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- Morality Of Gold - Interview With GATA
Secretary Treasurer Chris Powell
- Congressman Ron Paul Electrifies The
US Congress: Paper Money and Tyranny
- Congressman Ron Paul Introduces Bill
To Refrom Monetrary System
- The Ark Of Freedom - Crash Must Come
First
- Double Bubble
Of Fed's Own Making
By
Melvyn Krauss- Published: July 7 2003 20:18 | FINANCIAL TIMES
In pulling the rug out from under global bond markets, Alan Greenspan,
chairman of the Federal Reserve, has done Wim Duisenberg, his
counterpart at the European Central Bank, a big favour. He has
undermined the popular myth that it is Mr Duisenberg and the
ECB that have problems communicating with markets - unlike the
Fed, which is a paragon of virtue and effectiveness when it comes
to getting its message across. But who could fairly criticise
the ECB now that the Fed has misled investors so badly and caused
financial carnage by cutting only a quarter of a percentage point
off interest rates at its June meeting - after sending numerous
signals to the markets that a half-point cut was in the offing?
Who could argue that the ECB has the monopoly on poor communications,
given the Fed's subsequent communiqué - a badly worded
and confusing text apparently intended to clarify and explain
the Fed's stance on the economy? This is not the first time Mr
Greenspan's credibility has come into question. To his critics
he is the "double bubble" man.
-
- First, Mr Greenspan egged on
the stock market to bubble proportions with incessant happy talk
about the alleged limitless capabilities of US productivity.That
story did not have a happy ending, as we all know. Then, in the
run-up to the June meeting of the Federal Open Market Committee,
Mr Greenspan, in numerous public addresses, inflated a bond market
bubble. He did so with talk of a so-called deflation problem
that might require the Fed to adopt non- conventional means of
monetary stimulation - in particular, buying bonds at the longer
end of the yield curve.Such talk caused an unusual drop in US
10-year yields, from 3.9 per cent to about 3.1 per cent in just
six weeks. Reverberations from Mr Greenspan's bond-friendly public
statements were also felt in Europe. The argument doing the rounds
in European financial circles was that by publicly encouraging
fear of deflation in the US, the Fed was exacerbating the deflation
problem in Germany by further building up German deflationary
expectations. Moreover, the US bond bubble was creating an unwanted
European bond bubble as well. Suffice it to say that the Fed's
credibility suffered a significant blow when, at the June FOMC
meeting, it opted to economise on its scarce supply of conventional
bullets rather than push the new frontiers of monetary policy.
There is nothing wrong with this, of course - perhaps a 25 basis
point cut was the right thing to do in the circumstances - but
why, one wonders, did the Fed chairman mislead so many people
in the marketplace to believe the opposite?
-
- The unpleasant truth is that
Mr Greenspan and his colleagues first created the bond bubble
with their radical rhetoric, then burst it with their conventional
actions. Of course, few will shed tears for the bond market speculators
who made the wrong Fed bet. But the extraordinary and unnecessary
volatility the Fed has imposed on financial markets and the US
dollar could have adverse consequences for the real economy.
Mortgage rates surely will jump and threaten another of Mr Greenspan's
bubbles: the housing market. Moreover, the Fed's loss of credibility
will undermine its ability to guide the economy through the storms
that are currently gathering. In particular, if deflation becomes
a real problem in the US, the Fed's capacity to engineer looser
financial conditions without cutting rates has diminished along
with its credibility. This is an important consideration when
ammunition is in such short supply. Some Europeans may take comfort
from the Fed's troubles but this is not a situation in which
bad news for the US is good news for Europe. The US economy must
recover in order for Europe to do so, and the Fed's loss of credibility
may well slow down the US recovery. Still, the frequent attacks
on the ECB and Mr Duisenberg in both the markets and the media
have often had as their implicit assumption the view that the
Fed would do it better. This was always unfair. But now we know
that it was untrue as well. Mr Greenspan is the "double
bubble" man - not Mr Duisenberg. The Fed's fall from grace
is valuable if only for putting the achievements - and shortcomings
- of the ECB and Mr Duisenberg into proper perspective.
- The writer is a senior fellow
at the Hoover Institution, Stanford University
- Bankers Fear
Deflation
CNNMONEY
June 30, 2003: 7:41 AM
- BASEL, Switzerland
(Reuters) - Organization of central bankers warns that deflation
risk threatens world economy.The Bank for International Settlements
(BIS) said Monday the world economy was stuck in "an uncomfortable
soft spot" with deflation and a weakening dollar new threats
to an already stuttering recovery. To ensure a long-term recovery,
Asia and Europe would have to start pulling their weight because
the United States had been a "disproportionately large source
of global demand growth" for almost a decade, said the organization
made up the world's leading central bankers. "To ensure
the sustainability of a truly global expansion, more needs to
be done to strengthen domestic demand growth in countries with
healthy external balances," the Basel-based BIS said in
its 73rd annual report. "In Asia, this implies allowing
currency appreciation and eschewing export-led strategies for
growth. In continental Europe...implementing the structural reforms
that will allow the industrial sector to respond flexibly to
a stronger euro." Pernicious deflation is a very real danger
for many of the world's largest economies and central banks and
governments should consider preparing policies now to tackle
it, said the group. Debt
levels are at record highs in many leading industrial nations,
inflation and official interest rates already are very low, economic
growth is weak and rigid labor markets make wage cuts unlikely
-- all pre-conditions for deflation to take hold, the report
warned. "The successful taming of inflation has increased
the possibility that most advanced industrial economies might
be one deep recession away from experiencing deflation,"
it said.
-
- Japan and China,
where falling prices are already a reality, would suffer even
more if their currencies rose against the dollar, but "disinflationary
forces were evident almost everywhere," the BIS said. "The
quarterly frequency of effective deflation has jumped significantly,"
it said. Deflation on its own was not necessarily a bad thing,
but combined with sharp asset price falls, strong resistance
to wage cuts, already low or non-existent interest rates and
a high level of indebtedness, it posed a challenge for policymakers.
"The difficulty at the present juncture is that many of
the prior conditions needed for deflation to become a problem
seem to be in place," it said. In its report, the BIS said
the first tactic should be to cut interest rates further and
faster than normal if growth slows when inflation already is
low. This the U.S. Federal Reserve has done, cutting official
rates five percentage points since early 2001. To bolster public
confidence, authorities also could institutionalize this pro-active
stance, BIS said. For instance, a central bank could adopt a
higher inflation target. Or it could adopt an inflation band
that sets the targeted inflation rate closer toward the lower
band, signaling it would ease if deflation risks mounted.
