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To: orkrious who wrote (254586)	8/7/2003 12:55:14 PM
From: mishedlo	Read Replies (1) \| Respond to of 436258

Back in March - I thought July was a long was off as well. M

To: orkrious who wrote (254586)	8/7/2003 2:08:54 PM
From: ild	Read Replies (1) \| Respond to of 436258

Date: Thu Aug 07 2003 11:00 trotsky (corporate America vs. government statistics) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved we have recently been subjected to a load of cheery economic statistics...the mainstream economists are once again of one mind ( always beware of their consensus...their record is far worse than that of e.g. stock market investment advisors, and that's really saying something ) ,namely they all insist that a strong recovery is at hand. in light of this it's actually no wonder that the stock market struggles to make headway: the obvious question for investors is, if the economy is doing so great, why the hell have there been no significant profits to speak of? in fact, the only sectors of the economy which have seen the dough rolling in are the members of the 'free-lunch brigade'...the banks, mortgage lenders, REITS, etc. that have cashed in on the steepness of the yield curve and the 'Bernanke put' rally in bonds, as well as the state-dependent industries like HMOs and defense firms. of course, to do so, they had to assume risks that will only become apparent to the majority of market participants at a later stage. the old adage that there 'is no free lunch' still holds true, in spite of short term evidence to the contrary. a by-product of the finacial sector's 'free lunch' trades is a massive increase in systemic risk, as leverage has increased by astonishing proportions over the past three years ( a.k.a. 'the downturn' ) , accompanied by the by now almost 'normal' explosion in derivatives notionals growth. so a huge mountain of additional financial claims has been created - but was there a commensurate increase in the economy's potential to produce profits? not if one looks at the one sector that REALLY counts in this department, manufacturing. don't be deceived by the manner in which GDP stats are compiled - they vastly understate the importance of manufacturing to the economy. manufacturing is the heart of the economy, the sector with actually the biggest influence on wealth creation ( or the lack thereof ) . and it has basically dumpster-dived for three years running, while the financial wizards have piled debt upon debt. recovery? don't make me laugh...we can count ourselves lucky that we have escaped a total collapse so far.