/2003 By Thom Calandra Provided by


Market timers catalogue worrisome signs for stocks
SAN FRANCISCO (CBS.MW) - The U.S. stock market`s leading technical analysts see ominous signs in the fading rally that just a month ago raised the hopes of investors.

As the market`s recovery attempts lose the so-called breadth of robust trading volume, market timers see a turning point for U.S. stocks in the next several days. (More

Here is a round-up of several technicians and veteran market observers whose forecasts largely have withstood the test of time:

Looking at cycles
Tim W. Wood ofsees what market timers call "a re-test of the October lows." In plainer English, that means investors are nervously eyeing the stock market`s major indexes. The S&P 500`s recent low of 782.96 was reached Oct. 7.

"If those lows are indeed violated, the bear should be back in full force," says Wood in his monthly report. The S&P 500(SPX), which represents America`s largest companies, was trading at 860 on Monday morning.

Wood,in January, examines cycles of activity in financial markets, from lengths of 40 or so days all the way to four-year spans, nine-year spans and longer. "With the current weekly cycle topping out on Dec. 2, only eight weeks from the previous bottom, odds suggest a break below the October low is now likely. A break below the October lows should provide final confirmation that the current seasonal cycle has topped. The market should then have a downward bias into the next seasonal cycle bottom, which is not due until late summer or fall 2003," Wood says.

On a lower note, the Louisiana-based Wood looked at the so-called seasonal cycle, which averages about a year in length. He says if the Dec. 2 top proves to be the "current seasonal top, we can expect to see an average decline of between 26 and 31 percent. This would take the Dow down somewhere between roughly 6,200 and 6,700 as the next seasonal cycle bottoms." The Dow Jones Industrial Average(INDU)was trading at 8,100 Monday morning.

Lots of turbulence ahead
Richard T. Williams, chief market technician at Summit Analytic Partners in New Jersey, sees warning signs across the board. William, after digesting the "odd behavior" of the CBOE`s Nasdaq Volatility Index(VXN). The volatility gauge recently had some technology shares stripped from the gauge.

Williams says an imminent decline in stock-market averages is likely. He is charting weaker signals from money flows, lower volume-adjusted prices on Nasdaq, falling relative strength of stocks and problems with so-called oscillators, which help determine extreme oversold and overbought conditions for the stock market.

"The technical forecast calls for a sharp sell-off over the next few weeks, and then a bounce off the lows back up over the next nine months or so that will surprise the market in its strength and how high valuations go," Williams told me Monday morning. "We base this forecast on both historic precedent and our proprietary models, like supply/demand studies and traditional chart studies."

Williams says a small bounce higher is possible in coming weeks. Avoid software stocks - at least until a little later this year, he says. "We are seeing a number of signals that suggest that the market will sell off on increasing momentum over the next couple of weeks," this analyst says.

The psychology of timing
Market timing, the practice of anticipating rallies and swoons, is a finicky - and solitary - art (or science, for that matter). Few timers will stick to their guns if a market moves against their previously stated forecasts. As newsletter pioneer James Dines of four-decade-oldsays, "The ability to call turns in stock-market forecasting must by definition be done when alone, because by the time there is a bandwagon on Wall Street the move is already over."

Dines` timing in recent years has been better than the forecasts of most of the technical crowd. Author of the highly regarded financial book "Market Psychology," Dines looks for moments when the Wall Street and Main Street herds are absolutely convinced certain events - war, corporate profits and so on - will take place.

Dines sees a springtime rally within the confines of a continuing bear market. Such bear-market rallies, he says, are swift, often consuming one-third the time of a bull-market rally. So the race is to the quick. For the rest of America, just hold cash.

"A record 52 percent of Americans owned stocks in 2002, nearly all of them now staring at losses in a major bear market, figuring stocks are down, therefore cheap," the editor says. The time to hold stocks long term "is during a major bull market, not an invisible crash," says Dines.

He also has thoughts on the gold rally that began more than a year ago, and is continuing, in mining shares and physical bullion. Most investors see the commodity`s almost 30 percent rally in 13 months as a "brief fluke, a flash in the pan, even as they observe their portfolios melting. Therefore, we make this prediction, that the public will soon be saying, `Yes, the golds really are bullish, but it`s too late to buy them, they are already overpriced, too high!` "

Schaeffer`s view: War and headlines
I asked Bernie Schaeffer, a longtime market analyst and student of market psychology, what investors might glean from headlines that followed the Columbia space shuttle disaster that left seven astronauts dead.

"A tragedy, without a doubt," says Schaeffer of. "But if we as a nation are going to go into paroxysms of nationally televised, 24-by-seven grief over the death of American astronauts, how might it be should scores of our soldiers come home from a Middle East war in body bags? And if a 17-year-old boy sniper and his accomplice could effectively grind the DC suburbs into a fearful paralysis, how might it be should we experience multiple acts of terror on American soil?"

As for the numbers, Schaeffer says the 884.79 level of the S&P 500 represents a 50 percent "correction" of the rally in the index from its October 1987 low to its March 2000 high. Technical analysts use the word correction to mean a reversal of a trend -- because markets don`t move in straight lines up or down.

Schaeffer sees support for the index at the 870 to 880 levels. Anything lower is troublesome. Schaeffer in the past 18 months has been increasingly confident that gold, the polar opposite of stocks, will stage a lasting rally. "What I find interesting," he says, "is the fact that weakness in the dollar and strength in commodity prices is hurting bonds more than stocks. This supports the general theory that if in fact the reflation efforts now under way by the powers that

be - the Federal Reserve and other central banks -- are successful, the result will be unambiguously bearish for bonds, unambiguously bullish for gold, and just plain ambiguous for stocks."
My own view
What I call the Down-the-Dow-Staircase average will suffer 1,000-point daily losses -- in coming weeks, months and years. A decade of 40x price-earnings multiples for America`s "best" companies does not end with mere slippage to 7,000 Dow, or 6,000 Dow, or 5,000 Dow.

A decade of low interest rates does not justify multiplying a company`s earnings by 40 or 50, then delivering a fat check to a broker in return for a certificate, or an electronic confirmation. The Dow`s 30 companies, with a market worth of $2.5 trillion, represent 25 percent of the $10 trillion market of U.S. stocks. Just 25 percent. Yet the influence of this headline index grows daily, in good times and bad.

The scandal is that unlike most reliable equity indexes, the Dow is a price-weighted index influenced in large part by the biggest-number stocks in the gauge. That means stocks with high dollar prices - and there are two I have in mind -- wield enormous influence on both the index itself and investors across the globe who digest the incessant Dow headlines. When these two get knocked from their perches, the overpriced Dow is on its way down the Dow staircase.

[peter.wedemeier1]

"It will be debt that leads us into depression. It is only a matter of time with a fuse that is running short. The authorities know it, and foreigners know it, so it becomes a question of whether the economic contraction in the economy, the fall of the dollar, and the decline of equities will be orderly or culminate in a crash. That is the real issue at hand and the one reason why there is a slow and subtle movement into hard assets such as gold, silver, and other commodities. There are too many dollars in the system and not enough alternatives to replace it."

They’re Not Coming Back

http://www.financialsense.com/Market/commentary.htm

[peter.wedemeier1]

Market Still Headed Lower

By Dave Skarica
Feb 5 2003

www.addictedtoprofits.com





Dear Subscriber,

On January 23rd, we wrote an article entitled "Out of Time" which stated the market was running out of time and should soon break to the downside. On the next day of trading, January 24th, the Dow Jones Industrial

Average did as we predicted. It closed down over 230 points and broke below its key support level of 8,250. Since that time, the Dow has found short-term support in the 7,900 range. We are of the opinion that this break below 8,250 is very important. The Dow has been pushed below the bottom of it`s short term trading range and such downside breaks are usually fierce. We are now expecting the market to soon trade back to its fall lows (7400 range), if not lower.

http://www.kitco.com/ind/Skarica/feb052003.html

[peter.wedemeier1]

Excerpt - copied from financial sense online:

"Stocks retreated in advance of tomorrow’s presentation to the UN by Secretary of State Colin Powell. Powell is expected to lay the case for war due to Iraqi violations of UN covenants agreed upon by Iraq. The major averages lost ground today with all three indexes in negative territory for the year. We have just experienced the worst December and January in many decades -- a time when the major indexes fell back-to-back in normally what is considered the two strongest months of the year for the stock averages. Both December and January have been negative and that`s something we haven’t seen in a long time. Year-to-date the Dow has lost close to 4%, the S&P 500 3.6%, and the NASDAQ is down 2.2%. This makes for four years of negative returns. And unlike previous downturns, the little investor isn’t coming back into the market. Volume on the major exchanges has been falling since last summer. The brief trading rallies we have experienced last summer and fall were the product of intervention and interplay between the hedge fund community and fund managers playing the momentum game. Nobody is holding on to positions anymore. They just trade them in a game of chance and musical chairs hoping they land on something to earn a return."

[peter.wedemeier1]

David Tice (Prudent Bear funds) in an interview on Bloomburg today said he sees DOW 4000 by year end. (for those that don`t get Bloomburg, Realplayer provides some of their commentary - free)

[peter.wedemeier1]

On Shaky Ground

David Chapman

"If the month of January was supposed to be the hope that we could have an up year it has surely disappointed. Everywhere markets were down. Dow Jones Industrials -3.4%, S&P 500 -3.3%, NASDAQ -1.8%, TSX -0.7%, Tokyo Nikkei -4.3%, Hong Kong -2%, German DAX -5%, Paris CAC 40 - 4.1%, London FTSE 100 - 9.5%. If things are supposed to get so much better than why is everything going down. Certainly in listening to numerous market pundits we sometimes wonder if there is even a bear market out there. The worst offenders are Lawrence Kudlow and crowd at CNBC who undoubtedly are the biggest (still) bull cheerleaders around. We wonder if they live on another planet."

"In this type of environment only one thing shines and that is gold."

