Table On-Topic Summary - 20-Aug-2002

A compilation of this board's financial/economic posts From 40688 to 40734

Post  40688  by  Decomposed       OT: Table ON TOPIC SUMMARY Aug

Post  40689  by  lkorrow       OT Virtual library archives 9

Post  40690  by  srudek       Reply

Article&Link-Home Price Bubble? "In the last seven years home purchase prices have risen nearly 30 percent more than the rate of inflation. This run-up in housing prices has increased housing wealth by more than $2.6 trillion compared to a situation in which home prices had just kept place with inflation. This is an average of more than $35,000 of additional wealth for each of the nation’s 73.3 million homeowners. This paper examines whether the increase in home prices can be grounded in fundamental economic factors, or whether it is simply a bubble, similar to the stock market bubble." http://www.cepr.net/Housing_Bubble.htm

Post  40691  by  Arkural       Reply

Here are a few oil stks to watch for future use, perhaps. Hal, Bjs, Slb, Bhi, Oih (index)

Post  40692  by  uponroof       Reply

the dollar in the middle (east)... Tampathom and I had a breif discussion regarding the intentionally floated report of the US possibly freezing Saudi assets in America. This is only a portion of the now evolving economic/political mess that falls under middle east/dollar interests. The following tidbits of news help to form an understanding of this very dangerous, growing situation. It's not too hard invisioning the further inflamation an Iraqi invasion would bring. ******** snippet from LeMet: Dow Jones Business News Iran Mulls Dropping Dollar As Currency Of Oil Sales -Report TEHRAN -(Dow Jones)- Iran is considering whether to change the currency basis of its crude oil sale from the U.S. dollar to the euro to avert losses from the declining value of the dollar against major world currencies, managing director of the National Iranian Oil Co., Seyyed Mehdi Mir-Moezzi, said in remarks published Saturday. "Decision making in connection to the continuation of transactions in dollars is being considered in a committee set up at the Central bank of Iran," the local daily Hamshahri quoted Mir-Moezzi as saying. He said the NIOC has a representative at the committee to help it arrive at a decision. The committee's decision will be also of importance to the NIOC if it should decide to engage in the sale of Iranian crude on a short-sale basis, Mir-Moezzi said. The slide in the dollar's value against the euro in the wake of U.S. corporate financial scandal recently has prompted debate in the Iranian media whether oil pricing should continue based on the dollar. Iranian economists are asking the CBI to even change the reserves in its Currency Stabilization Fund, with some $17 billion in savings, to euros. -END- Then, the Malaysia news agency Bemama reports that Malaysia will soon begin using “The Gold Dinar” for trade with other Islamic nations: Malaysia sees '03 debut for Islamic gold trade system Reuters, 08.19.02, 6:55 AM ET KUALA LUMPUR, Aug 19 (Reuters) - Malaysia and a handful of other Islamic countries plan to bypass western currencies and use gold to settle bilateral trade from 2003, a senior Malaysian government official said on Monday. Prime Minister Mahathir Mohamad's economic adviser, Nor Mohamed Yakcop, told an international conference on the proposed trade system -- based on an electronic unit of value called a gold dinar -- would foster trade among the world's 1.3 billion Muslims. "The gold dinar could be an important facilitating mechanism...to move away from an inherently unstable and ultimately unjust global monetary system," he said. -END- This might be the worst news of all for the dollar. From www.arabicnews.com: Saudis want to withdraw investments from US Saudi Arabia-USA, Economics, 8/19/2002 Saudi businessmen have called for withdrawing the Saudi investments from the US in case the US will continue and allows judicial lawsuits proposed by some US lawyers against Saudi banks and charity societies, stressing that this case is deliberate and stands against all Saudi interests. News reports said on August 16 that the case which will be filed by families and relatives of victims of September 11 attacks in the US targets 99 Saudi establishments, organizations, and individuals. The director of "Bekheit " center for the Saudi financial consultation said in statements issued on Sunday by the Saudi daily al-Watan that the acceptance of the American courts of the filed lawsuits asking for compensations estimated at 300 billion dollars to the families of the American victims of the attacks of September 11, will push all Saudi investors in particular and the Arab investors in general to get their sums out of the American banks, so as to avoid risks of these trial cases. The Saudi Arab monetary fund establishment "Mu'assat al-Naqd al-Arabi al-Saudi" is to reconsider investments of the retirement and social insurance establishments in the USA, and to invest them in local or European markets which are more secure. The chairman of the Saudi- German company, Suleiman al-Sayarri, stressed the need of withdrawing all Saudi investments because of the fact that the US markets have lost transparency, and because of the fears in the Saudi investor, besides the change in the position of foreign investors in the world towards the American stances which are not attractive international investors. -END- One has to seriously wonder what is going on behind the scenes out there in the political/financial world. The material sent my way is as gold bullish, stock market bearish and dollar bearish as I have ever seen (in toto). Yet, gold tanked, the U.S. stock market rose sharply and the dollar remained firm all day long ???????? Meanwhile, oil continues to move curiously higher, closing at $29.84 per barrel. ******** Good Luck Cheers

