Suggested Reading
 
"The fate of the world economy is now totally dependent on the US stock market, whose growth is dependent on about 50 stocks, half of which have never reported any earnings."
Paul Volcker
Ex-Chairman of the Federal Reserve
September, 1999
We recommend you read the following eight articles to get the most out of iTulip.com.  While we don't agree with everything the authors say, taken together these articles are an effective antidote to CNBC kool-aid, a decidedly untrendy view from long term market and macroeconomics perspectives presented by the most reputable economists and market analysts we know of who don't have a newsletter to sell.

(1) THE INTERNET.

Every major advance in communication and transportation has been a marvel to users, a huge stock market celebration and, for the economy, significantly lowered costs.  Ultimately, every distinctive innovation matured and was eclipsed by the next one.
(2) The Ponzi Paradigm
Charles Ponzi wasn't the first to try it, but he has joined Dr. Bowdler and Captain Boycott among those whose names will forever be terms of abuse. And the classic scam that bears his name -- using money from new investors to pay off old investors, creating the illusion of a successful business -- shows no sign of losing its effectiveness.
(3) Trapped by the bubble 

Households and firms are on a borrowing spree. The private sector's financial deficit has risen to an unprecedented 5% of GDP (in the previous 50 years it has never exceeded 1%). Money-supply growth is rapid. And America's current-account deficit is heading for a record 4% of GDP this year. These are all classic symptoms of a bubble.

 (4) Mr. Buffett on the Stock Market

"Investors in stocks these days are expecting far too much, and I'm  going to explain why. That will inevitably set me to talking about the general stock market, a subject I'm usually unwilling to discuss."

 (5) Living On The Edge

"These figures aren't pretty. However you look at it, it's not pretty.  Basically, about one third of all (US) households are broke."
(6) Sitting out the party with Galbraith

In his lecture, Galbraith reminded people that 'the speculative crash, now called a correction, has been a basic feature of the system', and warned: 'We have far more people selling derivatives, index funds and mutual funds [unit trusts] than there is intelligence for the task.'

He continued: 'When you hear it being said that we've entered a new era of permanent prosperity with prices of financial instruments reflecting that happy fact, you should take cover.'

 (7) Economic basics predict apocalypse

The dismal science will never be the same if Dr. Kurt Richebacher's dire predictions for the global economy should come to pass.

The former chief economist and managing partner at Germany's Dresdner Bank says a deflationary collapse lies ahead that will ravage the world's bourses and usher in a dark period of austerity and financial discipline.

 (8) Secular Trends in Financial Markets

...different factors drive the supply and demand for stocks, bonds and
commodities. Stocks are primarily driven by earnings expectations which depend upon the business cycle. Bonds depend primarily upon nominal interest rates which are driven by inflation and by default risk. The long-term world bull market in bonds from 1865 until 1900 was driven by reduced risks to bondholders, and the current bull market in bonds has been driven by falling inflation rates. These structural adjustments can take decades. Because it can take years to bring into production new sources of oil, gold, or other commodities, raw material prices can remain stable for years, then jump in price suddenly. For these reasons, secular cycles in stocks, bond and commodities behave differently. 
These guys argue that rather than creating perfect competition, as the optimists project, information technology is doing exactly the opposite.

"We have argued that assumptions that underlie the microeconomics of the invisible hand will fray when they are transported into tomorrow's information economy."

Adam Smith need not apply

Then there's Alan Greenspan.  Digging through Federal Open Market Committee meeting minutes reveals that he was worried about the stock market bubble as far back as 1994 when the DOW was at a mere 4000.  Makes you wonder what he thinks today.

"When we moved on February 4th, I think our expectation was that we would prick the bubble in the equity markets.  What in fact occurred is that, as evidence of the dramatic shift in the economic outlook began to emerge after we moved and long-term rates began to move up, we were also clearly getting a major upward increase in expectations of corporate earnings.  While the stock market went down after our actions on February 4th, it has gone down really quite marginally on net over this period.  So what has occurred is that while this capital gains bubble in all financial assets had to come down, instead of the decline being concentrated in the stock area, it shifted over into the bond area.  But the effects are the same.  These are major capital losses, which have required very dramatic changes in the actions and activities on the part of individuals and institutions."

- Alan Greenspan, Federal Open Market Committee meeting, March 22, 1994
Full text of March 22, 1994 FOCM meeting transcript (3.7MB PDF file)
If you don't already have an Acrobat file reader  here.

Finally, we suggest strongly you read the following.  James Grant does have a newsletter to sell but he gives an issue away on occasion, such as the December 17, 1999 issue (1) Et Tu, Dow Jones?  This is an excellent marketing ploy because exposure to the careful research, thoughtful analysis, superb writing and lucent thinking lures one into plunking down hard earned dollars on a suscription.