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To: stockman_scott who wrote (4230)	8/9/2002 10:26:38 AM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

AbbyJoCohen track record in 2002, an annotated chart stockcharts.com[w,a]daclyyay[d20020101,20020808][p][vc60][iub14][J4665851,Y]&pref=G taken from Drilling thread AbbyJo is consistent, if nothing else / jim

To: stockman_scott who wrote (4230)	8/9/2002 10:34:00 AM
From: Jim Willie CB	Respond to of 89467

Puplava: Thursday, August 8, 2002 Market WrapUp Consumers Out of Steam Consumers seem to have finally run out of steam, or credit cards, as same store sales figures for the previous month have been weaker. Evidenced by, Best Buy Co., the largest U.S. electronics chain, lowering its earnings forecast for a second time today. For a company who has built its reputation on always having the product in stock, times like these are tough. After visiting one of the stores this week, it occurred to me that their shelves were very empty, at least as far Best Buy standards were concerned. The producer price index, released today, was 1.1% lower in the 12 months that ended in July, adding to the evidence of slowing consumer spending. This marks the third year-over-year decline on record and the largest drop in three decades of record keeping. It has been said for some time now by many economists that the current economy, while weak in the corporate profit sector, is being kept afloat by the consumer. Since this week has been full of hints of another rate cut from Greenspan and Company, confidence sure has picked the right time to wane. Should Greenspan and Co. lower rates next week or in the very near future, it may be just what the consumer needed to get back out there and increase the record amount of debt they already carry. Speaking of rate changes, while the big banks and brokerage houses are lobbying for a rate decrease, there seems to be plenty of economists who are against a rate change. The Fed has to be one of those. Remember it was only six weeks ago when the Fed last met, and at that time they were referring to positive economic growth and considered a rate hike. For Greenspan & Co., to change so abruptly could be a sign of confusion and will not be taken lightly by foreign investors. Financial Markets Banks including Citigroup and JP Morgan Chase & Co. led an advance as the IMF agreed to lend Brazil $30 billion, putting off the concern of default for a little while. With U.S. banks holding $32 billion of Brazilian debt, the loan goes a long way to reducing fears of another crisis in South America. However, as in the case of Argentina, it may simply be just a matter of time before Brazil defaults. The S&P 500 gained 28.69, or 3.3% to 905.46. The Dow added 255.87, or 3% to 8712.02. The Nasdaq Composite Index rose 35.62, or 2.8% to 1316.52. In the past three days, the S&P 500 jumped 8.5% and the Dow added 8.3%. For both, it was the most over that time period since the recovery from the October 1987 crash. Volume was 1.64 billion on the NYSE and at 1.56 billion on the Nasdaq Stock Market. Market breadth was positive, with advancers outpacing decliners by 22 to 10 on the NYSE and by 20 to 13 on the Nasdaq. Overseas Market European stocks rose after Brazil got a $30 billion loan to help it avert a debt default, boosting companies such as Santander Central Hispano with business there. BASF, Aegon and Reed Elsevier Group gained after reporting better-than-forecast profits. The Dow Jones Stoxx 50 Index rose 4.9% to close at 2734.50. The index has rallied 12% since falling to a five-year low on July 24, narrowing its loss this year to 26%. Japanese stocks fell, led by Tokyo Electron Ltd. and Advantest Corp., after some investors bet demand in the semiconductor industry will slow and a government report showed that machinery orders will drop this quarter. The Nikkei slid 0.4% to 9799.57, while the Topix shed 0.2% to 959.98. The Nikkei surged 3.5% yesterday, its biggest gain since June 28, after Cisco Systems Inc. reported higher-than-expected earnings. Treasury Market The 10-year Treasury note erased 3/32 to yield 4.39% while the 30-year government bond slipped 3/32 to yield 5.23%.

To: stockman_scott who wrote (4230)	8/9/2002 10:41:04 AM
From: Jim Willie CB	Respond to of 89467