Post  40693  by  tinljhtkh       Reply

08/19/02 Market analysis! Back to Basics! Monday was a day of gains in the markets, fueled by asset allocations from bonds combined with funds flowing in from money markets. Some bond funds, in my view, may have briefly lit in the money market accounts before moving on into stocks! Berkshire Hathaway bought another business that it could understand—CTBC—a company in the basic sector of poultry! Yes, I said poultry! At least that’s what I thought I said. The stock went down as they paid less in cash for share than the price per share! Something about CTBC needing access to cash to continue to fund and expand their business! Berkshire Hathaway does have cash! Underlying the 212 point upside in the Dow were several disquieting revelations. Ford Motor (F) extended its zero percent finance on through the end of September while raising the cash back options on many of its products. Almost simultaneously, Continental Tire announced the recall of hundreds of thousands of tires from two of Ford’s products! The last thing Ford needed right now was any kind of tire recall, regardless of its size! The underlying theme of Monday’s market might be summed up in one line: “It’s not a supply problem, it’s a demand problem!” There was great demand for home improvements reflective of Lowe’s earnings coming in a nickel higher than the street expected. This sparked a continuation of the debate about the relationship between Home Depot and Lowe’s—who has the better selection of merchandise versus who sets up the better environment for that new home supply consumer—the female shopper! If the housing bubble is getting ready to bust, you can’t prove it at Home Depot or Lowe’s, unless you buy into the argument that everybody is fixing them up to sell! A good place to look for that type of information might, in a normal world, be in the outdoor lights sector! In “light” of the events of September 11th and the need for increased security, outdoor lighting is now more necessary to keep the Al-Quida away, not to mention those sneaking around after the children! Wal-Mart and federated reported weaker back to school sales and blamed it on the heat! Among other excuses for the decline heard were the fact that students would go back to school and see what their friends were wearing before making their clothing selections after Labor Day! A recent interview with some teenagers revealed that they just were not excited by anything that they saw in the stores. Lack of imagination, never in evidence among teenagers, has apparently hit the apparel industry! Will they go back to school and discover that last years clothing “is in!” JC Penny had sales better than expected, but they are still losing money! Penny’s is a mall destination and they travel to the beat of their own drummer! Maybe everybody went there to beat the heat and take a walk in the mall? Toys-R-Us also beat earnings expectations and it’s CEO dropped the tidbit in an interview that Ames Department Stores, who is going out of business, had a 2 percent share of the entire nation’s toy business! This sounds nice except when you realize that Ames in gone and another toy powerhouse—K-Mart—had to ask to cut more jobs from its payroll as it struggles with its bankruptcy woes! Are we growing, or just consolidating? The leading economic indicators were down -.4 when the markets had expected -.5! It was down 20 percent less than expected, but still down! At the end of the day, one strategist made the statement that the 30-year bond is going to have to drop in price before any sustained stock market rally is going to take place! He also stated that the banking index would need to stabilize to indicate support for any long-term sustainable rally. If it rolls over and starts back down, this “gatekeeper of stocks” would lead quickly to a decline in the broad markets. On the positive side, there are only two stock offerings for 110 million dollars coming to market this week, making it one of the lightest on record! Less stock to soak up new money entering the markets is supposed to lead to higher stock prices! IMVHO! Regards, Tin

Post  40694  by  clo       Reply

Trade gap narrows WASHINGTON, Aug 20, 2002 (United Press International via COMTEX) -- The Commerce Department on Tuesday reported that the nation's trade deficit during June narrowed to a seasonally adjusted $37.2 billion from a record $37.8 billion in May but remained above the $36.1 billion gap posted in April. The May trade gap was the largest since the government began keeping records on a monthly basis back in 1992. Economists on Wall Street were expected the trade gap to narrow to $37.4 billion during June. Economists watch for the report not only to gauge U.S. and overseas demand but also to calculate gross domestic product. Imports are subtracted from economic growth, because they presumably replace U.S.-produced goods, while exports add to growth estimates. The Commerce Department said U.S. exports rose 1.7 percent in June to $82 billion, led by shipments of aircraft, semiconductors and other capital goods, and by consumer goods including pharmaceuticals. Imports rose 0.5 percent during the month to $119.2 billion. The report showed exports of consumer goods rose 3.7 percent in June to $7.1 billion. Foreign shipments of capital goods also rose 3.7 percent. The government agency said imports of autos and parts fell 3 percent in June after rising 3.8 percent in May. Imports of capital goods rose 1.2 percent led by civilian aircraft, computers and telecommunications equipment. The value of imported crude oil fell to $6.4 billion in June from $6.9 billion in May. The report showed the U.S. imported 9.2 million barrels of crude oil in June, less than the 9.3 million imported a month earlier. The price per barrel fell to $23.30 from $23.76. The Commerce Department said the nation's trade gap with China widened to $8.5 billion, the biggest deficit since October 2001. While exports to China rose to a record $2.2 billion, imports of $10.7 billion were the second highest on record. The trade gap with the Organization of Petroleum Exporting Countries widened to $2.9 billion from $2.4 billion. The deficit with Canada, the largest U.S. trading partner, narrowed to $3.4 billion from $4.2 billion in May. The gap with Mexico narrowed to $3.2 billion from $3.3 billion a month earlier. The deficit with Western Europe narrowed to $7.1 billion from $8.4 billion in May and the trade deficit with Asia's newly industrialized countries narrowed to $1 billion from $1.9 billion. Copyright 2002 by United Press International. -0- SUBJECT CODE: 04008004 04017000 *** end of story ***

