Table On-Topic Summary - 11-Sep-2002
A compilation of this board's financial/economic posts From 41731 to 41787

Post  41731  by  jeffbas       Reply
pmcw, you are correct. In fact, the Fed driving down short term rates reminds me of a similar move when the thrift industry went broke - leading to rising spreads to cover issues of that day, and different issues now.

On a different subject, do you have any guess when the telecom equipment industry might generally start to see sequential increases in sales? Is it months or years?

Post  41732  by  lkorrow       Reply
Hi Clo, that's a good point on paying down cc vs. mortgage debt, it does make sense to get rid of the highest impact debt. CC interest is higher and not even deductable. Hopefully the people with the cc debt are not the people paying down their mortgages! Thanks for posting the story, I only saw it mentioned on TV. I like WM too . . .

. . . only 42 more posts to go

Post  41733  by  lkorrow       Reply
Pace, spirare, shocking too that the Russians were making it. Don't all these people realize it would spread world-wide. MAD, mutually assured destruction. That's beyond insane. I have to think they wouldn't do it, since whatever they unleash would spread world wide.

Post  41734  by  ttalknet2       Reply
Anyone notice wild dollar fluctuations Tuesday?

There's something unnatural about this chart. Looks like a battle is going on.

Post  41735  by  Decomposed       OT: Table ON TOPIC SUMMARY Sep 10, 2002
Post  41736  by  Decomposed       OT: Special Summary: 9/11/2001

Post  41737  by  lkorrow       Reply
Thanks for clarifying, OCU. Your prior post seemed to imply it was more integral to the structure. p. s. have a good vacation, sounds great.

"Further, lending support to what you said about the heat factor, he said that the inner cladding of the world trade centers was made of aluminum which is very combustible after a certain temperature is reached. He also said that because of the structural design it was easier to bring down the towers by striking the upper storeys rather than the bottoms."

Post  41738  by  lkorrow       Reply
pace, roof, I think gold will drop back when nothing happens tomorrow before it resumes its trend. Today seemed really strange for gold and especially the dollar. KRY a little disappointing today, but I see from posts it could take some time . . .

Post  41739  by  ttalknet2       OT: dcomp done good going back 1 year.
Post  41740  by  lkorrow       OT welcome back, Tin.

Post  41741  by  lkorrow       Reply
jeffbas, didn't realize they were refinancing higher mortgages. Doesn't seem prudent. . . .

Post  41742  by  spirare       Reply
September 10 2002, Spot gold in New York settled lower at $317.80 an ounce, down $3.20 an ounce
from yesterday?s close in what is described as light trading.
Gold was pressured by
profit taking by large banks and institutions.
Dealers said Morgan Stanley was once
again the most active participant in the market, taking profits on recent purchases
on behalf of speculative clients overnight and through the morning.
Gold trading will
be shortened tomorrow as the markets will remain closed in the morning hours in
remembrance of the September 11 anniversary.
President Bush addresses the UN
on Thursday, while Dr Greenspan testifies before the House Banking Committee on
the same day.
?The market is long," said a bullion dealer. "Stocks look like they're
going to be up today.
The dollar is a little bit firmer.
Finally the dollar has an impact
and (gold) sold off on a little bit of profit taking."
The precious metal was already up
from its morning lows when the U.S. Navy issued a warning Tuesday morning to
shipping in the Middle East Gulf, which is also called the Persian Gulf, of possible
planned attacks by the Al Qaeda extremist Islamic group against oil tankers.
Gold was hit by profit taking early in the trading session but cut losses after reports that
U.S. raised its terror threat assessment level to orange, as concerns over attacks on
U.S. embassies overseas could be targets for attack.

London gold was fixed this afternoon at $317.90 an ounce, down from $318.35 an
ounce at the morning fixing.
The price of gold tumbled sharply in London as the
U.S. dollar strengthened and the U.S. stock markets recovered at the end of
yesterday?s trading session.
"It is going to remain volatile.
Capital markets are thin
and illiquid generally and therefore jumpy," said John Reade, metals analyst with
UBS Warburg.
Markets were awaiting statements from U.S. President George W.
Bush to the United Nations and British Prime Minister Tony Blair to a hostile
national union meeting. "We've got a few things out over the next few days...
This week is just very much wait and see," Reade said. President George W. Bush will
discuss Iraq in an address to the U.N. on Thursday in a bid to seek international
support to remove Iraqi President Saddam Hussein.
Blair, the western leader most
supportive of U.S. plans, was due to make his case to the nation later on Tuesday in
a keynote speech at the annual conference of trade unions.
"If nothing happens on
the terrorist front and the crest of war recedes somewhat, then we could see gold
move back further," Reade said.
"The political situation remains the key driver in the
gold market, although the nervousness pervading all markets at present has kept
trading volumes low," said Rhona O'Connell at the World Gold Council.
After the
run up yesterday, gold retreated on the back of profit taking in Asia and further
selling in London.
The physical market remains broadly sidelined, awaiting price
stability, she added.

