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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Terry Maloney who wrote (298367)	11/23/2004 10:24:16 PM
From: Earlie	Read Replies (6) \| Respond to of 436258

Earlie from Earlie: A bunch of PMs asking "why bearish?" Here's some of the meteorology..... that looks almost "perfect stormish" to me. As I noted earlier, all this past year, it looked to me like a normal bear market rally was in process, so worked the gold stocks and a couple of juniors. Now, "things are different". Inventories have exploded (for 3 quarters) and consumers are holding much less cash (no "refi", no tax cheques), I think this Christmas will not see consequential increases in consumer buying and in fact may witness a considerable retrenchment in consumer purchasing. Go "long" tarp manufacturers this winter. US government bond auctions have recently been ignored by foreign investors and foreign central banks are starting to sell off their massive US-denominated "reserves" (this could become a real disaster for the US, which requires more than $2.0 billion per day in net positive foreign cash flow to survive). The real estate bubble is past its peak. Credit card companies are in deep poop and Fanny and Freddie, the planet's largest Ponzi mortgage scams, are under investigation. The dollar is in free fall even as the trade deficit keeps on growing and growing and growing and ..... Energy (especially Oil) costs have exploded. This equates with a large, direct increase in operating costs for virtually all economic sectors. Of course, we have no inflation. (ha!) Insider selling has been "north of historic" now for two full years (averaging 54-to-one selling to buying.... almost unimaginable). Maybe they know something most investors don't? Margin debt has returned to mania levels even while most mutual funds are carrying historic low cash levels. Not often that one sees Joe Two-Pack buried in stock even as the fund managers are similarly exposed (so who buys now?, one might ask) Earnings were disappointing in Q3 (even in "pro-forma" clothing) and the warnings for Q4 were disproportionately large. Business purchases continue to sag. Job growth has been non-visible and lay-offs continue unabated. Iraq is a massive economic drag and saps the US spirit. It is a war that the US can simply not afford, yet it appears that it will be very difficult to exit stage right. In the past, most countries that allowed their military expenditures to grow out of proportion to their GDP went bust. The US military-to-GDP cost is off the graph and the US may be forced to "down-scale" its military activities on a simple economic affordability basis,.... especially if foreigners lose their enthusiasm for US debt paper. Many industries (auto, household furnishings etc.) are now saturated as a result of the constant "pulling" of future sales (via incentives and cash-backs) into the present. Most tech industries are now fully commoditized and faced with saturated global end markets,.... which accounts for their falling revenues and miserable real profits. Then of course these companies will soon have to come to terms with their past and current bloated "options" problems.... which does not bode well for analysts' current insane profit forecasts for 2005. Many corporate and government pension accounts are "offside" (in some cases, they are actually bankrupt in all but name). Reported profits are "pure baloney" where the company pension fund is in distress. Sooner or later, investors will see through this sleight-of-hand. US debt levels are off the end of any graph you want to create (pick any economic sector and weep). How does one say "unsustainable"? NY analysts are telling folks not to worry about the huge inventory build-up as "they will be sold in the coming exuberant Christmas period". NOT! US citizens are worried, have little free cash, are deeply indebted and are starting to actually save. Christmas sales will be disappointing and the after-Christmas inventories should sober up the current semi-drunken market. Of course, offsetting all of the above bearish observations, we have........... ????????? (g) Bears R Us Best, Earlie