[quote]
On 2001-11-29 16:25, enjolras wrote:

the free market will never be able to put a check on simple human fear and greed taken to extremes. but it does act as an excellent self-correcting mechanism when those emotions get out of hand.

Enron's problems arose from trying to set up an organization like a collection of markets. It gave many of its managers much more opportunity to seek entrepreneurial profits than almost any other firm. It hired the best and brightest, and sent them to work without any organizitional values except a belief in free markets.

Hmmm, it doesn't appear that the internal markets of Enron were all that excellent at self-correcting.

If a Martian visited earth, I don't think he would characterize the U.S. as a market economy. Instead he would be struck by the predominance of the organization in our society. Organizations are in many cases a substitute for free markets. Our organizations including governments dwarf markets in terms of economic activity, so I really fail to see how markets are superior to non-market mechanisms in our society. Of course it's not necessarily the case that what is extant is optimal, but that is as much of a case for market outcomes as it is for non-market outcomes.

[ This Message was edited by: Crispy '59 on 2001-11-30 17:03 ]

"The closest I'd come to doing so is a comparison between Osama bin Laden and certain GOP supporters."

Which ones?

"Which is rather like blaming American anti-semites of the 1940s for the Holocaust."

Which ones? Franklin Roosevelt?
The Tragedy of the S.S. St. Louis

"Marc, you're irrationally obsessed. Really."

Thanks. :smile:

Oh, figure it out, Marc. You know, the folks with fixed and iconoclastic religious views who believe that America is descending into Satanic sin and depravity and that God is going to punish us, although maybe He needs, or at least wants, a little help from the faithful.

Just the same, it was not those people who actually attacked the WTC, so I would "stop short" of blaming them.

Which ones? Franklin Roosevelt?

I wasn't thinking of him primarily, no. Not being a knee-jerk partisan like yourself, though, I'm prepared to blame FDR for failure to stop the Holocaust, whereas I would only blame our domestic anti-semites for thinking like Nazis.

Just as I blame our religious right today for thinking like bin Laden.

<center>Just as I blame our religious right today for thinking like bin Laden.</center><center> --Brian Rush</center></HTML>

Thanks again, Mr. Rush. The die is cast. :smile:

On 2001-11-30 20:44, Marc S. Lamb wrote:

<center>Just as I blame our religious right today for thinking like bin Laden.</center><center> --Brian Rush</center></html>

Thanks again, Mr. Rush. The die is cast. :smile:

Marc, how about a flashing marquee effect next time for a little variety?

Please clue me, Mr. Patton. How can I do it? And I will. :smile:

<blink>Marc, is your children learning? Them Democrats is sending subliminable messages. They got no honorousness and dignitude. They misunderestimate me.</blink>

Does the message above blink for you, Marc?

Fall from plateau appears imminent:

http://csf.colorado.edu/authors/Alex...ke/Plateau.gif

This was the trigger last time. The contemporeanous stock market crash from Sept to Nov 1929, being more visible, is used by S&H to mark the same event. This time, the stock market executed a slow motion crash, starting more than a year before the fall began. However the *bottom* of the crash occured a few months after the start of the fall in both cases.

What this means is my assessment last year of the beginning of K-winter (and the associated secular crisis) last year was early. I employed the begining of the stock crash in March as my indicator. But the fall from plateau, signalling the beginning of K-winter now seems to have begun in summer 2001, making summer 2001 and summer 1929 the exact same place in the K-cycle.

As of yet I do not yet have confirmation of winter, the Fed could yet pull us out like they did after the Asian crisis in 1998, but this is looking less and less likely.

Mike Alexander writes, "As of yet I do not yet have confirmation of winter, the Fed could yet pull us out like they did after the Asian crisis in 1998, but this is looking less and less likely."

If it is 'winter,' then, according to history, not only is there *nothing* the Feds, or anybody else for that matter, *can* do, Mike. Furthermore, anything anybody does will most likely just make it worse. Like passing a Smoot-Hawley bill. Or maybe jumping tax rates on the rich up to the 70-90% range again. Or like having the government take-over the health-care industry (14% of the economy) like they just did with airport security.

