Dow at 10,000

Via The Big Picture

With the DJIA approaching 10,000 again, let’s reminisce about 1999, the year it first passed that magic level on March 29th. Millennium by the Backstreet Boys was the best selling album, American Beauty won the Academy Award, the Euro was established, SpongeBob SquarePants aired for the first time, Hugo Chavez was elected President of Venezuela, Karl Malone, Pudge, Chipper Jones, Jagr and Kurt Warner won MVP awards and the average price of a gallon of gasoline at the pump was about $1.20. US nominal GDP ended at $9.6b vs $14.1 as of Q2 ‘09. Also, on March 29th 1999, the DXY was at 100.36 (now 75.60), the CRB was at 192.40 (now 269.15), gold was at $280 (now $1,060), oil was $16.44 (now $74.80), corn was $2.32 (now $3.85), copper was $.62 (now $2.83), the 10 yr yield was 5.19% (now 3.38%), and the fed funds rate was at 4.75% (now 0-.25%). Oh, how time flies.

Stark warnings to China Bulls

Albert Edwards warned the coming bear trigger by the China disappointment. He has a good track record. He was previously vilified then praised for calling the 1997 Asian Bubble, and called for a imminent Equity Market Meltdown last Semptember.

Qutoed from FT.com

View of the Day: China bulls will be let down

By Albert Edwards

Published: June 17 2009 15:09 | Last updated: June 17 2009 15:09

The wholehearted belief in China’s economic recovery could turn out to be the biggest disappointment yet for investors, warns Albert Edwards, global strategist at Société Générale.

“The ongoing enthusiasm for all things China reminds me of the way investors were almost totally blind to the fact the US growth miracle was built on sand,” he says.

“We saw this same investor mania 13 years ago with the Asian Bubble, which the consensus thought was a growth miracle.”

At the heart of Mr Edwards’ scepticism lies doubts about the accuracy of official data releases.

“The Chinese data is derided by economic commentators,” he notes. “Many have highlighted that GDP growth seems inconsistent with other data, such as electricity output. Yet few dare to point out that the emperors’ clothes might be absent – and when they do, they are met with robust official rebuttals.”

“That is not to say that the fiscal stimulus has not had a beneficial effect on Chinese activity this year. What I question is the quaint notion that the Chinese economy can grow at a respectable rate when the rest of the world is in a deep recession.

“I believe the bullish group-think on China is just as vulnerable to massive disappointment as any other extreme of bubble nonsense I have seen over the last two decades.

“The fall to earth will be equally as shocking.”