The Daily Reckoning Weekend Edition
June 26-27, 2004
By Addison Wiggin and Tom Dyson
Gold is over $400; but you already know that, dear reader, this is the tenth time we have said it. We’ll move swiftly on…
Late Friday afternoon, as your editor was preparing to leave the office, we received news that the Commerce Department had revised its estimation for Q1 growth from 4.4% (annualized) to 3.9%. No revision had been expected. Hmmm…
We then read that the core price index for consumer spending – one of Greenspan’s favorite measures of inflation, says Reuters – increased to 2% for the quarter, ignoring fuel and food, of course.
"Recent evidence of higher than ‘expected’ inflation and weaker than ‘expected’ economic growth continue to support the likelihood of a ‘stagflation’ scenario," says our ubiquitous Californian correspondent, Peter Schiff. "Last week the government released higher than ‘expected’ increases in both consumer and producer
prices, and larger than ‘expected’ increases in the trade and current account deficits. This week, the government released an unexpected 1.6% decline in May durable goods orders (the forecast had been for a
1.5% gain, and follows an even larger 2.6% decline in April), [and] a larger than expected increase in unemployment claims… "
The currency markets reacted to this news by sending the dollar almost a cent lower against the euro to 1.2205; The gold market had already closed, so we will wait until Monday for the ‘relic’s’ reaction. We suspect gold will like this music – it sounds like the ’70s.
On Wall Street, stocks were stagnant. Tech stocks led the way; the Nasdaq gained 2% last week, to trade at 2,025 by Friday’s close. The Dow shed 44 to 10,372 and the S&P – delighting the manipulation theorists – rounded off the week back in its narrow range at 1,134.
We turn, once again, to our readers. On Thursday, we lost Bill Bonner. We asked the readers to help us find him…
*** Based on the advice of Jon Ashenbrener, a so-called "Senior Monetary Specialist" at IRI, I have kidnapped Bill Bonner, and am holding him for ransom at my castle in Hot Springs National Park, Arkansas. If my ransom demands are not immediately met, I will administer the ultimate punishment, and he will never be the same again, ever, ever.
As you will note as you cruise into our town, there is a big, ugly brown sign bragging that our fine town is the "Boyhood Home of President William Jefferson Clinton". This means we can summon him home at any moment!
Mr. Jon, as I call him (no, he’s not my hairdresser!), has actually spoken with My Hero, The Mogambo Guru, and probably tried to sell him some Vanatu Commemorative Thousand Dollar Coins or some such.
If you do not immediately force Mr. Jon to convince My Hero, the Mogambo Guru, to call me for a personal consolation, I will sentence Mr. Bonner to the ultimate punishment:
I will call Bill Clinton home.
I will place the two Bill’s together in my basement on two matching Lazy-Boy recliners.
I will force Bill B. to listen to Bill C. as he reads, slowly, each and every word of "My Life". It will take years, and much lip biting, and many tears.
Here will be the dastardly consequences:
Bill C’s head will swell so much at actually having a personal "listener" that it will explode.
Bill B’s head will likewise explode due to listening for such an extended period to Bill C.
Since they will be in my basement, the dual explosions will kill me as well.
*** Dateline: Memphis, Tennessee 06/24/2004
A minor disturbance was quelled without injury today when renowned marketer and financial commentator Bill Bonner was reportedly spotted at a local Circle K store. With him, allegedly, was a colorful figure
dressed in a white bejeweled jumped suit while sporting long sideburns and dark glasses.
This second individual has yet to be identified but locals "thought he looked familiar".
Bonner was apparently interviewing this individual for a project involving one of his several publications.
Bonner later remarked, "At first I thought it was Alan Greenspan out and about in some sort of disguise, but I came to realize that Herr Direktor is none other than a famous entertainer reborn, so to speak, as the Chairman of the Federal Reserve. "
"At least ", Bonner continued, "we can now understand why federal monetary policy continues to make about as much sense as rock ‘n roll lyrics of the 50’s and 60’s. "
*** I don’t know if you were serious or not, but you owe your readers some kind of explanation. You talk about your Paris correspondent’s disappearance in Paris, and want to know where Bill is. Please let us know if this is a joke, and, if not, what is going on. Thank you.
Enjoy the weekend.
for The Daily Reckoning
June 27, 2004
P.S. As you may or may not know, we recently moved lock, stock and family barrel from Paris to Baltimore. Are we crazy? Possibly. But there is one thing that Baltimore has hands down over Paris – THE BLUES. Blues musicians in Paris are perfunctory. They know the correct notes to play… but they play them with about as much passion as an arranged marriage.