Once deflation takes
hold, the BIS said central banks can inject massive amounts of
money into markets by purchasing debt from banks to reflate the
economy. However, Japan's experience shows this may have little
impact if bad debt is weighing down the banking system. Working
closely with regulators is necessary. A more drastic step is
for a central bank to buy assets directly -- long-term government
bonds, corporate debt, equities, real estate and foreign exchange
-- creating market demand and lifting asset prices that in turn
could refloat the banking system. However, the central bank could
end up owning large swathes of the economy, raising public policy
questions that require discussions with governments.
Banks In
Danger If Bond Bubble Bursts
- By Jane Merriman - 16 Jun 2003 11:34
BST LONDON (Reuters) -
- The bond market boom that has
provided investment banks with revenue during the equity market
downturn may now have generated such a scramble for business
that banks risk becoming over-extended if the bubble bursts.
Bond trading revenues helped many banks produce estimate-beating
profits for the first quarter despite a prolonged drought in
lucrative mergers and new equity issues. Fixed income is set
to take centre stage again in the banks' second-quarter results,
which kick off in the United States this week when Morgan Stanley
MWD.N , Lehman Brothers LEH.N and Bear Stearns BSC.N are due
to report. Falling interest rates, companies' need to repair
debt-laden balance sheets and investors' preference for bonds
over volatile equities have created a hot-house climate for bonds,
which has already lasted far longer than many bankers had predicted.
"Last year people thought fixed income would slow down,
but it hasn't," said Derek Chambers, European banking analyst
at HSBC. "It can't continue at the same pace, so the big
question is can it stabilise or does it partially reverse?"
He calculated that fixed income trading revenues at the 10 leading
investment banks rose to a quarter of total revenues in the first
quarter of 2003, from just a fifth in 2002. At Lehman Brothers
LEH.N , fixed income trading accounted for more than half of
the firm's total revenues in the first quarter, according Chambers.
At Goldman Sachs GS.N , it represented more than 40 percent,
and at Deutsche Bank DBKGn.DE , Morgan Stanley, JP Morgan JPM.N
and UBS UBSZn.VX about 30 percent.
-
- DEBT SHAKE-OUT : The fixed income
feeding frenzy has prompted some bankers to draw parallels with
the equity market peak in 2000. "I think there will be a
shake-out on the debt side of the business because you are almost
getting a bubble building in the debt markets at the moment,"
said a senior executive at a major European banking group.
- "It is beginning to suck
in employment opportunities that are not sustainable over the
full business cycle."
- A hiring binge during the equity
market boom left many banks with bloated cost bases when the
stock markets turned down. Tens of thousands of jobs have been
axed as banks have hacked away at costs to keep pace with plummeting
revenues from M&A and equities operations. But others say
banks have exercised more restraint this time round and there
has not been a fixed income hiring spree. "It's not a bubble
in the sense that the industry has over-expanded, over-hired,
taken on too much risk," said John Winter, head of European
investment banking and debt capital markets at Barclays Capital
BARC.L , the debt-focused investment banking arm of the UK banking
group.
-
- BALANCE SHEET ADVICE The three-year
bear equity market has forced banks' corporate customers to shift
their focus too. Advice on mergers and acquisitions has taken
more of a back seat to advice on how to patch up finances for
firms that over-expanded or loaded up on debt during the bull
market. "The price for (M&A) advice has gone down and
the price for balance sheet (advice) has gone up," Winter
said. Top managers are focused more on their company's liquidity
risk, currency risk and risk management in general, he said.
For the banks, the key question now is whether M&A and equity
business will pick up in time to take up any slack if fixed income
cools down. "I find it hard to envisage the circumstances
in which fixed income will be stronger in the second half of
this year than in the first half of this year," said Chambers.
"The refinancing boom must have some limits."
- Bond Market
Fall Threatens Global Recovery
By
Jenny Wiggins in New York, Published: July 9 2003 20:33 | FINANCIAL
TIMES
The steep fall in global bond markets in recent weeks is threatening
to slow global economic recovery through higher mortgage and
corporate lending rates. US mortgage refinancing, which has been
a key support for the economy over the past year, has fallen
sharply following a rise in mortgage rates driven by higher bond
yields. Refinancing activity fell 21 per cent last week, the
Mortgage Bankers Association said on Thursday, the biggest weekly
decline since November.
- "We've definitely seen
a turn," said Jade Zelnik, chief economist at RBS Greenwich
Capital. "I think refinancings have peaked." Economists
said the downturn in refinancing was a potential headache for
the Federal Reserve, whose decision to cut rates by only a quarter-point
last month triggered the fall in bond prices and rise in yields.
"What the Fed doesn't want is a big sell-off in bonds that
would snuff out the early prospects of economic revival,"
said Sherry Cooper, chief economist at BMO Nesbitt Burns. In
Japan, the collapse in government bond prices has also pushed
up interest rates. Mizuho, Japan's largest bank, is expected
to announce on Thursday that it will increase its prime lending
rate from 1.25 per cent to 1.6 per cent. The Japanese finance
ministry said pn Wednesday it would increase the rate it charged
the Housing Loan Corporation, which dominates the mortgage market,
from 0.7 per cent to 1.3 per cent. The fall in US mortgage re-
financings follows a rise in average interest rates for 30-year
fixed-rate mortgages to 5.37 per cent, their highest levels since
May 2. Mortgage rates track government bond yields, which have
risen sharply after investors concluded the Federal Reserve had
finished cutting interest rates. As rates rise it becomes less
attractive for some homeowners to refinance their mortgages.
Refinancings hit a record $1,750bn last year, which helped push
total equity extracted by home owners to an unprecedented $700bn
in 2002, according to Fed estimates.In Japan, bankers warned
higher interest rates could hit consumer spending and business
investment. But John Alkire, chief investment officer at Morgan
Stanley, said higher rates could boost the economy. "Consumption
will rise because savvy individuals will stop hoarding money
and lock in ultra-low fixed rates before they rise for large-ticket
items such as mortgages and real estate."
US Task Force Economist: Japan
Must Fight Deflation First
Friday, 4 July 2003,
TOKYO -(Dow Jones)- Japan must put fighting deflation ahead of
structural reforms to return its economy to growth, according
to a member of a task force that will advise the U.S. government
on economic relations with Japan........ The United States, he
said, should encourage Japan to adopt policies that would efficiently
restore its economy to growth, since the world's economy is dependent
on a healthy Japan. But then he said, if "we can not
do anything to convince Japan to change its policies to restore
growth, we then have to prepare for what this means for the world
and for the U.S." ......
- AND
- UK Government Asks
BoE's Large To Look At Financial Disruption Laws
Thursday, 19 June 2003 - LONDON -(Dow Jones)- The U.K. government
has asked the Bank of England's Andrew Large to look into possible
changes in the law to deal with disruption to the financial system
in the event of a terrorist attack or a natural disaster. Large,
the central bank's deputy governor in charge of financial stability,
will head a taskforce to "examine the possible need for
legislative powers," the Treasury said in a statement Thursday.
