The Daily Reckoning
Weekend Edition
January 1-2, 2005
Baltimore, Maryland
By Addison Wiggin and Tom Dyson MARKET REVIEW: A YEAR IN REVIEW "Anyone who has ever cracked open a history book couldn't
help but know that French history is drenched in blood…"
wrote Bill Bonner in April. "The French have had enough of
war - at least for now. Let them enjoy a well-earned
cowardice…" The essay touched a nerve - and over the next few days, we
received hundreds of emails on the subject. In fact, the
essay - titled "In praise of cowards" - generated so many
reader comments, we had to devote an entire Saturday just
to read them all. Not that we're complaining. We love receiving emails from
our readers. In fact, we love the reader mail so much,
we've decided to republish the essay! "In Praise of Cowards" is just one of 12 retrospective
essays we've selected to mark the passing of 2004.
Controversial, insightful, or just plain entertaining,
these 12 essays represent the best of the Daily Reckoning
in 2004. You can find the links to these essays below. In
the meantime: Raise your glass, dear reader, to 2004, the year everything
went up… Cheers! Tom Dyson,
The Daily Reckoning P.S. Forward-looking readers will be less interested in
2004 and more interested in 2005…after all, you don't
make money by dwelling on the past. Fear not…we've got it
covered, at least, Chris Mayer has anyway. The fearless
editor of the Fleet Street Letter has made 7 stunning
predictions for 2005. Follow the link for the complete
list: Where do we go Next
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7 Stunning Predictions for 2005 Wall Street is at it again… and this time, their lies
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future! http://www.agora-inc.com/reports/FST/WFSTF100 ------------------------ THIS YEAR in THE DAILY RECKONING 01/28/04 FLIGHT TO GARBAGE
by Marc Faber "…2003 will enter the financial history books as the year
in which all asset classes increased in value, with the
exception of the U.S. dollar. The entire global investment
community has been seduced into believing that all asset
classes will continue to appreciate in 2004. But in my
opinion, asset markets will again show diverging
performances…and the surprise of 2004 could be renewed
economic weakness…"
http://www.dailyreckoning.com/body_index3.cfm?id=7981 02/12/04 SELL!
By Porter Stansberry "…Beginning in January 2000, [Sir John Templeton] sold
short 84 different Nasdaq stocks. On average, he made over
$1 million per position, increasing his fortune by 50% in
just a few months…Now, for the first time since January
2000, you will find Nasdaq 100 stocks trading at the same
kind of absurd valuations as they did at the top of the
bubble…What should we do? It's simple. We sell the
market."
http://www.dailyreckoning.com/body_index3.cfm?id=8144 03/17/04 GRUMPY OLD MEN
by Steve Sjuggerud "…There are the Grumpy Old Men…and then there are the
Elite Old Guys. The Elite Old Guys are the investors you'd
REALLY want to have on your side. Let's take a look at the
most credible investors on Wall Street - that small handful
of Wall Street old-timers that have actually survived
horrible bear markets, that bought stocks heavily when
prices were low and nobody was willing to buy, and are
still around today and are still relevant…"
http://www.dailyreckoning.com/body_index3.cfm?id=8502 04/09/04 IN PRAISE OF COWARDS
by Bill Bonner "…One of the many conceits Americans permit themselves is
that they bravely face up to the world's terrorist menace,
while others - most notably, the French - cower in fear.
