News Brief for October 15, 2002:

How do people like Ron Insana, Neil Cavuto, Maria Bartiromo, Lou Dobbs, Louis Rukeyser, and Paul Kangas keep their jobs? These people gave more airtime to lying, cheating, and corrupt individuals than anyone else. They also gave more airtime to stupid people.

They rarely challenged any of the CEOs, analysts, fund managers, gurus, investment bankers, and brokers, they interviewed on their shows. And it made little difference to these individuals that the people they were interviewing were touting stocks that had extreme valuations when based on price to earnings, and price to revenues or that salaries, stock options, and bonus money were far out pacing the results put forth by the individuals receiving the million dollar and sometimes, billion dollar compensation packages.

The same question could be asked about CNBC and the Wall Street Journal, why don't these companies just fade away since, in my opinion, they have shown they care much more about their advertisers and guests than they do their viewers or readers, the ones who really support the program or paper?

I don't have a clue to what the answer is. I heard this weekend that at the vary least, 95% of the incumbents in the U.S. Congress are going to be reelected? Really, health care, education, the Federal budget, the economy, and the stock market, are all screwed up more now than they were two years ago, but voters aren't going to hold the U.S. Congress accountable at all? The American people were right there giving Clinton, Greenspan, and Ruben credit for the strong economy of the Nineties, but now with the economy in the mud, the President, Federal Reserve Chairman, and the Treasury Secretary aren't responsible at all? It makes no sense to me. Keep watching and reading the same business programs and papers, and reelecting the same politicians and see what happens in another 10 to 15 years. Again, the Federal debt is $6.2 trillion and it just keeps going up and up.

News Brief for June 26, 2002:

Charles Schwab used to be a "deep discounter," but then came the internet and on-line trades of less than $10. Schwab at $29 a trade had to offer something for that extra $20. What was it that Schwab offered, what else, but advice. You know advice on how to manage your money. Now Schwab is pitching another angle: stock ratings. Schwab makes it sound like that since Schwab doesn't have an investment banking division, there's nothing to picking stocks, it's easy.

Makes sure you all pay that extra $20 a trade, because I'm sure it will pay for itself. All that great advice and those sure to be great stock ratings will more than make up for it. But, remember, Schwab and anyone else who charges for advice, doesn't guarantee anything and the regulators don't require them to produce any given returns. They can market themselves as experts with no track record.

It looks like E-Trade is doing the same thing. They can't compete with $10 trades with their $20 trades, so like Schwab, they have to offer something for that extra $10.

If I were you, I would think about it. Do I really want to pay that extra commission for their good-old advice? Granted, if you don't trade much or have a large asset base with these two companies it probably makes sense to stay with them. However, if you trade a few times a month and don't have $100,000 in assets with them, I think it would be better to dump them and go with someone who offers trades at $10 or less. Not to mention the fact, they both have started to add an extra service charge to their trades.

News Brief for April 10, 2002:

Read the last News Brief and then read this quote from The New York Times.

"'Critics Charge Pension Bill Favors Highly Paid Workers' (Wed. Apr 10, 2002, By RICHARD A. OPPEL Jr., The New York Times). WASHINGTON, April 9, When many employees lost their retirement savings after Enron filed for bankruptcy protection, lawmakers in Washington promised legislation that would mend the holes in the pension safety net exposed by the company's collapse.

But some legal experts and pension rights advocates say the first of the post-Enron pension measures to reach the House floor actually opens up fresh loopholes. Some of the bill's provisions would lead companies to seek to reduce the number of employees covered by pensions and give proportionately larger pension benefits to the most highly paid executives, they say."

Before you judge the politicians, the SEC, and the press on their handling of the Enron mess, wait until the results are in. That is, politicians, the SEC, and the press have lots of people with big mouths who can talk a lot, but talk doesn't mean much with regards to this case. What you need is action. Let's just wait and see if accounting firms really do change the way they do audits. Let's just wait and see if US corporations start to "fully disclose," vs. saying, "No Comment." Let's just wait and see if Enron execs. are found guilty of any criminal activity and if they are found guilty, do they serve time equal to the crime. Let's just wait and see if the Enron execs. are in the poor house, and where did the money they all made in the scam go? Did it go to the investors who lost money? Or did it go to the government, lawyers, and the big investors who lost money?

Last year, the Congressional Budget Office projected a surplus of $5.7 trillion over the next ten years. Due to the recession, the estimated surplus is now about $2 trillion. When politicians are asked, "Exactly where does the $2 trillion come from?" They answer, "Social Security taxes."

Social Security taxes are capped at $85,000. That is, the wealthy do not pay hardly any Social Security taxes when compared to their incomes. What does this mean? It means the politicians are using middle-class Social Security tax dollars (the projected $2 trillion surplus is all from Social Security tax dollars) to fund the tax cuts that mostly go to the wealthy.

There is one thing that the "X" and "Y" generations can expect from their baby boomer parents in a legacy: higher property taxes, higher income taxes, higher Social Security taxes, higher sales taxes, higher excise taxes, and a reduced standard of living... It's already happening.

News Brief for November 29, 2001:

Senator Daschle starts calling the current US recession the Bush Recession. When asked about Daschle's comments, Ari Fleischer, the White House Press Secretary, says it's America's recession. When the economy was strong throughout the Nineties, not once did I hear the press or the politicians give credit to Americans, the credit was either given to Clinton or Greenspan. I would also like to point out that not once did Clinton or Greenspan not accept the credit from the press and politicians. But, low and behold, when were in a recession, it's America's recession.

In 1999 and up until May of 2000, Mr. Greenspan and the Federal Reserve were aggressively raising interest rates with the sole intent of slowing the economy. Anytime the Fed raises or lowers interest rates there is a time lag of nine to eighteen months before the rate changes are felt by the economy. And anytime the Fed raises or lowers interest rates the amount of contraction or expansion caused by the rate changes are nothing more than an educated guess. Meaning, when the Fed hiked interest rates in 1999 and 2000 they did not know just how much they would slow the economy and the economy would not start to feel the effects of the rate hikes until late 2000 or early 2001. Last week it was reported that the US has been in a recession since March of 2001. Not to worry Mr. Greenspan or Mr. Bush, neither of you will be blamed for the recession, however, when the economy does turn around, the press and your buddies on the hill will be right there to give you all the credit that you will gladly accept.

Here in California many are cheering as Enron stock falls from the eighties to less than 50 cents. Unfortunately, those who are cheering do not realize that those responsible for all of Enron's problems: the executives and the board of directors, will pay nothing. In fact, those mostly responsible will walk away with $millions. This is our system here in America, when a company does wrong, those mostly responsible, go free and generally take millions of dollars in prior compensation with them.

Obviously, stock holders pay severely, and guess what? Over 70% of Enron's float is held by institutions like Fidelity Investments. Meaning, not only does the executives and board of directors of Enron pay nothing, but Fidelity's idiot fund managers who bought the stock with other people's money pay nothing as well. The real losers are the middle-class who trusted Fidelity and other institutions with their long-term savings. Since the losses are spread over millions of the middle-class and several mutual funds, nothing will done, and in a few months, it will all be forgotten.

