Educate Yourself

Week in Review
For the week 8/6/2007 - 8/10/2007
Brian Trumbore
President/Editor, StocksandNews.com

There was a time at the peak of the real estate bubble when I'd tell you about the latest sale in my townhouse complex, and how with the prices being totally absurd, I'd discount my own valuation $100,000 when toying with my net worth. No doubt I've been down on housing for years. It was always about affordability, to me, and knowing there were a ton of folks who were stretching far beyond their means.

I'm also always early. I was pounding the table on the Nasdaq bubble all of 1999, and I was a good 12-18 months early on real estate, as defined by figures such as housing starts, before it hit the wall last year.

It's not always fun hanging out with a doom and gloomer, I'll readily admit. All of those books you see on positive thinking, for example, tell you to avoid the likes of me (he typed with a grin). Surround yourself only with positive people, the authors tell you.

And if you wanted nothing but happy talk there was no shortage of it the past few years, though now you've undoubtedly noticed there aren't as many infomercials these days touting real estate with no money down.

But I prefer to think of myself as a realist. Believe me, you may not hit as many home runs when you adopt this mode, but you'll more often than not preserve your capital and still earn a decent return over any significant period of time.

The world has changed, as economist Robert Samuelson expounds on from a financial standpoint below. When I was on Wall Street, I'd tell recent college graduates that were applying to PIMCO for their first job that the great thing about the financial services industry is it's stimulating. Everything that goes on in the world has an impact on what you do. I left 8 ? years ago and I recognize the intensity has only increased two- or three-fold since then.

Yup, you're always learning and last weekend, as pessimistic as I've been on real estate, I was driving around, checking out all the For Sale signs (as well as half-finished developments that won't be completed, let alone filled, for years), and even I could only conclude, "Goodness gracious?.it's even worse than I thought."

Some of the nation's leading homebuilders and mortgage operators have obviously reached the same conclusion in just the past few weeks. Robert Toll, CEO of luxury homebuilder Toll Brothers, warned of increasing obstacles to mortgage borrowing.

"In the near term, tightening credit standards for borrowers should reduce the pool of potential buyers: Liquidity and affordability issues may impede some customers from closing, while others may find it more difficult to sell their existing homes. Excess supply exists in most markets and there is concern that additional inventory will emerge due to mortgage defaults."

That's for sure. I have a short drive from my home to the office and I probably pass 150 or so houses along the way, almost all upper-middle class and above by traditional standards. But every few weeks I notice a probable foreclosure, where the yard hasn't been cut for a few months. Not too long ago this was just the sign of a pending teardown. No longer. And as I noted this is far from subprime territory.

The nation's leading mortgage lender, Countrywide Financial, issued yet another gloomy statement this week, offering that it was seeing "unprecedented disruptions" and that the "potential impact on the company is unknown."

But the week's true poster child was French bank BNP Paribas, which only recently was giving the all-clear signal when questioned on its own exposure to subprime mortgages. Suddenly, BNP suspended three of its hedge funds, totaling over $2 billion, because, as it said, "The complete evaporation of liquidity in certain market segments of the U.S. securitization market has made it impossible to value certain assets fairly regardless of their quality or credit rating."

The other day, David Malpass, chief economist for Bear Stearns, had the following conclusion in an op-ed for the Wall Street Journal.

"The constant warnings of a housing-related collapse in domestic consumption overstates the importance of housing in the economy, while understating the importance of jobs and economic growth, both of which have been solid."

This totally misses the point that I've been making lo these many years. Housing is the average American's number one asset. The bubble created an artificial sense of riches, the wealth effect, from which the home became a piggy bank. That's what fueled consumption, more than anything else. Of course the labor picture has indeed been a big help, as well, and thank god for that, but the excess over what would be considered normal (or 'trend') came out of housing.

But for a more extended viewpoint, beyond the individual, here's Robert Samuelson from his op-ed in the Washington Post.

"(The) housing bust is really a small part of a larger story. Call it the tyranny of capital markets - global markets for stocks, bonds and other financial instruments. Our economy is increasingly under their sway. These markets are, of course, huge. At last count, the U.S. stock and bond markets alone were worth roughly $18 trillion and $24 trillion, respectively. Consider the impact on the 'real' economy of jobs and production:

"* In the 1990s, speculation in high-tech stocks and exuberant venture capital funds fueled a market 'bubble' and much wasteful business investment. From 1998 to 2000, venture capital investment in start-up firms quintupled, to $105 billion. Too much money chased too few good ideas. As start-ups went bankrupt, the stock market lost half its value and the economy went into a recession in early 2001.

