Market Review: Wall Street and The Mainstream Press

"Lured by `lower prices’," reports USAToday of Friday’s action, "buyers returned to Wall Street…shrugging off concerns about a profit warning from Circuit City and a federal probe into Computer Associates’ books."

The Dow regained more than 130 points and flirted once again with the mythical 10,000 level. The Nasdaq rose a meager 8 to 1724, after posting its lowest close since Oct. 31 on Thursday. And The S&P 500 closed the week slightly higher at 1089.

Makes you wonder what analysts are thinking, doesn’t it? "Lower prices"? Hmmmnnn…

"Even after wiping out trillions of dollars in retirement savings," Bill Bonner wrote in a special report I alerted you to on Friday, "the Dow is still 70% above its historic average."

And the Nasdaq? "Even after sliding from a peak near 5,050 to below 1,450… even after the massive `Tech Wreck’ wiped out more than 77% of Nasdaq’s gains… The Nasdaq 100 composite is trading for an incredible 73 times last year’s earnings!"

Tell me… is this a time to be long equities? Excited by a turn around in the economy? Probably not. Of course, you will make up your own mind. ]

And, as always, there’s more Daily Reckoning, below… including Bill Bonner off-the-grid in Nicaragua, Jim Davidson on the future of the corporation and John Pugsley on the future of government and the individual…

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THIS WEEK in THE DAILY RECKONING
by Bill Bonner

02/22/02 THE IDEA OF AMERICA – PART TWO

"…Most Americans look at the country as if it were an Enron financial statement. Sure, many of the assets are fictitious and the liabilities are understated. But, like Merrill Lynch, we are all bullish onAmerica…"

02/21/02 THE IDEA OF AMERICA

What are the ties that bind America together? "…Neither blood, history, religion, or language…but only an idea: that you could come to America and be whatever you wanted to be. You might have been a bog-trotter in Ireland or a baron in Silesia; in America you were free to become whatever you could make ofyourself…"

02/20/02 HUMPTY DUMPTY-SAN
Guest Essay by Dan Denning

"…the land of cheap electronics and Godzilla movies is leading the world to the brink of disaster…and the whole gruesome affair may be a chilling preview of what debt and deflation could wreak in the United States…"

02/19/02 DEAD PRESIDENTS…PART TWO

"…That’s what America is all about, says a character in Arthur Miller’s ‘American Clock.’ People work hard in order to get rich. That’s all there is toit…"

02/18/02 DEAD PRESIDENT’S DAY

An essay in honor of President’s Day: "…When it came to slavery, Lincoln was an opportunist. But that doesn’t mean the man had no long-held opinions. He did. Unfortunately, they were almost all lame-brained…"

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FLOTSAM & JETSAM: An Army Of Principles

– From John Pugsley,
Chairman, Sovereign Society

"An army of principles will penetrate where an army of soldiers cannot. Neither the channel nor the Rhine will arrest its progress. It will march on the horizon of the world and it will conquer."

-Thomas Paine (engraved on the headstone of Rose Wilder Lane)

"…Paine was correct in his belief that an army of principles will penetrate where an army of soldiers cannot. History shows us the power of adhering to principles; the stunning advances in science and technology are based on exactly this concept. Yet, the principles of freedom have failed to attract many followers.

This is a tragic puzzle considering the consistent failure of governments. In our lifetimes we have witnessed the failure of communism and fascism and the stagnation of socialism. Leaving decisions and responsibilities in the hands of individuals produces progress and peace, while transferring them to the state leads to stagnation and conflict.

Why then don’t all thinking people join Paine’s army of principles? The failure lies in the erroneous premises on which liberty’s intellectual pioneers built the case for freedom. The philosophy of liberty was built on transcendental arguments, not on science. Harvard professor Edward O. Wilson, the great synthesizer of sociology and biology, identified the problem. "If we explore the biological roots of moral behavior and explain their material origins and biases, we should be able to fashion an enduring ethical consensus. We can’t start out from a transcendental, a-priori starting point."…

As biology, anthropology, and genetics advance, we are discovering the truth about human nature. From this is emerging the realization that nature endows no species with rights, but, through evolution, endows them only with a specific "nature." By understanding our own nature we have the opportunity to discover principles on which a new, more rational and scientific social contract can emerge.

…the most fundamental principle is that any workable system must leave individuals sovereign over their lives and property. For whenever an individual passes his or her sovereignty on to another person or group, those given power are bound by their natures to first weigh their own self-interest, before considering the interest of the person who has entrusted them with power. Power will tend to corrupt, as it always has…"

Bon weekend,

Addison Wiggin,
The Daily Reckoning
February 23-24 2002

PS. "It’s tragic that this river of logic has not swept away mankind’s dependence on the state," Pugsley continues. "In spite of prose from the likes of Thomas Paine, Adam Smith, John Locke, Frederic Bastiat, and 20th century giants like von Mises, Hayek, Rothbard, Lefevre and Rand, we seem further away from a world where individuals are sovereign. Wars rage, tyrants rule, and in the large democracies, the masses vote themselves into bondage."