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2002 Archive  

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1-23-2003Censorship of Financial Data
Dear Mr. Nystrom:

I check the Bloomberg World Indicies every business day - http://www.bloomberg.com/markets/wei.html?sidenav=front. Recently, that table of data about world markets was changed. Two columns of data were eliminated. That table no longer shows the year to date percentage that markets are up or down and it no longer shows the year to date percentage that markets are up or down in US dollar terms. Perhaps they do not want us to see that 2003 is becoming another down year for the markets.. Perhaps they want to be able to play us for fools again.

1-19-2002Today's report is brought to you by the letter G.
"This has been a nasty data day," said Lara Rhame, U.S. economist at Brown Brothers Harriman.

"We're seeing not only preliminary signs of growth retracing, but one of the critical points of the (University of) Michigan survey (of consumer confidence) was ... the decline in the outlook portion. There's deep-seated uncertainty out there and that's very difficult to combat."
1-18-2002Today's report is brought to you by the letter W.
Stock Market Report Helium was up, feathers were down. Paper was stationary. Fluorescent tubing was dimmed in light trading. Knives were up sharply. Cows steered into a bull market. Pencils lost a few points. Hiking equipment was trailing. Elevators rose, while escalators continued their slow decline. Weights were up in heavy trading. Light switches were off. Mining equipment hit rock bottom. Diapers remained unchanged. Shipping lines stayed at an even keel. The market for raisins dried up. Coca Cola fizzled. Caterpillar stock inched up a bit. Sun peaked at midday. Balloon prices were inflated. Scott Tissue touched a new bottom. And batteries [war - Ed.] exploded in an attempt to recharge the market.
1-16-2003When Freedom is Outlawed, Only Outlaws will be Free
Score One for Disney

U.S. media conglomerates won big yesterday when the Supreme Court upheld a law that extends every U.S. copyright for 20 years, preserving Walt Disney Co.'s exclusive rights to Mickey Mouse and Donald Duck and AOL Time Warner's ownership of "The Wizard of Oz..."

Supreme Court adds another 20 years of copyright protection

What if Mickey had cancer?

Score One for The Nation State

"This is a tipping point case, [on medical marijuana]" Rosenthal tells me. "If they bust me, they are going to start closing these [local cannabis buyers'] clubs. The clubs will have no excuse. Everyone will have to plead out."

A last word from Eye: "When states and feds can't come to consensus on what a policy should be, it doesn't hurt the officials and policy makers. It's individual citizens who pay the price. Rosenthal is charged with cultivating marijuana, maintaining a place to cultivate marijuana and conspiring with others to cultivate marijuana. He's looking at the possibility of life. It's right there in the indictment on the penalty page."

The Right to Ease Pain v. The Federal Government
1-15-2003A Reader Writes...
In response to Pop Goes the Bubble II: Sell Your House Now!

Just got back from a 3 week trip to Brasil and read your article. You missed the biggest indicator of a real estate top. All the "you-can-own-real-estate-for-no-money-down guys" are back on TV! What ever happened to that Tom Wu guy with all the babes on his yacht?

In Brasil they invest in real estate to preserve any wealth they have against currency devaluation, but the real estate market is still down because of the economy. Also there is no financing because 25% - 50% interest rates helps with the financial discipline of the people. A car costs 1/2 more if you buy it over 6 months, and the initial costs are already sky high due to taxes.

Inflation is still very low. Just no faith in the currency. Hmmm.

- R.F.
1-15-2002 Full Moon This Saturday
Full Moon
Full Moon, Saturday Jan 18.

Moon Phase Calendar
1-13-2003More on Joseph and Pharroah's Dream
A reader responds to December's piece about Pharraoh's Dream:

"There were some values in the Egypt of Genesis. Joseph's interpretation allowed a prudent pharaoh to garner the grain. Within 14 years this man owned almost all of Egypt. He traded his grain for the people's land. After the drought was over and the land began to produce, he owned the most productive land in the known world. No wonder Egypt was the pre-eminent national power for generations.

