I would like to postpone the already advertised e-mail regarding “Germany and America”. There are several reasons to do so.

The first one was the screening of the movie “Wag the Dog” on German Television last Saturday. By accident I caught sight of the advertisement in a TV magazine – looking at such a magazine happens approx. 5 times a year, I guess. “Wag the Dig” (starring Robert de Niro & Dustin Hoffmann) is – for those who don’t know the movie – about a US president who got into trouble after a “little” sex affair. Since this accident happened two weeks before the next presidency elections, they stage a faked war against Albania as a feint. This happens partly with resp. without the knowledge of the CIA and the press – who both do their bits to elucidate the fraud, but the one who paid more would win in the end. If I had seen the movie before “September 11^th“, it would have been a very nice comedy to me. After “September 11^th“ I ask myself, how it was possible at all to make such a movie. Actually I don’t really ask myself, since an interdiction would have risen suspicion. However, a fantastic movie. One should really watch it if possible.

Reason No. 2 was an e-mail from a friend, which I got this morning. The German public TV channel ZDF deals with the topic “September 11^th” from time to time (e.g. magazine “Frontal” – Link: http://www.zdf.de/ZDFde/inhalt/0,1872,2009487,00.html). On Sunday, August 11, 11.25 p.m., they will show a reportage with the title “The day which changed the world – The faint of the mighty on September 11^th” (Link:  http://www.zdf.de/ZDFde/einzelsendung/0,1970,2036883,00.html ). I think, this is going to be interesting – at least the idea to watch a TV program from two different angles. The “official” version and if one also tries to see the things from a different viewpoint … 

At the latest now I would like to say “Thanks” again to all those who sent me their “hints”, comments, remarks and ideas. I think, without all this help I would have let “September 11^th” rest in peace … strange choice of words – I’ve  just noticed J

Well, that they show the programme “consumer-friendly” on a Sunday night at 11.25 p.m. is more than understandable (also see Mail “Hint No.2 – Signal Processing). Who is able to watch a political programme on a Sunday after 11 p.m.??? But okay, the topic doesn’t seem to be that important J Even 10 years ago I sometimes asked myself how TV stations can screen interesting documentaries and reportages at times of a day when “normal people” either sleep, have sex or several beers in any pub (some of us do all of the three things – but in reverse order J). However, I know that there are things I don’t have to understand – wouldn’t be the first time …

Reason No. 3 was the e-mail of another friend of mine (he’s an architect), from which I would like to quote a few words:
„... one of our professors used to talk about a meta-layer in architectural designs, … which is behind (or above) all details and gives the whole thing a superordinated meaning …”

Meta-layer? Superordinated meaning? Well, not always that easy to see it – that’s true. It also made no sense to me for quite a long time in my studies, why I should attend economics, public law and foreign languages. After university it was then clearer though, that this hadn’t been a waste of time, but had been “sort of connected with each other” in a integral-holistic sense.

If you look closely on the development of the Capitalism, this meta-layer can have many faces. The biggest and most well-known one is surely the shiny happy and filthy laughing face of “Money”.

I have no idea about economics, stock exchange and certain market laws. But I frequently asked myself – quite naively – how it is possible, that the share price of an enterprise can rise up at 400 % without increasing the productivity by four times within the same period of time. “Well, they will surely know, what they are doing at the stock exchange.” At that moment I always switched off my brain then J 

The online version of the German newspaper „Junge Welt“ (Sat, August 2 2002) included an article with the title “Auf dem Weg nach unten – On the way down”. A short part of it: 

„The crucial point for the decline on the stock exchange is doubtless the fact, that the value of the papers went further and further away from the real turnovers and profits during a long-term period of speculations. At the end of the day, share prices reflect the expectations on coming profits. An indicator which shows this “lifting” is the ratio of the profits and the share prices of the same enterprises (Price-Earnings-Ratio – P/E ratio). Therefore you can find a detailed long-term calculation of the US economist Robert J. Shiller, who compared the profits of the 500 most important US enterprises with the stock exchange index value Standard & Poor’s (S&P), which collects the share prices of the 500 most important US enterprises. Accordingly, the P/E ratio reached the value of 33 shortly before the market crash in 1929; the level of share prices was 30 times higher than the profits of the 500 most important US enterprises. After that the P/E ratio sagged to a value of 5. Until 1980 the P/E ratio ranged from 10 to 20. Since 1998 the P/E ratio had been bouncing very fast and reached then its historical peak of almost 45. Meanwhile it has decreased again down to 30, which is yet almost the record level of 1929. The conclusion of Robert Shiller is thus even from the Marxian viewpoint convincing: “I don’t see any reason, why the decline should have reached its end. We are still on the way down.” (Link: http://www.jungewelt.de/2002/08-02/006.php - only in German)

One may have only little confidence in the economical apprehension of the “Junge Welt”, since it was a former SED-near press (SED – former governing GDR Party), in particular if you remember some aspects of the GDR economy. But first of all 13 years have passed since the fall of the wall and secondly there are at least facts and explanations visible in the article. The “official media” still tries to flatten the drastic development – well, this is also understandable: No-one wants to be reminded of the times of a market crash. Furthermore, most probably 90 % of the investors don’t even know, what that is. Anyway, the DAX has lost more than 50 % during the last 2 years and “September 11^th” wasn’t as black as it may look like if one believes in the prognoses of the article above.

Short question: Where are we then, if we have reached – after a long drought – just the level before the last big market crash? But as already mentioned – it is maybe just “scary stories” – you never know?! J

I have just noticed that this e-mail gets much too long ... that’s why I’d like to continue here next time.

Have a nice, sunny day. Yours, Michael. 

PS: You can also forward this e-mail to people you know – I don’t mind that at all.