The announcement follows consultation of a parliamentary green
paper published in February, in which the government considered
whether existing powers were adequate to cope with major disruption.....
Large said much has already been achieved in dealing with business
continuity in the event of major disruption, but added that "we
will need to consider carefully whether further powers are warranted
and what else could be done." ......
- AND
- The New, New Bubble
By Bambi Francisco, CBS.MarketWatch.com
June 10, 2003 - ...... Strikingly reminiscent of the company's
Aeron -- the high-priced office chair that became an icon of
the dot-com period -- the Mirra's arrival is one more sign that
we have entered a neo-bubble era. Lots of bubble-era behaviors
have re-emerged of late........ Look no further than the bubble
developing in the convertible bond market, where banks are offering
aggressive terms (like zero percent rates and dilution only at
high conversion rates) in record numbers to land clients. We're
fresh on the heels of Wall Street's $1.4 billion settlement to
reform the conflicts of interest between investment bankers and
analysts, but it appears that it's business as usual..... According
to Deutsche Bank, researchers and bankers are kept separate,
and Patel did not know about the upcoming bond sale. Granted,
many companies are issuing convertibles these days to improve
their cost of capital and take advantage of the bankers giving
away the shirts off their backs........... We have strict firewalls
between our research and capital market businesses, which were
followed, and research was unaware of any pending deals and banking
was unaware of any research activity," said Ted Meyer, spokesman
for Deutsch Bank. "The policies are in place and they worked
exactly as intended.".........
- Is The Bond Market
Crashing?
- July 17, 2003 -- New York Post By JOHN CRUDELE
You may not think you care, but you do.
- If the price of bonds continues
to go down, the already pathetically slow U.S. economy will weaken
some more, corporate profits will suffer, the stock market will
come under additional pressure and you'll pay higher rates on
loans, especially mortgages....... Here's what has been happening:
Interest rates on 30-year government bonds were 4.17 percent
on June 13, which you might remember was before the last Federal
Reserve rate "cut." Now? Yesterday that same bond is
yielding a whopping 4.90 percent. And the rate went up to nearly
5 percent at its worst point yesterday.
- Rates move in the opposite direction
of bond prices. So with the drop in bond prices, things like
mortgages have already gone higher and will get more expensive
in the weeks ahead.
-
- Why is this happening? This
is not normal economics. Borrowing costs aren't rising because
the economy is suddenly improving or because inflation is rearing
its ugly head. Yes, inflation is worse than the government is
letting on. But the bond market usually takes Washington at its
word on cost increases. This time, rates are rising because of
things like the federal deficit (now projected to be $455 billion
this year), the tax cut and the seeming helplessness of the Fed
to enact monetary policy. In short, buying bonds suddenly looks
like a bad bet if the United States is a driverless car headed
down a steep incline. This could be the big financial story of
'03. So pay attention!
- *
- Hercules stock is up 30 percent
since this column broke the news back in March that corporate
raider Sam Heyman was getting set for another run at board control.
Now the company has to figure out how to keep the stock price
up if management beats Heyman in a proxy contest next week. The
company's shares were under $8 back when I broke the story of
the proxy battle. Lately they've been selling for more than $11.
The big question: What happens from here? Heyman looks like the
decided underdog now that an influential shareholder advisory
service has opposed his action. But now that the stock is up
in price, shareholders will be very disappointed if the price
retreated along with Heyman's threat.
- *
- You've only seen the start of
the mergers and acquisition boom, says a very good source of
mine who gets to look behind the curtain. Like the big trucking
deal announced recently between Yellow Corp. and Roadway, this
source says there will soon be a spurt of intra-industry deals.
And, he says, these deals aren't coming out of desperation but
from companies actually envisioning a healthier future. Do I
hear a hallelujah from Wall Street? This all could end, of course,
if the stock market declines, but for now we can dream.
- *
- This column adopted Circuit
City back when it was selling for six and change. The stock topped
$9 a share in recent weeks after it announced a $500 million
line of credit that it says will be used for working capital.
- Or could the money be used for
a share buyback if Mexican financier Carlos Slim is persistent
in his offer - kept secret by Circuit City - to buy the whole
company?
- *
- A while back this column noticed
that the computer chip industry in Asia was roaring at all-time
high levels - and we said to watch out, because nobody knew exactly
where those components were actually going. Afterward, Advanced
Micro Devices Inc. suddenly cut its second-quarter sales forecast
by 14 percent, blaming slumping demand in Asia. SARS is also
said to be the cause of the slowdown. Let's sort this out: Asian
chip makers are producing enormous amounts of computer components
and shipping them here - probably because, as AMD has found out,
there is no demand in their own market. I see the $400 desktop
and the $800 laptop in my future.
- * Please send e-mail to: jcrudele@nypost.com
- Greenspan's Bond Bubble
Has Popped; Time to Move On
- John Wasik July 21 (Bloomberg)
- Federal Reserve Chairman Alan
Greenspan hasn't used ``bubble'' and ``bond'' in the same sentence,
although he has noted that ``yields and maturities across risk
classes have posted marked declines.'' Greenspan also didn't
specifically say in his Congressional testimony on July 15 that
inflation will return with vigor, which forces bond prices lower.
In his usual translucent prose, he said that ``these financial
developments, apart from the heavy dose of fiscal stimulus now
in train, should bolster economic activities over coming quarters.''
Is Greenspan saying inflation is imminent? Sometimes it's not
what you say that counts when making an interpretation about
the markets. Following Greenspan's comments, the 10-year U.S.
Treasury Note showed its biggest one-day jump in yields since
1994 as bond prices fell. If you were betting a large part of
your portfolio on interest rates going down and bond prices rising,
now's the time to make some changes to avoid getting hurt. Abandoning
a heavy concentration in bonds is like seeing a skunk walking
toward you. You simply have to walk away from it. George Fisher,
an individual investor and author of ``The Street Smart Guide
to Overlooked Stocks'' (McGraw-Hill, 2002) from Sagamore Beach,
Massachusetts, has taken profits in his bond portfolio. ``I've
been taking profits in my bond portfolio over the last six months,''
says Fisher, who recently had to free up some cash for a daughter's
wedding. ``I overweighted bonds from late 1999 into early 2001.''
