Table On-Topic Summary - 09-Sep-2002
A compilation of this board's financial/economic posts From 41599 to 41659

Post  41599  by  pmcw       OT: pmcw report (newsletter)-
Post  41600  by  Decomposed       OT: Table ON TOPIC SUMMARY Sep 8, 2002

Post  41601  by  spirare       Reply
ot. the satan saddams diaperheads - Al-Qaeda 'plotted nuclear

Post  41602  by  abveldeh       Reply
PMWC, Warstud answered two important items. As to the employmentfigures being distorted, I read that 20,000 jobs were for airportsecurity. Although it's jobs it's not production and the only way to discontinue the tradedeficit is to produce and sell yourself. The fact that some Korean chipmaker makes a higher profit only means more tradedeficit.

Duisenberg is holding his foot stiff. No ratecut in Europe.

A ratecut has also a negative effect, namely it declines interest on savings, which are 4.25 % in Holland. I read a lot of buying power has been distroyed this way in the USA.

Lowering credit rates does not a lot for the high risk comps. They pay well over 10-12 % anyway.

Post  41603  by  uponroof       Reply
POG...323 under attack - last bid 321.50
ask 322.

Todays open in New York should be fun. Japanese analysts offer 3 very interesting points...

1. Japanese trading houses are building up their inventories for the Fall season.

2. Selling in New York is protecting 330 (where have I heard that before!)

3. ..."If the U.S. attacks Iraq, gold could move up to around $350"...

Whoops...there goes 330 cause GWB certainly has his horns out for Iraq. The constant war drum from the white house is intentional as it serves to gradually prepare the markets, reducing the shock when the war begins. What the arab nations retaliate with is yet unknown. Euros for oil, asset withdrawal from American markets, piling into gold to attack the dollar, all very possible.


TOKYO, Sep 09, 2002 (ODJ Select via COMTEX) -- By Jim Hawe


(Dow Jones)--Market jitters just before the one year anniversary of the Sept. 11 terrorist attacks on the U.S. will probably not be enough to lift gold past its key resistance level of $330, said some Japanese market insiders.

This is despite the bullion's role as the commodity of choice in uncertain times, they said.

An unexpected surge in the trading volume of gold futures on the Tokyo Commodity Exchange last Friday raised some talk on the market that Japanese investors spooked by the possibility of additional terrorist attacks have gone shopping for "safe haven" assets.

"There was indeed a big jump in the trading of Tocom gold futures last Friday, but I don't think this can be attributed to Sept. 11 fears," said Yuki Sonoda, a precious metals analyst with Daiichi Commodities.

"It is much more likely that some of the large Japanese trading houses are just building up their inventories for the fall season."

Last Friday a whopping 121,887 gold contracts - equivalent to 121.9 tons - were traded on Tocom, more than twice the number traded on Thursday and well above the daily average for August of 65,762 contracts.

However, volume Monday fell back to 58,326 contracts.

A precious metals futures trader based in Tokyo said recent selling out of New York has made it hard for bullion to make a serious run at $330 resistance.

"Short-term players in the U.S. have recently been very quick to take profits and this has made it hard for gold to rally," said this trader. "I expect gold will remain in a $315-$325 range for the time being."

This trader went on to say that gold trade around Sept. 11 could actually be very slow.

"I have heard talk that some U.S. traders are going to refrain from active trading this week to pay homage to the Sept. 11 victims. Even if a gold-friendly event does occur, such as another terrorist attack, it might not lead to a big move for gold as a lot of people in the investment community won't want to be seen as trying to exploit the situation to make money," said this trader.

Daiichi Commodities' Sonda feels that Sept. 11 jitters will not be enough to push gold out of its current trading range around $320.

"I think the bigger consideration for the gold market right now is a possible war with Iraq. If the U.S. attacks Iraq, gold could move up to around $350," said Sonoda.

Spot gold was quoted at $320.80 per ounce Monday afternoon in Asia, up from $320.25 late Friday in New York. On the Tokyo Commodity Exchange the benchmark August gold contract was up Y13/gram at Y1,220/gram.

-By Jim Hawe, Dow Jones Newswires; 813-5255-2950;

Post  41604  by  pacemakernj       Reply
Roof, good morning and thanks. We should have a great day. Pace.

Post  41605  by  pmcw       Reply
ab, First, WS hasn't a clue; he's shown this many times. Second, you said automotive sales would be down. They won't - this happens to be a fantastic quarter for new car sales. The important part of this picture is that the auto industry supports many companies that sell them parts (this incudes semis, btw where volume is also up). The low financing rates only applyl if the buyer pays near list for the car. It's a we'll get you one way or another.

BTW, I'll continue this dialog when you show me the respect of answering the questions I posed, but not until then.

Regards, pmcw

Post  41606  by  uponroof       Reply
Silver Market "capped"

Prospector Asset Management...
Very good read on the precious metals markets. NOTE the explanation of what is going on in silver...and who the "cappers" are.

Last week was most certainly not your average ho-hum week for the precious metals as gold was propelled higher in price as investors world-wide were rattled by three influences, the seemingly imminent war against Iraq and the concurrent rise in the price of oil, the first anniversary of the terrorist attacks of 9/11 and the continuing weakness of both the Nikkei and the US stock markets. This most potent cocktail of fear and trepidation has pushed gold prices into the $320’s; above ALL of it’s moving averages and bodes well for further price increases in the future.

Please be advised that there is “very heavy wood” (please interpret my jargon as meaning very substantial technical chart resistance) between current prices and the $330 level, and I do not expect the rise to be easy nor quick, unless upcoming news events trigger the need for higher
price levels. Gold was up $7.60 for the week, as the buying seemed to be coming from the most reliable and best sources, the Bullion Banks, and the trade. I found such information to be most comforting as the speculators are most often wrong and the trade is most always right.

Silver was up about 5 cents for the week, largely in sympathy with gold. But further gains in this metal were capped by J.P.Morgan/Chase who emerged day after day as a large seller in the $4.57 to $4.58 range, thwarting the ambitions of the silver bulls.

Please note that I use the word “capped” and not another adjective. Let me explain, if I may, as an old floor trader. If the market is trading at, lets say $4.57bid/$4.58 offered, a major concern who really wishes to sell, may enter the pit and offer a hundred or perhaps a couple of hundred at the offer, hoping that some local or public orders may indeed buy from them. If filled, they return as a seller, offering another couple of hundred contracts. In this method, contracts are really sold, and business gets done.

BUT, if the major concern is simply trying to “cap” the market, and not really sell any product, they enter the pit and offer not one, or three, or five hundred, contracts, but they offer to sell 4000 contracts, as they did on several occasions this week. Now…..local traders start selling in front of them, knowing and thinking that this order will remain unchanged, and prices never rise through the important level, even though this major concern may not have sold one contract. Markets are all about psychology, are all perception versus reality, and the perception of one large seller in the market effectively capped prices.