"* The 1997-98 Asian 'financial crisis' began when foreign investors abruptly withdrew funds from Thailand and other 'emerging market' countries. Many of them experienced deep recessions. In 1998, Thailand's economy was down 10.5 percent, South Korea's 6.9 percent and Indonesia's 13.1 percent.

"* High stock and real estate values have powered Americans' two-decade-long consumption binge. From 1982 to 2005, the personal savings rate dropped from 11 percent of disposable income to almost zero. People felt freer to spend - or borrow - as their financial and housing wealth rose. The Dow Jones industrial average is now almost 15 times higher than in 1982.

"* Global trade imbalances - huge U.S. deficits and other countries' surpluses - stem partly from the ease of cross-border investing. At year-end 2006, foreigners owned $7.3 trillion of U.S. stocks and bonds. If the dollars foreigners earned by exports couldn't be invested, they'd be sold (depressing the dollar's value) or used for imports.

"All this revises standard economics. The basic college course I took in the 1960s barely mentioned capital markets. Finance?was considered a sideshow. If the economy did well, the stock market rose. If companies needed money to invest - and were good credit risks - they could borrow from banks or sell bonds. Finance was passive?.

"Housing is its latest refutation. The boom stemmed partly from new 'subprime' mortgages, which enabled people with lower incomes or weak credit histories to become home buyers. Credit standards were relaxed, down-payment requirements lowered. The packaging of these mortgages into 'collateralized debt obligations' (CDOs) also encouraged lending?.The result: Credit flowed freely because a (relatively) small number of investors assumed big risks.

"It was a bad gamble?.But it captures a larger dilemma. Capital markets are not just incidental to economic growth. They're a force for both good and ill. The recent financial innovations have made it easier for countries, companies and individuals to borrow and tap investment capital?.

"The peril is that so much has changed so quickly that no one knows how the system operates. It's often roulette."

About now, I imagine, you're looking for some happy talk. CNBC's Maria Bartiromo chirped this week, "The world is not falling apart?remember what Hank Paulson said yesterday!"

Oh brother. Treasury Secretary Hank Paulson. Look, we know that administration lackeys are the last ones who will step before the people and tell them the truth, but for weeks, nay, months, Paulson has been saying the subprime housing debacle would be "contained." He's also been saying he's never seen a global economy as strong as the current one in his lifetime. Cisco's John Chambers echoed the theme this week.

But this has been my bottom line. While the global economy is strong and I underestimated its strength, we're also in the midst of a global real estate bubble; not just in the United States, but all over. Other markets may not have securitized their mortgage interests as we have, but eventually the impact will be the same. There is over-building taking place all around the globe. Yes, it's a boom?.but busts follow booms just as night follows day.

What compounds the issue, however, is leverage. Lots and lots of it, from individuals to hedge funds to corporations; particularly with the private-equity crowd in the last instance.

And notice how I've gotten this far in my commentary and haven't even mentioned the Federal Reserve. That's because at this point it's largely irrelevant.

Oh, sure, the Fed and other central banks can stem the tide, short- term, as they did late this week in injecting massive amounts of liquidity to stabilize the cash market, but further out it is going to take years to unwind the excesses regardless of what Mr. Central Banker does.

For the record, though, the Fed's Open Market Committee once again held the line on interest rates this week, reiterating that the "predominant policy concern remains the risk that inflation will fail to moderate as expected." They acknowledged that the "housing correction is ongoing," but then said, don't worry?be happy. Additionally, "The economy seems likely to continue to expand at a moderate pace over coming quarters, supported by?a robust global economy."

Lastly, since I'm not losing my shirt holding CDOs, CLOs, or any of the other exotica that is increasingly toxic these days, what has been another common theme in these columns over the years?

I imagine I've only written that about 50-75 times. In case you were on vacation the past few weeks (a real one) and have been a little out of the loop, this has become the biggest immediate issue in terms of determining securities' values. That and the fact many hedge funds were playing the same game, meaning performance has suffered in some and now they face the nightmare scenario of having to meet redemptions, which begets further selling. It's for a good reason that the SEC is looking into the books of the investment banks to make sure the Goldman Sachs' of the world are treating both sides of the trade fairly. Many on the Street are not, as will be proved later. There are bonuses, third homes, and jumbo mortgages to worry about, after all.