News Brief for August 31, 2001:

Speaking at the Fed's annual retreat in Jackson Hole, Wyoming, Greeenspan remarked, "There can be little doubt that sizable swings in the market values of business and household assets have created important challenges for policymakers." Rather challenges are created or not does not change the fact that Fed policymakers use the same methods they used 80 years ago. Prior to the stock market crash in 1929, the Fed was agressively raising short-term interest rates and nothing has changed since: the Fed still either raises, lowers, or leaves short-term interest rates alone. The adjustment to interest rates is still, basically, the only way the Fed deals with problems or issues regarding the economy.

The Chairman also stated, "While the stock market has been volatile in recent months, home prices have not." No shit Chairman, you mean when you lower rates 7 times, it surprises you that, that creates an instant incentive to purchase a home? Granted, mortgage rates have only come down about 1 percentage point in the past year vs. the Fed lowering rates by 3 percentage points, but that 1 point will still help home buyers.

I wonder why the Fed is not questioning that fact, why is it the Fed is loaning out money to the banks at 3 percentage points less, but the banks have only dropped the mortgage rate by about 1 point? And this is what I'm talking about, the Fed does the same shit they did 80 years ago, why doesn't the Fed try to find a way to get a better deal for the consumer? If the Fed is loaning out their money (which is really our money anyway) at 3 percentage points less and the banks are only loaning it out at 1 percentage point less, why doesn't the Fed come up with a new policy that just goes around the banks? (Greenspan quotes from the Fed's web site).

From the The New York Times, "The booming late 1990's appear to have left the middle class in the New York region and California no better off than it was a decade before, an analysis of Census Bureau data suggests. The poor got a little poorer, the rich got a lot richer and the large group in the middle emerged slightly worse off than when the decade began."

News Brief for August 14, 2001:

Today, the New York Times had a story titled, "Wall Street May Be Spoiler for New York's Economy" (By Leslie Eaton). Here are a few quotes from the article: "As Wall Street faces what could amount to its worst slump in 25 years, the securities industry's dire forecasts threaten to rain on the financial parades of New York City's mayoral hopefuls." And, "That group also predicts that bonus payments will fall steeply this year, by 30 percent or 40 percent. That works out to a drop of roughly $4 billion from last year the loss of which would ripple through expensive stores and pricey co-ops to City Hall, which would collect a lot less of the income and sales taxes that have kept its coffers full."

Wall Street faces what could amount to its worst slump in 25 years, but bonuses are expected to decrease by 30-40%. Does that make sense to you? Shouldn't bonuses be completely wiped-out? How would you like it if you boss came to you are said that the company was having its worst year in 25 years and that you were still going to get a bonus. Wouldn't that be great? Wall Street loves America. Wall Street loses billions of dollars for their clients, but still has the balls to pay themselves a bonus. Only in America, where the middle-class (those who pay the vast majority of the bills), are too busy to pay attention to all those upstanding individuals from Wall Street to Washington, ripping them off.

News Brief for June 14, 2001:

Yesterday on Fox News The O'Reilly Factor, Maria Bartiromo of CNBC stated, "Investors need to take responsibility. "She was referring to the fact that "investors" need to take responsibility for their own decisions when it comes to money. Bartiromo was inferring that Wall Street should not get all the blame. The fact is Fidelity Investment manages close to $1 trillion and where that $1 trillion goes exactly, is 100% up to Fidelity. No customer of Fidelity decides what bonds or what stocks are purchased. A customer can tell Fidelity to buy growth stocks, but exactly what stocks are purchased is decided by Fidelity. A customer can tell Fidelity to buy junk bonds, but exactly what junk bonds are purchased is decided by Fidelity. And all the so-called experts state that it is about individual stock (bond) selection stupid. So if it's about stock selection and Fidelity is the one making the decisions on which particular stocks to buy, it's Fidelity's problem stupid. If Fidelity was buying or holding Cisco when it had a PE of 150 and a market cap of close to $600 billion, it's Fidelity's stupidity and not their customers. Granted, those who paid for Fidelity's stupidity were the customers, but that's the way in goes in the real world.

Maybe someday the average Joe will see that the Bartiromos of the world care about one thing and that's the money. She doesn't care about the single mother in Walla Walla, WA...she cares about the fat cats and she is their puppet on a string. Read her book and I'm sure she will convince you it's all your fault and Wall Street had nothing to do with the ridiculous values that internet stocks got to.

It's like with Social Security, a couple of days ago, Mr. Moynihan (the co-chairman of the President's commission of Social Security) said, "That's what grown-ups sometimes have to do." He was talking about the fact that Social Security needs changes and even though it's going to be hard on Americans, they need to accept the responsibility. The fact is, Americans did accept the responsibility years ago: Americans started saving for their retirements via Social Security taxes, and I'm talking about taxes reaching 15% over a 45 year period which would more than be enough to provide disability and a full, yes, full retirement. Back in the Thirties, Social Security was planned on only being a partial, but that was when you were taxed at 2%. It's close to 15% now and has been for years, and if you think that means that Social Security is still only a partial, even though your taxes have gone up seven fold, you have to be nuts. Like always, those responsible: the politicians, who wasted your premiums, walk away free and clear. The real irony is the fact that virtually none of those individuals making the decisions in regards to Social Security (including the Bartiromos of the world) won't even need a cent of Social Security. And not to worry Politicians and Bartiromo, the American middle-class will not hold you accountable, in fact, they will immortalize you.

News Brief for April 10, 2001:

I know it doesn't have anything to do with money, but if anybody knows why the traffic in the Bay Area is getting completely out of hand, can you email me with your answer.

News Brief for April 3, 2001:

Bill O'Reilly of Fox News continues to say we are in a recession. It is impossible for us to be in a recession at this time: we must have 2 consecutive quarters of negative GDP growth to be in a recession and since the last quarter (the forth of 2000) was 1% growth we are at least another 3 months away from a true recession and that's only if you assume that the first quarter of 2001 was negative growth (we do not yet have first quarter GDP numbers). I believe the reason why O'Reilly wants to use the recession word is to draw attention to himself and his show. If not, why doesn't he simply say were in a downturn or a weak GDP growth period and he's watching the numbers and will let us all know when we truly are in a recession, why call it a recession, when it's not?

O'Reilly also told his audience, "But Talking Points has come to the conclusion that if you can afford to ride out this year there is some big money to be made in certain stocks next year. [on the other hand] I could be very wrong about this but if you are ever going to take a chance in the market the next few months might be the time. There are some excellent companies whose shares are very cheap. This is how fortunes are made. But [on the other hand] be very, very careful. It is a stock pickers game and that is a dangerous game." One thing I can pretty much guarantee is that sometime in the future O'Reilly will take credit for making a good call rather the market is up or down: if it's down, he'll say I told you it was a gamble, but if it's up, he'll say I told you I was buying last March and April. Harry Truman was well aware of the Bill O'Reillys of the world and that's why he wanted a one-armed economist to get advice from.

