A few days ago the Nasdaq crashed over 90 Points. The very next day it came back over 90 Points.

This is clear evidence of illegal Stock Market manipulation. But nobody complaints, because they are all making money! Wonder if they will be able to stop the bailouts of the Mutual Funds next week?

-- freddie (freddie@thefreeloader.com), December 17, 1999

Answers

The DOW is up over 100 again today and the NASDAQ almost 60. This is fricking nuts. Some of thos IPO's gain 200+ pooints in a day.

What the hell is going on here?

-- (Dow@watcher.com), December 17, 1999.

Do a web search on Tulip Panic.

-- a (a@a.a), December 17, 1999.

Don't know about today, but yesterday (thursday) Microsoft alone powered half the increase, and the other half was mostly another tech stock recently added to the Dow. Most everyone else was stable or down. What was a boom based on the 30 stocks in the Dow (the rest of the market has been in bear mode since april 98) has become a boom based on a mere handful of internet stocks, helped along by the Fed's liquidity pump. Remember Radio in '29? Be careful out there. It's getting scary.

-- Cash (cash@andcarry.com), December 17, 1999.

The higher the market goes, the farther it will fall. It's weird to watch it climb irrationally day after day based on the performance of a handful of internet stocks for the most part, but it is a classic bubble market, like the tulip bubble and the South Seas bubbles of earlier eras. Those few investors with the foresight to see what's coming and the determination and strength to stay out of the market now, will be incredibly wealthy before too long. All this is aside from Y2K, which changes all equations.

-- cody (cody@y2ksurvive.com), December 17, 1999.

It acted just as crazy in the twenties, but we have five factors keeping it up. 1 The lies, and half truths told by Alan Greenspan, and other Gov. personal. 2 Secret company buy backs of stock. 3 Gov. sponsered accounts to buy lagging stocks. 4 Booming IT sales due to Y2K upgrades, plus the Y2K preps made by the public. 5 A very naive public that doesn't understand whats going on, and wont untill they have lost everything. Just take a good look our world trade imbalance, and foreign debt. If the bottom doesn't drop out before the first, then it surely will shortly after. Just look at history in 1929, and 1939. It is repeating itself with the stock market, and the prelude to the next world war. Take care, Pack Rat.

-- Pack Rat (relief@coastalnet.com), December 17, 1999.

Don't remember where I read this, but in a discussion on how far the market would fall and when, one guy gave a very neat prediction (which I'll try to paraphrase): The stock market will fall until the typical investor is scared away.

As long as TPTB predict upward movement and the market recovers from each drop, then the small investor is confident and the market becomes more overinflated and vulnerable. When the fall is long enough and hard enough to wipe out the life savings of enough people, so that stories of personal disaster are commonplace, then small investors will stay out, and then stock values will once again be based on earnings. IOW, widespread individual disasters are the prerequisite for stock market stability. Boy, that's a grim picture.

-- bw (home@puget.sound), December 17, 1999.

The other day on CNBC an analyst for GE was challenged by Mark Haines (with that insulting over the glasses look) that GE had gained 45% market cap in a year with 15% profit gain. You technies are gonna love his response (somewhat paraphrased) was that are now in an economy where we now expect to see "repulsion from the mean". Haines responded, "Repulsion from the mean?" (looking over his glasses even more.) I came to terms with the market once I realized that this is what the final blowout looks like. Be patient. We who stepped out of harms way will not be harmed. I do pitty those 70 year old I'm-gonna- retire-soon folks who may be rudely awakened. The younger folks will learn a *relatively* cheap lesson that appears to be required by every generation at one time or another.

-- Dave (aaa@aaa.com), December 17, 1999.

A couple of days ago on ABC's World News Tonight, there was a story about the stock market. If I understood correctly, 52% of stocks on the Nasdaq and 64% of stocks on the NYSE are lower now than at the beginning of this year.

Stock market gains this year have not been broad-based.

-- Linkmeister (link@librarian.edu), December 17, 1999.

This morning while the Dow was up 30-something and the NASDAQ was up 70-something, new 52 week lows exceed the new highs. Advances and declines were flat. This is a thin market.

I have a little left in Janus and Janus Olympus. Otherwise my evil greedy twin would be turning blue.

-- gary (a@a.com), December 17, 1999.

Linkmeister,

I saw that ABC News story also... and I believe your numbers are correct. I know the 64% number is correct.

-- Dick Moody (dickmoody@yahoo.com), December 17, 1999.

OK, I'll bite. I'm familar with the basics of statistical analysis (standard deviatiion and such), but I don't recall ever coming across the concept of "repulsion from the mean." Is it a mathematical "term of art", or are those Wall Street rocket scientists inventing some of this stuff as they go along?