Earlier Gold closed at U.S. $317.80 an ounce on Tuesday in Hong Kong, down
$4.35 from Monday's close of $322.15. Spot gold fell in Australia and Asia on light
trade and profit taking after the recent run up in the price of gold.
Much of the
selling appears to be from dealers and Australian producers.
Gold traded in a very
narrow range in the Asian morning on light volume with many investors already
positioned ahead of the anniversary of the September 11 attacks, dealers said.


The U.S. equities markets sold off late in the session on a change in the
Tom Ridge ?color alert? to orange.

Apparently this is a higher-level alert.

The market did not seem too impressed and subsequently rallied higher on light volume
as institutions began to buy S&P market futures in the last 2 hours of trading.

Concerns about terrorist attacks on oil tanker sinking, threats of possible attacks on U.S. embassies, and the
continuing threat of war in the Middle East put a floor of
support under gold in spite of ?profit taking? by certain banks and investment

The U.S. embassies in Malaysia and Indonesia have been closed as a
precaution and others may be closed tomorrow as well.

One often cited reason why
gold may see reduced demand is that the drought in India may reduce gold
purchases by rural Indians.

However, buying remains in place and the slack has
been picked up in other Asian countries and by investment buying elsewhere.

The drought is a global concern that portends possible global famine in much of the

Recently grain prices have moved higher in anticipation of tight supply and
the stocks of grain-based corporations have risen, as crop failures are widespread.

Petroleum prices have been rising on declining oil inventories and Middle East

It appears that inflationary pressures may be on the horizon.

***Precious metals purchases have held up very strong, as people have taken a shine to gold and silver for its
insurance properties.***

100 years of data shows that when the dow gold ratio peaks, it likely returns to near a 5-1 ratio....

Here is another chart showing this with a projection on it.

Here is a chart of CALVF going back to 1985.

peak in 1987, higher peak 8 years later in 1994-95,

8 years from that is 2003.

History suggest a 5-1 dow-gold ratio that would send gold very high.

CALVF shows a long history of being dorment then exploding.

Not knowing how high gold will go, either 500 or 1000, and knowing CALVF has many more shares now so i
doubt that it
see's over 8.00 unless gold hits 1000.

But since you can buy all you want here for under .20cents.I'm placing my bet gold gets to at the worst 450-500
CALVF puts in a huge 16 year Head and Shoulder near 4.00 a share.

Not a bad return at all.

good luck

By: drooy $$$$$
09 Sep 2002, 09:38 PM EDT

Current Price of Gold

* * * * *

War on Terrorism

The victims demand it.
The families demand it.
America demands it.
Freedom demands it.


THIS is what our Nation is responding to.
Please remember that in the difficult times ahead.

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

Post  41743  by  abveldeh       Reply
Late mortgage payments on the rise

But economists say the surge of defaults, delinquencies won't hurt the housing market.
September 10, 2002: 3:47 PM EDT
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - The potential dark side of a red-hot U.S. housing market showed its face in the second quarter, as Americans defaulted on their mortgage loans at a record pace.

The Mortgage Bankers Association (MBA) said Monday that 1.23 percent of all U.S. mortgages were in the process of foreclosure at the end of the second quarter, the highest rate on record, compared with 1.10 percent in the first quarter and the previous record of 1.14 percent, set in the first quarter of 1999.

The MBA also said that 4.77 percent of homeowners were delinquent -- behind a month or more on their mortgage payments -- compared with 4.65 percent in the first quarter.

Most economists, however, downplayed the significance of this data, saying that an influx of new homeowners, attracted by historically low mortgage rates, naturally raised the number of people who would also struggle to make payments.

"The historical low delinquency rate was 3.9 percent in the late 1970s, while the historical high for delinquencies was 6.07 percent [in 1985]," said MBA chief economist Doug Duncan. "Right now it's right in the middle between the all-time low and the all-time high, and we're just coming out of a recession."

An increase in unemployment and a slowdown in wage growth after a recession that began in March 2001 has also hindered borrowers' ability to make payments, Duncan and other economists agreed.

All in all, most economists doubted the data implied significant potential weakness in the housing market, which has been outrageously strong despite the recession.