Oh, by the way, I too believe we're very close to the bottom and I am starting to dollar-cost-average back into the market, I plan to slowly get back in the market in the next 6 months. One thing I won't do is turn around and say, "On the other hand, the economy still stinks and I don't know if it is a good idea to get back in," and then sometime down the road, no matter what the market does, tell you, I was right the market is higher, or I was right the market is lower. No one knows where this market is going including those overpaid Wall Street professionals. If you are thinking about getting into NASDAQ stocks, read: NASDAQ 2001.

News Brief for April 2, 2001:

The New York Times reports, "Suddenly, Critics are Taking Aim at Greenspan." Inside the Stock Market has been challenging Mr. Greenspan and his fiscal policies for years. With irrational hikes, that is, no sound basis for the hikes, sooner or later Greenspan would get in trouble. For all those who say Greenspan is only one man, I say right back to you, why were you not saying the same thing when Greenspan was getting and taking the credit for the strong economy, that is, why, when he was getting all the credit, were you not saying, "He's only one man." The News says, politicians (or the Fed Chairman) always get the blame when things go wrong, I think the News is wrong: politicians (or the Fed Chairman) always get (and take) the credit when things are going well, but always blame it on something or someone else when things go bad.

Bill O'Reilly is one of Greenspan's critics, but only until recently. O'Reilly is a bandwagon player, that is, when Greenspan was actively raising rates (end of 1999 to May of 2000), severely hurting global economies, O'Reilly was jacking his mouth about the price of tea in China. O'Reilly (and the vast majority of other Greenspan's critics) only got on the bandwagon after the damage was already done.

News Brief for March 22, 2001:

On March 12th Bob Pisani of CNBC reminded us all that even though the S&P 500 and NASDAQ were in bear markets, the DOW still had 800 points to fall before it would be in bear market territory. Well, ten days later the DOW is only a couple of points away from a bear market. It has been amazing to watch the financial news such as CNBC, CNN, and PPS continue to give air time to Wall Street so they can continue to tell the American people to buy, and that were at yet, another support point. NASDAQ has already broken through at least twenty of Wall Street's so-called support levels (On April 3, Sue Herrera on CNBC would start her market rap report with, "Broke a couple of support points.").

More amazing is how someone (Wall Street) could be so wrong so many times, but still be allowed on national news media sources under the heading of experts. If the average Joe's doctor was as wrong about their jobs as Wall Street economists, analysts, and investment professionals, we would all be dead and gone by now. How Wall Street retains any credibility is simply amazing (understand, many will turn right around and say, "investors were wrong or you were wrong," but don't forget average investors and you were not paid billions of dollars for your advice or opinions).

Today, Craig Barrett, chief executive of top U.S. computer chip maker Intel Corp, said, "We don't know how long this slowdown is going to last. It may last six months, 12 months or 18 months." He also said, "As far as our visibility is today -- and that's only three months or so -- the picture doesn't look particularly bright." However, the stock was up 12% today. It seems Wall Street likes to gamble with other people's money, if the CEO doesn't know when their own company is going to turn around surely Wall Street's so-called experts don't know either.

News Brief for March 8, 2001:

Today, Fidelity reported profit more than doubled. Many executives and fund managers get richer even though the performance of Fidelity's funds was less than stellar and many of Fidelity's stock funds that were mainly invested in tech, lost over 50%. Fine, you want to say what do you expect when NASDAQ is down close to 40%, just make sure when NASDAQ recovers you use the same logic: tech funds are up because NASDAQ is up, don't say tech funds are up because of the business acumen of Fidelity's fund managers.

"BOSTON (Reuters) - Fidelity Investments, the world's largest mutual fund company, said on Thursday its profits more than doubled to $2.17 billion in 2000, as strong performances at its fund supermarket and brokerage arms offset weak sales of Fidelity funds and market declines."

"Revenues for the year were $11.096 billion compared to $8.845 billion in 1999 and assets under management at year end dropped to $919.8 billion from $955.1 billion, reflecting declines in the stock market. In 1999, Fidelity earned $1.008 billion in net income. While the profit figure was 115 percent higher than in 1999, the performance of Fidelity's funds was less than stellar."

News Brief for March 7, 2001:

Here's a News Brief of mine from last March:

On March 28th (remember this is last year), Goldman Sachs' strategist Cohen cut her stock allocation model. What's that mean? It means whatever the financial news media wants it to mean. If the news media wants to make Cohen look good, it won't matter what the market does in the next six months, if the market is flat or down, the news media will simply tell you Cohen warned you six months ago by cutting her stock allocation, if on the other hand, the market is up, the news media will simply tell you Cohen was still a bull because she still had a 65% stock allocation. My point is the news media has vested interests and what's in their best interest may not be what's best for you.

Just to show you how predictable the financial news media is, on April 14, 2000, NASDAQ was down over 1,000 points for the week, Maria Bartiromo on CNBC said, "Cohen, was right on." Here's what Cohen said on March 28:

"NEW YORK, March 28 (Reuters) - Stock market bulls paused on Tuesday after news that a closely watched Wall Street guru had reduced the equity exposure in her model portfolio to 65 percent from 70 percent... Cohen also forecast the Standard & Poor's 500 to be at 1,625 one year from now, a new outlook."

In my opinion, being "right on" would have been to of reduced your equity position at the very least to less than 25%. But, to simply reduce your position by 5% means nothing and in no way suggests you're "right on." Also, when Reuters put the story out on Cohen's allocation change, the S&P 500 was at 1518, now it's 1357 (April 14, 2000), slightly down from Cohen's prediction of 1,625. I realize it has not been a year yet, but my point is for Cohen to get such praise from Bartiromo and since Cohen is such a guru, I think Cohen should have said that the S&P would fall a couple hundred points in the next two weeks before it moved up to 1,625. Now if Cohen had reduced her stock allocation to 25% and said the S&P would be down 200 points in the next two weeks, that's a different story, and all the praise the financial news wanted to give Cohen would be well deserved. But, she didn't do that. She simply reduced her stock allocation by 5% and made a year from now call of 1,625 for the S&P 500. Reducing your stock allocation by only 5% would not have saved you much over the last two weeks and as far as Cohen's prediction of 1,625 for the S&P 500 in a year, we still have tweleve months to go to find out how accurate Cohen's prediction is going to be.

Well it's a year later and it looks like Cohen is off by almost 400 points. Guru? Not!

More on the subject of gurus. Last August 19th, Ralph Alcombora was on Money Week (CNN) and he said, "Next June [01] NASDAQ 6,000." Well if NASDAQ triples in the next couple of months, Alcombora will be "right on."

(Insert: Well, it's June of 2001 and NASDAQ is in the low 2,000s. Alcombora was 4,000 points off.)

What's my beef with gurus: they make $millions off individual investors and by their track records they clearly don't deserve it.