Now there are many who see such news, such disclosures, as proof positive of manipulation of the markets. Nothing could be further from the truth. Big money speaks loudest and big traders can and do have their way with the market, any market, for a period of time. I liken it to a poker game, with table stakes. The one with the largest amount of chips in front of him has a most definitive advantage. Now, please understand that the “large player” didn’t get to have the most chips by being stupid, and such a player TRULY realizes that his influence is transitory in nature. He can “bluff” from time to time but not always. I still believe that silver is really “stupid cheap” at current levels and I have recommended that clients of the firm maintain long positions in this market..."

uponroof- Leonard Kaplan, who wrote the commentary above, has come kicking and screaming to the gate of the 'precious metals are manipulated camp'. He has for years pooh poohed the possibility of manipulation. To see the explanation for silver above is yet another step closer for Mr. Kaplan...but not close enough. His resistance these days of full acceptance of manipulation is for the benefit of protecting his previous statements, years ago in which he called conspiracy theorists laughable.

Now why would JPMC want to "cap" silver? SIMPLE...Silver reflects what gold is doing. If silver were to break out gold might follow on a 'wag the dog' move. JPMC is not taking any chances on silver starting a POG run. Even Mr Kaplan is pounding the table for his own way.

Good Luck


Post  41607  by  pmcw       Reply
Intel to Unveil New Chip Designs
Sunday September 8, 1:43 pm ET

By Duncan Martell

SAN FRANCISCO (Reuters) - Intel Corp. (NasdaqNM:INTC - News) kicks off a conference for hardware and software engineers on Monday in Silicon Valley at a twice-yearly gathering hosted by the world's largest chipmaker to spur technology using its microprocessors.

Intel is expected to release more details on the first processor for laptop computers it has designed from scratch, code-named Banias, unveil faster Pentium 4 chips and demonstrate the next version of its Itanium processor designed for heavy-duty computing, analysts said.

Called the Intel Developer Forum, the conference in recent years has gone global, and is held around the year in Taipei, Moscow, Tokyo and Shenzhen, China.

An Intel spokesman said the company expects about 4,000 attendees -- flat with last spring's developer forum -- and said that the vast majority were engineers.

The conference comes as the personal computer industry, which represents Intel's major market, remains mired in the doldrums, following a slack 2001 when worldwide shipments of PCs declined year-over-year.

In the second quarter, according to market researcher International Data Corp., PC shipments were little changed from the year-ago period and fell a greater-than-expected 7.8 percent from the first quarter.

"Intel will show us how they will make their processors bigger and faster and the transistors smaller and more numerous," said Nathan Brookwood, principal analyst at market research firm Insight 64. "They'll do their best to rally the troops and get this industry restarted."

Intel will also sound a theme it has been pushing for more than a year, that convergence of computing and communications. Intel is trying to boost revenue from outside its mainstay PC business by moving into the market for communications chips and helping to push the development of advanced handheld computers and wireless devices.

"Every computing device will ultimately be a communications device" and vice versa, an Intel spokesman said. "PCs will communicate even more than they do today and cell phones will compute even more than they do today."

Intel is expected to reveal more details about the Banias chip, which is more than just a microprocessor, Brookwood said, adding that Intel will likely talk up wireless connectivity using the 802.11 standard, which allows for high-speed wireless connections to the Internet and networks.

"Banias is really almost a whole approach to system design," Brookwood said. "It includes chipsets that optimize power usage, and new wireless adapters that are far more power sensitive."

Intel Chief Executive Craig Barrett has said that key for mobile computing is prolonging long battery life with sufficient performance.

"The whole thrust of Banias is how do you have a computer with a reasonable amount of performance and battery life that allows you to use the computer most of the day," Brookwood said.

Intel will also provide more details on the next-generation version of its Itanium 2 processor, code-named Madison. That processor will have even more on-processor memory than Itanium 2 and will be made with smaller lines of circuitry, both of which will boost performance, Brookwood said.

"Intel will get up there and say better times will come, and just because you're not selling much now, you can't cut back on research and development because that's going to drive demand going forward," Brookwood said.

Intel, when it issued its mid-quarter update for the second period on Thursday, said it still plans to spend $4 billion in 2002 on research and development, despite a weak PC market.

Post  41608  by  pmcw       Reply
roof - Great Call!

9:54AM Crystallex Intl soars on Venezuelan mining pact (KRY) 2.42 +0.73: Rallies 43% following press release welcoming its selection by the Venezuelan government Friday to develop Las Cristinas, believed to be one of the largest undeveloped gold projects in Latin America and the world.

When are you selling?

Regards, pmcw

Post  41609  by  pmcw       Reply
GE Should Have Revealed Welch's Deal
Ari Weinberg, 09.06.02, 2:52 PM ET

This is not a tech company, but one that counts Warren (let's be transparent and double expense stock options) Buffett as a board member. All of this happened under Buffett's watch, but was never reported.

NEW YORK - On Dec. 20, 1996, Jack Welch was set for life.

That was when General Electric (nyse: GE - news - people ) settled on his post-retirement consulting agreement. It included a salary of $86,000 for his first 30 days of consulting work and $17,000 for every day thereafter. Also in the agreement were provisions for access to aircrafts, cars, offices, apartments and financial planning services. Moreover, according to the agreement, GE shall "also reimburse Mr. Welch..for reasonable travel and living expenses which he incurs in providing services at the request of the CEO, or which he incurs because of his position as a retired chairman of the board and chief executive of the company."

For Jack, this agreement looked to be a peach. It's only a year into his retirement and it's still impossible to separate the man from the company. So, to Welch, even picking up The New York Times in the morning could be seen as a retirement expense. It was fine too for Welch's wife, Jane. Before Suzy, that is--but now, to her, it's all b.s.

After a 13-year marriage, the Welches are ironing out a divorce following the revelation of Jack's relationship with former Harvard Business Review Editor Suzy Wetlaufer. But, after failing to reach a settlement, Jane Welch filed papers in Bridgeport, Conn. Superior Court on Thursday. In those papers, the Times reports, are details of Welch's expenses covered by GE during his employment and after. They include tickets for the New York Knicks, the U.S. Open and Wimbledon tennis tournaments, Yankees and Red Sox games and other leisure activities. GE is also said to have picked up "all costs associated with [his] New York apartment, from wine and food to laundry, toiletries and newspapers."

While not assigning a value on all the expenses, Jane Welch is living up to the axiom. Yet the fury of a woman scorned hasn't translated into worries by GE shareholders. Shares were up 2%, to $28.56, in midday trading on Friday.

Say what you will about Welch or his marital infidelities, GE itself should be chided by shareholders for failing to disclose the extent to which Welch was provided for. Yes, perks go hand-in-hand with power throughout business. But the lavish pay packages and extras for recently ousted corporate bigwigs--Dennis Kozslowski of Tyco (nyse: TYC - news - people ), Bernard Ebbers of WorldCom (otc: WCOEQ - news - people ) and Jean-Marie Messier of Vivendi Universal (nyse: V - news - people )--are now being held up as gross improprieties by companies and boards. Unfortunately for current Chairman and CEO Jeff Immelt, who was not on the board in 1996, the details of Welch's extras dropped from the courtroom and not the boardroom.

Immelt, who is committed to the idea of solidifying GE's reputation as a transparent company, said earlier in the summer that GE would sell or lease a New York apartment that had been reserved for him. Is there anything else your shareholders should know, Jeff? Now is the time.

Post  41610  by  uponroof       Reply

A little surprised at the open. Thought it might be higher.

Hoping for 50-100% move today, right now around 30%, was as high as 50%+ earlier. The real money will be entering after the percentages are announced (70-30%?).

Remember, this stock has years of baggage to shed on this deal. It rose to $9.00 on speculation of getting LC in 1998, only to lose it at the last minute thanks to a well placed suitcase of cash. Today it is suffering from the legal residue of the last 5 years and perhaps the stigma of VZ as a partner.

It will take time to establish the reality of the new situation...perhaps several weeks, as I posted last night. The CEO is making the media rounds today...everything is in motion. Patience is a virtue, in other words share prices should continue to trend higher as the story unfolds.

I won't be selling at these levels!

Waiting for a buyout or until progressive good news increases shares to at least 5-6. Long term expecting 10-20US on buyout or 1:1 shares from a major (ABX?). Too many ounces in the ground to let go cheap.

Looking for a close near 3 today. Wishing I had more cash on the side to buy in at these levels.

Good Luck


Post  41611  by  abveldeh       Reply
Eric Fry in Manhattan:

- On Friday, the glass-half-full contingent of US
investors responded jubilantly to the news that: A) our
national employment situation in August was not quite as
bad as expected and; B) Intel's third-quarter revenues
were not quite as dismal as feared.

- Intel, a prominent member of both the Dow Jones
Industrial Average and the Nasdaq Composite, jumped 7.3%
Friday, giving a big boost to both indices. The Dow
gained 143 points to 8,427, while the Nasdaq soared 3.5%
to 1,295. Despite the festive Friday action, however,
the Dow and the Nasdaq both registered losses for the

- So what was the sensational news from Intel? Merely
that its third-quarter revenues would fall only slightly
below the midpoint of its previous guidance of $6.3
billion to $6.9 billion, to something more like $6.3
billion to $6.7 billion. Given the unrelenting bad news
that has been flowing out of the semiconductor sector
lately, Intel's SLIGHT revenue shortfall seemed like
good news.

- And what about the terrific unemployment report from
the Labor Department? Well, at first blush, the August
employment report seemed pretty darned good. The
unemployment rate dipped to 5.7%, from 5.9%, while
payrolls increased by 39,000.

- However, as Alan Abelson observes, "of those 39,000
additions, all and then some - 41,000, to be exact -
came courtesy of Uncle Sam; there were zero net new jobs
created by private industry. On this score, more than a
little troubling was a 68,000 drop in manufacturing
employment, the steepest decline since the cold days of
January. Worth noting, too, we think, is that in each of
the past two weeks, new claims for unemployment
insurance topped 400,000. That intimates the current
month's job numbers and jobless rate could be more than
a touch bleak."

- Economic news that is less grim than feared might be
able to boost stocks for a day or two, but a sustainable
bull market will require bona fide good news, and lots
of it. Sadly, that's not in the forecast.

- As Addison noted in the Weekend Edition, Bill Gross,
Managing Director of PIMCO, thinks "Stocks stink and
will continue to do so until they're priced
appropriately, probably somewhere around Dow 5,000, S&P
650, or NASDAQ God knows where." Gross, in his latest
monthly letter, continues, "Come on people, get a hold
of yourselves. Earnings have been phonied up for years
and the market still sells at high multiples of phony
earnings. Dividends and dividend increases have been
miserly to say the least for several decades now...
Companies have been diluting your equity via stock
options claiming that management needs incentives of
millions of dollars just to get up in the morning and
come in to work. Then they pick you off by trading on
insider information, selling shares before the bad news
hits and you have a chance to get out."

- That about sums it up, folks. Mr. Gross deftly recaps
the litany of negative factors that we've been
highlighting for months in the Daily Reckoning.

- "Come on stockholders of America," Gross indelicately
continues, "are you na‹ve, stupid, masochistic, or
better yet, in this for the 'long run?' Ah, that's it,
you own stocks for the 'long run.'"

- Unfortunately, the long run can be a very long time
indeed. "The return on [stocks] depends significantly on
their beginning valuation and right now valuation
remains poor," says Gross.

- If you pay too much for stocks, a poor investment
outcome is all but baked into the cake. We've all heard
the grim statistics about ill-timed stock buys: After
crashing from its 1929 high, twenty-six long years
elapsed before the Dow finally regained all of the
ground it had lost. Again, after falling below 1,000 in
1973, more than a decade passed before the Dow climbed
back through that level for good. And most recently, in
Japan the beleaguered Nikkei Index has tumbled more than
75% since topping out in 1989. Anyone who purchased
Japanese stocks in 1989 is still nursing massive losses
13 years later, and the prospect of getting back to
breakeven is nowhere in sight.

- "Stocks historically return more than almost all other
alternative investments," says Gross, "but only when
priced right when the race begins. If you start from day
one with P/E's too high or importantly, dividends too
low, you will not obtain equity returns in excess of

- The "right" price, according to Gross, is somewhere
below Dow 5,000. "Dow 4,000 would do it, as would S&P
400," he says. "Until then, stocks are losers and anyone
who owns too many of them will be losers too."

Post  41612  by  uponroof       Reply
Japanese gummint buying stocks...
again. The question is what currency is being used? (hee hee hee!)

"...The Japanese prime minister Junichiro Koizumi is planning to invest three trillion yen (£15bn) of public money into the country's struggling stock market, according to reports.

Japanese news agencies reported on Sunday that the prime minister had bowed to pressure from his ruling party, who are calling for contributions to save the market from collapse..."

uponroof- What happens when this sort of 'free market' intervention becomes it is more and more with each successive effort? Not a good sign from Japan...unless you see their gummint as adept at solving financial crisis.

Post  41613  by  uponroof       Reply

don't get too twisted just yet buddy! Disapointing yes, but not so quick.

The truth is winding it's way from the jungles of VZ, into the 3rd world media-to the 1st world media and then being evaluated by the minions-icons of Wall Street....who, btw, are so busy covering recent major losses they can't find their a sses with both hands. Seeing things clearly is no longer as easy as it once was.

Lets' see where we close today and what Friday brings. I'll be very happy with a 50+% move today.

Good Luck


Post  41614  by  danking_70       OT: PMCW re: name that speaker

Post  41615  by  danking_70       Reply
PMCW re Welch's GE deal

The only people who have to explain this deal is GE's BOD, who dished it out.

What really needs to happen (and I know you have touched on this subject before) is a serious look at how the BOD interacts with the company. They give the word "RUBBERSTAMP" a bad name.

During this time of "Retro-spection", Jack's deal will be included as an example of corporate excess. And it should be.

The only comment that I have had a hard time swallowing by the defenders of this deal is (and I'm paraphrasing) that Jack Welch was responsible for the 200 to 300 billion increase in shareholder value.

So much for the thousands upon thousands of other employees there.

PS. Send an e-mail to Buffet. I got a gut feeling you might just get a reply.



