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Grizzly's
Growlings Back Issues
Monday Morning Market Musings 02/08/99
"It was the best of times..."
Most people are familiar with the famous opening line of Charles Dickens’A Tale of Two Cities, which reads: "It was the best of times, it was the worst of times." The memory of most people who have actually read this 1859 novel doesn’t go much beyond that line.
The rest of the opening of A Tale of Two Cities continues just as profoundly:
"... it was the age of wisdom, it was the age of foolishness,
it was the epoch of belief, it was the epoch of incredulity,
it was the season of Light, it was the season of Darkness,
it was the spring of hope, it was the winter of despair,
we had everything before us, we had nothing before us,
we were all going direct to Heaven,
we were all going direct the other way..."
Dickens’ depiction of the state of affairs at the turn of the 18th century is apropos to the turn of this century as well as the millenium.
- Japan’s "Great Depression" relative to the United States shows now signs of abating. Unemployment in the US is at a relatively comfortable 4.3 percent. In Japan, the 4.1 percent unemployment rate is the highest since the government began calculating the statistic in 1953.
- The government in Japan has tried every trick in the book, to no avail, to snap the economy out of its coma. The latest "Hail Mary" is $6 billion worth of "shopping vouchers," in essence a tax rebate. Most Japanese think the average payment of about $170 per family is a laughable pittance.
- The US trade deficit hit a record $168 billion in 1998. The Japanese trade surplus hit $107 billion. Japan’s $50 billion surplus with the US is the highest since, uh oh, 1987. Now which country was it again that’s in the depths of a depression?
- The Associated Press claims "more than one-third of the world is in recession." More than 60% of investment advisors are bullish, a contrarian extreme reading not seen since the summer of, uh oh, 1987.
- The Brazilian real has depreciated a full one-third against the Yankee buck in the last month. If and when Brazil losses its grip on its intravenous life-support line, the rest of Latin America won’t be volunteering to be pallbearers.
- The US House of Representatives has impeached a president for only the second time in our nation’s history. That president remains perhaps the most popular president in history and despite committing perjury and obstruction of justice, likely will not be removed from office. ["It’s the economy, stupid!"]
- The January 25th Forbes magazine calls Internet growth "the driving force in the world economy." Publisher Rich Karlegaard goes on to discusses the lofty heights and the rationale for this craziness.
- America Online is worth more than General Motors.
- Online broker Charles Schwab is now bigger than Merrill Lynch.
- Online portal Yahoo.com is now worth "double the New York Times and Dow Jones combined."
- At its recent highs, online vendor Amazon.com, which has yet to earn a profit, has a market capitalization of $18 billion.
- Online auctioneer Ebay is up over 1,200 percent since its IPO in August. The stock, one of the few InterneTulips actually with a P/E ratio, earned all of $1.5 million last year. Ebay is ebullient with their $10 billion market cap.
We know that history always rewards such manic ebullience with a crash. The question is always when. Yes, it’s a broken record, but it may be now. Just as they did last July, the Elliott Wave patterns potentially are saying, " THE top is in." We continue with our ongoing overall outlook for US stocks: FULL CRASH ALERT!
In the topsy-turvy worlds of politics, psychology, and investments, things might come together perfectly if the markets and President Clinton’s popularity top on the day the US Senate decides that upholding their own personal political fortunes is more important than upholding US Constitution.
It "bears" repeating:
"It was the best of times, it was the worst of times,Charles Dickens, "A Tale of Two Cities" 1859
it was the age of wisdom, it was the age of foolishness,
it was the epoch of belief, it was the epoch of incredulity,
it was the season of Light, it was the season of Darkness,
it was the spring of hope, it was the winter of despair,
we had everything before us, we had nothing before us,
we were all going direct to Heaven,
we were all going direct the other way..."