Post  40695  by  pmcw       Reply

No Double-Dip for the U.S. Economy 14 August 2002 It appears that Gail is looking through glasses with a well defined "rose" tint, but in all the gloom and doom, her perspectives are worth a mention. In the past, Paul Volker has praised her views as being objective and well informed. I'll leave it to you to decide. My take is that she is overly optimistic, but that her points are not without merit. My course of action remains building my three focus stocks and making opportunistic buys of EMC when given opportunities in the $6's. I do see reason to be bullish about several other stocks (even CSCO), but want to keep dry powder and a keen focus on what I feel I know best. U.S. economic growth will rise in the third and fourth quarters of 2002, clearly pointing to a recovery, according to the latest analysis from The Conference Board. "The recent U.S. stock market declines will have a bigger impact on businesses than consumers, as companies drive profitability and cash flow to meet market expectations," says Gail D. Fosler, Senior Vice President and Chief Economist of The Conference Board. "A so-called double-dip recession in the U.S. is practically impossible without some unexpected external shock to consumer prices or national security. The concern going forward is now growing deflationary pressures in the global business environment and the absence of any signs of long-term structural strength particularly in emerging markets." Her latest edition of StraightTalk, the monthly newsletter, was released today to The Conference Board's worldwide business audience, which is based in 67 countries. Quarterly growth rates will remain in the 2.5% to 4.0% range, due to continued recovery in investment and inventories and a stable and gradually improving consumer sector. Overall U.S. GDP will be growing 4.1 percent by the fourth quarter of 2002. In light of past recoveries, the advances in the U.S. LEI and its companion index, the coincident economic index, reflect the lack of cyclicality in the economic environment. Gains in both indexes are comparatively modest. In many ways a more comprehensive measure of economic activity than Gross Domestic Product, the CEI is made up of industrial production, employment, manufacturing and trade sales, and personal income. The CEI still remains below its previous peak – an important reason why the National Bureau of Economic Research (NBER) has not officially declared the recession over. The components of the CEI and, to a lesser degree, GDP, are the NBER's criteria in determining turning points in the economy. Corporate Profits Will Improve Although financial markets continue to fret about corporate profitability, the underlying conditions for improving corporate profits in the U.S. are the best since the early 1990s. Productivity gains have already far exceeded those achieved in any recovery since 1970, and will continue to be impressive. Although quarter-to-quarter gains will certainly slow, the remarkable trend of the past six months toward higher productivity will continue. Productivity gains are key to holding unit labor costs down, and low unit labor costs drive corporate profitability. Wage increases are coming down and, in combination with higher productivity, are rapidly bringing down unit labor costs. Even though non-wage costs (health care, transportation, insurance, borrowing costs, taxes, security, etc.) are rising, cost containment and restructuring are probably as intense today as during the worst phase of the recession last year. More leverage in labor markets and higher productivity will probably drive labor costs down at double the rates of the early 1990s. Industrial Sector Improving The Board's Leading Economic Indicators point to improvement in the hard-hit industrial sector. The U.S. LEI rose in May 2001 and is currently rising at 2.7% year to year -- comparable to 1992, but without the volatility. The gains in the LEI are widespread, with most of the index components rising during the past six months. "Especially encouraging are the gains in the real activity indicators -- new orders for consumer goods, the average workweek, and housing permits and the continued slide in initial claims for unemployment insurance," says Fosler. Nevertheless, the year-to-year gains in industrial activity and technology demand remain in negative territory. While the forces promoting recovery are well established, the recovery itself has not yet advanced to the point where gains reflect strong underlying growth. Global Recovery Underway The Conference Board's global leading indexes (excluding the U.S.) also continue to point to moderate economic recovery worldwide. The Board's forecast calls for global growth of 2.9%. The Conference Board’s global leading indexes are pointing to recovery, but like the United States, one with only moderate cyclical momentum. Interest rates have declined significantly in most countries. Money growth is a positive, and inventory levels appear to be more or less in line. What is missing in many cases is a strong signal from industrial orders that points to continued growth in manufacturing, since most of the industrial growth abroad, like in the U.S., appears to come from the inventory adjustment process. The level and pace of actual gains in economic activity vary considerably from country to country, and region to region. Australia has outpaced other countries, in large part because of a boom in the housing market that appears to be cooling and the impact on exports of the sharp decline in the Australian dollar. Other key export-oriented countries, like Korea and Mexico, are also enjoying a big boost from the improvement in the global marketplace, with exports to the U.S. important sources of growth for both countries. Even the Japanese LEI is turning up, although the structure of the improvement is little changed from the past decade. Key activity measures, which are improving along with productivity, signal a return to growth. But the CEI is still burdened by low employment and weak retail activity. The Japanese economy is almost wholly dependent on the global cycle and has no significant domestic stimulus of its own. While virtually every other region shows a significant cyclical improvement, the leading index for Europe lags. To date, most of the improvement in the European LEI has come from the U.K., with France and Spain showing weak upturns. Germany, on the other hand, is still in recession. The strong advance of the euro against the U.S. dollar does not help the European outlook. Even in a region where productivity growth has lagged, the underpinnings of corporate profitability would not appear to tolerate an 18% currency appreciation. Many European companies have shifted production to the U.S. in recent years, and this may blunt the impact in individual cases, but it will not help underlying investment, employment, and wage growth in the region. Source: StraightTalk, July/August 2002, The Conference Board. Gail Fosler Copyright ©2002 - The Conference Board Inc. All rights reserved.

Post  40696  by  pmcw       Reply

U.S. Leading Index Declines 19 August 2002 It's difficult for me to see the rosy picture Gail painted (see my previous post). Based on these indicators (analysis published by Gail's employer), I can't share in her nearly unbridled optimism. Mine is much more guarded - to the point where I feel it is still prudent, as I mentioned in my last post, to be ready for another potential drop (opportunity) with some dry powder. In other words, I'm buying strategically, but I'm not ready to move my equity allocation significantly higher. In light of substantial data revisions announced by the Bureau of Economic Analysis (BEA) in July, The Conference Board decided to undertake a mid-year benchmark of its composite economic indexes. This maintenance procedure, typically done in January, had no effect on the peak and trough dates of the composite indexes. However, in the coincident index, the data revisions increased the depth of the most recent recession. (Due to these revisions, month-to-month changes in the composite indexes are no longer comparable to those issued prior to this benchmark.) The Conference Board announced today that the U.S. leading index decreased 0.4 percent, the coincident index increased 0.1 percent, and the lagging index increased 0.1 percent in July. Although the incorporated data revisions deepened the depth of the decline in the coincident index in the most recent recession, the decline of this index remains mild by historical standards. The decline from the peak of the coincident index in December 2000 to its trough in November 2001 is only 1.7 percent compared to an average decline of 3.3 percent from peak to trough in the previous six recessions. Modest gains in the coincident index in the last five months reflect the slow pace of the economic recovery. To date, the pre-recession peak of the coincident index has not yet been reached. Although the leading index declined in three of the last six months, its six-month diffusion index, which measures the proportion of the components that are rising, remains above 50 percent. This month’s decline in the leading index was primarily caused by weak equity markets and lower consumer expectations. Leading Indicators. Six of the ten indicators that make up the leading index decreased in July. The negative contributors to the leading index - from the largest negative contributor to the smallest – were stock prices, average weekly manufacturing hours, index of consumer expectations, interest rate spread, vendor performance, and building permits. The four positive contributors to the index - beginning with the largest positive contributor - were real money supply*, manufacturers’ new orders for nondefense capital goods*, average weekly initial claims for unemployment insurance (inverted), and manufacturers’ new orders for consumer goods and materials*. The leading index now stands at 111.7 (1996=100). This index decreased 0.2 percent in June and increased 0.6 percent in May. During the six-month span through July, the leading index decreased 0.1 percent, with six of the ten components advancing (diffusion index, six-month span equals 55 percent). Coincident Indicators. Three of the four indicators that make up the coincident index increased in July. The largest contributor to the index was personal income less transfer payments*, followed by industrial production and manufacturing and trade sales*. Employees on nonagricultural payrolls held steady in July. With the increase in July, the coincident index now stands at 115.0 (1996=100). This index increased 0.3 percent in June and increased 0.2 percent in May. During the six-month period through July, the coincident index increased 0.6 percent. Lagging Indicators. The lagging index increased 0.1 percent to 100.7 (1996=100) in July. Two of the seven components of the lagging index increased in July. The positive contributors to the index – beginning with the larger positive contributor – were average duration of unemployment and change in labor cost per unit of output*. The two negative contributors to the index – beginning with the larger negative contributor – were commercial and industrial loans outstanding* and change in CPI for services. Ratio of consumer installment credit to personal income*, ratio of manufacturing and trade inventories to sales*, and average prime rate charged by banks held steady in July. The lagging index decreased 0.3 percent in June and in May. Data Availability. The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available "as of" 12 Noon on August 16, 2002. Some series are estimated as noted below. *Notes: Series in the leading index that are based on The Conference Board estimates are manufacturers’ new orders for consumer goods and materials, manufacturers’ new orders for nondefense capital goods, and the personal consumption expenditure deflator for money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labor cost per unit of output, and the personal consumption expenditure deflator for commercial and industrial loans outstanding.

