Table On-Topic Summary - 30-Aug-2002
A compilation of this board's financial/economic posts From 41283 to 41306

Post  41283  by  Decomposed       OT: Table ON TOPIC SUMMARY Aug 29, 2002

Post  41284  by  uponroof       Reply
Creative US bookeeping rejected by the WTO...

Now we have the WTO ruling against Congressional corporate tax relief, obviously implemented to offset the ever expanding detrimental effects of 'The Strong Dollar Policy' on trade.

Where have you gone Robert Rubin and 'Rubinomics'

This is big.

Post  41285  by  uponroof       Reply
Asian CBs increasing gold reserves...

I posted some quotes from NEM president LaSonde several weeks back in which he stated Asian CBs would be increasing their gold holdings substantially. Looks like he was right on.

Keep an eye on this and particularly China. They are not being controlled, like japan, by America. China understands the advantages of freedom from debt. China did not devalue it's currency as it's neighbors did. They walk to a different drummer....

Post  41286  by  uponroof       Reply
Japanese bonds again downgraded...

"Ratings agency Moody's Investors Service has downgraded government bonds issued by Japan - the world's second biggest economy - to the same status as those from Latvia and Poland..."

"...The Japan government's current and anticipated economic policies will be insufficient to prevent continued deterioration in Japan's domestic problems," Moody's said.."


"...Japan's general government indebtedness... will approach levels unprecedented in the post-war era in the developed world, and that as such Japan will be entering 'uncharted territory'..."


As a result gold sales are up again in Japan...

"...According to a note published earlier today by UBS Warburg gold analyst John Reade, Japanese gold imports in July came in at 6.7 tons, an increase of 50 percent on the previous month and more than double the figure of July last year. Year on year the figures are even more impressive, with imports of 60.5t more than three times higher than in the first seven months of 2001, notwithstanding the fact that appetite for bullion among Japanese investors has tailed off appreciably from its peak in the first quarter.

It is hardly surprising that bullion sales are picking up again. Exports, the only growth point in an otherwise woeful Japanese economy, are beginning to look vulnerable again as US consumer spending starts showing signs of drying up and gross domestic product growth falters. The US is the biggest market for Japanese goods.

"Japan's recovery as a whole has petered out," Frank Packer, an economist at Nikko Salomon Smith Barney told Bloomberg News. "Exports will slow and the economy will revert back to contraction in the fourth and first quarters," he said..."

Good Luck


Post  41287  by  jeffbas       Reply
And we criticize those leading our country? Japan makes our leaders look like geniuses! They have been playing Nero's fiddle for the last 10 years.

Post  41288  by  pacemakernj       Reply
Roof, great posts. I don't know if this is bad news but The Prudent Bear Fund had the following share sales in the last few weeks. As reported in IBD today.

190,000 Goldcorp
750,000 Durban Rdpt
77,000 Newmont Mining
75,000 Harmony Gold
15,000 Anglogold
35,000 Gold Fields

Post  41289  by  lkorrow       Reply
ICI Mutual Fund numbers out:

Equity fund outflows for July $52.6B are the largest ever recorded (recording started in 1940s).

Bond funds took in a record $28.1B.

Post  41290  by  maniati       OT: al Qaeda to Intervene in Baseball Strike

Post  41291  by  pacemakernj       Reply
Linda, more comments on the "China Syndrome". From today's IBD. The news just continues to pile up. This is a terrific article. Pace.

Globalism, End of Socialism Causes of Jobless Recovery

By Paul Craig Roberts

The Bush Administration would benefit from giving a little more thiought to the economy and a little less to Iraq.
Concerns already existed over the economy having 116,000 fewer jobs as of July than eight months ago, when the recovery supposedly began. Now there might be indications that the economy softened in mid-July and has been contracting for the past four weeks.
Continuing job losses well into a recovery marked the 1991 recovery. This phenomenon suggests that profits are recovering less quickly. Globalism and the demise of socialism are part of the explanation.
For decades U.S. producers were protected from competition by world socialism. But with privatizations in the UK and France in the 1980's, the demise of the Soviet empire, reforms in Latin America and China's "capitalist road," globalism has brought increased pressure on US generated profits. Many U.S. multinationals owe the bulk of their profits to their foreign operations.

