|A compilation of this board's financial/economic posts From 40884 to 40960
Post 40884 by uponroof Reply
The FED's inflation policy...
or loss of 'purchasing power'(confiscated private wealth) over the years...not to be confused with relative cost of living and increased income ratios (which are nothing but convenient disguises for this theft of our wealth).
$0.64 in the year 1776 has the same purchasing power as $1.00 in the year 1932 (not much loss of purchasing power over 159 years, before the FED in 1933).
$13.67 in the year 2001 has the same purchasing power as $1.00 in the year 1933 (enormous loss of purchasing power after the FED).
OT: Table ON TOPIC SUMMARY Aug 22, 2002
Post 40886 by lkorrow Reply
srudek, I'll preface this in saying I know little of currency and gold. I'm putting my faith in our government. Like the y2k collapse that didn't come, I think we'll muddle through the currency issues. It does not seem relevant that currency lost 90% of its value in the past. We have the highest standard of living that we have ever had. I guess I'm opening up myself to getting blasted on that, since so much wealth is being lost and I view you as having a great deal of knowlege in this area so you have good reasons for saying it. But another 90% over 30 years is ok with me if I can still afford a toy or two now and then. Could the world fall into recession? Sure, but I don't think the whole house of cards is going to fall and there are a load of things that could pull us out sooner than a typical business cycle suggests.
Speaking of y2k, there was a very well respected consultant that had written a number of IT books, he's an authority in many things. He believed so strongly that y2k would create a global catastrophe that he moved out of NYC, which he thought would look like the streets of Beirut, and built a compound out west that he supplied with food, etc., so he could be self sufficient as the world around him collapsed.
My perception is that he was too close to the situation. I believe that he, a smart, concerned person that was extremely knowlegable in all aspects of IT, was plagued by his foresight. In all his brilliance, he could project the worse case scanrio to a T. He could lay out all the what ifs and it wasn't pretty. But he couldn't place his trust in all the thousands of y2k workers around the world. He didn't think they could catch everything and pull it all off in time, that power plants would work, that the machines that build the machines would keep running, that the markets would survive. He couldn't figure the probability of that worse case scenario playing out. But everything worked out, the dedicated, motivated people pulled it off and the minor gliches that remained were fixed. (By way of disclosure, the part about the imbedded chips failing freaked me out somewhat because the IEE said they could fail and some of those chips are imbedded in important things in power plants, communications systems, cars, etc.)
I'm not suggesting that you're reacting like he did, but I think some of the people writing extreme positions on things like derivatives might be. Perhaps some of these stories, especially those that are not mainline press, should be taken in the context of the y2k story. You have made some prudent moves like your RE buys and sells to protect your investments. Heh, there are winners and losers in every bubble.
Post 40887 by lkorrow Reply
SkippyWalker, maybe it has something to do with the recent call to arms on wireless support -- cellular, WiFi, Sprint's nationwide 3G network rollout, the AT&T Wireless/Microsft deal, etc. Just a guess, haven't seen anything on PALM and HAND lately. . . .
ot: Interesting bugs in the On Topic Summary
ot: RB translations...
Post 40890 by spirare Reply
jeffbas, the XAU chart is still in a LT Bulltrend...
Note. its oversold but the LT Bull still intact!
The LT Bull would only be negated bellow the 50 line!
After a 22 year LT downtrend manipulation it would not
be a surprise to see it touch the 45 line before continuation of the LT Bull! I don't see it will happen, the chart has started to show a mirror reflextion LT Bull of the last 5 years downtrend...
Current Price of Gold
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
Post 40891 by spirare Reply
muslim extremists behead 2 Christians Hostages and dumped their heads in a public market...
Note, that's what they want to do to all Christians!!!
OT: I guess this is an example of real customer-or
OT: oldCAD, in my best Marlyn...
Post 40894 by clo Reply
NY attorney general looking into Citi's Weill-WSJ
NEW YORK, Aug 23 (Reuters) - New York State's attorney
general has widened his probe of Citigroup Inc.'s
brokerage unit and is now looking into a lucrative financing
deal and what role Citigroup Chief Executive Sanford Weill
might have played, the Wall Street Journal said on Friday.
Citing unnamed sources familiar with the matter, the
Journal said New York Attorney General Eliot Spitzer is
investigating whether Weill might have pressured Jack Grubman,
then a telecommunications analyst at Citigroup's Salomon Smith
Barney unit, into raising his rating on AT&T Corp. in
order to win a spot in underwriting a large stock offering for
AT&T's wireless business.
Salomon was one of three Wall Street firms tapped by AT&T
in April 2000 to underwrite the $10.62 billion offering of a
tracking stock for AT&T's wireless phone unit. Salomon, Merrill
Lynch & Co. and Goldman Sachs Group Inc. each
took home $45 million in fees for the deal, the Journal said.
Salomon landed a position on the underwriting team after
Grubman -- whose bullish opinions and close relationships with
a number of other telecoms firms that have since collapsed is
the focus of several investigations -- upgraded his rating on
AT&T to "buy," the Journal said. Grubman resigned from Salomon
The change by Grubman -- who until then had held
long-standing bearish opinions of the nation's top
long-distance telephone company -- came after Weill, an AT&T
board member, nudged the analyst to give AT&T a fresh hearing,
the Journal quoted unnamed people familiar with the deal as
AT&T Chairman C. Michael Armstrong regularly had asked
Weill to urge Grubman to revisit the merits of AT&T's cable
strategy, a person familiar with the matter told the paper.
Armstrong also was a Citigroup board member at the time.
Investigators from the attorney general's office have
spoken with AT&T lawyers about how the company handled the
underwriter selections, the paper said. The office also has
subpoenaed documents from the company about the deal, these
people say, and AT&T is in the process of responding to the
Also, Spitzer's office in March subpoenaed Salomon and
Grubman about his research activities and stock
recommendations, and has "communicated" with him since then,
the paper said. Officials there are expected to receive
testimony from Grubman in the coming days and weeks.
Weill hasn't been subpoenaed, a person close to the matter
told the Journal.
Salomon Smith Barney spokeswoman Mary Ellen Hillery told
Reuters that Weill never told any analyst what to write.
A spokesman for the attorney general's office was not
immediately available. An AT&T spokesman was also not
((New York Newsdesk 646-223-6000))
*** end of story ***
OT: Happy birthday, OCU! What a nice jesture that
Post 40896 by uponroof Reply
dollar up, POG flat, gold shares up?
very unusual action yesterday
Watch out folks...I believe we are about to swing. Might be quite a sell out ahead.
More on Mid East dollar attack strategies...
Tehran, Aug. 21 (Bloomberg) -- Iran has converted ``more than half'' of the country's $7 billion foreign reserves into euros to help boost trade with the European Union, the Iran Daily newspaper reported, citing a member of parliament.
The European currency's more than 10 percent rise this year against the dollar will give oil exporters ``a chance to usher in a new chapter in ties'' with European states, said Mohammad Abasspour, a member of the Iranian parliament's development committee, the newspaper reported. The lawmaker said he hoped a strong euro would weaken the U.S. ``monopoly'' of global trade. -END-
Wall Street Underground's Nick Guardino who enjoys a wide readership on gold:
08-16 Okay, let’s talk about gold. You have to understand that gold is being held by central banks en masse. For example, there are some things I thought maybe I should just point out to you, and that is that half of the U.S. reserves is held in gold. China has bought 205 tons of gold so far this year. We saw Japan buy a vast amount of gold over the last five years, and we’re seeing more central banks belly up to the bar.
Now European economies and banks are divesting of gold. The English had the gold giveaway. In fact, they’re down to $255 an ounce. Well done! They got out of the market, and gold price popped up. So we’re seeing that the growing economies in the world, like Asia, are diversifying into gold. The idea that gold is no longer held by banks and no longer part of the capitalization of sovereign nations is ridiculous. The United States holds 55% of its reserves in gold. Europe holds about 40%. Now when you look at countries like Pakistan and the Philippines, they own 14% in gold.
We are seeing now, as the countries change positions, as Europe and America become debtors and as Asians grow their economies, they’re accumulating gold. If you want to find out where the growth is in the world economies, just look at the flow of gold. Watch how that gold flows around the world. That will tell you where the wealth is because despite all of the spin that it’s a relic of the past, it still represents half the reserves of the wealth of nations—not something to make light of, my friends, not by a long shot.
People often make the mistake of watching how prices go and letting those price movements decide on values of investments. By doing that, you’re always wrong. For example, if you look at the movement upward, you got in the stock market at the high. If you looked at the movement upward in gold, when it ran at $800 an ounce, you bought it. The same thing with silver at $40. What you have to do is look for the underlying valuable investments that are out of favor and anticipate where the movement is going to go.
For example, the dollar was at an all-time growing high. That was the time to get out of dollars and diversify into foreign currencies. Now the dollar is falling, and it’s going to fall a lot more. Gold, hitting a cycle of ten-year lows, is again a buy. The market doesn’t want it. So as you see, by going contrary to where the popular price movement is, you can get there ahead of time.