News Brief for January 31, 2001:

Mr. Greenspan cut interest rates by a half point for the second time in less than a month. Just over a year ago, Greenspan was aggressively increasing rates and telling the American public the increases were necessary to fight inflation. Now with the CPI and unemployment about the same as just over a year ago and oil actually higher, Greenspan starts to aggressively cut rates. The man makes no sense. However, when you match his rate increases and decreases to the NASDAQ, you find the rate increases occurring when NASDAQ is punching through new highs and the decreases occurring when NASDAQ is going through new lows. Not targeting the stock market Mr. Greenspan? Look out Mr. Greenspan, playing with interest rates like you do may not be the best thing for the American and Global economies.

News Brief for January 12, 2001:

This is a good time to remind you about the news media and why you should take what they have to say with a grain of salt. On March 2, 1998, the front cover of Business Week magazine read, "ZAP! How the Year 2000 Bug Will Hurt the Economy (It's worse than you think)." Sixty Minutes stated on November 29, 1998, "Utilities a crisis," "Global economic crisis," "Implications in the world and American society that we can't even comprehend." The media clearly overstated Y2K.

Some say the reason why Y2K was no big deal was because "they" corrected most of the glitches. If that's the case then why in smaller countries where they did not take corrective action, Y2K was still not a problem? Again, the answer is that Y2K was more media hipe than anything else.

Don't worry though, Business Week, and Sixty Minutes, people will still buy your magazine and still watch your TV program because, unfortunately, everyone seems to like the bull shit now a days and when it comes to bull shit, you're the best.

News Brief for December 5, 2000:

Today, Greenspan said:

"In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending,"

He could just of easily of said, "When the US has a Fed Chairman who raises interest rates several times within a very short period of time and he refuses to let prior interest rate hikes be absorbed by the US as well as world economies, there is a very high possibility the Fed will over tighten." When the Fed Chairman has very little to personally lose due to an over tightening, the likelihood of carelessness on his part rises substantially.

News Brief for November 21, 2000:

O'Reilly: Cavuto said three times, "Been there done that." You should of told him we have never been there done that: had NASDAQ at a 52 week low, down 30% year to date including a DOW that's still at 2 1/2 year ago levels, had 6 rate hikes by the Fed within the past year, had a presidential election undecided after 2 weeks, and had as many large cap tech companies warn in the previous two months. Been there done that, what bull shit and from someone you call a market guru, based on what, he's on television?

On Greenspan: Greenspan's 6 rate hikes were for inflation. Why not ask yourself what evidence is there for inflation? The price of oil? Well, Greenspan's 6 rate hikes have done nothing to lower the price of oil, in fact, it's gone up since Greenspan started his hikes and is still at $35. Greenspan's rate hikes have slowed the economy, hurting corporate profits as well as the stock market, and the full affect of the 6 rate hikes has not even been fully felt by the economy, it takes up to 18 months to actually feel the last rate hike.

When you told Cavuto about the woes of the stock market and how that would affect the government's surpluses he virtually ignored you. The government makes 20% on every realized gain in the stock market, and for short-term gains which over half the trades on NASDAQ are short-term, the government makes 28%. Also, corporations pay taxes on corporate profits, rather corporate profits are still growing or not, the fact is they are not growing as fast and are expected, thanks to Greenspan's rate hikes, to slow even more in the next two quarters. The government will feel the pinch as well as the lower and middle class rather Cavuto likes it or not.

You stated lay offs will start to occur, they already have, Lucent announced over 2 weeks ago they are laying off 10,000 employees.

Cavuto said the economy is fine? Why have so many companies warned Neil? Why is the NASDAQ at a 52 week low Neil? Why is the DOW virtually at the same level it was in early 1999 (remember DOW 10,000) Neil? The economy is fine, right Neil?

This story is not about trashing Cavuto, it's about realizing there is a problem with the economy and you all in the news service need to realize it and get Greenspan back in the real world before it's too late. I would like to remind Neil, Greenspan just last week kept his tighting, no Neil not neutral, he kept his tighting bias, and he made no remark about lowering interest rates. As far as hoping Greenspan gets out of the dark ages, so far hoping has not work, the news media needs to start telling the truth about Mr. Greenspan.

Oh, by the way, the Fed was doing their thing: "fighting inflation", just before the 29 crash. But then, the Fed Chairman at the time didn't get laid off, so from his point of view it really wasn't a depression, it was just a mild recession.

News Brief for November 14, 2000:

I can't believe how screwed up the politicians are. And as they yak back and forth, billions of dollars is being lost in the stock market. The losses in the stock market are not only being caused by this messed up election, but due to Mr. Greenspan's six rate increases (Greenspan wanted to slow the economy and increase unemployment, his rate increases are doing just that). Since the government makes a ton of money off of corporate earnings and capital gains, those surpluses the politicians brag about all the time, will be history next year regardless of which Mickey Mouse politician is in the White House.

The irony of the whole mess: it's the middle and lower class who are going to be the ones who pay, not the ones responsible. For example, the middle and lower class are the one who will be laid off, not CEOs. Also, the middle and lower class look to journalists and reporters to keep pressure on the politicians to do their jobs, but unfortunately, most journalists and reporters are kiss asses at best (also, most reporters are partisan and that keeps them from getting to the real truths) . The only reporter who I have seen challenge those he interviews is Bill O'Reilly, and the vast majority of important politicians are too scared to come on his show, and O'Reilly, for the most part, doesn't get into finanicial and business matters and therefore doesn't interview any CEOs (that I have seen).

Here's a short, and I mean very short list, of who I consider, kiss ass or extremely partisan reporters: Ron Insana, Neil Cavuto, Tom Brokaw, Karen Gibbs, Jesse Jackson (CNN, Both Sides), Charley Rose, Bernard Shaw, Larry King, Paul Kankas, Louis Rykeyser, Imus, Juan Williams, Dan Rather, Maria Bartiromo, Elanor Cliff. America's middle and lower class: as long as you continue to watch and listen to these kinds of reporters, you will continue to get the shaft (For example, most of the children of these people attend private schools, do yours? Most of these people have the best medical services possible, do you? Most of these people don't need Social Security, do you?).

News Brief for November 8, 2000:

Another failure for journalists and the American news services. They should have taken their own advice: every vote counts so don't make a statement about who won before all the votes are in and counted. It was a known fact that this election was going to be very close, statistically it was a dead heat. This fact should have been a red light to the news media to hold off on announcing their predictions especially in the close states such as Florida, Wisconsin, and Oregon. The news media is more concerned about being first to air then they are with getting the facts straight.

The journalists and news broadcasters also showed how "out of touch" they are with the average American Joe. All night long the journalists and news broadcasters complained about having to stay up late. Welcome to the real world: many Americans are pulling all nighters, taking care of babies and holding down two jobs to survive.