My point is, how can you say this is it, but maybe not?

A differing take from: (reprint for educational purposes only)

George F. Will
Sunday, December 2, 2001; Page B07

The official certifiers have certified that since March the economy, after a 10-year expansion, the longest in U.S. history, has been in a recession, the 10th since 1945. So let us relearn the two laws that make economic news intelligible.

Law One: All news is economic news. Law Two: All economic news is bad news.

Terrorists attack. U.S. forces advance. Katie Couric is in love. Or not. All this is economic news? Indeed. Consumer spending is three-quarters of all economic activity, so anything that affects their sense of well-being is economic news.

The prices of gasoline and heating oil are down about 25 percent from this point last year. The average price of a gallon of gas ($1.12) is less than what it was in 1985. The decline of energy prices is the stimulative equivalent of a $100-billion tax cut. But is it good news? Yes, but it contributes to what appears to be bad news: Gas and heating oil sales are factored into calculations of retail sales and hence helped produce the news that retail sales figures, aside from those for automobiles, seem weak.

But surely surging auto sales are good news? Up to a point.

Just eight days after the terrorist attacks, General Motors launched zero percent financing. Other automakers followed, more vehicles were sold in October than in any month ever, and 2001 may be the second- or third-best sales year in Detroit's history. How can this be bad news? Here is how.

The financing effectively meant a 4.7 percent drop in the prices manufacturers were charging for cars, so profit margins are now minuscule. Furthermore, what an analyst calls "profitless prosperity" is cannibalizing future sales, which probably will plummet when normal financing resumes. See? Record sales can be seen as depressing news.

But every sign of economic anemia (this may be advertising's worst year since 1938) can be matched by a sign of vitality (Internet traffic quadrupled between 2000 and 2001). And the real economic story is the economy's resilience. Consider:

Since the bursting of the tech bubble in March 2000, when the stock market swiftly shed $5 trillion in value -- more than the GDPs of Britain, France and Italy combined -- employers have pruned 900,000 jobs. Then terrorism provoked an immediate loss of another $1.4 trillion. Even after all this, the recession is not as severe as might have been expected.

The portion of September after the attacks constituted 22 percent of the third quarter, and in that quarter GDP was down 1.1 percent. And one estimate is that the economy will shrink 1.5 percent in the fourth quarter. However, the number of workers filing for new unemployment benefits recently declined for four consecutive weeks.

Alan Abelson of Barron's reports that consumer installment debt as a percentage of personal income is 21 percent, near the record high and substantially higher than what is normal (under 16 percent) at the bottom of recessions. While that will limit the boost consumers can give to the recovery, the values of most families' most valuable assets, their homes, are still rising. That should help consumers feel good.

So would rising stock portfolios. As recently as 1990 individuals had only 22 percent of their assets in the stock market. Today they have almost 50 percent. This reflects the recent flood of assets into equity mutual funds that crested in 2000 with investors putting a net $305 billion into such funds. This year they have put in just $12 billion.

Perhaps they are tired of turbulence, something completely new to the tens of millions of Americans who did not start investing in the stock market until after the convulsion of 1987. But the rapidity with which the market climbed back to its Sept. 10 level indicates that investors are not so risk-averse that the market, which partly reflects and partly determines the nation's sense of well-being, must stagnate.

Finally, it is wonderful to hear worries about deflation. Not that deflation -- a protracted general decline in prices -- is desirable. But just 20 years ago the fear was that inflation would always be the systemic disease of democracy -- that democracies, by fiscal profligacy and monetary policies determined by the public's low pain threshold, could not help but ignite inflation and could not stomach the measures to extinguish it.

Well, Barron's Randall Forsyth noticed that in the eventful month of September 2001, little attention was given to the retirement of some Treasury bonds issued in 1981. Because of high inflation then, and expectations of more, those bonds carried the highest interest rate the government ever paid on long-term borrowing -- 15.75 percent. The fact that we have nothing like that today refutes Law Two.

[Marc:] If it is 'winter,' then, according to history, not only is there *nothing* the Feds, or anybody else for that matter, *can* do, Mike.