"But rising gold prices aside the real concern for most people is the falling stock market. And the stock market has a lot further to fall. And a falling stock market is putting pressure on all sorts of financial entities. Pension funds have become under funded to the tune of an estimated $300 billion in the US. This will put immense pressure on companies to finance these pension obligations and in turn that will put continued pressure on falling profits."

"A falling stock market was going to happen irrespective of a war. And the war is merely a distraction to make one forget about the weak economy and monetary system. So war is not an excuse for a falling stock market."

http://www.gold-eagle.com/editorials_03/chapmand021103.html

[peter.wedemeier1]

THOM CALANDRA`S STOCKWATCH

Leading stock indexes near meltdown
Dollar`s drop, commodity rally start to sway investors

By Thom Calandra, CBS.MarketWatch.com
Last Update: 11:09 AM ET Feb. 10, 2003

SAN FRANCISCO (CBS.MW) -- After a 10th consecutive week of rising gold prices, and an almost simultaneous streak in the benchmark Commodity Research Bureau`s index of hard assets (XX:1864498: news, chart, profile), Main Street is beginning to lose its appetite for the stock market`s paper chase.

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yh…

[peter.wedemeier1]

Bankers Plan for Financial Crash
The following edited excerpts are taken from an article that first appeared in the July 28, 2000 issue of Executive Intelligence Review (EIR). Note the parallels, then vs. today. Hmmmmmm???

"CFR Bankers Plan for Financial Crash
by Richard Freeman

On July 12-13, 2000, the New York Council on
Foreign Relations (CFR) held a conference at its headquarters on the East Side of Manhattan titled, "The Next Financial Crisis: Warning Signs, Damage Control and Impact."

For two days, several speakers told a high-powered audience of 250 people, comprised largely of bankers, investors, corporation officials, and policymakers, from the United States and Europe, of the possibility that the U.S. stock market, and potentially the world financial system, would melt down.

The conference featured discussion of the outcomes of the simultaneous breakdown of major financial markets around the world.

What had been simulated, was a policy of pumping huge amounts of liquidity by the Federal Reserve, both through public sources and also through secret channels, to "keep the main markets open." The simulation was conducted such that "all the public would see, is that the Fed volume of loans to banks had gone up."

The CFR conscripted 75 people, including bankers, former Treasury Secretaries, and former State Department officials. Participants were divided into four teams, sent into four rooms, with the ability to communicate with each other and with a command headquarters through the computers.

The four teams covered: 1) monetary-financial, which dealt with the functions of the Federal Reserve Board of Governors; 2) economic and trade, which dealt with the functions of the U.S. Treasury Department; 3) regulatory matters; and 4) former CIA director James Woolsey played the role of Secretary of Defense. The game-players were hit with breakdowns in several markets, which increased in severity, and in some ways interacted, during the simulation.

The market assumptions included: the Dow Jones Average Industrial Average falling by stages, from 10,000 to 7,100; the price of oil shooting up to $36 per barrel; the dollar plummeting against both the euro and the yen; the affiliate of a large British insurance company that was a big player in the equity derivatives market getting into trouble,
causing panic in the derivatives market. The CFR has not yet written up the outcome of the simulation, but one conference panel was a "report-back" by participants in the simulation meltdown.

A major objective of the exercise was to bail out the financial markets. According to an article in the March 10 issue of Euromoney
magazine, written by an eyewitness reporter during the simulation, two of the largest mutual funds in America went to the Securities and Exchange Commission saying that they were experiencing redemption rates that could
threaten their firms. The article reported, "They need an injection of
cash to meet the payments without having to dump their portfolio on the market at fire-sale rates. . . . The regulators [a simulation team] approached blue-chip J.P. Morgan and discussed the Fed secretly guaranteeing a huge line of credit to the two funds. Morgan would take excess collateral, but it wouldn`t be taking the credit risk of the mutual fund companies themselves. That would be borne by the Fed. Fed Chairman Greenspan is uncomfortable, but agrees to the deal. `All
the public will see,` says one regulator reassuringly, `is that the Fed`s
volume of loans to banks has gone up.` "

Former World Bank Managing Director and Treasurer Jessica Einhorn, who played vice-chairman of the Fed during the simulation, reported at the conference that, in the simulation, "We kept the main markets open, and let other things go. We lowered rates and put in liquidity. The main thing was to create the perception of confidence."

http://messages.yahoo.com/bbs?action=m&board=7082634&tid=jpm…

[peter.wedemeier1]

"The Golden Road"

From "The Daily Reckoning" 2/20/03.

This is quite good.

<The Daily Reckoning PRESENTS: What a long, strange trip
it`s been. The International Speculator`s Paul van Eeden
takes us on a scenic tour of the dollar demise and the
rebirth of gold.


THE GOLDEN ROAD
By Paul van Eeden

In 1992, the Brazilian economy buckled under debt and
runaway inflation, resulting in a complete collapse of the
Brazilian real. The real literally went to zero and was
replaced with the new real.

During crises, money flees to the safest haven. The
Brazilian crisis caused large amounts of capital to seek
asylum in the U.S.. Careful analysis shows that the influx
of capital from Brazil caused a noticeable uptick (about a
10% gain) in the U.S. dollar from 1992 to 1994. This marked
the beginning of the greatest bull market in history,
encompassing stocks, bonds and real estate.

The next year, 1995, Mexico experienced its biggest
economic collapse since the Revolution and the peso lost
50% of its value. Being our southern neighbor and one of
our largest trading partners, this caused additional
capital to flee to the U.S., which in turn strengthened the
dollar even more. Our stock and bond markets followed suit.

At this stage, the U.S. economy was robust, real interest
rates were running at 5.02% compared to Europe`s 3%, and
given a stronger economy and higher real rates of return,
it is no surprise that capital migrated to the U.S. as
economic mayhem continued to plague the world. But the
stock market was already overvalued, with the Dow at around
3,500.

In 1996, the South East Asian Tigers caught a bad case of
the flu. This time, however, the new capital influx into
the U.S. was staggering, totaling $356 billion during 1996
and 1997 alone. It is not a coincidence that gold peaked in
February 1996 at $415 an ounce.

The world was still sniffling from the Asian Flu when
Russia defaulted on its debt in 1998. In January 1999, the
euro was launched and promptly started falling against the
dollar, eventually losing as much as 35% during the ensuing
two years. More capital made its way into the U.S.
attracted by reports of a "New Era", supposedly as a result
of productivity gains and the ultra-efficient U.S. economy.
Not to mention the gains in the U.S. stock market from
earlier flight capital infusions...and of course there was
still the perception of the U.S. as a safe haven for
foreign capital. By this time, it was already difficult to
distinguish between the roaring 20`s and the roaring 90`s.

From 1992 to 1999, more than $1.2 trillion (net) flowed
into the U.S. economy. This had to have ramifications.
Initially, the money was invested primarily in bonds,
leading to a spectacular bull market in that sector, but
more importantly driving down U.S. interest rates.

The falling cost of capital had an immediate effect on the
U.S. economy and the markets. Lower borrowing costs
increased corporate cash flows and profits. Higher profits
lead to higher stock prices as more cash flow allowed
companies to increase capital expenditures and R&D. The
latter two stimulated the economy by increasing jobs and
the velocity of money in the system.

Individual consumers also benefited. Unemployment declined,
along with mortgage rates and the interest on bank loans.
Cheap access to money induced both corporations and
consumers alike to take on debt at a staggering pace. From
1992 to 2002, consumer credit increased 119% and corporate
debt 95%.

It`s important to realize that Bill Clinton and Alan
Greenspan did not engineer these `good times`. They were
merely bystanders, spectators and orators. The markets did
not listen to Greenspan in 1996 when he warned of
irrational exuberance because he could not stem the influx
of capital. Likewise, Greenspan will not be able to
alleviate the correction we are now experiencing any more
than he succeeded in have preventing it. Finally, the
emperor is seen for what he is.

As mentioned, the dollar`s run started in 1992, but it was
not until 1996 that it really got going. And the stronger
dollar had consequences. Exports from the U.S. become more
expensive, hurting the export industries. Imports get
cheaper, hurting those competing with lower prices
(imported products, as in the steel industry). Lower import
prices also stimulated demand for imported goods, causing
the balance of trade to get out of kilter. A negative $36
billion trade balance in 1992 expanded to over $420 billion
by 2002.

Undeniably, a negative trade balance leads to a negative
balance of payments. The influx of capital during the
1990`s and the expanding trade deficit are two sides of the
same coin. Foreign demand for dollars was offset by out
demand for imported goods.

The problem with an expanding negative balance of payments
is that never before in the history of the world has there
been a large balance of payments deficit that was not
followed by a recession to correct the imbalance. The
magnitude of the ensuing recession is also in direct
proportion to the size of the deficit. The problem is that
the balance of payment deficit in the United States today
is exceptionally large by any measure. On a nominal basis,
it is the largest the world has ever seen.
The magnitude of our balance of payments deficit suggests
that we are going to have a long and severe correction
ahead of us. The influx of capital into the U.S., which
lowered our borrowing costs and led to exorbitant capital
expenditures, suggests that we are not merely looking at a
recession, but a full-blown depression.


Regards,

Paul van Eeden,
for the Daily Reckoning

P.S. Foreign capital has not yet left the U.S. en masse, as
evidenced by our still negative balance of payments. But it
is becoming ever more difficult to attract new foreign
capital on economic and investment merits. Bush is not
helping, either, by changing the previously favorable U.S.
climate for foreign capital to a perilous one with
terrorism-related seizures and the freezing of accounts.

The U.S. economy is stumbling over a cliff, and it`s going
to take the dollar with it. The result will be slower, or
negative, economic growth, collapsing stock and real estate
markets, and spectacular bankruptcies.

This collapse in asset prices creates deflationary pressure
that the Fed is going to fight tooth and nail with as much
money creation as possible. That will ultimately lead to a
real inflationary problem that could be far worse than
anyone is currently imagining. Navigating through this
investment environment will not be easy.

P.P.S. Fortunately, there is hope. The future is bleak for
the dollar whether we face inflation of deflation. That is
because during the current deflationary period, U.S.
economic growth is grinding to a halt, thereby reducing the
allure of U.S. stocks, bonds and real estate to foreign
investors. As foreign investors reduce their investment in
the U.S., the dollar will fall. To combat deflation, the
Fed is going to try to devalue the dollar, which is
obviously bad for the dollar.

Since gold acts as a stable international monetary asset
and since the gold price in U.S. dollars is inversely
proportional to the U.S. dollar exchange rate, the gold
price will increase as the dollar falls.

Furthermore, war games around the world are likely to cause
the average gold price to increase as well, further
increasing the U.S. dollar gold price. The question should
not be whether to own gold or not, but how to invest in
gold and related assets.


Editor`s Note: Originally from South Africa, Paul van Eeden
brings an international perspective on markets and gold in
particular to his analysis. Paul is well known for his work
on the relationship between gold and the currency markets.
In addition to his expertise in gold, he enjoys an
insider`s understanding of minerals exploration, having
been intimately involved in the financing and evaluation of
resource companies since 1995. Paul van Eeden is co-editor
of:>

[peter.wedemeier1]

Russell`s Dow Theory Calls

Richard Russell

February 22, 2003 -- We`re, unfortunately, in a major
or primary bear market.

According to Dow Theory, neither the duration nor the
extent of a primary trend can be predicted in advance.


In late 1974, I stated that all the characteristics of
a bear market bottom were present. I further stated
that I believed we were at the birth of a new primary
bull market. A few months later the bull market was
confirmed under Dow Theory.

But in my wildest dreams I never envisioned the bull
market lasting for the next 25 years, and I never
foresaw the Dow rising to over 11000.

In September 1999, I "called" a bear market based
under Dow Theory. Since most bear markets last roughly
a quarter to a third as long as the preceding bull
market, I guessed that the bear market might last to
2005 to 2007. But those were, and still are, only
guesses. It`s a lot easier to identify a bear market
bottom than it is to guess correctly when a bear
market might end.

I also stated that I believed the Fed would fight the
bear "tooth and nail" and in so doing, extend the life
of the bear market. So far, I believe my earlier
thoughts on the bear market have proved to be correct.

The fact is that this bear market has been in force
going on three years. But it could go on for another
two or three years or another 10 years. I don`t have
the answer, and neither does anyone else.

Identifying a bear market bottom is a different
matter. Bear market bottoms are characterized by great
values in stocks (stocks fall below "known values"),
low volume, and black gloom on part of the investing
public. Margin debt tends to drop to about 10% of that
which existed at the bull market high, and Wall Street
and even capitalism itself become dirty words.
Expressions are heard such as "I never want to hear
about stocks again," or "we`re seeing the death of
equities," or "the stock market will never recover
from this one."

I don`t have to tell you that we`re nowhere near that
kind of sentiment. The last time I heard or saw this
type of sentiment was at the 1974 lows -- and before
that during the lows of 1949, at which time the Dow
bottomed at 161.60.

The real surprise to me is that today, going on three
years after the Dow Theory bear market signal,
psychology is still so optimistic. Cheerleaders are
everywhere. The stock market magazines continue to
advertise hope, Barron`s continues (on its cover) to
list stocks to buy, The Wall Street Journal (like
Barron`s) has become a cheerleader. Only The Financial
Times (and possibly Economist) provide helpful
perspective of what`s really going on -- and both are
published by the same outfit.
Particularly sad are two of my formerly favorite
reading places, Barron`s and The Wall Street Journal.
I spend maybe 10 minutes on each today, and find them
next to useless as far as the big picture is
concerned. As far as bearish perspective in this, the
greatest and most costly bear market in generations, I
find them both woefully inadequate.

I`ve stopped writing for Barron`s because I don`t
believe they want to print what I have to say. As for
The Wall Street Journal, they stopped accepting
investment advisory ads decades ago. And in their new
revised spread on the action of the stock market, they
don`t even see fit to put their own stock averages,
the Industrials, Transports and Utilities together on
the same chart.

The big picture today is that we are still very much
in the second phase of what could easily be the
greatest, or should I say the worst, bear market since
1929-32. The second phase of a bear market is the
phase where stocks decline as they discount
deterioration in the economic, political and social
fabric of the nation.

A few years ago when I wrote about deterioration in
the economic, political and social fabric of the
nation, people wrote and asked how the "political and
social fabric" could fit into my description of the
second phase. Today people are not asking that
question. I think the answer is becoming rather
obvious.

I want to repeat that the most difficult exercise in a
bear market is -- to stay out of one.

Staying out used to entail being completely in cash.
But today being in cash also entails a danger, since
we`re dealing with a Fed that is generating liquidity
at a rate that boggles the mind. To protect ourselves,
we are forced to buy either other currencies or gold
and gold shares.

But buying "other currencies" is foreign to perhaps
98% of Americans. And buying gold or gold shares is
almost as foreign. Furthermore, we are warned in the
press and even in our newspapers that buying gold or
gold shares is "highly speculative" and very apt to
produce major losses. Of course, the fact that our
paper currency loses purchasing power year after year
is ignored. But American are used to paper money -- as
for real money they mainly come in contact with it via
gold crowns on their teeth, in gold watches and some
gold bracelets.

[peter.wedemeier1]

Russell Final Words........
Thus, my advice to subscribers is simple. To best
survive this bear market be in cash (either US or
foreign cash) plus gold and gold shares.

Incidentally, my old friend Jim Grant (Interest Rate
Observer) writes as follows: "Wending its way through
the SEC is a proposal to transform the gold investment
business. If the SEC approves, the barbarous relic
could be traded like a common stock. One could buy it
on an exchange and take delivery of the physical
metal."

Adds Grant, "Internationally accessible bullion could
change the way people deal with money. . . And it
could wipe the smiles off the faces of some eminent
central bankers."

The Russell comment is that this is an idea whose time
has come. I believe it`s only a matter of time before
the public "gets it" as far as gold is concerned. And
since there is money to be made in making gold far
more accessible to the common man, again, I believe
it`s only a matter of time. "Follow the money." The
real money is gold, and if gold becomes readily
accessible, I believe you`ll see fireworks in the
price of the yellow metal. Patience, patience and more
patience.

People ask if this is a global bear market? The answer
is that great bear markets are always international in
scope. Along these line, this from today`s Bloomberg
-- ECB`s Duisenberg no longer predicts economic
recovery, signals low rates. European Central Banks
President Wim Duisenberg said the economy of the dozen
states sharing the euro probably won`t recover this
year, signaling policy makers may reduce interest
rates as soon as next month. >


Russell`s opinion......But the Dow Theory has been rated by the Hubert Financial Digest as the best market timing newsletter since 1930 (N.Y.Times Aug 18th 2001).

[peter.wedemeier1]

TOMI KILGORE`S MARKET MAP

Weak demand, meet ample supply
Commentary: Lack of buyers leaves market vulnerable

By Tomi Kilgore, CBS.MarketWatch.com
Last Update: 12:01 AM ET Feb. 24, 2003







NEW YORK (CBS.MW) -- Economics -- and markets -- are about supply and demand. Without demand, all you have left is supply.


http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yh…

[peter.wedemeier1]

Re: Dr. Marc Faber
Here is what I managed to jot down from the Dr. Marc Faber Interview:

Last few years in US, growth has been generated through borrowing
(vs. saving).

Most people cannot drive like a race car driver and they don`t try
but they think they can invest like George Soros or Julius Robertson
and they can`t.

Central banks believe that problems can be solved through money
creation. Money flowed from one place to another. In the 90`s,
western stock markets were the beneficiary. Since March 2000, money
has been flowing into hard assets, real estate and commodity
markets. Significant increases have been seen in the prices of
propane, coffee, natural gas, oil, coffee and gold.

There is a shift out of financial assets into hard assets.

This shift is for real and will continue for a number of years for a
variety of reasons.

There is not necessarily a bubble in real estate, but there is a
bubble in borrowing to purchase real estate. The mortgage credit
growth in Q3 2002 was at a rate of over 900 billion on an annualized
basis (10% of the GDP). Almost all of the borrowing was real estate
related (as opposed to business investment) and this is very
unhealthy.

The residential market will weaken quite substantially following the
commercial real estate market. There are now 20% vacancy rates in
some of the formerly hot commercial real estate markets. [I know
that this is the case in Boston.]

There is always a change in leadership following the bursting of a
bubble.

The overvaluation of one sector creates undervaluation in other
sectors of the markets.

Warren Buffett was looking elsewhere for investments during the
technology boom.

There are tremendous cross-currents when a bubble bursts. People
don`t believe that the bull market has ended, they think the bear
market is a correction in a bull market so they keep chasing the old
leaders. People think that every bear market rally is the beginning
of a new bull market.

Most people in America have not sold their high tech stocks.

After the 1929 bubble burst, the new leaders were not radio stocks,
electrical utility stocks or movie companies. New companies came
into the market.

After the 77-80 oil/energy bubble burst, the money flowed into
financial and Japanese markets and then in the 90`s, into the US
markets.

Each time you try to solve a problem with easy money, you create a
problem somewhere else with unintended consequences.

The bailout of Mexico encouraged investors to speculate in Asian
markets in the 90`s which lead to a huge increase in real estate
markets culminating in the 1997 crash.

The series of crises has been:

Mexico
Asia
LTCM
Russia
Argentina/Brazil

Two major themes in Faber`s new book are rising commodity prices and
emerging markets.

These major populations (a couple of billion between
India/China/Asia) will require increasing amounts of oil, food and
industrial commodities as their standard of living increases.

This is the beginning of a bull market in commodities. The gold
price fluctuations that we have seen are normal for the beginning of
a bull market.

The per capita consumption in emerging markets is less than in
Western countries but the absolute numbers of people have an
astonishing impact.

For example, on a per capita basis, the Swiss drink 50 times as much
coffee as the Chinese, but because of the size of the population,
the Chinese account for a much larger portion of the coffee trade
than the swiss.