"Be careful in assuming that when you're contemplating the falling into the abyss that you don't forget that some things won't fall - like its edge. We are in an era when some prices are falling, but oil is up, gold is up, Cable TV is up, natural gas is up, taxes are up, and housing is still up. What is down are shares of companies (generally speaking). Deflation is an historical spectre but it isn't universally destructive. I'm not an economist, but my opinion is that debt is very useful for accumulation during a time when the printing presses are open full, like now. The debtor pays off the obligation in the future with cheaper money. It has worked well during other times. While it isn't prudent to have debt that you can't pay off in an emergency, modest debt can be a tool for leveraging accumulation of property (land), especially if the land increases in value because the grain it produces is increasing in value by way of a depreciating dollar.

"Even during the terrible drought of Egypt, the prudent pharoah and Joseph's family benefitted greatly. Perhaps the prudent today shall prosper, too. Such prosperity is a promise that I did not make, but I believe its outcome is GUARANTEED. The mystery for every generation is how can we secure it."

- Turlock, CA
1-11-2003The Truth about Venezuela
I just came back from Caracas, Venezuela. And the U.S. government and the banks and the oil companies have been working out on the president of Venezuela - the communist dictator and etc. What they donít tell you is the reason they are out after this guy is that he is not just the president of Venezuela; he is the president of OPEC. And he has doubled the royalties on oil companies taking oil out of Venezuela. Not many people know that Venezuela is our main supplier of oil in this hemisphere.

- Greg Palast
1-4-2003Be Wary
The market was up over 3% on the first trading day of the New Year due to psychological factors and short covering, not because of improving economic conditions. The largest single day gain in Nasdaq History - up over 14% on the second day of trading last year (2002) - came in the thick of the bear market, and did nothing to stem the tide of falling prices for the year. One day does not a new bull market make.

There are several reasons to be wary of yesterday's spike rally:

Earnings warning season is just getting underway and Home Depot, Cadence Design, Advent Systems and Radio Shack, among others, have already warned. Walmart, the biggest company in the world, warned on earnings last week. Federated continues to drop its sales forecast nearly weekly. Best Buy has also warned of a shortcoming. GM, Ford and Chrysler see no rebound in the auto sector until 2005 (3 years away). Existing house sales fell 3.5% in November.

Target Department Store's credit card default rate of 7.3% is projected to reach 10% this year.

The S&P PE ratio is still around 36 while markets bottoms are made in 8-12 range. Japan's Nikkei is trading at its lowest level in 19 years, and Japan's industrial production, expected to drop .4%, actually dropped 2.2%. The U.S. Federal Budget deficit is rising at a record pace, and the National Debt ceiling will be raised to $7 trillion this year. The debt is beginning to grow at an exponential rate. State governments have their own deficits to deal with as tax revenues plunge. As a result, state cutbacks will force a new wave of layoffs of state employees. Millions of Americans are just now losing their unemployment benefits, and those with homes will be forced to put them on the market, causing the collapse of the second to last asset bubble in the world.
1-3-2003The Truth
We are somehow not permitted to say this, but the solution to Iraq is at hand. Repeal sanctions immediately. Trade with Iraq. Oil prices would fall dramatically. Hatred of the US would abate. The plight of Iraq could no longer be used as exhibit A in terrorist recruitment drives. The only downside, of course, is that US companies connected to the Bush administration would not be the owners of the oil fields, but instead would have to compete with other producers in supplying consumers with oil.

- Lew Rockwell
1-1-2003Flashback: Dow Theory Sell Signal Still in Effect

1-1-2003Flashback: Turning Point from 1-15-2002
Gold has seen steady physical demand in major consuming areas, with reports of increased interest in the Far East. Then there is Tamisuke Matsufuji, former Salomon Brothers bond trader who wants to blow the lid off the gold price. He'll likely have a good shot at it. His theory is this:

"Japan is the world's largest creditor nation. Individual assets total more than 1,300 trillion yen. If just 1% of this money could be moved into gold, that would instantly account for five years worth of global production, and gold prices would skyrocket," Matsufuji said.

"Japan has the potential to really move the market," said Matsufuji, who hopes Jipangu will serve as the vehicle for pumping more Japanese money into the gold market.

Once folks realize that the two largest economies in the world are a hair's width from technical bankruptsy the price of gold should really start to move.
More intersting reading in the the Bibliography

Some publications to help you anticipate the changing landscape: