Table On-Topic Summary - 27-Aug-2002
A compilation of this board's financial/economic posts From 41126 to 41178

Post  41126  by  Decomposed       OT: Table ON TOPIC SUMMARY Aug 26, 2002

Post  41127  by  Decomposed       Reply
re: HLIT, $3.44, Arkural,

My reply is a bit late in coming, but I've been swamped with work.

Yes, HLIT crossed $3.44. By the time I saw that, it had already peaked and was falling. I spotted it at $3.29 and sold at $3.28... for a roughly 75% gain in 30 days (I don't have my calculator handy. What's 1.39/1.90?

It was a nice run, but... but I agree that a pullback is coming. On top of everything else, I read yesterday that fund managers will likely pare their inventories back a bit this week. I have to take THAT with a grain of salt, of course, since it's not in the best interest of a fund manager to leak when it's time to sell. The competent ones will stay tight lipped...

Nonetheless, I expect to buy HLIT -- and some other stocks I've sold -- back in the near future at substantial discounts. Now for some patience.

Post  41128  by  srudek       ot: lkorrow, does that National Geographic article

Post  41129  by  abveldeh       Reply
Trying to Beat the House (of Cards)
By Rick Pendergraft (
8/26/2002 2:41 PM ET

"New home sales set another record in July." This could be the headline for a number of articles written today, but it's not exactly telling the whole story. After announcing in June that new home sales eclipsed one million units for the first time ever, the government lowered the figure to 953,000. Now July becomes the first month to reach seven figures (until next month's revision, that is).

The market's initial reaction was one of skepticism. Apparently, those on the floor didn't trust the accuracy of the government's report. Can we make the bureaucrats in Washington sign-off on the accuracy and truthfulness of their economic reports? All of these revisions are ridiculous. Recently, there seems to be a bias toward the downside when restating the numbers. The initial report heralds better-than-expected results, only to have a follow-up months later that would've been in line with (or below) expectations. Sorry … I digress. Back to the housing report.

Regardless of whether or not the month of July provided a record number of new housing starts, I can't help but believe the housing bubble is about to burst the same way the Internet bubble did. The economy is weak, yet the number of new homes being built continues to climb. If employment continues to weaken, how are these homes going to be paid for? And what are we going to do with the existing homes out there? I realize that existing home sales have been rising almost as rapidly as new home sales, but it seems that supply is going to outpace demand. Going back to basic economics: prices fall when supply is greater than demand. Falling prices on a home that's mortgaged at 95 percent of its value is a scary proposition … not only for the individual, but also for the lending institution.

My wife and others have accused me of being too pessimistic. I can't help it if I look at things a little different from the majority. While reading one report about the housing numbers, I came across a statement that said some analysts were concerned about a bubble while others were not. One of the reasons the "concerned" crowd cited was that demand was being driven by demographic factors, such as immigration. How is that good? Whether they're referring to immigration from one region of the United States to another or immigration into this country is irrelevant. If it's the former, then shuffling people from region to region isn't going to create more demand. If it's the latter, then adding more workers to an already flooded labor pool isn't going to help the economy.

Here's one last note of concern from the housing report. The average price for a new home fell from $220,300 in June to $215,200 in July. The median price fell from $186,200 to $170,500 during the same time period. Using the government's original median price data for July, sales for the month amounted to $173.4 billion. If you take the revised number and median price data for June, the total comes to $177.45 billion. In other words, the number of new units might be up, but the amount spent on these new homes isn't.

- Rick Pendergraft (

Post  41130  by  clo       OT:SquawkBack Poll: Iraq invasion?

Post  41131  by  clo       Reply
+8.7% July durable goods! +3.9% when you take autos out.
June had been down (-4.5%)
Put your seat belts on...! Rally still intact.
Consumer Confidence out at 10:00
Enjoy! clo

Post  41132  by  abveldeh       Reply
clo how much when you take housing bubble of. -x%, Intel is not soaring!!

Post  41133  by  StockRyder       Reply
Thanks for the HLIT chatter. It helps round my perspective as I review my own portfolio. After doing some rebalancing last month, HLIT has suddenly become my largest holding! Time to rebalance again, perhaps to some lagging XICO shares?! (Strategy, strategy... Hmmm)

Too bad I've dug such a big hole for myself this year. I can't see the light but the air smells fresher in the direction I'm going.

Post  41134  by  pmcw       Reply
Ryder, Glad to see you're getting out of the TYC hole. I think your rebalance target is a good idea. I still like HLIT and I'm holding a ton, but at today's price, I like XICO better. Regards, pmcw

Post  41135  by  clo       Reply
abveldeh, "housing bubble"?

While I haven't followed this very closely, they stated yesterday on CNBC, that the supply of houses is very small as compared to years ago when housing did bubble.

They said that fact that supply is small means NO bubble at this time.
Just so you know what they are saying...
I can't confirm or deny.
Good luck, clo

Post  41136  by  abveldeh       Reply

Post  41137  by  Tampathom       OT: The Iraq Debate: The Coming Counterattack
Post  41138  by  oldCADuser       OT: The results of the poll are in and the results

Post  41139  by  clo       Reply
abveldeh, "housing bubble", yes, I read that yesterday.

Please know that I'm NOT involved enough with this info to confirm or deny. Just wanted you to be aware of what "the word" is, at least the one their are feeding us.

You might want to explore this site?
I haven't, so if you find some gems, please share them.
Enjoy your day ;)) clo

Post  41140  by  clo       OT: Iraq vote from CNBC:

Post  41141  by  Arkural       Reply
Decomp-Hlit, nice to have pocket change, eh. :-)

Post  41142  by  Bullbud       Reply
Somebody was trying to tell me what a pos SLGLF was...

And that they are ALWAYS right. 100% right. WRONG! I'm up 77% on free shares. As you were gentlemen! Good luck with your investments!

Post  41143  by  spirare       Reply

Gold Stocks Update, editor

Caledonia Mining Corporation

CALVF Risning from oversold conditions - bullish

Current Price of Gold

Interview With: S.E. Hayden
President and CEO
Dated 07/02/2002
Click here if you don't hear audio...

Imo. TIA. Pass It Along>>>>>>>>>>>

(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)

Post  41144  by  Arkural       Reply
I guess Lu~cy ain't gonna dance afterall, too shy? eom

Post  41145  by  Arkural       Reply
StockRyder-Xico-I know of at least a few folks that will fire a couple arrows if the apple falls under 4, however they can afford to do so.

Just the same, I'd rather be prudent than not, in this current mkt climate.

Post  41146  by  jeffbas       Reply
sr, I would still prefer to see historical Price/Sales to any other measure so far.

I think P/E is worthless, despite being widely used by the press - since the E at the bottom of a cycle is not a particularly meaningful guide to anything, especially with the writeoffs now required by accounting rules versus 40 year amortization in past cycles.

I have commented on Tobin Q before. P/R seems to have a similar drawback. To the extent that future earnings will be driven much more by intellectual capital rather than physical plant and equipment (which retained earnings were typically invested in), I think those measures are a better guide to the past than the future.

For example, with the (ongoing) rationalization of manufacturing out of the hands of the big electronics companies into the hand of more efficient ECM's, Tobin Q and P/R would look at those companies as a group and say they are overpriced versus the past, at any given stock market level. However, as design, sales and marketing organizations (with little fixed assets and having reduced their retained earnings by selling/writing off plant and equipment) they are actually more profitable and less risky (as the ECMs have found out in this downturn) - and inherently more valuable than before, at any given stock market level.

Post  41147  by  clo       Reply
CBO Predicts Four Years of Deficits

By Jim Abrams
Associated Press Writer
Tuesday, August 27, 2002; 9:13 AM WASHINGTON –– The federal budget will be in deficit for the next four years and will only see substantial movement into the black in later years if the tax cuts enacted last year expire in 2010 as scheduled, the nonpartisan Congressional Budget Office said Tuesday.

The CBO also projected that this fiscal year's budget deficit will hit $157 billion, a result of "a sharp decline in tax revenues coupled with double digit growth in spending."

It said the outlook for fiscal 2003, starting Oct. 1, was a budget shortfall of $145 billion, and that the federal ledger will only return to the plus side with a $15 billion surplus in 2006.
The White House last month put this year's deficit at around $165 billion.

The return of deficit spending this year, the first since 1997 and after a $127 billion surplus in fiscal 2001, is generally attributed to the fragile economy, the shaky stock market and the government's response to the Sept. 11 terrorist attacks.

Democrats also blame the 10-year, $1.35 trillion tax cut that President Bush pushed through last year.
The budget numbers are likely to become a factor in this fall's midterm elections, with the parties blaming each other for frittering away a budget surplus that only 18 months ago was estimated at $5.6 trillion through 2011 if Social Security money is included. It now appears inevitable that the government will have to dip into Social Security surpluses to pay for other programs, an action both parties have pledged to avoid doing.

The CBO said that if the tax cuts expire in 2010, the budget will return to substantial surpluses in the years 2010 through 2012 and that the government will be $1 trillion in the black over the 2003-2012 period.
Over that 10-year period, the CBO said, the general budget will record a $1.5 trillion deficit, compensated for by a $2.5 trillion surplus in the Social Security fund.

The Bush administration and congressional Republicans are pushing hard to make the tax cuts, which affect estate taxes and taxes on married couples, permanent.
The White House's Office of Management and Budget last month estimated the 2003 deficit at $109 billion, but said the government will return to a surplus of $53 billion in fiscal 2005 and record a cumulative surplus of $827 billion in the 2003-2012 period.

OMB spokesman Trent Duffy said the White House and congressional budget offices agree that the war on terrorism and the recession – rather than tax cuts – are the main causes of the return to deficit spending. "We have a shot at getting back to balance if we do what the president is talking about."He said that entails encouraging economic growth while holding down government spending. Democratic plans to increase spending could add trillions to the long-term deficit, Duffy said.

The CBO projections assume current rates of spending, and do not include ambitious plans by the Bush administration to further increase defense spending or efforts by both parties to give seniors a prescription drug benefit.
The surplus projected over the next decade is nearly $1.4 trillion smaller than CBO estimated last March.
The office said reductions in revenue estimates and hikes in spending were equally responsible for that change.–––On the Net:CBO:

Post  41148  by  Decomposed       Reply
re: HLIT, Arkural

Yes, it's nice to have "pocket change," even though whenever I do, it always seems to burn a hole trying to get out.

I don't recall whether I bought or sold HLIT specifically based on your recommendations... but I probably had them at least in the back of my mind. I've definitely paid special attention to your picks for a while, and based just on your recent SANM and HLIT calls, I'm very impressed. Do you have any particular buy and sell techniques, or particularly valuable newsletters/books/other resources you'd be willing to share with the board?

Post  41149  by  Arkural       Reply

For the time being let me just say the majority of my work is, to use maniati's word, 'intuitive'. Over the yrs I have posted on Table hundreds of what I thought might be helpful sites, a couple books, etc.
I have yet to subscribe to a pay-for stk picking service, only one newsletter did I ever pay for, you might be able to guess the author.
Thx for the compliment.
I'll try to explain more later on

Post  41150  by  danking_70       OT: Maniati: The unfortunate one-way street of M

Post  41151  by  abveldeh       Reply
clo what I meant is the construction materials involved in the housing bubble contribute largely to the durable goods figure besides cars and once these sources dry up???

Post  41152  by  clo       Reply
abveldeh, besides the issues you noted, consider the

possibility that these "great new numbers" could be revised by Our government...

However, if housing continues to be strong I imagine durables will also.
Autos need to offer low to nil interest rates, but this will catch up. Unless new emission and or gas mileage requirements kick in. IMHO

Time will tell...
Enjoy your day ;)) clo

Post  41153  by  abveldeh       Reply
danking_70 Danes are not the most appreciated people in Europe for the extremist way they treat foreigners with some colour. Your reference to Pim fortuyn who I have met personally concerning our party matters has nothing to do with the way Denmark treats coloured immigrants.

I think your story should therefore be red the otherway around.

Post  41154  by  maniati       Reply
srudek: Well, I'm going to respond, anyway! I haven't given up - yet. But, after responding to you and Culmus, I think I'll be pretty much spent on this topic, which I'm sure comes as a relief to everyone.

You say that options "pervert everything they touch." They haven't by any chance touched you, have they? :-) That might explain some of those over-the-top comments, such as "pending the government outlawing them along with heroin," and "You don't need to reply to this; I think my logic is pretty unassailable, personally...."

Ok, so that was a little humor at your expense. I couldn’t resist, but I meant no offense. You are certainly not the only person who feels strongly that employee stock options should not be allowed. But, I'm not trying to take issue with that. Now, I don't share your belief that options are inherently evil, but the point of my original post was not to either defend or attack options; it was simply to advocate that they be accounted for in a way that reflects the economic reality. That's my beef. If I got my way, we would all be better off, because the accounting rules would be that much better at describing the economic condition of corporate America.

Then, if you want to ban options all together, if you want to make it punishable by death (:-)) for anyone to create, hold, or exercise an option, then go ahead. That has nothing to do with the rules of accounting. That's a societal preference, and if you can convince enough people to outlaw them, then more power to you. But, regardless of how that fight turns out, I want to account for them correctly. I don't want to say, "Well, we don't like anything that dilutes shareholder value, so let's call 'dilution' something else. Let's call it an 'expense.'" That sounds like Doublespeak.

Let's say you're trying to solve the energy problems in California. You can pass a bond-issue referendum to build more plants. You can pass a law that raises rates, imposes a tax, or flat out caps the number of watts people can consume. There are a million things one could do - from totalitarian regulation to laissez-faire capitalism and everything in-between. But there's this group of people, called MOABE (Make Options A Business Expense), and the way MOABE wants to solve the energy problem is by changing the definition of what a "watt" is. A watt measures power, so MOABE wants to reduce power consumption by changing the definition of a watt. In physics, power equals voltage times current: P = V * I. MOABE says we should change this to voltage divided by current: P = V / I. That will make power a much smaller number. Presto! Problem solved.

Now that is nonsense. Right out of Alice in Wonderland. You run into that problem any time you try to call something that which it is not, just as it is nonsense to say that yellow is blue, or a fish is a bird.

And an option is not an expense.

Now, it turns out, you're saying options are not an expense, but they are income, in the form of wealth confiscated from the shareholders. Well, I totally disagree, but let's say just for the sake of argument that that is true. That "confiscated wealth" eventually ends up in the hands of the employee when he receives the options, right? So, if the confiscation of wealth is income, then the subsequent distribution of that wealth to the employees is.....guess what? guessed it! expense! So, just as every confiscation has an offsetting distribution, all the income from confiscation is offset by a corresponding expense, with the result that there is no net effect on the company!

Well, there's a much easier way to get to the same result, and that is to simply realize that the issuing of employee stock options is neither income nor expense to the company.

By the way, that wealth that comes from the shareholders never really passes through the company, you know. It goes straight to the employees, without passing through the company. Yes, the legal right of ownership is created by the company. But the economic benefit of ownership does not come from the company - it comes from the shareholders. And it's the economic condition of the company that the accounting rules should reflect. There is no way in the world the economic benefit of ownership can come from the company. Only the shareholders possess that benefit. The company, itself, does not. (The company cannot own itself.) So, the company cannot give something it does not have to begin with.

Let's take that example of yours where the company confiscates stock. Do you realize that, even then, the company is not confiscating wealth?! They can steal shares, but they cannot steal wealth. When the company puts those stolen shares in the treasury, the remaining shares simply become worth more. Oddly enough, those stolen shares have value anywhere on the planet except for one place: the issuing company's treasury. As treasury stock, they are worthless. Here's what Anthony & Reece say about treasury stock, in their "Management Accounting" text:

Treasury stock is a corporation's own stock that has been issued and subsequently reacquired by purchase. The firm may reacquire its shares for a number of reasons....Such treasury stock while held by the corporation has no voting, dividend, or other shareholder rights. Since treasury stock is clearly not a "valuable thing or property right owned by a business" - a corporation can't own a claim against itself - it is not shown as an asset....

That being the case, the confiscation of stock by the issuing company cannot be income to the company. That's the one place where the stock has no value.

When an option is exercised, the payment of the exercise price to the company could be considered income. I suppose one could debate whether that should hit the income statement or not. I think it should just affect the balance sheet ("Cash" and "Paid-In Capital"). But, regardless, the issuance of the option is not income. The transfer of wealth from shareholder to employee is not income to the business.

Anyway, I'm not trying to tell you not to hate options. In fact, despite my different view on the evils of options, you will find me quite sympathetic to the cause of the ripped-off shareholder. I'm all for doing something to curb corruption and largesse. But I won't call options an expense because they are not. You can change the accounting rules to make them an expense, and, guess what? They still will not be an economic expense. We'll just be calling them that, but we'll all be wrong, because that's not what they are. And the same is true of calling them "income." They are not income, either. We can all say the world is flat, because we hate roundness, but we would all be wrong. We cannot will something out of existence simply by calling it that which it is not, any more than one can cure cancer by calling it a butterfly.

sr, these things seem to have you so upset that you don't see that you are playing right into the hands of the very people who use them. Those execs are just laughing, saying, "Yeah, let them think options are an expense. We can always pad our income statement some other way to make up for it, like we always do. But, this way, we divert their attention from the truth, which is that their interests are being diluted." They've got you sifting through the sand in the wheelbarrow, looking for stolen goods, when, all the time, they're stealing wheelbarrows. Expensing options is the one thing corporate America has proposed doing; doesn't that make you suspicious? They'll be happy to make options an expense. Then, they will declare the problem solved, and they will go right back to issuing options, or whatever else. Then where will you be?

And, when you complain down the road, they will say, "We did what you asked."

And when everyone else complains about how the accounting rules do not mirror the economic reality of the businesses they purport to describe, and when investors complain that they cannot make sense of the financials, some astute historian is going to come along and say, "Well, how could they? We gave up on the idea that the rules should mirror reality a long time ago. The accounting rules are now viewed as a tool to manipulate behavior, because it was easier to try to coerce behavior by changing the accounting rules than it was to get Congress or any other legislative body to do anything about it. So, it was decided that, by changing the accounting rules, we could re-write the laws of physics. That's why we call options an expense. That's why we made the accounting category called 'Extraordinary Income From Theft.' That's why the accounting rules say that P = V/I. That's why the accounting rules say that bin Laden is dead. That's why the accounting rules say that Social Security will never go broke. That's why the accounting rules say that 'Teletubbies' is good television and 'Saturday Night Live' is still funny."

You cannot make a problem go away by calling it something other than what it is. When you do that, you still have the original problem, and now you've added confusion on top of it.

Don't take my word for it; go ask Alice. :-)

Post  41155  by  maniati       OT: danking: Ok, now you're really catching on. I'

Post  41156  by  Warstud       Reply
US housing--bubble, bubble
By Ian Campbell
UPI Chief Economics Correspondent
From the Business & Economics Desk
Published 8/26/2002 6:41 PM

"Bubble, bubble, toil and trouble," is not what Macbeth's witches said. It is, rather, the phrase that has entered the language. And now, after one bubble has caused rather a lot of trouble, another is bubbling up. "Double, double toil and trouble," was what the witches said. And that is what the U.S. economic cauldron is cooking: Double trouble as a second asset price bubble is allowed to boil.

What are we talking about? It is a question, we fear, our readers often ask. But take this August economic commentary from the Mortgage Bankers Association of America and our meaning may soon become clear. It is about asset price bubble No. 1, now an ex-bubble: "Stock prices were hammered sharply lower over the past month, widening the losses of consumer wealth, raising the cost of equity capital to businesses, and taking a substantial toll on business and consumer confidence."

In 1995-1999, but especially in 1998-99, the U.S. stock market bubbled. The world applauded it at the time. Indeed not to applaud it was considered wrong-headed and perverse. The cauldron was bubbling healthily with high growth, low inflation, high productivity, capital inflows, strong dollar, new paradigm and miracle economy as ingredients and never an "Adder's fork" or "blind-worm's sting," nor an eye of Enron, nor a wool of WorldCom, nor "a hell-broth boil and bubble" in sight. Yet, in August 2002, more than two years since the cauldron suddenly started to cool, its poison is still running through the veins of the U.S. economy.

Bubbles can be fun, but there are problems with them. When the prices of assets inflate rapidly, the economy becomes distorted in all sorts of ways. Why? Add $1 million to your bank account and -- assuming you are unaccustomed to having $1 million in it -- your behavior is likely to change. You could, after all, always use a second car, or a third one. Your computer is a little old, and on the new ones you can make your own videos. Speaking of which, a video camera would be nice. And a bit more room. Perhaps a house extension would be good? Or even, a new home -- which we will come to.

Put a million dollars into pockets is just what the stock market did in its late 1990s bull run -- and if not a million, half a million, or a hundred thousand, or ten thousand. Not all Americans shared in this bonanza. Only about half the population has direct ownership of shares. And this money, it is true, did not go direct into bank accounts but mostly into saving schemes intended to provide pensions. But some of the extraordinary stock market gains were converted directly into house purchases or new cars or new computers, and a sense of growing affluence persuaded many Americans and, on average, all of them to save much less of their income and spend more of it.

But what if the source of that spending, that additional magic million, suddenly disappears, as the stock market drops back to where it was before it began to boil? Then a great deal of consumption and investment has been encouraged by funny money. The adjustment may be difficult. More income may need to be saved to provide for the future or to service debts taken on in the champagne days. Americans are just beginning this process. It explains why, in our view, the prospects for consumer demand and growth in the U.S. economy are poor next year. Double-dip recession is a very real prospect. But one sector at least is strong, a defense, a bastion. What is it? Housing.

Economy struggling? You would not think it from some figures. The Commerce Department reported Monday that new home sales rose to 1,017,000 in July: the first time sales of new homes had ever exceeded 1 million units in a month. The sales figures in four of the last five months are the highest the market has ever recorded.

The National Association of Realtors celebrated Monday other bullish data on the housing market, for sales of existing homes in July, which "rose 4.5 percent to a seasonally adjusted annual rate of 5.33 million units in July from an upwardly revised pace of 5.10 million units in June," the NAR reports.

Housing sales are at an all-time high -- even as the economy, emerging from its 2001 recession, struggles to obtain the momentum to avoid renewed slowdown. This is a mismatch that is easily explainable yet nonetheless a cause for alarm.

It is not difficult to understand why the market is booming. David Lereah, NAR's chief economist, said "Mortgage interest rates were ... the lowest since Freddie Mac started tracking them in 1971, and looking at other sources we have to go back to 1967 to see interest rates as low as they are today. Combined with other strong market fundamentals, this is keeping the housing market on track for another record year."

The NAR forecast record sales of new and existing homes in 2002. In other comments, Lereah said, "the fundamentals show us there is no risk of a national housing bubble."

Indeed so, how could anything be wrong? This, after all, is the fourth year in which the housing market has boomed, showing that boom is sustainable for all time, just like the 1995-99 stock market one.

But consider some figures. In the first half of the 1990s the annual level of existing home sales was almost invariably below 4 million units per year. Since the beginning of 1999, sales have been consistently above 6 million units per year. Is this super-high level of activity sustainable?

In fact, in the NAR's own data, there are signs that the boom is beginning to ease. In the Northeast where the financial centers of Boston and New York dominate, existing home sales were down by 3 percent in July compared to July 2001. And in the West, too, where tech used to be king, sales were down, by 2.9 percent. It is no coincidence that these are areas in which the late 1990s economic bubble bubbled hottest and where the post-bubble pain is being felt first. Here, even with interest rates still lower, the first signs of cooling can be seen.

The housing bubble cannot inflate much further. If there is a solid economic recovery, interest rates will rise and demand for housing will fall. And when demand falls, house prices, too, are likely to drop from their current high level. Those who have indebted themselves to buy at a high level are likely to find their mortgages worth more than their homes. That is unfortunate and will act as a drag on the economy for some years to come.

But another outcome is perhaps more likely. It is only housing that is responding wholeheartedly to the current record low interest rates. The danger for the United States is that because of the damage done by the first asset price bubble, still lower interest rates do not stimulate much of a recovery. Yet whether this is a better outturn for the housing market is in question. Rates may fall but, with unemployment rising and incomes stagnant, house prices may drift -- and still have to face the impact of higher interest rates when the U.S. economy finally does strengthen. After its record run, the housing market's slump could also be long-lived. That is worrying.

The U.S. economy was poisoned, we said, by that first steaming cauldron in which equity prices bubbled. The second bubble, in housing, risks doing further harm and perhaps greater harm. The wealth effect from housing, the International Monetary Fund argued in a report this year, is greater than that from stocks. More people own houses than stocks. The housing boom that most economists applaud may be more distorting and leave more of a negative legacy than the boom in stocks.

U.S. economic policy got it wrong in the 1990s when it allowed stock prices to soar out of control. The lesson has not been learned. Now house prices are emulating the stock bubble -- and most people, including Federal Reserve Chairman Alan Greenspan -- say this is good. Double, double toil and trouble. It is all a charm of powerful trouble.

Post  41157  by  clo       OT: maniati: beheading!

Post  41158  by  spirare       Reply
Dollar Index Cash (NYBOT:DXY0) well, the $$ going down...

Gold looking good, soon big breakout*^*^*^*^*^

Gold 27 Year Seasonal (1974 - 2000)

Gold Stocks Update, editor

Caledonia Mining Corporation

CALVF Risning from oversold conditions - bullish

Current Price of Gold

Interview With: S.E. Hayden
President and CEO
Dated 07/02/2002
Click here if you don't hear audio...

Imo. TIA. Pass It Along>>>>>>>>>>>

(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)

Post  41159  by  srudek       Reply
maniati: I thought you might respond! ;-) Your original entry was great because it really got the wheels in my head whirling. To a significant extent, my entry was intended as a joke. I hope it got a few chuckles from a few people.

However, having written it and worked out the logic, I really do think that accounting for stock options as a separate line item of INCOME is the best way to handle them I've seen yet. Yes, the second entry to debit salary and credit Extraordinary Income would zero the net transaction, but what's wrong with that? It would still leave a highly visible trail across the financial statments. It would also come closest to matching the accounting and physical reality of what's happening -- wealth which was reported to shareholders as THEIR equity is being taken back . . . and it isn't just an adjusting entry (it's not a mistake being corrected). My treatment seems much more correct and clear than a simple dilution mentioned in a footnote.

Simply calling them "expense", as you pointed out, completely violates basic accounting principles. Keeping them only as a note at the bottom of the financial report, perpetuates the secret dilution, as most people who buy stock do NOT read the entire financial statments and the market is -- and will surely continue to be -- marketed as an investment for the general population.

Anyway, I've hopefully given you something to ponder and smile about! I am not as upset over options as you might think, as I haven't lost so much to them -- especially if the economy proceeds to full recovery. I don't think they are "evil" any more than I think a nuclear bomb is evil; but I think both are potentially too dangerous to be freely available.

It does bother me that you and pmcw still appear to defend their easy availability. Do you have a reason why you think their "legitimate" function (compensation) couldn't be better addressed in a cleaner way? If you really want employees to think as owners, there are many better ways -- require them to accept part of their salary as stock which must be held.

Post  41160  by  stockmom       Reply
SEC Tightens Reporting Rules for Stock Trades

Washington Post Staff Writer

The Securities and Exchange Commission unanimously approved rules today that will force corporate insiders and large shareholders to report trades of company stock within two days, dramatically reducing the time period to disclose such trades.

The insider trading disclosure rules revamp practices that investor advocates have long said hamper public access to vital insider trading information.

Currently, insider trades must be disclosed on the 10th day of the month following the month in which transactions occur, giving a lag time of as many as 40 days before the investing public knows about buying or selling by company executives or directors.

The insider trading rules were part of a broader array of tougher disclosure requirements approved today and the commission's first steps to implement the Sarbanes-Oxley Act, enacted last month to rebuild investor confidence in a market hit hard by accounting scandals.

"We are determined to give real teeth and meaning to the protections in the new law," SEC Chairman Harvey Pitt said at today's open meeting, the first time the commission has had a full five-member complement in more than two years.

Insider trading disclosures will have to be filed electronically within a year, according to the new federal law. Currently the vast majority of them are filed on paper and are not available on the Web.