--Stocks broke a 3-week losing streak thanks to a late rally on Friday that allowed the major indexes to post gains after a 387- point bloodbath on Thursday. The Dow Jones rose just 0.4% to 13239, but the S&P 500 picked up 1.4% and Nasdaq posted a 1.3% gain. As alluded to above, the Fed had to intervene three times in adding cash to the system, which had a positive effect, but the proof will be in next week's action.

--Forget equities for a moment. Retail sales at the chain stores were far from great for the month of July, while the back-to- school season could be a real problem as well. And in another sign of the times, Home Depot is being forced to lower the sales price on its construction supply division by the private-equity buyers. I'm picturing the latter jacked up HD officials in the power saw department for full effect. Other announced deals face a reworking of the terms as well, if they go through at all.

Yields were all over the place and I'll spare the commentary until next time. The week was light on economic news, but this coming one features a further report on retail sales, along with data on industrial production, housing, and inflation.

--A Wall Street Journal survey of 54 economists found they lowered their forecasts just a hair to 2.3% GDP growth in the third quarter, 2.5% in Q4, and 2.8% for 2008. I would beg to differ on '08, big time.

--Crude oil slipped $4 despite bullish news on the inventory front. The concern among traders was that a slowing global economy would dampen demand. But the International Energy Agency reiterated that the world's current supply isn't enough. The IEA is urging OPEC to open up the spigots to prevent another price spike that could kill economic growth for good.

--Mara Der Hovanesian had an excellent piece on real estate in Business Week. She notes, "In January, industry analysts predicted that the 10 biggest builders would have average earnings per share of $3.69 for 2007; the latest forecast is for a loss of $1.18." That's how quickly it turned.

--Another real estate tidbit: 32% of homebuilder profit at the peak in 2005 came from California; with another 14% in Florida and 10% in Nevada. 56% in just those three?which coincidentally are about the three worst markets today.

--But wait?there's more! According to S&P, homebuilder Hovnanian has negative cash flow and faces far more cancellations. One issue?it, and the others still own too much land. Yet I saw Hovnanian's CEO on CNBC the other day and he said all is calm?all is bright.

--After the close on Friday, Beazer Homes announced it was delaying its quarterly SEC filing due to accounting issues. If I were them I'd change my name to Beaver and see if the government notices.

--Reader Billy F., responding to my comment the other day about the issue of rising property taxes while the value of your home declines, notes "a market-friendly and equitable reform is to lower the tax on buildings, while simultaneously increasing the tax on land values; 'two-rate' taxation. Land with easy access to public services is ideal for development and therefore very valuable. However, such land often remains under-developed as the landowners' cost of inaction are small relative to the potential profits from buying and holding land for speculative gain." I'll explore this topic more as time goes on.

--China's trade surplus for the month of July was another $24.3 billion, the second-biggest monthly figure ever, on the heels of accelerating export growth, 34%, despite a string of recalls and product safety concerns. Numbers like this make for an easy target in the U.S. Congress.

--Cisco Systems supplied some good news in issuing a solid earnings report with revenue up 18%, thanks to increasing demand for upgraded networks that can handle the latest video and data traffic; meaning YouTube and the like.

Speaking of which, I saw on the "Today" show the other morning that the latest craze is for kids to order drinks at the drive-through window of a fast food restaurant and then throw the drink at the server, which is videotaped and shown on YouTube. What a sick society we are.

--President Bush said he was convinced there would be a "soft landing" in real estate. He also thought there was enough liquidity for the "market to correct," a statement that had some of us scrunching up our faces trying to figure out if he had really said this. But fear not?we were told on Friday "the president is monitoring the economy." Phewww. I feel much better.

--What an arrogant bunch Bear Stearns is. Bear liquidated its two bankrupt hedge funds in the Cayman Islands instead of New York to limit the ability of creditors and investors to get their money back. The move also largely prevents victims from filing lawsuits. You could sue in the Caymans, but judges there have a track record of supporting management. Bear CEO James Cayne also traveled to China looking for a cash infusion. Can you say "China Century?"

