[excerpt from Don McAlvany Current Intelligence Briefing]
Link 01/21/2000
(may not last long, daily updates...)

RAMSEY KING

IBM, Intel, Microsoft, and CMB reported earnings that derived heavily from investments. This occurred in the Japanese Bubble of the '80s. Japanese industrial companies derived a good part of their earnings from 'zaitech', or financial engineering. Many US corps haven't contributed to their pension funds for years, an enormous earnings bonanza. When the bear arrives, earnings will fall even harder than analysts can imagine.GE had in-line earnings but fell; its chart is ugly.

Yesterday's early irrational exuberance quickly morphed into gloom as asset allocators bought bonds and sold stocks. The allocation occurred both in the physical market, and futures market. CME sources said Merrill sold >2k SPHs. PIMCO, and/or Wells Fargo were the rumored Names. Bonds had an adventure yesterday. They opened and cratered to a new low @89.01. Then asset allocators ran USHs to 90.05. When the allocation was over, bonds sagged and stocks rallied >100 DJIA points. Around 2:30 EST oil rallied sharply, nearing $30. Bonds cratered, forcing stocks lower. It's the inflation, stupid!. The theme for 2000 will be increasing inflation thanks to Slick and Al, and the realization of the inflation by an increasing number of market denizens. The last 3 minutes of oil trading, Feb. oil tanked 85 cents! USHs were closed; stocks tried to rally, but failed.

A much weaker than expected Philly Fed Index (9.1 in Jan vs. 15.1 in Dec) and a drastic fall in new orders (1.9 vs. Dec's 16.8), helped bonds, and induced liquidation of cyclicals. Cyclical stocks have been in collapse the past two weeks; they're under pressure from rising raw commodity prices.

Fed Gov. Meyer warned the risk of boom/bust is high, and the Fed shouldn't be concerned with stock prices, but with economic overheating. Boobie, they're one and the same. If you don't know that, you shouldn't be making policy. Today is expiration, volume may be a record. Lucent's soft earnings has Globex SPHs down. Stocks are cratering after earnings, even if good - a bad portend.

Central banks and governments are still trying to cap gold as other commodities soar. Any gold explosion would wreck havoc as bankers, brokers, and gold mining companies are short a multiple of deliverable gold. When gold rallied in September, Ashanti Gold went tapioca as it was short more gold than it could mine in years. Wednesday, we noticed Newcrest Mining's (Melbourne) earnings report on the DJ tape. Newcrest reported their hedge book at 6.9m ounces of gold. For the last 6 months of 1999, Newcrest produced 466,450 ounces of gold. Newcrest is short >7 years of production!!! Now multiple that by untold mining companies around the gold, plus wise guys, bankers, and brokers. When gold finally unleashes the unruly bonds of mass manipulation, it is likely to make QCOM look like chump change. There's no predicating the level of price equilibrium. We just put some gold shares into the pension accounts and the kiddy's accounts.

Fed bank credit is +11.5% y/y. M3 is +15.2% in Q4; 11.9% the past 13 weeks. The 1st sign of restraint: M3 fell $57B last week, seasonally adjusted.

-- Possible Impact (posim@hotmail.com), January 21, 2000

Answers

Thank you very much for this posting. I did not know this webpage existed and at one time I paid $700 per year for daily emails of just one of these sources.

-- Red Hill, CPA (r.c.hunter@usa.net), January 21, 2000.

guys.,...give me a break....gold has never been lower.....just look at the global market and get a life

-- jim sullivan (seamus83@yahoo.com), January 21, 2000.

Jim, this IS a "look at the Global Market".
Why the price is low, and might change...
And every day "looks" for more market information, use it or not, your choice. Free advice from a free site, it is of great value to Me, just sharing with others who might want to take a look.

-- Possible Impact (posim@hotmail.com), January 23, 2000.

Thanks for link,Gold will shine again,but rest of world may look dark.I will keep smilen though.

-- BRAD (FNWYSS5@AOL.com), January 23, 2000.