[Mike:] Quite right. But how do we *know* that it is winter? Answer: we will *know* when the Fed's efforts fail. That is we will be able to tell only *after* the fact.

For example, was the September low THE bottom, or will it go yet lower? How can you tell? Bottoms (and tops) are identified retrospectively. The same is true of turning changes.

Thus, in summer 2000 I forecast the imminent arrival of Kondratiev winter (and the secular crisis with it) by the major stock market top in March 2000. But it was NOT certain by any means that this top was "it". Only today, in retrospect, can we say, yep, that was the end of the bull market.

Today by looking at the structure of the reduced prices (and realizing that the stock market has already spoken), I forecast that K-winter began in July 2001. But it is NOT certain at this time that this drop in reduced prices is THE fall off the plateau and not a false alarm like in 1998. (see http://csf.colorado.edu/authors/Alex.../Stanpor2.html ) Only next year, in retrospect, will it become clear that, yep, we fell off the plateau in summer 2001, and that K-winter has begun.

Even then, I must *still* rely on my *hypothesis* that the K-cycle and saeculum are aligned in order to claim that the crisis began in 2001 along with K-winter. The sort of events that will convince you are still years away. But by the time you are convinced it will be far too late to act on the cycle.

But then again, I could be wrong. Maybe the cycles aren't aligned. After all these predictions are merely a test of the structure I have assembled. An experiment if you will. My cycle approach is different from those of others in that it is falsifiable. I can be wrong. Events can come to pass that will cause me to throw out all my cycle work and perhaps select another hobby :smile:

[ This Message was edited by: Mike Alexander '59 on 2001-12-02 11:35 ]

well, since i have weighed in on other threads with what my own model of what the k-wave is saying, let's try it again here.

1. this recession is the normal lull in a 20 year technology based boom period that occurs at the end of a cycle trough popular war (i.e. the gulf war)

2. the stock market and the economy should recover smartly over the next 7-10 years and should not peak out until we have a cycle peak war probably in the 2009-2013 time frame which should then issue in an extremely deep and serious recession when that war is concluded.

3. following the peak cycle war and normal post-war recession we should see a period of inflation, and i believe this period should see much greater inflation than that seen in the 1970s. to make money in this period will require a wholesale switch out of financial assets and into hard assets.

4. inflation will be brought under control by a massive monetary contraction and arrival of extremely conservative political forces into power. this will issue in another very deep and serious recession.

5. this recession will be followed by a period of widespread speculation and rising prices in financial assets before finally peaking out and causing the final great "devaluation" when all the enormous debts in the world today are probably going to be repudiated and a 100-108 year period of disinflation and deflation ensues.

if the next 7-10 years do not produce rising stock prices and relative economic prosperity and are followed by an unpopular peak cycle war, etc. etc. then i too will probably have to go back to the drawing board and re-evaluate this model that has served me well since the mid 80s.

Will Argentina default?

http://news.independent.co.uk/world/...p?story=108003


Argentina close to collapse after run on banks
By Jan McGirk, Latin America Correspondent
03 December 2001

Argentina edged close to bankruptcy yesterday as people queued at cashpoint machines and bank tellers' windows to withdraw money after a government decree restricting bank withdrawals and overseas transfers.

Passengers on planes and ships were frisked for illegal dollar stashes before leaving the country. The decree sparked fears of an imminent devaluation of the peso, wiping out savings overnight.

The run on the banks was only the latest sign that the financial crisis that has rocked Latin America's third-largest economy for the past four years shows no signs of abating.

It was reported that savers withdrew at least $400mon Friday. Local banks have lost 17 per cent of their deposits worth $14.5bn this year.

Rumours that President Fernando de la Rua would be forced to resign and call early elections after a default on the country's $130bn debt fuelled the crisis. The President's austerity measures have made him deeply unpopular and have proved largely ineffective. Thousands of unemployed Argentine professionals are applying for overseas visas and fleeing into economic exile.

After analysts warned that the financial system might collapse within 10 days, the government capped cash withdrawals at $250 a week for the next three months.