--The Financial Times commissioned an analysis of 27 big deals in North America and found suspicious trading in 60 percent of them prior to any formal announcements. This compares to one case out of the seven largest deals announced in 2003. John Coffee, a Columbia University law professor, concluded:

"You're in a world where there is much more competition. You need to trade quicker, search for additional facts. Sometimes that induces illegal behavior. Human nature has not changed since 2003, but the predominance of hedge funds has."

[Of course with the current credit crunch, you aren't about to see another "27 big deals" anytime soon.]

--Former Brocade Communications CEO Gregory Reyes was convicted on all 10 criminal charges for fraud and conspiracy involving the backdating of stock option awards; a huge win for the government as it represented the first guilty verdict in this widespread scandal. The SEC is pursuing similar investigations at more than 140 companies.

[Just a reminder to those who insist on defending the backdating practice. If it wasn't properly disclosed, it's fraud, pure and simple; let alone the fact in almost every instance there were tax consequences. In Brocade's case, it illegally boosted earnings, which impacted the share price, the value of options held, etc.]

--Former Home Depot CEO Bob Nardelli has ended up at Chrysler where he will head up the No. 3 U.S. automaker. This reminds me of the major league baseball manager merry-go- round, where one gets fired and very often ends up elsewhere despite a sorry track record. Then again, the man Nardelli is replacing is named Tom LaSorda.

--Scott P. was traveling in Colorado and drove past Lucent's facility in Littleton. He reports that the lawn looked green and trimmed, which ordinarily would be a good sign when employing my lawn indicator, but Scott added he couldn't tell if it was painted on.

Separately, Scott, who resides near Cape Canaveral, opined on my NASA comments of last week; but from the standpoint of the ongoing "brain drain" from the Cape as it "forfeits its competitive advantage to Alabama's and New Mexico's commercial space capabilities." Good point. He adds it's time to "reignite the passion and energy that took us to the moon the first time."

--My portfolio: After reporting strong earnings, I purchased more shares in my China biodiesel investment?selling some in another holding to pay for it, thus keeping my cash level near the 80% benchmark I've advocated. The expansion plans I've been betting on appear to be on track, even if a bit later than expected (though the company would dispute this).

Of course I'm conflicted on the play. If you're new to this column, I read an interesting research report, flew to China to visit the operation, liked the people, and am betting an increasing portion of my equity exposure on its success, even though I also see long-term problems for China in general.

But this isn't buying into an Internet operator or a toy manufacturer. China's biggest issue over the coming years, aside from the potential for political unrest, is its environment and a biodiesel operation should be successful. That's my bottom line.

I was, however, unhappy to hear my company will be increasingly using palm oil leavings because palm oil is a major target of environmentalists. For now, though, the company has assured me they have alternative supplies should the palm oil channel be cut off through government action in places like Indonesia.

Meanwhile, on the pollution front, China celebrated the one-year kick-off for the Beijing Olympics, which commence next Aug. 8, and it brought to the forefront yet again the air quality issue. A British Olympic Association executive told the South China Morning Post, "It's interesting to see the air pollution with my own eyes over the past week. It's really an acute problem. But on the other hand, we have noticed the consciousness and efforts by organizers to tackle the issue."

--Lastly, the Journal ran a story by Kelly Greene on the backlash against equity-indexed annuities, a hot investment product. When I was in the fund business, I hated this stuff for the simple reason that the expenses were high, many investors didn't understand the surrender charges, and it just made more sense to buy a good equity fund and couple it with term insurance.

Since then, while expenses have come down some, from what I understand (and I admit I don't follow this arena closely anymore), there is still a ton of deception taking place in the sales process.

Iraq: We all could use a break from the commentary, I think you'd agree, and I have little to bring to the table today. In about four weeks, General David Petraeus will present his update on the surge to Congress and everyone knows what he'll say?aspects of the surge are working and we need more time. Democrats, in turn, will have hammered out their talking points during the recess and will advocate yet again for a timetable for withdrawing troops. Some Republicans will join the Democrats, as we saw recently, and President Bush will accept some form of compromise.

What will force the issue is the fact that while militarily there may be progress, there has been zero when it comes to the Iraqi government and it will be impossible for the White House to dispute this come September.

It also doesn't help the White House's case for staying the course when you have reports that the U.S. military can't account for 190,000 guns.