Post  41616  by  uponroof       Reply
Bush Saber Rattling...
Boosts Gold

Interesting comparison to 1990 Invasion of Kuwait

"...John Doody, of the revered newsletter Gold Stock Analyst, has just completed a study of gold during the Gulf War. Gold staged its biggest gains -- about $68 an ounce from the lows, or 20 percent -- in the weeks just before Aug. 2, 1990, when Iraq invaded Kuwait, and in the three following weeks.

"The gold price was in a decline the first half of 1990 despite Saddam's increasing threats against Israel, including use of chemical weapons," Doody notes. "By mid-June, Iraqi troops were being gathered on the Iraq/Kuwait border and Saddam's possible sinister intentions drove gold higher. The price spiked $10 an ounce (higher) on Aug. 2 as Iraq invaded, and gold hit $414 an ounce three weeks later."

Doody said he expects a similar price gain "as tensions heat up, but this time the fear will not be of Saddam's army, but his possible early use of chemical weapons..."

KRY is also mentioned in this report:

"...On Monday, gold mining shares rose more than 2 percent to their highest point since mid-July. One company, Crystallex International (KRY) , saw its shares gain 45 percent on the American Stock Exchange in early trading. The company, after years of waiting, says it is seeing the light at the end of the tunnel in Venezuela, where it is vying to mine the vast Las Cristinas gold deposits.

"This is the first step, and there should be more details later in the week relative to the company's agreement to operate the project," said Bob Bishop, of investment service Gold Mining Stock Report..."

uponroof- This is mainstream media talking...The inference is the situation is still cloudy, "seeing the light at the end of the tunnel", and only "the first step". Not phrases or words used to describe a clear and complete understanding.


Good Luck


Post  41617  by  danking_70       OT: Interview 'betrays secret that bin Laden is d
Post  41618  by  pmcw       OT: Dan, You are exactly right about the source of

Post  41619  by  Warstud       Reply

Do yourself a favor and read some old posts of PMCW's and you'll see who is really clueless. He's been bullish for the past 2 years now. And continues to post the book to bill and other bullish sounding articles on semi's, but the stocks keep falling.

And most of all don't fall for the PMCW newsletter, I've had his subscribers e-mailing me and asking "What should I do" saying they never recieved a newsletter and that it's a BIG scam and all the stocks they bought are at great losses.

Post  41620  by  Decomposed       Reply
re: Gold... KRY & KGC

I just moved my money -- and then some -- out of KGC (bought @ $1.70, sold @ $2.29) and into KRY @ $2.16. Under the circumstances, I think I'm fortunate to bought shares so cheap.

Remember: News like this has to be analyzed by portfolio managers before they're able to make their own purchases and comments. I expect the stock to make strong upward moves each day this week.

In any event, NEM, KGC ... and most other gold stocks... have been strong today. Given that KRY had such monumental news, its own gains for the day struck me as modest. I was really expecting to see it somewhat closer to $3.00 by now.

I'll buy more if it gets any cheaper.

Post  41621  by  pacemakernj       Reply
Decomp, I agree I thought it would be $3 as well. In fact a close below $2 would be very strange to me. How in the world could this stock be lower with the news than it was without it? Pace.

Post  41622  by  pacemakernj       Reply
Roof, would you be worried with a close below $2? Pace.

Post  41623  by  Decomposed       ot: Iraq, uponroof,

Post  41624  by  abveldeh       Reply
Warstud I got it in the last post. Anyhow whatever I would argue I guess PMCW would disagree. I suppose all the people having bought a new car this year will buy an other one next year. Wonder who will lend the money to the US.

Greenspan is playing games again with his 40 billion he can spend on futures cause he ain't enough to move the market otherwise. At least the big banks can unload this way. Also like the way they drop spotgold just before close.

Sure do appreciate this kind of attitude below:

"BTW, I'll continue this dialog when you show me the respect of answering the questions I posed, but not until then.

Regards, pmcw"

Post  41625  by  pmcw       Reply
WS, I tell you what, you tell anyone who emailed you with a complaint stating they didn't receive the issues promised in their paid subscription of my newsletter and I'll send them a refund for double what they paid.

Post  41626  by  abveldeh       Reply
Decomposed, me being considered the most liberal on this board can agree with the Allied putting Sadam Hussein and his minority Baath party out of power. Such has to be decided by the UN and GWB and Blair have to come with substantial evidence.

At the same time if GWB would not obstruct the International Wartribunal, SH could be brought to justice like Milosowitch. Legal prison walls are more efficient than aggression which cannot be accounted for.

Post  41627  by  pacemakernj       OT: Dan, I firmly believe the left could care less
Post  41628  by  pmcw       OT: Pace, to be fair, I feel the far right (specif

Post  41629  by  uponroof       Reply
What me worry? I am absolutely going to hold at least until the details are out!

old saying: "when you're right.....sit tight!" JP Getty I believe.

KRY has just moved from 55th in the world (ranked reserves) to 12th overnight! KRY shares have been higher WITHOUT LC FOR GOODNESS SAKES! No detailed contract SIGNED as of yet, merely an agreement in principal to work together.

There has been so much confusion via legal challenges on this site that clarification will take time. The NEWS on Friday was that VZ was satsfied with KRY, which was pretty much what a lot of informed investors thought. PDG/VVV still screaming bloody murder.

Those who are watching this from a less than informed position are still leary. Those who have OPM at stake are waiting for the details. We are now watching speculative trading based on clouded information.

Here's a good recap on the situation:

All that many chances do you get to by into something AFTER, AFTER, AFTER, the news is out?!!!

Crystallex Intl. Raised to `Speculative Buy' at Yorkton Sec.
By Christopher Stothard
Toronto, Sept. 9 (Bloomberg Data) -- Crystallex International Corp. (KRY CN) was raised to ``speculative buy'' from ``hold'' by analyst George Albino at Yorkton Securities. The 12-month target price is C$5.00 per share

Audio interview with Marc Oppenheimer, CEO of KRY:

btw did you see the POG close?! Word is, heavy bank selling at the end.

btw#2 Pimco's Gross saying DOW 5000...just out today

Post  41630  by  clo       OT: Decomposed: "liberal" thoughts...
Post  41631  by  oldCADuser       OT: I think that was a totally uncalled for and in

Post  41632  by  maximus295       Reply
Warstud - your statements about PMCW's newsletter are downright slanderous. If I were you I would put a sock in it now before incurring any additional liability. The newsletter was delivered as advertised and as investing newsletters go was easily the best value I have ever received for my money. I will be subscribing to the next phase and, after attempting to read abveldeh's confused rants, I would suggest he/she do likewise.

Post  41633  by  maniati       OT: Czech: Thank you for a thought-provoking post.

Post  41634  by  abveldeh       Reply
maximus295, insults are for weaklings. Come with arguments or shut up.

Post  41635  by  StockmanI7       OT: John McEnroe op-ed about 9/11

Post  41636  by  spirare       Reply
ot. Iraq Linked to 9-11 and Oklahoma City Bombing
Wes Vernon,
Monday, Sept. 9, 2002 WASHINGTON-

The Wall Street Journal has added its voice to those - in and out of government - who have concluded the circumstantial evidence linking Saddam Hussein?s Iraq to the 1995 Oklahoma City bombing, the 1993 first World Trade Center bombing, as well as the 9-11 attacks, is overwhelming.