One final note about viewer email. Viewer email is not about letting the average Joe view their opinions. Viewer email is about the broadcasters and networks pushing their agenda and making the public think they are being heard when in fact, they are simply being used. For example, Bill O'Reilly of Fox News says he's an independent and completely fair and balanced (unbiased), but he's human, and like all of us he is biased one way or the other. One way O'Reilly shows the public he is fair and balanced is by airing viewer email. On any given topic, he will air 2 or 3 emails stating that he was more liberal and then turn right around and air 2 or 3 emails stating that he was more conservative, suggesting he is fair and balanced. However, no viewer can really make any judgment, that is, for all we know as viewers, O'Reilly could have gotten 1,000 emails on the given topic and 990 of them suggested he was more conservative and only 10 suggested he was more liberal, meaning the general public thought he was anything but fair and balanced. Viewer email is also completely edited by broadcasters and networks, many times it's edited so much that the viewer's real opinion is not what's aired.

News Brief for October 8, 2000:

I believe that regardless of who is in the White House, who controls the Senate or the House, four years from now you will not see any significant change with: Social Security, education, or health care. You will see the surpluses disappear. The only reason why America had surpluses was because of corporate profits that resulted in larger almounts of corportate and capital gain tax revenues. Without corportate profits a large amount of Federal tax revenues will go down the drain...and as long as the Fed refuses to let the US economy grow more than 2-3% there is no way corporate profits can continue as they did in the Nineties.

News Brief for September 28, 2000:

Today on Neil Cavuto's "Your World," Karen Gibbs said everyone is worried about the four "Es": Economy, Euro, Earnings, and Energy. My biggest worry is the one "F": the Federal Reserve and Mr. Greenspan since all of the four "Es" are tremendously affected by what the Fed does. Why the news media continues to not significantly address the issue of the Fed rate increases and how they are affecting the economy, the Euro, earnings, and energy is beyond me. To try and find out, I have written several times to Fox News and Mr. Cavuto, but I never hear back.

News Brief for September 21, 2000:

In the past few weeks several companies have announced earnings and revenue shortfalls for the 3rd quarter. Virtually all news stories from major media sources are reporting that the shortfalls are due to the Euro and high energy prices. (I say "virtually" because I mean 98% of the news stories, no I'm not saying every single news story.)

Why are not virtually all the news stories regarding the shortfalls saying that the Fed and Mr. Greenspan are getting what they wanted: they raised interest rates 6 times in the past year because they wanted to slow business across the board and now they are getting what they wanted.

Is the news media scared of Mr. Greenspan and the Fed? If they're not? Then why are they not reporting the root cause of business slowdowns, that is, the 6 rate increases? Or is it that most news reporters don't know the basics of Econ 100?

Increasing interest rates in the US makes the dollar stronger and the Euro weaker. Increasing interest rates in the US makes other countries increase their interest rates as well. Increasing interest rates takes capital away from industries making them slow production which decreases supply which can then cause product inflation. Increasing interest rates will cause layoffs.

Why doesn't the news media want the results of the Fed rate hikes known? Why do you all want to pretend that it's "something" else that causing economic slowdown when clearly it's the Federal Reserve and Mr. Greenspan?

Quit ignoring, down playing, or hiding, the root cause of the economic slowdown in the US and world. Give the people the facts and let them decide.

News Brief for August 4, 2000:

From Morningstar.com:

"Tuesday July 11, 7:00 am Eastern Time, Morningstar.com, 'Rising Stars at Fidelity,' By Kunal Kapoor.

All good things come to an end. Even your favorite fund manager will eventually call it quits.

This year, for example, there have been some high-profile retirements at Fidelity. Beth Terrana, longtime skipper of Fidelity Fund (Nasdaq: FFIDX - news)...

Shareholders of these and other funds going through a management transition may have good reason to be concerned. Often, when a top manager leaves his or her post, the new manager simply isn't up to the task...

Good managers are hard to come by and often become the targets of rivals and other firms. The three aforementioned managers certainly have bright careers ahead of them, but there's no guarantee that they will stay at Fidelity. Indeed, if this list had been compiled a few months ago, Erin Sullivan, now ex-manager of Fidelity Aggressive Growth (Nasdaq: FDEGX - news), would have been on it. She left the firm to start her own hedge fund at the ripe old age of 28."

News Brief for July 31, 2000:

The financial news media and the politicans can't talk enough about the budget surplus and the great economic times. However, for some reason, they don't talk about the fact that if Greenspan continues to raise interest rates those so-called great economic times and surpluses won't last. Last year the NASDAQ was up 85%, the DOW was up 25%, and the S&P 500 was up 19%, this year all those averages are down. Come next April 15, the federal government is going to find out that they were making money from the stock market as well, that is, Greenspan didn't just screw everything up for the little guy, but screwed it up for the federal government too: capital gain taxes this year are going to be slim to none as compared to last year's.

C-Span has been airing old political conventions. The convention that hit home with me was the Republican National Convention in 1956. Eisenhower, in his acceptance speech, talked about improving the educational system and how important it was for the future of this country. After 24 years of Republican Presidents and 20 years of Democratic Presidents, they're still "talking" about the screwed up educational system in America and how "they" are going to fix it. It's funny how the American people continue to listen to the bull shit coming out of Washington year after year after year. One thing that won't be funny is when Americans pay for their actions as far as not demanding politicians do what they say. The baby boomers got lucky: there were still plenty of high paying manufacturing and union jobs for those who didn't have a good education. However, the X-generation won't have that luxury and "they will find out" that many of them have no where to go when it comes to a decent wage (and don't forget, for those of you who are hoping for continued economic growth to solve some of America's problems, Greenspan does not like wages going up even during strong economic growth, you are in a lose, lose situation). I say "they will find out" because the oldest X-generation individual is only 35 years old. It will be another 20 years before you see and feel the impact of the piss poor American Educational System.

News Brief for June 26, 2000:

Tomorrow the Fed meets, the Fed will not increase rates. And if Greenspan finally gets the fear of inflation out of his head, maybe we can get back to growing the economy and helping the middle and under-class people. Somebody forgot to tell Mr. Greenspan that 20% of American children still live in poverty and here in California the number jumps to 25%. Also, 35% of Americans over 65 live in poverty. As long as Greenspan has his way these numbers will not get any better.

Before you judge Mr. Greenspan realize that inflation cuts both ways: when you have a Fed tightening the money supply which slows down production that hurts the supply side which can cause inflation. Increasing interest rates also causes home buyers to rush in due to wanting to lock in a lower interest rate which can cause inflation in the short-term. It takes 9-18 months to see the true impact of the rate increases made by the Fed which means we have at least another year just to find out what the last couple of rate increases have done to the economy. Finally, don't assume that the US economy can't grow at 6-7% just because Greenspan says so and just because the old US economy couldn't.

The politicians are all talking about percription drug benefits. Just to remind you: it took the politicians about 40 years to finally wake up about the tobacco companies. If I was you, I wouldn't wait 40 years to realize that the politicians care more about the drug companies than they care about you. You may be better off exercising and watching what you eat than taking percription drugs, drugs which have not been evaluated for long-term side effects? I'm sure the drug companies like the fact that eighty percent of Americans are overweight and seventy-five percent of Americans don't exercise, but what's in the best interests of the drug and food companies might not be in your best interests. (I am not saying that all perscription drugs are bad, I'm saying that you may be better off avoiding some perscription drugs, if at all possible.)