An economy's success is dependent on it's ability to produce per capitaincome growth. Per capita income growth in the US is under attack from two factors: The US exports high productivity jobs and imports low productvity people. The advent of globalism means that capital and technology are mobile. Mobile capital and management sek low cost skilled labor, and have found it in China. A long list of American high tech companies have relocated manufacturing, engineering, research and development jobs to China.
The export of high productivity jobs means that foreign nationals abroad earn the incomes from producing goods sold by U.S. companies in US markets. Policy-makers and trade enthusiasts assume that this rosy development, because it means lower prices for consumers and holds down inflation.
They ignore the other side of the equation: lower growth in per capita incomes from the loss of high-productivity jobs.
Simultaneously, the US imports millions of poor non-English-speaking immigrants each year. These immigrants hold down per capita income growth in the retail, construction and low tech sectors of the economy.

Consumer Demand Lives

By encouraging the export of high paying jobs and the import of poor people, policy makers have eroded long term growth in US oer capita incomes. The consumer sector accounts accounts for two thirds of the economy and is deeply in debt. How can there be a strong recovery? Low interest rates have kept consumer demand alive through mortgage refinancing, which frees money for household spending. When this one time boost plays out, what will drive consumer demand?
More consumer debt requires a rise in stock prices and household wealth. Business investment requires profits and consumer demand. With U.S. multinationals improving their bottom lines by chasing lowest-factor cost abraod, the incomes needed to drive the U.S. economy are not being generated in America.
The export of jobs is rationalized as "free trade." But no trade is involved in the export of U.S. jobs. Chinese firms sell the U.S. goods made with Chinese labor, and U.S. firms sell U.S. goods made with Chinese labor. The U.S. capital and technology that employ Chinese labor are relocated to China by U.S. firms, not exported to China.
Trade enthusiasts stress that every $1 billion in U.S. manufactured exports means 10,00 U.S. jobs. Last year the U.S. exported $640 billion in manufactured goods-thus the claim that the U.S. is dependent on trade for 6.4 million jobs.
Trade enthusiasts neglect the other side of their rule of thumb. Last year the U.S. imported $951 billion in manufactured goods- a loss of 9.5 million jobs. The net effect of trade in manufactured goods is a loss of 3.1 million U.S. jobs.
In 2002, the U.S. trade deficit in manufactured goods is running at a $350 billion annual rate, which translate into an increase in manufacturing job loss of 400,000.
The income growth needed to drive the U.S. economy cannot come from exporting manufacturing jobs and replacing the jobs with retail clerk jobs selling foreign made goods.

Stock Market, Economy Split

The future could see a split of the stock market from the economy. U.S. multinationals can generate income on foreign operations, but the associated wage and salary incomes accure to foreign nationals and do not flow through to Americans.
The U.S. has played its economic cards carelessly. The incomes to support the U.S. share of world consumption are no longer being generated in the U.S. Sooner or later this fact will reduce foreign capital flow to the U.S. and the value of the dollar. The redistribution of income that the Third World has been demanding from the First World is taking place as China gains American incomes.

Paul Roberts was assistant secretary of treasury for President Reagan.

Post  41292  by  Decomposed       ot: Baseball Deal Reached

Post  41293  by  SkippyWalker       Reply
little ditty on LU cousin AGR
Agere Shifts Gears

NOT EVEN A PROMISING pedigree was enough to spare Agere Systems (AGR.A1) the indignities of the telecom meltdown.

Last week, the Lucent Technologies (LU2) spinoff unveiled plans to dump its optoelectronics business, close almost all of its manufacturing plants and lay off 4,000 — a third of its work force. The decision, though drastic, was all but unavoidable in light of the state of the industry and the health of the broader economy. What's curious, though, has been the stock market's reaction to it all.

Agere's shares have been hovering between $1.50 and $1.70, off a 52-week high of $6.30. The price blipped up on the announcement, but only a tad. In other words, the market seems to be saying the news is practically neutral; that huge layoffs, plant shutdowns and a dramatic shift in strategy will leave the company worth about what it was worth before the announcement.

Clearly, that's absurd. More likely, investors want to believe in Agere, but they don't trust it yet. And who can blame them? Until early 2001, Agere was the microelectronics group at Lucent. Lucent spun it off because Lucent's finances were in deep crud, just as AT&T (T3) spun off Lucent in 1996 because AT&T was in trouble.