Former CIA Director James Woolsey also expresses skepticism that Timothy McVeigh, executed for the Oklahoma City bombing, and his accomplice Terry Nichols, sentenced to life in prison and awaiting further trial on murder charges, could have planned and executed this monstrous crime all by themselves.

Woolsey believes the work of persistent investigators, reporter Jayna Davis and Middle East expert Laurie Mylroie, are onto something, as many clues in their separate probes point ominously toward Baghdad.

"[W]hen the full stories of these two incidents [Oklahoma City and the first Trade Center bombing] are finally told,? he told the Journal, "those who permitted the investigations to stop short will owe big explanations to these two brave women. And the nation will owe them a debt of gratitude.?

In a lengthy carefully worded Sept. 5 op-ed piece, Wall Street Journal senior editorial page writer Micah Morrison says while the information to date stops short of "conclusive evidence? the Iraqi dictator was implicated in the attacks on the Trade Center or the federal building in Oklahoma City, "there is quite a bit of smoke curling up from the various routes to Baghdad??

That the Wall Street Journal is taking a serious look at the "Iraq connection? is significant if for no other reason than the fact that this Dow Jones icon of business journalism is not noted for an addiction to wild conspiracy theories.

But the WSJ is by no means alone. Other mainstream publications have recently weighed in with similar observations.

"Our position is: Congress should hold hearings on evidence of previous Iraqi connections to terror,? editorialized the Indianapolis Star Sept. 7.

"In the Oklahoma City case,? the paper added, "[Jayna] Davis painstakingly reviewed telephone records that indicate Terry Nichols contacted Iraqi intelligence in the Philippines to acquire bomb-making expertise.?

Two weeks earlier, Star editorial writer James Patterson wrote that Indiana Rep. Dan Burton?s House Government Reform Committee had spent some of the August congressional recess "sniffing around? Oklahoma City looking for reasons to believe that Timothy McVeigh and Terry Nichols had help.

"They found plenty,? Patterson reported.

Committee staff interviewed at least six people who claimed they saw McVeigh keeping company with "foreign-looking men? in the days, "even minutes? prior to the blast at the Murrah federal building that killed 168 innocents on April 19, 1995.

Apparently, the committee?s interest was aroused in part by David Schippers, the Chicago lawyer hired in 1998 as chief investigative counsel for the House Judiciary Committee?s work in the impeachment of then-President Bill Clinton. According to Patterson, Schippers "has been traversing the country? citing Davis?s investigative work in the case.

Yet another credible voice has been added to the chorus of those who do not believe the execution of McVeigh and the sentencing of Nichols neatly added up to "case closed.? Larry Johnson, former deputy director of the State Department?s Office of Counter-Terrorism has told TV audiences that his suspicions in the case were confirmed by "his own deeply held law enforcement contacts? 9Patterson?s description). Further, Johnson is convinced the Middle East terrorist cell that carried out the bombing is still in business.

Suspicion that Iraq was involved in the Sept. 11 attacks was fueled mainly by reports over the past year of a meeting in Prague in April 2001 between apparent hijacker Mohammed Atta (believed to have piloted the first plane that crashed into the World Trade Center a year ago) and Iraqi diplomat Ahmed Khalil Ibrahim Samir el-Ani.

The fact that Atta was located in Virginia and then in Florida shortly before and after the reported meeting has caused much of the media to dismiss the story. Two things about that:

Post  41637  by  CHILAR4567       Reply
OT, Is this the most obvious case of the kettle calling the pot black in a long time? Or am I confused? My recollection of JM in his day, was that of a very obnoxious brat.

"...In travelling the world as a tennis player, I have a better appreciation of other countries than most Americans. We could do with being a little less besotted with money, money, money, win, win, win. "

Post  41638  by  oldCADuser       OT: I was thinking the same thing. Even if this h

Post  41639  by  Culmus       Reply
maniati, everybody must be sick about that options discussion by now

I'm sorry for not having answered that post of yours earlier, I'm working on a rather comprehensive research project that I have a timeline on.

I see we agree on much more points than it originally looked:-) Yet, I still have a little to add to your last post. I did it again, in my last post I again mixed up positive and normative arguments. Concentration problems abound.

In order to prevent me from doing it again please let me cite your comments right in front of my point of view.

So, it sounds to me like you are torn on the matter. It sounds like you wish compensation options could be expensed, even though you realize that they really are not an economic expense.

I do not wish that compensation options could be expensed, I wish that compensation is being expensed, I think it HAS to be expensed. Options just can't, right. That I realize and that was my point from the beginning, I just mixed up the positive and normative aspects. So I agree with everything you said down to the line "It sounds like you are beginning to see this." (I saw that before).

Then you cite me and refer to the second sentence: On the other hand, these options are a form of compensation and hence there must be an expense for that compensation. Stupid me, that sounds again as if I wished options were being expensed. Wrong, they can't, but compensation must be expensed, just not by way of options.

There comes the disagreement, you said: But, don't forget that options do not bypass the income statement entirely: they show up as dilution in the EPS numbers.

I believe the income statement ends with the line "net profit" or "profit after tax". Anything related to the share count has nothing to do with the income statement but only represents a "bridge to the balance sheet" in order to show profit per share as the price of a share in the company is also quoted per share on a daily basis. If options can't be expensed because they have nothing to do with the income statement, then why should the share count have to do with it? I don't see that as being the case. Normally the last line in the income statement, "net profit" would have to be put in relation to the market cap of the company. For convenience companies state earnings per share, not because it would be part of the income statement.

maniati, the question about options being legal or not in my eyes is not as clear as you state. Yes, shareholders have approved options as a form of compensation and it therefore technically is legal, but I doubt that they had in mind to hand over 20 or 30% of the company to these insiders. A direct proxy vote asking for this would not have gotten approval IMO. That's the point where things went out of hand and IMO the "legality has been weakened".

As to double-counting, I have to admit I just don't understand your logic. I have explained that, if you expense options, then that results in double-counting the effect of the options. Obviously, right now, there is no double-counting because options are not expensed. There is only the one effect of dilution. But, if you expense them, then you have both the dilution and the expense. That's counting them twice, and that's wrong.

As I made clear in my prior post, simply referring to "options" is misleading. Compensation by way of options only refers to the part above the strike price. The amount up to the strike price can be neither compensation nor expense (for those willing to try the impossible). There is no loss - and hence no expense - for that part of options which represents the strike price, neither for the company nor for shareholders. It is a "secondary offering" and therefore the number of shares given out must be counted without having anything to do with the compensation or expense question. I can't see what is so flawed with that logic, you can't give out new shares and then don't count them, can you? Maybe you want to re-read that example I made in my last post where I asked to have the strike price equalling the market price and the options would have to be excercized at the same day. There is no cost at all, to nobody.

You are of course right when pointing to my mixing up of the positive and the normative sides in the rest of your post though. That leaves as the only disagreement the question of double-counting or not.



