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To: Knighty Tin who wrote (224788)3/2/2003 11:27:49 AM
From: stockman_scott  Read Replies (1) | Respond to of 436258
 
yup...Ari is just a talking head...IMO, he has about as much credibility as Jim Cramer...;-)



To: Knighty Tin who wrote (224788)3/2/2003 4:48:56 PM
From: Secret_Agent_Man  Read Replies (4) | Respond to of 436258
 
Top manager predicts a depression
Three years ago, when Michael O'Higgins was entirely out of stocks and into zero-coupon Treasury bonds, when he was predicting that stocks would lose half their worth, I didn't believe him.
If you listen to O'Higgins now, you won't want to believe him
either: he's predicting another depression.
However, I think you should pay close attention, because it's possible he's on target. Again.
O'Higgins, for whom the term contrarian is much too mild, has a record of being right when most of us are headed in the wrong direction. And a record of making money while we're losing it.
Since our last conversation in March of 2000, zero-coupon treasuries are up 43.5 percent. The S&P 500 Index is down 41 percent. He said long-term Treasury bond yields would drop from 6.15 percent then to 4.6 percent. They are now paying about 4.7 percent.
O'Higgins manages $200 million at his boutique investment firm in Miami Beach that caters to clients with assets of at least $1 million. He's been a top money manager for more than 20 years and has written best-selling investment books, Beating the Dow and Beating the Dow with Bonds. He's best known for his Dogs of the Dow theory, which worked well for quite a while when the market was still going up.
Today, O'Higgins won't touch a Dow stock or almost any other stock at current prices.
Because he is looking for a depression to begin soon or to be already in progress. ''Perhaps the greatest deflation and depression of all time,'' he says, ``Following the greatest speculative boom [in stocks] of all time.''
It'll begin as the Baby Boomers wake up and realize that the stock market's downturn over the last three years has wiped out almost half of their nest eggs.
''When you say it can't be like 1929 through 1931 [when stocks lost 89 percent of their value], ``you're right. It could be worse,'' he says.
Boomers and consumers will begin to save more money when they realize that the bull market is firmly over. Stock gains in the future will not bail out an investor if he has put too little money away.
People today have higher levels of debt -- for consumers, government and corporations as a percent of Gross Domestic Product -- now than at any time since 1929, he notes.
The depression will not end until that debt is liquidated, he says.
ECONOMIC COLLAPSE
When consumers decide to save more, they'll stop spending. And the economy's main support will collapse.

After that, you can wait and watch for the Dow Jones Industrial Average, currently just under 7,900, to sink by another 24 percent to 6,000. And that's his best-case scenario.

It could go as low as 3,100, if the stock market goes back to its normal range throughout the last century for the dividend yield, which is the figure you get if you divide a stock's dividend by its price.

Right now, O'Higgins is only interested in gold, which he sees as undervalued and heading up because of deflation. ''Because it's real money, because it has held its value for thousands of years, because it's not subject to the manipulations of government or central banks or dishonest corporate executives,'' he says.

What's more, gold goes up when stocks go down. In 1929-1932, he notes that gold rose 69 percent. And indeed, in the last 12 months, it is up 20 percent. Yet its price is still far below what it traded for in 1980: $850, or roughly 2 ½ times higher than today's roughly $350 an ounce. Global supplies of gold, too, are dwindling.

miami.com



To: Knighty Tin who wrote (224788)3/2/2003 6:58:49 PM
From: stockman_scott  Read Replies (3) | Respond to of 436258
 
The latest from Maureen Dowd...

Bush Ex Machina
By MAUREEN DOWD
OP-ED COLUMNIST
The New York Times
March 2, 2003

WASHINGTON — George W. Bush has often talked wickedly about his days as the black sheep of a blue-blooded, mahogany-paneled family. But the younger rebellion pales before the adult revolt, now sparking epochal changes.

The president is about to upend the internationalist order nurtured by his father and grandfather, replacing the Bush code of noblesse oblige with one of force majeure.

Bush 41, a doting dad, would never disagree with his son in public, but in a speech at Tufts last week, he defended his decision to leave Saddam Hussein in power after Desert Storm.

"If we had tried to go in there and created more instability in Iraq, I think it would have been very bad for the neighborhood," he told the crowd of 4,800. (Was he referring to Baghdad or Kennebunkport?)

He conceded that getting a coalition together is harder now, because the evidence about Saddam's weapons of mass destruction is "a little fuzzier" than was his evident invasion of Kuwait. But 41 still thinks coalitions work: "The more pressure there is, the more chance this matter will be resolved in a peaceful manner." (Maybe he should enter the Democratic primary.)

At the very same moment the father was pushing peace, the son was treating the war as a fait accompli. At the American Enterprise Institute, he finally coughed up the real reason for war: trickle-down democracy.

Unable to handcuff Osama and Saddam, he soft-pedaled his previous cry for a war of retribution for 9/11. Now he was being more forthright, calling for a war of re-engineering.

"A new regime in Iraq would serve as a dramatic and inspiring example of freedom for other nations in the region," he said, adding: "Success in Iraq could also begin a new stage for Middle Eastern peace, and set in motion progress towards a truly democratic Palestinian state."

Conservatives began drawing up steroid-fueled plans to reorder the world a decade ago, imperial blueprints fantastical enough to make "Star Wars" look achievable.

In 1992, Dick Cheney, the defense secretary for Bush 41, and his aides, Paul Wolfowitz and Scooter Libby, drafted a document asserting that America should prepare to cast off formal alliances and throw its military weight around to prevent the rise of any "potential future global competitor" and to preclude the spread of nuclear weapons.

The solipsistic grandiosity of the plan was offputting to 41, who loved nothing better than chatting up the other members of the global club. To Poppy and Colin Powell, this looked like voodoo foreign policy, and they splashed cold water on it.

In 1996, Richard Perle, now a Pentagon adviser, and Douglas Feith, now a Rumsfeld aide, helped write a report about how Israel could transcend the problems with the Palestinians by changing the "balance of power" in the Middle East, and by replacing Saddam.

The hawks saw their big chance after 9/11, but they feared that it would be hard to sell a eschatological scheme to stomp out Islamic terrorism by recreating the Arab world. So they found Saddam guilty of a crime he could commit later: helping Osama unleash hell on us.

Mr. Bush is his father's son in his "trust us, we know best" attitude.

After obscuring the real reasons for war, the Bushies are now obscuring the Pentagon's assessments of the cost of war ($60 billion to $200 billion?), the size of the occupation force (100,000 to 400,000?) and the length of time American troops will stay in Iraq (2 to 10 years?).

A Delphic Mr. Wolfowitz tried to blow off House Democrats who pressed him on these issues: "We will stay as long as necessary and leave as soon as possible."

Rahm Emanuel, a congressman from Chicago, chided Mr. Wolfowitz, saying, "In the very week that we negotiated with Turkey, the administration also told the governors there wasn't any more money for education and health care."

The president's humongously expensive tax cuts leave less for all programs except the military.

Asked if we should give up the tax cut to underwrite the war, the president demurred, replying, "Americans are paying the bill."

Nobody knows if the Bush team's hubristic vision for redrawing the Middle East map will end up tamping down terrorism or inflaming it.

Either way, deus ex machina doesn't come cheap.

nytimes.com