Meanwhile, the dialogue between Iraqi Prime Minister al-Maliki and Iranian President Ahmadinejad was more than a bit unsettling, as Bush himself had to admit. Iran said U.S. troops must leave immediately, while Maliki praised Iran for its "constructive" role in "fighting terrorism." You can be sure Bush read Maliki the riot act after this became public and the president was made to look like a fool during his press conference the other day.

Then there is Turkey. Maliki met with Turkish Prime Minister Erdogan on the issue of the Kurds and Maliki vowed to crack down on the terrorist PKK organization. Of course this was meaningless, as Erdogan well knows, because there is no way Maliki can crack down without having the Kurds withdraw from his government.

For his part, Erdogan appears to be turning some to Iran as Turkey seeks closer cooperation on both the energy front and in dealing with their common foe; Iran having its own share of Kurds seeking independence.

Back to Iraq, the evidence is irrefutable that Iranian-made bombs are killing U.S. soldiers. At some point the administration has to say 'enough!' Geopolitical concerns have taken somewhat of a backseat the past few months, thanks in no small part to the increased volatility in global financial markets.

But while we've been asleep, not only is Iran's nuclear weapons program progressing, virtually unimpeded, but Iran is also getting bolder in confronting the United States through its various proxies. This must stop.

September is going to be an incredibly busy month on the foreign policy front. Aside from the Iraq debate, the U.S. will be pressing its case for increased sanctions against Iran at the UN Security Council, with probably little success. Other hot spots, some of which I list below, will be heating up as well. Try and get some rest over the coming weeks. You'll need it.

North/South Korea: The leaders of the two are slated to meet for only the second-ever summit in Pyongyang, Aug. 28-30. The first was also in Pyongyang, June 2000; a fact that ticks off many South Koreans. The North's Kim Jong Il, after all, had pledged the next one would be in Seoul. So Lil' Kim is obviously afraid to travel, let alone he's a scheming liar straight out of the Gollum mold.

As for what is expected to come out of the summit, no one knows but I'll take a stab at it. Kim will ask for all kinds of goodies and investments, South Korean President Roh will likely acquiesce as he seeks to burnish his legacy, there will be some talk of ending the Korean War on a formal basis, but Kim won't do anything more than he already has on the nuclear weapons front.

Israel: Citing a "severe potential threat," the government is warning Israelis not to visit Muslim countries over the coming months, especially ahead of the mid-September Jewish holidays, over fears Hizbullah is preparing to abduct Israelis. Aside from Jordan and Egypt, terrorism experts are warning against going to Morocco and Tunisia.

Pakistan: President Pervez Musharraf is in deep trouble and his leadership is being questioned on a number of different levels. Also his allegiances. This week he blew off Afghan President Hamid Karzai's "peace jirga," or tribal council composed of 700 or so elders from the region, as did leaders from terror-plagued Waziristan. Musharraf said he had other things to do, but as the Taliban was not invited to the jirga it's easy to read that Musharraf didn't want to tick them off any further than he has already done so. In other words, once again Musharraf is attempting to walk the tightrope where he doesn't appear to be too pro-American, especially since the jirga was basically Washington's idea.

Musharraf had also threatened to declare a state of emergency, but here the White House prevailed and insisted that Pakistan hold free and fair elections this fall.

Russia: The Kremlin denied it fired a missile outside a village in Georgia, though Georgia claims it has irrefutable evidence it was the target of a Russian airstrike. [The missile did not explode.] But once again, Georgia appealed to the world community and heard nothing in return.

China: Amnesty International issued a report saying that Chinese authorities have reneged on pledges made when bidding for the Olympic Games by heightening abuse and surveillance of political and religious dissidents, as well as jailing journalists. An AI official said "Not only are we not seeing delivery on the promises made that the Olympics would help improve the human rights situation in China, but the police are using the pretext of the Olympics to extend the use of detention without trial." [South China Morning Post]

I also just have to comment on all the talk this week of China using its huge U.S. dollar reserves as a "nuclear option" in combating any new trade sanctions levied by Congress against it. This has always been a concern.

But while a trade war is a distinct possibility unless cooler heads prevail in Washington (and Europe, for that matter), I have argued that where China can use its dollar reserves most effectively is in its handling of a future crisis over Taiwan.

One must assume that taking Taiwan is off the table until after the Olympics, but next year will also see some maneuvering out of Taipei that will be none too pleasing to Beijing.