Domingo Cavallo, the economy minister who pegged the peso to the dollar 10 years ago, said the regulations would "defend the interest of Argentines and stop the flight of capital until we can restore confidence". He urged Argentines to keep their cash in the banks and show faith in a massive debt swap even as interest rates soared.

"Deposits and the value of the peso and dollar in Argentina are untouchable and guaranteed. Those who disbelieve or mistrust will end up losing out," he said. In the 1980spersonal savings were converted into government bonds overnight at a poor rate of exchange. Recently, government employees took to the streets in protest after their salaries were paid in bonds.

To counter worries that savings in pesos will be devalued while locked inside bank vaults, officials have promised to permit depositors to convert their peso accounts into US dollars without charge.

Overseas and offshore transfers of more than $1,000 will be severely restricted in the coming months. The government will also forbid new bank loans in pesos, and insist financial institutions lend only in dollars. Business leaders read that as a signal that the government is about to ditch the peso for the US dollar as the national currency. The peso is already considered overvalued, which makes it difficult for Argentina to compete with neighbouring Brazil and Chile. But President De la Rua denied he would tamper with the currency's value or step down.

Union leaders called the banking measures "the hijacking of a nation's savings," and said strikes may be called for next week.

Are we headed for a Depression?

http://www.larouchepub.com/other/200...tes_broke.html


State Budgets On Fire:
Don't Worry, Say Experts
by Mary Jane Freeman

"Our houses are on fire!" cry state officials. "Don't worry," reply the economists, "We predict it will rain soon." That exchange summarizes recent babble, to the effect that there will be an economic turnaround by Spring, and so no need to worry about the billion-dollar revenue holes burning through state budgets. Already at the end of October, California, Florida, Michigan, New Jersey, New York, Ohio, Washington, and Wisconsin announced revenue shortfalls in the multi-billions, and many more have holes bigger than $500 million. A California headline, "State Revenue Decline Worst Since World War II," captures the reality. The high-flying revenues derived from taxation on the speculative U.S. stock market bubble and the high-tech "New Economy," on which most states relied through the 1990s, have evaporated, leaving a combustible tinderbox.

A few national economic indicators show the accelerating downturn in the U.S. real economy over the third quarter (July-September) and October. The industrial production index fell 1.1% in October, a 13th consecutive monthly fall. Three key components of the index had huge third-quarter drops: semiconductors, 24.8%; industrial machinery, 15.9%; and textiles, 16.6%. September import/export trade figures, released by the Commerce Department on Nov. 20, show exports fell by 8.5% compared to August, with capital goods dropping by $1.6 billion, and industrial supplies and materials down by $1 billion. Imports fell 14%, which makes a six-month continuous fall. The impact of the shutdown of physical economy was writ large in October's 732,000 newly unemployed, bringing the (understated) official national unemployment to 7.7 million. These national figures are not divorced from state statistics, but rather reflect economic activity in all 50 states.

This depression trajectory was long in the making, and will not be ended by Federal Reserve chairman Alan Greenspan's interest rate cuts, done to feed the voracious bubble market economy; nor by Congress' pathetic "stimulus package" tax breaks, loans and payments to select corporations, and expanded unemployment benefits coverage.

Revenue shortfalls in the states are tied to three primary tax sources: personal income (PIT), sales, and corporate taxes. Figure 1 shows states' total tax collections, nationally, have fallen by 3.4% in third quarter 2001 from third quarter 2000. The corporate tax component of this, fell a whopping 25%. States' sales tax growth rate has declined over the last six quarters, beginning second quarter 2000. The folly of tax cuts at this volatile time should be obvious. The solution lies not in one-time cash infusions, but rather in restarting the productive economy, using directed low-interest credit for nation-building projects?Lyndon LaRouche's policy.
Fiscal Outlook: From Bad To Worse

The state brush fires began in January, leaving over one-third of them scrambling to balance their budgets by June 30?the end of their 2000-01 fiscal year. By the end of the first quarter of the new fiscal year (July-September)?and before the impact from Sept. 11 took hold?44 states were in trouble. The National Conference of State Legislatures' (NCSL) "October Update" found that 16 of these 44 states have both revenue shortfalls and spending overruns. But at least 28 states have or will cut their budgets or freeze spending as a result of the revenue shortfalls and expenditures overruns.

