| Prices in the Dow Industrials and in the S&P 500 | | | | an impending shakeout in the number of automobile |
| began a general uptrend about the middle of March | | | | dealerships. How long does one suppose that dealers |
| 2008. The Industrials made a small double top in May; | | | | can maintain those huge lots of unsold cars - and |
| and most of the major Indexes peaked at the same | | | | continue to pay the electricity bill for all of those |
| time, having recovered about 60% of the decline | | | | hundreds of powerful light bulbs which convert night |
| from the October 2007 tops. Those who believe that | | | | into day? The Ford Crown Victoria is gone; |
| the upmove was only a retracement, rather than a | | | | Oldsmobile and then Plymouth disappeared some time |
| return of the bull market, were looking for a top | | | | ago; is the Mercury brand next? Buick? Pontiac? |
| somewhere in that range in order to justify their | | | | The weak dollar has made our "patrimonial assets" |
| hypothesis. Had the advance proceeded much | | | | look cheap to those whose assets are denominated |
| beyond that, especially if it had gone to and beyond | | | | in foreign currencies. The major banks which fell into |
| an 80% retracement, there would have been | | | | the subprime trap had no choice but to look |
| concern in that camp that their analysis was wrong. | | | | overseas to countries to which our dollars had been |
| However, prices appear to have topped and | | | | transferred by high oil prices, in order to replenish |
| reversed to the downside for good on May 20. | | | | their vanishing capital base. A Chinese national |
| What is the outlook now? The technical analysts - | | | | company tried to buy a major American oil company, |
| and, in particular, Japanese Candlesticks charting | | | | but the effort failed because Congress and the |
| analysts - have breathed something of a sigh of relief | | | | general citizenry would not have allowed it to happen. |
| that their prognostications have come to pass, and | | | | But now we are staring in the face of a devastating |
| believe that the bear market which began last | | | | disaster of deepest national impact: the real prospect |
| October has come to life again. In the longer view, | | | | that Anheuser-Busch may be bought out by a Belgian |
| "Elliott Wave" technicians believe that the highs of | | | | company! |
| last October represent the top of a "b" wave of | | | | The immensity, the significance, and the profundity |
| very large degree, which itself was a rebound from | | | | of this impending cataclysm cannot be |
| the lows of 2002-2003 that followed the "mania | | | | underestimated. It is beyond human understanding |
| highs" of 2000. In that analysis, the "c" wave which | | | | even to contemplate the possibility that "Bud" might |
| necessarily follows will eventually drive prices down to | | | | be foreign-owned. "Bud," which commands half of the |
| at least 7000 in the Dow Industrials, and probably | | | | USA beer market, would slip out of our national |
| lower. | | | | provenance. Miller is already gone, to South Africans. |
| Doesn't that sound crazy? Well, it may help a bit if | | | | Molson-Coors is partly Canadian-owned. Will there be |
| you come to understand that the Dow Industrials' | | | | no major beer brand left which we can call our own? |
| numbers since year 2000 are phony numbers | | | | Effective control of our major banks falling into the |
| anyway. In terms of purchasing power of the dollar - | | | | hands of foreigners is one thing. They pretty much |
| which is what counts - the Dow is really not at | | | | did it to themselves. American carmakers who, |
| 12,500 at all - rather, it's at 3,400! That's right; since | | | | decades ago, were generous enough to dismiss |
| 2000, the Dow is really off 72%. So, apart from | | | | Japanese brands by "allowing" them 2% of the |
| individual situations, the investor who feels that his | | | | American car market pretty much did it to |
| stocks are doing just fine is deluding himself; on the | | | | themselves, too. But "Bud" hasn't done anything |
| other hand, he knows very well that the dividends | | | | wrong, or anything demonstrably stupid. It's just that |
| which he receives from his stocks buy less all the | | | | it has become cheap because the dollar has collapsed |
| time at the supermarket and at the gas pump. Those | | | | around it - and it has become a very tempting target |
| prices are inflating. No argument there. | | | | for deep pockets lined with cash which has |
| At the same time, the prices of some items are | | | | appreciated in value against the dollar. |
| heading in the other direction: they are deflating - | | | | On this national Holiday, and in contemplation of |
| houses, for sure; used cars (except for the tiny | | | | another one - the celebration of our country's |
| ones); clothing. Even some of the "big box" | | | | Independence on July 4 - true patriots must stand |
| fixed-price stores are becoming willing to negotiate | | | | firm, rally now, and petition Congress to enact |
| on price for major items. One of them has told its | | | | legislation which will ensure that "Bud" will now and |
| employees on the floor to "be nice." This is the | | | | evermore be and remain a Symbol of our nation's |
| leading edge of coming events. One wonders about | | | | glory. One can even envision a "March on Washington. |