Here's the bottom line. If and when China feels compelled to strike Taiwan, which would fall in days, China will use the nuclear option against any threats by Washington to come to Taiwan's aid. "Lay off?or we tank your economy."

Lastly, some in the U.S. defense community are expressing concern over strengthening ties between China and Thailand in the wake of the September military coup that cooled relations with Washington. As reported by Wendell Minnick of Defense News:

"The United States suspended $24 million in military aid to the country and canceled military education programs. But China quickly recognized the new government and offered $40 million in military training and other aid."

For years people have been warning the U.S. not to take Asia's support for granted. But then the White House has had its attention focused elsewhere.

--U.K. authorities said there is a "strong possibility" that the current foot-and-mouth disease outbreak originated at one of two laboratories nearby. At this point it's unclear whether this was an accident or sabotage. Back in 2001, an epidemic led to the slaughter of as many as 10 million animals.

Afghanistan: Congratulations to our friends for increasing their global share of the poppy crop from 92% to 95%, as production has increased 15% since 2006! Most people aspire to be world leaders in technology or manufacturing. But only one nation can call itself the world's leading source of heroin.

Others would say this is not a good thing; as in the profits help fund the Taliban. The United States and the NATO coalition have been in Afghanistan for almost six years. Counter-drug efforts have obviously been a miserable failure.

Mexico: The White House is preparing a massive aid package to counter the seriously deteriorating situation in Mexico concerning the narco-traffickers.

"Imagine if our country were so ravaged by drug cartels that the president sent the military into a third of the states to break the terror. That's where Mexico is today. We all pay the price.

"Narcotraficante infighting took over 3,000 lives in Mexico last year as the Sinaloa and Gulf cartels struggled for turf. With government officials and police officers facing the old choice of 'silver - or lead,' out-of-control corruption plagued the country?.

"In response, Mexicans elected a tough president, Felipe Calderon. And President Calderon took action, ordering the army into nine states and deploying troops to cities such as Tijuana and the run-down resort of Acapulco.

"But the drug lords are fighting back. Today, the level of violence transcends mere crime. Mexico faces a narco- insurrection. And its government needs help?.

"(This) is going to be a long struggle. Ninety percent of the cocaine and much of the heroin and methamphetamine entering the United States now transits Mexico. For us, the immediate problems are addiction and crime. Drug abuse was behind many, if not most, of the 1.8 million violent crimes committed here in 2005?.

"We can't just blame this problem on Mexico. Without the U.S. market for illicit drugs, Mexico's transit-corridor problem wouldn't exist?.

"Now, here we are. And we've got to do something. Because Mexico's problem is our problem."

Felipe Calderon is a real hero in this crisis. He is the only one who has been willing to stand up to the drug lords. But as Ralph Peters concludes, "Thanks to his crusade? President Calderon is himself a prime candidate for assassination?.This is one insurgency that must - and can - be defeated."

Canada: Prime Minister Stephen Harper donned his rubbers and trekked to the Arctic (the ground is soft underfoot this time of year) after Russia's action to plant a flag under the North Pole. As a Harper spokesman said, it was time "to reassert Canadian sovereignty," by god, while the prime minister a few weeks ago noted "We either use (the Arctic) or lose it. And make no mistake - this government intends to use it."

Canada's opposition, though, has had a field day because, for starters, Canada has no icebreakers heavy enough to even tackle the Arctic ice.

No problemo, as Bart Simpson would say; the ice continues to melt at a rapidly increasing rate. So who needs icebreakers?! Meanwhile, Harper vowed Canada would build two military bases in the far north on the shores of the disputed Northwest Passage. Yes, soon we could be talking The Battle of the Baffin Islands! [If I'm a soldier, I'm watching out for the ferocious leopard seal.]

Dow Jones +0.4% [13239]
S&P 500 +1.4% [1453]
S&P MidCap +1.3%
Russell 2000 +4.4%...yippee!
Nasdaq +1.3% [2544]

Bulls 43.8
Bears 31.5 [Source: Chartcraft / Investors Intelligence?just two weeks ago the figures were 53.9/18.0 and I reminded you at the time this was a contrarian indicator. Newsletter writers had suddenly become too bullish. Now sentiment has swung wildly the other way. It's just one indicator, but every now and then it's meaningful???which is why after all these years I keep posting it!]

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