Whoopie, a new 12,000 high for the Dow, and how nice for the Replicants. Could I rain on this parade? Oh, but of course.

The Dow Jones Industrial Average (DJIA) of 30 stocks is calculated by adding up the dollar closing prices of 30 "representative" stocks of our economy and then dividing by a divisor. I'll slow down if I'm going too fast for some of you…

The DJIA Index is denoted in "points"

you can take a 30 stock Raw Score of about 1499 and divide that by the teeny divisor.  Or take the raw score and mulitply by 8. Yeah, 1500 times 8…carry the 4…comes out to about 12k. (Nightly Business Report says, $1 of stock value is more than 7 points in the DJIA. Can you smell the "Never give a customer an even break" aroma?)

Well, since most, I mean more than HALF, of the Dow 30 stocks actually trading lower than they were back in March of 2000, I decided to do some research.  Nobody was really explaining HOW parts of index could mostly be lower, and yet the Index itself was hitting new highs.  And isn't that nice for the Replicrooks.

In one of my old adult ed workbooks, I'd written down that as of June 5, 2000, the Dow's divisor was 0.18238596. That means that the Dow's March 2000 high of 11722 had a Raw Score of approximately 2137. I'll skip the decimals and the slight mismatch on dates here.  I want you to know though, that my Hewlett Packard 12C calculator did these calcs with batteries to spare.  At the Dow's high back in the spring of 2000, $1 of stock value equated to only about 5 and a half points on the Index.

Presto Reducto, our new high on the Dow has been caused by reducing the divisor…and the public snoozes on.

(And don't even get me started on the drop in the purchasing power of the money invested in the Dow stocks - caused by the 30% dunk of the dollar in the last 6 years…)

On Planet Wall Street, figures may not lie, but we should bet much more often that liars can still figure, especially in an election year.  Over 43% of the population DO figure that somehow the Bush Administration lowered the price of gasoline in the last 2 months.  Why won't the public consider the possibility that other scams are at work in our other markets?

Wednesday, October 11, 2006

Dear Ben:

This scurrilous screed was found in Alan Greenspan's papers at the FED after he retired. Apparently it's a draft of a speech he intended to give at the Jackson Hole Conference in August of 1997. (As you might not have heard, there was a rather long cocktail hour that year and Al passed out in the raspberry puree.)

Al's obviously still trying to compensate for his lame "irrational exuberance" comment the previous December at the Washington Economics Association dinner. And the speech is written on the back of one of the envelopes the new redback $100 dollar bills were delivered in. What should I do with this?

Eddie G.
Enc.

————————————————–

"THE FEDDY'SBURG ADDRESS

Four score and seven years ago our FED Fathers brought forth on this continent, a Euro-notion, conceived in dynasty and dedicated to the proposition that all Central Bankers are created superior.

Now Me are engaged in a great financial war in this country, testing whether our FED or any Central Bank so conceived and so dedicated, can forever endure. Me are met here in the lap of luxury far from the great New York battle field center of that war. Me has come to dedicate a portion of tonight's dinner as a final resting place for those who here gave their energies that our FED might continue to live. It is altogether fitting and proper that Me should do this.

But in a larger sense, Me can not dedicate - Me can not consecrate - Me can not hallow, much less stomach — this rubber chicken. The brave Bankers, opulently living and dead, who struggled at the Open Market desk, have consecrated this lousy chicken, far above My poor power to add or subtract. The world will little note nor long remember what I say here, but it can never forget what I said and did in D.C. It is for Me the living, rather, to be dedicated here to
the unfinished work which they who founded Central Banking have thus far so nobly advanced.

It is for Me to be here dedicated to the great task of gold elimination remaining before us — that from the present success of paper currency we take increased devotion to that cause for which FED Bankers in history have given the last full measure of devotion — that Me here highly resolve that gold shall not have died in vain — that this FED, under Me, shall have a new birth of secrecy, derivatives and market manipulation — and that the FED of New York, by New York, and for New York, shall not perish from this earth."

——————————————————-

Friday October 13, 2006

Dear Eddie:

It's yesterday's news. An atomic bomb blew up in the Far East last Monday, and the price of gold is lower today than it was before the damn thing went off. If the stupid Chinese haven't learned by now that our price stomping game in New York is effective, they never will. Gold won't help them. Gold is no longer the go-to financial safety net for anything. Gold can't even help itself. WE don't have to rededicate to anything, WE've won.

Do whatever you want with Al's creepy little parody. Spill it on the internet if you want. If a Princetonian student had handed it in to me, I'd have flunked 'em. Nobody will understand it anyway. Once we take housing down, the clueless, goldless middle class will be in chains in a year.

Bennie B.

Cf: www.geezerboomer.com

Non-hierarchical comedian Robert Newman addresses a Brit audience and makes the history of oil actually interesting as well as informative. He charged money for this?

