Co-brand Partnerships

award-5.gif (6517 bytes)

topsite.gif (1668 bytes)

webfifty.gif (6027 bytes)

drop_center.gif (2753 bytes)

wpe1.jpg (2095 bytes)

Email Login
New Users Sign Up!
Sign up for our weekly e-mail newsletter!
Tell Me More!

Enter your e-mail address
search by:

Current Weather
Enter Your City, State, or Zipcode:





Enter Symbol


Enter Symbol:


Enter Symbol:


Enter Symbol:


Enter Symbol


Search For:

Company Name
Ticker Symbol

Exclusive Broker

Enter Ticker




Contributed by Bill Bonner
Publisher of: The Fleet Street Letter



Today:  A Christmas Letter

*** Santa's Rally - Wall Street still believes in 
Greenspan's magic

*** The real cause of weakness on Wall Street...and why it 
won't go away soon...

*** Consumers, businesses - weighed down by a huge debt 
burden...the dollar falls...and a good recommendation

* * * * * * * * * * * Advertisement * * * * * * * * * * * *

Dragon-sized Profits in China - 75% in less than two weeks! 

Get first-hand investor intelligence from an experienced 
speculator and score profits of 75%, 700%, even 4,000%. You'll 
join an exclusive circle of investors who are alerted to 
spectacular opportunities within 15 minutes of their discovery. 
To find out how you can cash in on three "special situation" 
bargains poised for mind-boggling profits:
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

*** Christmas is over...but not the Christmas season...and 
probably not the Santa Claus rally that began at the end of 
last week.

*** I had been expecting Mr. Bear to take a little break 
during the holidays. Finally, on Friday, he bade Merry 
Christmas to all and gave out his good tidings.

*** Both the Dow and the Nasdaq rose. The former by 148 
points; the latter by 176 points. 2035 stocks advanced on 
the NYSE; only 891 declined. And more than twice as many hit 
new highs as hit new lows.

*** Even Amazon rose on Friday - up 3/8th, but still below 

*** The Wall Street Journal presented what is sure to become 
the standard interpretation of market's late autumnal 
performance. The problem, said the distinguished financial 
daily, was a combination of bad news all at once: poor 
earnings, the tech bust, the election hang-up, and 
Greenspan's rate hikes finally catching up to the market.

*** And yes, there did seem to be a lot of bad news in the 
last 8 weeks. But the real cause of the market's weakness is 
something else. After years of very loose is 
becoming very expensive. Remember, the real, net cost of 
borrowed funds depends on what you can do with the money. If 
you just stuck it in growth stocks - in any year of the 
1990s - you would have gotten about a 20% return. Subtract 
your interest costs, say, about 8%, and the real, net cost 
of the money is a plus 12%. In effect, it paid to borrow.

*** This, of course, encouraged people to borrow recklessly, 
for which they needed little encouragement in any case. The 
result was a huge buildup of debt - a load so heavy that it 
has become hard to carry.

*** While most of the tech world bounced on Friday, Lucent 
went down. The company announced a 20% decline, year-to-
year, in revenues...and a larger-than-expected loss in the 
4th quarter. Lucent's balance sheet shows $20 billion in 

*** Xerox has even greater liabilities - $24 billion. Xerox 
is now being forced to sell assets to raise money - it has 
exhausted its lines of credit. Bloomberg reports that 
Chase/JP Morgan is the biggest creditor - with $375 million 
on the line.

*** The situation among the automakers is not much 
different. The WSJ reports that GM is cutting 15,000 jobs in 
North America. GM has 265 billion in liabilities. Ford has 
only slightly less - $263 billion. And a Bloomberg report 
tells us that "DaimlerChryler May Run Short of Cash."

*** "We have been borrowing an average of $1 million per 
hour," says Gordon Smith, President of Pacific Gas & 
Electric, "to pay for the power we deliver to Californians. 
No company can continue to operate under such conditions." 
PG&E is threatening to go bankrupt unless it is allowed to 
pass along power costs to consumers. 

*** Speaking of consumers, it is any wonder that those at 
the bottom of the economic food chain are hurting too? 
Thanks to the good graces of the credit industry - notably 
credit card and mortgage companies, especially Fannie Mae 
and Freddie Mac - they too partook of the great feast of 
free credit during the `90s. They gorged themselves as 
though at Christmas dinner everyday - refinancing their 
homes at 125% of their value to keep the cash coming in. But 
now it's diet time. The cost of borrowed funds this year has 
been nearly 30% - interest plus stock losses. If you had 
invested exclusively in Nasdaq stocks, it would have been 
closer to 60%.

*** The Consumer Sentiment Index dropped from 107.6 in 
November to 98.4 in December. "I'm going to watch my dollars 
next year," said a typical consumer quoted by the WSJ, "and 
play it month by month to see what's going on."

*** Most likely, he's going to watch his dollar fall. The 
euro rose again on Friday, to over 92 cents, and ended the 
week up 3%. March futures contracts have the euro at 95 
cents. And I will let you in on a little secret - the euro 
is headed back above $1. The dollar is doomed.