For everybody's information, I have contacted CalPERS about the expense question, below their answer. The critical part of that answer IMO: We believe performance-based compensation produces the best alignment of shareholder and management interests.

The question remains open just how and on what you want to measure that "performance".


Thank you for your interest in the CalPERS Shareowners' Forum. The issue of options has long been under review here at CalPERS. The Investment Committee has had many discussions regarding the offering and expensing of options as well. You may refer to many recent agenda items presented to the Investment Committee to obtain a more thorough review of the matter ( Specifically, you may want to review Item 7B from the June 17th Investment Committee meeting - Corporate Governance/Market Reform as well as Item 3 from the August 19th Investment Committee meeting - Approval of the June 17, 2002 Minutes where portions of Item 7B were approved. Also look for the September 17th Investment Committee agenda item - 7B that will be addressing more in the way of Financial Market Reform.

In essence, CalPERS supports the fundamental reasons for companies to offer their executives and directors a substantial portion of compensation by way of options -- to attract/recruit or retain competent executives/directors. We believe performance-based compensation produces the best alignment of shareholder and management interests. Unfortunately, we have seen companies abuse this practice. For example, we see companies who have Compensation Committees comprised of non-independent directors, repricing of options without shareholder approval, as well as egregious severence agreements offered without prior shareholder approval. All of these examples prove to us that companies are in need of alignment with their shareholders. Ultimately, corporate governance practices within various industries have come under significant scrutiny and are now in the midst of causing market reforms.

Within the coming year, we hope to create a section on our web site to display companies that have offered or may wish to offer egregious compensation packages. We hope that by highlighting these companies, the public will be empowered with the knowledge and desire to force change with their annual participation in the voting of proxies.

Post  41640  by  pacemakernj       OT:PMCW, I did hear those comments from Blair. At

Post  41641  by  Starfleet       Reply
I decided to take a look back and see how the Table board expressed themselves on the events of 9/11. kind of interesting to read the stunned reactions. It was almost a year ago but still seems like yesterday. If anybody else is interested the postings start at #27139...

Never forget, as Andrew Sullivan said in Time Magazine, " the appropriate response to this attack is not grief or remembrance or sadness or reflection, although each of these has its place. The appropriate response is rage..."

Never forget...

Post  41642  by  maniati       Reply
Culmus: Once again, I think we are saying the same thing. You are saying that, if you issue options, then you have to "count them." That means that they have a dilutive effect. I've been saying that all along. So has pmcw. So, we are all in agreement that issuing options is dilutive, and that dilution has to be acknowledged in the financial statements.

Where it once appeared where we disagreed was on the issue of whether options should also be expensed. You appear to agree now that they should not be expensed. Therefore, we appear to be all in agreement on that as well.

Based on your last post, you agree that options have to be "counted" towards dilution. Great, we all agree on that. So, then, counting them as dilution and as an expense would be counting them twice, which would be wrong.

But, you already said that you agree that options should not be expensed, but they should be counted towards dilution. That's only counting their effect once, and that's correct, and we're all in agreement that that is the proper treatment.

So, I don't see what the issue is.

Post  41643  by  pmcw       OT: pace, You are preaching to the choir, but your

Post  41644  by  spirare       Reply
On September 11, final words of love

A final 'I love you' from victims in burning buildings and
hijacked planes

September 9, 2002 Posted: 5:20 PM EDT (2120 GMT)

From Maria Hinojosa
CNN New York Bureau

NEW YORK (CNN) -- What if you had
just one opportunity to say goodbye to
a loved one immediately before you
died? Would you know what to say?
Would you be able to bring yourself say

On September 11, many of the more than
2,800 people killed in the attacks on the
World Trade Center faced those very

The attacks took place as thousands of
workers were just starting their workday.

Moises Rivas, 29, a chef at Windows on
the World, the renowned restaurant at the
top of the center's North Tower, was able
to get a call out immediately following the attack.

His stepdaughter Linda Barragan answered,
according to Elizabeth Rivas, Moises'

"So I called Linda and said, 'Linda, did
Moises call?' And she said, 'Yes, Mami, he
said not to worry, he is OK.'

"'He said, 'Mami, he loves you no matter
what happens. He loves you.' That's it."

Moises Rivas never called again, leaving his
widow with a secondhand account of his
message of love.

"A lot of people, maybe they were screaming and crying and getting suffocated
with the smoke and everything and he tried to call me," Elizabeth Rivas said. "He
called me."

A voice on the answering machine

International trade consultant Melissa
Harrington Hughes, 31, also stuck in one of
the towers, called her father Bob Harrington
at home in Massachusetts at 8:55 a.m., nine
minutes after the first plane crashed into the
North Tower.

"She was a little hysterical and I couldn't
understand what she was saying so I said,
'Slow down a minute and tell me what the
problem is so I can help you out,'" Bob
Harrington said.

As his daughter spoke, Bob Harrington
turned on the television. His heart split open
when he saw the images of the Trade Center on fire, but ever-the-father, he
remained cool and calmly told her to find an exit sign.

"I said, 'You get to the stairwell and get out of that
building as fast as you can.' I told her that I loved
her," he said. "She said, 'I love you too, Dad' and
she said, 'You have to do me a favor. You have to
call Sean and tell him where I am and tell him that I
love him.'"

Twelve minutes later, at 9:07 a.m., Melissa was able to make a second call to her
newlywed husband Sean, who was asleep in San Francisco, and leave a message.

"Sean, it's me," she said in her message. "I just wanted to let you know I love you
and I'm stuck in this building in New York.

"There's a lot of smoke and I just wanted to let you know that I love you always,"
she said.

Her father was left to live with a
gut-wrenching image, yet he was one of
the few that got to say good-bye.

"When she called me, she was
panic-stricken but she thought she could
get out of the building," Harrington said.
"But when she talked to Sean I could see in
her voice that see knew she was going to

"In one instance, it's really good that I
talked to her," Harrington said, weeping.
"Because I can always remember us
exchanging 'I love you' -- 'I love you, Dad,'
It's just painful sometimes because you just don't forget a girl like that."

'We're trapped on the 106th floor'

Other messages were received from victims via the Internet. Bill Kelly, 30, used his
Blackberry pager to send an e-mail at 9:23 a.m. to his sales manager at Bloomberg
L.P., who had e-mailed him to ask if he was safe.

"So far," Kelly replied. "We're trapped on
the 106th floor, but apparently the fire
department is almost here."

Kelly's sister Colleen said she became
fixated with the messages from her brother.

"I was really obsessed with [the]
messages," she said. "Really obsessed and
[I] really wanted to know everything that
Bill might have communicated.

"I think, for me, it was helping me accept
his death and accept that he wouldn't be
able to communicate anymore with us."

Another sister, Mimi, said what she values most about Kelly were the "messages he
gave us all throughout his life."

"We're never going to know exactly what happened," she said. "And I've resolved
in that I know he probably died the way he lived his life. ...

"He died with honor, he died with courage, he died a gentleman and he died with a
lot of love and faith because that's how he lived."