Remember, folks: In the early 1970s, the "Nifty Fifty" blue chips were never, ever supposed to lose money. Money piled in and they all hit "dot-com" multiples. Soon enough, they had all crashed, taking a whole lot of investors with them.

-- Mac (sneak@lurk.com), December 17, 1999.

I saw Abbey J. Cohen of Goldman touting that new economy gibberish, and also Alice Rivlin spouting the same as well. What do I do? Buy my first shares of DROOY, HGMCY, GSR!!! I am using National Discount Brokers ndb.com. I am convinced we will see a correction, possibly even a mini crash. I do not expect "they" can allow a full blown crash; the PPT (NY Fed Reserve) will buy to keep the thing afloat for a semi-gradual chart reversal. I see a corresponding increase in gold, oil, lumber, as all commodities start to rise, finally. Gold WILL be the future, I am convinced. We will probably go to a semi- gold standard, with the dollar somehow pegged to the market price of gold. Not a true gold standard, but sort of a fiat/gold amalgamation. I do not ever believe the FED will give up the ability to print unlimited amounts of script. It is only because the FED can create money out of thin air that we are seeing the current blow-off in a mania. Literally guys and dolls, this is a mania.

I know Goldman is buying gold. I caught a CBS article on GSR. Said buy. That way, when the worm turns and suddenly Goldman Sachs is recomending buying gold and gold instruments, they can say "See all the smart money heeded advice such as this CBS Marketwatch story, and saw the future". I guarantee that we will eventually see a mania in gold, with gold @ levels of 1000 dollars plus. My opinion.

Take heart gold bugs, for this is our winter of discontent. We will have our day in the golden sun. My June 2000 predictions: DROOY: 15 HGMCY: 100 GSR:14

Assuming I am not at my field emplacements fighting the blue helmets!! ;-)

Semper Fidelis, Richard, USMC

-- Richard, USMC (Richard,USMC@leatherneck.mil), December 17, 1999.

Has anyone tracked where the Dow would be today without the replacement of those 4 stocks last month?

-- (RUOK@yesiam.com), December 17, 1999.

For those that don't know, Greenspan used to be a FREE-MARKET economist, and radically so -- was associated with Ayn Rand (novels Atlas Shrugged and The Fountainhead) and Nathaniel Branden. They published many of his articles in their Objectivist Newsletter and related pubs.

Here is something for your paranoids (as I am, also) -- maybe Greenspan is STILL free-market, and has cleverly gotten himself into a position of power so that he can bring this corrupt system down, and hopefully build an honest one on the rubble. What better way to bring it down than to build up the bubble to unprecedented proportions (thus making the collapse even bigger), so when it crashes, even the sheep will realize that they should accept only an honest system in the future. I guess I'm dreaming.

-- A (A@AisA.com), December 17, 1999.

Maybe the guy meant "reversion to the mean"?

-- A (A@AisA.com), December 17, 1999.

Here is something for your paranoids (as I am, also) -- maybe Greenspan is STILL free-market, and has cleverly gotten himself into a position of power so that he can bring this corrupt system down, and hopefully build an honest one on the rubble. What better way to bring it down than to build up the bubble to unprecedented proportions (thus making the collapse even bigger), so when it crashes, even the sheep will realize that they should accept only an honest system in the future. I guess I'm dreaming.

-- A (A@AisA.com), December 17, 1999.

I've had the same thought already. Too bad we'll probably never know the truth.

-- Steve Heller (stheller@koyote.com), December 17, 1999.

A -

If he meant "reversion to the mean", then he's either illiterate (not able to use the term correctly) or innumerate (knows the definition, but can't handle the basic math). Possibly both...

Ah, but what do I know? I'm just another one of those poor sods who doesn't understand The New Economy(TM).

-- Mac (sneak@lurk.hid), December 17, 1999.

Oh, would that it were true, A!

Godspeed,

z

-- Pinkrock (aphotonboy@aol.com), December 17, 1999.

I am tense and nonplused at the levels of the market. I got out in early summer. I'm fine with that. But this is CRAZY!!!!!! so I'm spooked.

-- Mara (MaraWayne@aol.com), December 17, 1999.

Steve and Pinkrock: It would be a rather sophisticated way of "stopping the motor of the world", wouldn't it? :-)

-- A (A@AisA.com), December 17, 1999.

Who is John Galt?

-- Powder (Powder@Keg.com), December 17, 1999.

When someone looses big bucks in the stockmarket...Where does the money go? Does it simply vanish into cyberspace?

Never invested in stocks etc. May mother lost $40,000 on junk bonds. I quoted the following to her. "There is a reason they are called Junk Bonds!" Lyndon LaRouche

-- Mark Hillyard (foster@inreach.com), December 18, 1999.