A New Casual Precedent

The Daily Reckoning Weekend Edition
July 03-04, 2004
Baltimore, Maryland
By Addison Wiggin and Tom Dyson

The big event was a non-event… the Fed raised interest rates by a quarter-point and the markets yawned… and then went down.

The big market event was produced on Friday; the latest jobs data were released. June non-farm payrolls increased by 112,000. The market didn’t like the number. Not only was it well below expectations, less than half the 250,000 new jobs that Wall Street had predicted, but the news marked a change in trend from three previous months of much stronger growth.

The market dropped like a stone, initially, and then recovered. Recently, bad news has caused the markets to rally. This time it didn’t. "A new causal precedent is being set," writes Paul Mampilly of Capuchinomics.com, "weaker news is not being seen as a prelude to an even longer period of low interest rates."

The Dow finished the day down 51 points and the week down 89. The Nasdaq lost 19 points last week, a 1% decline.

Where do we go from here, dear reader?

That question is a popular one these days. Here at the Daily Reckoning HQ, we don’t even pretend to know. But DO intend to find out… with your help.

Bill, Eric, Tom Dyson, Dan Denning, James Boric, myself – heck, the whole dang Daily Reckoning team – will be in Vancouver in August for the Agora Wealth Symposium. We hope that you’ll join us…  together, perhaps we will be able to unravel some of the more stubborn knots that lurk in the global capital markets. Here are the particulars:

The Agora Wealth Symposium
Vancouver, Canada
August 11-15, 2004

Hope to see you there,

Happy Independence,

Addison Wiggin,
The Daily Reckoning
July 11, 2004

P.S. Your editor appeared on the Korelin Economics Report yesterday with Congressman Ron Paul. Listen to the interview:

The Korelin Economics Report

— Daily Reckoning Book Of The Week —

Upon announcing we had assembled a collection of essays exploring the "Idea of America," we wrote: "Of course, we have no illusions"… suspecting that people glued to their TV sets watching FOXNews would have no interest in a collection of "deep thinking on the meaning of our nation."

Perhaps the ideas expressed in the collection resonate well with readers concerned about military adventurism abroad… and skyrocketing budget deficits… and perishing personal freedoms at home.

Naahh… we suspect most people would still rather not ask questions… so we still have no illusions.

But if you are curious, dear reader, what better day than the 4th of July to take a look?


By Bill Bonner

"… As people in villages died, thousands and thousands of orphans were left to fend for themselves. Others were simply abandoned by parents who couldn’t feed them, but didn’t have the strength or heart to eat them… "

By Chris Mayer

"… I have the distinct feeling that when the GSEs are finally stricken by crisis, it will be written as if it were obvious all along. Just as the history of LTCM – where one is prone to shake one’s head and say "my goodness what were they thinking?" – so too, future readers will just shake their head, as it will all seem so obvious by then… "

By Doug Casey

"… But, understanding the risks, I think silver stocks could provide some of the best, if not the very best, contrarian returns in the years ahead. There are several reasons I say that, but the main one is the ongoing silver supply/demand equation… "

By Dan Ferris

"… Perhaps by now you’ve guessed that the answer to these questions, the most unwanted asset today, the one thing nobody seems to want to own, the one asset people can’t seem to get rid of fast enough, is… "

by The Mogambo Guru

"… Now, let me just flash my credentials – I am a guy who has experienced many episodes of "They are many, and I are few!" and I note, for the record, that it never really worked out for me… "



Free Rent
by Byron King

"… Thus we have a housing bubble. It is a cascading tragedy of people using funds that are not theirs, to "purchase" real estate that they cannot afford, obligating themselves to make payments that will stretch their incomes and constrain their lives. At the same time, we have landlords making unprecedented allowances to find solvent tenants. This simply cannot reflect a healthy economy… "

Rubber and Rice
by Dan Denning

"… Think about it. One village produces nothing but spam. Just spam in a can. Maybe people buy it. Maybe they don’t. But the village cranks it out no matter what. What if the village can’t make enough? What if it makes too much? How does it adjust? Or, take an expensive item like say, caviar. A whole village cranking out caviar. All at the same price, and regardless of demand. You can see that it simply can’t work… "