The budget-cut fire buckets, which governors, state legislators, and budget officials propose to use to keep the flames at bay until it rains, will in fact act like gasoline rather than water. Some states have reduced or eliminated pay raises for teachers and state employees, which sparked demonstrations at some state capitols?and will lower their revenue. Medicaid expenditures, the biggest budget-overrun item, are getting axed in many states, resulting in nursing home closures and mental health program cuts, as well as smaller benefits paid out to the elderly, disabled, and poor. A blowback of such cuts, is that states will receive still fewer Federal matching dollars. (The matching ratio had already been lowered by the 1997 Balanced Budget Act.) And even before October's surge in unemployment, 23 states' unemployment insurance funds were so low that Federal infusions will be needed to ensure benefits are paid.

Up until now states have done everything possible to avoid cutting school budgets in kindergarten through high school. But a recent Stateline.org news service survey reveals that 15 states have, or soon will cut these, too. "What we are seeing here is a downturn that was so quick that states did not see this coming," said Mike Griffith, policy analyst for the National Governors Association's Education Commission on States. More to the point, they were in denial as to the magnitude of collapse of the real economy. The cuts will include: no teacher raises, halting class size reduction plans, and even cutting school nurse programs. The 15 states are: Alabama, Arizona, California, Florida, Georgia, Idaho, Iowa, Massachusetts, Michigan, Mississippi, Nebraska, North Carolina, New York, Ohio, and South Carolina.

Ironically, when most state legislators were haggling out new budgets for this FY 2001-02, they had already factored in a slower rate of economic growth. But reality raced ahead; even the lower growth projections are too high. "Nationally, FY 2002 revenues were projected to grow 2.3% above FY 2001 actual collections, only half as much as the 4.5% actual revenue growth in FY 2001. It now appears that the modest revenue forecasts made for FY 2002 are unlikely to be met," the NCSL report understates.
Biggest State Economy In Big Trouble

EIR 's May 4, 2001 feature on state budgets in crisis, showcased how California's shift away from reliance on revenues derived from the productive economy, to the speculative bubble non-productive economy, created the potential for a long-term effect of "permanently amplifying the magnitude of revenue loss to a crisis ... beyond control." Indeed, on Nov. 14, the California Legislative Analyst's Office (LAO) issued its 30th annual Fiscal Outlook report. Its opening analysis states that the "deceleration" in revenue growth from FY 2000-01 to 2001-02, will be "the deepest one-year decline in the post-World War II period."

That one-year decline is 12.1%: from $77.7 billion total revenues in 2000-01, to $68.3 billion in 2001-02. EIR had detailed how the state's inordinate dependence upon revenues derived from the stock market and the high-tech information technology (IT) industry, made the state's wherewithal highly vulnerable as those failed.

The impact of the "abrupt revenue fall-off is pushing the state into a major deficit for the first time since the early 1990s." Figure 2 dramatically shows the decline. "In a nutshell, ... after increasing 22% in 1999-2000, revenues decelerated to 8% growth in 2000-2001, and are projected to fall 12% in 2001-2002," which the Outlook shows will result in a $4.5 billion deficit, at the least, by June 30, 2002. That, wishfully, assumes a "recovery" will "begin next Spring." Even so, the following fiscal year's deficit is expected to be $12.4 billion!

EIR asked one LAO economist what the basis is for this recovery assumption. He replied, "It's what the mainstream national economists" are predicting.

Concretely, these multibillion-dollar shortfalls mean that the state of California will not have cash to pay its bills, unless it borrows monies. This is a risky proposition, as the state had already been threatened with having its bonds downgraded, when the manufactured energy crisis forced Gov. Gray Davis to spend $6-plus billion to keep the power on. That $6-plus billion hole has yet to be repaid to the General Fund, and negotiations to float $12 billion in state bonds to cover it are stalled.