Agere, for its part, came away with a potentially strong chip business and great technology — its roots go back to Bell Laboratories, and Agere is blessed with 6,000 patented technologies covering optics, integrated circuits and semiconductor manufacturing processes and technology.

But it also came away with horribly bloated operations. In the spring of 2001, Agere had 18,500 employees; by the end of next year that number should be down to 7,200. Lucent, in desperate straits, stuck Agere's managers and shareholders with $2.5 billion in debt. Lucent also passed on a legacy of strategic mismanagement, which left the company saddled with semiconductor fabrication plants (known as fabs) that companies like Agere can no longer afford.

Credit Agere management for stripping the company down to its essentials. It's closing all but one of its fabs, turning instead to contract fabrication outfits in Asia, as do most midsize and smaller chip companies. That means not only capital savings, but also savings of $100 million in annual process R&D costs. The optoelectronics business that it's exiting — chiplike devices that route traffic on long-haul fiber-optic networks — may have brought Agere profits in the future, but it's a business that may not recover for years. Agere can direct that investment elsewhere.

So where's the focus going forward? Three chip markets, from fastest to slowest growing:

# Wireless networks, including the fast-growing technology known as 802.11 (a.k.a. WiFi), and cellular telephones. Agere is a close No. 2 behind Intersil (ISIL4) in WiFi. Among its cell-phone customers is Samsung, which uses Agere chips in its new phones for 2.5G networks. Agere is also a major player in the flourishing cell-phone market in China.

# High-density storage. Agere makes three chips essential to storage: One amplifies the signals picked up by the read head in the hard drive; another converts those amplified signals to digital; and a third controls the hard-drive motor. New chips combine the last two functions. Hard drives are commodities, but the chips that control them are not. Agere counts the four largest hard-drive manufacturers as major customers.

# Multiservice network solutions. Marketing verbiage for chips that process data in networks. Customers here include Cisco (CSCO5), Riverstone (RSTN6) and Huawei, also known as the "Chinese Cisco."

Clearly, Agere's prospects depend on a capital-spending recovery. The company will lose money this year. But Greg Waters, senior vice president of strategy and business development at Agere, says the company is committed to paring costs to the point where it could break even on current revenues — about $500 million a quarter. "Even if the economy doesn't improve, even if our business doesn't improve, our cost structure will allow us to make money," he says.

Not much money, of course, but Waters says that after breaking even, as much as 70% of new revenues could fall right down to the bottom line. In other words, when the economy turns around, Agere earnings will be positioned to take off, and midyear 2002 would prove to have been a great time to get into the stock.

Of course Agere, which is ranked as the No. 1 vendor of communications chips by Gartner, must execute — particularly with companies like Intel (INTC7) paying more attention to those very same communications chips. And Agere's Lucent legacy gives cause for pause. But Waters, who came from Texas Instruments (TXN8) three years ago, says two-thirds of top management joined the company within the past two years. Another good sign.

Post  41294  by  maniati       OT: Hmmm. Coincidence? You decide. :-)

Post  41295  by  lkorrow       Reply
I guess I was ahead of my time in suggesting media companies and distribution networks should part ways. From The Gartner Group:

• From 2002-2006, ad dilution will force large media companies to become vertically and horizontally integrated, owning both content and distribution across related
media channels.

• From 2007-2011, conglomerates that survived the digital distribution revolution find they are better off divesting distribution since it no longer guarantees control of the

Baseball owners, union reach labor pact

Dow commentary

Post  41296  by  pmcw       Reply
The consumer and the content provider will continually pinch the middleman. Today we consider telephone (local wired service), Internet and entertainment distribution (cable or satellite) three separate entities. Converged media (TriMedia) is already beginning to blur these lines. Next week I'll have 1.5mbs (downstream) Internet, full featured local phone and cable (including the two premium channels of my choice) for $99.97 per month. All of these features are delivered to my house on one pipe and fiber is only a few hundred feet away (a maximum of 250 homes share the fiber - local roadrunner service will place up to 750 homes on a fiber).

Within a few years, plus or minus depending on Congress and the FCC, my entertainment will not be separate considerations. The fiber will be at my house and I'll have the bandwidth to order directly from the content provider. My bill from my provider will just be for a fat dumb pipe and through this I'll order what I want from an IP address. There will be free channels, subscription channels and, of course, pay-per-view. Ironically, the issues in the way of this system moving at light speed are all sitting in Washington, not the board rooms of companies ready to invest.