Post  40697  by  jeffbas       Another article on the home pr

Post  40698  by  cuning_linguist       Reply

pmcw - I think you have to remember that the index of leading economic indicators has predicted twelve of the last seven recessions. Cheers CL

Post  40699  by  jeffbas       "Quarterly growth rates w

Post  40700  by  pmcw       Reply

CL, Even though that is a long standing joke, it speaks volumes of truth. There is absolutely too much weight in the LEI that comes from "mood". That is why I find it interesting that the VP of the service releasing the negative indicators said, just days before the release, don't pay attention to the talking head on the wall, the guy behind the curtain can get you back to Kansas. From my seat I see too many unknown variables to cast a firm opinion. Therefore, I want to be ready for anything between blue skies and the deep blue sea. Regards, pmcw

Post  40701  by  pmcw       Reply

You'll have to call Gail on that one, but I feel she is writing about sequential quarterly growth rates of something other than GDP. Regards, pmcw

Post  40702  by  jcl22192       Reply

Placer from Cannacord Placer Dome Inc. (PDG : TSX : C$13.47 | PDG : NYSE : US$8.60) - BUY - 12-month target price: C$25.00 Brian Christie Comment: Placer launches feasibility on the Pueblo Viejo gold project Placer launches feasibility on the Pueblo Viejo gold deposit in the Dominican Republic following the ratification of its Special Lease agreement by the Congress of the Dominican Republic. Historically (over 24 years) the mine produced five million ounces of gold and 22 million ounces of silver. Placer estimates that the deposit contains 16 million ounces of gold at 2.0 grams/tonne cutoff. Placer must spend US$10 million and reach a positive production decision within four years. Project could ultimately yield 400,000 ounces/year over a 30-year mine life. At this point it is difficult to ascribe a value to the deal given a lack of firm details regarding metallurgy operating costs and Capex, but the project provides Placer with leverage to a rising gold price. We are maintaining our BUY recommendation on Placer with a C$25.00 target price.

Post  40703  by  Arkural       Reply

Emc-sh. term tgt, 7.72/.87, currently in @7.38. eom

Post  40704  by  Arkural       Reply

jeffbas-Housing-I feel your last paragraph is a good starting place at the very least, eventhough it may be improbable. I have always felt that single home mortgages should some how (e.g. formula) allow folks to have them payed off in 10, perhaps, 15 yrs at most.....eventhough that may also be improbable and perhaps, unthinkable to certain banking networks.

Post  40705  by  lkorrow       Reply

Now why wouldn't German CEOs want to stand behind their companies? German Corporations Split over new SEC Rules "Germany and the United States are at loggerheads over new U.S. rules aimed at combating accounting fraud. In a letter by the BDI German industry federation, leading corporations are demanding that they be excluded from a new rule drawn up by the U.S. Securities and Exchange Commission that will force the chief executives of companies listed on U.S. stock markets to provide sworn statements about the accuracy of their balance sheets." Full Story: http://www.handelsblatt.com/hbiwwwangebot/fn/relhbi/sfn/buildhbee/cn/GoArt!201098,201098,556447/SH/0/depot/0/index.html

Post  40706  by  pmcw       Reply

jeff, I'm not sure why you said the author of the article you posted has probably never bought a house. On balance, I concur with the perspective of the author. Most large ticket items such as houses, cars, etc. are bought on payment rather than price. In the car industry they train salespeople to learn very early in their discussions with perspective buyers if they are payment or cash buyers. House prices most certainly move inversely with other factors that effect the payment. And, as the analogy is written, other value stores move on a relative basis with all other forms of value storage. Regards, pmcw

Post  40707  by  lkorrow       Reply

Forbes on bear markets. Includes a chart on the possible correlation between Nikkei and S&P 500 cycles. http://www.forbes.com/2002/08/19/0819simons.html

Post  40708  by  wilful10       Reply

NY crude oil rises to $30/barrel for the first time since May 2001 eom.

Post  40709  by  jeffbas       Reply

pmcw, the point of that piece I wrote on housing was twofold. As I have noted here before, I object to writers who write with a predisposed bias that is not well-supported by the data. (Some people, too few, have been trained to look at data objectively.) I think the gold writers vie with Wall Street for the worst. Second, if you have ever bought a house, you know the only thing that counts is what monthly payment the bank will qualify you for, not the price. In fact, many people these days go looking for a house prequalified (by virtue of the payment the bank thinks they can afford, and their down payment) for a certain price by a bank. The price is relevant only so far as the appraiser for the bank has to end up with a reasonable loan to market value ratio. Thus, to talk about climbing house prices as if it were the next stock market "bubble", I find to be distorted analysis. (I would much rather be a house-seller than a house-buyer now, but I had the same view 2 years ago and was wrong.)

Post  40710  by  clo       Reply

jeffbas: housing issues. This was discussed on CNBC a short time ago & their poll on Squawk had 60% thinking this bubble will pop. They mentioned in California you can get a mortgage and only pay the interest. This could create issues for the banks later on. I hold WM, so my ears perked up. So FWIW, I pass this info along. clo CNBC 8/20/02 - 1:17 PM... If the houses prices fall, you have to equity and you are stuck with a loan worth more than the value of your home. So these mortgages are generally for people who do not plan to be in their home that is long or plan to refinance and them become big businesses for mortgage lenders. Washington mutual says the loans are the most requested. They are accounting for a billion dollars a month over the last year and they are also a thriving business for union bank of california, such loans give the banks a competitive product, but as they bring risks for borrowers, they bring rifngs for the banks. If loans you are making today are made on home values that may not be sustainable, the risk profile of that loan to the bank has gone up because you have not received any principle payment. >> He has no conflicts, he has a hold on the stock. Now, here, this is the house. Is that the house? That's like 625. Here is the $459,000 for that. There is a lot of debate if there is a real estate bubble. If so, it will pop or slowly deflate. On "squawk box" they asked that question, 60% said yes, 40% said no, we had over 1900 votes. We did have a housing bubble in... (Voluntary Disclosure: Position- Long)

Post  40711  by  Arkural       Reply

pmcw-I have a question. I want to know if you would consider placing a numerical rating on each of the 4 little horseman you are naming 'focus stks'. Feel free to use any configuration you please, but please post the 'key' to your number values. eg. 4=strong buy, or 100=strong buy, etc. That sort of thing. I know it may be an impossible question, but what the heck. Feel up to it?