Blanchard Company, one of the world's largest dealers in precious metals has just filed a class action lawsuit against Barrick Gold (ABX) for their possible actions in contributing to POG manipulation, through hedging more than legally allowed. Blanchard is no small time peanuts outfit and will sink some teeth marks into ABX over this. How much blood they draw remains to be seen.
Post 40897 by lkorrow Reply
What a [strange]deal. Perhaps if AOL is having trouble getting rival cable operators to run AOL service, it should decoupled its service from ISP access and run their site as a subscription service, promoting it heavily and leveraging Time Warner's video content. I have never understood why content companies felt a need to install and run cable networks. I have been spouting for years that this should be a telco function, it lets everyone focus on their core business -- telcos, wire; cable companies, content. jmho.
Friday August 23, 4:00 am Eastern Time
Cable groups hold the aces on broadband
By Richard Waters and Christopher Grimes
For Michael Armstrong, the irony must be irresistible. It was not long ago that the AT&T chairman was a supplicant before the cable industry, eager to strike deals that would let him sell AT&T's telephone service over cable networks.
Despite a tentative agreement with Time Warner, those efforts eventually failed. Now, however, it is Dick Parsons, boss of the new AOL Time Warner, who finds himself bowing down before the cable industry.
And Mr Armstrong - as the man in line to become chairman of the biggest US cable operator once the sale of AT&T's own cable business to Comcast is completed - now finds that the boot is on the other foot.
The power of the cable companies is evident from the deal that Mr Parsons was forced to strike earlier this week to secure broadband distrubution for the ailing America Online service. AOL will have difficulty making money out of the arrangement, analysts warn, but it had little choice but to act.
Until now Mr Parsons has been hard pressed to persuade rival cable companies to carry the AOL service. That failure has been a major source of concern to investors, since AOL's merger with Time Warner was built in part on the promise of creating new businesses on the high-speed internet.
In an interview, the AOL boss claimed the Comcast deal was the breakthrough AOL had been seeking in its efforts to escape the narrowband world.
"The cable industry always follows the strong leader," he said. "The fact that we could structure this important transaction with a tough negotiator like [Comcast chief executive] Brian Roberts will influence the rest of the industry."
For Jonathan Miller, recruited earlier this month to head the AOL online service, the deal at least provides a springboard for a new phase of growth.
Cox Communications is expected to be next to strike an agreement with AOL, with Cablevision tipped to follow. Cox said it was in talks about a carriage agreement, saying it was "plausible" a deal could be struck by 2003.
However, Mr Parsons' deal with AT&T Comcast shows just how tough it will be for the AOL service, one of the most profitable ventures to emerge from the early days of the internet, to make money in the broadband age.
While none of the companies involved in the deal will discuss details, one person familiar with the terms indicated that AOL would pay Comcast $38 a month for each high-speed internet customer it signed up on the company's cable systems. That is only just below the $39.95 that Comcast charges its own customers, leaving little room for AOL to charge a higher price to cover the marketing costs of winning customers and make a profit. Also, Comcast will share any extra revenues that AOL generates from its broadband customers by selling them new services.
The terms are far tougher on AOL than had been expected. Richard Greenfield, analyst at Goldman Sachs, laid out a business case this year under which both cable operators and ISPs like AOL could make money from broadband distrubution deals. This envisaged the ISP paying only about $30 for access and then charging its own customers $50 for service.
Jessica Reif Cohen, media analyst at Merrill Lynch, said the apparent terms of the Comcast deal made it "clear the leverage lies with the cable industry, as opposed to ISPs".
AOL will be hoping it can strike better terms with less powerful cable companies - while also looking forward to the chance to renegotiate terms with Comcast once the initial three-year term of the deal ends.
Post 40898 by StockRyder Reply
I am surprised to see you elevate our actions at Pearl Harbor as some kind of moral standard and then suggest that in an attack against Iraq we would lack "the moral provocation to do so". I'm going to assume that it is your point that we do not have a clear picture of who is responsible for the attack in New York, unlike Pearl Harbor where the situation is more obvious. However, I would hardly call an attack by us on Iraq "unprovoked". Unfortunately, in this situation, we will probably never have clarity of the perpetrators; and if we ever felt that we did, it would likely be a false confidence.
I do give great thanks that we have the current administration that we do. While GWB may be prone to the errant comment, he is a man that I TRUST would not enter into a conflict of that magnitude without due cause -- even if I am not privy to the entire cause.
Regardless of which "country" we decide to blame for the terrorism that befalls us, there is no doubt that it comes from the Arab community. I have yet to see a response from them that gives me any comfort that they are taking ownership of the problem or have a real desire for it to be corrected. Consequently, I fear the alternative is to just accept a periodic terrorist attack on our soil that will eventually be atomic, with casualties in the millions.
OT:StockRyder, Iraq Vs Saudi's
Post 40900 by pmcw Reply
tt, Please allow me to interject some additional thought to what you posted from Mises.
Please don't take me wrong, I don't feel the preponderance of ideas is without merit, but at least in places, the foundation on which the opinions are built is shaky at best.
I totally agree that a loose money policy leads to inefficient investment in capital resources. I also agree that lowering interest rates via artificial means is likely an overused method to attempt economic stability. However, when used prudently, it can reduce the pains of natural economic ebb and flow.
Money is a commodity. Like all commodities, it can be grown (increased). Minerals and ore are mined while grain and oats are grown. Clearly, commodities require investment to grow and so should be the case with money.
Money should rightfully increase with both productivity and output (GDP). As money grows (supply grows) it in theory should balance with demand. In recessions demand for money decreases and, if left to its own course of action, money supply would eventually increase enough to stimulate demand through lower usury (interest) rates. However, through the use of a central bank that operates properly, we can accelerate this stimulus and thereby lessen both the depth and duration of a recession. Fundamentally, the artificially lower rates speed up the demand. The key point here is that all must realize this is a temporary fix like a splint to get someone with a broken leg to a hospital where it can be fixed properly.
Savings rates and gross savings are in fact increasing as witnessed by the money supply measures. While we've been waiting for this, the artificially low rates have kept the consumer in the game. However, since we've just endured one of the largest bubbles in human history (as measured by the inflation adjusted dollars of inefficient investment) we need to do more to stimulate capital spending by industry. If we don't, industry will continue to reduce the cost basis of these assets through writing off loans. This additional stimulus (also artificial and temporary) needs to be in the form of government tax subsidy.
If you've ever read the tax code it is full of subsidies. These dwarf all the Fed has ever done to adjust interest and manipulate the money supply. These subsidies are a big enough subject, they deserve their own post so I'll resist going into this rant here. The point to make here is that we need to adjust subsidies and that subsidies are nothing new. And, those I suggest would be so small in comparison to those already existing that they wouldn't even register on the budget meter.
Now, before I debunk the BS in this essay, let me agree with one more point. There is a very reasonable potential that we could see what the author termed as "whirlwind of recession or crash" - possibly something even worse. Such a brutal payment is a normal outcome for excesses of this magnitude. However, there are things that we could do to avoid the worst. Some I've mentioned above.
On with the debunking:
Rothbard starts out fine when he enters the discussion of productivity and baselines his thoughts on the twenties. Few realize that between 1926 and the close of 1929 that there was only a total of 1% inflation. In fact, during 1926 and 1928 the CPI actually declined. As far as productivity improvements taking credit for this performance goes, I'll just believe Rothbard. It's logical enough given what was going on at the time, but it's also something that could have been manipulated just as easily as today.
However, after setting this baseline the LSD evidently starts to peak and Rothbard takes residence in another land. This is evidenced by his comment:
" Productivity growth has been minimal since the 1970s, and real income and the standard of living have barely increased since that time."
That's one of the most absurd statements I've ever seen published by an economist (well, not really, but certainly off the wall).
Let's just look at major developments in real (not inflation adjusted) prices:
The cost of a coast to coast LD call has dropped from roughly $1 per minute what - FREE.
The cost of computing has dropped to where the average desktop literally has more computing power than all of NASA in 1970.
The cost of a transistor has dropped by roughly 4,000,000% (that is literally a pretty close guess).
The cost of delivering a gigabit of data coast to coast has dropped from the cost of a plane ticket to - again, essentially free.
The cost of white goods, TV's and all sorts of durable goods has dropped in non-inflation adjusted dollars. This is also true of the time required to do household chores.
Even if one was only to consider the PC and the Internet as the only inventions of the last thirty years it is patently crazy to not acknowledge productivity improvements of epic proportions.
As Rothbard moves away from his productivity fantasy world he moves on to dissecting the 1980's. Again, he starts out just fine recapping the inflationary period of the late 1970's and early 1980's. He also addresses how the US$ is held by some countries as protection from their own hyper-inflating currency. However, he must of recovered from what appears to be a bad acid trip in a very bad mood. From the aforementioned sound footing and simple fantasy, Rothbard moves to pure deception:
"In fact, the dollar declined in value, compared to foreign currencies, by about 30 percent in the year following the "recovery."
The reason I call this deception is that he has taken a very small and out-of-context slice of history in a failed effort to make HIS point. Not what I would expect from a true academic that should let the data guide him rather than guide the data.
It is true enough that the dollar lost ground in 1984. Take a look at what was really going on during 1984 and I'll let you figure out why. However, that's not really the point here. The reality is that we needed a weak dollar to stimulate exports.
During the years involved, the German Mark was viewed in much of the world as the currency gold standard (not literally, just perception). In 1971, before we went into our little hyper-inflation recession, the exchange rate was 3.6:1. By 1980 the rate had moved to 1.7:1. Hmmm, the strong dollar sure didn't do much for the US during those years, did it? In 1985 the rate moved back up to 3.1:1. Now, here's what Rothbard doesn't mention. By 1986, the rate had moved down to 1.6:1 and America was enjoying a booming economy. In other words, we got our strong economy and our strong dollar.
The rate hit a low before the 1992 elections of 1.4:1 and then began to creep up by the end of 1992. In 1998, the rate hit around 1.8:1 and proceeded on to a high in 2000 of 2.9:1. Upon converting to the Euro, the rate was roughly 2.2:1.
I really can't explain why Rothbard uses obviously flawed and distorted data to support his points. Clearly, he knows better.
Note: All historic currency data is from http://www.oanda.com/convert/fxhistory
OT: Coming to a Middle Eastern Country near you.
OT: spirare: I second that. And, btw, for those wh
Post 40903 by ljpit Reply
Memo to America:
Why indeed does the US care about what Europe thinks or does with regards to Iraq? Send your memo to Brazil, Argentina, Mexico, Canada, China, Japan, Australia, South-Africa, Senegal, Korea, Malasia and India. How much more are they doing compared to Europe? How much more supportive are they?
The author of the memo to Europe has a rather short view on history. Europe's history is not limited to the last 60 years. Even more so for the history of Israel, Palestina and Iraq, the issues are not just from the last few decades, they are from thousands of years. The US hardly has a history, which probably explains why they cannot comprehend the consequences of having one.
So with Sept 11th the US now has it's second major trauma. In contrast, Europe still hasn't overcome their trauma of WW II, which might explain their behaviour when confronted with war, and why they freeze in pure fear/confusion when confronted with a situation like that of the Balkan. Germany for example is still very shy about making sounds of war; anyone who cannot understand that really doesn't get what has happened in Europe. Fifty years later most of Europe is still remembering the years '40-'45, each year, in painful silence. The US has a mass grave of 3000 in NYC, Europe has mass graves of millions of it's own people scattered throughout. Sorry, but the equation didn't even change a milipercent.
What the US is doing is pure self-defense. Nothing wrong with that, but don't play this rightous game: "if it were not for America [terrorists] would still be ensconed in Afghanistan". Why don't we hear the sentence "if it were not for America more than 5 million people would still be alive in Somalia"? That's a 1000 times Sept 11th for you there. Why don't we hear the sentence "if it were not for America, Tibet would still be occupied by China" ? I doubt whether the people of Vietnam, Cambodia, Iraq, El Salvador or Nicaragua would agree that the US has brought peace to their countries. Why isn't the US doing anything against the dictator Mugabe in Zimbabwe who is responsible for many killings? There are of course countries that would say the US has brought peace, the previous is not to belittle the US and Europe is just as quilty in all the given situations if not more so, but it's to show that US interference is very selective and has nothing to do with being a benevolent peace keeper.
The author is uninformed about Europe's involvement in the "war on terrorism", and is telling lies about a supposedly Europe-wide hostility against this war. Europe's hostility is not against the war, but against the way the US handles it: breaking the laws. As parodoxical as it may sound, there are still (international) laws when waging a war. Then, Europe has more experience with terrorism than the US has. The US has never had to deal with it before, Europe has been dealing for decades with terrorist groups like the IRA and it's splinter groups in North-Ireland, ETA in Spain, Nov 17 group in Greece, Rote Armeen Fraktion in Germany, Hamas in Israel, and various other extreme right-wing and left-wing organizations. Remember the dramatic Palestinian terrorist attack at the Olympic games in '72 in Germany.
Fact is Europe offered more military resources than the US commanders could use in the war in Afghanistan. Fact is Europe cracked down on terrorists and disrupted their finances worldwide. Fact is Europe is leading in rebuilding Afghanistan, dealing with the humanitarian crisis. So don't spread this lie about a Europe-wide hostility against this war on terrorism: Europe's been at it a lot longer than the US.
The author is also uninformed about Europe's relationship with Palestina and Israel. Europe does not fund a terrorist clique, and oppose a democracy in Israel. Claiming the opposite is bad-mouthed propaganda-speak. If you give food to people in Iraq, do you thereby support Saddam Hussein? When you dropped food and radios over Afghanistan, did you thereby support Al-Qaeda? I think not. Europe has funded several projects to help Palestinian people. The US did the same. It's called development aid. We're talking people here, people like you and me who are trying to survive. In comes Israel and destroys a few projects worth millions of donations from Europe, and oops, Israel admits it made a judgement error there. I think it's quite logical for Europe to get a bit pissed off.
This doesn't mean Europe is anti-Israel. Being critical doesn't make one anti. Let alone Europe is anti-Semitist or that it's an indigenous form of hate. That's slander. It's an insult to all the people that gave their lives to defend Jews in WW II. Next time you're in Amsterdam, pay a visit to the Anna Frank house, you might learn a thing or two.
Here is what happened: Bush calls Arafat a terrorist and calls for his replacement. The next day France's foreign minister appears demonstratively next to Arafat. This is purely a political move. The message is this: the US does not dictate who leads a country or when that person has to step down. Calling this action anti-semitist is, again, quite ridiculous.
Palestinians have democratically elected Arafat. Nobody seems to like the outcome of that now, but at the time it happened it was fine with everyone. Saying that Israel is pro-democracy and thereby insinuating that Palastina isn't, is not describing the whole picture. Don't forget that the world even gave Arafat the Noble prize for peace. You're very naive if you believe this could've happened without the US having a big influence in this decision. Just as the author of the memo in it's simplicity wants to argue that Europe is pro-Arafat and anti-Israel, we could just as easily argue that the US that has done nothing but reward and protect the terrorists in Palestine, just like they helped Osama bin Laden and Saddam Hussein to take power. The US is using double standards: they send its troops to the other side of the world to strike at al-Qaeda terrorists, but they denounced Israel every time it crossed the street to strike at Palestinian terrorists. Leadership means showing by example. Don't patronize Israel when they follow your example. After all, you're either with Israel or you're with the terrorists.
How ridiculous the author's arguments are shows even more when he refers to when "an anti-Semitic fascist comes in second in the first round of French voting". If you think Europe was cheering about this, forget it, everyone was shocked! In the second round Le Pen didn't stand a chance, and that was that. But the thing is, Le Pen isn't as insinuated. He's against anything not French: black, yellow, red, Italians, Germans, Swiss, Brits, Spaniards, etc. It's France first. He's against an open Europe. All the right-wing movements you see happening in Europe right now have nothing to do with jews, it has everything to with Europe itself: each EU country is trying to come to grips to losing it's sovereignty and being part of a larger, very open, Europe. Europe is obsessed with internal reforms unlike anything ever happened in history, and it's pretty logical this upsets a (minority) part of the population. These counter forces are at work now, and I'm sure this will pass over without too much damage as the majority is willing to take the risk of uniting, and that force is a lot stronger than the extreme forces; time and favorable economic times will help.
I thought this statement in the memo was spot on:
By unilaterally disarming itself, Europe is making a statement about how the world should be governed: by mediation, diplomacy, international agreements, polled sovereignty.
the author of the memo then goes on about a piece of history of no more than 50 years in an attempt to make this choice look bad, again showing his short-sighted view of history.
Europe's main criticism is simply this: the US is not sharing its view of how the world should be governed.
US's main criticism is simply this: Europe is not sharing its view of how the world should be governed.
I don't want to go into a debate of which view is right and which is wrong. The difference is obvious, and this is the root cause of the friction. This friction shouldn't be made into an elephant though where it's really just an ant. Let's not forget we're both on the same side, just not as black and white as the US rightously demands.
America has the right to defend itself, but it would be irresponsible if America's actions aren't extensively analysed. Demanding to do as we say or pipe down sounds like a dictators decree. We should always remain very suspicious whenever someone says we have "no option". We've heard that before. America should not break international law. Yes, Saddam Hussein is a dictator. But which international law or any other type of law specifies that responsibility for selecting a nation's leader falls to the United States? The US message to Europe to pipe down and putting forth ultimatums like "if you're not for us you're against us" is typical US bullying, like a spoilt child, not gettting what it wants: a carte blanche.
Europe's message to the US: do unto others as you would have them do unto you.
Post 40905 by pmcw Reply
roof, You really need to look at what else happened during those years before you assign cause and effect. Just one little something to keep in mind is income tax another would be the prevalence of exchanges that actually involved currency. And, how about the fact that in the 1800's there were no less than 10,000 legal currencies circulated in America. I could go on, but I'm sure you see my point. It ain't as simple as blaming it on the Fed. Regards, pmcw
OT: wilful10..link..no I don't know why that is ha
OT: maniati: terrorist hiding places:
Post 40908 by oldCADuser Reply
I think if you check it out...
"Regardless of which "country" we decide to blame for the terrorism that befalls us, there is no doubt that it comes from the Arab community."
...you will find that strictly speaking, Iraq (as well as Iran) is not an "Arab" country. Granted, they're Muslims, but that does not mean they're Arabs. I was just in Malaysia this past week and it's definitely a Muslim country, but you would never mistake their people for Arabs, or at least you shouldn't.
And another thing about Malaysia is that despite it being a Muslim nation, it does not strike you the way you would expect it too since the people there do not fit the stereotypes that we see on TV. They are very friendly and while their manner of dress (women with their heads covered) makes it obvious that they are Muslims, their clothes are brightly colored and the women obviously are very active and even outgoing. There were several in the meetings that I attended and they participated like anyone else and during the breaks they mingled with non-Muslims and even the Americans that were at the conference (there were 4 of us from the states, although since our company is so diverse, I was the only native-born American in that my fellow employees were from France, India and Indonesia, but then that's what it's like working at EDS). After watching what the news media shows as Muslims on TV, it's a bit of a shock to see a bunch of women, with their heads covered, get out of a Mercedes in front of the hotel (and one of them was the driver) and take the valet parking slip and walk into the hotel talking among themselves as if they were a bunch of housewives getting together for lunch (which they may well have been, for all I know). I think it has to do with the fact that Malaysia is an obviously prosperous nation and that when that's the case these people are neither perceived as nor do they act that much different then anyone else in a similar situation.
Anyway, I think that most American have little or no concept of what a Muslim is and that we tend to assume that Arabs and Muslims are the same thing and that everyone in the middle-east (with the expectation of Israel of course) are all from the same racial and ethnic group.
Post 40909 by StockRyder Reply
Perhaps I don't know what the strict definition of "Arab". Could you explain why Iraq is not an "Arab" country? I draw most of my reference from a significant amount of time that I have spent in Kuwait on several occasions over the past couple years. The Kuwaitis that I spoke to (they love to discuss politics) disapproved of the leadership in Iraq but did not harbor bad feelings for the average Iraqi citizen and indicated a very real kinship with Iraq, as well as Saudi, UAE, and others. So semantics aside, the bond of at least some of these countries is very real.
Post 40910 by StockRyder Reply
I don't think I've fully drawn that conclusion, but where tin was looking for just cause from the information that we have (in public), there seems to be more arrows pointing at Saudi than anywhere else (i.e. the origins of the known perpetrators and their funding.) I can fully accept that any country has its own share of extremists. (We all live in that glass house.) What I am less clear about is the hearts of the Saudi leadership, and I haven't heard or seen anything really compelling from any of the Arab states.
OT: maniati..that ever so loooooong article..thank
OT OCU, is Saudi Arabia the only Arab country, the
OT: StockRyder, that seems to explain why Saudi Ar
Post 40914 by tinljhtkh Reply
OCU and Stockryder!
From stock's post 40898!
"Regardless of which "country" we decide to blame for the terrorism that befalls us, there is no doubt that it comes from the Arab community. I have yet to see a response from them that gives me any comfort that they are taking ownership of the problem or have a real desire for it to be corrected. Consequently, I fear the alternative is to just accept a periodic terrorist attack on our soil that will eventually be atomic, with casualties in the millions"
From OCU's post
"Anyway, I think that most American have little or no concept of what a Muslim is and that we tend to assume that Arabs and Muslims are the same thing and that everyone in the middle-east (with the expectation of Israel of course) are all from the same racial and ethnic group."
That has been the point of so much of my writing here on this board! There is no monolithic American! We become about as united as we can be when we have been attacked by some external foe! There is also no monolithic Arab community either, to take responsibility for anyones actions! There are over 1 billion Muslims scattered around the world, and they're not all Arab by any means! I think that I read somewhere that Malaysia/Indonesia has the largest Muslim population in the world!
I quoted past history in my post simply because it presents the best solutions to our current problems! It is all too easy to take the lowest common denominator--revenge--as the path to actions that are all too often regretted down the road! If Kennedy had done what his advisors wanted him to do in 1962, he would have invaded Cuba and we might have had a nuclear exchange! He didn't, and it gave history a chance to catch up with the Soviet Union as Ronald Reagan confronted it in the 1980's! Our best weapon is our economic system and we should, as we currently are, be busy about the business of cleaning up its reputation and restoring its moral underpinnings!
The only monoliths that we are dealing with here are the ones that we create in our own and everyone else's mind! This is not a one size fits all situation by any means!
Post 40915 by ttalknet2 Reply
pmcw, I'm glad you liked the Rothbard excerpt enough to parse it out a bit. And I can't take issue with most of what you wrote. I don't feel qualified, since I'm pretty new to this Austrian school of economics... and nowhere close to being an economist myself!
When Rothbard said Productivity growth has been minimal since the 1970s I too wondered if this was true way back in 1988 when I think the piece was written. An explanation for that statement is probably buried somewhere within Rothbard's many other rants. Frankly, I've only read a few of them, yet I remember no mentions of 'productivity' other than this one. I'll bet he defines productivity in a way that's unique.
btw, I've avoided reading Rothbard's articles on politics and society. For now I'm just trying to focus myself on the fundamentals of money, debt, interest, and banking. Environmental influences are important, of course, but I'd rather tackle them later.
Now, having said all that, I also have to say that governments are counter-'productive' in that they debase, confiscate, and consume. Their actions are a huge drain on the 'productive' endeavors of individuals in the quest for wealth and security. And I think that's a big reason why Rothbard always points the accusing finger at Central Banks, fiscal policies, subsidies, taxes, etc.
So we are on a perpetual treadmill: It takes more and more labor to earn (and retain) a unit of wealth because the government keeps piling up more units of debt and expense. Hence, we are usually productivity neutral. Sound about right?
Well, maybe. As much as I appreciate Rothbard and Mises, they make this layman a little dizzy.
Post 40916 by Tampathom Reply
To check the ethnic makeup of any country, may I suggest you consult the CIA World Factbook:
You may wish to bookmark this site for future reference.
Iran is predominantly Persian...a distinctly different ethnic group than the Arabs.
Iran's ethnic makeup: Persian 51%, Azeri 24%, Gilaki and Mazandarani 8%, Kurd 7%, Arab 3%, Lur 2%, Baloch 2%, Turkmen 2%, other 1%
OT: whoops, sorry, forgot the OT!
OT:StockRyder, following your train of thought,
Post 40919 by Arkural Reply
They're taking the mkt down.......Do you know why?
This-Y-is a proxy for a forked tongue.
now now, don't cheat, answer the question in your mind, first.
Post 40920 by tinljhtkh Reply
A 10 (tin) star post! 40903 is an important post!
Highlights from it below!
"Europe's history is not limited to the last 60 years. Even more so for the history of Israel, Palestina and Iraq, the issues are not just from the last few decades, they are from thousands of years.."
"So with Sept 11th the US now has it's second major trauma. In contrast, Europe still hasn't overcome their trauma of WW II, which might explain their behaviour when confronted with war, and why they freeze in pure fear/confusion when confronted with a situation like that of the Balkan. Germany for example is still very shy about making sounds of war; anyone who cannot understand that really doesn't get what has happened in Europe. Fifty years later most of Europe is still remembering the years '40-'45, each year, in painful silence. The US has a mass grave of 3000 in NYC, Europe has mass graves of millions of it's own people scattered throughout. Sorry, but the equation didn't even change a milipercent."
"There are of course countries that would say the US has brought peace, the previous is not to belittle the US and Europe is just as quilty in all the given situations if not more so, but it's to show that US interference is very selective and has nothing to do with being a benevolent peace keeper."
"Europe's hostility is not against the war, but against the way the US handles it: breaking the laws. As parodoxical as it may sound, there are still (international) laws when waging a war."
"Europe has been dealing for decades with terrorist groups like the IRA and it's splinter groups in North-Ireland, ETA in Spain, Nov 17 group in Greece, Rote Armeen Fraktion in Germany, Hamas in Israel, and various other extreme right-wing and left-wing organizations. Remember the dramatic Palestinian terrorist attack at the Olympic games in '72 in Germany."
"The author is also uninformed about Europe's relationship with Palestina and Israel. Europe does not fund a terrorist clique, and oppose a democracy in Israel. Claiming the opposite is bad-mouthed propaganda-speak. If you give food to people in Iraq, do you thereby support Saddam Hussein? When you dropped food and radios over Afghanistan, did you thereby support Al-Qaeda? I think not. Europe has funded several projects to help Palestinian people. The US did the same. It's called development aid. We're talking people here, people like you and me who are trying to survive. In comes Israel and destroys a few projects worth millions of donations from Europe, and oops, Israel admits it made a judgement error there. I think it's quite logical for Europe to get a bit pissed off."
". It's an insult to all the people that gave their lives to defend Jews in WW II. Next time you're in Amsterdam, pay a visit to the Anna Frank house, you might learn a thing or two."
"Leadership means showing by example. Don't patronize Israel when they follow your example. After all, you're either with Israel or you're with the terrorists."
"Europe is obsessed with internal reforms unlike anything ever happened in history, and it's pretty logical this upsets a (minority) part of the population."
"America has the right to defend itself, but it would be irresponsible if America's actions aren't extensively analysed. Demanding to do as we say or pipe down sounds like a dictators decree."
"America should not break international law."
"America should not break international law."
"America should not break international law." Quote repeated three times for emphasis!
I thank you for this piece! Your writings are welcome at my small part of table anytime! We may not agree on everything all of the time but I respect your view and we need to hear from more posters like you!
This is an outstanding piece of thought and writing, as least as far as I am concerned!
OT:Arkural, simple, profit taking! ;)) clo
Post 40922 by oldCADuser Reply
I think you're correct...
"I think that I read somewhere that Malaysia/Indonesia has the largest Muslim population in the world!"
...as my co-worker from Indonesia that I was with this week explained to me, Indonesia is approx 80% Muslim and since Indonesia also has a population of something over 220 MILLION, that would seem to back up your comment.
OT: Wilful re: Europe
Post 40924 by pmcw Reply
tt, I certainly don't profess to be an expert on any pure economic theory. It seems to me that the more detailed the theory gets the more apt it is going to only fit a certain time and space. Of course, that's pretty well true about most things in life as well. From Ten Commandments we now have thousands of laws.
I'm certainly appreciate the theory that Government is a drag on productivity, but I don't necessarily believe it to be true. I don't know if you've taken the time to read some of Arthur Laffer's old work, but I think you would find his basic principle of the Laffer curve a thing of beauty.
As I mentioned before, when theory starts adding detail it moves towards being suited for only a specific time and place. The Laffer curve is about as simple as things get. The general theory applied to government says:
At 0% tax we would have a very unhealthy economy since anarchy would rule the day
At 100% tax we would also have a very unhealthy economy since there would be no incentives for productivity, etc.
Therefore, the optimal tax is somewhere in between these extremes.
The goal for government must be to strive for efficiency which implies that it will achieve maximum effectiveness. Sure, in a perfect world absent of human sin, we don't need government and it would therefore be a drag. However, until we find that world, government is the next best thing. ;o)
Post 40925 by Arkural Reply
pt.2 They're taking the mkt down.......Do you know why?
We've had an intercept glitch and had to run the cheat test again.......press your mouse to continue.
This-Y-is a proxy for a forked tongue.
Avoid the obvious.
now now, don't cheat, answer the question in your mind, first.
1 Ans: The recent mkt rally was stronger than anticipated!
.......and, they need to have you sell [dumb] while they buy [smart]....and then sell back to you when they bring it up, SIMPLE!
And now you know the mystery to mkt-life, is no mystery at all.
p.s. Your next question will be, Why did the US government invent MFs for the wee folk and HFs for the non-wee folks? Remember, don't cheat........................................yourself. :-)
Post 40926 by tinljhtkh Reply
Could this be a reason?
And now we return to our story!
Jack Grubman supposedly upgraded T in order for Salmon Smith Barney to get the “richest payday” the markets has ever seen when T spun off AWE! And Grubman did it under pressure from C’s chairman—Sandy Weill! At least the request for information from Elliot Spitzer, the crusading New York state attorney general would appear to lead in that direction! Grubman subsequently downgraded T again shortly thereafter once the deal got done! T has also been sent a request asking what they might know about this event!
In an interesting and perhaps coincidental event, that paragon of virtue Ron Perleman suddenly pops up! It seems that a company that he is heavily invested in—Golden State—is going to combine with Citigroup (C) after passing on an earlier offer from Sallie Mae.
Sallie, a government backed entity who is going public in a few years, supposedly made an offer that would have generated a higher price per share for Golden State investors, although it was all stock while C’s offer did have some cash! According to CNBC, Golden State’s shareholders might not have been informed of that fact! Mr. Perleman would, if this deal goes through, become one of the largest individual shareholders of C, right there along side of the Saudi investment billionaire—Prince Alwaleed!
And, while we are on the subject of the Prince! In another development, the good nephew of Saudi King Faud, who invests over 200 billion in the United States equity markets, has reassured us that not only will they not withdraw any funds from our markets, but will be adding on. And, the Saudi’s and OPEC will be making up any shortfalls in oil production caused by an invasion of Iraq!
Meanwhile, AOL is accused of possibly improperly booking revenues from a “relationship” with Worldcom during the period when Bernie Ebbers was in charge! And, in addition to that, there is also a probe into Quests relationships with the same entities?
And, in another unrelated but interesting development! Mel Carmason, chairman of Viacom, had to sign off before Opey and Anthony (Opey and Dopey), the radio shock jocks who supposedly engineered and broadcast a sex act at St. Paul’s Cathedral in New York City, could be fired from their cushy jobs at Infinity Broadcasting! I wonder if Opey and Dopey date from the period when priests….! And were they just trying to get even for some childhood transgressions?
And, the FAA has decided to allow passengers to carry drinks, correctly sealed, through screening areas of airports. Is this a concession to those who fly drunk anyway who may be sobering up due to the waits before they get on the plane? Or is it an attempt to pacify those who hate the airport delays caused by the increased scrutiny of their baggage by getting them inebriated?
Meanwhile, down in Houston Texas, the government is ceasing/freezing massive amounts of private money!
Tune in Monday as our soap opera continues! Can Sandy stand being accused? Will Bernie bear up under this additional burden? Did Jack really do this horrible thing? And, if he did, what did Sandy have on him, or what was his bonus? Will CNBC’s Mike Huckman pursue Jack in the street again! Will Jack continue to repulse his advances? What part will the mysterious prince play in all of this? Will he pull out and leave them all adrift? Where will Opey and Dopey end up working? Will they enter the priesthood? Does Mel feel better now that someone other than the SEC has asked for his signature? Did he think that they wanted an autograph? Will Sallie’s stockholders get together with Golden State?
Will Sandy, Ron and the prince get together and buy Argentina, or even the entire South American continent? how will Juan Valdez react to this?
And, that final burning question on everyone’s mind: who is going to replace Opey and Dopey? And, if they do enter the priesthood--what church will they be at!
PS--pardon any misspellings of names--its been a long week!
Post 40927 by srudek Reply
economic euphemisms ARTICLE - discusses our difficulties with words such as "depression".
It began with the word ``depression.'' Economists since Adam Smith used such phrases as ``trade depression,'' but only in a literal sense, to mean that prices or production were lowered. The word didn't acquire its modern sense until after the stock market crash and ``panic'' of 1893, which was triggered by the overbuilding of railroad infrastructure, in a pattern eerily similar to the telecom crash of the past two years.
The general economic meltdown that followed became known as the ``Depression of the Nineties.'' Before it was over, a third of the nation's railroads were in bankruptcy, President Cleveland and his Democratic Party had been roundly repudiated in midterm elections, and the word ``depression'' was irredeemably associated with desperate times."
Post 40928 by oldCADuser Reply
Sorry, it was Iran that I was thinking of when I said that "strictly speaking" they were not Arab's. It appears that Iraq IS approximately 75%-80% Arab.
OT: Ljpit: Arafat "democratically elected&quo
Post 40931 by danking_70 Reply
Ljpit re: Memo to America
Thank you for responding. I'd like to respond in full however, I can't do so today. I'll do so over the weekend.
I would like to point out one thing.
"The US hardly has a history, which probably explains why they cannot comprehend the consequences of having one."
I see this phrase used constantly and I think it's a bunch of BS. Very similar to this other phrase "Because I said so!"
Just because the Colonies revolted against the British and started a new form of government, doesn't mean that we don't share Europe's history. European history is very much a part of us.
Post 40932 by Briguy Reply
Stock to watch...
I really doubt ANY of you will remember me touting this stock last fall when it was in the teens. I felt at the time it was an excellent contrarian play for a leading abatement company that supplies semi co's. Interestingly enough, I had a $35 price target on the stock. The stock actually went past that by a couple bucks. Turned out to be an excellent investment.
Well, the stock is now back in the teens again so I am recommending for those interested in a volatile, still somewhat expensive stock that can offer substantial gains when it goes up, to CHECK OUT ATMI. I'm not recommending buying it here- that is for you to decide. Stock has gone up about $5/share in the last couple weeks so it may cool off a bit. Then again, it may not. Nevertheless, if it gets anywhere near $15/share again, then I would strongly recommend purchase.
So check it out. And if you people find anything positive or negative about the stock, share it with us.
OT: The "democratic" process in the mid
Post 40935 by pmcw Reply
INTC, I'm amazed (well, I guess not since they don't focus on what's really important) it hasn't made the mainstream news, but INTC recently announced they've overcome the obstacles that most still can't in making 90nm silicon a high volume reality. Some are saying the "strained silicon" technology they have invented will be as important as the copper interconnect technology developed by IBM in 1998. If this proves to be the case, I wouldn't want to be long on AMD. OK, the truth, I wouldn't want to be long AMD anyway. Regards, pmcw
OT: Sephardic Jews
OT:Tampathom, Sephardic Jews, for you. I'm not sur
Post 40938 by jeffbas Reply
lkorrow, I generally share your view that currency losing 90% of its value over 70 years is not too big a deal, if the economy is growing and standards of living are rising. It is a compound annual depreciation rate of about 3% per year (.97**70=.12).
Furthermore, the folks who are hurt most by inflation are those on fixed incomes and/or dependent on savings. Most of these are elderly, who have an offset of having received far more in Social Security benefits than their contributions justified (if they did not die prematurely). Younger folks who tended to have the debt were the ones who benefited by repaying in cheaper dollars. The disadvantaged had government welfare programs. Thus, there were not many losers in a growing economy with rising standards of living.
A problem is that you can't always control the circumstances that generate inflation, just as the government is having trouble controlling the opposite at this time. The results can be catastrophic. Ask anyone who lived in Germany after WW I. Even the 1970's were not very pleasant here either, at low double digit inflation rates. I recall being thrilled to get inflation adjustments in salary, and thinking about those who did not.
Post 40939 by smokesignals Reply
Whatever happened to letting the markets work? (5 big myths of a bottom)
By Bill Fleckenstein
(The views and opinions expressed in Bill Fleckenstein's columns are his own and not necessarily those of smokesignals')
There may be a knighthood for Greenspan in stage-managing a bubble, but there's nothing but pain for everyone if we tell lies to each other to keep it going. Plus, a market realist exposes five big myths of a bottom.
The National Zoo in Washington houses pandas, cheetahs and assorted slithering creatures. Pretty soon, it may welcome another species: the scapegoat. This one's trip will be brief, because home is currently the offices of Federal Reserve Chairman Alan Greenspan, just a few Metro stops away. But his fall from grace in the eyes of hurting investors will be immense, from once-infallible master of monetary policy to willful stoker of our stock-market bubble. That the former view still reigns in Footsie Land can be seen by his recent elevation to knighthood. For charity's sake, let's hope the title is not callable.
On a recent morning before the casino opened for business, the S&P futures were up 1%, dragging the other indices along with them. Then a skunk showed up at the garden party, in the form of Best Buy, which said its results would fall short of expectations and acknowledged that the retail environment had deteriorated in the last four weeks. Now for those who haven't been paying attention, Best Buy sells electronic doodads, something that heretofore the consumer has been buying more or less hand-over-fist. So the company's announcement has broad ramifications for everything in chip land, because if consumer electronics are under pressure, on top of the slowdown everywhere else, there ain't much hope for things to get better.
Back against the Wall Street
Turning to the news, and in the coals-in-their-stock-ing department, a few days prior to this past week's FOMC meeting, The Wall Street Journal ran a really wonderful headline called "Wall Street Wants Feds to Lower Funds Rate." (Only the absence of the subtitle "And Promises to Throw a Temper Tantrum if It Doesn't Get Its Way" stands between it and perfection.) The story therein proceeded with a quote about how if the Fed didn't do something voluntarily, it would be "forced to act by the markets." Sadly, it comes as no great surprise that Wall Street wants the Fed to bail out its positions, just as two weeks ago, the banks called for Brazil's rescue by the International Monetary Fund, which basically amounted to their own rescue.
It seems now that every time something goes sour, somebody wants to be bailed out. After all, that's what the implicit belief behind the doctrine "too big to fail" is, right? If you're big enough and you make enough mistakes, then you can't fail. You have to be bailed out. So that's sort of the rationale behind the big Money Center banks, it seems. Whatever happened to letting the markets work?
Look what the laissez-fairy brought!
Lately, I have been struck by the fact that when the stock market and economy were screaming, everyone seemed to be in favor of laissez-faire capitalism. You know, let the markets work, let's all be capitalists. And now that we're seeing its creative-destruction side -- which is a necessary component to the way capitalism works -- it seems to me that people have listed somewhat toward socialism.
Now they're appealing to the government, rather than letting nature take its course. I believe this is a very bad development. One of the things that make capitalism great is the destructive part of the cycle, because this sows the seeds for the boom. Booms and busts go hand in hand. By the way, Jim Grant does an excellent job of explaining this in his book "The Trouble with Prosperity," and I highly recommend it for any of you who'd like to learn more about the subject.
But back to my rant. The more that the government tries to prevent the cycle from playing out, the longer the process of finishing the work at hand. We had the biggest bubble in the history of the world, and the cleanup will be painful. That's why many of us were so outraged while the bubble was inflating, because we were sure of the pain that was to follow. Well, now the pain is upon us, and people should prepare themselves for a continued bout of difficult economic times and an unprofitable stock market. They should not allow themselves to get sucked in by all the wishful thinking that we see so regularly. The sooner we get on with the adjustment process, the sooner we can come to the end of the adjustment process.
In praise of purge-atory
So I think all the calls for government to save the day are wrongheaded. Perhaps once we let the markets clear, the government can do some things. I would much have preferred to see the markets clear a long time ago, and then the Fed could have gotten busy cutting rates, rather than cutting them before and trying to extend the boom. All we've done is make matters worse. I find the whole thing rather sickening. As I've said all along, I don't want bad things to happen, but bad things were preordained when we had a bubble. And all the meddling by the government and the Fed will only make things worse.
Actually, the minority view of the Fed's incompetence may now be set to encompass Main Street at large. That is suggested by a recent piece in The Washington Post called "Give Greenspan's Fed Its Share of the Blame" by William Greider. Some of the excerpts are just spectacular, so I absolutely must share them.
By now, everyone should have enough background for the article to really hit home. Greider begins:
"With New Economy icons falling all around, the next one may be the Federal Reserve and its hallowed chairman, Alan Greenspan. When anxieties subside and people examine what caused this debacle, they may grasp that the Fed's policies and proclamations are centrally implicated. Notwithstanding his opaque manner, Greenspan became a cheerleader for the financial-market optimism and implicitly ratified its excesses. The chairman failed to take the timely actions that would have instilled more caution in investors, believing as he does that markets can work things out on their own. Well, they have.
"This is exactly what you don't want from a Federal Reserve chairman. Central bankers are not supposed to be either optimistic or popular. They are supposed to be the national scold -- the economic regulators who worry constantly over what might go wrong and impose restraints before public opinion or the markets see any problem. In that sense, the Federal Reserve went off the rails in the bubbling 1990s. Though still celebrated for wise stewardship, the Fed failed its core function as the disinterested governor.
"How does Greenspan feel, for instance, about the mega-conglomerates in banking that he helped midwife, now that Citigroup and J.P. Morgan Chase are in the crosshairs of criminal investigations? The Fed chairman personally approved Citigroup's creation even before Congress made it legal by repealing the Glass-Steagall Act. He approved the 'firewalls' that were supposed to prevent the kind of scandalous conflicts of interest recently revealed. And did the Fed's own bank examiners not notice the funny-money lending to Enron?"
Finally, here is Greider's conclusion:
"But Greenspan's second great error was joining the celebration himself. He suggested that rising productivity had opened a glorious new era of ever-upward prosperity. His ebullient remarks sounded very similar to the self-congratulations expressed by the Federal Reserve in the late 1920s. Then and now, the Fed's happy talk excited stock-market plungers, large and small. . . . The point is, the nation pays a terrible price for allowing this cloistered governing institution to evade serious public scrutiny and tougher questioning. Financial markets always matter, but finance is supposed to serve the real economy, not the other way around. Until the Fed's distorted priorities are corrected, the U.S. economy will continue to experience deep troubles."
The debunk hunk
From distortion, it's just a short hop to myth, and that brings me to Justin Mamis' newsletter from a week ago, titled "Bull Markets are All Happily Alike, But Bear Markets are Each Unhappy in Their Own Way." I quote extensively, because I think it's a truly superb discussion of the various fallacies related to people's expectations of a bottom forming in the stock market. As many people know, Mamis has been chronicling the market action for close to 40 years. A keen student of human psychology, he understands how people's need to believe in myths persists, despite headlong encounters with a wall of reality. In the following excerpts, he offers a stunning dose of the latter, to debunk five commonly held myths for why a bottom is in place.
"Five fallacies: the oft-repeated 'amazing' overlay of the decline in the Nasdaq composite to the Dow's decline in 1974 (and occasionally to the decline in the early 1930s). This equates the technology sector in itself to the prosaic bigger-cap stocks in the NYSE -- a comparison less accurate and less useful than comparing apples to oranges, or even Eastern deciduous trees to Western evergreens. A comparison with the decline of the energy stocks from their peak in November 1980 -- when they represented whatever percentage it then was of the S&P 500 . . . comes to mind. In those days, the wild rise in oil stocks had made them approximately as big a percentage of the S&P as techs became during the bubble.
"The current fantasy is that because the Nasdaq composite is down approximately as much as those prior indices had fallen, the overlay automatically equates to 'this is far enough,' thus tempting many barbers (and dentists). This is a particularly dangerous fallacy, because it also fails to take into account the considerable remaining vulnerability of the admittedly small number of tech stocks -- the SOX components, in particular, but also Mercury Interactive, Amazon.com, Yahoo! (YHOO, Cisco Systems and Dell Computer (the 'leaders') that still have room for big percentage declines.
"Similarly, the media (and strategists, too) have calculated the statistic they wanted to find --that the average length of a bear market has already been exceeded by this bear -- and thus have announced with confidence the 'telling' point that this bear market has lasted longer than it should have, and therefore is ripe for coming to an end. Talk about naivete! It's astounding how the singular event of the bubble bursting is being ignored or dismissed. [The emphasis is mine.] This statistical triumph equates run-of-the-mill bear markets which have come along every so often (consider 1984 or 1966, or even 1990) with this particular situation, which is by no means ordinary. Indeed, it is a once-in-a-generation bear, a century-straddling bear. To use an average of average bear markets to 'call' this decline sufficient is more foolish than grasping at straws as one loses one's footing at the edge of a cliff.
"The third 'fallacy' is not so much a fallacy as it is the extreme of self-indulgence. Fellow who should know better said on TV the other day, in defense of monetary policy, and thus earnestly trying to make the point that further Fed easing should be viewed as positive: 'Monetary policy works! . . . There have been only two times when monetary policies didn't work.' Only two! Imagine! He went on casually to cite those two exceptions: 'Japan in the 1990s, and the U.S. in the early 1930s.' How can someone who gets paid to 'think' about the market not hear his own words? That the only two times that monetary policy didn't work happen to be -- and not by accident, of course --the only two times a bubble burst, before this grandest bubble of all popped, splattering the bubble gum all over everyone's face.
"A fourth fallacy has only recently surfaced, but it has rapidly become ubiquitous: the public is being urged to hold on. 'If you get out now, you won't be able to get back in.' Why not? Is there a Wall Street law sort of like a 'wash buy' prohibiting a buy order at any time -- ever -- after selling out? People who get divorces from unhappy marriages are entitled to remarry, aren't they? Or have the 'experts' promulgating this stricture never experienced the one thing the market is guaranteed to do -- that is, it will fluctuate?
"After the 1974 bottom that they are now so devoted to making comparisons about, one had until July 1982 to get back in -- much of the time along the way at better prices, too. And if one waited patiently until the spring of 1982, one would have been able to identify --and thus get back into -- the consumer 'growth' stocks. Why are they talking this way, when we don't even know yet which stocks we would want to get back into? Speaking cynically, it sounds like a Wall Street conspiracy to keep the public 'in,' when one can tell by the slide in Charles Schwab's stock that they know better than to stick around.
"The fifth fallacy is the eagerness to believe in volatility. They are trying to turn what looks like volatility, and is measured as volatility (the VIX stuff, which doesn't seem to be consistent enough, anyhow), and quacks like volatility, into some sort of bottom -- when today's apparent 'volatility' is primarily a lack of bids when prices are going down, and an absence of sellers when stocks are rising. If it is swinging at all, it is like giggling middle-aged couples exchanging room keys. Of course, the laws of Wall Street gravity may change, and old fogies may be unable to change with it, but until proven otherwise, all we know is that those major bottom-ending bear cycles that we can see on the charts (1932) or have experienced (1974) have developed via a drying up, an erosion, a whimper -- not on violence."
That eloquent note brings this week's Contrarian Chronicles to a close. I don't usually like to let other people write my column, but these two articles were so grand that I felt I just had to share them.
William Fleckenstein is the president of Fleckenstein Capital, which manages a hedge fund based in Seattle. He also writes a daily Market Rap column for TheStreet.com's RealMoney. At time of publication, William Fleckenstein owned none of the equities mentioned in this column. Positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy, sell or hold any security. The views and opinions expressed in Bill Fleckenstein's columns are his own and not necessarily those of CNBC on MSN Money.
OT: Thanks, clo. I guess the rationale is that th
OT: Tampa: When they were forced to leave Spain/Po
Post 40942 by spirare Reply
Take a look at the long term 10-year chart
(click on the thumbnail) and we see the price advancing on high volume out of a long flat base of 4 or 5 years duration.
Note also the high attained in 1994 at over $12, which demonstrates that this share has great upside potential...
CALVF Risning from oversold conditions - bullish
Current Price of Gold
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
OT: yes, I see. This source also has a very inter
Post 40944 by clo Reply
INTC:RESEARCH ALERT-Bear Stearns cuts earnings view on Intel
NEW YORK, Aug 23 (Reuters) - Bear Stearns on Friday said it
cut its earnings estimates on Intel Corp. , saying the
world's largest chip maker was facing sluggish demand for
personal computers and a back-to-school electronics season that
is shaping up to be relatively weak.
"Intel is very well positioned to capitalize on a recovery
in the PC market, however that appears unlikely until sometime
in 2003," analyst Charles Boucher wrote in a research note.
A series of faster microprocessors released by Intel and a
strong position against rival Advanced Micro Devices Inc.
might not be enough to counteract weak corporate PC
demand, Boucher said.
With the burden falling on consumer demand, the
back-to-school season will be key for Intel, he said.
"September will be pivotal," Boucher said.
Intel, based in Santa Clara, California, is the dominant
maker of PC microprocessors, the brains of personal computers.
Boucher said he now expects Intel to report third-quarter
earnings of 13 cents a share, down from a previous estimate of
14 cents a share. For the year, Boucher now expects Intel to
report 55 cents a share instead of his previous view of 57
cents a share.
For 2003, Boucher said he expects Intel to earn 82 cents a
share, down from his earlier estimate of 85 cents a share.
Boucher also lowered his fourth-quarter revenue growth
estimate to 7.5 percent from 9 percent. In active late trade,
the stock was off $1.22 or over 6 percent to $17.93 per share.
((Daniel Sorid, New York Newsdesk, 646-223-6187))
*** end of story ***
Post 40945 by Arkural Reply
clo-Yep, you're right, simple profit taking......................................................off the 2.3B inflow this week! Ha ha ha.
New tgt on Dow=9440, Naz 1445.
Post 40946 by pmcw Reply
spir, Just once - only once, try to defend CALVF's fundamentals. Try any way you can. IMO, there is no defense. They are as bad or worse than typical penny stock fundamentals. If you want to hype a gold mine at least pick a good one!
The fact is, the price of gold has gone up little more than the dollar has dropped when compared to the Euro. This reality clearly states that gold hasn't gone up, the dollar has just gone down.
OT: Clo re: Elections
Post 40948 by tinljhtkh Reply
08/23/2002--Some days are diamonds, some days are dust!
There were no articles on Table today about diamonds, and the markets got left in the dust of events as many “money movers” packed up for their personal version of “the Hamptons”, that popular Long Island by the sea resort community! Bill Gates was apparently on his way to Six-Flags as it was revealed that he had upped his stake in the popular middle class resort destinations stock to an interesting 10 percent! Does Bill now need a place to take his own children, or is he more interested in taking a stake in the survival of a non-Disney regional playground in its time of need?
The airline industry has been in the financial news all week as it becomes more apparent that all sorts of travelers are choosing to either not go, or if they do, not in airplanes! Six Flags in mainly an automobile one-day destination that has been suffering from economic and travel slowdowns in certain parts of the country! Southwest Airlines ran its first 299-dollar cap on rates television ad as it attempts to coax the business road warriors’ back into the air. The “group” gets ready to teleconference with a person only to find out that he is out for the day! As they stare at each other, he shows up in the outer office ready to join the group!
Jack Bogle, the retired Vanguard Mutual fund group Chairman, raised some eyebrows when he pontificated, on CNBC, that up to half of the mutual funds currently in existence would soon disappear in the wake of the recent market downturn, victims of consolidation as many funds got rid of their weaker, ill-funded links!
