OT: Dow 3600greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
By Russell Mokhiber and Robert Weissman
A couple of wise guys write a book titled Dow 36,000 and the market takes a dive.
Former Washington Post columnist James Glassman and his sidekick, Kevin Hassett, want us to believe that the stock market is grossly undervalued.
In Dow 36,000, the book that has received inflated reviews by a stock-market crazed public, Glassman and Hassett make the argument stocks will double, even quadruple, within a short period of time and that the Dow Jones Industrial Average should -- and will soon -- reach 36,000.
The book was published on September 20. On that day, the Dow closed at 10,823.90. As of this writing, the Dow stands at 10,019.71 -- a 7 percent drop, in less than a month. Way to go boys! You jinxed it!
All kidding aside, we take the view that the market is wildly overvalued. Glassman and Hassett think it should be 36,000. We think it should be more like 3600.
Corporate financial reports purport to measure profits and loss. Hundreds of billions of dollars in social costs -- sometimes called corporate crime and violence -- are for the most part externalized -- they don't make it onto the balance sheet.
Thus pollution, corruption, fraud, worker death and disease, price-fixing, shoddy consumer products and false advertising -- are costs that should be borne by the corporate perpetrators, but instead are paid for by consumers, workers and individual citizens.
This happens because there is not an effective counterweight -- law making, law enforcement or otherwise -- to the growing corporate power that overwhelmingly dominates the political economy.
In his book, The Tyranny of the Bottom Line: Why Corporations Make Good People Do Bad Things (Barrett Kohler, 1996) American University Accounting Professor Ralph Estes estimated these costs to be $2.6 trillion a year -- that's five times all corporate profits for the year 1992 -- the year of the study.
Let's assume that Estes is off in his estimate by a factor of five -- which he might be. The costs that corporations impose on the rest of us would still wipe out all corporate profits!
The science of estimating social costs is admittedly squishy. There is a big unknown factor. But at least Estes tries to put a number on it. The companies don't even report the costs, and there is a dead political economy that allows corporations to impose these costs on living, breathing human beings at will, virtually without popular resistance and without a demand for a public accounting.
Glassman is currently housed at the corporatist think tank, the American Enterprise Institute. At a luncheon session there recently, and in a phone interview, we asked him if one of the assumptions he makes in Dow 36,000 is that the country would remain controlled by the corporate interests. Glassman said that while he didn't have a crystal ball, he assumed that the "benign political environment" (read: ongoing control of our democracy by big corporations) would not be dramatically changed.
"There's only a remote possibility that we are going to retreat on market-oriented policies," Glassman said.
For example, he wouldn't want to see a crackdown on corporate violence. Or, rather, he doesn't see corporate violence.
A couple of years ago, Glassman wrote that the rich "don't commit the violent crimes that require billions to be spent on law enforcement."
We asked him whether he would include in his definition of violence cancer caused by petrochemical companies that pollute a city's air and water. "No, I would not consider that violence," he says.
Jonathan Rowe is a Washington journalist working on a book tentatively titled When Down Is Up: How Our Economic Barometers Mask Disaster, Divorce, Disease and Misfortune as Prosperity and Economic Advance (Doubleday, 2000).
Rowe says that Glassman is "a case study in the congenital inability of most reporters to look past the numbers and see what these Wall Street trends actually signify in people's lives in concrete terms."
"Glassman totally assumes that when the Dow goes up, life gets better," Rowe told us recently. In fact, Rowe explains, it often gets worse.
Many of the growth industries in the economy -- prisons, casinos, nursing homes -- reflect a troubled society.
"The things that you and I would call misfortunes, as seen through the lens of the Dow Jones Index, are economic gain," Rowe says.
Glassman says that the percentage of Americans owning stock has increased from 10 percent in 1965, to 20 percent in 1995, to close to 50 percent today. He thinks this is a good thing, because the more people own stocks, the more they will align their political views with the corporations they own, the more politicians will be beholden to corporations, thus creating an even more favorable political atmosphere for corporate stock ownership. Glassman calls this a virtuous circle.
Rowe says Glassman is talking about an economy that works like a retrovirus. "It turns us into agents of the disease," he says.
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999; http://www.corporatepredators.org)
(c) Russell Mokhiber and Robert Weissman
Focus on the Corporation is a weekly column written by Russell Mokhiber and Robert Weissman. Please feel free to forward the column to friends or repost the column on other lists. If you would like to post the column on a web site or publish it in print format, we ask that you first contact us (email@example.com or firstname.lastname@example.org).
