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To: Alex who wrote (42657)	10/11/1999 9:12:00 AM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 116764

Alex a great piece by Crudele at NYPost. The Labor Dept has been stocked by old shoes of 50 years of Democratic party Socialist tax and spend agenda.That is why AlanG correctly distrusts them. My brother in law is a widely traveled businessman and he tells me: "right now, whoever does not have a job is because he does not want to work". Also " the Big 3's decision to give workers "lifetime employment" was the stupidest ever". In a downturn of the economy they'll be crying the blues again". When my local shopping Mall puts out " a job fair ", you know we've run out of workers. As I am talking to you I hear Kathleen Hayes on CNBC saying how we are also running out of part time employees who are looking for full time work. So we are turning to immigrants. That would be great except for what happened with many immigrants some time ago when after promising under oath to the Immig & Naturaliz Service not to put any of their future dependents on The Public Dole, they proceeded to do just that. This is one giant bubble. I think Alan G knows it and he is just waiting for the right moment to pop it as gently as he can. ( Get it? Pop it gently <VBG>). His hand may indeed be forced by the arrogance of Wall Street. I believe it will. Wall Street needs to be hit across the forehead with a 4 by 4 to stop calling " great buys" every money losing co on the horizon. (example Pepolesoft will make 1cent this Q and has just bought Vantive who has not made a penny ), TA Message #42657 from Alex at Oct 11 1999 5:40AM RATE HIKE COULD COME SOONER THAN YOU THINK By JOHN CRUDELE ------------------------------------------------------------------------ HOW stupid is Wall Street? That question is brought to mind by what happened to stock prices on Friday. On Thursday, the Federal Reserve released the minutes of its August policy meeting where it very clearly threatened to raise interest rates again if the stock market continued to behave in an irrational fashion. So how did the geniuses on Wall Street respond? The very next day they forced the most visible and most easily manipulated of all stock indices, the Dow Jones Industrials, higher by nearly 113 points. The Fed's nose has been tweaked by greedy professional traders - again. Let's step back. This column has been saying for a long time that the Fed right now is primarily concerned about "asset inflation," which is a fancy way of referring to the stock market bubble. The Fed's very concerned that the paper fortunes being made on the bubble will start leaking into the real economy and drive up prices of things like homes, boats, cars, gold and other amenities. One thing leads to another in an economy like ours and eventually the price of everything - from a cruise to butter - shoots through the roof. That is the Fed's worst nightmare - out-of-control inflation that destroys everyone's quality of life. The Fed has issued veiled warnings about this many times before. Alan Greenspan has railed against "irrational exuberance." Other Fed governors have warned about the bubble. More recently the Central Bank has twice been forced to push interest rates higher. That was mainly in response to Wall Street's craziness, but also because of rising prices of things like oil, gold and other commodities. And then we have last Thursday's statement, which is as clear a message as any: The Fed isn't going to put up with Wall Street's greed anymore. So what happens? Traders tell the Fed to go to hell and jack the Dow up another 113 points. Now Wall Street is not only greedy and stupid but also foolishly arrogant. Why was Wall Street so bold last Friday? Because it wrongly thinks it has another five weeks or so before the Fed can do anything on interest rates. The truth: The Fed can, and - because of days like Friday - probably will push rates higher before its next meeting, on November 16. The last round of rate hikes in '94 included just such an in-between meetings surprise. There are reasons why Wall Street thinks the Fed's hands are tied. First off, it doesn't believe Alan Greenspan has the guts to take any action that'll hurt Wall Street. Too many rich people with political connections would get hurt. And, besides, why would the Fed finally show any nerve in fighting the bubble when it hasn't for years? The government's labor figures released Friday also gave stock traders some false comfort. On the surface they showed the number of jobs declining by 8,000 in the U.S. in September. That's supposedly good for stocks because rates will stay down. But I'll let you in on a secret. I'm told Alan Greenspan has very little regard for government economic statistics. He's relying on private numbers, which, as I've said, show that inflation is climbing. The Labor Department actually takes two surveys of jobs each month. One relies on a relatively small sampling of employers. That's where the government came up with the 8,000 loss. Yet before the government tweaked that number for "seasonal adjustments" - like teachers going back to school, etc. - there was really a very worrisome increase of 630,000 jobs. But don't get too bothered by that. When the government called homes directly, it came up with a gain of 139,000 jobs. Wait another minute. That figure - when adjusted for the same season as the number above - deteriorated to a loss of 709,000 jobs. Down 8,000 or up 630,000? Up 139,000 or down 709,000? The only thing clear about Friday is that the Fed isn't going to be happy with the way Wall Street is behaving, no matter what numbers it's looking at. nypostonline.com;

To: Alex who wrote (42657)	10/11/1999 12:45:00 PM
From: Tunica Albuginea	Respond to of 116764

