3/31/03
It appears as though the up move in the stock markets is over. We could still maybe go to 9000 or at best 9200, but I seriously doubt it. Gold is holding in the 325 - 335 area poised for a run up. Long bonds - Treasuries, are holding at about 4% 10 yr. and 5% 30 yr., yields should start to expand.

Economically speaking - everything seems to get slowly but gradually worse. There appears to be a misconception that when the Iraqi War is over the economy will soar. While anything can happen, I just don't see it. All of the economic problems predate 9-11, actually starting under Clinton.

The congressional plan to give less than half of Bush's requested tax (cut) benefits will have less than no effect. In order to turn the economy around, we need to encourage savings and investment. Further, as a country we need to reduce the enormity of debt overhanging individuals, corporations and governments (city, state & federal) We are all too indebted.

Recent PPI and CPI numbers released are starting to suggest rising inflation. While this is a definite possibility, the big risk is a runaway inflation which the Federal Reserve will cause attempting to stop deflation.

Basically what we are looking at is stagnation. No growth, with various industries suffering from deflation (computer, autos, telecoms, etc.) and various industries suffering from inflation (commodities, medical services) ALL AT THE SAME TIME.

As a reminder: For all of you who are passing Arnold's Ramblings on to friends, family members, enemies - whoever, now you can provide them a fresh copy, direct from the source! Ask them to go to http://www.arnoldsramblings.com/NavLinks/Subscribe.html.

Copyright 2003 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Monday, March 31, 2003

 
3/20/03
The markets have risen into the start of the US-Iraqi war. No what? There are two perspectives:

1.) A short war - 3 days to two weeks and it's over. Saddam Hussein is captured or killed. Initially the markets would soar, then when reality struck, the markets would head lower.
2.) Not a short war, no capture of Saddam Hussein. As the war grinds on, then the markets would get hit, much lower.

The only question in my mind is wheher the Dow will test 9000 and stop at 9200 - the NASDAQ test 1500 and stop mid 1500s - or are we basically through already? We will see!

The forecast of Dow 6000 or less, NASDAQ 1000 or less is still in place.

Economically, layoffs abound. Applied Materials is laying off 2000, Gatway 1900. United Airlines is talking about liquidating and going out of business. Speigel (owner of Eddie Bauer) filed for bankruptcy and HealthSouth, an enormous healthcare provider, was charged in a massive $1.4 Billion fraud.

Where does this put us today? There will be many more high profile corporate frauds, bankruptcies are just starting - American Airlines is due any day now (with or without a war in Iraq) -- Ultimately I still believe most of our U.S. airlines will file for bankruptcy in an attempt to eliminate shareholders and make creditors the owners of the company, thereby eliminating or enormously reducing debt.

Virtually every heavily indebted public (and private) corporation will ultimately file for bankruptcy by sectors: Airlines, cable companies, telecoms, autos, etc. - individually the higher the debt, the higher the probability of filing (for bankruptcy).

Gold did not hold $340, but should hold $330, where there is major support. Once Gold bottoms and the stocks start to move, this in my mind is the trade of a lifetime (NEM, AU, ABX and BGO).

Real Estate prices on the higher end are clearly falling in most markets. Thus far lower pricing is holding, not rising. After spring season - we will see how the real estate market performs.

As a reminder: For all of you who are passing Arnold's Ramblings on to friends, family members, enemies - whoever, now you can provide them a fresh copy, direct from the source! Ask them to go to http://www.arnoldsramblings.com/NavLinks/Subscribe.html.

Copyright 2003 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Thursday, March 20, 2003