Over the next 5-10 years, demand for commodities from China will
increase and push up prices.

The bond market in the US is looking quite vulnerable.

Deflation of debt is necessary in order to complete working off the
excesses of the bubble. This is required on a very large scale.
Either through massive default or hyperinflation (so debts are
repaid with "cheaper" money).

Housing stocks appear to have peaked and are not confirming the
continued strong housing numbers. This may be indicative of a top.

There are a record number of houses being built but appliances and
furniture industries are down. Their revenues are flat and the
unemployment in these sectors is increasing…but imports of
appliances and furniture from China are soaring.

The US $ will continue to depreciate, but what is the best hedge?
Faber suggests a basket of commodities.

Bernanke is "a very dangerous man". He is likely to be the next
Chairman of the Fed (replacing Greenspan). If you believe that
Bernanke means what he says, then you should immediately sell all US
financial assets and move in to commodities and hard assets.

[peter.wedemeier1]

Riding a Sinking Ship....
down to Davy Jones....

2) Although fearful in the short-term, most people remain very optimistic with regard to
the stock market`s long-term performance. That is, the stock market is still widely
considered to be a good place to invest for the long-term. Such optimism has never been
seen at bear market bottoms in the past.
3) Very little money has left the market. In fact, there has been a substantial net addition
to equity mutual funds since the major peak was reached in March of 2000. We doubt that
this will turn out to be the first bear market in history during which the public bought all
the way down and was therefore fully invested at the ultimate bottom. Reason no. 3) is, of
course, directly related to reason no. 2).

http://www.gold-eagle.com/editorials_03/milhouse022503.html

[peter.wedemeier1]

Many Investors Are Fleeing Stock Funds
3:42 p.m. 02/24/2003 Provided by

NEW YORK (Reuters) - With the bear market entering its fourth year, investors pulled a
net $1.0 billion from U.S. stock mutual funds last month, the first net withdrawals to
occur in January since 1990, fund research firm Lipper Inc. estimated on Monday.

At the same time, investors seeking relative safety added a net $12.9 billion to bond funds
last month, Lipper estimated. Lipper said the bond fund inflows set a January record and
were the strongest since the summer of 2002, when money was leaving stock funds at a
record pace.

"Investors looked back at the past three years, became even more averse to risk, and
shifted their allocations accordingly," said Don Cassidy, Lipper senior analyst. He noted
that investors not only sought shelter in bonds but also chose more conservative stock
fund investments.

January usually has been a robust month for fund flows, with sales getting a boost from
contributions to retirement plans. January 2001 and January 2002 each saw net inflows of
more than $20 billion despite the bear market which began in March 2000.

In January of 1990, the stock funds saw net redemptions of $274 million according to the
Investment Company Institute, a trade group.

The ICI, which is expected to report its January data around the end of this month,
compiles fund flow data based on reports of sales and redemptions from firms representing
about 95 percent of industry assets. Lipper and other research firms use various methods
to estimate flows.

Money market funds had outflows of $3.4 billion last month, Lipper said.

For stock funds, the January outflows were the latest in a series that started in June 2002.
Since then, only November has seen inflows, and they were a modest $7 billion.

Outflows from stock funds appear to be continuing in February. TrimTabs.com, a Santa
Rosa, Calif. research firm, estimates an outflow of $5.7 billion for the month, based on a
projection of activity through Feb. 19.

Analysts note that whether there are inflows or outflows in any month, they are not large
compared with the $2.6 trillion in stock fund assets.

The Lipper report noted that January flows are usually swelled by the investment of
year-end bonuses, contributions to retirement accounts, and quarterly and annual
contributions to pension and retirement plans by employers.

After a rally in the first few days of January, the stock market sputtered and finished the
month with the Standard & Poor`s 500 stock index and the Dow industrials down about 3
percent. The Nasdaq composite fell by a more modest 1 percent.

Among diversified stock funds, value funds, which buy stocks that are believed to be
reasonably priced on the basis of key financial measures, took in $1.5 billion in January,
Lipper said. Growth funds, which seek companies with fast-growing revenues and profits,
had outflows of $3.9 billion.

[peter.wedemeier1]

Roger Arnold doesn`t just read charts. He cares about the Real World and its effect on your company, your mortgage and your retirement. Get the lowdown from the guru who defied conventional wisdom and predicted the recession months before the media caught on. Roger is a frequent guest on "The Tom O`Brien Show" and now you can hear him every weekday from 11am till Noon on The Tiger 1590.

http://www.tiger1590.com/

[peter.wedemeier1]

From Russell`s update tonight....

Back in 1991 we were in a primary bull market. Today we`re in a primary bear market. And believe me, there`s a difference. In a bear market matters work in reverse. In a bear market "whatever can go wrong WILL go wrong." In my opinion, it will be a grave and costly mistake to think that "this time it will be the same as in 1991."

[peter.wedemeier1]

Der bull market beim Gold befindet sich erst am Beginn. Der Goldpreis hat noch einen weiten Weg nach oben vor sich. Der Dow Jones hat noch einen weiten Weg nach unten vor sich. Dem Dow Jones wünsche ich hiermit einen sehr schönen Crash (2.000 - 3.000). Das normale historische Ratio sollte 1:1 betragen! Dieses heißt, mit einem Dow Jones Punkt kaufe ich eine Unze Gold. Der Goldpreis und der Dow Jones werden sich zwischen 2.000 und 3.000 treffen!

[peter.wedemeier1]

If the DOW breaks 7700 support.....
It could head for 5000 this year.

[peter.wedemeier1]

Dow Theory Confirmation:
The Dow would now have to break below its February 13 closing low of 7749.87 to confirm the Transports. If the Dow does confirm by breaking below this level, substantially lower prices would be expected according to Dow Theory.

[peter.wedemeier1]

Weekday A-musings
From "Safe Money Report"

Dear Subscriber,

All over the world, investors are running from
stocks as fast as the wind.

They`re scared out of their wits this morning,
driving major stock indexes down as much as 4% -- the
equivalent of nearly 320 Dow points.

Yesterday, North Korea fired a missile into the
Sea of Japan. Today, terrorist bombings rocked
Beijing. But that`s not all that`s shaking Asia in
its boots:

Japan`s Prime Minister Junichiro Koizumi
just hammered a nail in Japan`s coffin with
his appointment of an "old guard" central
banker. That means MORE status quo in
Japan -- no real reforms, no change in the
disastrous policies that are throwing Japan`s
finances into disarray.

Now, surely, Japan`s economy is going down for the
count, and Japanese investors know it. So they are
selling with a vengeance, pounding the country`s
biggest bank shares, transforming them into penny
stocks.

Meanwhile, in Europe, war fears are ripping the
Continent apart. Giant European food retailer Ahold
just disclosed it rigged its earnings by $500 million
over the last two years. America`s accounting
nightmare has now spread to Europe.

The US markets are next. Yesterday was ugly --
falling corporate earnings ... war fears ... exploding
state and federal budget deficits ... and plunging
retail sales.

Now, as this morning`s wave of panic selling
overseas washes back to the US markets, it`s going
to get worse -- much worse.

The UBS Index of Investor Optimism has already
fallen to its lowest level ever! Investors pulled
$1 billion out of stock market mutual funds in
January -- the first January withdrawals since 1990!
But that is still just a very small fraction of the
selling you`re about to see.

There is absolutely no doubt in my mind that the
Dow is going to make a beeline to 6600 ... then to
4300.

[peter.wedemeier1]

Weekend Report
Safe Money e-News

March 1, 2003

Dear Subscriber,

For the past year the White House spin on the economy was
predicated on the notion that we have "a real recovery" in
America. But in recent months, the hard data showed
NOTHING OF THE KIND.

So if you`re the Federal Reserve Chairman, and you have to
testify before Congress about the state of the economy, how
do you tell the truth ... AND ... avoid offending the White
House at the same time?

Mr. Greenspan and staff must have struggled for hours on this
delicate issue. But they finally came up with a "solution":
Perpetuate the myth about the recovery. Never mention the
"recession" word. Then, coin a new term: SOFT SPOT.

We still have a recovery, said Mr. Greenspan, but we`re in a
soft spot of that recovery.

The whole charade made sense to no one. But it did prove one
thing: Newspeak was alive and well in America, and George
Orwell would be proud.

Now, though, the soft spot is turning to quicksand:

* Consumers, who until recently had single-handedly propped up
the crumbling economy, are now buckling: They are mired in debt.
They see their jobs in jeopardy, mega-failures in Corporate
America, mega-disasters globally.

As a result, overall consumer confidence just plunged to the
lowest level in nine and half years. Consumer expectations for
the next six months are at the lowest level in ELEVEN years!
And consumer expectations for their future income are at the
lowest level since the Conference Board began keeping records
in 1967, THIRTY-SIX years ago!

Chairman Greenspan was stunned by this. He admitted as much in
his own words to the Senate Banking Committee: "... the
order of magnitude [of the plunge in consumer confidence] is
certainly a surprise."

But it comes as no surprise to us. Jobless claims are up to
417,000 in the latest week reported. Retail sales are stumbling.
Auto sales are fading -- down from 16.2 million in January from
18.3 million a month earlier.

Meanwhile ...

* The real estate market is about to go bust. New home sales
plunged 15% in January. And the outlook for February looks to
be just as bad. Mortgage applications for purchasing homes have
dropped 15% in the four weeks from January 31 to February 21,
the latest data on record. The home-buying frenzy appears to be
on the wane.

* Investors are up in arms! The NASD reported a record number
of investor complaints in 2002. 7,704 new arbitration cases
were filed in 2002 -- that`s 11% higher than 2001 and 39%
higher than in 2000. Investors are hopping mad that Wall Street
has taken advantage of them for so long, and they`re finally
beginning to fight back. But this is still the tip of the
iceberg ...