Here in Baltimore the blues are gritty… the musicians make lots of mistakes… they get drunk, chase women… some are missing teeth… but when they’re tearing into a riff, it makes you feel good.
We recently had the good fortune to meet Rudy Strukoff of Rude Dog’s Rythmn Review. Rudy, a Chicago native, has been in town for several years and taken it upon himself to collect samples from some of
Baltimore best blues musicians. "While it can be said that not all of these players are completely sane," says Rude Dog, "the musicians on this compilation took the long hard road and did something noteworthy, they combined their talents and made a blues record that is guaranteed to keep you groovin’ from beginning to end."
This weekend would be a good one, if you’re interested, to sample the cool crisp Baltimore blues sound. We recommend you try:
BALTIMORE ON TAP – Great Blues, Cheap!
Go ahead… it’s only 10 bucks, less than the cost of a greasy breakfast, but it will entertain you for hours.
P.P.S. The picture on the cover of the CD was taken from our favorite vantage point at the bar in the Cat’s Eye Pub, Fell’s Point.
— Daily Reckoning Book Of The Week —
Bull’s Eye Investing: Targeting Real Returns in a Smoke and Mirrors Market by John Mauldin.
This is a great book… factual, balanced and most importantly, interesting. We enjoyed it from start to finish. But don’t listen to us; Mauldin is a friend of ours. Take it from Amazon.com and the most critical readers on the web. A reader writes:
"What I like the best about John Mauldin’s writing is his balanced approach – he is neither a stock shill nor a gold bug – but one who allows the facts and logical arguments to dictate his conclusions."
THIS WEEK in THE DAILY RECKONING
THE BEST THING ABOUT MONEY 6/25/04
By Bill Bonner
"… There is something vulgar about the hustle a real business needs… like sweat-stains on a starched shirt or a cold cup of coffee and stubbed out cigarettes. A man who wants to make a real fortune usually has to grub for it; it’s hard to be elegant or refined when you’re scratching for cash or market share. But grubbing
for money is still better than a lot of other things men do… "
THE CRUDE AWAKENING 6/24/04
By John Myers
"… Year after year the Americans have made up the shortfall in oil production by importing foreign crude. But what happens when the world’s output begins to fall? The price impact of dwindling supplies will meet surging demand – a formula for incredible profits in oil and gas stocks… "
POOR DEMOCRACY 6/23/04
By Hans Sennholz
"… A recent report by the World Commission on the Social Dimension of Globalization, sponsored by the International Labour Organization, is long on pious advice and short on economic reasoning… "
THE BUFFETT OF BOMBAY 6/22/04
By James Boric
"… There’s something in the air, here in Mumbai, and it’s not just the sweet smell of curry. Indians are optimistic. "They know they sit on the cusp of becoming a developed nation. They’ve simply come too far to slip backwards again," said Mr. Shah… "
GOLD, WATER AND MRES 6/21/04
By Mogambo Guru
"… Why would "foreign sources" do this to themselves? And why would Alan Greenspan let this happen? One of the big mysteries to me is why Alan Greenspan, a guy who once wrote a defense of gold as money, while writing, at the same time, a classic denunciation of fiat currency, would do what he does. It makes no sense… "
HEADLINE, NEWS And INSIGHT:
Why Invest In Iraq
by U.S. Department Of State
"… The recent establishment of a new, sound currency, transparent legal environment, and a friendly business environment will help ensure strong, sustained growth in the years ahead… "
The Land Boomers
by A Reader Writes…
"… The boom continued to gather strength. In 1885 the harvest was prolific, the price of wool was high, the railways made a profit for the first time in the colony’s history, and optimism reigned supreme. A few warning voices were raised overseas, but heard as from afar…
Who Controls Account 990N?
by A Reader Writes…
"… My firm and I have contacted the Merc on three different occasions with video proof that I recorded of my trading. It shows blatantly this guy crossing his orders thousands of times a day. The first person we talked to in compliance admitted that he saw something there when they reviewed the video of the trades I taped of him. He was mysteriously fired the next day… "
by James Boric
"… What a day I had yesterday. After meeting with Mr. Ranjit Pandit, the managing director of McKinsey&Company (India), Mr. Amitabh Khanna, the CFO of a major Indian telecom company, and Kakesh
Jhunjhunwala – one of India’s most successful proprietary investors – I have confirmed many of my original thoughts. India is a place worth investing in for the long haul. I’ll explain by taking you through each of my three meetings yesterday… "
by Byron King
"… The Internet has given radical Islam its day-to-day communications and connections to the world at large. And Western complacency ("What, me, worry?") has given radical Islam its fifth-column in every target set. (For example, the 9/11 hijackers were hiding in plain sight, taking flight lessons, marrying German girls and collecting welfare in Hamburg… )"