B4 The Bell Moonday March 29, 2004

[Guest yobob1]

[Guest]

I'm going to be watching RIMM for the next day or two to see whether the pop that will hit it this morning gets sold into. I'm guessing it will, and was hoping for this thing to get ramped in order to get back on the southbound train again. A whole bunch of RIMM longs felt mighty damned stupid in recent days, and I'm guessing they'll welcome a speedy exit today...though given the end-of month madness, the safer entry point may occur on Wednesday at the close.

 

Also keeping an eye on the Ten Year since the whole world is tied to it.

[HiHat]

" The possibility still exists that 2004 could end up being something of a "hang year" where despite a plethora of brewing economic and geo-political problems, equity markets basically avoid a true "Acapulco Cliff Dive" far longer than one might ever expect. "

 

http://www.sandspring.com/charts2004/cdj032504.html

[Guest]

http://www.nytimes.com/2004/03/29/politics/29PANE.html?hp

 

White House Admits it LIED:

 

The White House acknowledged Sunday that on the day after the terrorist attacks of Sept. 11, 2001, President Bush asked his top counterterrorism adviser, Richard A. Clarke, to find out whether Iraq was involved.

 

Mr. Bush wanted to know "did Iraq have anything to do with this? Were they complicit in it?" Condoleezza Rice, the president's national security adviser, recounted in an interview on CBS' "60 Minutes."

 

Last week, the White House said it had no record that Mr. Bush had even been in the Situation Room that day and said the president had no recollection of such a conversation. Although administration officials stopped short of denying the account, they used it to cast doubt on Mr. Clarke's credibility as they sought to debunk the charge that the administration played down the threat posed by Al Qaeda in the months before the Sept. 11 attacks and worried instead about Iraq.

 

 

DESPARATE MEASURES

[Hiding Bear]

Bonds away:

 

Prices of 10-year Japanese government bonds (JGBs) and JGB futures fell sharply on selling prompted by firmness in Tokyo stocks amid expectations of an economic recovery in Japan.

 

Kyodo News Service; Mar 29, 2004

 

In interdealer trading, the yield on the key No. 258 10-year, 1.3% government bond issue rose 0.085 percentage point from Friday to 1.490%, marking the highest level for a key 10-year bond issue since Nov. 10 when it ended at 1.525 .

 

The price of the benchmark June futures contract for 10-year bonds fell 1.00 point to 137.00 on the Tokyo Stock Exchange, sending the yield up 0.084 percentage point to 1.678%. It was the highest finish for a key futures contract for a 10-year bond since Nov. 10 when it ended at 1.736%.

[Guest yobob1]

.....So, I was leaning towards the view that some assets would continue to increase in value in 2004 while others, such as bonds, would begin to fall by the wayside and enter longer-term bear markets. After further consideration, I am now increasingly concerned that sometime soon "everything" could begin to unravel. When interest rates rise, it is conceivable that bonds, stocks, commodities and real estate will all decline in value at the same time.

 

In the past I have had the tendency to dismiss the deflationist views of some reputed economists and strategists as unlikely. I now feel the current universal asset inflation and overheated Chinese economy will be followed by a serious bust and asset deflation, which will kill consumption in the US. The only question is when.

 

I'm at a loss as to when this bust will occur. But given the overbought condition of the US stock market, the extremely high bullish consensus (indicative of market tops in the past), the rising commodity markets and the tendency of markets to defeat central bankers who entertain the same erroneous beliefs that central planners under the socialist ideology had when they thought they could plan the best possible economic outcomes, the bust could come sooner rather than later.......

 

........So, given that consumption driven by asset inflation is unsustainable in the long run and always ends badly, what should the contrarian investor do?

 

The least desirable asset in the world is US dollar cash. The investment community can take everything in stride - even a 70 per cent decline in Nasdaq stocks. But interest rates, as low as they are now, compel people to speculate on everything from commodities, homes and bonds to equities.

 

Therefore, investors in the current speculative environment should be extremely defensive and not be tempted by short-term gains, which could be swiftly erased. Daily moves of 5 per cent in investment markets will become common. Nickel recently fell 8 per cent in a day, copper by 5 per cent, and the euro by 5 per cent within a week. Gold and, especially, silver may offer some protection but, once the current asset inflation bubble ends, they could also be in for a rough time.