"There will be a logistical burden on issuers and insiders, but there is no general feasibility problem," said Alan L. Beller, director of SEC's Corporate Finance division.

The commission also agreed to shorten deadlines for companies filing quarterly and annual reports. Public companies will have to file their quarterly statements--form 10-Qs in SEC parlance--within 35 days, rather than 45. Annual reports, otherwise known as 10-Ks, will have to be filed within 60 days, rather than 90.

At the urging of many large companies, the commission agreed to phase in the accelerated filing deadlines over three years, and the rule will initially affect only companies with market values of more than $75 million.

The commission also approved rules that force corporate executives to certify that their companies have internal controls which protect against inaccurate financial disclosures, another element of Sarbanes-Oxley.

In addition, executives at investment companies will have to certify their semi- annual reports filed with the SEC are accurate to the best of their knowledge. The agency also proposed creating a new form that would force fund executives to verify shareholder reports that mutual fund investors get in the mail regularly.

The new rules take effect Thursday.

Post  41161  by  pmcw       Reply
Ryder, Did you swap some HLIT for XICO this morning. If you did, you're happy. ;o) Regards, pmcw

Post  41162  by  stockmom       OT: NYC/San Francisco 2012 Olympics Finalist
Post  41163  by  danking_70       OT: Shah's son in U.S. plots return of royalty to

Post  41164  by  spirare       Reply
August 27, 2002, Spot gold in New York traded higher at $312.90 an ounce, up $2.90 from
yesterday? close.

Gold was supported by a weaker stock market after consumer
confidence data revealed weaker than expected numbers.

The Conference Board
said its Consumer Confidence Index fell to 93.5 from a revised 97.4 in July.
Analysts had been expecting a reading of 97.0.
The industry group?s index, based
on a monthly survey of some 5,000 U.S. households, is closely watched because
consumer confidence drives consumer spending, which accounts for about
two-thirds of the nation?s economic activity.
Durable goods orders increased and
that was initially perceived as bullish for stocks, except much of that increase has
been attributed to zero percent financing in the auto sector so this data carried
little weight and investors focused on the consumer confidence data instead.

Traders said they expected gold to breach resistance at $312.00 before the end
of the week.

Geopolitical tensions are rising and the preparations for war continue.
U.S. warplanes on Tuesday attacked a radar site in a northern Iraq
"no-fly" zone and an air defense command facility in southern Iraq, the U.S.
military said, citing hostile acts by the Iraqi military.
The Defense Department said
the planes attacked the sites after the Iraqi military targeted U.S. and British jets
policing the two no-fly zones.

With increased tensions between the U.S. and Iraq,
"we would not expect too many short positions (in gold) to be built by U.S.
players in the next few days," said Frederic Panizzutti of GoldAvenue, a major
gold online trading company.

Futures prices in New York broke above $312,
"opening the room for more upside momentum," he added.
Physical activity for
gold around the world has also picked up these recent days and "will be one more
positive factor providing the necessary support for a move toward $315,"
Panizzutti said.

London gold was fixed this afternoon at $310.50 an ounce, up from $309.40 an
ounce at the morning fixing.
"Gold has rallied...on renewed concerns about
potential U.S. military action in Iraq," said UBS Warburg analyst John Reade.
Spot gold hit a high of $311.40 an ounce, up from New York closing levels of
$309.45/309.95 an ounce on Monday and late European levels of
"It would appear only a clear break of $312.00 would attract
fresh investment buying and aggressive short-covering," said Standard Bank
London in a market note. Yesterday, U.S. Vice President Dick Cheney on
Monday laid out the White House's case for pre-emptive action against Iraq,
citing mortal danger to the United States.
"The continued noises coming from
North America on what they intend to do about Iraq have pushed gold higher,"
one trader said. U.S. Vice-President Dick Cheney endorsed pre-emptive action
against Iraq, saying it was safer to act against Baghdad's weapons program than
to do nothing.
Separately Presidential spokesman Ari Fleischer said White House
lawyers had concluded President George W. Bush had authority to take military
action against Iraq, without special congressional approval.
Gold prices appear to
be reacting as a safe haven as talk of war and increasing geopolitical tensions
dominate the news.
"Gold seems happy to trade $306-$311 for the moment, but
continued U.S. economic uncertainties and war tensions should add to its
safe-haven value," said James Moore, analyst at
O?Connell of the World Gold Council notes in the Daily Gold Market


The situation with respect to the Middle East and by association the
oil market has had an increasing impact on gold market sentiment over the past
few days and will continue to attract attention, although the dollar and equity
markets are still cited as the primary elements driving short term intra-day

The background fundamentals reflect steady physical buying at the
lower levels, which is defining the lower end of the market?s present range as
standing between $305 and $308/ounce.

Spot gold jumped Tuesday in Asia, as a weaker U.S. dollar confounds earlier
expectations that gold wouldn't move much from Monday, traders said.

The weaker dollar is likely to have caught some traders and funds short, whose
covering subsequently pushed gold higher, said a European bank trader.

nervousness in the market as the anniversary of the Sept. 11 terrorist attacks on
the U.S. approaches is also helping gold, said Martin Mayne, a bullion trader with
NM Rothschild & Sons (Australia) Ltd.

Thom Calandra of CBS Marketwatch notes in today?s article:
Adrian Day, another longtime gold investor and president of Global Strategic Management in
Maryland, says American investors are puzzled by gold's gyrations this summer.

The metal has actually lost ground during the horrific summer season for the U.S.
stock market.

"More and more investors seem to be buying into the arguments
that the markets are managed," says Day, reflecting growing reports that New
York City banks are using derivatives to deflate gold prices.

"Whereas two years
ago, this was very much a fringe argument, it is now more widely acknowledged
as a valid possibility."

