(GATA News) Warning, David Tice at Le Metropole Cafe (aka Economic Armageddon)
Subj: David Tice: Never Before - Day 36 / Some thoughts
Date: 12/18/99 11:04:26 AM EST
From: LePatron@LeMetropoleCafe.com
To: dougak
Le Metropole members,
David Tice has served commentary at the Hemingway Table.
"And look at derivatives...
Greenspan long ago joined Wall Street as a proponent of derivatives
as instruments for reducing risk. As a result, never before have there
been 40 million of open stock option contracts at the Chicago Board
Options Exchange, having almost doubled in 4 months. Certainly, this
explosion of option positions is related to speculating and not risk
management. Never before have there been $100 trillion in outstanding
derivative positions. Never before have US banking system portfolios
had $28 trillion of interest rate derivatives, having almost doubled
in two years. Never before has the largest US bank with total assets
of $380 billion and shareholder's equity of $23 billion had almost
$13 trillion of derivative positions..."
Another on the money piece by David Tice. I would like to add that
NEVER BEFORE have I felt such emotionalism about the markets.
The "bubble gold camp" emotion's have been strained to the limit
and agitation is in the air everywhere. The "I cant take it any
more feeling" is all over the place.
That is understandable. Here we are at an emotional time of the year,
at the end of the year, the end of the decade, the end of a century.
Headlines pronounce Nasdaq record after record.
IPO fortunes are made daily.
Meanwhile, back at the ranch, Goldman Sachs and the U.S Fed hold gold
in a tight range like vice. The gold shares trade like they are trapped
in a glacier.
It is the most normal feeling in the world to be FED up.
But, this bubble will burst and unfortunately it is going to be something
like this country has never seen. Gold IS GOING TO BE THE "GO TO" INVESTMENT
when that happens. Many celebrated Internet stocks will go from the penthouse
to the outhouse.
Time to start enjoying the Christmas and holiday season.
Bill Murphy Chairman, Gold Anti Trust Action (GATA) gata.org
WHAT! Is this guy Bill Murphy of GATA serious ???
Ya, start enjoying and do not be influenced by those thoughts that the end
of economic life, the means to engage in it thru an exchange of something
of value like paper money for goods and services, will be disrupted as folks
learn that those sheets of paper and ink that represent money and share
holdings in some internet focused companies become worth a penny on a dollar.
ok, so what can be done here ? Do we accept the above as loud voices from
a New York City street corner and rename Mr. Murphy as Mr. Murky and do like
a child does with a Mr. Potato and make a Mr. Murky Potato Head, or might we
create a talking Bubble Head that speaks babble and have it sound like the
voice of Mr. Murphy.
So many options, so little time.
To be or not to be.
To believe or not to believe.
The truth is out there.
On the Cafe's pay per view site.
All thats needed is one to cough up $99 and GatAbout on over.
But who to go, to know ?
Hutch knows derivatives, and knows GATA is out to lunch.
Sounds good, lets get Hutch $99 so he can save us from a worry.
Hutch will go to the Cafe and pop David Tice of The Prudent Bear Fund.
Piece of cake for Hutch. Easy as pie with ice cream & whip cream on top.
ok Hutch, ready "to go where no ......" ?
Here is the path, and so that you can know what to expect....bits & pieces.
Bill Murphy, Le Patron, Le Metropole Cafe lemetropolecafe.com
The Hemingway Table, Discussion du Jour: US Financial Markets
David Tice
The Prudent Bear Fund
ticed@prodigy.net
December 17, 1999
Never Before - Day 36
The historic speculative meltup.....
Not atypical at the late stages of.....
In past commentaries we have discussed how this period has.....
... growing financial and economic distortions made collapse unavoidable.
During the boom, so-called miracle economies were saturated with
hot money, and this hot money fueled what were seemingly endless
exceptional business profits and strong investment returns.....
It has been said, a culture of optimism is a culture of denial.
With this in mind, here at home there was absolutely no recognition
that the proliferation of derivatives and egregious speculation
played key roles in the Mexican and SE Asian booms and busts the blame,
instead, was to be pointed firmly at crony capitalism, and certainly
not hedge fund speculation, Wall Street derivative desks or the global
financial architecture. Even warnings from George Soros were ignored.
In short, it was complete and absolute denial.
So, here we are today..... Today, it is our stock market that is
the epicenter of an historic speculative run fueled by derivative
leverage, rampant financial credit creation and other hot money flows,
not to mention unprecedented public debt growth and stock market
participation. Yet, there is outright denial that anything is amiss,
denial that the current environment is anything but reasonable,
justifiable and sustainable. Things that in the past would have had
thoughtful economists in a rage are today either ignored or explained
away as unmistakably bullish. Wild excesses are not only ignored,
they are condoned.
Take our country's trade position that is deteriorating exponentially.
..... is somehow explained as a bullish outcome created by insatiable
foreigner demand for US investment. Yea, right.
And look at derivatives...
For households, mortgage debt has increased by more than ... in just the
past two years. Total mortgage debt has increased by almost ... trillion.
And if households are running to borrow, corporations are sprinting.
Total corporate debt has increased almost ... billion, or ... during
the past two years. And throughout the over-zealous financial sector,
the greatest credit expansion in history. During the past .. months,
the financial sector has increased borrowings by .. trillion, or more
than ... Yet this patently excessive credit growth is disregarded.
Instead of sound analysis, the current fad is to hype the new era
and celebrate new paradigms.
... with the credit system unrelentingly out of control,
egregious speculation and endemic credit excesses combine
to covertly malign the real economy.....
Never before has an economy so gutted its productive capacity while,
at the same time, accumulating a mountain of foreign debts. Never before
has the structure of the US economy been more dependent on imports to
support its standard of living, while at the same time less capable of
producing tradable goods. Never before has it been so apparent that the
present course is unsustainable, while, ironically, never before have
so many been so convinced that the financial and economic booms will last
forever. This is as tragic as it is unbelievable. So many lessons were
not learned; so many warnings blindly ignored.
David Tice |
