1/27/03
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Firstly and most importantly, our cruise was fine - the rest and relaxation was wonderful.

Economically speaking, major layoffs are still announced daily. Earnings are still not strong and most companies are still expecting reduced sales. Will we have war with Iraq? I do not know. I find the entire process curious, but the decision will become apparent within weeks. In so far as North Korea is concerned, I do not expect anything significant to happen there.

The Dow Jones still cannot even come close to 9000. In order for the Dow to really advance, it must exceed 9000 on a closing basis and 9200 on a closing basis with huge volume. I just don't see it. We should continue in the 7200 to 9000 trading range until we finally break through 7200.

The Dollar declined by 18% during 2002. We should experience more of the same in 2003, which should cause Gold to rise in 2003. Gold is now over $370 per ounce.

We (the U.S.) are faced with rising deflation and rising inflation simultaneously. The rising deflation is being imported from China and Japan. The inflation from commodities. From my research, I have not found an era within 100 years where we experienced this phenomenon. How this plays out should not be pretty. Again, I use Japan post 1990 as the rough model since Japan is essentially experiencing the same situation as we are today.

There are significant differences:

- Japan has a very high savings rate - the U.S. savings rate was negative, now barely positive.
- Japanese banks are essentially insolvent, and are not being permitted to fail - in the U.S. we close insolvent banks, liquidate them to strengthen existing banks.
- Japan has a current account surplus - The U.S. has a huge deficit.
- Japan has a budget deficit which is (by GDP%) several times the U.S.

Go figure.

In terms of real estate pricing, I still feel that the top is in - or will be in by Spring 2003 - followed by lower real estate prices.

Copyright 2003 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Monday, January 27, 2003

 
1/24/03
Welcome to Arnold's Ramblings! Feel free to subscribe to our newsletter, to get each issue sent to your preferred email address upon publishing. To subscribe, click the link on the left side, or email us at comments@arnoldsramblings.com. Please take a look at our archives to get a better idea of what we are all about.
- posted by Arnold @ Friday, January 24, 2003

 
1/2/03
ARNOLD'S RAMBLINGS FORECAST 2003 ISSUE

This will be our first full year forecast issue. We will endeavor to make full year forecasts. When you combine them on December 31, 2003, those that are correct are of course fine those that aren't...

DOW JONES INDUSTRIAL (DJIA)
ARNOLD'S YOURS

12/31/02 close 8342
High for 2003 9000
Low for 2003 5200
12/31/03 close 6400

NASDAQ

12/31/02 close 1336
High for 2003 1550
Low for 2003 700
12/31/03 close 1000

GOLD (per ounce)

12/31/02 close 348
High for 2003 475
Low for 2003 330
12/31/03 close 456

YIELD 30YR BONDS

12/31/02 close 4.78%
High for 2003 7.50%
Low for 2003 4.63%
12/31/03 close 7.40%

GDP FOR THE YEAR 2003

I believe we will have a return to recession by the 3rd quarter of 2003.

For those who consider this forecast to be depressing, 2003 should be the bottom of the stock indexes for the next 3 to 4 years. So the forecast really is upbeat!

The economy should stay in a tight range of up or down 2% GDP for the forseeable future; entering recessions, coming out of recessions, basically stagnant; with ever increasing unemployment and falling real estate prices. Real estate prices are now dropping at all levels except $250,000 and below -- and those prices will start heading lower as well.

Any of you who like to predict December 31, 2003 final numbers certainly may do so by placing your predictions next to mine and then emailing it back. Next January 2nd or 3rd we'll compare results to see who did the best job of predicting the future.

NOTE: Arnold & Miriam will be on vacation from January 5th to January 12th (Cruising). Should you have any questions or needs, address them to either Kim or to Michael. We will be in daily contact by email from the ship.

Arnold

Copyright 2003 Arnold's Ramblings Inc. All rights reserved.
- posted by Arnold @ Thursday, January 02, 2003