News Brief for June 5, 2000:

Yesterday, Headline News, reported that the US was in 24th place at 70 years when it came to life expectency. Erica Jong said, "We've won the right to be exhausted," referring to the women's movement. Now, in the US not only is it necessary for the man of the house to work full time, but the woman of the house must work full time too. In the US with both men and women becomming more and more stressed as well as exhausted, it's no wonder we're in 24th place.

Also, that 70 year life expectency is interesting when it comes to Social Security. Looking at it from the government's point of view: they take your money through a program called Social Security for about 50 years; taking the first dollar at 18 years of age; and on average pay you a salary for 4 years (70 which is the life expectency minus 66 which is the retirement age equals 4, the number of years SS pays an average retiree, the middle boomer, born 1955, has a full retirement at 66 years, 2 months.).

Let's further analyze this. The average baby boomer will get $2,500 a month in 2022 dollars, in 2022. In 2022, the average baby boomer will get $120,000 (48 months X $2,500) from Social Security. My last year's Social Security was $5,328, now double it because my employer also paid that amount in my name, that's $10,656. If I put only that year's Social Security away in a personal savings account drawing 7% interest until 2022, I would have $50,000. If I would put it in small-cap stocks, the amount would be $176,000 by 2022. And remember these amounts: $50,000 and $176,000 are based on only one year's Social Security payments. The first $100 I gave Social Security in 1973 would actually be worth $5,400 in 2022 at 7% interest, and if I could have put it in small-cap stocks it would be worth $80,000 in 2022 (again the $100 would be doubled to $200 because my employer matched my contributions, it's the law.).

I'm looking at it from the government's point of view which is the average participant, many like to look at the few examples where someone passed early and of course under those circumstances Social Security is a great deal. However, a few examples don't make up for the tons of individuals working and paying into a system for their whole lives, that on average, only pays them a few years of benefits. Oh by the way, I'm required to carry disability insurance outside of my Social Security bills. Don't forget too, 2022 is a long way away, the government is already extending full retirement benefit age, you would be a fool if you didn't think it was going to get worse...or become more of a ripoff.

News Brief for May 26, 2000:

Politicians and the news media mostly talk about how Greenspan is saving the US Economy with his great fiscal policies from certain death.

If the dollar does this and the GDP does that, and the stock market does this and if the Fed doesn't do that...the US economy will surely die, so says Mr. Greenspan.

Based on what Mr. Greenspan? Can we really base this current global, high-tech economy on old, isolated economy data? Are you so sure Mr. Greenspan the US can't handle growth greater than 2-4%? There's a lot of global competition out there holding prices in check like never before. As far as wages and workers goes, most workers aren't getting raises anymore than the CPI, and there are still 3.9% of the workforce still looking for work?

One thing for sure though, Greenspan's actions are: slowing the economy; slowing business, decreasing future business profits; killing the stock market; raising the unemployment which will mostly hurt the middle and lower-class, women, and minorities in America as well as overseas since all foreign economies are dependent on America's Economy; decreasing the chance for Americans to buy a home; decreasing the chance to send American children to college; and reducing the tax revenue of the Federal Government.

Congratulations Mr. Greenspan.

But, not to worry the politicians and news media are very optimistic and will only look at the bright side: "Thank you Mr. Greenspan for saving us all from certain economic destruction."

News Brief for May 21, 2000:

I have two questions for America:

1) How can Mr. Greenspan not target the stock market with his rate increases regardless of what he says?

From econ 100: raising interest rates slows down the economy; a slowing economy will decrease business across the board; decreasing business will in turn decrease earnings; a decrease in business earnings (profits) will result in a decrease in the stock market.

2) If I am correct, why isn't the financial news media directly pointing out the fact that Greenspan can not raise interest rates without affecting the stock markets? Since earnings come off the top, after paying the bills, even a slight reduction in economic growth can severely affect company earnings which in turn, rather that's Greenspan's intention or not, will affect the stock market: old economy stocks as well as the new economy stocks.

Any help you could give me in answering the above questions would be very much appreciated.

News Brief for May 19, 2000:

Greenspan with his 6 rate increases has more impact on the average individual including those overseas than Elian ever had, but he gets only a small amount of news coverage relatively speaking. If you asked the average American who Greenspan is and what does he do, most people don't have a clue.

Today Greenspan gave a speech supporting trade with China. I'm not debating the right or wrong of free trade with China. What I am debating is free trade with China will cause American Corporations to grow even faster. If Greenspan is raising rates to slow down the US economy why is he suggesting to grow American businesses even more?

There are 1.2 billion potential customers in China for American businesses. Assuming equitable trade with China is what Greenspan and Clinton are going for that could only grow American businesses at even a faster rate than they are growing now. So Greenspan will have to increase interests rates even more?

It looks like Greenspan wants to play God, he wants America to expand, but he wants to control the time and amount of growth completely.

As far as inflation goes, growth overseas causes new business for American products, but it also causes competition, good competition, the kind that keeps inflation under control, the good competition, the kind that's keeping inflation under control now and has been for the past several years. Inflation is not being controlled by Greenspan.

If Greenspan puts us in a Recession I hope we all are willing to share in the responsibility for letting him carry on without having to support his rate increases with facts and data. Facts and data regarding the new global economy, not the old US economy of the Nineteen Twenties.

News Brief for April 14, 2000:

What's happening in the stock market now is a liquidity crunch and that's it. Large institutional investors who control the vast majority of money have been showing you for years that they are no longer fundamental investors, just look at some of the junk they have been buying for the last two years: 1) large cap tech stocks with growth rates less than 30% and PEs greater than 100, and 2) internet stocks that have no earnings, only losses, and it was a known fact that the losses were going to go on for several years, but the institutions were still buying them.

Why this is important for you to understand is it will keep you from going crazy if you're a fundamental investor. You know you were buying solid companies with growth rates close to their PEs, solid balance sheets and cash flows, the stocks you were buying would even be considered value stocks because they still had good value based on price to earnings, price to revenues, and price to book values. But, your stocks have tanked right along with the high-flyers. The reason? The institutions have not been fundamental investors for years. Since they control most of the capital and since they are momentum investors, stocks like yours, solid companies, are going to be sold right along with all the junk. Wall Street institutions are sheep and they just go with the crowd.

Right now the crowd is sitting on the side with cash, and as soon as the lead sheep starts buying the other sheep (institutions) will start to buy as well. This is why I call it a liquidity crunch, the cash is there to buy stock, but for now it's on the side. It won't be long before it's right back in, driving prices back up.

