Hi Pezz, The real world news flow remains horrid and seeming to, impossibly, get worse with each passing cyber trading session.
Is tonight the night to buy some shares that will hopefully blossom into an expensive Christmas present by, er, Christmas time 2002? What will it be? Should I buy CD, GE, and/or MO, directly, or via the shorting of Puts?
I just received my September issue of The Gloom, Boom & Doom Report from Dr. Marc Faber. Precious, life saving, and a good read as well.
According to the Doctor, bubbles beget bubbles. The new home sales bubble, itself an outgrowth of the equity bubble, amount to one million units annually, and at the average price of little less than USD 200k per unit, and if at 100% financing, would require mortgage debt expansion of USD 200 billion. Actual mortgage debt grew at USD 600 billion, and the difference of USD 400 billion ended up in the other bubble – consumer spending, and particularly for autos. The auto industry is on track to sell 17 million vehicles for the year, the fourth year in a role at such sales level. Annual auto sales before the 1990s averaged 14.6 million units. Auto ownership for driving age population has risen from 90% to 99.8% in the past 10 years, and “Americans could buy somewhere between 30% and as much as 50% fewer vehicles per year for four or five years and still very adequately meet their transportation needs”. In the mean nasty time, both GM and Ford are below their 1990 highs, and GM has unfounded pension/health care liabilities of USD 61 billion. All this, and the economy is not even in recession yet.
The rest of the report discusses the ‘giving back of 6 to 12 years of bubbly gains’, ‘Dow at 2,500, Nasdaq at 350, SUNW at USD 0.5, CSCO at USD 0.08, NOK at USD 0.15, ORCL at USD 0.12, AOL at USD 0.05 (1990 prices)’. The good Doctor is not suggesting that these shares will reach those prices, but he is saying there still exists considerable downside risk.
Enough said, and with that I wait for another day to buy my Christmas present generator, because I want to preserve wealth as related to you 13 months ago (yes, we are still on this aging script):
Message 16227919
“my fantastic vision of wealth … idly meandering amongst coconut palms, fringing a blue lagoon, dotted with thatch-roofed huts cooled by antique electric fans, summer all year round, connected by broadband and satellite com, and simply complemented with oodles and boodles of Caterina, Jade, Veronique, Ursula, Jasmine, Etsuko, Suzie, India, all frolicking in an ambient temperature and gently surfing water, swaying to the undulating beat of "do that to me again and again", with Gretchen and Gloria back at the open-air kitchen preparing sandwiches and mixed drinks, and Alexus carefully filtering home-made beer through an ice filter held up by Kiki, standing next to Kimiko, searing some Kobe beef on the grill.
Did I leave anything or anyone out by inattention to detail?
What do you think? Oops, that’s right, I forgot, you like the enterprise of busily treading QCOM New Economy scripts.
Grace believes real wealth is busy money, wildly flopping in the equity sea, not for a moment considering the possibility that true wealth is instead idle comfortable self-indulgent lazy unkempt piggish heft, soaking in a protected primordial lagoon, surrounded by beauty and adored by youth, rapping with buddies of equivalent disposition and complementary temperament.
As such, any one aiming for true wealth must act to panic, panic first, run fastest, jumping over others, before the already licking flame engulfs all within the Temple of Greenspan.”
Even though some in this den, like ACF Mike as of April, was still not tuned in to the rhythmic frequency of global debt-ly collapse:
Message 17310144
“You're starting to sound like the other debt wackos, DJ.
… It's two years now since the Nasdaq crash and there has been no significant economic impact. Personal bankruptcies and consumer loan charge-offs are within the normal range.”
Well, we are about to move beyond the comfort range, at least by popular media reports:
usatoday.com
kansascity.com
Chugs, Jay |