'She said, I love you'

Outside Washington on September 11, American Airlines Flight 77 was hurtling
toward the Pentagon while passengers were herded into the rear of the passenger

Unbeknown to the hijackers, passenger and political commentator Barbara Olson,
45, was able to call her husband -- Solicitor General Ted Olson -- on her cellular

First, Barbara Olson told her husband that
her plane had been hijacked.

"We then both reassured one another, this
plane was still up in the air, this plane was
still flying," Ted Olson recalled during an
interview broadcast on CNN's "Larry King
Live" on December 25, 2001.

"And this was going to come out OK. I told
her it's going to come out OK. She told me
it was going to come out OK. She said, 'I
love you. ...'

"We segued back and forth between
expressions of feeling for one another, and this effort to exchange information. And
then the phone went dead."

Flight 77 crashed into the Pentagon, killing 184 passengers, crew members and
people inside the Pentagon.

Another hijacked airliner, United Flight 93, also carried passengers who phoned
loved ones.

Mark Bingham, 31 -- one of a group of passengers who tried to overpower the
hijackers and regain control of the plane -- called his mother to say goodbye.

"He said, 'I want you to know I love you very much, and I'm calling you from the
plane. We've been taken over. There are three men who say they've got a bomb,'"
recalled his mother, Alice Hoglan.

Fifteen minutes later, Flight 93 crashed in a field in rural Somerset County,
Pennsylvania, killing 40 crew members and passengers.

Post  41645  by  oldCADuser       OT: Well, this is going to be somewhat of a shorte

Post  41646  by  pmcw       Reply
ab, It looks like you're wrong again. You said:

"Nex quarter GM and F will have lower figures and so they will next year."

No wonder you didn't accept my invitation for a bet. ;o) The proof follows at the bottom of this post. BTW, even the analysts expect F to nearly triple profits next year.

Now, let's move on to why I said I would respond to you again when you showed the respect of answering some of my questions.

This isn't a one way street and I get to choose as to whom I will respond. There are very few I ignore. However, in the US we have a little custom we call "quid pro quo".

In your posts you made some outrageous claims that I don't believe are based on fact. As a matter of a fact, you've already withdrawn a couple admitting them to be at least exaggerations. However, I asked you about several others and you simply seem content on ignoring these questions. Let's review:

You said household expenses were currently taking 95% of disposable income. I say that it BS. According to the most recent Fed data the correct number in 14.05% which is less than they were absorbing in Q4 2000. Either substantiate or withdraw your statement.

I also asked you to substantiate the following claim:

"The US owes trillions to Japan and China and Europe and they are not buying US goods just selling their own and China instead of buying more US bonds is moving to other investments."

Again, either substantiate or withdraw the statement.

You said construction was falling in the private and commercial sectors. Assembly you are separating construction for individual and for companies with this statement. If so, we know it is BS. Of course commercial has dropped off. Why build new buildings when you have fewer employees. However, we know that residential is booming.

Please clarify this statement and then explain why it matters that commercial construction is off.

You said: "I could argue DOW at 2-3000 and NAZ at 2-300." As I said, please do or are you just trying to bluff that you have an argument.

You then ended your rant with a gold cheer that included a statement that the Chinese symbol for money is the same as the symbol for gold. I trust you are trying to say that there is only one symbol for money and that this unique money symbol also means gold. Is this what you're trying to say? Or, are you saying that the symbol for gold can also mean money. This prompted me to ask you two questions:

1) What has been the inflation adjusted return on gold over the last two hundred years?

2) The Chinese (you know those are the guys hording gold) were one of the first civilizations to develop currency. What was their first currency?

So, again ab, when you respond to my questions and either substantiate or withdraw your wild claims, I'll respond to some more of the exaggerations you seem driven to post.

And, finally, here's the proof F is doing better than most thought which is exactly what I said they would prove.

Ford expects 'small profit' in Q3
Wall Street expected a loss of 10 cents per share
By William Spain,
Last Update: 5:17 PM ET Sept. 9, 2002

DEARBORN, Mich. (CBS.MW) -- Ford said Monday that it will have a little extra something under its hood in the third quarter: Earnings.

After the bell Monday, the No. 2 automaker announced that, contrary to current Wall Street expectations, it expects to be in the black on the period, although it did not specify a per share number.

The current consensus estimate of analysts polled by Thomson Financial/First Call is for Ford to lose 10 cents per share.

That figure, which excludes unusual items, will have to be revised, says the company's CEO.

Shares of Ford (F: news, chart, profile), which have been running a string of 52-week lows and are at their lowest level in nearly a decade, closed up almost 6 percent at $10.80.

"We beat analyst estimates in the first and second quarters and we will do it again in the third quarter," said Chairman Bill Ford. "On an operating basis, we expect to report a small profit for the third quarter."

The company also said it intends to post "a modest profit for the full year."

Ford credited the turn in fortunes to "success in capitalizing on larger-than-expected industry volumes" and "steady progress on our revitalization plan."

Ford and its competitors have been offering unprecedented incentives to woo buyers, including free financing and large cash discounts. Analysts have questioned how long the industry can sustain the lower margins brought on by these programs, though a Ford spokesman had no worries on that score.

"With $25 billion in cash, we have more than enough liquidity to weather any short-term incentive spending," said Dave Reuter.

Post  41647  by  clo       Reply
Oh My Oldcad!

"So I will give you all an update on the tourist view of the country when we get back (of course I will still be here a couple of more days) but I won't be home for long as on Tuesday, October 1st, I start about 7 weeks of travel both domestically and overseas that will take me to 4 American and 4 foreign destinations (now you see why when I plan a vacation, I generally opt for a "road trip" ;-)."

After reading your post, I'm surprised your vacation isn't staying home! No vehicles at all...

I'm a homebody, (moonchild on good days, crab on off days) I would be in a trauma unit after a year like yours! ;))
So I will look forward to the journey through your windshield.
smiles & safe travels, clo the nester...

Post  41648  by  Culmus       Reply
From my post # 41313:

After - now hopefully unmistakenly - having stated that options are an inappropriate way (at least IMO) to compensate employees, let me comment on their effect since in reality they are being used (I might have mixed up these two matters before, causing that confusion). Even if someone figured out the "right way to expense options", double-counting is not the case because of the two unrelated components of options. Let's assume employees would get these options with a strike price that equals the stock price on the day of grant and they would have to be exercised on the same day. No luxury of 15 years validity. In that case the economic advantage to the employee would be nil, he would pay the days stock price and in effect this were nothing else but a secondary offering of the company to a selected circle of people, employees. But since there are new and additional shares outstanding now, they must be counted in the shares outstanding. This would be no dilution because the employee pays the equivalent of the current share price, he pays exactly what he gets in (market) value and the company gets in additional equity. This would be a value-neutral transaction for all parties, employees and shareholders. Now, whether that transaction takes place on the day of grant or 15 years later and despite the fact that the strike price 15 years later is only 20, 10 or 5% of the then prevailing stock price makes no difference at all. In any event must these shares be added to the number outstanding and this has nothing to do with the "compensation" and "expense" problem, there are additional shares given out and they must be counted. This does not equal any expenses to the company and hence can't be one of the two occasions they are being counted as "expense", therefore no double-counting. The dilution only comes into existence 15 years later after the stock price has increased way above the strike price. For the mentioned reason the dilution does not equal an expense. Would you agree to that? If not, why?