1) They need to separate the Broadband (digital content) portion of communications from all requirements of The Telecom Act of 1996 for speeds above roughly 1mbs. This gives cable and satellite a clear signal that they will not be encumbered by laws never intended for the digital age. It also tells the Bells that they can spend money without the fear of parasitic CLEC's demanding wholesale prices below the real cost of deploying next generation services.

2) They need to define ownership and methods for the protection of digital rights.

3) They need to get state, local and municipal governments and the PUC's the heck out of the greedy way. To do this they need to enact laws very similar to the Interstate highway act of the 1950's. The last mile and the metro ring needs to be cleared for quick and easy access.

4) They need to allow DISH and ECHO to merge. They face huge competition and need to combine resources to offer viable competition. If done right, we'll have satellite, cable and telecom competing for the same business. For the first time in our history, our communications and entertainment industries will be competitive.

5) Since they have screwed up this industry so much with bad legislation and regulation they need to provide basic stimulus packages for last mile and metro upgrades. By the estimates done in the Senate (Democrat estimates I might add) this will cost only cost $2B (estimated total cost for Senate Bill S.88). In reality, this isn't an expense at all; it's a solid investment. It will put underutilized assets to work in a fashion where they will make money. It will help avert bankruptcies. It will generate taxable profits and it will deliver more services to the consumer. The consumer will also have an option to lower his cost (they can obviously opt for more services and spend more money) - profits will come from both more services being utilized and lower delivery costs.

Regards, pmcw

Post  41297  by  Czechsinthemail       Reply
Cable Access
by John B. Judis
Post date 08.27.02 | Issue date 09.02.02

Telecommunications was the driving force behind the great economic boom of the late '90s. Between 1996 and 2000 the telecom industry grew at twice the rate of the national economy. By March of last year telecom companies had reached a market value of $3 trillion, and their share of the national GDP had risen to almost 6 percent. The Internet, and wireless and other telecom services, spurred investment in information technology, which by 1999 accounted for 43 percent of private, nonresidential investment. To a great extent, the boom of the late '90s was a telecommunications boom.

By the same token, the bust of the early 2000s is being driven largely by a collapse in telecom. The industry has lost an estimated $2 trillion in paper value on the stock market--more than eight times what it cost to bail out the savings and loan industry a decade ago. New investment capital, vital for innovation, has dried up. In the first six months of this year (i.e., before WorldCom's bankruptcy) telecom lost 225,000 jobs, one-fifth of the total jobs lost in the country. And with thousands of miles of excess capacity in fiber-optic cable, and as much as $500 billion in questionable debt, the industry may continue to hemorrhage value and jobs for the foreseeable future--potentially imperiling the country's overall recovery. Says former Federal Communications Commission (FCC) chairman Reed Hundt, "If the communications sector doesn't start attracting investment again, it's going to be hard for business investment in general to increase. And if that doesn't happen soon, the whole economy will begin to shrink again."

The government official most responsible for turning telecom around is the current FCC chair, Michael Powell, son of Colin. Articulate and well-liked on Capitol Hill, Powell was the first choice for the FCC job of former Senator Commerce Committee chair John McCain and House Commerce Committee chair Billy Tauzin. But Powell has proven a disaster. He has equivocated, frustrating even ardent supporters like Tauzin; and when he has finally acted, it has been to prolong rather than shorten the telecom slump. Like Harvey Pitt, the chairman of the Securities and Exchange Commission (SEC), Powell would be ripe for replacement--if his feckless, ideological approach didn't so perfectly reflect the president he serves.

By Powell's own admission, the key to reviving the telecom industry is stimulating the growth and improvement of broadband--the high-speed Internet connections that are widespread in business but have only incrementally made their way into consumers' homes. High-speed Internet connections--carried either over cable TV lines or phone lines (called DSL, for "digital subscriber line")--could speed the technological convergence between the phone, the computer, and the television and spark new investment in hardware, software, and infrastructure. As Powell himself stated in testimony last month before the Senate Commerce, Science, and Transportation Committee, "Broadband very likely holds the key for the long-term recovery of the telecommunication industry, and indeed our nation's long-term economic growth and its ability to compete on the global stage."