* Accounting shenanigans continue. Parades of CEOs in handcuffs
still haven`t stopped some corporations from fudging their books.
The U.S. division of Dutch supermarket conglomerate Ahold, which
operates the Giant and Stop & Shop chains, will restate at least
$500 million of its earnings.

The SEC is now investigating and S&P has knocked the stock to
junk, but where were they back in April 2002? According to the
New York Times, that`s when the company said that its 2001
earnings, if prepared by GAAP rules, would have been 90% less
than they were under Dutch accounting rules. Clearly, something
fishy was already going on.

[peter.wedemeier1]

US personal bankruptcies to hit record in 03-Fitch
Fri February 28, 2003 01:54 PM ET
NEW YORK, Feb 28 (Reuters) - U.S. consumer bankruptcies should hit a record high in 2003 for a second straight year as a persistently weak economy slams debt-laden households, Fitch Ratings agency said on Friday.
With few signs of the economy improving enough this year to help consumers, personal bankruptcy filings should rise by about 7 percent to 1.65 million in 2003, Fitch said in a report. That`s up from a record 1.539 million in 2002.

A jump in bankruptcies could hurt consumer spending, which makes up two-thirds of the economy and so far has stayed solid despite a plunge in confidence to a nine-year low on worries about war, high energy prices and a poor labor market.

Layoff announcements and jobless claims are at levels typically seen in a recession, Fitch said. Claims jumped in the week ended Feb. 22 to 417,000, a two-month high and a level that suggests unemployment may be rising from its current 5.7 percent.

In a sign people are paying down debt in response to the pressure on their checkbooks, consumer credit posted its biggest drop since the 1990-91 recession last December, falling by $4 billion, or 2.75 percent, to $1.72 trillion.

Bankruptcies are already rising this year. In January, bankruptcy filings increased 9.2 percent from the same month last year to 121,316 filings, Fitch said.

[peter.wedemeier1]

Apocalypse is nigh, Buffett tells Berkshire faithful



Posted on 03/03/2003

Apocalypse is nigh, Buffett tells Berkshire faithful By Simon English in New York

Warren Buffett is poised to issue his most doom-laden forecast for the state of the world economy yet, including a damning verdict on the derivatives industry he fears could cause a global financial crisis.

In the upcoming annual letter to shareholders of Berkshire Hathaway, Mr Buffett drops his usual folksy style to warn that banks do not understand the hidden risks lurking on their balance sheets.

He labels derivatives "time bombs, both for the parties that deal in them and the economic system" and "financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal".

The views of the world`s second richest man are closely watched and his apocalyptic vision will do little to steady nerves on Wall Street or in the City of London. Extracts from his annual letter, to be delivered on Saturday but posted on Fortune.com yesterday, reveal that he has little optimism for the stock market.

"Despite three years of falling prices which have significantly improved the attractiveness of common stocks, we still find very few that even mildly interest us. That dismal fact is testimony to the insanity of the valuations reached during the Great Bubble. Unfortunately, the hangover may prove to be proportional to the binge," he writes.

Until now vague warnings about the pyramid nature of derivatives contracts have led to bland assurance from banks that there is no threat to their stability.

Mr Buffett says the banks simply have no idea what their exposure could be. "When Charlie [Munger, his business partner] and I finish reading the long footnotes detailing the derivatives activities of major banks, the only thing we understand is that we don`t understand how much risk the institution is taking."

Derivatives are often complex financial instruments that allow investors to take bets on anything from share prices to the weather. Their range is limited, says Mr Buffett, "only by the imagination of man, or sometimes, so it seems, madmen". Enron was especially fond of derivatives, offering contracts that would be settled years in the future and claiming profits immediately.

Berkshire Hathaway acquired a derivatives dealer when it bought reinsurer Gen Re. After failing to sell this business, Mr Buffett is now closing it down though he admits this will take years. "Reinsurance and derivatives businesses are similar. Like Hell, both are easy to enter and almost impossible to exit," he says.

Mr Buffett, dubbed the Sage of Omaha, believes that major insurers are exaggerating earnings from derivatives contracts and underplaying the "daisy chain risk" that comes when they lay off business with other firms.

His personal fortune fell last year by $5 billion to $30 billion, leaving him second to Bill Gates in the rich list.

[peter.wedemeier1]

Bei einem DOW Jones von 6000 können wir einen kleinen Hüpfer nach oben sehen, einen schwachen Sprung nach oben im besten Fall, mehr möglich eine kurze Seitwärtsbewegung. Wenn der Dow Jones erst mal auf ein Niveau von 3000 bis 4000 gefallen ist, dann befinden wir uns erst auf dem fair value, FAIR VALUE. Wenn die USA in eine Depression geraten, wie ich es momentan sehe, der Boden beim Dow Jones könnte erst im besten Fall bei 777 sein!!!!!

[peter.wedemeier1]

"US Dollar:

Now this is the Mother of all Bear Markets. I do not believe, even with success on the ground in Iraq, that a significant rally is possible. This is a target of the al Queda guerilla war economic strategy. This fact was revealed by the convicted murderer of Daniel Pearl of the Wall Street Journal during his trial in Pakistan. As usual, it was not carried in the Western Media."

http://www.jsmineset.com/s/Home.asp

[peter.wedemeier1]

"there will not be a safe haven if the USA mkts crash... if USA mkts crash it will be a globally synchronized crash.. Canada and its highly moral people will not find safe harbor in regular stocks, espeically banking stocks..after all the crisis I am looking for is a BANKING crisis..a world wide banking crisis..caused by a miserably broken FIAT system"
http://messages.yahoo.com/bbs?.mm=FN&action=m&board=7078991&…

[peter.wedemeier1]

As Hank Locklin would say.........
Please help me Im falling......."

All about inflation, falling market, Buffett bombshell
12:00 p.m. 03/07/2003 By Thom Calandra Provided by


Inflation, the falling market and a Buffett bombshell
SAN FRANCISCO (CBS.MW) -- Abandon all hope of portfolio redemption, you who pass through this gate.

Investors, instead of curling up inside their highly mortgaged cocoons, are registering alarm at the incessant declines of their holdings. They appear to be heeding, albeit slowly, the warnings of solid researchers such as Barry B. Bannister at Legg Mason Wood Walker. Bannister, embarking on a series of reports on the outlook for inflation the next 12 years, says simply, "We do not see a sustained change in direction that consistently favors equities until around 2015."

Bannister, a capital goods analyst, gets little attention from Wall Street. Yet his research, and his conviction, are compelling. Debt in all sectors of America`s economy, when measured against gross domestic product, is about where it was in 1933, just before the United States began a 20-year process of cheapening its dollar assets and thus "reflating" its economy.

The so-called "multiple" of debt to economic output is near a factor of three. Meaning this is one very lopsided teeter-totter. For more, and aof defensive investments, seeThe Calandra Report.

At the heart of sensible researchers such as Bannister is the belief that an accelerated pace of inflation, and America`s $30-plus trillion of debt floating around the globe, will sink stocks and most bonds and other paper assets. Not the coming war in Iraq. Not terrorism, politics or sightings of hostile globs from outer space.

At some point, says Bannister, $1 of new debt will have absolutely no "incremental positive effect" on the American economy. That point, says the former co-chief for U.S. equity research at SBC Warburg, will come in the year 2014.

Bannister is Wall Street`s worst nightmare. He`s all about a world where investors seek out safe-money strategies and hard assets -- and sidestep anything that comes in the shape of a certificate or broker confirmation.

In my view, the fringe, from its glass-tower messengers in the investment business to ordinary folks on Main and Elm streets, will move closer to center stage as we all get closer and closer to the gates of H-E-L-P!

Bill Murphy, a volatile publisher of bullion facts and fancies, is one of the best examples of that fringe. Murphy, as creator of, reaches a paying audience numbered close to 4,000, all of them bent on seeing the price of gold break away from the mid-$350-an-ounce range and soar to its rightful place in the stratosphere. (I believe it will.)

The publisher, who doubles as chairman of the, heads a team of hard-nosed researchers who estimate a "gold derivatives neutron bomb" will soon explode, liquidating the balance sheets of bullion lenders, among them, asserts Murphy and his analysts, the New York City bank J.P. Morgan Chase(JPM).

In the past 36 months, the rising price of gold has put 75 percentage points between itself and shares of J.P. Morgan Chase, which trade on the New York Stock Exchange. (See chart above.)

"A sharply rising gold price will most likely ignite J.P. Morgan Chase`s $26 trillion of derivatives into some kind of blow-up mode," Murphy tells me on the eve of the full Warren Buffett state-of-the-union address, due from that insurance executive`s shareholders on Saturday.

[peter.wedemeier1]

As Hank Locklin would say.........#2
Berkshire Hathaway`s(BRK.A)Buffett this week sounded like the Italian poet Dante Alighieri in painting the world of derivatives as an inferno. The summary: Abandon all hope of leaving, you who pass through the derivatives gates.

"Let`s see: stocks overvalued and offering more risk than reward," observes Robert Bishop, editor of 20-year-old."The dollar in a confirmed major bear market. Derivative poster-child gold rising. It`s not exactly a great leap to conclude that Monday`s business sections may indeed be telling us of Berkshire Hathaway`s newfound exposure to that best known of contra-cyclical investments, gold."

For his part, Murphy, the bullion fanatic who has been largely correct about the direction of gold these past 18 months, tells me, "Good grief. The news does not get any more gold bullish than the employment news in America. Wages up 0.7 percent. Biggest jump in something like 16 years. Employment falling off a cliff. Dollar tanks. Yet, gold is held in check ... to a fractional move higher so far," he told me Friday morning, as U.S. stock indexes set new lows for the year.

Murphy has an audience with dollars and euros, yen and Australian dollars to spend, mostly on gold-mining stocks and bullion-linked investments. Besides his almost 4,000 subscribers, the publisher and former commodities specialist has a mailing list of 7,000 or so additional readers. Murphy and the researchers at the Gold Antitrust Action Committee have long alleged the world`s central banks and bullion lenders are woefully short of the physical gold they need should their customers demand delivery of the pawned metal.