*** Richard Russell had a good recommendation. Ask your 
broker to buy some euro-denominated bonds from Freddie Mac. 
Freddie Mac's stock is almost sure to decline in the months 
ahead - a victim of declining credit quality. But as a 
Government Sponsored Agency, it is unlikely to default on 
its bonds.

*** Bonds have run up nicely as investors expect lower 
rates. Ten-year T bond yields fell 54 basis points in the 
last 3 weeks. 

*** The Dow rose 2% in the week before Christmas. The S&P 
500 fell 1%. And the Nasdaq dropped 4%. TheStreet's 
index sank 16% for the week. But gold stocks rose 6%. More 
on that tomorrow. 

* * * * * * * * * * * Advertisement * * * * * * * * * * * * 

RETIRE OVERSEAS Learn about the world's six best places to 
live or

Live like royalty on $14 a day. Own an exotic beachfront 
getaway for $35,000. Or romantic pied-a-terre for under 
$60,000. Enjoy fine restaurant dining for $7 per person. 
Employ a maid or gardener for $2 a day. Buy comprehensive 
health insurance for $20 per month. Get the details in your 
FREE report now.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 


We enjoyed a very quiet, and unseasonably warm, Christmas 
here in Poitou. The festivities began with a party for the 
English speakers in the area. We invited the five or six 
families we know - English, South African, Scottish...and, 
of course, our own American bunch. Among them was a doctor 
and her husband...and a farmer whose wife is named Looney. I 
am not making this up - just reporting it to you. Looney is 
an avid horsewoman, like my wife, Elizabeth. Eventually, 
every serious rider is kicked in the head, trampled, or 
thrown from his horse onto his head. So, I assume that the 
name is descriptive...or perhaps predictive.

Kurt, meanwhile, does underwater construction work. It is a 
difficult career, but he seems to enjoy it. He is leaving 
today for 6 weeks in Iraq - where I presume he is working on 
oil equipment. Richard manages a local Bed-and-Breakfast, 
frequented by English tourists. And Kim is restoring a 
chateau in an even more remote little hamlet.

Of course, there is no reason why you should be interested 
in our Christmas - especially, since nothing out of the 
ordinary happened. But the Daily Reckoning is a free 
service, and I feel entitled to bore you from time to time. 
Plus, it is the day after Christmas and I am not ready to 
address trivial matters.

Not that I haven't been thinking about stocks and the 
economy. Not in my waking hours, of course - when I have had 
had more important things to think about. But I woke up this 
morning with an unsettling thought on my mind: What if the 
developing downturn included not merely a bear market and a 
recession - but an historic breakdown of the entire world's 
financial system?

Never before has the world economy relied so heavily on a 
single currency - the dollar. And never before has a 
currency been so heavily freighted with debt. And never 
before have the debts been so goulashed up - by 
securitization, derivatization and globalization (to coin a 
catchy phrase). 

The embers of my nocturnal unease were fanned this morning 
by Doug Noland of the "At this point, the 
overriding issue comes right down to the solvency of the 
entire U.S. financial sector, and the Federal Reserve and 
the leveraged speculating community are playing with fire. 
Or, stating it differently, they are "betting the ranch" by 
perpetuating absolutely reckless financial sector leveraging 
and an historic accumulation of foreign liabilities, 
especially in the face of mounting credit and economic 
problems. To be candid, I see this as nothing less than the 
absolute worst-case scenario developing - the unrelenting 
self-destruction of our financial system."

Rest assured, I think about these things too. So you will 
not have to do so. And tomorrow, I will take them up as 
economically as possible - beginning at the end! I will look 
at what could be the best way to protect your money and your 

But let me leave you in suspense today...and return to my 
Christmas tale...

The purpose of our get-together at the house was to sing 
Christmas carols in English. Caroling has been a family 
tradition for many years - it is something we miss out here 
in the French countryside.

The tradition began in Baltimore more than 15 years ago. We 
lived in a formerly Jewish neighborhood, of elegant houses 
built in the last century. But the Jews had moved out...all 
that is left is the synagogue on Eutaw Street - which is 
still in use. By the time we arrived, in the 
looked as though the area might be ready for an urban 
renaissance. So we bought a house for $27,000 - and joined a 
small group of white homesteaders in a predominately black 

It was an uphill battle, and ultimately, a complete defeat 
for the forces of gentrification. But it had its comic 
moments. Among them was our futile attempt to bring American 
bourgeois culture to the ghetto. One effort was the annual 
caroling - in which a little band of earnest homeowners 
would parade up and down the inner city sidewalks singing 
Christmas carols. 

The spectacle was almost as foreign and absurd to the local 
drug dealers and welfare addicts as though aliens had landed 
in front of the corner liquor store. But at least one woman 
tried to make sense of it:

"What's this?" she asked the carolers, rolling one white 
tradition in with another, "Chantikah?"

