Cereberus Mauls the Mighty

Cerberus, a three headed dog with a dragon’s tail who guarded the gates of Hell in Greek times, paid a visit to Wall Street Friday… and put an abrupt end to Thurday’s “mighty” rally.

For our purposes, the three-headed beast looked eerily like the “Three E’s” we’d come to know so well last fall – Earnings, Energy and the Economy…

Earnings: …earnings warnings from Radio Shack, Agilent Technologies and Sycamore Networks… and tough news from Motorola left these 4 stocks down significantly, dragging the major indexes with them…

Energy: …a request for bankruptcy protection from the California utility PG&E saw California’s energy crisis claim its first major victim and…

The Economy: …a Bureau of Be-Labored Statistics report indicated the unemployment rate rose to 4.3% in March – the highest level in 20 months. Businesses cut 86,000 in March. “Payroll reduction” was even more daunting, a number not seen since the end of 1991. The “R” word is still dancing on analysts’ lips…

And what sorrow the beast hath wrought. On Thursay, the Dow had enjoyed its second-largest one day rally ever – gaining 402 points. But by the close on Friday, Cerberus had reclaimed 126 of those gains… and the week end saw the big board closing 87 points lower than Monday’s opening…down to 9878.

The Nasdaq also slipped Friday – down 64 for the day… down 120 for the week to 1720. Nasdaq investors sufferd a tantalizing 8.9% boost on Thursday. The S&P 500 lost 23 on Friday to close the week out 31 points lower at 1128.

Markets never go straight up… or straight down. Sell the rallies.

Around The World: In Japan, the Nikkei inched up 0.02%. But in Europe all markets closed lower…The DAX in Frankfurt shed 1.4%; The FT-SE 100 in London and the CAC-40 in Paris dropped 0.4% apiece.

The Russell 2000 – an index of smaller companies in the US – dropped 10 points on Friday to 434. The Russell lost 3.5% for the week.


Gold: $260

Crude Oil: $27.06

Natural Gas: $5.38

CRB Index: 212

Dollar Index: 114

The Sad, Sad Euro: $.90

British Pound: $1.43

Japanese Yen: $.81

FLOTSAM AND JETSAM: In case you didn’t “get it”…


Following every speech by Greenspan you hear the mass media prattling on about “emergency rate cuts” and the “soft landing” being orchestrated by Fed chief Alan Greenspan. The “slowdown” of the economy was meant to happen… now all he needs to do is twist a knob here…pull a lever there and we’re saved. Everything is going according to plan, right?

Well is it? I’d like to call your attention to a shocking special report. It’s yours free, to consider at your leisure. But I wouldn’t wait too long to read it, because as you’ll see…

The man who accurately called the Asian crisis… the collapse of Brazil’s currency… the dot-com wreck…and the meltdown in tech stocks on Wall Street…is now calling for a financial calamity of far grander proportions.

Please allow me to introduce you to Dr. Kurt Richebacher. You may have heard Bill Bonner quote regularly in the Daily Reckoning.

– Dr. Richebacher has been described as “the man who predicted the Asian crisis” by the French national newspaper, Le Figaro. – Paul Volker, chairman of the Federal Reserve Board under Ronald Reagan, proclaimed, “Sometimes I think that the job of central bankers is to prove Kurt Richebacher wrong.”

Unfortunately, that’s a very difficult position to be in. Dr. Richebacher has developed one of the most amazing track records in the world for predicting economic trends. He saw the “earnings melt-down” coming, but that’s nothing compared to what he sees coming next.

In fact, for the better part of a year he’s been laboriously proving that “The Crisis Almost No One Sees Coming” is about to rock the U.S. markets and wreak mayhem with financial institutions around the world…

A crisis so far reaching it will could affect your business, your pension, your investments… even your cash in the bank. Most investors don’t have a clue about the dangers that lie ahead. Even more dangerous… they don’t care.

Worst of all, as the report below indicates, massive imbalances in the financial system are setting us up for “the greatest economic disaster in 70 years.” In fact… “The last time [this event occurred]… it wasn’t long before the stock market came down, too. And a recession that was the worst in the last 25 years.

Unfortunately, many investors today hardly remember it. Most stock brokers and fund managers today have never seen a bear market, let alone have managed investments when a bear is devouring portfolios.”

“The coming crisis will be much more devastating than 1987. The imbalances are far worse… and there are fewer options for dealing with it… because financial markets have changed dramatically.”

Simply click on the link below. Not only will you find yourself more informed — and prepared — than the average investor who gets the bulk of his information from CNBC and similar mass media sources, but by reading Dr. Richebacher, you’ll also get a chance to profit from unique opportunities that a situation such as this provides the very few — the well-informed.

Plus, you’ll gain the opportunity to join Dr. Richebacher as he tells the real truth behind last autumn’s Wall Street collapse… and prepare yourself for the events sure to come. I couldn’t urge you to heed Dr. Richebacher’s warnings any more strongly than I am today.

Addison Wiggin,
Paris, France
April 7-8, 2001

P.S. As you’ll see when you follow this link, we’ve also prepared three additional reports — specifically written with you in mind. We want to bring new readers up to speed on the real effect of the credit bubble on the U.S. economy and stock market — as soon as possible. Should you choose to join Dr. Richebacher… the three reports, nearly priceless in value, will be rushed to you immediately

The Daily Reckoning