I get a kick out of Richard Russell. He’s entertaining, talks in generalities instead of specifics, and has been bearish on balance during the seventies and from the late nineties. This is a cut-n-paster from 2/22/05. A lot of his old stuff can be accessed at an otherwise stupid Gold Bug site
http://www.gold-eagle.com/research/russellndx.html

"On February 7, I received a brilliant report by Trey Reik of Clapboard Hill Partners. One particular chart in Reik's report caught my attention. It was a chart showing total credit in the US as a percentage of the US Gross Domestic Product. The immediate lesson here is that it's taking more and more credit in order to produce less and less of the US Gross National Product.

Happily, Alan Abelson must have received a copy of the same Reik report, and also happily, Alan reproduced Reik's credit chart in this week's Barron's.

A few facts from the chart. At the 1929 stock market high, total US credit was 176 percent of GDP. In 1933 with GDP collapsing and the Depression in full force, total credit rose to 287 percent of what was left of GDP

Now get this -- in 2000 at the top of the late bull market, total credit was 269% of GDP. That was wild enough, but do you know where we are today? Currently, total credit is 304 percent of GDP!

In other words, under Alan Greenspan's liquidity explosion and his mini-short interest rates, the United States is now awash with credit. And with it all, the Dow still can't make it back to its 2000 bull market high.

And then there's the law of "regression to the mean." Somewhere ahead the credit bubble is going to burst. When it does, the bear market will be on in full. Or -- somewhere ahead the stock market will topple over. When that happens the giant credit bubble will fall apart. Either way, the Greenspan Fed has created the greatest credit-balloon this nation has ever seen. This credit-balloon has created inflation, which is just now becoming visible -- even in the government's statistics.

Greenspan is now in the process of trying to "calm down" the credit bubble. He's doing it with his "measured" increases in short rates . But this is a very dangerous process. It's like rubbing a balloon with a pin rather than just puncturing the balloon. Will Greenspan be successful? Can Greenspan get out of office by early 2006 without triggering a disaster? Place your bets. Either way, it promises to be a fascinating year, and we still have ten months to go. (This is the end of the piece that appeared over the three-day weekend).
….
Just for the fun of it, Faye and I visited numerous homes that are on the market here in La Jolla. My impression -- It's like a descent into madness, and, of course, I'm talking about the prices. Even the meanest little shack in La Jolla costs near or above a million dollars. The scariest four words in the US economy today are the following -- "Regression to the mean."
Richard Russell
Editor-in-chief - DOW THEORY LETTERS

__________________
89 300E
79 240D
72 Westy
63 Bug sunroof
85 Jeep CJ7
86 Chevy 6.2l diesel PU

"The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane."
Marcus Aurelius

By Jon D. Markman
RealMoney.com Contributor
1/21/2005 9:02 AM EST
Click here for more stories by Jon D. Markman


Even if 2004 wasn't the best year for your portfolio, it sure was for a lot of U.S. corporate executives and insiders. According to Thomson Financial data, last year was the second most lucrative on record for insiders as they sold $41 billion worth of their shares to the public, a figure that was up 40% from 2003.

In contrast, insiders were buyers of only $1.45 billion worth of stock. That was the second lowest annual level since 1996, according to Thomson.

If the differential between selling and buying sounds extreme, it is. The ratio between dollars of stock sold and dollars of stock bought by insiders was 28-to-1, the most bearish Thomson has recorded since the company started tracking the figures in 1990.

Insiders were particularly active in their sales in the final three months of last year, dumping $12.8 billion on the public while only buying $342 million worth of stock. Thomson says the dollar sell-buy ratio, its top augur of executive sentiment, was a whopping 37-to-1 in the quarter.

__________________
89 300E
79 240D
72 Westy
63 Bug sunroof
85 Jeep CJ7
86 Chevy 6.2l diesel PU

"The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane."
Marcus Aurelius