Post  40712  by  Culmus       Reply

The Cisco Plot I mentioned it before as one of the reasons why I don't like Cisco, here is the latest on the Cisco management ploy: http://biz.yahoo.com/rc/020820/tech_andiamo_cisco_3.html Cisco said the price tag, which will be based on Andiamo's sales, will not be determined until the deal closes. SG Cowen analyst Christin Armacost estimates the deal could be valued between $300 million and $1 billion. Andiamo's switch products are used to route information in computer networks that store and share company data. Andiamo, which started operating less than two years ago, has recorded no revenue to date and just unveiled a line of products. Cisco is betting privately (Edit: by CSCO management) held Andiamo's sales will take off, allowing it to grab a piece of the market, which is expected to grow from about $1.2 billion this year to $4.3 billion in 2006, the company said, citing Gartner Group data. I don't know where that SG Cowen analyst has his $ 300 million to $ 1 billion price tag from, but Cisco has announced before they'll pay $ 2.5 billion for their management's company (set up with loans from Cisco): http://www.businessweek.com/magazine/content/02_12/c3775075.htm Andiamo Systems' management: Not a single name is on their web page: http://www.andiamo.com/company/management.html Yes, each of the management team members has over 20 years of industry experience. Wow, that is a truly well thought out retirement plan guys! More details about this story: http://www.byteandswitch.com/document.asp?doc_id=4197 Those are currently under development at a stealth-mode startup called Andiamo Systems Inc., which is controlled by Cisco. So, by whom is it controlled, this Andiamo Systems? If it is Cisco controlled then why is the company paying $ 2.5 billion for what belongs to it in the first place? If it is Cisco controlled then the research cost to develop these products is covered by Cisco and hence why should the company pay for the developed product as well? If that is the case, then why do this in a seperate company? It can be "Cisco controlled" and still be held to a degree by Cisco managers, and employees on leave from Cisco: http://www.tbri.com/News/pgViewArticle.asp?Id=140 Andiamo is housed within Cisco's main campus and is staffed by employees who are on leave from Cisco. Cisco took a 44% stake in Andiamo and in exchange loaned Andiamo $42 million, and agreed to provide as much as $142 million more. Cisco also agreed to acquire the rest of the company for as much as $2.5 billion in stock, depending on the success of Andiamo's products. Cisco's research-and-development expenses over the past year have included $38 million for Andiamo. The Andiamo financing arrangement, probably "represents one of the last hurrahs of the startup climate that was around in 2000 and started to come apart in 2001," Yeah, let's just take one last big sip from this bottle before it is empty. What a bunch of crooks! Regards, Culmus

Post  40713  by  Arkural       Reply

Emc-Out for half of the traders. eom

Post  40714  by  pmcw       Reply

Ark, After writing my last regular edition for Phase One of my newsletter during the last week of May, on the subject of selling, I realized where I had made several mistakes. It's funny how one can teach himself a lesson if they listen closely enough. I sold a bunch of stock, went on vacation and, upon returning, proceeded to tackle a series of home remodeling projects. There's something about working hard in the hot sun that is purifying. I don't know if I actually sweated out my demons, but I found time to rethink my goals and view the market from a fresh perspective. I think it's a good idea for an investor to review their strategy at least once every six months and complete a serious shakeout of goals at least once per year. I like building a goal from the bottom up and start with what I consider the minimal acceptable result. I complete this for investment horizons of one, three, five, ten, twenty, thirty and forty years. I set these goals as my bottom line risk maximum. From here I look at goals I feel are reasonable, considering my bottom line risk, and see if I can accommodate potentially higher rewards without expanding risk. Through this exercise, I determined that I can tolerate some short term (year or so volatility) if I have a high degree of confidence in the three to five year window. I think that, generally speaking, we will return to a healthy economy in the not terribly distant future, but just "thinking" this will come to pass is not enough assurance to use as a basis for bottom line goals. Due to this, I looked carefully at the companies I track in an effort to select a few focus stocks. From this long list, I selected three primary stocks I felt were beaten to an absolute pulp yet have a fantastic chance to not only recover, but also to run to new 52 week highs much more quickly than the broad market. I also evaluated the potential of each to fail. Those I selected I feel rank from "no way" to a very minimal chance. ISIL and XICO fit into the former category and HLIT into the latter. To compensate this moderate risk of failure, I feel HLIT provides some excellent opportunities to trade. Due to the size of the positions I've built in ISIL and XICO I'll be trading them too, but not near as aggressively as HLIT. EMC is my wild card forth company. I like the simplicity of the smaller cap companies right now, but I also like EMC's turnaround strategy and management. However, the complexity of turning around a ship the size of EMC is significant and I feel their market position is significantly more fragile than my focus three. This is why I'm building EMC more slowly and much more carefully (not to say I'm not exercising great care with the others) than I am with my focus stocks. The reason I've gone to the trouble of explaining all this is so that readers will understand my selection of these stocks is as much due to the design of my unique goals and strategy as it is because I feel the investments will be profitable. With this in mind, I'll share that my total cost basis (not cost per share, but total money invested) in the stocks starts with XICO as the highest, ISIL is second, HLIT is third and EMC is a distant forth. This, I guess, corresponds as well as anything would to any numeric ranking I could provide. Needless to say, as they apply to my strategy, the first three are between strong and table pounding buys (at the right prices) and EMC would be at least a buy below $7. Did I dodge your question adequately? ;o) Regards, pmcw

