War Drums:
The Next Attack on Baghdad
Could Launch the Next Bull Market
With
Iraq war drums beating ever faster, renewed worldwide terrorist
attacks and North Korea's stunning admission it has an illegal
nuclear weapons program, it is no wonder investors are increasingly
concerned over the future of oil prices, precious metals markets,
currencies and the stock market.
Donald Rowe, editor
of The Wall Street Digest, says Iraq is the wild card
in front of a bull market.
Over the past 25 years,
he has compiled a list of Seven Key Market Indicators that have
proven most reliable in predicting major market turns. For the
first time in 25 years all seven indicators are now simultaneously
and powerfully UP.
The indicators show
Rowe that we are about to enter the second leg of a bull market
that will be nothing short of sensational.
"While most bull
markets begin in October than any other month," Rowe says
"The uncertainty of a pending attack on Iraq will probably
delay the bull market lift-off until at least November."
Rowe points out that
the attack on Baghdad on the evening of January 15, 1991, launched
the 1991 bull market on the morning of January 16, 1991.
"If Greenspan
continues to expand the money supply to encourage faster economic
growth, the next attack on Baghdad to eliminate Hussein could
launch the next bull market," says Rowe. I believe the stock
market will remain in a trading range until the war to displace
Hussein begins. Hussein and Greenspan are two enormous problems
for the stock market. Resolution of both problems will launch
the longest and most profitable bull market that you and I have
ever seen. With stock valuations low and bond prices peaking,
the market's upside potential is enormous," says Rowe.
"Anyone who is
betting against a rising stock market over the next 18 months
is now betting against insurmountable odds.
"The fundamentals
and technicals are actually more bullish now than they were at
the beginning of the 19952000 bull market. The first advancing
leg of a bull market is always followed by a pull-back, which
unfolded in 2000-2002. The second advancing leg is always bigger
than the first. In this case, the second leg should stretch 160%
beyond the first!
"The second leg
will begin in the fourth quarter of 2002. My calculations show
a minimum price expectation of 5,500 for the Nasdaq before the
second leg ends. The Dow Jones Industrial Average will close
above 12,000 and the S&P 500 will close above 1500 before
the end of 2003," forecasts Rowe.
Significant
Differences
Between Then and Now
Alexander
Paris, editor The Alexander Paris Report, writes: "There
is obviously considerable uncertainty about the coming war with
Iraq, which appears increasingly certain. Many, including the
New York Times, warn that the effects of such a war on
the U.S. economy would be disastrous, though we doubt the Times
would like anything President Bush did. However, the concerns
are reasonable since analysts can point to the 1990 Iraqi invasion
of Kuwait and what followed as an example. Oil prices did spurt,
consumers did cut back spending, and the economy was thrown into
a modest recession. With our current very slow economic recovery,
it would not take much to push the GDP into negative territory.
There are some significant differences between then and now.
Harvey Pitt finds himself chairman of the SEC at an unfortunate time. He will certainly have to go. The more important question is what was he doing there in the first place?
As was well known prior to his appointment, Harvey Pitt was a very wealthy and prominent Wall Street attorney, who at one time or another, had represented all the major accounting and investment firms, the stock exchanges themselves, and many large public corporations, including fraud-ridden Enron, and the disgraced accounting firm of Arthur Anderson. It would be almost impossible to find a candidate to head the SEC with more conflicts of interest, or closer ties to those over which he was to be the head watchdog. And indeed, in his first ten months in the position he had to abstain from voting 29 times because the cases involved former clients.
Critics point out that didn't stop him from meeting privately with executives of former client companies that came under investigation, including accounting firm KPMG, under investigation for improprieties in its audits of Xerox, and Goldman Sachs, also a former client now under investigation.
His latest problem stems from the revelation that in selecting the head of the SEC's new Public Company Accounting Oversight Board, charged with cleaning up the epidemic of corporate-accounting scandals, Pitt named William Webster, possibly about to be embroiled in such a scandal himself. Webster is a former board member and head of the audit committee of U.S. Technologies, which allegedly fired auditors that had raised questions about the firm's accounting practices. U.S. Technologies is now virtually bankrupt and facing multi-million dollar investor-fraud charges. Pitt reportedly withheld that information about his candidate from other SEC commissioners and the White House.
The man has to go. But why was he there in the first place?
The cycle of investor abuse will not be ended in any kind of permanent way by once again finding and punishing a few obvious offenders, when the cause of the age-old problem continues to be the appointment of friends of the industry to the regulatory agencies that are the watchdogs, and to the committees set up to bring about reform.
Editor's Note: Sy Harding is president of Asset Management Research Corp., 169 Daniel Webster Hwy, Suite 11, Meredith, NH 03253, publisher of The Street Smart Report, 1 year, 17 issues, $250 (now in its 15th year of exceptional market research for professionals and serious investors) and The Street Smart Report Online at www.StreetSmartReport.com, 1 year, $225.
Mr. Harding has consistently ranked in the Top Ten Timers by Timer Digest for years. In 1999, he authored the book, Riding the Bear How to Prosper in the Coming Bear Market, $12.95 (the Dow topped out just 9 months later). In Riding The Bear, Mr. Harding explains not only bear markets, but how bull and bear markets get started and end; how public investors can break their pattern of only becoming interested in bull markets in their final stage, get killed, and then are too scared when the next bull market begins. He explains in plain English how the market reacts, how cycles work, and how to take advantage of them to hold onto your bull market profits and actually increase them during a bear market. Harding also explains the Seasonal Timing System in detail. This highly recommended book is FREE as a bonus with a subscription to Sy Harding's Street Smart Report.