The time to really worry about a liquidity crunch is when the boomers decide they don't want to own stock anymore, meaning the money won't be on the side waiting to be put right back into the market, but it will be going into more stable investments such as bonds to help support the boomers in their retirement. In 2010, the first boomers will be retiring and that's when you will first start to see money coming out of the stock market, money coming out for good. It will also be a slow process over a period of years that the money comes out for good, not like this past week in the stock market where $2.1 trillion in market cap was lost. That's twice what the whole stock market was worth when I started investing in 1984.

News Brief for March 28, 2000:

Numerous news media sources have remarked about the price of oil. They tell OPEC that an increased oil price can cause a slow down in economic growth which not only will hurt consumers, but OPEC too. I wonder why Greenspan can continuously raise interest rates which can hurt the economy as much, if not more than rising oil prices, but no one seems to care? In fact, many news media sources applaud Greenspan and his actions even though Greenspan doesn't really know exactly what the rate increases will do in the long run.

America's new global economy may be able to handle more than 3-5% growth, but with Greenspan we will never know. And if Greenspan doesn't slow down the rate increases and give the economy time to adjust, Greenspan will not only be curtailing higher economic growth, but may wipe out the growth we currently have. It's nothing more than a guess on Greenspan's part, but everyone claims he's some kind of prophet.

Today Goldman Sachs' strategist Cohen cut her stock allocation model. What's that mean? It means whatever the financial news media wants it to mean. If the news media wants to make Cohen look good, it won't matter what the market does in the next six months, if the market is flat or down, the news media will simply tell you Cohen warned you six months ago by cutting her stock allocation, if on the other hand, the market is up, the news media will simply tell you Cohen was still a bull because she still had a 65% stock allocation. My point is the news media has vested interests and what's in their best interest may not be what's best for you.

(Just to show you how predictable the financial news media is, on April, 14, NASDAQ was down over 1,000 points for the week, Maria Bartiromo on CNBC said, "Cohen, was right on." Here's what Cohen said on March 28:

"NEW YORK, March 28 (Reuters) - Stock market bulls paused on Tuesday after news that a closely watched Wall Street guru had reduced the equity exposure in her model portfolio to 65 percent from 70 percent... Cohen also forecast the Standard & Poor's 500 to be at 1,625 one year from now, a new outlook."

Treasury Secretary Rubin resigned on May 12 of last year. White House spokesman Joe Lockhart remarked:

"Secretary Rubin will be leaving after playing an extraordinarily central role in this administration as far as our outstanding record of fiscal discipline and turning the economy around."

America, quit listening to the double talk of the media, politicians, and corporations including CEOs, and start thinking for yourselves. You and your children will be a lot better off today and in the future.

News Brief for January 12, 2000:

I spent New Year's Eve in Australia and like most people, Y2K had no impact on me whatsoever. I even flew on January 1 at 9:30 AM. Again, there were no Y2K problems with any of the airlines or services in Australia. So what was all the hipe about Y2K? The answer is the media wanted you to watch them and read them, and if it meant they had to mislead you and scare you unnecessarily, it was all fine and dandy with them, as long as it got you to tune in to their program or got you to buy their publication.

On March 2, 1998, the front cover of Business Week magazine read, "ZAP! How the Year 2000 Bug Will Hurt the Economy (It's worse than you think)." Sixty Minutes stated on November 29, 1998, "Utilities a crisis," "Global economic crisis," "Implications in the world and American society that we can't even comprehend." The media clearly overstated Y2K.

Some say the reason why Y2K was no big deal was because "they" corrected most of the glitches. If that's the case then why in smaller countries where they did not take corrective action, Y2K was still not a problem? Again, the answer is that Y2K was more media hipe than anything else.

Don't worry though, Business Week, and Sixty Minutes, people will still buy your magazine and still watch your TV program because, unfortunately, everyone seems to like the bull shit now a days and when it comes to bull shit, you're the best.

News Brief for October 20, 1999:

From an article at CBS MarketWatch:

"About two decades ago Fidelity Investments created this unique group [sector funds], supported by what's now recognized as the 'best and the brightest' team of analysts, researchers and portfolio managers tracking industrial sectors."

Here they go again giving credit where it has not been earned. The article lists Fidelity's top sector funds for the past year (Fidelity has 39 sector funds). The top seven funds for the past year had returns from 60.9-109.8%. When you first look at these returns they look great, but before you judge them you must first compare them to a corresponding index. The top seven funds were in technology and are closely tied to the NASDAQ so I'm going to compare these so-called great returns of Fidelity's top seven sector funds to the NASDAQ index. I don't know the exact date the article used for their calculations. Since last October 12-20, the NASDAQ was between 1500 and 1650, I'm going to use 1575 for my calculations . Based on using 1575, the NASDAQ has returned 75% for the past year which actually beats Fidelity's 4th, 5th, 6th, and 7th place finishers. Only three of Fidelity's sector funds beat the NASDAQ index. I wonder how this brightest team of analysts and researchers would perform if they were not helped by a very strong bull market in technology during the period?

News Brief for September 28, 1999:

Today CBS MarketWatch reported that Fidelity Magellan fund hits $100 billion in total assets. The article also stated,

"Eric M. Kobren, who's been tracking the fund since he started the independent "Fidelity Insight" newsletter 14 years ago, credits both Magellan's performance and growth in the fund industry as a whole for the landmark."

"its success is a testament to excellent investment performance, as well as a reflection of the mutual fund industry's rapid growth."

Since Fidelity Magellan's 10 year investment return, load-adjusted, from Fidelity's web page, can't even beat a simple average such as the S&P 500 (Magellan's = 17.08% and the S&P 500's = 17.1%), the only testament proven is how the financial news media continues to bullshit the American public about the investment performance of the mutual fund industry including Fidelity and Fidelity Magellan.

News Brief for August 10, 1999:

Last Friday the unemployment numbers were reported. The unemployment rate stayed at 4.3% and employee wages rose 4.6% based on annualizing today's data for wages. The stock market did not like this because the stock market believes this data will add support to the Fed's desires to raise interest rates at the next Fed meeting.

Think about this for one minute. The Fed does not care if CEOs get 15%, 20%, or more for their raises, but the Fed does not like it one little bit when the average joe gets a raise of 4.5%. Here in the Bay Area, California, housing prices alone went up, on average, close to 15%. What this means is that the first time home buyer this year, even if they got a 4.5% raise during the last tweleve months (which the Fed can't stand), are deeper in the hole by 11.5% when compared to last year's first time home buyer.

Last Friday evening, Rukeyser on PBS' Wall Street Week, even made jokes about it, that is, the Fed not standing by for the middle class getting a 4.5% raise. Why is Rukeyser making jokes, because he's not one of the average joes, but is one who makes tons of money off the average joes. From his point of view, it is funny.

Three months ago the financial news was stating the small-caps were doing better and the market was broading out. I challenged that in my last news brief. Well, here it is, three months later and the sheep on Wall Street are still acting like sheep and buying what everyone else in buying which are the large caps. Today the big three indexes (DOW, S&P 500, and NASDAQ) are still up year to date, with the DOW and NASDAQ still posting double digit returns. However, the Russell 2000 (a small-cap index) was actually in the negative year to date.