-
- Inflation Signs: It's easy to
be complacent about bonds. After all, the Fed has cut rates 13
times over the last three years and may pare rates again if the
economy doesn't recover. Bond returns also have provided a respite
to a dour stock market. Long-term government bond funds were
up an average 13 percent for the past three years through the
first half of this year, reports the fund service Morningstar
Inc. Compare that with a 20 percent loss in large-company stock
funds, and most investors will gladly say they feel more comfortable
with bonds. Yet there are signs that the bond bonanza is kaput
thanks to a resurgence of inflation. U.S. consumer prices rose
0.2 percent in June and will probably climb more as natural gas
shortages force up energy prices. A commodity diffusion index
that tracks inflation indicators, produced by the Leuthold Group's
Inflation Watch newsletter, a publication of the Minneapolis
research firm, showed recently that it ``remains in a high inflation
danger zone with 84 percent of Leuthold's 74 spot commodity prices
now above year-ago levels.'' ``Deflation is capturing today's
headlines, but inflation may be a bigger concern by year-end,''
the newsletter reported. Millions of investors may agree with
the Leuthold prophecy. The most popular category for mutual fund
dollars in May -- the most recent period available -- was intermediate-term
bonds, according to Financial Research Corporation, a research
firm. All told, three of the top 10 categories were funds investing
in bonds with maturities of five years or less, accounting for
$24 billion in fund investments.
-
- Tax-Law Changes: Creating an
income portfolio has become even more complicated with the change
in U.S. tax laws.
- Now stock dividends and gains
are taxed at the 15 percent rate for most taxpayers, down from
a maximum 35 percent. So it may make more sense to flip-flop
your portfolio and stick taxable bonds in a tax-deferred account
and put dividend-yielding stocks in a taxable account. Before
making that change, look at what's in your bond portfolio. Your
risk exposure depends on the average maturities of the bonds
you hold. Fisher is doing what most portfolio planners recommend:
He's ``laddering'' his portfolio with varying maturities ranging
from three years to five years to reduce market risk. Since 1997,
Fisher also has taken gains from stock sales and reinvested in
U.S. Treasury Inflation-Protected Securities, or TIPS, which
are indexed to beat inflation. ``I sold every standard fixed-income
bond and bought only TIPS,'' he said. ``I've been a strong advocate
of TIPS -- great for the bondholder and stupid for the government.''
It's folly to have all your bonds in maturities greater than
10 years, so consider diversifying to reduce duration, a measure
of price volatility that indicates how much a bond can lose value
when interest rates rise. The longer the duration, the greater
the likely price decline when rates rise.
-
- What to Buy: A bond mutual fund,
for example, with an average duration of 10 years can lose 20
percent of its value in a two-point rate increase, according
to the Vanguard Group, the second-biggest U.S. mutual-fund company.
A bond portfolio with a five-year duration can lose 10 percent;
a 2 1/2-year duration 5 percent. Keith Anderson, chief investment
officer of Blackrock Inc. and manager of the $2.2 billion Core
Bond Total Return fund, said at the recent Morningstar Mutual
Fund conference, ``I'm bearish on bonds, but don't sell everything.''
Splitting his portfolio between Treasury and U.S. agency mortgage
bonds, the effective average duration of Anderson's portfolio
is four years. He cautions against high-yield ``junk'' bonds,
which ``give me the heebie-jeebies'' because of their recent
popularity. ``Things are getting better (in the overall economy)
and it doesn't make me want to own Treasuries,'' he said.
-
- Assessing Risk: With most government
bonds, if you hold them to maturity, there's little risk of losing
principal. Corporate bonds pose a risk of being called by the
issuer for redemption. Or the issuer may default on interest
payments if it's a corporation in severe financial straits. Mutual
funds that buy bonds pose different perils because they have
no fixed maturity and threaten an even greater risk of principal
loss. ``Go short on maturity on both taxable bonds and munis,''
Fisher advises. ``And don't buy bond mutual funds of any kind.
Overall, now is not the time to be making new long-term commitments
to income- producing investments. Better times -- and yields
-- lie ahead.''
Japan's Key Overnight
Money Rate Falls Below Zero For The 1st Time
- BUSINESS TIMES-ASIA- TOKYO: June 25,
2003
- Borrowing money in Japan took
on a new dimension on Wednesday when the nation's overnight lending
rate fell below zero for the first time in history, the Bank
of Japan said.The minus 0.001 per cent money rate - which means
lenders pay interest to borrowers - came because Japanese authorities
have eased monetary policy in an effort to support the ailing
economy and steady stock and currency markets.'The overnight
money rate averaged at minus 0.001 per cent today, down from
0.002 per cent,' a central bank official said. 'It was the first
time the overnight rate has fallen below zero in our history.'
The central bank uses the call rate, charged on overnight loans
between commercial banks, as a benchmark to gauge fund demand
and supply in the money market. Investors said the minus rate
was not a big surprise as some deals between banks at below-zero
rates have been made since January. Some dealers said the negative
rate came after some foreign banks, which attempted to lower
the level of their yen funds, lent some 20 billion yen by paying
interest. 'We had thought this would happen anytime, since there
have been below-zero rate deals since earlier this year,' said
Yasuo Goto, an analyst at Mitsubishi Research Institute.
'But it is symbolic and surely abnormal,
which was caused by the zero-rate policy (adopted by the Bank
of Japan) and a loss of trust in the Japanese financial system
among foreign banks,' Goto said. 'No one thinks the rate will
continue falling rapidly, but the rate is likely to hover around
zero for the time being.'
- Evidence Of Market
Manipulation
By
Mark Hulbert, CBS.MarketWatch.com - 12:01 AM ET July 2, 2003
Is the stock market being manipulated?......... Is the Pope Catholic?
- The latest evidence of manipulation
came Monday, the last day of the quarter. On that day, the majority
of mutual funds beat the market. While that would seem to be
a mathematical impossibility, researchers take it as evidence
of a manipulative practice that is known in the mutual fund world
as "marking the close. "The SEC defines "marking
the close," which is illegal, as "attempting to influence
the closing price of a stock by executing purchase or sale orders
at or near the close of the market."Right before the close,
in other words, funds will place buy orders on stocks that they
already own. That will cause the prices of their stocks to rise
and thus make the performances of their funds look better than
they otherwise would. Four researchers, led by Mark Carhart,
co-head of quantitative strategies at Goldman Sachs Asset Management,
have collected overwhelming evidence that mutual funds have engaged
in this illegal behavior for years. For
example, they found that trading volume tends to spike significantly
in the final minutes before the close of each quarter in the
very stocks that top mutual funds are holding. (Their research,
"Leaning for the Tape: Evidence of Gaming Behavior in Equity
Mutual Funds," appeared in the April 2002 issue of the Journal
of Finance. Those interested in a more detailed discussion of
their research should read an article I wrote about it in the
Oct. 6, 2002, New York Times. I should also note that I have
witnessed investment newsletters engaging in this practice in
an attempt to boost their Hulbert Financial Digest performance
ratings.)