But anyone who has ever cracked open a history book
couldn't help but know that French history is drenched in
blood…The French have had enough of war - at least for
now. Let them enjoy a well-earned cowardice…"
http://www.dailyreckoning.com/body_index3.cfm?id=8743 04/14/04 SNOWDRIFTS OF DEBT
by Chris Mayer "…Inflation (an expansion of the money supply), or
legalized counterfeiting, is the modern spin on an old
idea. The forces that led to these earlier swindles are
converging now on a debt-laden America. From Solon, to
Roosevelt, to Nixon's closing of the gold window, the
tradition of fraud is evident…[but] these debts must be
dealt with; they cannot grow indefinitely at their current
rates…"
http://www.dailyreckoning.com/body_index3.cfm?id=8788 05/11/04 IMBALANCES AND DISLOCATIONS
by Dr. Kurt Richebacher "…For most American economists, sufficiently easy money
is of infallible efficacy. The few instances in history
when record-low interest rates persistently failed to work,
like recently in Japan and during the 1930s in the United
States, are summarily discarded with the argument that
central banks failed to act fast enough…"
http://www.dailyreckoning.com/body_index3.cfm?id=9064 05/20/04 BOB THE PLUMBER
by Karim Rahhemtulla "…Bob came through and we met for lunch. He was very
excited about the stock market. He was making a lot of
money using this new system that worked solely by using
standard deviations and trading in the first ten minutes of
the day. I pretended to care. I was actually upset. "Bob, I
thought you gave up day trading after getting killed in the
tech-bubble." I prodded…"
http://www.dailyreckoning.com/body_index3.cfm?id=9166 05/19/04 FLASH BUBBLES
by Dan Denning "…Third, however, and greatest of the policy blunders is
the assumption that monetary policy can cause wage
inflation. Because of this error, the Fed is about to
discover that its entire effort to reflate the economy
through low rates has failed. And it is nearly out of
interest rate bullets…"
http://www.dailyreckoning.com/body_index3.cfm?id=9157 06/29/04 THE ONCE AND FUTURE KING
by Dan Ferris "…Perhaps by now you've guessed that the answer to these
questions, the most unwanted asset today, the one thing
nobody seems to want to own, the one asset people can't
seem to get rid of fast enough, is…"
http://www.dailyreckoning.com/body_index3.cfm?id=9538 07/09/04 REDISCOVER AMERICA
by Bill Bonner "…Yesterday, we crossed a desert section of North
America. That is, 'desert' in the old sense. We would say
'deserted' in today's language. Explorers tromped from the
north shore of Nova Scotia, on the Bay of Fundy, to the
south shore on the Atlantic nearly 400 years ago. Today,
along both coasts, there are modest habitations. But the
interior is still kept in reserve by the Deity and
mosquitoes…"
http://www.dailyreckoning.com/body_index3.cfm?id=9618 10/28/04 TANGIBLE ASSETS THAT SWEAT
by Chris Mayer "It is an old adage on Wall Street to buy cheap and sell
dear. But it is often overlooked, as investors continually
overpay for businesses that they have fallen in love with."
http://www.dailyreckoning.com/body_index3.cfm?id=10646 12/03/04 THE FABULOUS DESTINY OF ALAN GREENSPAN
by Bill Bonner "In addition to the bad theory, Mr. Greenspan had bad
information. The 'information age' brought more information
to more people - including to central bankers…but the
more information people had, the more opportunity they had
to choose the misinformation that suited their purposes."
http://www.dailyreckoning.com/body_index3.cfm?id=10940 ------------------------ THIS WEEK in THE DAILY RECKONING
LET THE GOOD TIMES ROLL 12/31/04
By Bill Bonner
"Until very recently, the foreigners seemed perfectly happy
merely to hold the U.S. paper. They liked the feel of it.
They felt richer and more secure with each bundle that came
their way. By the end of 2004, they had racked up some $10
trillion worth - nearly $3 trillion more than Americans had
of their assets."
http://www.dailyreckoning.com/body_index3.cfm?id=11158
MARKET MISCONCEPTIONS 12/30/04
by Marc Faber
"In my experience as an emerging market investor, and also
from what I have read about previous capital investment
rushes over the last 200 years, it would be most unusual if
the recent great China investment boom ended any
differently than the various canal or railroad booms of the
19th century, or the great European investment rush into
Russia at the beginning of the 20th century!"
http://www.dailyreckoning.com/body_index3.cfm?id=11155
SCIENCE - SHAKEN, NOT STIRRED 12/29/04
By Carl Waynberg
"The 9.0 earthquake that shook the earth under the Indian
Ocean was an anomaly. There are relatively few examples of
this kind of seismic hyperactivity and many more examples
of lesser activity, and the relationship between the two
follows a precise mathematical model."
http://www.dailyreckoning.com/body_index3.cfm?id=11148 THE MISSING LINK 12/28/04
By Dr. Kurt Richebächer "In essence, the lower inflation rates allow a looser
monetary policy than domestic conditions justify. For
Greenspan and many others wanting the loosest possible
monetary policy, this was certainly a highly esteemed
effect of the trade deficit. For us, it is insane."
http://www.dailyreckoning.com/body_index3.cfm?id=11135
ECONOMIC NIGHTMARES AND FINANCIAL MONSTERS 12/27/04
By The Mogambo Guru
"There are angry government agents and desperate neighbors,
and even more desperate strangers banging at the door,
because they have also finally realized that there is no
such thing as a free lunch, and they are galvanized into
action because they also suddenly realize, in their stupid
small-brain little way that makes you want to slap their
faces and shout, 'Wake up, you moron! Your government is
destroying your country right before your eyes!'"
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