The Daily Reckoning Weekend Edition

July 15-16, 2000

Paris, France

By Addison Wiggin

Dear Daily Reckoning Reader,

I’ve been reprimanded – on your behalf.

I’m told, by people who know about these things, it’s impolite to begin sending you The Weekend Edition without giving you a widely advertised opportunity to say ‘No, thanks’. right up front.

While the Weekend Edition is designed to allow you the maximum opportunity to review the Daily Reckoning – and all the ideas, insights and advice we assemble on the website each week – at your liesure. I suppose, it is kind of rude to assume you would like it. (Did I mention it’s still free?)

Anyway, never one to ignore my ‘p’s and ‘q’s, I’m obliged to let you know: the Daily Reckoning and the Weekend Edition are separate e-mails. You don’t have to get one to get the other. Or vice versa.

So here’s your big chance. If you don’t want the Weekend Edition, but would like to continue getting the Daily Reckoning click on this e-mail address: unsubweekendedition@agora-inc.com and type “unsubscribe” in the subject line.

If you want to continue getting both e-mails do nothing. You’re already signed up.

Alright then?

Let’s see what’s cooking.

Addison Wiggin

MARKET REVIEW:

Despite dipping into negative territory late in the day on Friday the Dow closed up 24 points. Analysts blamed the late selling on a Florida jury who ordered the cigarette industry to pay a record $145 billion in damages to Florida smokers. Still, following an even later rally the average closed up. and ended the week at 10,812.75. Gainers led decliners by a 7-to-6 ratio on the NYSE.

The Nasdaq was up 71 for the day and finished the week at 4246. Notably, Amazon.com gained $7.50 Friday following an analyst’s claim the River of No Returns stock isn’t in danger of running out of cash. The S&P 500 closed up 14 to 1509.

Russell 2000: 542.23 down 0.53

Gold: $282.00 up $1.10

Crude Oil: $31.30, down $0.17

Natural Gas: $4.145, down $0.021

CRB Futures Index: 219.45, down 2.35 points

MARKET COMMENT:

“The Labor Dept. released June wholesale and retail prices Friday. the wholesale Producer Price Index (PPI) rose 0.6 percent and retail sales were up 0.5 percent. These are fairly strong numbers.

“But keep this in mind: if you exclude the volatile food and energy costs, the “core” PPI actually decreased 0.1 percent. June also marked the slowest increase in industrial output in the last 9 months – up only 0.2 percent. All in all, this week’s numbers give us some indication that the economy may, in fact, be starting to simmer down.”

Dan Denning,

Fleet Street Letter

HOT PICK OF THE WEEK:

Mines in the Making, Profits for the Taking by Dan Ferris

Following cyclical trends in mining stocks can be very lucrative. The annualized return for the first pick in the Real Asset Investor GEMS portfolio is up 152%.

HEADLINES, INSIGHTS and NEWS:

Analog Bear, Digital Dreamer by James Davidson

Within our lifetimes, the contradictions between an ‘analog’ government fashioned for the Industrial era and an Information economy will create a world of woe.

The Web of Debt and the Great Abyss

by Dr. Gary North

Some estimates put the derivatives market at US$150 trillion. Yet the investing public has no clue regarding the magnitude – or danger – inherent in this increasingly complex web of debt.

“Perfect” Demons And “Three-Sigma Events”

by Raymond Devoe, Jr.

Many investors feel the possibility of a severe secular bear market is a “three sigma event.” Meaning, among other things “it couldn’t happen again in 200 years.” Really?

Political Quagmire and Looming Profits in Gas

by Dan Denning

The 16th World Petroleum Conference was welcomed with great pomp in Calgary, Canada but it concluded with a whisper: look for trouble from OPEC and profits from natural gas…

If It Sizzles, It’s Probably Fat

by Lynn Carpenter

Good companies should be picked like fine furniture and good clothes. Focus on enduring quality – and income – not what’s ‘hot’. The Fleet Street Letter 10-Stocks-for- 10-Years provides ample proof.

And in case you missed it…

THIS WEEK in the THE DAILY RECKONING

By Bill Bonner

07/14/00 BASTILLE DAY

“…what went up like a Bastille Day rocket came down like Louis 16th’s head. The Information Age seemed to offer little knowledge or wisdom to guide investors. A company that was worth a billion dollars one day was thought to be worth less than 5% of that a few days later. The “efficient” market seemed to have no idea a stock should really be worth…”

07/13/00 AGNES WORLD

“…one of the unlovable weaknesses of the human character is the unwillingness to take responsibility for our own mistakes. The stars are blamed…the god-parents, spouses, brokers, the devil – anyone but ourselves…”

07/12/00 F****** BOND TRADERS!

“…Bastiat, too, makes the same distinction – between “real law” – that is, the rules of a self-organizing system, the laws of nature, the laws of thermodynamics, and customary taboos and practices – and the “pretended law” that kings, despots, Al Gore and the IRS produce. Real law, he says, give us just results. Pretended laws are counterfeit. They are the cause of injustice, not the cure for it…”

07/11/00 THE WEDDING PARTY

“…for my part, a private confession that I make reluctantly…I am willing to stand before God when the time comes – if that is what happens. But, to paraphrase Faulkner when he got fired from his job at the Post Office, I’ll be damned if I want to answer to every son- of-a-bitch with a gun or ballot in his hand…”

07/10/00 ADVICE FOR YOUNG MEN

“…marriage makes no sense, of course. It is contrary to the spirit of liberty we men profess to adore… the pledge to ‘love and to cherish…forsaking all others…until death’ is a guarantee that is usually outlasted by a refrigerator or the drive train on a Oldsmobile…”

FLOTSAM AND JETSAM

from Dan Ferris,

Editor,

Real Asset Investor

“Last week’s announcement from the Saudis looks like another entry into the ‘all-talk-and-no-action’ column. Their ‘surprise’ 500,000 barrel per day production increase has yet to materialize… and the market is still waiting for evidence of the additional oil.

Oil moved back above $31 Thursday, after sinking below $30 last week.

The whole energy sector is off this week, including high- flying natural gas. Still, as long as oil prices don’t skyrocket too much, the long-term outlook remains bullish, as incentives to explore and produce are kept in check.”