-
- Other evidence suggesting that
mutual funds are marking the close comes from the percentage
of them that beat the market averages on the final trading days
of each calendar quarter. For example, the researchers found
that on the last trading days of the calendar quarters between
July 1993 and June 1999, some two-thirds of all domestic equity
funds beat the S&P 500 -- about three times higher than the
percentage of them that beats this index on all other days. This
pattern was apparent in mutual funds' performances for this past
Monday, when the S&P 500 index (SPX: news, chart, profile)
fell by 0.18 percent. The average fund in 11 of Lipper's 12 major
domestic equity fund categories did better than this.To be sure,
the performance boost that mutual funds enjoy because of marking
the close will be short lived in most instances. In fact, the
practice will tend to dampen their performances over the long
run, since the stocks they buy right before the close of a quarter
will tend to be relatively high priced. But, according to the
researchers, many funds are more than willing to pay that long-term
price in order to boost their standings in the short-term performance
sweepstakes.This means that you should not invest in mutual funds
on the last day of a quarter, since by doing so your purchase
price will be artificially inflated. You'd be surprised how many
investors nevertheless invest in funds on those dates. Many firms'
retirement plans, for example, invest each month's employee contributions
as of the end of each month.Just by changing the investment date
to any other day, according to the researchers, you should be
able to increase your returns significantly -- by more than 4
percent per year in the case of small-cap funds, for which marking
the close tends to have the greatest impact. It's too late to
change what happened on Monday, of course. But it's not too late
to start lobbying your retirement fund to change its investment
dates, so that come this coming Sept. 30 you won't once again
pay the price for many mutual funds' manipulative behavior.
- Mark Hulbert is the founder
of Hulbert Financial Digest in Annandale, Va. He has been tracking
the advice of more than 160 financial newsletters since 1980.
- Prophet Of Doom Warns
Of Blowout
By
Robert Gottliebsen - July 11, 2003 - NEWS.AU
- The world's most prominent bear,
Stephen Roach, comes to Australia at a time when he knows he
is under pressure.
- The chief economist of the world's
biggest investment bank, Morgan Stanley, was the great bull of
the 1990s. He picked the top of the market in March 2000 and
since then has been correctly forecasting a difficult and dangerous
time ahead.
- But US shares have risen more
than 20 per cent since mid-March and have led a global equities
rally, which has extended to Japan. Wall Street believes that
the bear market is over and that we are into a new upward cycle.
- Forecasters have to get it wrong
from time to time and even Roach must know he is overdue for
an error. But Roach does not think this is the time to change
course. He believes, with a passion, that the markets are taking
incredible risks without recognising them. Roach believes that
the world is passing through a series of asset bubbles which,
he says, only "heighten the eventual perils of the post-bubble
endgame"."Since the 1990s, the policy response to each
asset bubble has guaranteed that it has spread to the next asset
class," he says. And so when the equity bubble exploded
in 2000 the US central bank lowered interest rates to provide
"extraordinary valuation support" for equities.
-
- But that led to a US property
bubble and when the US Federal Reserve cut rates even further
to combat the multiple pitfalls of anaemic recovery and emerging
deflation risks, a new bubble emerged – the bond market.
- The bond bubble helped US consumer
spending because US home loans are linked to the bond rate.
- In the past few weeks, with
the rally in equities, bond yields have risen from 3.1 per cent
to 3.7 per cent, causing huge losses. Wall Street believes that
the equity game is now ready to start all over again and will
be led by technology stocks. Roach says consumers have become
addicted to the extra purchasing power they can extract from
overvalued assets. As a result, the debt burden of US households
has risen sharply and, even with low interest rates, the debt
service burden is well above the levels of the 1990s. If the
economy recovers and interest rates rise again (as the bond market
is now predicting) then the debt problem would be enormous. But
there is equal risk of deflation emerging.
- Roach says that as a result
of the US government deficits and the tax cuts it is "not
that far-fetched to envision the net savings rate falling from
a record low of 1.3 per cent in the second half of 2002 to zero
over the next 12 to 18 months".
- "If that were to occur
the current account deficit could widen further from its record
5.5 per cent of GDP in the March 2003 quarter to between 6.5
per cent and 7 per cent by the end of 2004," he wrote recently.
-
- "Such a massive US current
account deficit could well set the stage for the ultimate pyrotechnics
of the post-bubble endgame – a full-blown (US) dollar crisis
that would deal a very tough blow to the global economy and financial
markets."
- The Fed strategy is to buy time
and hope for a "gradual and benign endgame"."But
I would assign equal odds to the possibility that there will
be a more treacherous moment of reckoning. My concerns stem not
only from the bubble-enduced debt overload but also from the
increasingly ominous current account implications of a savings
short US economy."The biggest difference from my bearish
view of the world and the more sanguine views of others can be
traced to the destructive power of the bubble. In my opinion
the world is facing its toughest array of economic problems since
the end of World War II. "I never dreamt that I would live
to see such profound challenges to core macro principles."
- Robert Gottliebsen writes four
columns a week for The Australian and broadcasts each night on
ABC Asia Pacific TV.
- gottliebsenr@theaustralian.com.au
- Global Economics: An
Historic Moment?
- Stephen Roach - 7/15/2003
- A collision
of forces. The global dispersion
of external imbalances has never been wider, while global deflation
has never been a greater risk. There has also been an extraordinary
confluence of asset bubbles; meanwhile, the Authorities have
never been so lacking in conventional weapons to meet these challenges.
- Running out
of traditional ammunition. The
world's major central banks are almost out of basis points; the
world's fiscal authorities are facing similar constraints —
especially in Japan, the United States, and Europe.
- Non-traditional
options. Central banks are
flirting with monetarist-driven liquidity injections; the world's
fiscal authorities have adopted an analogous approach —
augmenting massive government deficits with supply-side remedies.
- No guarantees.
The monetarist proposals
suffer from the lack of a stable relationship between the money
supply and the aggregate price level; the supply-side actions
aim fiscal stimulus at savers — hoping the impacts will
"trickle-down" to middle-income spenders.
- Uncharted waters. The debate over non-traditional policies
is extraordinary — it is emblematic of how desperate matters
have now become in this dysfunctional world; unfortunately, the
track record of such actions is not encouraging — suggesting
that policy traction could remain elusive.
- Rebalancing.
I continue to believe that
resolution will ultimately have to come through a weak-dollar-led
rebalancing of an unbalanced world. To the extent this puts social
and political contracts at risk, it tempts the Authorities and
investors to believe in the untested and alluring promises of
the quick fix.