Mary Anne and Pamela Aden, sisters and editors of the
Costa-Rica-based The Aden Forecast, are confident the gold sector will outpace
other investments this year.

With that performance will come greater respect for
the metal.

"Since gold has been down to dull for most of the past 20 years while
stocks were all the rage, most investors don't know much about it," the sisters told
me in a joint e-mail.

"But they have seen gold and gold mutual funds outperform
all other investments this year.

If this continues, it'll attract more attention."
Sinclair, the grizzled head of Tan Range, says Joe Q. Public will sit up and take
notice when gold prices make their next move higher.

"I would tell Joe Public that
if he sees gold close above $330 and then above $354, he should do everything
to set his financial houses in order," Sinclair says.

"It means there are serious
problems on the horizon well beyond the decline in the stock market and gas
costing more.

Volatility in the equity markets means Stay Away."


Oil imports keep arriving in the United States and yet oil inventories
have decreased over the last four months.

So where has this oil gone?

It appears
that the oil is going into the Strategic Petroleum Reserve in anticipation of military
action against Iraq in coming months.

Even though Saudi Arabia has as much as 6
million barrels/day excess capacity, oil prices are moving closer to $30/barrel for
light sweet crude.

It appears that war is on the horizon whether or not the U.S. will have any allies in this latest venture
against Iraq.

This afternoon it was
announced that Saudi Prince Bandar, who is also the Saudi ambassador to the
United States, is visiting President George W. Bush at his ranch in Crawford,

It is reported that the prince was told that Saddam Hussein is a ?menace?
in the Middle East and he must be dealt with.

The pressure is being put on Saudi
and others to build support for the coming war.

The equities markets are
deteriorating once again.

It appears that the markets have ?topped out? as the fall
months are rather difficult periods for the stock markets.

Most of the stock market crashes have occurred in September and October. September is also the
critical ?pre-announcement? month for the third quarter.

It is expected to be a
?weak? month for the markets.

The price of gold has held up well during these
?summer doldrums? when trading is usually very light, however, the rising
geopolitical tensions in the Middle East and increased buying in Asia have given
the precious metals a boost.

Gold buying has begun to pick up according to the
World Gold Council as Central Asians gear up for the festival season.

***Many bullion dealers report sharply increased sales of precious metals in what has been a typically
slow season in years past.***

Gold 27 Year Seasonal (1974 - 2000)

Gold Stocks Update, editor

Caledonia Mining Corporation

CALVF Risning from oversold conditions - bullish

Current Price of Gold

Interview With: S.E. Hayden
President and CEO
Dated 07/02/2002
Click here if you don't hear audio...

Imo. TIA. Pass It Along>>>>>>>>>>>

(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)

Post  41165  by  pmcw       Reply
I'm hesitant to even post this on the risk that someone might fall for this snake oil salesman, but I feel confident that Table readers are all smarter than that.

The stock market is a zero sum game inside the performance of the total market index. The S&P 500 makes up 75% of that index. To feel that you can regularly beat the S&P 500 over the long haul with a sizeable portfolio through trading is simply folly. It happens so infrequently that you can count the winners on a meat cutter's hand. Please note that small investors buying only a couple of stocks or trading change can do it for a few years, but it simply isn't done over the long haul by investors who are playing with estate size blocks of money. The reality is these guys, just like Tice, have had a couple of good years and they want you to think the gravey train is waiting for you. It ain't! Their wallet is waiting for your money.

Anyway, the rant is off and I just want to share with you how low has gone to try to raise a buck. Here is their spam email (yes, I've called, I've emailed and I've pleaded for them to quit spaming me):

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And today, sadly, my research shows that most investors still own the
wrong funds.
They're counting on aging superstars to bail them out...piling into funds
ill-suited for these uncertain times...and betting on yesterday's "hot
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How about you? Do you own the RIGHT Vanguard funds-those
headed for BIG GAINS now...or the WRONG funds that are simply
loaded with RISK?
I can help you answer that question-FREE!
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I run a "watchdog service" for mutual fund investors called "The
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In fact, there's just a small handful of funds I recommend right now...
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That's why I urge you to take advantage of this FREE offer and get
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don't, thank your lucky stars and avoid it like the plague.
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these secrets-as far as they're concerned, you're on your own. But
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Best of all, this offer is totally FREE. Don't wait. Don't pass up the
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That's the difference between smart management of your Vanguard
investing versus old-style buy-and-hold.

Post  41166  by  pacemakernj       OT: Linda, I am sure it was Cheney's comments that
Post  41167  by  pacemakernj       OT: Clo, 2044 of the dumbest people I know. Are th

Post  41168  by  pacemakernj       Reply
Roof, I haven't spoken to you lately. Any thoughts on why KRY has been acting so weak in the last few days. The chart is looking terrible. I haven't herd a word. Your always good for some insight. Appreciate your comments. Hope all is well by you. Pace

Post  41169  by  lkorrow       Reply
srudek, I wasn't able to find the amount of water used to raise animals for flood in a chart as I'd like to see it, but did find some references in books:

- one hamburger, fries and soda: 1500 gal. of water
- Thanksgiving meal: 42,674 gal.
- Raise, process and and cook a 20 lb turkey: 16,300 gal.
- Stuffing: 6,004 gal.
- green beans, carrots and milk for 4: 4,000 gal.
- Pumpkin pie: 1240 gal.

- One flush of a standard toilet uses more water than most of the world's people use in a day. Flushing is around 70% of personal usage. [Some years ago, NYC was running out of capacity and gave away free low-water toilets. Should be a national policy on this, imho!]

- Water-stressed countries have sharply increased grain imports in the last 5 yrs., since they don't have the water to grow it. Net imports avgeraged 51% between 1998 and 2000 --Saudi Arabia imports 73%.

