09/02/01 MARKET REVIEW: Consumers Running Scared
Things on Wall Street went from bad to worse this week as the Dow closed below the 10,000 point mark for the first time since April. Consumer spending – or the lack of it – is the most recent worry for investors. Thursday brought news from the Commerce Department that consumer spending in July grew at its slowest pace in 9 months. All three major indexes tumbled…but who’s watching?
American consumers are clearly beginning to tighten their belts. This could spell even more bad news for the economy. Consumer spending accounts for two-thirds of U.S. GDP.
The Dow closed down 473 for the week to 9950. The Nasdaq was down 111 to 1805, while the S & P dropped 51 to 1134.
THIS WEEK in THE DAILY RECKONING
by Bill Bonner
08/31/01 MADAME DE ST. GEORGES
“…Most people take material progress for granted. But it is not guaranteed. Investors are shocked by the idea of a 17-year bear market. Economists are appalled at the suggestion of a Japan-style 11-year slowdown. But markets, assets, living standards, and incomes can go down for very long periods. Nothing in life is guaranteed…certainly, not progress…”
MADAME DE ST. GEORGES
08/30/01 THE 17 YEAR ITCH
“…In 1989, it was hard to find something negative to say about the Japanese economy. Every word was flattery as the Nikkei Dow rose towards 40,000…eleven years later, every headline about Japan makes the country sound hopeless. How long will it be before American reputations are flattened by a bear market just as those in Japan have been?…”
THE 17 YEAR ITCH
08/29/01 BULL MARKET IN BLAME
Guest Essay from Christopher Byron
“…For nearly four years, the analyst community on Wall Street, and the media organizations that covered it, engaged in what amounted to a massive, shameless and totally irresponsible free-for-all riot in pursuit of money. Action must be taken now to prevent an even more dangerous recurrence of such fraud…”
BULL MARKET IN BLAME
08/28/01 BACK TO TREND
“…What happens when bubbles finally pop? ‘Every bubble for which we have data…stocks, bonds, commodities and currencies…went back to trend, no exceptions, no new eras, not a single one that we can find in history,’ says Jeremy Grantham. If we are not mistaken, Chairman Greenspan’s reputation also seems headed ‘back to trend’…”
BACK TO TREND
08/27/01 PLANTING TREES
“…timber is the only low-risk, high return asset class in existence. People are not familiar with it…and what they are not familiar with they avoid. But timber is the only commodity that has had a steadily rising price for 200 years, 100 years, 50 years, 10 years. And a unit of wood, just the price of a piece of wood – in real terms – beat the S&P over most of the 20th Century, from 1910 to 2000…”
PLANTING TREES
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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