Be braced for a bust as bubbles look set to burst

[Guest]

Yobob:

 

Thanks for posting that article.

 

The assessment that gold will decline in the event of a simultaneous dislocation on all fronts seems to ignore the prospect of wars or other forms of strife that may be likely to break out globally over these economic dislocations. Anybody who thinks the world is going to become more stable while the gears are flying out of the engine hasn't thought this all the way through. If it all starts to come unraveled at once, I seriously doubt that the dollar will be perceived as a safe haven, while Freddy and Fanny implode, taking the world down the drain along with them.

[DrStool]

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[Guest]

"We're looking for inflation in all the wrong places," said technical anal cyst Louise Yamada, a managing director at Smith Barney. It is "subtly shifting seats."

Inflation may well be tamed in the manufacturing sector, where the cheap labor of China and other developing nations has pushed down the costs of finished products like computers, apparel, furniture and electronics. But it is pronounced in what Yamada describes as "the essentials people need on a daily basis" such as food and fuel.

 

By failing to account for the rising cost of so-called consumer essentials, the official inflation rate of 1.7 percent over the past 12 months has lost touch with the reality of everyday spending habits, some say.

 

"Inflation's down except for what you actually buy," said portfolio manager Chad Hudson of the Prudent Bear Fund. "People are feeling it more than the government is calculating. They have to be."

 

"The Fed has what in the private sector is called a conflict of interest," sniffed anal cyst James Grant, of Grant's Interest Rate Observer.

 

The single biggest distortion in the government's main inflation index involves housing, Grant said. Instead of capturing the sizzling prices being paid in the latest home sales, the CPI uses an estimate of how much those homeowners could collect in rent.

 

With home ownership soaring, rental rates are depressed, and the index is a full percentage point lower than it should be, said David Lane, a researcher at Grant's.

 

 

 

http://www.sun-sentinel.com/business/local...-business-front

[Lock Limit Down]

Morning all

 

I am away from home working with a new laptop

 

Does anyone have the site that offers a download for the live gold and silver bug with realtime prices on the toolbar?

Am tearing my hair out trying to find it.

Many thanks in advance.

[Guest]

The resurgence of day trading calls into question whether investors have learned the lessons of the recent past. In 2000, legions of online traders -- especially novices who quit their jobs to trade stocks -- suffered heavy losses when technology stocks crashed, the broader stock market plunged and many savings and retirement portfolios plummeted. In South Florida, financial experts are warning that inexperienced day traders are repeating the same mistakes and will hurt themselves all over again.

 

There are fresh signs that the stock market may be overheated: The Standard & Poor's 500-stock index is trading at more than 22 times earnings, well above its historical average of 15 times earnings. Some technology indexes, such as the Internet UltraSector ProFund, have nearly doubled in the past 12 months. And consumers are borrowing heavily to trade stocks, indicating speculative trading.

 

In January, investors borrowed $189.4 billion to buy publicly traded stocks on margin, according to the latest figures provided by the National Association of Securities Dealers, which includes data from the New York Stock Exchange. That's 17 percent higher than the monthly average for 2003.

 

"Everybody talks about how much money they make trading online, but not how much they lose," says Shein, chief executive officer of Compass Financial Group Inc. in Lighthouse Point. "You could lose all your money trading online. Investors never learn this lesson. ... People are irrationally exuberant, again."

 

http://www.sun-sentinel.com/business/local...-business-front

[yellowfish]

Morning all

 

I am away from home working with a new laptop

 

Does anyone have the site that offers a download for the live gold and silver bug with realtime prices on the toolbar?

Am tearing my hair out trying to find it.

Many thanks in advance.

Kcast from Kitco.

 

http://kcast.kitco.com/

[dogsie]

Well, woke up this morning early in a bit of a panick as I am currently short the qqq's. I am deeply worried that we are in for a big move up in the market today.

[machinehead]

Bloomberg shows the ten-year T-note yield up another 4 basis points, to 3.87%. This after another bad day in the JGB market in Japan. (It's all one trade.)

 

The ten-year T-bone is the pin on the Bubble II grenade. Yank it out, and (with a slight delay) the whole Bubble goes bang.

 

I have retreated to my bunker. So, bring it on.

[DrStool]

Bong Yield Soars in Big Turn

 

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