After giving up on the city, we moved out to the country, 
near Annapolis. There, our caroling took on a new dimension. 
Along with other members of the church group, we would drive 
around to `shut-ins.' It was fun for the carolers, but the 
shut-ins were - in some cases - so tightly shut-in, and deaf 
to boot, that they didn't hear a note or a word...and 
actually slept right through the whole show while we 
shivered in their front yards.

But here we were on this Christmas Eve, drawn up around the 
fire...a small outpost of Anglo-Saxon Christendom in remote 

Elizabeth had made fruitcake, cookies and homemade eggnogg - 
to which we added rum or whiskey depending upon our tastes. 
The eggnog was so frothy that by the time we began singing, 
we all had traces of white mustaches. Now, it turned out 
that while we all knew the same carols, the English had 
different melodies. That is the way with the English...they 
can never quite get in tune with the rest of the English-
speaking world. But it didn't seem to matter anyway. After a 
few rounds of eggnog, we were surprised at how good we 

The party ended in the early evening. But there was more 
singing ahead. Elizabeth, Maria and I rushed over to the 
church - where we had been welcomed onto the choir in the 
spirit with which a fat girl might be invited to enter a 
beauty is always nice to have someone around to 
whom you can feel superior.

The little church at Bourg Archambault was packed on 
Christmas eve. We were late getting there, but fortunately 
Pierre has saved a seat for me and had begun to worry that I 
wouldn't show up. We are the only two basso profundo voices 
in the choir. We don't sing very well, but when we feel sure 
of ourselves we really belt it out and chuckle to ourselves 
after the fact. But we drown out the rest of the choir on 
these occasions...and Pierre's two daughters - Anne Sophie 
and Elisabeth - turn around and frown at us. My own 
daughter, meanwhile, took a seat on the other side of the 
church. At 14, she fears embarrassment more than death. And 
I'm afraid I give her plenty of cause for mortification.

But Anne Sophie and Elisabeth are both in their early 20s - 
and beautifully turned out. Pierre seems to find it a 
pleasure to catch their eyes, as I do - even if it is to 
draw a look of disapproval. 

Then, after church - at about 11 PM - we returned home and 
gathered around the fire again, partly for intimacy...but 
largely just for heat. The fireplace is the only source of 
heat out in that wing of the of the house. The children were 
soon sent off to bed so that Mr. And Mrs. Santa could fill 
the stockings hung by the chimney with care...and finish 
wrapping a few presents. Actually, Mrs. Santa did the 
work...while Mr. Santa helped himself to what remained of 
the eggnog and put on a CD of holiday music. 

And so, our Christmas eve came to a close much as it 
began...with carols. I dozed in my chair in front of the 
fire...perhaps dreaming of the Depression of Tammy 
Wynnette sang `Silent Night'.

In the holiday spirit,

Bill Bonner
About The Daily Reckoning:
The Daily Reckoning... "more sense in one e-mail than a month of CNBC."  That's what readers are saying about The Daily Reckoning.

Bill Bonner, recognized internationally as a brilliant writer, entrepreneur
and publisher of The Fleet Street Letter, offers you his daily market
commentary absolutely FREE. For the first time, outsiders are getting a peek into his powerful and profitable investment insights. Bill's practical contrarian advice empowers even average investors to protect their hard-earned wealth and achieve amazing gains.

Bonner writes his email letter from Paris, France, each morning --
describing the wacky, wonderful world of investment, politics and everything remotely related. Irreverent. Sharp. Honest. Thoroughly, unabashedly contrarian. It's also among the fastest growing e-letter on the Internet.  It's a brand new service... but it has a distinguished history..

For nearly 62 year, The Fleet Street Letter, the oldest investment
advisory letter in the English language has consistently delivered
invaluable economic and political foresights to savvy investors. Current readers regularly enjoy impressive investment gains even as the market falters. Here's more from his online readers...

"My small portfolio has followed true to my wife's description of my
investment philosophy, "buy high and sell low." However, that has changed since I started religiously reading DR... I credit this reversal of fortune directly to The Daily Reckoning"

" Your Daily Reckoning is the best in business commentary... mixing
serious warnings and the state of the market with gentle humor"

"It is actually better than some of the newsletters that I pay to

"Your statements and philosophy have kept me from storming into the market and in fact [I'm] making some money in put options" (Frank)

Open your mind with the most stimulating e-mail newsletter that you'll ever read, The Daily Reckoning. To receive this free daily email newsletter click here now.

Search for it at the TulipSearch Open Directory
Investment Bookstore Investment Newsstand Market Mavens Report



Tulips and Bears
Internet Stock Talk
Traders Message Boards
Traders Press Bookstore

City Guides
Travel Center
Bargain Bloodhound

TulipHost...coming soon
TulipTools...coming soon
...coming soon

Questions or Comments? Contact Us

Copyright � 1998-2002 Tulips and Bears LLC.
All Rights Reserved.  Republication of this material,
including posting to message boards or news groups,
without the prior written consent of Tulips and Bears LLC
is strictly prohibited.  'Tulips and Bears' is a registered trademark of Tulips and Bears LLC

Last modified: April 01, 2001

Published By Tulips and Bears LLC