The positive side is that there is a secondary offering with the result of additional shares outstanding. Expense or not, that is what is. In the above example there is no dilution, the share count is increased because new shares are given out.

As stated in that post the dilution does not equal options being counted as expense. The dilution is the result of more shares being given out and that's it.

From your post #41356:

In fact, if you agree with me, then you are better-equipped to fight the real battle. As I said, the issue of expensing options distracts attention from more important issues. And, yes, in answer to your question, by "more important issues," I am talking about issues of executive compensation. I do think it is out of hand.

But, corporate America is trying to sell everyone on the issue of expensing options. Just ask yourself, who is it that has been pushing that idea in the first place? It's corporate America. They have jumped onto this issue, one company after another.

It's a smoke screen. Don't be fooled. Here's why: Corporate America knows that expensing options will not hurt valuations!! Why is that? That's because, by definition, that would be a non-cash expense. And when analysts value the company, corporate America figures that they will just add back those non-cash expenses, like depreciation, amortization, stock option compensation, etc.

Therefore, we will be right back to where we started: the only effect will be dilution, and they will continue to issue stock options, only now they will be expensed. We've accomplished nothing!!

Ok, let's assume that all is correctly reflected the way you state it, the only time options are being "expensed" (note, I have put "expense" also before in hyphens because, first, it is no expense, and second, IMO they also can't be expensed) is by way of dilution (the one time you count it). I agree with your statement that nothing is achieved and valuations are not being impacted because analysts will try to reverse the "expense" by adding it back into earnings. How should that work if the expense is accounted for by way of dilution?

When analysts calculate their "adjustments" they can't reverse the dilution of shares given out as compensation "expense" again when in effect they are still outstanding. We hopefully agree that dilution can't be reversed - also not on paper - as long as the shares are still outstanding.

Apart of my opinion that dilution doesn't reflect an "expense" as described above, for adjustment reasons it also can't be reversed. I continue to think that - if intended as a return for compensation - "expense" can only be that part of options that exceeds the strike price. That part of options would have to be added back into earnings.

Because I oppose options outright as a form of compensation I admittedly haven't looked into the way their "expensing" is intended to be. I understand there are several possibilities, including the treasury method preferred by Maxim Integrated Products which I linked to myself. Regardless which method is being used, there is one thing all of them should have in common.

As "expense" they take the present value of these option packages, again there are different ways of calculating that value. The value of these option packages obviously depends to a great degree on how the stock market fares. Let's assume we get a long and sustainable bull market the kind of which everybody wished came back, like from 1982 to 2002. The number of fully diluted shares outstanding would remain the same (for the options expense already reflected) while the value of these option packages would increase over time (remember, they are vesting over 10 year plus time frames). If a company then constantly bought treasury stock to compensate for the dilution, in a bull market in effect the amount that would be calculated back into earnings would also increase, and that for an expense that supposedly was laid out already. That means estimating "pro-forma earnings" would have to include guesses about the stock market, and correct ones. That will inevitably lead to disaster, sooner or later.

If the value calculation is a one time event at the time of grant rather then being a dynamic process over the life time of the vesting period then employees would turn out to be grossly overpaid during that time. When dynamic then the amounts added back into earnings would increase over time and thus show corporate profits ever higher. If the vesting periods were to become very long at some point corporate profits could exceed sales. What a joke.

As you said, they are going to do it anyway. I take solace in my conviction that a long and sustainable bull market is a long time away.



Post  41649  by  pacemakernj       OT: PMCW, we agree. Thanks. Pace.

Post  41650  by  pmcw       Reply
OCU, I may have mentioned it before, but my wife and I really like checking out a stack of novels before we leave on a road trip. We went through six during one trip.

They have many classics plus a ton of history. Look too for a narrator you like. Lithgow(sp) (Third Rock) is fantastic.

It sounds like you've made the run a few times. There's some real interesting territory west of Colorado Springs if you feel like diverting from the interstate and then rejoining "Route 66" further west.

Regards, pmcw

Post  41651  by  pacemakernj       OT:OCU, inappropriate generalization! Pick up the
Post  41652  by  oldCADuser       OT: PMCW, actually on this trip almost nothing wil
Post  41653  by  ljpit       OT: September 11: One Year On
Post  41654  by  oldCADuser       OT: A little humor to close out the day:

Post  41655  by  uponroof       Reply
pace/Decomposed KRY

1 million Bolivar warrants expired today at $2.75C ($1.76US) = 1.3 million shorts getting very lucky! Sheesh! When is this bad luck gonna end!

"...The stock closed at $3.20, limited somewhat by perennial wannabe's, Vannessa Ventures (V.VVV), continued to grasp at straws in a continuing feeble attempt to sell as much of its stock as possible ( ). This, as well as a million warrants priced at $2.75 for KRY were set to expire today, kept KRY's stock price under pressure for most of the day as profit takers shorted the stock and bought the warrant, for a quick gain.

Much of the market is waiting to hear the details of the agreement between KRY and the Venezuelan government. Our sources state that shareholders of KRY will be very happy with the details of the agreement when finally announced, hopefully in the coming weeks.

Our guess is that Crystallex will likely end up with ownership of 65-75% of the joint venture with the government.

There will be a lot of speculation in the coming weeks, but we believe that at the current price, given today's news, KRY is very undervalued. Its market cap as of today's close is $168 million USD. Their likely ownership of Las Cristinas, when all said and done, should have an asset value of over $2 billion..."
(change stackhouse to stockhouse)

Post  41656  by  spirare       Reply
THIS is what our Nation is responding to.
Please remember that in the difficult times ahead.

Post  41657  by  uponroof       Reply
OCU...thats a keeper!eom

Post  41658  by  maniati       Reply
Culmus: I have taken note that, in the following excerpt, you underlined a portion of it, as follows:

As stated in that post the dilution does not equal options being counted as expense. The dilution is the result of more shares being given out and that's it.

Yes, I know that. I'm quite well aware of that. I've only said a million times that options should not be treated as an expense, and they should be treated only as being dilutive. So, of course I agree with that excerpt. Why do you feel the need to tell me that, and underline it?

I just don't get where any of this is going.

Can you just tell me in one sentence what your point is? I really don't understand this. I do get the sense that there is something here that's important to you, since, in response to my comment that we appear to be in agreement, you have written a lengthy post with lots of cutting and pasting from past posts. But I still don't see what you are trying to tell me.

Is there something we disagree on? If so, what is it? I can't figure out this discussion anymore. And, if there's nothing that we disagree on, then what's going on here? I'm lost.

Post  41659  by  uponroof       Reply
What Our Nation is...
responding to.

Thanks spirare..

Please don't let GWBushmaster see that. If he reacts as I did Iraq will become, no later than tommorrow, the largest lake in the world.

As for the oil problem:

Time for the Saudomites to cease and desist with the 'we got you over the barrel' for oil routine. Let them sell sand to all those lucky new lakefront properties in Iran.