But the growth of broadband is lagging. Eighty percent of businesses connected to the Internet use broadband, but only 12 percent of homes with Internet service do--not nearly enough to spark widespread new investment. The reason is largely that prices for residential broadband remain high. While other kinds of telecom prices--from long-distance and wireless-phone rates to super-high-speed oc-3 lines--have fallen, prices for high-speed cable and DSL connections have actually risen. It costs between $40 and $50 per month for residential broadband, compared with just $10 or $20 for slower, dial-up modem connections.

Why have broadband prices risen while other telecom services are getting cheaper? The answer can be found in the first chapter of most economic textbooks: There is little or no competition among broadband providers. In most areas, the cable company connects residences to the Internet through the TV cable, and the regional Bell company connects businesses through DSL lines. Cable and phone companies rarely compete with one another, and both have effectively discouraged independent service providers (ISPs) like MindSpring or EarthLink from using their connections. Cable companies have often blocked other providers outright, while phone companies have used a variety of tactics--from getting local or state commissions to set prohibitively high rental prices for their lines to sabotaging rival systems by deceiving them about whether Internet addresses were available. In Virginia, when one small town, Bristol, wanted to set up its own broadband system, Verizon lobbyists persuaded the pliant, Republican-controlled state legislature to pass a law prohibiting any town from doing so.

In the older dial-up market, where prices have fallen, there are 15 ISPs for every 100,000 subscribers--everything from AOL to MSN to the small start-up. These ISPs have been the source of innovations like instant messaging. In the high-speed market, by contrast, there are fewer than two ISPs for every 100,000 subscribers. Affiliates of cable and phone companies have a 95 percent share of the broadband market. That lack of competition keeps prices up, demand down, and innovation at bay.

That's the short-run problem limiting broadband's expansion. The long-run problem is that the high-speed services offered by the cable and phone companies are still fairly primitive. During the late '90s fledgling companies laid down high-capacity fiber-optic lines between large cities and even across oceans, but phone companies continued transmitting the "last mile" of connections--i.e., from local hubs to individual residences or businesses--through slower, lower-capacity copper wires. This isn't a problem for telephone conversations, which transmit a relatively small amount of information at a slow speed. But it's a major problem for broadband, which transmits huge bundles of information and can be greatly slowed down by copper wires. Nor is widespread broadband access over cable lines a solution: Like copper phone lines, cable is a relatively low-capacity conductor, and the speed of delivery slows dramatically as the number of users grows. (If you subscribe to broadband through your local cable system, cross your fingers that your neighbors don't follow suit.) To achieve its potential, broadband providers need to "uncork the last mile," extending fiber-optic connections to office buildings and residences. But so far, the Baby Bells, which own the wires, have proved reluctant to replace them. And why should they? Lacking competition, they have little incentive to improve or innovate.

There are solutions to these problems, some fairly obvious. As Americans first learned a century ago, the way to encourage competition in an industry that tends toward natural monopoly is through strong government regulation. That is the long-standing purpose of antitrust laws. In this case, the FCC has the power to force the cable and phone companies to open their lines--for a reasonable price, of course--to the competing Internet providers trying to enter the high-speed market. The problem of wiring the last mile is a trickier one; but here, too, the government could adopt measures like those it has traditionally used to encourage new industries. Just as it helped develop the railroad, automobile, and airline industries by subsidizing the construction of rail, roads, and airports, the government could subsidize the last mile of the information highway, either through tax breaks or outright grants. (Former FCC chair Hundt and others have urged exactly this.) By so doing, the government would also preserve its right to demand open access to the broadband infrastructure it had helped create.

But Powell, backed by the Baby Bells and the cable companies, has rejected these forward-looking solutions in favor of a simplistic mantra of "deregulation." "Deregulation is a critical ingredient to facilitate competition," Powell announced when he was nominated last year. But Powell's brand of deregulation protects the Baby Bells and cable companies from competition in the illogical hope that they will invest in new technology to improve transmission. Far from increasing competition, it will reinforce the trend toward monopoly.

At first, Powell's deregulatory crusade was largely rhetorical, but this year he began to take action. In February, Powell, who enjoys a three-to-one majority on the FCC, announced a "proposed rulemaking" on "telephone-based broadband." According to the FCC's decision, telephone-based broadband services are "information services, with a telecommunications component, rather than telecommunications services." The distinction sounds semantic, but it has profound legal implications. According to the Telecommunications Act of 1996, telecommunications services have to grant open access to their facilities, but information services do not. By defining telephone broadband as an information service--a designation originally intended for content providers like LexisNexis--the FCC removed it from regulation, allowing the Baby Bells to ban other ISPs from transmitting over their lines.