- Double Bubble
May Follow Greenspan's Dot.Com Fiasco
- By Christopher Lingle, Korea Times -
07-04-2003
TOKYO _ News that President George W. Bush intended to support
the continuation of Alan Greenspan as chairman of the Federal
Reserve Board of Governors was greeted with wide support. However,
if Greenspan cares about his place in history, he might be wise
to decline the offer. As it is, Greenspan's reign as chairman
of the Federal Reserve will be remembered for the asset bubbles
that occurred during his watch. His departure as monetary helmsman
for the world's largest economy should come sooner rather than
later so that the burden of blame for a pair of other bubbles
might fall on his successor. Up to now there has been a double
bubble that is likely to be followed by a third one affecting
the bond market. The first Greenspan bubble was the dot.com boom
that collapsed into what is likely to become known as the ``Great
Correction for its intensity and longevity. Despite noting that
irrational exuberance at work in stock markets, he opened up
the credit taps in 1998 and allowed things to really get out
of hand. After two mostly-bearish years, the Dow Jones average
continues to hover above the level when this famous utterance
was made. Now the loose monetary policy and the artificially-low
interest rates it brought have helped generate a housing bubble
and a bubble in the bond market. If either of these doppelgangers
blows up in our collective faces, the U.S. economy could be blown
out of the water. That would certainly be a hit below the water
line for the global economy. First, consider the housing sector.
After adjusting for inflation, housing prices are up 28 percent
in the U.S. since 1996. Following an increase of 11 percent in
2001, U.S. home prices rose 7 percent in the year-to-December
of 2002. Since actions of America's monetary authorities influence
interest rates elsewhere, house-price inflation is evident in
other industrialized countries where such data is collected.
With mortgage rates at a 40-year low of 6 percent, they are more
likely to rise than fall. Lower mortgage rates have been driving
demand for housing that has caused an upward drift in home values.
Higher prices have caused property tax bills to rise, making
them the second largest expense for homeowners after their mortgage
payments. In 2002, Americans made interest payments of $265 billion
on their homes while paying $205 billion in property taxes.
-
- As it is, the housing market
is vulnerable to a combination of forced sales due to job losses
or the inability to make higher mortgage payments when rates
rise or the unsustainable burden of taxes. The bad news for those
who may wish or are forced to sell is that prospective buyers
will bargain for downward adjustments in the asking price to
offset the burden of the higher tax assessments. At the same
time, higher lending rates may reduce the number of prospective
buyers. Looking to the past, housing bubbles often lead to crashes
with price drops on homes that average from 25 to 30 percent.
And these upsets have generally been accompanied by large economic
contractions. The prospects of a punctured housing bubble would
be bad enough. Now consider the bond market bubble. While stock
prices have had three bad years, bonds have had three good years.
Indeed, strong surges in prices have occurred over the past year
when investors sought the safety of holding government debt.
As a flood of new bonds are sold this year due to tightening
government finances, those levels may now be untenable. Like
bad things, good things cannot and do not last forever. The forces
of supply and demand will ultimately push bond prices down. Additional
pressures will be put on bond prices if taxes are eliminated
on stock dividends and investors respond by putting more funds
back in equity markets.
- With investors attempting to
find safe investment vehicles during the slowdown, the price
of government bonds has been bid up so that interest rates have
been driven down. Similarly, investors have been encouraged to
buy bonds on expectations that a policy of low interest rates
will be followed for the foreseeable future. As it is, the rising
demand behind the bond bubble is caused by the loose monetary
policy of the Federal Reserve has put excess liquidity into the
system. And so it is that monetary easing has made the yields
on government bonds more volatile.
-
- Greenspan's debt bubble is not
limited to the U.S. The market in emerging market debt is current
staging a remarkably strong rally that will inevitably end in
tears with a bust in debt prices. Over the past 12 months, the
average rate of returns on emerging market debt funds has been
21 percent. Rising from a low of 7.3 percentage points over U.S.
Treasuries prior to the Brazilian presidential election in October
2002, average debt spreads are now about 4.3 percentage points
over benchmark American government securities. Unfortunately,
these improvements have occurred without any changes in the fundamentals
for the main emerging markets economies. Consider the situation
in some of the most important emerging market economies. For
example, Brazil's vast domestic and external debt burden remains
just as unsustainable since its economy remains mired in slow
growth. And many of its Latin American neighbors have become
afflicted with political instability. In Turkey, domestic political
issues have diverted energies that might have boosted reform.
Meanwhile, central European economies are waiting for Godot in
the form of a resilient German economy. Emerging market debt
prices have benefited from the worsening of the overall global
economic environment. This is because declining global interest
rates induce investors to shift assets out of equities and into
fixed income funds like the higher-yielding debt issued in emerging
market economies. In turn, bidding for debt causes prices to
rise and attracts more funds due to the prospects of capital
gains. There will be an inevitable correction in prices for debt
issued in emerging market economies. It will occur when central
banks tighten up on global liquidity or when the reality of the
effects of global slowdown begins to bump up against weak economic
fundamentals. Then the true legacy of the Greenspan years will
come to haunt. Better that he quits now before his legacy is
completely tainted.
-
- ** Christopher Lingle is
a member of the economic board of editors of The Korea Times
and professor of economics at Universidad Francisco Marroque
in Guatemala. CLingle@ufm.edu.gt
- Fed Questioned
After Bond Market Rout
Sat
Aug 9, 7:45 AM ET By Tim Ahmann (Reuters) -
- The blame game in the wake of
the bloodiest U.S. bond market rout in nearly a decade is in
full swing and many of the fingers are pointed at the Federal
Reserve. Accusations are flying that the central bank overplayed
its concerns on deflation in a manipulative effort to push long-term
interest rates lower to goose the economy. Now the Fed has been
"caught out" -- as Melvyn Krauss of the Hoover Institution
put it in an opinion piece in the Wall Street Journal on Friday
-- some argue its credibility has been damaged. "The Fed
whipped up a positive frenzy about deflation," said James
Grant of Grant's Interest Rate Observer. "To my mind not
the least of the sins of the Fed in this period was its cavalier
willingness to suppress, manipulate and distort what had been
more-or-less free prices." But other analysts say misplaced
market bets in the rally that preceded the meltdown may have
been more the result of an unusually open Fed debate and a complex
policy message than an intention to deceive. "The Fed didn't
set out to consciously screw over markets," said Adam Posen,
a former New York Fed researcher now with the Institute for International
Economics. "Because the Fed is moving to a more transparent
regime and therefore is communicating when things are uncertain
or when things are contingent, they are more open to being accused
of being inconsistent," he said. "People are just not
ready to deal with that yet."
-
- DASHED HOPES
- The roots of the current schism
trace back to November when Fed officials first began to speak
of how they could ward off a potentially crippling decline in
consumer prices in the event they ran out of room to cut short-term
interest rates.
- The then-listless economy had
the Fed preparing to cut overnight rates to a fresh four-decade
low of 1.25 percent.
- Officials have said their exploration
of how best to fight deflation was merely prudent due diligence
and their frequent public discussion over alternative policy
tools, such as buying Treasury bonds to pull long-term rates
down, was simply an effort to educate markets and the public.
