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Hitting Market Highs - May 14,
2003
It looks like the
markets are making their highs on the year right now - if the continue largely
down in the next ten months the next bottom on S&P 500 looks like it is in
the range of 690-735 by this time next year and we will be in a brutal secular
bear market for years. Unless there are massive tax cuts or "interest free"
loans it is unclear how the US consumers can continue to buy cheap Chinese
products. This could mean doing something with SS accounts to US markets with
another massive scam (possible in 2007-2009 timeframe) but what do we do until
then with unemployment rising. The ship appears to be taking on too much water
too fast - cannot get enough headway. This consumer debt needs to be deflated
away with massive coming dollar devaluations - I cannot see any other trick/scam
left to play - they are almost out of trump cards I think. This will leave the
Chinese Yuan in a hugely undervalued level at which time they will pull the
trigger on the US economy and switch to China as the next Millenium play and
US will be left to drive hydrogen cars and live off declining
service/entertainment industry.
$128 Trillion Reasons
11/22/02
$128 Trillion Derivatives trading
outside exchanges grew 15 percent to a record $128 trillion in the first half of
the year, driven by contracts pegged to interest rates, the Bank for
International Settlements said earlier this month. The market is more than four
times global gross domestic product as measured by the World Bank. The
development of derivatives such as securitized bank loans, credit card
receivables, and secondary mortgage markets is helping build a ``far more
flexible, efficient, and resilient financial system than existed just a
quarter-century ago,'' Greenspan said. For that reason, governments must be
careful to ensure they don't stifle risk-taking in regulating derivatives. ``We
have the responsibility to prevent major financial market disruption through
development and enforcement of prudent regulatory standards,'' Greenspan said.
``But we also have the responsibility to ensure that the regulatory framework
permits private-sector institutions to take prudent and appropriate risks, even
though such risks will sometimes result in unanticipated bank losses or even
bank failures,'' Greenspan said.
Comment:The market is more than four times global gross domestic product as measured by the World Bank!! This happens when fiat money will hyper-inflate; in fact it already has because borrowing future interest rates only postpones the collapse and makes the amplitude higher of coming financial tsunami. This is one way to collapse the world financial markets.
Regarding the Boom and Bust of the
NASDAQ
note: this particular article was *not*
written by Dr Stephen Rinehart
it was gleaned off the internet and the URL was unfortunately lost
(11/19/02) Anyone who looked closely enough at the
Nasdaq's own data could see the rot accumulating. In 1996 the National
Association of Securities Dealers "delisted" (in effect, kicked off the market)
200 companies, mostly because their stocks had fallen so low they no longer met
the market's minimal listing requirements.
This was a relatively small portion of the Nasdaq's
total listings -- just 3.5 percent. But soon the numbers started piling up. In
1997 the delistings reached 250 stocks. In 1998 they hit 596, then 440 in 1999
and 630 more over the next two years. All told, from 1996 to 2001, NASD delisted
2,116 stocks.
This number surprised even Alfred R. Berkeley III,
the Nasdaq's vice chairman and the highest-ranking official to stay with the
market throughout its boom-and-bust years. "It wasn't that high," he said. But
shown NASD's own figures, he reconsidered. The furious turnover on the Nasdaq,
he said, reflected "Darwinian competition."
Why were so many marginal companies listed on the
Nasdaq in the first place? The short answer is twofold: because it was
profitable, and because the Nasdaq made it easy for them to be
there.
The Magnificent Seven !!