Post  40715  by  pmcw       Reply

Cisco's Approach To Pricing Andiamo Said To Reduce Risk By Anne Brady, Of DOW JONES NEWSWIRES PHOENIX -(Dow Jones)- Cisco Systems (NasdaqNM:CSCO - News) Inc.'s unusual approach to pricing its acquisition of Andiamo Systems Inc., which currently puts the price at anywhere between zero and $2.5 billion, reduces the risk that Cisco will pay too much for the privately held developer of storage switching products, the company and stock analysts said Tuesday. Cisco, based in San Jose, announced Tuesday that it was exercising its previously disclosed right to purchase the remaining equity interest in Andiamo that it doesn't already own. Cisco has so far funded $74 million of a $184 million investment commitment to Andiamo, and estimates that its investment will be convertible into a 44% equity stake. However, the purchase price of the remaining equity stake will be based on a formula that will take into account sales by Cisco of Andiamo products during a three-month period shortly before the closing, anticipated to occur in early 2004, no later than July. The valuation of Andiamo will be determined by applying to those sales a multiple based on Cisco's own market capitalization and revenues. "This is a very prudent method of doing this," said analyst Gina Sockolow with Buckingham Research Group. "They invested in a company several years ago that was basically a piece of paper, and they don't want to get fooled again. ... They're pricing it (this way) as an insurance policy." Sockolow does not own Cisco shares. In addition to requiring a successful launch of Andiamo products for the sales price to be substantial, the formula safeguards Cisco against adverse changes in market conditions, noted Soni Jiandani, Cisco's vice president of marketing for storage networking, in an interview. "Using that creative model, with the right elements of risk and reward, .... reduces (Cisco's) risk," she said. "We have received some very positive comments from analysts on the model as well." In a research note early Tuesday, A.G. Edwards (NYSE:AGE - News) & Sons Inc. analyst Peter Andrew said the "key" element to the pricing strategy "is that Cisco is going to be paying a price based on known performance/demand of the Andiamo product line." Analysts agreed that in order for the price to reach $2.5 billion, sales of Andiamo products would have to go exceedingly well, and it's unlikely the price will come in that high. Jiandani called that assessment "fair." "They're just giving a full range of possibilities," said analyst Matt Barzowskas with First Albany Corp. "The bottom line is, 'How do you value a private company with no track record, that is just rolling out products?' " A.G. Edwards and First Albany both make a market in Cisco securities. An A.G. Edwards analyst or household member owns a long common equity position. Analysts generally praised the decision to move forward with the acquisition, saying it will move the company into a high growth market with products that are complementary to its existing products. The company will be competing in the storage switch market against Brocade Communications Systems Inc. (NasdaqNM:BRCD - News) and McData Corp. (NasdaqNM:MCDT - News; MCDTA). Jiandani said the company believes it has identified problems within the market that current products don't address. In connection with the acquisition announcement, Cisco announced its complete line of Andiamo switches. "We saw two trends - migration toward the network storage market and overall growth in storage," said Jiandani. "We noted room in the market for innovation. ... We looked at available options and didn't find solutions to identified problems." Stock analyst Mark Kelleher with First Albany said in a research note that he views Cisco as "a more likely ... threat to the low-end of Brocade's market." His colleague Barzowskas said the low end of the market may be "a good entry place" for Cisco, but added that "eventually, Cisco is going to try to attack the whole market."

Post  40716  by  danking_70       Reply

Gadaffi To Head Human Rights Body http://www.sky.com/skynews/article/0,,30000-12090008,00.html Gadaffi To Head Human Rights Body Libyan leader Colonel Gadaffi is to head an international watchdog on human rights. Libya is to be elected chair of the United Nations Commission on Human Rights - despite its links with terrorism and torture. The move sparked a storm of controversy as it emerged British officials did nothing to block the appointment. Libyan terrorists were responsible for the 1988 Lockerbie bombing, which killed 270 people, and Gadaffi's regime has been criticised for violence against its own people. Isolate Human rights groups and Tory leader Iain Duncan Smith united to criticise the appointment. But a Foreign Office spokeswoman said: "Our policy is to engage constructively with Libya, rather than isolate them." Gadaffi's one-year term begins next March.

Post  40717  by  smokesignals       Reply

lkorrow..re: TABLE past.. TABLE had been around for about one year before I began to lurk on occasion. There were some of the posters that you now know and some that don't post here anymore. There was pmcw, briguy, arkural, artsuh taraz, RSpencer, kantbleveit, warstud, clo, danking 70, Decomposed, starfleet and rdmill. And soon thereafter to find a place at TABLE were maniati, oldCADuser, kduff, uponroof, KWEECHA, IamCanadian, maldinero, ohmygosh, czechsinthemail and culmus. As well as all the others here now. You can probably imagine what it was like with so many bright minds illuminating the atmosphere around TABLE. The talk was about all realms that had financial/economical ties and a bit of humor thrown into the mix. You would probably enjoy the experience that you would have by looking back at some of those old post. That would give you a better inclination of how TABLE past was. Better than my words could ever convey. Even now, one can learn from the discussions that were posted on TABLE past. The food is still warm and smells great even though it has been sitting there for a while. Just dust off the cobwebs and enjoy.

Post  40718  by  srudek       ot: Ginger - This may have alr

Post  40719  by  smokesignals       OT: warning..this url will lea

Post  40720  by  pmcw       OT: Smoke, Thanks!