As talk about unusual deflation-fighting steps reached a crescendo
in mid-June, the yield on the benchmark 10-year Treasury note
touched a 45-year low of 3.07 percent. But when the Fed met later
that month, it cut short-term rates by a modest quarter point
and made no reference to the possibility of departing from traditional
policy tools. That June 25 decision disappointed investors who
had bet the Fed was edging toward buying Treasury bonds -- and
the selling began. Things got uglier in mid-July when Alan Greenspan
(news - web sites) made the central bank's thinking plain: if
further stimulus was needed, overnight rates would be the tool.
He told Congress chances were slim the Fed would need turn to
other measures. The selloff did not cool until last week, after
the yield on the 10-year Treasury note nearly reached 4.6 percent.
The yield now is hovering above 4.2 percent. "Price action
in the last few weeks reveals that the bulk of the pupils flunked
the mid-term exam," economists at Credit Suisse First Boston
wrote after Greenspan's testimony. "When the bulk of the
pupils fail the test, we are inclined to assign considerable
blame to the teacher." Former Fed governor Lyle Gramley
agrees the Fed has had trouble communicating but disagrees with
those who say the central bank's credibility with the markets
is shot. He said the biggest problem was that the Fed's current
message has mixed implications for bonds. It plans to keep short
rate low for a prolonged period -- a bond positive -- but it
wants to push up a too-low inflation rate -- a negative.
- "The Fed is in uncharted
territory here, so is the market, and trying to communicate the
message and getting it correct is inherently very difficult in
these circumstances," he said.
-
2004 MAJOR HEADLINES
- 2003 MAJOR
HEADLINES - UPDATED REGULARLY
- you
may need to sign up with our yahoogroup to read some of the articles
below
-
- [12.31.2003] Another Great Depression? (schidzomania)
- [12.31.2003] Truth Behind the Demise of the American Software Industry (ucdavis.edu)
- [12.29.2003] Forever Blowing Bubbles, Nightmare On Deficit Street (guardianuk)
- [12.23.2003] ROACH: Global Desiquilibrium (morganstanley)
- [12.23.2003] Hunger and Homelessness Increase in U.S.(truthout)
- [12.19.2003] BundesBank Warns On Dollar Crash, Debt Crisis (rmn)
- [12.18.2003] IMF Gives Brown/UK Borrowing Warning(guardianuk)
- [12.15.2003] A New Stock Market Decline, Can't Be Far Away (reuters)
- [12.10.2003] China Bank Bailout Could Need US$290 Bln (iht)
- [website] CRASHREADY: Does History Repeat Itself? 1929 and now (tripod)
- [12.10.2003] US Mortgage Activity Tumbles (safemoney)
- [12.12.2003] World Central Banks Into Tightening Mode, World Face Tough Hurdle (cnn)
- [12.09.2003] UPI: Can 'They' Be Dumb Again? (upi)
- [12.09.2003] The Fed. Res -- Kill `Considerable' Clause Before It Kills Us! (bloomberg)
- [12.08.2003] Dollar’s Dramatic Decline Comes Out Of Your Wallet (cnbc)
- [12.03.2003] Globalisation 'Is Failing Africa'
(bbc)
- [12.03.2003] USA: Distress Everywhere: debt rose $15.1 billion to $1.97TN (chicagotribune)
- [12.03.2003] The US Job Figures Are Unrealiable (nyost)
- [12.03.2003] The Difference Between The Banksters and The Real World (dailyreckoning)
- [12.02.2003 Beyond Bull, Boyant US Economy And EU Facing A (huge) Crisis (guardianuk)
- [12.02.2003] ROACH: Global - Growth at What Cost? (morgan&stanley)
- [12.02.2003] US Baby Boomers Short on Savings: 50% of the population endagered (LAtimes)
- [12.01.2003] Engineered Extinction Of The US (newamerican)
- [12.01.2003] Jobs Overseas? Another Attempt to Explain (mises)
- [12.01.2003] The International Financial System Is Defective (guardianuk)
- [11.23.2003] Fiddling With The Dollar While EU Burns (observer)
- [11.26.2003] EU Stability & Growth Pact (Hoax) (morgan&stanley)
- [11.26.2003] China To Face Own Irrational and Blind Expansion (nytimes)
- [11.24.2003] Derailing the Global Trade Engine (globalization decline/fall) (morgan&stanley)
- [11.20.2003] Crunch Looms After EU's Colossal Mismanagement (times.uk)
- [11.20.2003] Is The Dollar A Looming Crisis? (cbsmw)
- [11.17.2003] Insanity is Prevalent (fin.sense)
- [11.18.2003] US Debt Increases At $1 Trillion Per Year/10% Of GDP
(dailyreckoning)
- [11.16.2003] BOE Warns consumers over debt (guardianuk)
- [11.12.2003] US Pension Time Bomb - The $44 Trillion Abyss (fortune)
- [11.11.2003] Time Bomb: UK Pensions Crisis To Cost £27bn A Year (times.uk)
- [11.10.2003] USA: Debt Doom Lurking (nypost)
- [11.07.2003] China's Undercooking Its Books (bloomberg)
- [11.07.2003] IMF Counter-Report Says US Economy Is Mirage(jubilee.org)
- [11.06.2003] Worldwide Crash-Like Collapse Of Stock Prices Very Likely (rumormill)
- [11.06.2003] US Corporate Debt More Fragile Than You Think (cfo)
- [11.05.2003] Deep In Debt, Caught In The Net (dailyreckoning)
- [11.04.2003] Trade deficit fouls economy (madison)
- [11.04.2003] Is China's Bubble About To Pop? (safemoney)
- [11.03.2003]Deficits, Debts and Growth: A Reprieve but not a Pardon (levy.org)
- [11.03.2003] Not Like 1984 (If Liars Can Figure) (comstockfunds)
- [11.03.2003] Global: Asia at the Crossroads (morgan&stanley)
- [11.03.2003] Worry About The Economy, Not The Fed (safemoney)
- [10.27.2003] The U.S Creaky House That Cheap Credit Built (numbers are scary) (nationalpost)
- [10.27.2003] Jobless Recovery Scr*wing The Middle Class (etherzone)
- [10.27.2003] All Dressed Up For The 'Cra$h Gala'? (comstock)
- [10.27.2003] UK Credit Junkies Face Crash Landing (independent.uk)
- [10.24.2003] The China Bubble (we've been here before)(cnn)
