Here's what we think...

Have you ever wondered which came first, the chicken or the egg? That's a really hard one. We give up, which came first?
Here's an easy one. Have you ever wondered which came first, a Market movement or well compensated armchair analyst's excuse for that Market movement? The excuse is always ex post facto. The excuse is always an excuse. Sometimes the excuse is a gullibility test. True, sometimes there is enough congruity between what happened and the excuse for what happened, that the excuse seems like a reason. Sometimes it actually is a reason. The excuse is a reason often enough that complacent investors don't bother to look beyond the superficialities. Far more often than not the excuses are adscititious, pretentious concoctions which fit a sacrosanct agenda of clueless individuals or groups of clueless individuals. What is this abecedarian agenda? That people who put cash into stocks are investing. Who are the clueless individuals? Investors. The extent to which this vapid hypocrisy is swallowed whole is quite amusing indeed. Time after time the same stupid nonsense is obsequiously accepted at face value. You just can't seem to get any useful information from financial analysts. Period.

It's astonishing how many people think that there is some sort of connection between the presidency and the Market. It's astonishing how many think there should be some sort of beneficial relationship between what a president does or says and the movements of financial markets. The markets aand the presidency are separate entities. Or at least they should be thought of as being so. If you don't like the president, why hope that declining indices will lead to his downfall? That's self defeating. If you lose in the markets when your investments lose value, blaming the president won't put the lost value back into your portfolio. Besides politicians are successful in direct proportion to their capacity to be excellent liars. Everybody knows that. Everybody should also not forget that Mr. Greenspan is a politician. Investing can make people forget what they know.

The immediate impetus which motivates Market movements is invariably greed, an unabashed pursuit of filthy lucre. Why not explain the actual reasons for Market movements? Holy concepts could be tarnished. Dervishes might stop whirling. Investors might stop feeding the sharks. And cynical options traders would be deprived of some hilariously funny humor.

VeeJay asked us for our comment on an article from the NY Times. Some exerpts:

July 24, 2002, By The Associated Press
Bush Job Approval Dips Into 60's
"At this point in their presidencies, people were about evenly split on approving of Ronald Reagan, two thirds approved of the elder President Bush and people disapproved of Bill Clinton's job performance by a 42-49 margin".
"Witt said Bush's ratings remain high because of two factors -- strong ratings on the war and heavy support from Republicans. Republican approval of the president remains near nine in 10, while independents are at almost two-thirds and Democrats have fallen to about half in recent polls, according to a recent analysis by the Pew Research Center for the People & the Press."
nytimes.com/aponline/national/AP-Bush-Polls.html

Here's what we think...
See above.

Vee Jay likes the New Yorker very much. VeeJay was concerned enough about another little New Yorker article to send it to us for a comment. It came out about July, 24 2002. Some excerpts:

July 30, 2002, Talk of the Town
HIGH HOPES
Issue of 2002-08-05, Posted 2002-07-29
newyorker.com/talk/content/?020805ta_talk_cassidy
"Last Wednesday, two days after President Bush made these remarks, the Dow shot up almost five hundred points and closed well above 8,000. He must have been mightily relieved."

"Even now, stocks are far from cheap—a point that Kenneth Dam, the Deputy Secretary of the Treasury, acknowledged in a surprising moment of candor. At last week's lows, stocks in the S. & P. 500 index were selling for about twenty-two times their earnings per share over the past twelve months. Going back to 1870, stocks have traded, on average, at about fourteen times earnings. It's true that some firms' profits are unusually low because of the recent recession, but there is still no indication of a sustained recovery in corporate earnings. Indeed, there is a serious threat of a relapse."
"Since the spring of 2000, about seven trillion dollars of stock-market wealth has vanished—about seven hundred thousand dollars for each American household."
" pessimism could turn out to be self-fulfilling, in which case a "double dip" recession would be quite possible."
"At the moment, thankfully, shorting bricks and mortar is a minority pursuit, and most people still consider real estate a safe investment. Of course, most people used to feel the same way about stocks.
John Cassidy"

Here's what we think...
Knowing is better than guessing. Guessing is better than hoping. John Cassidy wrote, "fourteen times earnings," translation: P/E has averaged 14 since 1870. "Since the spring of 2000, about seven trillion dollars of stock-market wealth has vanished—about seven hundred thousand dollars for each American household." Wow.

Some articles VeeJay recommends.