Post  40721  by  tinljhtkh       Reply

August 20th, 2002, The 48-hour market? I’m not going to go back and check the last month of trading on the NYSE or the NASDAQ! However, if we add up the last two days trading on either exchange, we do come up with positive numbers! I suppose with the world wide equity marketplace that currently exists, there is probably a market open somewhere just about every minute of the day! There are also those who would like to trade every minute of the day, however, the days of the 2 day trader may still be far away! This market and the financial community that surrounds it were very busy places to be watching today! It was almost as if two days of news could be crammed into one—particularly an august day! We hear the first rustlings of the winds of post Labor Day September beginning to build as we begin to worry about oil prices. The crude facts are that light sweet hit an 11-month high today as is brushed up against 30 dollars a barrel for the first time in 2002! It’s always interesting how oil always has the potential to gain pricing power faster than a shuttle launch under the right set of conditions! Someone recently commented, whether true or not, that the United States gets most of its oil from the America’s, with the world wide oil marketplace dealing with the rest of the globe and its ever changing needs! It has also been said that much of the oil coming down from Alaska ends up going the Far Eastern export route! The United States current oil reserves, not counting the strategic petroleum reserve, now stands at 300 million barrels on hand, a far cry from the 390 million barrels that we had at the start of the 1990-1991 Persian Gulf War! I find this to be an interesting statistic! If most of our oil does come from the America’s, it is obvious that much of it does not come from within the United States, so it must be coming from south of here! When we look at the financial situation in South America, and the political situation in Venezuela, it makes for some interesting thoughts! The president of Mexico, Mr. Fox, has decided to postpone a planned trip to the United States. I have no idea what that means but I do know that Mexico does produce oil! Are the markets are trying to tell us something here? One analyst said that oil could be sustained at 22 dollars per barrel excluding any event risk, so there must be about 8 dollars per barrel built into the price these days! If we go back to the days of the Clinton White House, we can remember the decision to release some oil out of that reserve, and just how precedent setting and controversial it was! We’re either planning a short war with Iraq, or we’re not planning to maintain that petroleum reserve at the levels that it currently is at. There was an interesting rumor that floated around surrounding the Iraqi dissident group that briefly occupied their home country’s embassy in Berlin today. There were supposedly 5 of these dissidents, unarmed, who held the staff hostage for seven hours before the German’s stormed the place! The rumor is that there was some sort of intelligence gathering mission that went on during that seven-hour ordeal! Regardless of what went on, it was, to say the least, an odd occurrence! After the markets closed the crude oil supply came in with an increase of 6.6 million barrels, instead of the 3 million-barrel decrease that “analysts” had predicted. Oil analysts are a pretty hardy crew and supply volatility like this only further illustrates just how unstable the situation really is. The worldwide economic slow-down is also playing into this scenario as OPEC has supposedly revised downward what it thinks that the demand will be so that it can price accordingly! New players on the oil scene such as Russia are also factoring into this situation, making accurate predictions harder and harder to come by! I’m no expert on oil, as you’ve probably figured out if you’ve read this far, but I wonder how the demand for oil related products is holding up inside of the United States? Did the oil supply go up because of a flood of imports or simply because demand went down? It is interesting to note that Cendent, the big hotel chain who owns Motel Six, among others, is eliminating 7 percent of its rooms and 15 percent of its workforce as it terminates relationships with non-paying franchisees! Motel Six, with its always on light, is usually the first site to fill-up along any Interstate! Whether any of those rooms are going is not my due diligence, but 7 percent are going somewhere, none-the-less! The trade deficit came in at 37.16 billion for June, while the revised May figure was 37.85 billion! It hasn’t lost much pricing power but there was some interesting conjecture about that figure. What was its composition? Was the trade deficit composed of pricing power goods or simply cheap foreign commodity laden manufacturing designed to further erode what pricing power some sector do have left? Clo had a piece on the deficit on Table today: http://ragingbull.lycos.com/mboard/boards.cgi?board=TABLE&read=40694 One trader speculated that the Federal Reserve with its low interest rate policy and non-existent money market rates was forcing people back into the markets where many might be investing in risk equity investments that could go bad on them if the wrong set of circumstances set up! Other trends and comments of note! The median house price in California now sits at 320,000 dollars and people are buying interest only mortgages betting on the rise in prices to create their equity stake. This is like shorting the market in reverse except that it does have an end—if your house becomes worthless that is the extent of your loss! You also have to be able to sell it! Housing illiquidity can make illiquidity in the stock market look downright tame! And they don’t charge property taxes on your illiquidity every year—or homeowners insurance with mandated earthquake coverage! Srudek has a post on the housing situation! http://ragingbull.lycos.com/mboard/boards.cgi?board=TABLE&read=40690 Clo also had a post on this subject! http://ragingbull.lycos.com/mboard/boards.cgi?board=TABLE&read=40710 WPP, the large European ad agency who also trades here, announced that they expected no revival in advertising on any big scale until 2004! Fred’s, the discount chain, saw an earning surge, while BJ’s wholesale Club saw revenues up with prices slightly down! CNBC reported that JP Morgan had a note out that stated that higher fuel prices, over the last 9 years or so, decreases sales at wholesale clubs! In my area, the clubs, grocery stores, and Wal-Mart have run a number of independent gas stations out of business since the first of the year! I wonder how that will factor into Morgan’s calculations as time goes on! Continental Airlines is cutting capacity by 17 percent by August 2003! This is another reaction to US Air’s bankruptcy and American’s announced contraction! Dell Computer has announced a plan to sell unbranded “white box” computers through selected retailers. This is a large departure for them as they attempt to grab a piece of that estimated 3 billion-dollar marketplace! The farmer in the Dell is selling its commodity is ever widening circles, taking advantage of its efficiencies of scale! Staples, who also deals in commodities, beat the street by a penny! On the technical side of the market! Volume was not bad on either exchange, particularly for late August! New highs and lows narrowed to almost even on the NYSE, while they are still a disaster on the NASDAQ! Upticks and downticks, the most recent trade on a stock, remained positive on the NYSE, while they were still very bad on the NASDAQ! The Vix (CBOE volatility) has settled in at around 32, indicating a mainly sideways market over most 48-hour time periods for a time! That’s why it is a 48-hour marketplace! IMVHO! Regards, Tin PS—Pmcw had two posts on “the double dip” that sparked some discussion! http://ragingbull.lycos.com/mboard/boards.cgi?board=TABLE&read=40695 http://ragingbull.lycos.com/mboard/boards.cgi?board=TABLE&read=40696 One final thought on the oil situation: They wouldn’t start a war to support the price of oil now would they? Not two oil men from Texas! Just my odd mind at work again!

Post  40722  by  lkorrow       Reply

danking, I wonder if he's obligated to do any work. Just what we need in NY :-(

Post  40723  by  lkorrow       OT Thanks smokesignals, I'll t

Post  40724  by  srudek       OT: Tin-Thx for "48 hour&

Post  40725  by  maldinero       Reply

Ark – There is a way… No complex formula necessary, just 2nd Grade mathematics. Simply tack on whatever additional amount suits one's budget with each monthly payment, and subtracted from principal. Using a printout of the amortization schedule, the additional payment can be adjusted to correspond exactly with a scheduled future balance. Our first 30yr (10.75%) mortgage was retired in 34 months. The proceeds from the sale of that home allowed us to hold clear title to our current residence after just 13 months. Lenders usually provide an amortization printout only when it is requested by the borrower. I think it should be supplied as a routine requirement of the truth in lending agreement.

Post  40726  by  maldinero       OT: Corrected syntax…pardon me

Post  40727  by  srudek       Reply

Soros: $ to fall 1/3 but gloom is excessive. Article ------------- IMO, the continued fall of the dollar seems almost inevitable; I just can't think of any really good reason for it to stay as strong as it still is -- and I haven't found ANY good argument to the contrary, anywhere. In fact, I really haven't heard any argument to the contrary (good or not) at all -- except the same old drivel about how you "can't time the markets". In extremes -- such as we have today in the dollar, the stock market, and real estate -- you certainly CAN "time" the market...just so long as you keep in mind you are dealing with PROBABILITIES and not time. (It's sort of the same logic I've applied to the stock markets since 2000 -- it would take Cold Fusion or the Second Coming to restore the U.S. markets; for starters, you'd have to find a whole new crop of suckers and new accounting tricks or it wouldn't even be possible. Twenty years may give us time to grow a new crop of suckers. Thus, it remains far more likely that the stock market will fall far from here in the intermediate future than that it will rise far from here anytime soon. I talked about probabilities in my well-timed entry "How to Time the Market: If It's May, It's Time to Sell Stocks" http://ragingbull.lycos.com/mboard/boards.cgi?board=TABLE&read=34698) Anyway, it seems to me that one of the smartest things a body could do would be to simply move some money out of the dollar and into foreign denominated assets. Has anyone on this board made that move? Are there any restrictions? German government bonds already pay a pretty good rate (I've heard 4%+?) and they -- unlike our own Fed -- don't seem too keen on inflation. 4%+ sounds really good. 4%+ backed by an almost certain gain of the Euro against the dollar could easily -- and SAFELY -- give you double digit returns. Having Soros agreeing with you, improves your odds of being right. Comments? ------------- George Soros, the billionaire financier, has warned that the US dollar could lose one-third of its value over the next few years. On the currency markets, meanwhile, allegations of yet another accounting scandal - this time at office equipment firm Xerox - made investors dump the US dollar and push it within a quarter of a cent of parity with the euro. Mr Soros also warned stock markets could fall "much lower" if consumer confidence and growth faltered in the United States. The financier made his fortune running a hedge fund which speculated against weak currencies, including the British pound, reportedly making a £1bn profit by forcing it to leave the European Exchange Rate Mechanism in 1992. . . . Mr Soros said that the "cult of success at any price" was partly to blame for the accounting problems in the US "where anything goes as long as you can get away with it". He said the UK system, which held the professionals liable for giving a "fair and accurate" picture of a firm's financial position, was better than the US approach, which allowed accounting firms leeway to bend the rules. He welcomed moves by the US regulator, the SEC, to require directors to ensure that their accounts gave an accurate picture. But he warned that markets were now exagerating the scale of the accounting problems at US firms. "Clearly you had an excess of optimism and overstatement, and now you are plunging into an excess of doom and gloom," he told the BBC. http://news.bbc.co.uk/1/hi/business/2072100.stm