45 minutes with laughs and fancy video graphics. For that time in your day when you have…some time.

http://www.informationclearlinghouse.info/article13416.htm

"I've been young and I've been old, but I never knew when young ended and old began…"

 "They say you can't teach an old dog new tricks. Who needs new tricks? If you play it right, the

 old tricks still work…"

The Columbia Biz School students have been busy parodying our new Fed Thief.

The link is below. (Notes to song: "BPS" stands for Basis Points-1/100ths of 1% in financialese; and "CBS" stands for the Columbia Biz School itself…not the broadcast network of the same initials.)

The singer guy is funny, and I wonder if he - Dean Glenn Hubbard - is any relation to Glenn Hubbard, a Presidential Economic Advisor these days…? Anybody know?

http://www.youtube.com/watch

The following public comments and quotes are loosely compiled from www.gata.org and other sources believed to be reliable.  GATA is the Gold Antitrust Action Committee started by a former commodities trader, Bill Murphy, and a newspaper guy, Chris Powell.

They have amassed a large body of evidence at their website pretty clearly demonstrating (to me, at least) that somebody's fingers are on the gold price scale.  GATA has been producing evidence on gold price suppression since 1999 with little or no public recognition…because the major media, including newspapers, magazines, radio and TeeVee have flat out ignored them.  (Keep in mind, the major media have ignored gold and silver generally, precious metals mining company executives, gold mutual fund managers and gold investors of ALL kinds during the last 5 years…while the price of gold has moved from $255 an ounce to over $550 an ounce - a price movement colloquially known as a "bull market.")

I'm a recovering lawyer, and this is the outline of an argument.  When I was trying cases for a D.A.'s office years ago…, as long as the corpus delecti (elements) of the crime had been established, ONE confession was usually considered more than sufficient to convict.  Today, without having any fingerprints or direct documentary evidence about the gold's woefully sluggish price performance over the last 10 years, I've sorted through and collated a mess of my saved GATA emails.  (If you'd like to be on their mailing list, sign up at gata-subscribe@yahoogroups.com.) 

I doubt if I could "prove" price fixing in a courtroom.  I doubt if anybody could without the abject confessions of the guys rigging prices every week on the Comex in New York.  But I do think GATA has collected an awful lot of highly self-incriminating comments made by guys who certainly should have known what they were talking about when they said these things. I've written some of these down quickly without extensive checking…so don't hold me to exact punctuation, dates, etc.  But two final things here:

  (1)  If you're going to invest in gold, you need to know what GATA knows,
  (2) More than a few of these statements sound a lot like bragging:

July 24, 1993:  The usually turgid Alan Greenspan, before Congress in one of his bi-annual Humphrey-Hawkins testimonies, came right out and said:  "Central Banks stand ready to lease gold in increasing quantities should the
price rise." ("Leasing" has several advantages for NY banks in a gold price suppression scheme, i.e., the boys in NY get to make more money off it than outright sales…)

Sometime after September 26, 1999 (the date of the first "Washington Agreement"  wherein 14 mostly European Central Banks agreed to LIMIT their gold sales, and the gold price roared upwards of $50 in two weeks.) 

"The rise in the gold price threatened one or more finance houses and could have taken the rest down in their wake.  The British were very helpful in controlling the price, also the Americans."  by Mr. George, the Governor of the Bank of England.  

More on How Many Confessions Do You Need?

From the brilliant and quotable Mr. Franklin on the 200th anniversary of his birth:

"If you would know the value of money, try to borrow some."

"Wealth is not his that has it, but his that enjoys it."

"He is ill clothed who is bare of virtue."

"No man was ever glorious who was not laborious."

"All things are easy to industry. All things are difficult to sloth."

"What is serving God? T'is doing good to man."

"Sin isn't hurtful because it's forbidden. Sin is forbidden because it's hurtful."

"Love your enemies, for they tell you your faults."

And don't forget, "Early to bed, and early to rise, makes you yawn and stretch with bloodshot eyes."

I sent out an Xmas Card this year extolling the virtues of commodities. Feedback has been underwhelming. I should have done a video. Well, Sam Zell did.

Sam Zell is a Forbes 400 kind of guy who's made a pile of dough being way smarter than the next guy in the real estate biz. Among other projects, he made a lot of money in the 1980's with real estate limited partnerships, and then made a lot money rolling those partnerships up into a REIT empire in the 1990's. He entertained offers in the $37 BILLION range for his publicly traded Equity Office REIT from smug private equity types who were in diapers when Sam started building wealth decades ago. Yeah, yuppie puppies are going to put one over on old Sam…the guy known as the "Grave Dancer" for the way he's buried guys in financial deals over the decades.

In an investment dictionary, next to the definition of "Sell High" at the top of a market, there's a picture of Sam Zell. Anyway, Sam took some of his play money and created a Holiday Greeting video with a voice-over and a song highlighting meaningful images of moving money - his take on where we are at the end of the 2006 financial pagent.  He updates his Christmas message every year.   Watch and wow.

www.yieldsz.com