The DJIA and S&P 500 indices broke out of their two-month trading range last week, decisively to the upside. The DJIA surged some 500 points on Thursday and Friday to a new record high, within 270 points of the 10,000 landmark.

What sparked Friday’s massive blowoff rally? A report from the US Labor Department showing that unemployment rose from 4.3% to 4.4%. Is it a genuine signal that the US economy is at last starting to slow, thus relieving pressures on the Federal Reserve to raise interest rates?

Well, scrape just a few inches of dirt off the top of the unemployment  number – more than 275,000 new jobs were created in February – hardly a sign of economic weakness. Looks more like an insignificant statistical blip, a rounding error, or just a glitch in the seasonal adjustment factors used by the Labor Department.

The underlying technical fundamentals of the markets remain unconvincing. With Friday’s 269-point rally, only five of the 30 DJIA stocks made it to new highs. The market is extremely vulnerable by all rational measures. The problem is that we are in an irrational mania, and rationality is viewed as foolhardiness.

Russia
News reports indicate that nearly three out of every four Russians now grow some or all of their own food, a measure of the ways in which they are attempting to cope with their ever-increasing impoverishment. No wonder Boris Yeltsin doesn’t want to get out of the hospital. Read the full story at  http://www.russiatoday.com/rtoday/news/1999030104.html?html

Europe
The much-vaunted united European currency is now a much-disappointing flop. Since its birth on January 4^th, the Euro has slipped steadily against the US dollar, down nearly 7%. Reaction from the poobahs at the European Central Bank: "We’re puzzled."
Grizzly’s translation: "The global economic meltdown is claiming its next victim." Indeed, North America now stands alone as the world's last bastion of economic growth.

The G-7 ministers have agreed to create a "financial stability forum", a pool of experts who will try to foresee (and even forestall) problems in the world financial system. The Americans also told Japan and Europe to speed up their sluggish economies.

Meanwhile, the US and Europe are on the verge of a trade war, over, of all things, bananas. It might as well be nuts.

Japan
From The Economist: "The dubious honour of WORLD'S BIGGEST GOVERNMENT DEBTOR has passed from the United States to Japan, whose government issued $235 billion of debt last year. That is more than twice the amount issued by all other rich countries combined. J.P. Morgan, an American bank, reckons that the Japanese figure will reach $350 billion, as the country makes nearly nine-tenths of all new global government-bond issuances this year."

Interest rates hovering just above Absolute Zero have failed to revive the Japanese economy. Japan is on the road to ruin, say analysts Warburg Securities.

Brazil
Check out the CATO Institute’s dead-on analysis of why the bailout of Brazil by the IMF has failed, and indeed why all such actions are doomed to failure. http://www.cato.org:80/dailys/02-25-99.html