The LAO report assumes no impact on the General Fund's condition from this outlay, because by law the "loan" must be repaid. But it notes, "the loan-repayment delay" has "fiscal implications from a cash-management perspective." That is, "the General Fund will have $6-plus billion less in cash than its budgetary balance." To bridge this gap, "the state will have to borrow an additional several billion dollars," and this poses "a special challenge" due to the "General Fund's projected large deficit."

This is an understatement. California's current and projected deficits are so huge that the stability of its income streams with which to pay off its bond debts is in question. Were investors to sell these bonds, hoping to get a better return now, than later, this could lead to the blowout of the $1 trillion state and municipal bond market, and set off a financial shock wave.

The gap between revenues and expenditures is depicted in Figure 3 . The gap is nearly $10 billion, with $68.32 billion in revenues expected to come in (plus $6.7 billion from the prior year's ending balance) against $78.7 billion budgeted to be spent and $800 million in other obligations. The resulting $4.5 billion deficit will leave no final balance at year's end, thus compounding the next year's deficit.

The revenue/expenditure gap means drastic budget cuts will be required. So far, Governor Davis has taken baby-steps, imposing a hiring freeze and asking Cabinet members to find $150 million in cuts?the two steps together total $260 million in savings as against a likely need to cut $3 billion this year. Reductions in education spending, assistance to local governments, and state layoffs are likely. The LAO report, operating in the confines of managing the fire, suggests "reduction or elimination of inflation adjustments for programs, permanent reductions in program service levels (such as reducing caseloads or limiting benefits), or permanent increases in fees or tax rates." But in current national depression conditions, these measures pour on the gasoline.

Unemployment increases in California in the pre-Sept. 11 period were largely in the manufacturing and business services sectors, "primarily related to cutbacks in computer and software industries," reports the LAO. Between January and September 2001 these two categories of employment lost nearly 100,000 jobs in the state. Figure 4 shows the sharp trajectory of job losses and personal incomes as a percent change year-over-year. The personal income decline is the most dramatic, and directly reflects the blowout of stock markets and the IT sector. As the LAO puts it, the "substantial downturn," from 8.8% in 2000 to @ms5.2% in late 2001, is due to "dramatic decline in stock options-related earnings, which significantly reduced wealth, income, and spending." But worse, LAO wishfully assumes that "California will rebound when the national upturn ensues during the Spring of 2002."

There was a sharp 18% decline in withholding taxes collected through the first three quarters of 2001-02 over 2000-01 (see Figure 5 . LAO states, "This ... decline is ... the steepest in the past three decades." Personal income taxes are the state's largest revenue source. EIR showed in May that the capital gains and stock option revenue components in 2000-01 comprised 22% of California's General Fund revenues! LAO assumes a 60% decline this year in these two revenue sources. Between May and September, cash receipts were $1 billion short of expectations.

As noted at the beginning, the rate of decline had already accelerated before the attacks; the cash deficit was $389 million in May-June and $600 million in July-September. No wonder there's a hole in the budget.
Other States To Keep An Eye On

While California is the most dramatic blowout, both in terms of magnitude and importance, recall that 44 states were already in trouble as of October, with 28 making or planning cuts this year. We touch on just a few of these other precarious state situations.

Virginia's outgoing Gov. Jim Gilmore (R) suddenly found an $890 million hole in expected revenues, making a sham out of his pre-election accounting shenanigans to keep his GOP promise to cut car taxes. On Nov. 15, he blamed Sept. 11 for the newly found recession, while suspending the phaseout of car taxes and announcing 2% spending cuts in most agencies, as other state officials consider cuts in Medicaid benefits.

Illinois now expects at least a $500 million shortfall, and budget cuts will likely mean state worker layoffs. Maryland's General Assembly budget analysts predict a two-year $1.7 billion deficit. Gov. Parris Glendening has imposed a hiring freeze and cut all agencies by 1.5% for starters. New York's latest financial report states this year's shortfall is at least $1.5 billion, but is expected to go to $3 billion once the full "impact of the attacks" is counted. That is, there was a decline before Sept. 11. Gov. George Pataki's administration has said the state is experiencing the largest revenue declines since the 1960s, and that when the World Trade Center disaster's impact is factored in, they will be the worst losses since the Great Depression.