The next month Powell struck again--getting his majority to declare that cable-based broadband was "an interstate information service" and not either a "telecommunication service" or a "cable service." Here again, by defining cable broadband as an information rather than a telecommunication service, Powell permitted cable to ban other providers from using their lines. Moreover, by defining cable as an "interstate" information service rather than a "cable service," he removed it from any local regulation over prices and service. Michael J. Copps, the sole dissenter on Powell's FCC, said of the March decision, "Make no mistake--today's decision places these services outside any viable and predictable regulatory framework." Or as Governing magazine put it, the decision means "local governments won't be able to enforce customer service standards."

Lately, as deregulation has been discredited by scandal, Powell has openly espoused the end to which deregulation was the means. In an interview last month with The Wall Street Journal, Powell admitted that he favored major (supposedly innovation-spurring) consolidations in the telecommunications industry along the same lines of those the defense industry underwent in the '90s. During the '90s the defense industry was reduced from about a dozen to three giant firms: Lockheed Martin, Raytheon, and Boeing. By that logic, the telecommunications industry would consolidate into a handful of firms based on the Baby Bells. But as Mark Cooper of the Consumer Federation of America has noted, the two industries are hardly analogous. Defense firms contract primarily with a single buyer, the U.S. government, which enjoys substantial leverage over them. They are thus intrinsically subject to government oversight. Phone and cable monopolies, by contrast, contract with millions of unorganized consumers who, in the absence of a vigilant FCC, can't exert much influence over them.

If you want an analogy for what Powell is trying to do, you have to look at the Bell system before the breakup of AT&T in 1982 or to the French telecommunication monopoly in the '90s. AT&T was broken up partly because its monopoly was stunting innovation and removing competition. Long-distance prices fell 40 percent in the decade after AT&T's breakup. Similarly, French Telecom once boasted about its Minitel network, which since 1981 provided text-based, monochrome information services. But by the mid-'90s its monopoly held back the introduction of the Internet, a far better medium for conveying information. The U.S. telecom industry could eventually suffer similar obsolescence under Powell's plans for new consolidated regional monopolies.

Indeed, U.S. failure to wire the last mile is already undermining its telecom industry in relation to competitors in South Korea and Canada. South Koreans, for instance, are currently four times more likely to have broadband than are Americans; and South Korean telecom companies are now in a position to leapfrog their American competitors in Internet technology in much the same way American telecom firms leapfrogged the once-formidable Japanese during the '90s. (This, too, was largely because the Japanese were held back by a national monopoly, NTT.) Falling behind in telecom technology won't just mean American consumers have to wait for affordable broadband service. It will mean, as Powell himself argues, that the telecom industry will likely remain in the doldrums--and perhaps keep the overall economy there with it.

In June, when the Los Angeles Times asked Powell what he considered his greatest accomplishment at the FCC, he responded, "I'm still here." It was a joke that could just as easily have been made by Paul O'Neill at Treasury, Harvey Pitt at the SEC, or Lawrence Lindsey in the White House. Powell is yet another Bush administration appointee who has not measured up to the daunting challenge of a downturn that has swept away many of the gains American industry made in the late '90s. Powell may indeed survive. Sadly, the American telecom industry--and with it, hopes for a near-term economic recovery--may not.

Post  41298  by  danking_70       OT: From the Bizarro land of the Middle East.

Post  41299  by  pmcw       Reply
czech, I hope you see the irony in this the article you posted. It is obviously partisan.

The conclusion that we must foster the use of our telecom assets is clearly correct. However, the arguments as to what created the problem and what's holding up progress rank between distortions and lies.

First, Hundt was easily the worst FCC Chairman in my lifetime. He fundamentally ruined T with a single decision to block their entry into TriMedia. A Federal appeals court later reversed the decision, but the damage was done - T had no money left after serving the debt on non-performing assets for a year after the Hundt block.

Although the folks at FON are now glad they didn't merge with the crooks at WCOM, the reasons why Hundt and the DOJ blocked this merger were off the wall. They said it would destroy LD competition. Huh? And, why was the DOJ involved in the first place. Reno was obviously another huge loser.