The sheep mentality on Wall Street is also the reason you see CNBC constantly talking about the internet sector being down, 40%, 50%, and isn't that going to put a drag on all stock buying? Only investors who buy junk (and sell junk) like Wall Street would be concerned about the internet sector's effect on the overall market. Wise investors buy stocks that have good fundamentals, not stocks like the internets that, for the most part, don't have any real value.

News Brief for April 28, 1999:

It's fun to watch how Wall Street tries to explain things now a days. Last news flash I told you how Schwab was addressing the issue of volatility. The way they explained it was by simply saying that it was only certain areas of the market that were volatile, for example, the internet and high tech stocks. The fact is, virtually every area of the stock market is volatile. The oil service sector is up over 50% in just the last few months and many stocks in the basic materials sector are up 30% in just the last few weeks, just to name of few. These stocks are not internet or high tech stocks.

The thing that Wall Street is trying to explain for the past few weeks is the advance/decline line, that being, more stocks are going down than up even though the overall market is going up. What you want is for the market advancers to be equally weighted. You want the overall market going up with strength not only in the large cap stocks, but in the mid and small-cap stocks too.

Wall Street is starting to tell everyone, don't worry, the market is now broadening out, investors are starting to buy the cyclicals and small-cap stocks, so they say. First of all the Dow, big cap stocks, is up 18% and the Russell 2000, small-cap stocks, is up less than 3% (year to date). And as far as investors buying the cyclicals, that's true, but when the cyclicals are bought, like today, investors are dumping the high techs. This is not a broadening out of the market, but simply selling in one sector and then buying in another.

Another thing that Wall Streeters are trying to explain are the high valuations of the internet stocks. Many internet stocks have no earnings and the few that do have earnings have PEs greater than 500. Revenues and book values for these stocks also can't be used to explain the large market caps. For example, Amazon has a price to revenue of 50 and a price to book value of 236. Before a price to revenue of greater than 5 and a PE over 50 were considered high. Wall Street is being forced to come up with new ways of justifying the high valuations, many of which, since I have never heard of them, I can't explain. It's a whole new way of fundamental analysis.

The fact is, what's really going on with all this is simply the Wall Street marketing machine. Everybody wants to own stocks, and as long as everybody keeps buying stocks, stock values are going to go up, up past the point where the valuations can be fundamentally explained. When investors are going to start changing their minds and want to sell vice buying, is anybody's guess. The oldest baby boomer is only 53, 12 years away from normal retirement age.

News Brief for February 25, 1999:

Yesterday, I received "The Schwab Investor" newsletter. There was a Q/A section where they asked a Schwab executive, "Today's market swings are a new experience for many investors. What has changed to cause this volatility?" The executive said there were two different areas of volatility: 1) IPOs and 2) intra-day volatility, most recently involving internet-related issues.

It seems that Wall Street just doesn't want to admit that volatility is everywhere anymore. The top five market cap stocks on NASDAQ added over $200 billion to their market caps during a six week period ending January 6, 1999. $200 billion was 10 times the total amount of money that flowed into stock mutual funds for all of January. $200 billion is 33% more than the total market cap of AOL, Yahoo, Amazon, Netscape, and Ebay.

The first thing someone on Wall Street would say to the above is, "Yes, that's volatile, but those are high tech stocks." So, you all want to think that the only volatility that's going on is with IPOs and internet stocks which is clearly not the case.

And by the way, lets talk about stocks of the DOW 30 and their volatility, and in case you don't know, these are some of the oldest most established, non-technical stocks in the world. Let's look at GM, it has a low and high for the last year of $47 and $94 dollars, a 100% difference. You could have doubled your money with this stock in just the last 6 months. What about Wall Mart, it has a low and high for the last year of $45 and $90 dollars, again, a 100% difference. What about McDonalds, it has a low and high for the last year of $56 and $87, a 60% difference. Wall Street, volatility is everywhere in the stock market now, what is it you are trying to hide from the small investors?

Another question Schwab asked the executive was, "In what ways is today's market different?" The executive answered, "The main differences are that we have a strong economy, interest rates have been going down, not up, and earnings have been good." During the period 1959 to 1965, there was a strong economy, interest rates were between 4-5% (better than now), and earnings were good. How come the stock market back then had a PE of around 18, vice the current PE which is in the mid-thirties?

The answer is back then, Wall Street was not marketing stocks like cars and soda, and individuals weren't being told that Social Security wasn't going to be their for them. The current high demand for stock ownership is what's causing stock prices to be so high, not the fundamentals which is what the Schwab executive wants you to believe.

To read more about volatility go to: Volatility and What it Means to You

News Brief for February 3, 1999 (Fed meeting):

I wonder when the Fed will talk about the real issues behind inflation. We now have a global economy. Many of the countries have but one way of competing in the global economy, that one way is by selling commodities (agricultural products, oil, timber). When it comes to technology and services, America is so far ahead, that many coutries will never be able to compete. Think about it, if IBM, AOL, Sun Microsystems, Oracle, can't compete with Microsoft, what chance does some company in Brazil have to compete with them. With so many coutries trying to survive in the global economy and so many countries trying to sell commodities, all at the same time, there is only one way commoditiy prices can go. Why the Fed refuses to talk straight about this, I don't know?

The other issue behind inflation, outside of commodity prices, is worker's wages. The vast majority of workers have not had good raises in the past several years and there is no evidence that this will change in the future. Only today, you did not hear that some CEO gave employees a great raise, what you did hear was some CEO cut 700 jobs (Qualcomm, Inc.) and the company's stock going up by over 6%. Only a small fraction of the employees in this country are getting these threating raises that the Fed keeps talking about. And the small fraction is not enough to spark inflation. Why the Fed refuses to talk straight about this, I don't know?

Why I'm concerned about this is if we have a Fed that is living in the past, they won't be able to deal with problems in the future. The Fed must admit to what's going on now. Inflation is no threat, too many coutries are selling commodities, and worker's wages simply aren't going up that much. What is happening is that monetary compensation and rewards are mainly being distributed via the stock market with many individuals outside of the US and many of the individuals in the US not participating. For example, many government employees, small company employees, agricultural, and those who are self-employed, have no dealings with the stock market at all.

News Brief for January 6, 1999:

The below five companies: Microsoft, Intel, Cisco, Worldcom, and Dell, now have a total market cap of $1 trillion, a 25% gain in 6 weeks. Don't forget that none of these companies are listed on the NYSE. Another way of looking at the gain in these 5 companies is to say that these 5 companies have added $200 billion to their total market cap in six weeks which is the total loss in all Asian stock markets when the "Asian Crisis" was at its peak.

News Brief for November 25, 1998:

Microsoft is now the largest capitalized stock in the world, its market capitalization now surpasses General Electric. Microsoft along with Intel, Cisco, Worldcom, and Dell now have a total market cap of $800 billion, 40% of the total market cap of all the stocks listed on NASDAQ. There are about 5500 stocks on NASDAQ.