__________________________________________________ _____
Posted: 2001-09-21 14:33 By Marc Lamb

DOW: WORST DROP SINCE DEPRESSION

Needless to say, this headline will be added to the current mantra of those among us that believe we be 4T: PROOF!, they will say.

Bah!, I say. The days ahead are gonna be rough, there can be no doubting that. Most likely, except for those among us that were children back in 1933, the days ahead are probably gonna prove to be the most difficult we have ever faced in our collective lives here in America.

__________________________________________________ _____

That statement, so soon after 911, was more guts than anything. Nevertheless, I was very confident in those dark days that America was going to overcome this, and bounce back.

This may well be an important milestone toward reaching that goal:

Dow Breaks Above 10,000 Mark

:smile:

as i have said before, the current rally in the stock market is just the beginning of the next 7-10 year final upleg of the tech boom that we began at the end of the normal post war recession after the gulf war. to be sure there will be plenty of bumps along the way, but the general trend should still be higher. and valuations will remain at levels that will make those still expecting 1970s valuations to return continue to stay out of the market and watch with frustration as prices continue to "bull" higher.

but in another 7-10 years, particularly when the next peak cycle war breaks out, people will finally begin to realize that the emperor just might not be as fashionably dressed as they previously thought. then the pessimists will finally begin to have their day in the sun.

i would predict that in the coming decade you will see hedge funds become as popular and as prevalent as mutual funds are today. also, look for single stock futures to very likely become the next big investment and speculative craze over the next couple of decades. this one area, should it prove as eventually popular as i think it might, may turn out to be the single most destructive investment vehicle to be introduced into the marketplace since the 1920s and 30s. but the real dangers here won't be readily apparent until we get closer to the "great devaluation." until then, there will very likely be fortunes made in this area just as some day traders made fortunes during the last big bull move. the question this time will also be, will any of them be smart enough to keep what they make?

Mr. Brian Rush arrogantly writes within this thread:

"Much as Byron York of the National Review would like Clinton to be judged on the 9/11 attack -- and much as one might make the case that he should, just as Calvin Coolidge should have been judged on the Depression -- it won't happen."

From the LA Times comes the voice of a Clinton supporter;

Clinton Let Bin Laden Slip Away and Metastasize
<HTML>
<center>"The silence of the Clinton administration in responding to these offers was deafening."</center>
<center>"Clinton's failure to grasp the opportunity to unravel increasingly organized extremists, coupled with Berger's assessments of their potential to directly threaten the U.S., represents one of the most serious foreign policy failures in American history."</center></HTML>

[ This Message was edited by: Marc S. Lamb on 2001-12-06 19:48 ]

Subject: Delusional thinking.

Nothing has changed. The economy is still in just as rotten and precarious a state as it was a few days ago (or a few minutes ago for that matter). Today's action was a very typical bear rally fueled by Uncle Al's counterfeiting operation in the basement of the Fed building and by delusional thinking by naive longs like Marc Lamb and ejolras (I wish that guy was smart enough to learn how his caps key works).

There's no telling how long it will last but do not be decieved, things are not getting better but much worse. The recession is not over and more debt (which is what is driving this rally) will not solve the problem.

Does anyone know how the GDP and personal incomes have be doing since 1973 in real dollars? And in relation to 1973, 1990, 1999, 2000, early 2000, what is the real income of the average person at this moment in time?

Enron's Fall & Culture of Secrecy from the WSJ of 5 December 2001 via FreeRepublic.com.
"If you don't ask the absolute right question, you don't get the right answer....Enron does that a lot." Mr. Clinton lives!

On 2001-12-05 19:53, Robert wrote:
Subject: Delusional thinking.

Nothing has changed. The economy is still in just as rotten and precarious a state as it was a few days ago (or a few minutes ago for that matter). Today's action was a very typical bear rally fueled by Uncle Al's counterfeiting operation in the basement of the Fed building and by delusional thinking by naive longs like Marc Lamb and ejolras (I wish that guy was smart enough to learn how his caps key works).