This author wants to brag about telecom in the last half of the 1990's like it did something good. Actually the reverse is true. The highly flawed Telecom Act of 1996 was possibly the most poorly written piece of legislation ever signed into law. There are roughly a dozen cases pending in the supreme court due to its lack of clarity. Hundt actually made things worse by not giving all the parties a clear interpretation of the Act. Instead, he chose to just let them fight it out in the courts. This basically created enough delays to starve the CLEC's. Trying to rescue them today with unrealistic delays to deregulate broadband is simply making things worse.

What Powell has proposed (nothing is firmly implemented) and he is catching flak over from his own party (Lott in particular) is to deregulate the data side of the telecom lines. This makes total sense and will free the Bells to compete with cable without the CLEC's being able to suck the assets for unrealistic prices. This wish has gone nowhere just as the deregulation bill that passed the house has sat in the Senate to rot.

There is the potential to set the stage to where we have competition from satellite, cable and telecom industries all going for the same brass ring. I mentioned earlier the new deal I signed. Well, you know what Time Warner did the week after I was able to sign with Everest? Yep, the contacted me and said they would cut my cable rate in half if I would stay. Ya know what I said? I think you can guess. All they want to do is drive the competition out of business and then go back to the old game. Let the Bells loose and let the satellite companies merge and we'll all save money plus put the national fiber backbone laying dark today to work. That is how we save telecom.

Oh, I don't want to miss the chance to plug stimulus one more time. Funny, the author and I agree on this. However, he's too busy bashing just Republicans to care and mention that it is Daschle who is blocking all forms of telecom / broadband stimulus.

The problem is everyone just wants to make a partisan argument rather than tell the simple truth. Both parties are in the way of progress because they are doing favors for those who pay for their elections.

Regards, pmcw

Post  41300  by  lkorrow       Reply
Pace, you're right, great article! There was a recent story about moving programmers offshore. It profiled India, where employee costs started low and are now almost on par with the States. Speculation was that it is a cycle, where jobs go out, costs go up, jobs come back. What is missed is the expertise and familiarity lost and the difficulty in transitioning. In China, the catch-up wage interval could be a lot longer. Guess manufacturing's a different animal because of the cap ex. Tough issue.


What a week for gold, how sweet it is!

HP and IBM tie for lead in server market share at 27.8%. SUN third. cnbc

Post  41301  by  lkorrow       Reply
pmcw, looks like a good vision. You hit on my other hot button, unrealistic (low) wholesale prices as T and WCOM go into massive debt. And during the bubble, it was hard for paying customers to get service in a realistic timeframe! It's possible customer service is still in bad shape due to those financial woes.

S.88 has been around awhile, I wonder if it will happen along with a recovery of the cable industry after the T/Comcast and T/AOL deals. Maybe it will all come together next year, sure hope so. The economy will factor into demand. . . .

p.s. you're going to love that cable, it's well worth it! :-)

Post  41302  by  lkorrow       Reply
pmcw, how do you see the IXCs panning out?

Post  41303  by  lkorrow       Reply
pmcw oops, mean playing out.

Post  41304  by  maldinero       Reply
Broadband stimulus…grassroots style.

Post  41305  by  spirare       Reply
August 30, 2002, Spot Gold in New York settled slightly lower at $312.30, off 40 cents from
yesterday?s close on a shortened pre-holiday trading session.
The gold pits closed
at 12:10 p.m. Eastern Time Friday in preparation for Monday's Labor Day
On the consumer side of the equation, which represents about two-thirds
of economic activity, personal consumption jumped 1.0 percent in July even
though income stayed steady, and the University of Michigan Sentiment survey
found that people's feelings about the health of the economy eased only slightly to
87.6 from a previous reading of 88.1.
The price of gold dropped slightly at the
close on a stronger showing in equities and slightly stronger Chicago PMI data.
There was some minor profit-taking by speculators at the close.
Todd Hultman,
president of provided an upbeat picture on gold Friday. "Gold is
emerging from the depths of a 22-year bear market and the worst is over."
He attributed the recent strength in gold prices to the consolidation that has taken
place in the mining industry.
"As this new industry learns to discipline its output, I
expect prices to chop higher for several years taking prices to at least $400 per
ounce," he said.
Overnight strength in gold was derived from news that Place Dome Inc. is cutting its gold hedge
position by 20% from the 8.5 million ounces of
gold reported as of June 30, traders said.

