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I've been very, very bearish for a long time now. It's good to see some reality creep into these markets. When the average P/E is something like 40 to 1 using pro-forma earnings, you know something is wrong.

I'd like to share this little tidbit from todays report at www.comstockfunds.com - "Every day, it seems, we get more evidence that the so-called economic recovery is faltering. April employment was up 43,000, but the March number, originally reported as up 58,000, was revised downward to minus 21,000, a swing of 79,000. Similarly, the February figure, initially reported as plus 66,000, now stands at minus 4,000. With substantial downward revisions such as these, the current release showing a turn toward growth must be taken with a grain of salt."

Has anyone else noticed the fact that these unemployment numbers get announced with trumpets and fanfare when they are first released, and then when the revised numbers come out they are buried on page 47, under the ads for dry cleaning? Is anybody buying this anymore?

Anyway, I've been out of stocks for over a year now (except for some short positions) and I'm entirely in cash and real estate now (house is paid for). The big question is do I buy some gold now or wait a week or two for a possible momentary dip in prices? As far as this market is concerned, I'll go long again when P/E ratios matter again. The current multiples are just silly.

Has anyone else noticed the fact that these unemployment numbers get announced with trumpets and fanfare when they are first released, and then when the revised numbers come out they are buried on page 47, under the ads for dry cleaning?

Someone here (I think it was Wyatt's Torch) predicted that those numbers were wrong and would be revised...

The big question is do I buy some gold now or wait a week or two for a possible momentary dip in prices?

The Elliot Wave people claim gold will go to $250. I don't buy it. I'd get a position in gold now (I bought at $265) and add to it on the dips (if there are any).

The gold pros say that gold will move $25-$50 a day when the shorts positions blow up...

April employment was up 43,000,

Could this be caused by the extension of unemployment "benefits" ? How many had exhausted theirs and have reapplied ?

"The big question is do I buy some gold now or wait a week or two for a possible momentary dip in prices?"

If you are a gold speculator and intend to actively trade your position, hold off. Otherwise go ahead and buy now.

If it closes above $320 I'll jump in, and hold for a while. But I agree with the EWI guys and think in the short term it will go back down below $250. For a horizon of a year or more though, buying gold now is hardly a bad decision.

EWI says this this about gold this month:

"The swell of bullishness toward gold has spilled into the mainstream. 'Gold's Got the Touch Again,' says The New York Times. 'Goldbugs Rejoice!' proclaims the Financial Times. 'Take a shine to gold,' urges a financial columnist. The 10-day Daily Sentiment Index of gold traders has pushed to 73.9% bulls, a level commensurate with previous market highs. One group that is not bullish on gold is the smart-money commercial hedgers, who now hold their largest net short position (-72,703 contracts) since the yellow metal was at $418 in February 1996 (-98,449 contracts.) So the smart-money has been selling into this rally. This should turn out to be a sound decision, as the Elliott wave pattern from the February 16 low ($253.50) retains a clearly corrective look. Wave (2) should be contained by resistance of $320-$325. Wave (3) down should carry gold below $250. The alternate count allows for a sharp spike to about $350."

It's the media coverage that tips the scales for me in favor of EWI.

The dollar wave count is much clearer to me, and points to at least one more rise before the dollar dies. While a rise in the dollar doesn't necessarily mean a drop in gold, it doesn't help the near-term gold bull argument. And ISI's liquidity index (M3 + commericial paper) has gone negative, which means actual deflation, not just disinflation.

Here is an important article (SafeMoneyReport)
Debt Disaster Looming (05/02)

We've been telling subscribers to Safe Money for months now that Xerox is on the brink of disaster. So we weren't surprised to see Moody's downgrade the company today. We were just surprised it took this long. After all, our research shows that the company has $16.2 billion in debt with just $4 billion in cash, and its sales are plunging!

But Xerox is not the only company investors should be worried about. We've identified hundreds of other companies with huge debt loads. Here are just a few:

* Nextel is drowning under $16.7 billion of debt, and has only $4.2 billion in cash on hand. Plus, the company has lost over $3 billion in the last 21 months alone.

* PSINet, a leading provider of Internet backbone services, has $3.7 billion in debt, annual interest expenses of more than $398 million, and it doesn't even generate any cash!

* Maytag, Rite Aid, and Finova Group are just a few of the other American corporations that are up to their eyeballs in debt with little practical hope of repaying.

And there are many more examples just like these.

No wonder corporate credit ratings are plummeting. For the past TEN quarters in a row, the trend has been three corporate credit downgrades for every one upgrade. And a fourth of all junk bonds are now trading at distressed levels. Welcome to the club, Xerox.

Here is an important article (SafeMoneyReport)
Debt Disaster Looming (05/02)

We've been telling subscribers to Safe Money for months now that Xerox is on the brink of disaster. So we weren't surprised to see Moody's downgrade the company today. We were just surprised it took this long. After all, our research shows that the company has $16.2 billion in debt with just $4 billion in cash, and its sales are plunging!

But Xerox is not the only company investors should be worried about. We've identified hundreds of other companies with huge debt loads. Here are just a few:

* Nextel is drowning under $16.7 billion of debt, and has only $4.2 billion in cash on hand. Plus, the company has lost over $3 billion in the last 21 months alone.

* PSINet, a leading provider of Internet backbone services, has $3.7 billion in debt, annual interest expenses of more than $398 million, and it doesn't even generate any cash!

* Maytag, Rite Aid, and Finova Group are just a few of the other American corporations that are up to their eyeballs in debt with little practical hope of repaying.

And there are many more examples just like these.

No wonder corporate credit ratings are plummeting. For the past TEN quarters in a row, the trend has been three corporate credit downgrades for every one upgrade. And a fourth of all junk bonds are now trading at distressed levels. Welcome to the club, Xerox.