3/26/04
Hi,

My previous missive I gave a sell signal for the NASDAQ. Since that time the Nas is already down 5%. This missive I am advising that I am giving a sell signal on the DOW and the S & P. The trading action has been terrible. While I do not yet know if we are looking at 25% drop, I can safely say that we are looking at 9,000 - then we will reassess.

In terms of gold: the price action of the physical metal has been surprisingly strong moving between $400 and $420 the ounce.I still believe that there is a possibility of one more sharp drop that could take gold to $360 to $375. The dollar has been rising against other currencies for a few weeks and this rise could continue for up to one month. Beyond the end of April, I would not expect the dollar to rise.

The economy seems to be going nowhere fast. While by appearance the economy is improving, the lack of job creation should improve in the short run but not be really robust. I have real problems with the current personal debt levels and corporate debt levels. Home equity has been dropping substantially and this is while home prices are rising significantly. The average American (all 300 million or so of us) has debt of $18,000; when you add in all debt excluding mortage that number rises to $42,000. These debt numbers are staggering. Then recognize that the savings rate is at or about zero and you start to understand that we Americans, like our government are swimming in a sea of debt.

The presidential election appears to me to be bizarre. Bush is running on his record, whether you like that record or not - though Kerry, while attacking Bush's record, states that his own record is irrelevant. Kerry has the support apparently of all these international leaders, but the only international leader who has publicly supported Kerry is the former prime minister of Malaysia, a self described virulent anti-semite. Kerry apparently rejected his support (bad for campaign contributions, since a large percentage of donations come in from Jews).

Kerry also waffles on easy issues. I am perplexed by this approach by John Kerry. As Jay Leno had said last week, this presidential election will depict two completely opposing sides for the American public to consider - and both sides will be presented by John Kerry. I really do not understand this at all. There should be a clear choice for each of us to consider, and then decide what is it that we are looking for in a president. Unfortunately, it does not look as though that is going to happen.

Which reminds me of another issue: the outsourcing issue. Kerry is suggesting that any corporatiion doing business in a foreign country not be given a tax credit for the taxes they pay in those countries. That way all the jobs will move back to the United States. If this ever were to be enacted, corporations doing business outside of the United States would have effective tax rates over 70%. This is clearly protectionist drivle.

Arnold

Copyright 2004 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Friday, March 26, 2004

 
3/4/04
Hi,

The Dow is still in the 10,600 range, unable to exceed 11,000. It would appear as though 11,000 will be impenetrable.
The NASDAQ appears to have topped and is heading lower, at least 25%. Long bond prices are moving in a tight range. There will probably be one Fed interest rate rise in 2004 (maybe none) but after the election, rates should start rising significantly. Gold has been basing around $400 per ounce. I still see the possibility of Gold dropping to $375 -380, but if that happens, this should be the low. The economy appears stronger into the 3rd or 4th quarter, but I still doubt we will have a sustained economic recovery.
In so far as the election is concerned, While it appears close at the moment, barring a major adverse economic effect or a terrorist attack before the election, I still believe Bush will win in a landslide.
I do not understand the Democratic candidate's rhetoric of the "Two Americas" - how the rich have their own tax laws and the rest of us have a different (more oppressive?) one; the rich have their own healthcare plans, etc...
The taxes for the rich are onerous, the top 1% of taxpayers pay 44% of all taxes paid - I do not understand this at all..

Arnold

Copyright 2003 Arnold's Ramblings Inc., All Rights Reserved.
- posted by Arnold @ Thursday, March 04, 2004