Gold maintained support on continuing concerns over impending war with Iraq
and the possible disruption to global oil supply.
U.S. Vice President Dick Cheney,
speaking to Korean War veterans (the ?Chosen Few?) in San Antonio, Texas,
repeated charges from Monday that the Iraqi leader posed a "mortal danger" to
the U.S. Cheney said weapons inspections, interrupted four years ago, could not
guarantee Iraqi compliance with U.N. disarmament resolutions.
Gold was also
supported by the rising prices of gold mining stocks which investors often turn to
take advantage of an anticipated increase in the bullion price.
Gold shares typically rise in advance of surging gold prices.

The mega-hedgers appear to be tripping all over themselves to announce a pull
back in forward sales. Shareholders of mega-hedger gold producers who have
seen the price of their shares vastly under-perform as compared to the shares of
the non-hedger producers have been putting the heat on corporate executives to
rethink the policy of selling forward gold production.
Placer Dome Inc.
announced yesterday that it is reducing the level of its committed ounces by 20%
from the 8.5 million ounces of gold reported as at June 30, 2002.
Placer Dome Inc. joins AngloGold, Barrick, Newmont, and others who have recently
announced the unwinding of corporate hedge books on expectations of a higher
gold price.
A move by miners to reduce the amount of their gold sold into forward
markets at fixed prices -- has been instrumental in gold's rally this year by
removing what many analysts saw as a cap on the gold price.
"Further evidence that producers are prepared to buy gold serves to reinforce the view that the
metal will be supported by opportunistic producer buying," said John Reade,
metals analyst at UBS Warburg.

London gold was fixed this afternoon at $312.80 an ounce, up slightly from
$312.40 an ounce at the morning fixing.
Gold moved higher on the weaker U.S.
dollar, the unwinding of gold hedges by miner Placer Dome Inc., and talk of war
against Iraq.
The London market was essentially flat ahead of trading in New York.
Traders appeared to be willing to wait for the New York market to open
for a sense of direction. One trader Lawrence Eagles at GNI Touch Research
summed it up nicely:
"Those players who were not lying on a beach in the sun
somewhere were left to try and make sense of a markets suffering from anorexic

Earlier gold closed at $313.15 an ounce on Friday in Hong Kong, up $1.80 from
Thursday's close of $311.35.
Spot gold rose initially Friday in Asia, as shorts
covered their positions ahead of the long U.S. weekend, traders said.
Gold remains supported on a number of bullish factors, such as the overnight fall in the
U.S. dollar and tough talk by the U.S. government against Iraq, these traders
An overnight announcement by Canada's Placer Dome Inc., the world's
seventh largest gold producer, to cut hedging by 20%, further supported gold.
An analyst of precious metals with a Japanese trading house sees "good chance" gold
will rise to $350 by year-end due to host of the usual bullion-friendly factors such
as weaker equities, struggling U.S. dollar, rising crude prices and possible
U.S.-Iraqi war.
Gold sold off in Singapore and Hong Kong as the Asian trading
session ended with good support for gold above $313.50 an ounce.


There really isn?t much news ahead of the shortened trading session

Speculators and investors alike appeared to settle up and take off for the
long weekend.

However there is some news that does give support to the
precious metals.

The biggest story is that Placer Dome Inc. will cut their hedge
book by 20%.

This is a growing trend among the hedged gold producers as a
rising gold price and lower interest rates just make the narrowing spread too

Shareholders have also been putting pressure on the executives of the
hedged miners to maximize the share price and show some spark as has been
demonstrated by the performance of the nonhedgers.

***The continuing lackluster performance of the equities markets, a weaker U.S. dollar, and
uncertainties over
the global economy have led some investors to park cash on the sidelines and into safe havens like
precious metals.***

The United States and British military forces
continued to attack Iraqi targets for a sixth straight day in what appears to be a
?softening up? action ahead of an eventual invasion.

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  41306  by  pmcw       Reply
lk, Ironically, that's the real question; who is going to play and who is going to pan. There's way too many variables to make any reasonable call (anyone who does is guessing). However, I would venture to say that FON has as good of a chance as any. Those guys know how to manage assets very well. Regards, pmcw