There are, according to Murphy & Co.`s best estimate, gold loans and swaps of around 15,000 tons, an annual supply/demand deficit of 1,700 tons and mine supply at just 2,500 tons.

"According to the work of the GATA camp (strategists Frank Veneroso and Reginald Howe), the central banks are short some 15,000 to 16,000 tons of gold," he says. "That is gold that

has been lent or swapped to the bullion banks. Much of this gold was lent, or swapped, at sub-$300 gold. The bullion banks are on the hook to return the gold to the central banks, should they call it back. These loans are going underwater big time."

Murphy - and this will rankle some purists - says, "We are not that much different from Warren Buffet, who recently warned on excessive derivatives, calling them `financial weapons of mass destruction.`"

Speaking of Buffett, Andy Smith, the Mitsui Precious Metals analyst who elaborated earlier this week - in this space -- on Berkshire Hathaway`s possible penchant for gold, is not willing to bet the legendary investor will spill the gold beans in his annual letter Saturday. Buffett and his partner Charles Munger in 1998 told the world they had bought 4,000 tons of silver, a revelation resulting in a brief frenzy for that metal.

Smith told me Friday from London, "I have a feeling themay be humming. But as I hinted; the odds are no. Threshold quite high. And the silver announcement came only after protracted rumors."

Gold on Friday was getting its tail kicked, down $6 in the spot market to $350 at noon New York time, even as the dollar continued to slide against most major currencies.

[peter.wedemeier1]

Reuters
Park Your Cash, `Fear Index` Says
Sunday March 9, 10:58 am ET
By Haitham Haddadin


NEW YORK (Reuters)

But don`t bet the house on an Iraq rally, the experts say.

"In the Gulf War, stocks rallied not because we dropped the bombs but because uncertainly was lifted," Brumley said. "Now, a conflict might be drawn out; there`s political turmoil, we don`t have many allies, and stocks are in a long-term downtrend. We`re not looking for such a strong rally."
http://biz.yahoo.com/rb/030309/markets_stocks_fear_1.html

[2teidie]

Herr Wedemeiner sind sie nicht der Kontraindikator Schlechthin ???

[peter.wedemeier1]

All about inflation, falling market, Buffett bombshell
12:00 p.m. 03/07/2003 By Thom Calandra

SAN FRANCISCO (CBS.MW) -- Abandon all hope of portfolio redemption, you who pass through this gate.

Investors, instead of curling up inside their highly mortgaged cocoons, are registering alarm at the incessant declines of their holdings. They appear to be heeding, albeit slowly, the warnings of solid researchers such as Barry B. Bannister at Legg Mason Wood Walker. Bannister, embarking on a series of reports on the outlook for inflation the next 12 years, says simply, "We do not see a sustained change in direction that consistently favors equities until around 2015."

Bannister, a capital goods analyst, gets little attention from Wall Street. Yet his research, and his conviction, are compelling. Debt in all sectors of America`s economy, when measured against gross domestic product, is about where it was in 1933, just before the United States began a 20-year process of cheapening its dollar assets and thus "reflating" its economy.

The so-called "multiple" of debt to economic output is near a factor of three. Meaning this is one very lopsided teeter-totter

[peter.wedemeier1]

Richard Russell yesterday:


<The week ended with the S&P selling at 27.59 times trailing S&P reported earnings. The dividend yield on the S&P stands at a very low 1.96%.>

The Big Bear market
Richard Russell
Dow Theory Letters
March 10, 2003

http://www.321gold.com/editorials/russell/russell031003.html

"In a bear market everyone loses, and the winner is the one who loses the least."

In a big bear market, which this one is, you`re going to lose somewhere or somehow. You may lose it in the value of your house, the value of your stocks, the value of your bonds or ultimately in the value of the dollar itself as the dollar declines in purchasing power.

In a big bear market, which this one is, the idea is to survive and, if possible, keep up your standard of living. I certainly hope all my subscribers survive this bear market, and it would be comforting if we could all keep up our standard of living.

The first part, survival, should not be too difficult. Go with the flow. Don`t worry if you lose money, we all will.

Get spiritual. There are more important things in this world than money.

Get philosophical. These are bad times, and they will get "badder."

Get used to it.

My old friend, Ken Gammage who for many years has been writing the delightful Richland Report (858 459 2611) is an expert on the McClellan Oscillator. Ken writes that in all his years of studying the Oscillator (since 1962) he cannot recall seeing the Oscillator "traverse above and below the zero line five times in five days, as it did last week." Ken ascribes this remarkable action to churning, lack of direction and conviction, uncertainty. And indeed, we believe there undoubtedly is such a reason.

"In a word, it`s manipulation. . . or some other euphemism like "stabilization" or "intervention." By whom? By the powers that be, of course -- the Fed, Treasury, and the surrogate minions, the big banks and wire houses. It merely goes to show that the markets these days are totally rigged. With the concerns about the impending war and the economy, when we have 2-3 days of decline the Powers fear could develop into a waterfall crash, then send the Plunge Protection Team in the persona of their surrogates -- Goldman, Merrill, Solly, Morgan-Stanley, etc., -- to buy futures and options on the indexes and on the handful of most heavily weighted stocks in the key averages, thus suddenly, turning the markets upwards."

Russell Comment -- I suggested this yesterday when gold dropped six dollars and the dollar was actually down!!

So be it -- ultimately the primary trend always trumps manipulation.

[peter.wedemeier1]

Blutbad am heutigen Montag für den DAX und den Dow Jones?!

[peter.wedemeier1]

Fannie Tumbles on Fed Official`s Remarks
6:27 p.m. 03/10/2003 Provided by


By Mark Felsenthal

WASHINGTON (Reuters) - Shares of the top U.S. home finance companies tumbled to their lowest levels in more than two years on Monday after St. Louis Federal Reserve Bank President William Poole warned that a financial shock at Fannie Mae(FNM)or Freddie Mac(FRE)could hurt the broad economy.

"Should either firm be rocked by a mistake or by an unforecastable shock, in the absence of robust contingency arrangements the result could be a crisis in U.S. financial markets that would inflict considerable damage on the housing industry and the U.S. economy," Poole said at a conference on the two government-sponsored enterprises, or GSEs.

Because of the scale of the short-term debt obligations of Fannie Mae and Freddie Mac, a problem at either company could spread quickly, Poole said. "A market crisis could become acute in a matter of days, or even hours," he warned.

Poole repeated a recommendation he made last year that the government withdraw credit lines to the two shareholder-owned companies, chartered by Congress to provide funds to mortgage markets. The firms buy mortgages from lenders and repackage them as securities for investors.

Fannie Mae and Freddie Mac executives dismissed his comments as repetitious and off the mark. Bonds backed by agency mortgages held their value as bond traders, who have watched efforts to limit the agencies` credit lines hit heavy opposition in Congress, shrugged off Poole`s comments.

But stock investors seemed more concerned. Fannie Mae stock tumbled more than 6 percent to lows not seen since September 2000 while Freddie Mac fell nearly 6 percent to a level not seen since October of that year.

[Preiselbeere]

Nach einer aktuellen Analyse der Trading Central dürften wir den Dow in Kürze bei 7270 sehen.
(http://www.traderbikerboerse.de/forum/showthread.php?postid=… )

Da haben wir ja noch ein kleines Stückchen vor uns - und der Dax würde dann dementsprechend seine 2000 anvisieren...

[peter.wedemeier1]

I mean Weiss.....

Dear Subscriber,

Was this week`s surge in the stock market the widely
expected "war relief rally"? Or will there be still ANOTHER
relief rally when the war actually gets under way?

Our view: You can debate all these short-term ups and downs
until you`re blue in the face. But it doesn`t change the
fact that year after year, THE TOTAL VALUE OF MARKETS ALL
OVER THE WORLD IS VANISHING BEFORE YOUR VERY EYES ...

ESTIMATED LOSS IN MARKET CAP OF
WORLD`S STOCK EXCHANGES SINCE 2000


United States $10,500 BILLION
Japan $1,500
Taiwan $302
South Korea $212
Germany $545
France $616
Hong Kong $232
United Kingdom $898
--------
Total $14,805 BILLION

That`s $14.8 TRILLION in market capitalization that has been
destroyed since early 2000. And this does NOT include:

- The huge losses in Japan BEFORE the year 2000

- The devastating losses at smaller stock exchanges in these
and other countries

- The ultimate losses in many companies that have been
delisted due to bankruptcy or destruction of market cap.

What does all this mean to you?

FIRST, it means you must stop searching for a bottom at
every fork in the road. Instead, recognize that we are in
the midst of A MAJOR, FUNDAMENTAL, LONG-TERM, HISTORIC BEAR
MARKET.

SECOND, view sharp rallies, such as we`ve seen this week, as
EXIT opportunities. Whether it goes by the name of "war
relief rally" or not, just sell. If you get another one,
then sell some more.

THIRD, recognize that $14 trillion in losses MUST HAVE a
major economic impact. Individual investors around the world
are feeling the pinch. Private pension funds are getting
clobbered. State and local pension funds are in even worse
shape. Companies can`t raise capital to finance growth. And
economists are still talking about a recovery?! It`s about
time they wake up and smell the coffee!

Fourth, weak stock market performance reflects weak
fundamentals! In order to improve their bottom lines and
attract investors, companies are cutting costs. One of
the first places they look -- jobs. In just the US alone,
over 2 million jobs have been lost in less than two years.

Plus, the economic situation continues to deteriorate ...

* American Airlines is looking like it will become the next big
company to join the bankruptcy ranks. We`ve identified 12 others
that may not be too far behind. These companies are drowning under
a host of problems ranging from huge debt loads ... to pension
deficit problems ... to plunging earnings ... and more.

* Federal Reserve official William Poole warns that Fannie Mae and
Freddie Mac present "fundamental risk to the continuing stability
of our financial system." According to Poole, these two mortgage
leaders do not have sufficient capital to withstand a severe
finacial shock.