Everyone Is Outraged, By PAUL KRUGMAN, July 2, 2002
"Arthur Levitt, Bill Clinton's choice to head the Securities and Exchange Commission, crusaded for better policing of corporate accounting - though he was often stymied by the power of lobbyists. George W. Bush replaced him with Harvey Pitt, who promised a "kinder and gentler" S.E.C. Even after Enron, the Bush administration steadfastly opposed any significant accounting reforms. For example, it rejected calls from the likes of Warren Buffett to require deduction of the cost of executive stock options from reported profits."
"My last column, describing techniques of corporate fraud, omitted one method also favored by Enron: the fictitious asset sale. Returning to the ice-cream store, what you do is sell your old delivery van to XYZ Corporation for an outlandish price, and claim the capital gain as a profit. But the transaction is a sham: XYZ Corporation is actually you under another name. Before investors figure this out, however, you can sell a lot of stock at artificially high prices."
"And if some cynic should suggest that Mr. Bush's new anger over corporate fraud is less than sincere, I know how his spokesmen will react. They'll be outraged."
nytimes.com/2002/07/02/opinion/02KRUG.html

Highly recommended New York Times article.
July 27, 2002
The Sunny Side of the Street, By BILL KELLER

"To begin with, the crisis has deflated an artificially inflated market, and forced us to face up to the fact that we were living an economic lie."
"When everyone was feasting together, moreover, it was easy to overlook that the system had grown some blatant conflicts of interest. The consultant who taught you how to evade your taxes was partners with the auditor who testified that your accounts were on the up and up. The investment banker who underwrote your expansion was joined at the hip to the stock analyst who rated your stock. The directors of the company were too often well-stroked pets of the chief executive they were supposed to oversee."
"Here's another cheering prospect. This shift in the zeitgeist may stimulate a healthy resistance to the overweening influence of corporate lobbies. I'm betting we won't be privatizing Social Security anytime soon, despite the president's continued devotion to the scheme. Legislation to stop companies from dodging taxes by setting up phony headquarters in Bermuda is at least up for discussion. The Bush tax cut - mother of all deficits - still seems nearly invulnerable, but who knows? And it's possible that the scandals may even have created enough of a backlash that industry lobbies will not quite so easily have their way on issues like health care and the protection of the environment."
"There is no reason voters' wrath should be reserved for Republicans. Democrats like Tom Daschle and Joseph Lieberman and Chris Dodd and Charles Schumer, for example, have helped smother important corporate reforms, and there are plenty of Congressional Democrats who act like wholly owned subsidiaries of special interests."
nytimes.com/2002/07/27/opinion/27KELL.html

Voter's Wrath?
Are you wondering why the feds are pestering Martha Stewart about selling 4,000 shares of ImClone? That one just doesn't make any sense does it? Why not nab the real bad guys? Go ahead and rage at the machine. Fat chance it'll make any difference. Why? Because everybody was doing it. And when everybody is doing something wrong, nobody goes to jail. Get it?

Fortune Magazine, Fortune.com
THE GREEDY BUNCH, You Bought. They Sold. Hundreds of top execs have sold $66 billion worth of stock since the boom-time peak. Meet the 25 companies with the greediest executives. Is yours on the list?
fortune.com/insiders/companies.html

THE GREEDY BUNCH, You Bought. They Sold. "Meet the 25 companies with the greediest executives. Of the big companies whose stocks dropped 75% or more from their boom-time peak, these are the ones where officers and directors took out the most money via stock sales from January 1999 through May 2002. An exclusive study by FORTUNE, Thomson Financial, and the University of Chicago’s Center for Research in Securities Pricing."
fortune.com/insiders/companies.html

Fortune.com
THE GREEDY BUNCH, You Bought. They Sold. "The Cash-Out Kings These masters of greed from America's Losingest Companies took out the most money via stock sales. · The Great CEO Pay Heist
fortune.com/insiders/execs.html

A Washington Post article VeeJay read.
washingtonpost.com

The Boomerang Economy, by David Ignatius, July11, 2002
PARIS -- "An investment banker who has probably moved trillions of dollars in and out of financial markets in his lifetime confided recently that he was waiting for a "real" blowout, with the Dow collapsing to 6000 and the dollar evaporating to $1.15 for a measly euro. Then, he said, he was going to put every penny he could raise into the U.S. stock market."
washingtonpost.com/wp-dyn/articles/A58385-2002Jul11.html