- [10.20.2003] WARNING: U.S Consumers Pile on Debt to Sustain World Growth (lemondediplomatique)
- [10.26.2003] Russia To Show Classic Signs Of 'Irrational Exuberance' (observer.uk)
- [10.24.2003] WARNING: U.S. Said to Be Open to Ending Credit Lines of Loan Giants (nyt)
- [10.20.2003] Booming 90'S: How Corporate America, W.H and Wall Street Failed Us (cs.monitor)
- [10.20.2003] UK: Bear Market Over? That's Just A Load Of Bull (observer.uk)
- [10.14.2003] Economic Statistics: The Bears Will Have To Go Into Hibernation) (comstock)
- [10.14.2003] The Higher the Deficit Soars, the Harder the Economy Could Crash (safemoney)
- [10.15.2003] BOE Fears High Debt Could Tip UK Into Crash (observer.uk)
- [10.15.2003] USA: The Federal Gov't's Financial Conditions And Fiscal Outlook (gao.gov)
- [10.14.2003] The Devil Wears Pink: A Grim Financial Fairy Tale (cbnc)
- [10.14.2003] Predatory Lending Tactics Blamed For UK Debt Crisis (observer.uk)
- [10.13.2003] US Deficits And Surpluses - New York Times, Wrong Again (unclescam)
- [10.15.2003] WARNING: It's still 1999 out there (observer.uk)
- [10.07.2003] The Truth Behind Much-Vaunted U.S. GDP Growth (dailyrecknoning)
- [10.06.2003] The Upcoming Worldwide Financial Dislocation (various sources)
- [10.04.2003] The Dollar Meltdown (forbes)
- [10.03.2003] WARNING: Spending Our Way To Disaster (cnn)
- [10.02.2003] Food Overproduction Was The 1st Domino -1928(rumormill)
- [10.02.2003] How 9/11 Makes The Economy Look Worse Than It Is (nypost)
- [09.27.2003] Banking On A Lifeline: Savings
Crisis Created By Low Inflation (observer.uk)
- [09.28.2003] Booming Middle East Region
Is In Fact A Giant Domino Set (observer.uk)
- [09.27.2003] Sounding The Alarm (optimism
sells… but watch out) (rockwell)
- [09.00.2003] The Great Depression As A Credit Boom
Gone Wrong (a true confession) (bis)
- [09.26.2003]
G7 Persuaded To Gamble With Weapon Of Mass Devaluation (guardian.uk)
- [09.26.2003]
Loading Up On Debt Will Do Nothing To Avert Another Crash (guardian.uk)
- [09.29.2003]
US Employment Disaster (321gold)
- [0924.2003] The Fruits Of Irrationality,
Echoes Of Tulip Mania (guardian.uk)
- [09.00.2003]
Potential Catalyst - Real Estate (comstockfunds)
- [09.18.2003] The Prime Suspects Of An
Enormous Bankruptcy (comstockfunds)
- [09.22.2003]
We Can't Speculate Our Way To Prosperity (market as not an ATM
machine) (cnbc)
- [09.17.2003] US Economic Folly Should
Worry Us All (guardian.uk)
- [09.19.2003] Global: A Warning From the
Global Consensus (rapidly deteriorating imbalances) (morganstanley)
- [09.18.2003]
Free Market Reality Risks Insolvency? Something Smells (financialsense)
- [09.16.2003] Is Monetary Policy Working?
$13.50 of debt for each dollar of real GDP (comstock)
- [09.18.2003] Someone Needs to Take Away
Uncle Sam's Credit Cards (safemoneyreport)
- [09.14.2003] The USS Economy is Sinking
- Man The Lifeboats (financialsense)
- [09.15.2003]
A Little Déjà Vu Should Concern You ( wall street
bullish deadly habbits are back)(safemoneyreport)
- [09.18.2003]
British Homebuyers Living In A 'Fools' Paradise', Sit On debt
Time Bomb (guardian.uk)
- [09.18.2003] Asian Bankers And Policy
Makers Have Been Warned (but do they care?) (torontostar)
- [09.15.2003] The Myth Of A Self-Sustaining
Recovery (cnbc)
- [09.10.2003] Tens Of Trillions Of Dollars
in Deficits? (fiscal catastrophe) (fortune)
- [09.09.2003] USA: Jobs, Jobs, Jobs --Sequel….
An Ugly Ending (comstockfunds)
- [09.09.2003] European Monetary Union:
Crunch Time Approaches (prudentbear)
- [09.10.2003] U.S. Machine-Tool Consumption
During Jan-July Down 15.5% From Last Year's Depression Level
(rmn)
- [09.08.2003] IMF warns of deflation threat
to Japan's recovery (financial times)
- [09.08.2003] Asian debt withdrawal threat
to US deficit (financial times)
- [09.11.2003] Fears Grow That China Is
Overheating (ft)
- [09.06.2003] USA: The Collapse of the
Middle Class (buzzflash)
- [09.04.2003] Economic Worries in China
as Companies Pile Up Debt (nytimes)
- [09.00.2003] Pushing Germany Off a Cliff (levy.org)
- [09.01.2003]
Sino Bubble How Do You Say 'Bubble' In Chinese? (321.gold)
- [09.02.2003] Bad US Consumer Credit Situation
Will Only Get Worse (safemoney)
- [09.02.2003] US Deficit Projections Get
Scary (wpost)
- [09.02.2003]
The
World Beginning To Look Like France, A Few Years Before The Revolution
(guardian.uk)
- [08.31.2003] Threat Of A Financial Crash
Looms Large (ameinfo)
- [08.28.2003] The Food Line In Ohio Reminds
Of the Great Depression (cbs)
- [08.28.2003]
U.S Endangered…….. Billions, Trillions, Who Cares?
(rockwell)
- [08.25.2003] Global: Global Oomph? (morgan&stanley)
- [08.14.2003] Banks Shifting Vast Amounts
Of Their Lending Risk (economist)
- [08.05.2003]
The U.S. Economy May Be Broken. (nypost)
- [08.05.2003] Job Drought Threatens Economy
(cnn)
- [08.05.2003] WSJ: The rapid price decline
in the bond markets - Drop Reminds of 1927(rumormill)
- [08.02.2003] Desperate Efforts To Sustain
Unsustainable Bubbles (goldeagle)
- [08.01.2003]
US Homelessness and Poverty Rates Skyrocket (scoop.nz)
- [08.20.2003] Investors Are Terribly Myth-Guided
(capitalismmag)
- [08.01.2003] Global: Warning Shot: Dreaded
Deflationary Spiral Threat Is Here To Stay (morgan&stanley)
- [08.03.2003]
Intentional De-Industrialization Of America Not A Pretty Picture!
(rumormill)
- [08.04.2003] UK Shoppers Create Unsustainable
Bubble - Part 2 (guardian.uk)
- [07.15.2003]
Asia To Buy US$ Frantically To Keep Currencies Competitive (apocalyptic)
(atimes)
- [07.29.2003]
Why You Shouldn't Believe The New U.S Jobless Stats (nypost)
- [07.29.2003] US Buying Bubble Could Burst
The World Economy (mg.co.za)