There's no telling how long it will last but do not be decieved, things are not getting better but much worse. The recession is not over and more debt (which is what is driving this rally) will not solve the problem.

LOL... well at least that was enough to give me a good laugh! i have been hearing perma-bears tell me just how "delusional" and "deceived" i have been since 1982. i was intermediate term bearish at the peak all the way down into late march, where i turned bullish and then bearish again in mid august before becoming long term bullish again in september. but my longer term basic optimism has never changed as this has once again been the typical action that you see at the midpoint of a 20 year bull market that occurs after a popular trough cycle war, i.e. the gulf war. and yes, i do also agree that things actually are getting worse and there will be hell to pay (although they have been "worse" since the 60s and have just been getting gradually more worse since then)...but that's still in the future. it will take the right set of catalysts to bring about the "great devaluation" and they have not yet occurred. the doom and gloom crowd will eventually be right... just as a stopped clock is right twice a day. and when the time is right i plan on joining them... just not anytime soon.

and by the way, i don't use my caps key on purpose. its just been the style i have always used. call it my personal homage to e.e. cummings. and it would be nice if you could find the "n" key on your keyboard as well when spelling my name not to mention remembering that old rule "i before e except after c"...:wink:

[ This Message was edited by: enjolras on 2001-12-05 22:02 ]

[ This Message was edited by: enjolras on 2001-12-05 23:51 ]

Unemployment now at 5.7%

http://dailynews.yahoo.com/h/nm/2001...jobs_dc_2.html


U.S. Economy Kept Bleeding Jobs in November
WASHINGTON (Reuters) - The U.S. economy shed jobs at a searing pace for a second month in a row during November as the unemployment rate shot up to its highest level in more than six years, the government said on Friday in a report implying the recession may bite deeper and longer than thought.

The Labor Department (news - web sites) said another 331,000 jobs were lost last month -- far worse than the 189,000 that Wall Street economists had anticipated -- on top of a revised 468,000 that were cut in October. Previously, the department said 415,000 jobs were shed in October.

The October and November job losses were the worst for any two months in more than 20 years, since May and June of 1980, department officials said.

The unemployment rate climbed to 5.7 percent in November from 5.4 percent in October. That is the highest level of unemployment since a matching 5.7 percent rate in August 1995, the department said.

Service-producing industries that were the engine of the job boom during the record 10-year expansion that ended in March cut jobs for a third straight month in November, letting go 164,000 workers after a huge job loss of 327,000 in October. The hemorrhaging of factory-sector jobs worsened in November as another 163,000 jobs were cut on top if 124,000 in October. 

[ This Message was edited by: madscientist on 2001-12-07 08:47 ]

The economy flies further south for the winter.

http://www.washingtonpost.com/wp-dyn...-2001Dec6.html


Retailers Report Weakest November Since 1990

Associated Press
Friday, December 7, 2001; Page E02

The outlook for the holiday season grew dimmer yesterday as major retailers, bruised by unseasonable weather and a sluggish job market, reported the weakest November results since 1990.

Discounters and other "value" stores, particularly Wal-Mart Stores Inc., Kohl's Corp. and TJX Cos., had the strongest sales. Meanwhile, mall-based merchants, especially apparel and department stores, suffered amid piles of marked-down coats and sweaters.

Michael Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd., cut his 4 percent holiday forecast in half after seeing the numbers.

The bank's index of 79 retailers was up 2 percent, below the 3 percent forecast. The biggest culprit, Niemira said, was Gap Inc.

Gap, whose business has dropped precipitously, saw sales at stores open at least a year plummet 25 percent, worse than the 17 percent forecast.

Federated Department Stores Inc., parent to Bloomingdale's and Macy's, met expectations but expects December sales to be down.

Even Wal-Mart, with a 4.3 percent gain, has been discounting heavily, hurting its bottom line.

Kmart Corp. reported a 2.6 percent decline.

Subject: Deflation and bond speculators.

There's a really interesting essay on bond speculators, lower interest rates and their role in deflation over at the Gold-Eagle website:

http://www.gold-eagle.com/editorials...ete120701.html