-- (email@example.com), October 16, 1999
DOW 3600? HAH.You're an OPTIMIST.
If you read the book "At The Crest of the Tidal Wave" by Bob Prechter, written in 1996, he shows clearly and unequivocally that we would soon be entering the 4th of the 9th wave i.e. wave FOUR down of GRAND SUPERCYCLE degree.
The book has scientific backing in the area of geometry known as chaos theory, of which fractal waves(which includes ELLIOTT waves)area sub-set. The Great Crash of 1929-32 was of one degree SMALLER(SUPERCYCLE), and it took the DOW down 89%, from about 380 to 41.
What is scary is that since we are seeing now the GC WAVE FOUR portended in that book, fractal theory says that ultimately,(and that means it can take decades, but also means there will be NO new DOW high until long after this), the DOW drop will not stop until it reaches to the depths of the fourth wave of one-lesser degree. Well, that is EXACTLY the Supercycle wave IV where the DOW dropped to 41 in 1932.Since then, we have been in Supercycle WAVE V of GC WAVE THREE.
So, we are looking at an ultimate target for the DOW of between 41 and 380. THAT IS NO SHIT OR MISPRINT.
If the DOW CAN LOSE 89% AT ONLY SUPERCYCLE DEGREE, IT WILL LOSE 95-99% AT GRAND SUPERCYCLE DEGREE. So, from 11,000 to about 100 is a loss of 99%. Read the book.There are astounding predictions made in it that are now unfolding almost exactly in the order given in the book! The only thing is that the TIME element, which is the LEAST certain parameter of fractals, has been stretched out farther than what BOB called for in the book. He expected all this present dross to hit in 1996.
THERE WILL NOT BE A NEW HIGH SEEN IN THE DJIA FOR MANY, MANY DECADES, GET IT?
-- profit_of_doom (firstname.lastname@example.org), October 16, 1999.
This will be the mother of all crashes - no question.
-- Andy (2000EOD@prodigy.net), October 16, 1999.
Corporate violence and Mokhiber and Weissman, one of the sillier things I've ever read. I'd be truly amazed if these guys were not government funded in one way or the other. Just absolute silliness and nonsense. Should have a disclaimer for entertainment purposes only.
-- (email@example.com), October 16, 1999.
Prechter is a very bright guy and E-Wave is a fascinating concept. The problem is that Prechter has been sighting the target of 41-380 since 1987. By my reckoning, that was 8000 Dow points ago, and he's completely missed a great bull run. The book was written in 1966 when Bob stated we were at the crest of the tidal wave; it simply hasn't happened yet and the market has been up by almost 300% since he penned his forecast.
Contrary to your statement, his book has NO scientific basis and Prechter would never claim that it does. You may be correct in saying there is a scientific basis to fractals, but it is quite a leap to conclude that any such science is applicable to Bob's wave interpretations. Using the term "science" suggests an element of ultimate truth which is hardly justifiable after missing the greatest bull market in history.
-- mike (firstname.lastname@example.org), October 16, 1999.
I saw that Kevin Hassett dude on the news last night, trying to calm everyone down. Man was that funny. I swear the guy looked like steam was going to start blowing out of his ears and he was going to explode. After bullshitting half the world into thinking the market was going to 36,000, here he was on the hot seat, trying to explain away the fact that it just lost over 600 points in one week. I loved watching that guy squirm. What an asshole. I hope they hang him by his balls.
-- @ (@@@.@), October 16, 1999.
James Glassman and Kevin Hassett impress me as a couple of con artists that are only out to sell their book. I don't think that they believe that the DOW will reach 36,000 any time in the near future. Their provocative title has gotten them plenty of news coverage and interviews. Their punishment for this grand theft bunko should be for them to have to eat all of the unsold copies of their book without water. After next week, there will be warehouses full of them.
-- Mr. Adequate (email@example.com), October 17, 1999.
Yeah, the stupid ass is between a rock and a hard place now. He has to keep selling the lie because if he doesn't, everyone will know he's a fraud. And the more he keeps bullshitting them, the madder they will be when the bottom falls out. I guarantee you when some of these investors snap and go postal this guy will be one of their most hunted targets. If I was in his greedy frickin shoes right now I'd be looking to catch the next shuttle to the moon, and fast.
-- @ (@@@.@), October 17, 1999.
Anyone consider INFLATION????????
-- Larry (Rampon@cyberramp.net), October 17, 1999.