Let's find the FLAW in your logic.
1. "People are looking to next year and they're optimistic," said Mike Murphy, managing director of trading at First Union Securities.
2. 3M, a component of the Dow average, jumped $5.68 to $107.85 after reporting earnings fell 21 percent.
3. American Express Co. gained $1.28 to $30.60, also helping the Dow, even after the firm said profits dropped 60 percent from the same period a year ago, missing analysts' forecasts.
4. First-time unemployment claims ROSE to a 10-year high.
5. Continuing unemployment claims ROSE to 3.6 million.
6. So far, MORE companies (something like 160) have warned this quarter that everyone should LOWER expectations. This is MORE lowering than what was seen in Quarter 1, Quarter 2, AND Quarter 3 -- you know, during the "bottom" and the really "bad" quarters.
7. You've got the usual Federal Reserve "intelligence" (politicians!) telling everyone that on a personal level, a corporate level, and a national level, everyone should SPEND their way to profits! Spend your "refund" (advance!), use your credit cards, buy back your stock, print more money. Federal Reserve Bank Governor, Robert McTeer said, "What we dearly want is for Americans to behave like Americans -- to do the patriotic thing and go out and spend." Federal Governor, Laurence Meyer said, "The Federal Reserve should consider adding corporate bonds and stocks to its portfolio of securities."
8. Polaroid and Bethlehem Steel (two small, no history, unknown companies) declared bankruptcy.
9. Ford and GM's credit ratings just got chopped. Was there an old saying about "the way GM goes . . ."
10. The major banks are having record defaults on loans. Providian said they would stop loaning to high-risk entities.
11. Industrial Production fell -- no big deal. Oh, that makes 12 months in a row it has fallen -- this hasn't happened since World War II.
12. Capacity utilization fell to the lowest level since 1983.
13. The National Association of Home Builders Housing Index went from 56 to 48 in Sept. -- the biggest one month drop in the HISTORY (16 years) of the index.
14. Ebay's PE is 167 and Krispy Kreme's is 109 -- there is certainly NO MORE of that SPECULATION in THIS market anymore!
15. The multiple on the S&P is at a record 38, and the dividend yield is an almost nonexistent 1.46% -- BUT, if you adjust for inflation, the market is a SLIGHTLY better value than right before the 1929 crash and a SLIGHTLY better value than the peak of 2000. What a relief!
16. There is this terrorist thing going on -- oh, no bad reports for over a month (anthrax is a piece of cake), so no worry there anymore. Did Cheney really say, "For the first time in our history, we will probably suffer more casualties here at home in America than among our troops overseas." -- Nah, couldn't have, because the market knows ALL.
17. Did anybody read www.zealllc.com/commentary/monsterpf.htm ? No big deal. Probably all lies and misinformation. JPM would never leverage $42 billion in stockholder equity with an outstanding aggregate derivatives position with a notional value of $26,276 billion. Why that's 626 to 1 implied leverage -- ludicrous to even suggest this. Forget it. The market has.
18. Did I say there was a terrorist thing going on? Surely this won't divert any monies from helping to stimulate the economy. Forget I said it.
Greenlaw, I really don't see your confusion. Everything looks wonderful to me.
I remain,
SOROS |