- In 12 years, 3 billion people, 40% of the projected population, will live in water-stressed countries, driving more countries to import more grain.

- By 2025, the wheat needs of China and India will exceed the total exports of the U. S. today. China is doing something about it (pipeline). One forth of India's grain production, 45M tons, is at risk now from groundwater depletion and overpumping. Pakistan is plagued by shortages of Indus river water, groundwater overpumping, and salinization of land and will not be self-sufficient much longer. Poppies, anyone?

"All in all, water stress will become a much bigger driver of the international grain trade in the coming years."

Given the depletion of aquifers below the wheat belt and farms in California, does anyone see the catch 22 here? The next major pipeline from Alaska will not be oil!

Post  41170  by  lkorrow       Reply
Ark, wonder if they got some play because of the recent hype on AOL, T, and cable overall. . . .

Post  41171  by  lkorrow       Reply
Way to go, Pace. It's a shame the people didn't rise and take care of their own problem.

Post  41172  by  oldCADuser       Reply
I wonder what Vanguard thinks about this guy? I mean he's linking himself to their name and then uses their funds as "bad" examples and it appears, at least based on the wording of his note, that he is targeting people who are customers of Vanguard (Ever wonder how and where he is getting the Vanguard customer list?). I agree PMCW, this guys sounds like he's prying on people's fears and uncertainty, and worse, he's probably really going after older couples who tend to the most vulnerable. I hope that your efforts will at least slow him down if not stop him and if it turns out that he had done anything illegal, then lets hope that this starts a process where he is both shut down and punished.


Post  41173  by  uponroof       Reply

Hi old buddy. Hope you're hanging tough in this lousy bidness climate. My bidness, incredibly, is doing well despite the ongoing drought this summer. Very, very busy these days. I'm betting the Fall will be even busier once the all day rains start again.

I am guessing KRY is suffering from yet another earnings letdown about to be released. I still hold shares waiting for 'the announcement' which I hope comes before we take out 330 (yes I still believe KRY will get LC, they just are slower than snakepoop down there). After 330, I will be moving into juniors and pennys with a vengence.


Interesting that Richard Russell has become very outspoken and bullish on gold within the last year. I can remember his much different position as recent as a a few years ago.

From tonight’s Richard Russell:

"...By the way, I believe a tremendous tidal change is taking place before our eyes. I think what we're experiencing is a sweeping change by investors, who are slowly and subtly moving from financial assets toward tangible assets.

You can certainly see it in the move out of stocks and into housing.

You see it in the high prices paid for legitimate art, with auction prices for many painting at record highs.

You see it in odd places such as the gold coin that just sold for over $7 million, highest price ever paid for a coin.

You can see it in the record price of over $750 thousands just paid for a block of inverted airmail stamps.

You see it in the price of top-grade jewelry and diamonds. Diamond prices are high and holding there.

You see it in the new highs in the CRB and the Goldman Commodity Indices.

You may be seeing it in gold as the yellow metal slowly gathers strength -- despite the wishes and actions of world central banks and those gold mines that are still hedged (short).

As I see it, the cheapest commodity around is gold. It's cheap because it's been held back for years by the central banks and by certain gold mining companies who have been selling short (or forward selling) their own product -- the process is called hedging.

This brings up the question -- "Do governments have the power to permanently defy the natural market forces?

In my opinion, they can manipulate the market for a limited period of time, but in holding back the primary forces, they are pressing down on a coiled spring. Ultimately, the spring will express it's repressed energy by "exploding." Which I believe gold will do somewhere ahead..."


Good Luck


Post  41174  by  srudek       Reply
Journal entries for options:
Debit Credit
---------- ---------
Owners Equity 10,000,000
Extraord Income from Theft 10,000,000
(to record confiscation of shares)

Salary Expense 10,000,000
Cash 2,000,000
Owners Equity 12,000,000
(exercise of options/issue shares)

I made a misstatement in my last entry. This is the correct treatment for stock options -- in FULL compliance with both common sense and double entry accounting, I believe. With this, their impact on the enterprise will be clear in both the balance sheet and income statement.

Maniati and I may publishing a paper on our resolution of the stock options dilemma, given that it has stumped the best minds in the world up until now. ;-)

Personally, I expect that when this standard of accounting is ratified by FASB, you will see use of stock options all but disappear. Stock options are one of those things that just can't stand the light of day. It's just no fun to steal owners' equity when everyone can see what you're doing!

Post  41175  by  srudek       Reply
lkorrow: Water rights are a tremendous investment opportunity right now. My tax attorney says a major portion of their practice is now focusing on legal issues for this "sleeper" investment. You may remember I was asking earlier if anyone had any advice on how to buy water rights. Water companies which own their water supply will be sitting pretty.

You may have to wait for a while, but -- as you've pointed out -- the aquifers are getting drained rapidly. The central U.S. will become a real desert unless they start piping water in. Then, I expect, we'll see the price of meat skyrocket.

Post  41176  by  srudek       Reply
pcmw: "...just like Tice"? You seem to be as obsessed with bring Tice down as I am with bringing down stock options! Why? Did you own Tyco or something??

I'm up 30% on BearX fund which I bought in April. I'll sell when the market falls a bit more or convinces me its not going to fall more. Even Tice plans to go long eventually. He's NOT expecting to beat the S&P over the long haul; just during this secular bear market.

Post  41177  by  Userisme       OT: Maniati: In the UK Muslims say quite openly

Post  41178  by  pmcw       Reply
sr, I think Tice is generally a slum lord who plays a one note fiddle. His record, when taken from the start of his fund, is terrible. And no, I played TYC for a quick trade (great profit) when he slammed it the first time for "pooling" in 1999. However, pooling was actually a non-sin. There were plenty of reasons to not like TYC, but pooling was not in the mix.

Regards, pmcw