* Shareholders are not taking their stock market losses sitting
down. Instead, they are suing companies at a rapid pace, alleging
securities fraud and misrepresentation. A total of 224 class-action
lawsuits were filed by shareholders in 2002.

* Retail sales fell 1.6% in February -- the fastest pace since
November 2001. One sector being hit hard is auto manufacturers.
As a result Ford and GM will likely cut production even more in
the coming months as sales remain weak.

[peter.wedemeier1]

Willst du sehen, wohin der Dow Jones in Zukunft hingehen wird, dann besuche doch mal diese Seite:

http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP5…

[peter.wedemeier1]

BusinessWeek Online
Don`t Bank on a Bounce-Back
Tuesday March 18, 8:41 am ET
By James C. Cooper and Kathleen Madigan in New York with bureau reports

http://biz.yahoo.com/bizwk/030318/b3825811_1.html

[2teidie]

Ja es ist so #51

[peter.wedemeier1]

Daily Reckoning
What are the insiders up to? Barron`s reports the
officers and directors of the 10 leading tech companies -
firms such as Microsoft, Intel, Qualcomm, Dell and Oracle -
are remarkably bearish. While the investoriat buys tech
stocks, the people who know the industry best are
unloading. "Since the start of this year," continues the
Barron`s report, "in the aggregate, there has been a
single, solitary purchase of 3,600 shares by those
insiders. However, over the same stretch, those worthies
were responsible for 112 sales, in the process dumping 33.9
million shares of their own stock. Put another way, the
ratio of shares sold to shares bought by the so-called
smart money in the 10 biggest tech and growth companies
works out to a staggering 9,407 to 1.

[peter.wedemeier1]

I HOPE IT IS ALRIGHT TO POST THIS-- I JUST THOUHGT IT MADE A LOT OF SENSE--

- And let`s not forget the U.S. dollar. Even without our
expensive war in the Middle East, the greenback would be a
currency under the siege of a soaring current account
deficit. The dollar has been weakening for months and, as
every gold bug knows, the dollar`s weakness is gold`s
strength.


- The reason to own gold is not the battle for Baghdad, but
the battered U.S. dollar, says John Hathaway, manager of
Tocqueville Gold Fund. Over the long term, he asserts,
foreign investors will tire of funding America`s ballooning
deficits. As they retreat from U.S. assets, the dollar will
slide, thereby boosting the gold price.


- "We`re about to see some shock and awe in the gold
market," my friend Jay Shartsis told me yesterday. "The
gold shares are about to mount a major advance." Jay, a
successful long-time options trader and occasional
contributor to the "Striking Price" column in Barron`s,
tells me that put-buying on many gold shares is soaring.
This contrary indicator reflects widespread bearishness
toward gold stocks, which is a bullish indicator.


- Typically, extreme bearishness precedes strong rallies.
To illustrate his point, Shartsis notes that put-buying on
the XAU Index of gold stocks has reached the highest levels
since last October, immediately prior to a major rally.
Shartsis also notes that put-buying on Newmont Mining is
"the heaviest is has been in several years"...Gold
investors take note!

[peter.wedemeier1]

THEY WILL!

Black Blade (03/27/03; 20:57:29MT - usagold.com msg#: 100446)
Slogging toward recession?
ht*tp://money.cnn.com/2003/03/26/markets/wareconomy/index.htm

Worries that the war could last months, not weeks, lead to double-dip fears.

Snippit:

Investors remain unprepared for anything but a short war, said Morgan Stanley economist Bill Sullivan, and it is doubtful that they have even begun to factor in the possibility that a longer war could mean not just another deferral of sustained economic growth, but outright contraction.

"If conflict extends for several months, that is a completely different dynamic than investors are assuming," said Morgan Stanley economist Bill Sullivan. "One could not rule out global equity markets hitting new lows."

Black Blade: I hate to break the news to these people, but we are still mired in a deepening recession. We never fully emerged from it. I don’t understand why Wall Street pinheads and financial media carnival barkers rely solely on GDP as an indicator. According to the National Bureau of Economic Research (NBER), the official arbiter of recessions, we are still in a recession that began in March 2000. A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade. A recession begins just after the economy reaches a peak of activity (March 2000) and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Because a recession influences the economy broadly and is not confined to one sector, the NBER emphasizes economy-wide measures of economic activity. The traditional role of the NBER is to maintain a monthly chronology, so the NBER refers almost exclusively to monthly indicators. The committee gives relatively little weight to real GDP because it is only measured quarterly and it is subject to continuing, large revisions.

[peter.wedemeier1]

Dear Subscriber,

When the economy is losing jobs hand over
fist -- 97,380 in just the last three months ...
when every single sector of the economy, including
manufacturing, services, and consumers, is falling
apart ... you have a COMPLETE recipe for disaster.

Now, THIS is really hitting the CORE of our
economy. Now, all the fireworks are going to be
going off simultaneously -- retail sales will
get killed ... credit card delinquencies will
multiply ... mortgage defaults will go off the
charts.

You can blame it on the war. But if you do,
you`re making a deadly mistake.

ALL of these trends were set in motion long before
terrorism or war reared its ugly head. All of these
trends are still intact ... getting worse by the
day ... and they are showing no signs whatsoever of
turning around. The government reports just
announced today bring this point home loud and clear.

Bear market rallies -- such as we are experiencing
now -- are merely the market`s way of trapping more
blinded buyers, only to spit them out in a selling
panic during the next leg down. Plus, for those who
can use them as selling opportunities, they`re a
great gift.

You`ve seen it over and over again. There have
been 6 bear market rallies in the Dow and the S&P
since the bubble burst. EVERY SINGLE ONE OF THEM
MADE A LOWER HIGH THAN THE PREVIOUS RALLY AND THEN
MADE NEW LOWS.

This is a giant bear market that is nowhere near
bottom. Not even close.

You can see it in the sinking stats on the economy
AND in every important stock market valuation measure
under the sun ...

* The Dow is trading at a price-to-earnings ratio
of nearly 29 now, compared to a historical valuation
of 17. Just based on that alone, the Dow must plunge
40% to get back to normal.

* The S&P 500 Index is trading at a
price-to-earnings ratio of nearly 31, compared to a
historic valuation of 16. The S&P stocks would have
to fall by 48% to get back to a normal valuation.

And all this is based on the assumption that
earnings are real.

AOL just announced another $400 million in phony
earnings! And our latest study of US corporations
tells us that another 726 could be cooking their
books -- either legally or illegally.

The economy is going down hard. Stocks are still
WAY overvalued.

[zenman]

steht hier nur son amizeugs?

[southbound]

.

[peter.wedemeier1]

I see triple top failure:


Bear market rallies -- such as we are experiencing now -- are merely the market`s way of trapping more blinded buyers, only to spit them out in a selling panic during the next leg down. Plus, for those who can use them as selling opportunities, they`re a great gift.

You`ve seen it over and over again. There have been 6 bear market rallies in the Dow and the S&P since the bubble burst. EVERY SINGLE ONE OF THEM MADE A LOWER HIGH THAN THE PREVIOUS RALLY AND THEN MADE NEW LOWS.

This is a giant bear market that is nowhere near bottom. Not even close.

You can see it in the sinking stats on the economy AND in every important stock market valuation measure under the sun ...

* The Dow is trading at a price-to-earnings ratio of nearly 29 now, compared to a historical valuation of 17. Just based on that alone, the Dow must plunge 40% to get back to normal.

* The S&P 500 Index is trading at a
price-to-earnings ratio of nearly 31, compared to a historic valuation of 16. The S&P stocks would have to fall by 48% to get back to a normal valuation.

And all this is based on the assumption that earnings are real.

AOL just announced another $400 million in phony earnings! And our latest study of US corporations tells us that another 726 could be cooking their books -- either legally or illegally.

The economy is going down hard. Stocks are still WAY overvalued.

[peter.wedemeier1]

James "Rev Shark" De Porre at RealMoney.com

Signs of a Top
4/09/03 01:55 PM ET

I mentioned this morning that Chartcraft.com`s Investor Intelligence numbers showed a fairly big increase. Bulls increased from 47.2% to 51.1%, and bears declined to 31.1% from 34.8%. The ratio of bears to bulls dropped from 73.7% to 60.9%. That approaches the levels we saw at the tops in March 2002 and November 2002.

[peter.wedemeier1]

jpm=SYSTEMATIC RISKS/EARNINGS SHAM
jpm = LTCM

"the macro picture is dangerous and getting more so. Large amounts of risk, particularly credit risk, have become concentrated in the hands of relatively few derivatives dealers, [like JPM] who in addition trade extensively with one another. The troubles of one could quickly infect the others. On top of that, these dealers are owed huge amounts by nondealer counterparties. Some of these counterparties, as I`ve mentioned, are linked in ways that could cause them to contemporaneously run into a problem because of a single event (such as the implosion of the telecom industry or the precipitous decline in the value of merchant power projects). Linkage, when it suddenly surfaces, can trigger serious systemic problems.

Indeed, in 1998, the leveraged and derivatives-heavy activities of a single hedge fund, Long-Term Capital Management, caused the Federal Reserve anxieties so severe that it hastily orchestrated a rescue effort. In later congressional testimony, Fed officials acknowledged that, had they not intervened, the outstanding trades of LTCM--a firm unknown to the general public and employing only a few hundred people--could well have posed a serious threat to the stability of American markets. In other words, the Fed acted because its leaders were fearful of what might have happened to other financial institutions had the LTCM domino toppled. And this affair, though it paralyzed many parts of the fixed-income market for weeks, was far from a worst-case scenario.

One of the derivatives instruments that LTCM used was total-return swaps, contracts that facilitate 100% leverage in various markets, including stocks. For example, Party A to a contract, usually a bank, puts up all of the money for the purchase of a stock, while Party B, without putting up any capital, agrees that at a future date it will receive any gain or pay any loss that the bank realizes.

