THE DAILY RECKONING
WEEKEND EDITIONOctober 7-8, 2000 Paris, France By Addison Wiggin MARKET REVIEW: The Anti-Wealth Effect...All Indexes Down
For the Week...
"The Wealth Effect has gone seriously into reverse," Bill
Bonner wrote in the Daily Reckoning on Friday... the
Nasdaq, suffering severe Big Tech earnings warnings lost a
total of 8.5% for week. The index is down over 15% for the
year. Some $800 billion in paper wealth has - vanished. Yesterday witnessed a one-day drop of 3.2%... as the
Nasdaq closed down 111 to 3,361. It's a curious thing to
predict market weakness. When you're right, you're right.
But who's happy about it? The Dow and S&P 500 both lost ground, too. Both indexes
surrendered all their gains from an otherwise stable week.
The Dow - down 128 to 10,596 - ended 54 points lower than
Monday's opening. The S&P lost 27 on Friday, and 28 for
the week. Friday, 1,969 stocks dropped on the NYSE, while just 850
rose. Ouch. The employment numbers didn't help... Friday at 9:30 the
BLS announced unemployment dropped to 3.9% in September.
The report was absorbed by the market as bad news - and
helped soften it up for the day's selling. "In the wake of
the Fed's decision on Tuesday to leave interest rates
unchanged," reports the WSJ, "[Greenspaon and co.] remain
on alert for inflationary pressures." Tight labor markets, skyrocketing real estate prices (+
11.4% in Seattle, +15.4% in DC), and prices at the pump are
keeping the FOMC on their toes... easy money, ain't so easy
anymore... This week, saw trouble for central bankers on the other
side of the Atlantic, too. The European Central Bank
surprised everyone and raised rates a quarter point,
nullifying the G7 bail-out efforts the week before. The
euro dropped to $.86. Overall not a good week for the investing class. Even the
broad market indicators got humped: The Russell 2000 closed
at 491, down 30. The Wilshire Smallcap shed 67... closing
at 792 Friday. PRICES for the week...
Gold: $269, down $7 bucks.
Crude Oil: $30.86, up $.52
Natural Gas: $5.08, down $.04
Platinum: $590, up $11
Palladium: $749, up $42 (volatile stuff, this palladium.)
CRB Index: 226 unchanged
Dollar Index: 114 up a point
Yen: $.009 (yawn)
The sad, sad Euro: $.86 down $.02 despite Wim's best
intentions
British Pound: $1.44, down $.03
* * * * * * * * * Advertisement * * * * * * * * * * * When The Greatest Credit Bubble in History Bursts...What
Comes Next? No banks or brokerage houses went bust in the 1929 crash.
In fact, many investors and businessmen prospered. The
real damage was done later on - when popular sentiment
turned against stocks altogether. Just as is happening in
our markets today... Will you profit in the months ahead? You will if you
prepare yourself now - EVERYTHING that is happening in the
markets today has already happened before. Click here to
learn more about the Hidden Logic of Credit Bubbles. * * * * * * * * * * * * * * * * * * * * * * * * * * * THE DAILY RECKONING FREE INVESTOR'S LIBRARY
Skyrocketing Energy Prices AND A Plummeting Stock Market...
What are YOU going to do next?
Oil prices 3X what they were last year... a Big Tech melt-
down... and the dollar still rising? What's going on here?
Much more than you think. And the answer is the key to
greater profits - and safety - during large-scale market
movements. In this edition of THE DAILY RECKONING INVESTOR's LIBRAY,
you'll learn simple methods used by serious investors for
protecting bull market gains during downturns... market
analysis that's essential for building your own fail-safe
portfolio. Your Free Report: Click Here * * * * * * * * * * * * * * * * * * * * * * * * * * * FLOTSAM AND JETSAM: This Week The Daily
Reckoning Announced An Agreement with Grant's Investors.com...
- Excerpt of a letter from Bill Bonner
"...The Grant's team - located right on Wall Street (which
I don't hold against them) - does the kind of research that
Goldman Sachs or Merrill Lynch analysts ought to do, but
don't. You've heard me mention some of their suggestions in my
daily emails: Finmeccanica, Dana Corporation, Ariba.
Finmeccanica is a stock I especially like because it's a)
cheap, b) a defense contractor, and c) it is priced in
euros. Again, it was Grant's team of analysts who discovered it.
Unlike most analysts on Wall Street, the Grant's people
actually do research and analysis. So, they not only find
good value situations...they also reveal anti-value when
they find it. The most recent report from Grant's, for example, provides
more evidence of what I have described as the "exploitation
of the capitalists by the workers." 3Com of Santa Clara,
CA, sold off its Palm unit...and generously re-jigged its
managers' stock options...so that the managers, who had a
claim on 4% of the shares before the Palm spin-off, ended
up with more than 20% afterwards. Grant's is about the only service that does this kind of
research - a welcome relief from the ceaseless cheerleading
and bullishness of the mainstream financial press. What's more, their reports are so elegantly written that my
jealous little writer's ego shrivels each time I read it." - Bill Bonner
...Our agreement with Jim Grant gives Daily Reckoning
readers a complimentary trial subscription to his web-based
new service: Grant's Investor.com But keep in mind, the free trial offer - and the charter
subscription rate that will be available to you should you
choose to become a paid-up subscriber - has been extended
by invitation only. So you've got to take advantage of this
offer right away. Follow this link - enter your registration
information where it's requested... and your free trial will
begin immediately. Hope you'll give it a try. Have a great weekend,
Addison
* * * * * * * * * * * * * * * * * * * * * * * * * * * *
CONTRARIAN GLOSSARY: Sensation Mongers
SENSATION MONGERS: People think the news media just report
the facts. Yet, a zillion things happen every day...and the
news media doesn't mention any of them. Instead, the media
confines itself to amplifying the madness of crowds and
reporting all the news that fits its "group-think" agenda. For more Contrarian Glossary entries click here. | 