Credit Bubble Bulletin, by Doug Noland from PrudentBear website prudentbear.com concluding paragraphs: There is no doubt that leveraged speculation has come to dominate the U.S. markets and Credit system, as it has also in the U.K. and likely increasingly throughout Europe and elsewhere. How much money has been borrowed cheap in Japan, Switzerland, or elsewhere to play spreads in the U.S. only time will tell. How much derivative “insurance” has been purchased (or planned to be acquired) to protect against a decline in the dollar is anyone’s guess, although it must be huge. How much derivative “insurance” has been purchased to protect against rising U.S. rates is similarly unknown, but clearly enormous. Who are the GSE counterparities and how will they protect themselves? Clearly, we are sitting on top of a massive pile of dry derivative tinder, with dynamic hedging strategies in both the interest rate and currencies markets an accident waiting to happen. There is also the issue of the 6,000 or so hedge funds, with myriad of “sophisticated” strategies and unknown leverage. Once one strategy fails, the risk of a domino collapse of forced liquidations is a distinct possibility. The leveraged Credit market players were bludgeoned this week. It also sure looked as if the “market neutral’ equity strategies – where speculators’ long equity positions are hedged with short positions and/or derivatives – ran amuck. And, yes, panic short covering does do wonders for the prices of many stocks and the market as a whole. However, such dynamics and this week’s dislocation should be a cause for serious concern and not celebration. In such an environment, today’s short covering can abruptly change to tomorrow’s panicked long liquidation. This week brought back memories of how technology and financial stocks (in particular) rallied strongly back in June and July of 1998, as the system was headed straight into what proved near financial collapse by late September/early August. We are the first to admit that after this week’s stock market dislocation, anything could happen in the short-term. And perhaps the dollar Bubble will be sustained over the coming weeks. But the bulls should not kid themselves. There’s one hell of a problem unfolding, a crisis that has been building for years. It should also be obvious that a stock market melt-up will only put further pressure on the Fed and the Credit market, a circumstance that has significant potential to develop into U.S. systemic liquidity crisis and potential dollar dislocation. / jim

To: stockman_scott who wrote (4230)	8/9/2002 10:54:11 AM
From: Jim Willie CB	Respond to of 89467

article: Don't count on the Fed (CNN) Everybody's hoping for an interest rate cut -- but Greenspan may be shooting blanks. August 8, 2002: 12:54 PM EDT By Justin Lahart, CNN/Money Staff Writer full article in link, with a couple graphs money.cnn.com NEW YORK (CNN/Money) - Expectations are building that the Federal Reserve will move to cut interest rates when the central bank's policy-makers meet on Aug. 13 or shortly thereafter. But the worry on Wall Street is that a wave of Alan Greenspan's wand would do nothing to stanch stocks' losses. While they would hardly even consider it a few weeks ago, many economists have come to think a Fed rate cut in coming months is a real possibility and some, like Goldman Sachs' Ed McKelvey, reckon it's a foregone conclusion. The sharp deterioration in stocks looks like it's fed through to the economy and the possibility that we might slip again into recession looks real. Businesses pulled back sharply in July, and a troubled corporate bond market has led to fears of a credit crunch. Yet even though stocks are supposed to rally when the Fed cuts rates, this time a rate cut could end up having the opposite effect. "There would be a little short covering rally, but I don't think it would last too long," said Todd Clark, managing director of listed trading at Wells Fargo. "People would worry that the Fed is seeing an economy that's dipping back into recession." Short-covering rallies occur when investors who have bet against the market by shorting stocks buy them back. The rallies can be sharp, but usually lack substance. Once the shorts have finished their knee-jerk buying, stocks go lower again. Gimme back my bullets The Fed, the nation's central bank, cut 11 times last year, bringing the target for its fed funds overnight bank lending rate from 6.5 percent to 1.75 percent -- the lowest level in 40 years. But while those cuts probably helped prompt this year's modest recovery in the economy, they did nothing for stocks. Since the day of the first cut, in January 2001, the S&P 500 has fallen 34 percent. There aren't many rate cuts left in the gun. If the Fed cuts again and stocks and corporate bonds (which are having problems, too) don't respond, the Fed would have wasted a precious bullet. Market participants are well aware of what's happened in Japan, where rates are effectively at zero, giving the Bank of Japan no easy way to fuel a flagging economy. Perversely, investors might see a lack of a positive market response to a rate cut as a sign the U.S. was one step closer to the Japan experience -- even though it is investors themselves who are responsible for stocks' movements. "Investor psychology is so fragile that there would be a what-does-the-Fed-see that-we-don't mentality," said Morgan Stanley fixed-income strategist Kevin Flanagan. "I don't think the market would benefit. The Fed would be best served by holding onto their ammunition to use if they have to." Talking Feds What's the Fed to do? To begin with, if it does move to cut, it would be best for the cut to catch markets at least somewhat by surprise. In recent speeches Fed officials have been downplaying the risks to the economy. Friday San Francisco Fed President Robert Parry said he wasn't "convinced at the present time that the economic expansion is seriously threatened." On Sunday St. Louis Fed President Poole called the odds of a double-dip recession "very, very low." Economic commentary from Kathleen Hays Not everyone is buying it. In astatement on Monday, the Internation Monetary Fund indicated that it will likely have to revise down its prior U.S. growth projections -- and a number of IMF directors said they saw "room for further easing" by the Fed if conditions worsen. And the market seems to be expecting a cut. In the futures market the odds of a quarter-point cut are being put at 76 percent. One-year Treasuries yield around 1.50 percent -- another bet on a cut. "A quarter point move is already built in to the market," said Miller Tabak bond strategist Tony Crescenzi. "It wouldn't have any impact." If the Fed really wants to shore things up, then, it's going to have to cut rates by even more than investors expect. And use up more of the precious cartridges it's still got in its chamber. -end-