Total-return swaps of this type make a joke of margin requirements. Beyond that, other types of derivatives severely curtail the ability of regulators to curb leverage and generally get their arms around the risk profiles of banks, insurers, and other financial institutions. Similarly, even experienced investors and analysts encounter major problems in analyzing the financial condition of firms that are heavily involved with derivatives contracts. When Charlie and I finish reading the long footnotes detailing the derivatives activities of major banks, the only thing we understand is that we don`t understand how much risk the institution is running.

The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Knowledge of how dangerous they are has already permeated the electricity and gas businesses, in which the eruption of major troubles caused the use of derivatives to diminish dramatically. Elsewhere, however, the derivatives business continues to expand unchecked. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts."

[peter.wedemeier1]

Black Blade (04/29/03; 22:12:09MT - usagold.com msg#: 102122)
Market Wrap Up – Puplava
www.financialsense.com/Market/wrapup.htm

Snippit:

The U.S. may have the strongest military in the world, but our Achilles heel is our economy and financial system. The U.S. economy runs on credit. It must be constantly fed with ever-increasing amounts of debt or the economy shuts down. Right now, it is government deficit spending, housing and mortgage financing keeping the economy afloat. The Fed is buying government debt and running the printing presses at full throttle. The only problem is foreign investors are beginning to get nervous. As the graph of the dollar below shows, the dollar is in danger of breaking down. In fact it has received very little benefit from the stock market’s rally. Normally when U.S. financial markets appreciate the U.S. dollar benefits. The fact that it hasn’t tells me the dollar could be headed for trouble.

The fall in the dollar means foreigners are losing money on their U.S. investments. In addition to a falling dollar, America’s burgeoning trade deficit is putting more dollars and U.S. debt in foreign hands. What foreigners think and do will become more important to what happens to our economy and financial markets since they own a major portion of our bonds, government and corporate, stocks, and real estate.

With foreigners now accumulating more and more dollars as a result of our trade deficits it can’t be assumed that they will always hold on to and invest those dollars. There are now plenty of alternatives to the dollar. There are plenty of alternative paper currencies for them to invest their trade surplus. There is also gold and silver. Asian investors and central banks, Middle Eastern investors and governments are now accumulating gold and silver. A process of diversification out of the dollar has begun which explains much of the weakness in the dollar chart above.


Black Blade: As we are discussing the US dollar and precious metals tonight – Puplava’s market wrap up has a nice section on what gives with the dollar. The dollar is weakening and as foreigners are bailing it is now up to who to buy US debt? The Fed of course will pick up the slack. This next round of debt offerings will surpass all previous records $67 billion this time around I believe. Worse yet, it isn’t the foreign investors who are coming in anymore (well, not like they used to). As they bail out of the dollar for alternative investments with better yields and more solid assets for insurance (gee I wonder what that could be?), it is up to the Fed and anyone they can suck in to keep the game afoot. And yes, even worse yet – the amount of “debt” bond offerings are expected to rise again. Yikes! No wonder the dollar is weakening.

[peter.wedemeier1]

US Deficit in 2002 was $400 B+.

[Guru-Schreck]

Viel Zeit bleibt aber nicht mehr, wenn der Dow und der Nasdaq um 50% fallen sollen.

[peter.wedemeier1]

http://www.gold-eagle.com/gold_digest_03/anderson050103.html
snippet:
"And there`s a larger issue too: the dollar`s decline in Iraq is a microcosm of a larger but more troubling issue, one that the White House and the Federal Reserve System cannot spin away with its political happy talk or pretend does not exist. Both the U.S. economy and the dollar are in trouble, and their difficulties are intertwined with each other.

During the early 1980s, the U.S. economy was in its worst downturn since the end of World War II, yet the dollar was strong relative to other world currencies, many of which were mired in an inflationary morass, a holdover from the creepy decade of the 1970s. Although the U.S. Government had begun to incur massive budget deficits, the dollar was still the favored world paper, as producers of oil and manufactured goods overseas were more than willing to take dollars as payment.

In return, dollars flowed back here to purchase U.S. securities to finance the deficits, build manufacturing plants, and Japanese investors even went on a real-estate buying binge in this country, purchasing landmarks such as the Rockefeller Center in New York City. Even though the bottom dropped out of the real estate market in the early 1990s, foreigners holding U.S. dollars still had not had enough as money found its way into the stock market boom.

As we so well know, the party is over, and it has been over for a long time, except that few people here want to believe it, especially those who hold political power, at least for now. The dollar has been taking a beating for some time on overseas markets, and seen in that context, it is not surprising that Iraqis are making the same decisions that so many others have already made: dump your dollars."

[peter.wedemeier1]

S & P 500--PEs

"According to the Dow Jones newswire, the price/earnings ratio of the Standard & Poor`s 500 Index (SPX – 990.14) at the close of trading today was 40.10. Wednesday`s ratio stood at 39.94. Over the past 15 months, the price/earnings ratio has ranged from a low of 31.46 on October 9 to a high of 46.99 on March 19, 2002. The lowest price/earnings ratio on the S&P 500 came in the second quarter of 1949, when the reading slipped to 5.9. Over the last decade, the low was 15.77 in the first quarter of 1995. The price/earnings ratio, known as the multiple, is a measure of the average stock (or index) price divided by the average earnings per share (or cumulative earnings per share). The earnings data is based on the trailing four quarters. After closing above potential resistance at 950 on May 27 for the first time since August 22, 2002, the index has continued to rise. This is in contrast to August, when that close marked the high close prior to the SPX falling as low as 768.63 on October 10 as the July to August 24 percent rally failed. The rally from the October to December was also 24 percent before the index turned and headed lower. The recent move higher from the March 12 intraday low of 788.90 is now 25.5 percent. "

[peter.wedemeier1]

Bubble is Back

S&P 500 Trailing PE 6/6/03 of 31.
S&P 500 Trailing PE 3/23/00 of 31 at the last bubble peak.
PE Average over 50 years is 17.
Bottom of Bear Markets is typically under 10.
No capitulation selling 2000 to 2003.
Looks like another bubble needs popping.

[peter.wedemeier1]

Patience and the art of trading.

"One of the most important aspects of the Great Game of Speculation is patience, zealously stalking a potential trade and waiting until the ideal moment to strike with a fresh speculation. While it is certainly challenging being patient and waiting for the markets, the mastery of the art of patience often separates the great traders from the merely average traders.

The perpetually-escalating speculators’ information arms-race does indeed equip prudent speculators with some powerful financial weapons, but they can only be wielded successfully by a speculator with the right training.



The best training is years of actual trading, as the markets are relentless at exposing every one of our own individual emotional weaknesses, ferreting out every chink in our armor. Only by winning and losing your own scarce capital in the brutal real world of speculation can you learn to suppress the inherent greed and fear warring deep within your own heart.



Not surprisingly it is their own painful battle scars that bring priceless wisdom to accomplished speculators!"

Adam Hamilton

Contrarians

"A speculator can possess fantastic information, but if he lacks the courage and emotional fortitude necessary to execute the trade at the very contrarian moment when everyone else thinks it is a foolish idea, the speculator will fail.

For speculators, emotion is both the boon and bane of their very existences. Everyone else’s emotions are wonderful for speculators because they create gaping short-term market inefficiencies that speculators can exploit for great profits. Emotion is a sharp double-edged sword though. While speculators love others’ emotional trading, if they emotionally trade themselves they are doomed. Greed and fear are lethal for an individual speculator if they are allowed to run free within the speculator’s own heart.


When the majority of speculators get scared, they tend to buy many more put contracts in anticipation the markets will plummet even farther. As all contrarians know however, it is these very times of great fear when a bounce is imminent! When everyone else is scared is exactly when a speculator should be going long or buying calls.

Conversely, when the markets have already been rallying for a while immense general greed and complacency sets in like a malignant cancer. Market participants somehow seem to magically forget all their past hardships and suddenly assume that trading is easy. Dollar signs cloud their eyes and they run out to buy call options aggressively betting the markets are going to soar even higher.This usually marks an excellent short entry opportunity.

I defer to the great Oracle of Omaha Warren Buffett who wisely declares, “Be brave when others are afraid, and afraid when others are brave.”

The thundering herd is always wrong at the turning points as most people are blinded and enslaved by their own emotions. The prudent contrarian speculator actively suppresses his own emotions so he can capitalize on the emotional mistakes of the majority to earn large speculative profits."

Adam Hamilton.

[Siedlerpradies]

Der Chartguru Schultz sieht derzeit eine gemischte Lage für den Nasdaq.
Nach einer aktuellen Analyse wird der heutige Tag entscheidend für die Entwicklung dieser Woche sein!
(http://www.traderbikerboerse.com/forum/showthread.php?postid… )

NUn, sieht man sich die Kurse heute an, dann sieht es nicht besonders gut aus...

Schönen Abend
Der Siedler aus dem Paradies

[Guru-Schreck]

@Peter

Was passiert eigentlich nach den 6 Monaten, wenn der vorhergesagte grosse Einbruch nicht eingetroffen ist. Drehst du dann die Charts um 180Grad und dann stimmts wieder ?

[Zimtzicke]

[Guru-Schreck]

[Guru-Schreck]

@Peter

Hast du vielleicht die Richtung verwechselt ?
Es musste in deiner Überschrift wohl Aufwärtspotential lauten.

[Thorpe]

Dieser Wedemeier scheint so ein verschrobener Goldheini zu sein, der den Untergang der Börse vorhersieht und alle möglichen Verschwörungstheorien bzgl. des Goldpreises parat hat.

Offenbar ist er nicht von dieser Welt..

[Guru-Schreck]

Immer noch die falsche Richtung, obwohl Peter 1000% sicher war, dass alles 50% fällt.

[Nefprak]

ab mitte august wird es anfangen runter zu gehen. im oktober hat er dann zu 1000% mit seiner aussage recht gehabt. vorher fallen die märkte nicht.

[Guru-Schreck]

Jetzt muss der Dow und der Dax schon deutlich mehr als 50% fallen damit sich die Prognose erfüllt.

[Guru-Schreck]

[Guru-Schreck]