The big news affecting the markets was event related as it was revealed that Citigroup might now be even more deeply tied to potential scandal as Elliot Spitzer, New York State’s Attorney General, investigated its chairman. Jack Grubman reemerged once more from the recent past as his analyst ties in the telecommunications sector haunted his former employer once again. This time it was the upgrading of AT-T just before the spin-off of its wireless carrier AWE, to be followed soon after by another downgrade. The question is simply put: did he do this under pressure to help secure a huge payday for Saloman Smith Barney when they became lead underwriter on this issue? The various rating agencies are rumored to be taking a look at Citigroup’s rating, as much for damaged reputation in the wake of Enron, Argentina, and now this latest fiasco!
Table had an interesting Friday that began late Thursday night as its founder—Briguy—posted an opinion on the topic “divide and conquer!” That post was soon followed by several others, and they are all listed immediately below!
Table has, for some time now, broadened its “reach” and has become a place to read all sorts of diverse opinion, much of it in anticipation of things that will soon affect the broader markets! It has become a place of opinion, information, humor, statistics, reference, and even the political cartoon. Today’s offerings are, in my opinion, some of its very best work! Opinion came in from around the world. American members in far away places typed some of it, while those who may never have set foot on American soil expressed their views from their own social, political, and geographic perspectives! There were so many diamonds today that they far outnumbered the dust. It reminds me of what George W’s Old West might have looked like when civility finally came its way around a century ago! They dug post after post and strung the wire that began to bring some semblance of order to an otherwise wild, wooly and very unpredictable place. Here, linked below, is some of Table’s very fine wire!
I will do a weekend market analysis and recap some of the gems missing from others and my own commentary later this weekend!
The Middle East and all of its ramifications!
IMF article and economic theory
Sephardi or Sephardim
Y2K and technology
Post 40949 by spirare Reply
August 23, 2002, Spot gold in New York settled at $306.20 an ounce, 50 cents lower than yesterday?s close.
The price of gold sank lower to test the $305 level where it found support before rebounding.
The price of gold appears to be following
London?s lead on light volume ahead of the weekend as there is little economic data to give direction.
While conditions are quiet, notably ahead of the long
weekend in London, steady physical support is helping to cushion the gold market, noted Rhona O'Connell at the World
Asian trading has been light and London is more or less somnolent, she added.
This seems to be the attitude in the U.S. market as well.
"The strength of the dollar, the perplexing
concurrent strength of the equities market, and very thin trading conditions due to cyclical considerations have conspired to keep the gold and silver markets on
the defensive," wrote Leonard Kaplan, president of Prospector Asset Management, in his daily client note.
"On the positive side of the ledger, we are
beginning to see the reawakening of Indian demand," continued Kaplan.
Gold is still up 11 percent on the year, and physical demand offers protection above the Aug 1 low at $300.30.
Silver finished the day lower on additional fund selling today, losing 5 cents.
Yesterday?s active trading in silver was supported by fund buying that lifted silver from lows.
Chartists are excited that a divergence has emerged on their radar screens and would presume that they would be waiting for further trend confirmation before loading on silver holdings.
In all probability, silver may have
a better chance to try higher during Friday?s trading with upside objective of $4.55 as stated in the Standard Bank of London daily report.
This reversal of fortune for silver could give additional support to the other precious metals.
Gold kind of followed silver to some degree.
London dealers said silver, widely used in electronics and photography, was under pressure from worries about industrial demand as the economic rebound struggles to get traction.
London gold was fixed this afternoon at $305.95 an ounce, slightly higher from $305.80 an ounce at the morning fixing.
Gold was under pressure in early European trading on light speculator selling.
With the anniversary of September
11 (911) looming, dealers could be wary of going short for fear of further terrorist reprisals stated in the daily Standard Bank
of London report.
appears to be finding support through physical demand around the current level from investors and growing interest from India," said John Reade, metals analyst at UBS Warburg.
India is the world's largest gold consumer market and is
heading into its important festival season when gold imports peak after monsoon rains.
"Few traders are prepared to shorten gold near the lows, due to the risks of sudden bullish events.
Gold should find its balance in its narrow $306 to $310
trading range until we get a clearer direction from currency and equity markets," said Reade.
The London gold market will be closed Monday for an extended three-day weekend.
Earlier Gold closed at U.S. $306.25 an ounce on Friday in Hong Kong, down $1.00 from Thursday's close of $307.25.
Spot gold in Asia was pressured by
U.S. dollar strength and rising equities markets overnight.
The fact that gold has traded in a narrow US$305-US$314 an ounce range this week, amid the
summer doldrums in the northern hemisphere, has also dulled trading interest, said traders.
"At this level, there's not much interest to trade," said a Hong Kong-based trader.
"It is very hard to call the direction right now.
We are up one day and down the next," said William Leung, dealer with Standard London (Asia) in Hong Kong.
"In the short term, I think that we will see range trading,
between US$305 and US$310," Leung said.
"But after the weekend, we could test lower.
There is just not enough interest to push us up."
Bullion prices should
benefit next month from a pick-up in demand for physical gold across Asia next month.
"Next week we could get us some key indications of physical demand,"
said a trader with a European bank in Sydney.
Buyers would love to restock
near the US$300 level or lower, but prices were unlikely to remain there for
long, the trader said.
It is reported that price conscious jewelers have been
looking for a pull back in the gold price before stockpiling inventory ahead of
the holiday season.
"Next week we could get us some key indications of
physical demand," said a trader with a European bank in Sydney.
love to restock near the US$300 level or lower, but prices were unlikely to
remain there for long, the trader said.
On a week with very little economic data gold continued to trade
within a fairly tight range within $305 to $310 an ounce.
The U.S. dollar has
strengthen and with little else in terms of economic data, gold?s trading range has been muted.
Wall Street continues to experience corporate scandals as a result
of claims concerning corporate malfeasance.
Today we hear that former CEO
Sandy Weill of Citigroup (NYSE: C) is now a target of New Attorney General
Elliot Spitzer?s probe of skullduggery on Wall Street in a widening probe of
market analysts and unethical (and possibly) criminal behavior at the hands of
The equities markets traded lower today though trading in
the gold pits ended as the market indices traded lower.
A report recently
released shows that I a survey among 130 of the nation?s economists,
expectations are weakening for an economic recovery in the second half (gee is
that a surprise).
Gold has been supported as Asian demand has been picking up
ahead of the festival season in India ? not to mention renewed geopolitical
tensions concerning the India-Pakistan border dispute along the Kashmir
The fall Asian wedding season will soon add to gold demand.
month jewelers and fabricators will begin to stockpile gold ahead of the western
holiday season although many have waited and hoped for lower gold prices.
They may be running out of time as they will soon need product to begin the
manufacturing of jewelry to meet expected demand.
***Precious metals are trading at bargain prices in light of deteriorating global economic conditions
worldwide geopolitical tensions.***
Take a look at the long term 10-year chart
(click on the thumbnail) and we see the price advancing on high volume out of a long flat base of 4 or
5 years duration.
Note also the high attained in 1994 at over $12, which demonstrates that this share has great upside
CALVF Risning from oversold conditions - bullish
Current Price of Gold
Tia. Pass It Along>>>>>>>>>>>>>>>>>>>>>>>>
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
OT: And some stories are diamonds and dust:
Post 40951 by lkorrow Reply
jeffbas, it was 30 years . . . Thinking back to the 70's, I didn't have an inflation-indexed salary, but loved those great raises and the large interest rates on my savings plan. Yes, I see how it could have felt if the raises didn't at least compensate for inflation. On the flip side, the low interest rates today are hurting the elderly who have their money in savings accounts and CDs, a point maldinero mentioned once. I guess there has to be a balance somewhere. I do hear your message on how miserable it could be under high inflation.
Post 40952 by lkorrow Reply
Ark, we'll get to 10000 yet. :-)
Post 40953 by lkorrow Reply
pmcw, Your group's cookbook is fantastic and very usable. And best of all, it's for a good cause. Thank you for posting the link.
OT: Pmcw! Art Laffer on Kudlow and Cramer right no
OT: lk, Thank you very much! The cause couldn't b
Post 40956 by oldCADuser Reply
Oh thanks PMCW. All I needed was ANOTHER reason for questioning my investment in AMD.
Post 40957 by Arkural Reply
lk-Indices-we should get near those tgt I
posted.............................................BUT, the mkt needs to
hold up in neighborhoods like: 8800/1350.
10g's, wellll ummmmmmmmmm, one step at a time, for the moment, I'm outta darts!
Post 40958 by jeffbas Reply
pmcw, the way I look at it is that foreigners are willing to add gold at the same or cheaper prices in terms of their own currency, but (so far) not otherwise. Since that is the most of the rest of the world, I am not overwhelmed with this sign of demand.
I would add that based on what has been stated here, it seems there is also "artificial" demand coming in from mines or investment banks looking to unwind prior hedges, which makes a flat gold price in terms of other currencies look even worse.
I would venture to guess that in terms of other currencies gold is struggling to stay even, probably consistent with the performance of other commodities, demand, and prices in general.
OT pmcw, You're welcome. For a first shot, it's pr
Post 40960 by lkorrow Reply
Ark, hear you, we'll see! Go markets, go USA! :-)