Post  40728  by  Arkural       Reply

pmcw-4pack-Yes that will be quite adequate, inclusive of the embellishment, thank you. We shall see about this economy. Indications I am looking at are pretty suggestive/indicative as to the negative slope, however rabbits have been pulled out of hats before. As for being an artful-dodger, ummmmmm, let me think..............it seems there have only been two or three occurrences, a recent one and one further back which was a question about, what you felt would follow after the semiconductor. But in a sense no answer is still an answer, for me, heck, I've dodged a few myself. :0) Veering left~~AH yes, many steam baths+jump in the sea, did we partake in, in South Boston, Ma, it certainly exceeded a couple hundred over a couple of years, regardless of weather/season. Very therapeutic (salt water version) and highly recommended as one of the best ways to expunge nasty 'things' and tune up ones state of health in many ways. Without question, a clearer state of mind can be had under these and related activities. In many ways, folks just don't know what they're missin'.....not real easy to duplicate

Post  40729  by  Arkural       Reply

maldinero-Mortgage-That's great, I hope that some folks can pick up on your point. What I was trying to say, was that I felt that if the 'standard' was set in a 10-15yr duration (subsidized or something, I dunna know), it would be helpful to get the main payment out of the way for most families/individuals. Most folks have limited budgets, so paying down principal is a non event. Btw, I read a report some yrs ago that stated the avg life span of home ownership was 7-10/12 yrs, as I recall. In other words most folks do not stay to in their homes long enough to pay-off the 15-30 yr loan. Your situation appears to be another example of this statistic.

Post  40730  by  tinljhtkh       OT: "L"

Post  40731  by  tinljhtkh       OT: srudek!

Post  40732  by  Arkural       Reply

Morningstar's blip on bonds...fwiw Thursday August 15, 11:42 am Eastern Time Morningstar.com Our Favorite Long-Term Government-Bond Funds By Robert Gynn There's a rare calm in this category right now. Things have temporarily settled here compared with the wild ride these funds have been on during the past year. First, the category rallied following last September's terrorist attacks, as investors flocked to the relative safety of Treasury bonds. The group reversed course in November and December, however, as the economy showed signs of improvement and the Federal Reserve indicated that its string of interest-rate cuts was nearing an end. The category started the year out well, as increased demand pushed bond prices higher. In March, however, positive comments from Alan Greenspan about the health of the economy weighed on the prices of long-term bonds. The tone has changed somewhat since then, as the threat of a double-dip recession has kept interest rates in check for now. So far, the category has delivered a respectable 8.75% return for the year to date through Aug. 14, 2002. Returning nearly twice that total and leading the pack are American Century's target maturity portfolios. With average maturity dates that range from 13 to 28 years, the target maturity funds are more sensitive to changing interest rates than more-diversified offerings, as they invest primarily in ultra-interest-rate-sensitive U.S. Treasury zero-coupon bonds. Funds less sensitive to interest-rate changes, such as Seligman U.S. Government Securities and INVESCO U.S. Government Securities, have not fared as well, lagging the average by more than 100 basis points. If there are marked signs that the economy is rebounding or interest rates will be increased, the long-term government category could be in for a rough ride. Indeed, rising interest rates cost the group more than 5% in both 1994 and 1999. Investors should consider the inherent risks of this category before jumping in. T. Rowe Price U.S. Treasury Long-Te PRULX This straightforward offering is a terrific choice for investors in search of a long-term government fund. The bulk of its assets are devoted to long-term Treasury bonds, but it does own a stake in GNMA pass-through mortgages. Its managers make moderate duration bets but generally try to stay in-line with a long-term government-bond index. The fund struggled a bit in 2001, but it has rebounded this year. Moreover, it boasts a solid long-term record as well as an expense ratio that is roughly 30% lower than that of its average peer. Vanguard Long-Term U.S. Treasury VUSTX This offering truly benefits from an expense ratio that is nearly impossible for other funds to surmount. For just 28 basis points, investors get fairly pure exposure to plain-vanilla long-term Treasury bonds. (And those investors with $50,000 or more to invest can buy the even-cheaper Vanguard Admiral Long-Term Treasury VALGX, which charges a scant 15 basis points.) In effect, the fund gets a head start on its competitors every year. As a result, the management team here has amassed an impressive long-term record. Indeed, its five- and 10-year trailing returns rank in the category's top quartile. Given this performance, along with seasoned management and a cheap price tag, it isn't hard to see why this offering has earned our endorsement. http://biz.yahoo.com/ms/020815/79577_1.html

Post  40733  by  lkorrow       OT Tin, you're a gentleman and

Post  40734  by  uponroof       Reply

The success of the IMF? Interesting terms come out... More proof that the IMF 'Brazilian bailout' was actually a much more important 1st world bank bailout. Only $3 bil of the $30 bil in IMF 'relief' is to be allocated 'soon', with the next $3 bil in November....maybe. This sort of disbursment satisfys O'Neill's concerns of secret swiss accounts but does little for the country's immediate cash crunch. These standby funds support foreign underwriters simply through their absense of use. More banking losses absorbed by the ever degenerating subserviant 3rd world. http://www.washingtonpost.com/wp-dyn/articles/A33836-2002Aug18.html So how's the Argentina bailout? http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185874402&p=1012571727102 ******** Bailouts are simply temporary window dressing. The underlying problems remain...even in US airline industry broke means broke. Good Luck Cheers