Alex.:Contrary Investor:" Is Gold An Upside-Down Mirror?.. " contraryinvestor.com Market Observations - 10/7 Is Gold An Upside-Down Mirror?...One of the truly amazing things about human nature is that perceptions can change so quickly. Sometimes it's a comment from a trusted friend. Sometimes it's the uncovering of some significant piece of new information. Sometimes it's the actions of a crowd that influence individual behavior, attitude and perception. After 20 years of a bear market in gold, perceptions are changing very quickly. All of a sudden, the market is pricing in structural imbalances that have been quite apparent for some time. The selling by Central Banks as an artificial price depressant. The short position being massive. Mining companies that are now caught on the wrong end of forward sales contracts that have been standard industry practice for years. This is not the recognition of new facts. The fact is, it's the recognition being impounded in price that is new. The reasons were there all along, it's just that now they have become perceptually important. Two weeks ago, gold was a loser asset. Gold always goes down. Anyone who's smart sold gold a long time ago. Gold has no use in a new era global economy. Gold as an inflation hedge is dead. . . .As you know, the price of bullion has "changed" by 28% in about two trading weeks. A "crash to the upside". A perceptual crash? Will the stock market become an upside-down mirror for the recent action in gold at some point? That's our bet. 20 years of the continually reinforced message that stocks go up, there's nowhere else to put your money, be in it for the long term, ...you know the rest. One day the perception will change. It will probably come out of the blue. Perceptual change will refocus investors on a different set of facts. They may not be new facts. The facts may have been there all along. The fact that they will all of a sudden become important and influence prices is what will be new . The one constant in the financial market and as a characterization of human nature is that change is endemic to the beast. Are you ready for the next perceptual crash? It may be just around the corner. A spike in the lease rates for gold was a tip off to the perceptual change to come. Is the spike in "lease rates for credit" the tip off for the financial markets? All "Bias" and No Sells...The ECB and the Bank of England interest rate decisions handed down today were no-go verdicts. We mentioned this possibility on Tuesday. Interest rates were left unchanged across the board. It appeared that rate increases were in the works a few weeks back based on some pretty stern statements coming out of the ECB. Following in Greenspan's footsteps, Wim Duisenberg did say that there's a bias among the ECB committee towards raising rates. As you know, all of the tough talk was before gold blasted off. We speculated on Tuesday that if we saw an interest rate pass across the board in Euroland, it may portend behind the scenes trouble in global leverage land. As you may know, Ashanti Goldfields has dropped from $ 9 3/8 to under $4 in a matter of days due to the negative effects of having sold gold forward as part of their hedging program. Once again, derivatives rear their ugly head as asset prices change direction significantly. Crazily enough, investors(?) had bid up Ashanti with the pop in bullion without ever thinking through Ashanti's in place hedges. As opposed to reducing risk, the hedges acted to dent the financial condition of the company. Extend this thinking from little Ashanti to the global hedge community. Could it be that Greenspan, the BOE and the ECB aren't telling us something? You bet it could. Quite unfortunately, the ramifications of a potential problem would mean that the global central banks will keep providing liquidity to the markets ( in their own special ways). As you know, this funny money can always find its way into you know where - the equity markets. Be prepared for anything. Again, we look for trouble in November and December as the surprise to the masses. In the spirit of full disclosure, we're looking to be long a few November index puts in the near future. We've sworn them off for over a year, but just can't help ourselves now. Time to add a few more logs to our cumulative loss carry forward fire. More Blabbing...You may have caught Ms. Cohen on CNBC this morning. "The market is 5% undervalued. The volatility in the equity markets is normal." You know the rest. The fact is that the volatility in the financial markets is not normal. Steve Leuthold did a recent study showing current volatility at the highest level in 25 years. Obviously, Blabby is not a Leuthold subscriber. Other highlights on the boob-tube this week were Tommy G. from DLJ adamantly proclaiming that the Dow will increase 20% in the next six months. Also perma-bull Joe B. predicting 12,000 on the Dow by year end. Botta-boom, botta-bing, botta-paglia - 12,000, here we come. Earnings, Earnings, Earnings...Yahoo-ey. Here we go again. It's Internet time. "They" are starting to ramp the Internet's again given the increasing signs of nuclear winter for the mainline technology group. Hat's off to Dan Niles for speaking up on IBM today. Unfortunately for Dan, big Lou just took down an additional $10 billion in new IBM shareholder debt. Just what do you think he has planned for that money? That's right, stock buybacks. What gave it away? Will the Street finally begin to focus on quality of earnings? Since the real tech stocks are showing signs of strain, it's time to move on to the group that has no real earnings. Remember, eyeballs can't disappoint, only earnings can. One analyst was quoted on Yahoo as saying "Anybody who says that Internet companies don't make money obviously hasn't looked at Yahoo". That's right, they do make money. At today's close they are priced at 543x's this year's real earnings. Yahoo!!! Yahoo credited the magnificent performance to luring users with digital music, electronic greeting cards, and said it now plans to charge its online merchants who pay "rent" each month (7000 strong) commissions on retail sales. Has Yahoo stolen Amazon's business plan? Do these companies know what they want to be when they grow up? Unfortunately for Amazon, it's a moot question as this company is destined to never live past childhood. What is so amazing to us is that most people "just don't get it". Yahoo is basically living off of advertising revenues supplied to them by net startups with big advertising budgets. Most of these startups are not profitable to begin with. The unprofitable startups are burning VC money in attempts to "build the brand". When the VC spigot is eventually turned off, the advertising revenues at companies like Yahoo are going to simply dry up. We know the Yahoo execs understand this. It's why they are desperately trying to build other revenue streams such as renting retail space, charging for premium services, initiating bill paying services for a fee, recruiting for employers, etc. Good luck guys. Every other big net company is doing the same thing. What ever happened to focus? For probably 90% of the public Internet companies, the hoof beats of the black horsemen grow louder and louder each day. contraryinvestor.com TA