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Milking the 'bubble'

"Mortgage rates are very low; usually when they're high is when the economy begins to deteriorate, and that leads to tighter lending," said David Lereah, chief economist at the National Association of Realtors (NAR). "But mortgage rates are low and the debt service is low, so the burden's not that high right now -- there won't be as much tightening as under other scenarios."

Demand for houses will drive sales of new and existing homes to a record pace in 2002, according to the NAR. Home prices have risen a whopping 31 percent in the past five years, including 7.4 percent in the past year alone -- much higher than normal increases.

These higher prices have made homeowners wealthier, helping them weather a prolonged bear market for U.S. stocks. And a surge of mortgage refinancing has lowered monthly payments, while people have been able to borrow on their increased home equity.

These factors have helped support consumer spending, which drives about two-thirds of the total U.S. economy.

Some observers have worried that prices are just too high, that there's a "bubble" in the housing market that will pop, soaking homeowners and sinking the economy.

But most economists say that the current housing market does not look like a bubble because there's very little excess housing supply on the market, meaning prices aren't artificially inflated.

"I don't think home values will crash -- they will rust, not bust," said Richard Berner, chief U.S. economist at Morgan Stanley. "Demographics have underpinned demand, courtesy of a wave of immigration in the past 16 years that reduced supply, and you don't see the speculative overhang that could contribute to a bust in home values."

The MBA report came on the same day as a Federal Reserve report that growth in consumer credit surged to a 7.6 percent annual rate in July, including a 10.8 percent jump in credit card debt, home equity loans and other revolving credit.

Calculators: Your Home
Refinancing calculator

Two homes better than one?

Mortgage qualifier calculator

The housing market could also be slowed down a bit as mortgage lenders, seeing the gains in delinquencies and defaults, tighten their standards for issuing loans. Most observers doubt such a tightening will be enough to make much of a dent in the housing market.

"I don't think we'll see credit standards get too tight," said Greg McBride, a financial analyst with "To get the very best rate, borrowers are having to be more pristine in terms of their credit history and personal balance sheet. That makes [borrowing] more difficult, but it doesn't shut people out."

And while a Wall Street Journal report on rising mortgage defaults partially blamed aggressive lenders for luring people with less-than-stellar credit into a financial situation they couldn't afford, McBride pointed out that the buck stops, finally, with the buyer.

"The borrower is the one that has to make the monthly payments, not the loan officer," he said. "In the event that a borrower is pushed into a loan they may not be able to afford, that's a decision they have to make -- and they're in the best position to make that decision."

Post  41744  by  abveldeh       Reply
Duitsland: handelsoverschot stijgt, export daalt
11/9/2002 09:27

AMSTERDAM (De Financieele Nieuwsdienst/bn) – Het handelsoverschot van Duitsland is in juli gestegen naar euro 12,1 mrd. Een maand eerder bedroeg het overschot een herziene euro 10,8 mrd. Dat heeft het Duitse Bundesamt für Statistik bekendgemaakt.

Het overschot steeg ondanks het feit dat de export in juli met 4,5% daalde ten opzichte van de voorgaande maand. De import daalde met 7,3% echter nog sterker.

Copyright (c) 2002 Het Financieele Dagblad

Post  41745  by  clo       Reply
IamCanadian, many thanks for stopping by and offering your

knowledge on WM! I will keep an eye on the outsourcing issue.
Now if you could tell me when they will push through 40.00 and not look back I would be even happier ;))

Hope all is well in your corner of the world. clo

Post  41746  by  pdowd       Reply
Sun Micro's secret dot-comeback plan
Commentary: New sales mantra 'prove it works first'
By Mike Tarsala,
Last Update: 12:09 AM ET Sept. 11, 2002

MENLO PARK, Calif. (CBS.MW) -- I set out this week to write a damning report about how Sun Microsystems, the company that supposedly makes the "Net work," will never make a dot-comeback.

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I had all the formulaic metaphor prepared: The future of the company remains overcast. Demand is cloudy, at best. It's only a matter of time until IBM and others fully eclipse Sun's piece of the high-end computing market.

Then I saw the light -- or at least some light. A meeting this week with some of Sun's top managers challenged some of my worst perceptions about the company. I came away convinced that Sun might have staying power as a general-purpose computer maker after all.

"When things do turn around, and they will, we're going to be in much better shape going into the next bubble than we were in the last bubble," said CEO Scott McNealy.

McNealy is one of many ever-effervescent tech executives who spout platitudes for a living. His statement seems to mean as much as this week's vow of sobriety by Snoop Dogg, the rap musician who a few months ago won the Stoner of the Year Award from "High Times."

This time, at least, McNealy might not be blowing smoke. Key to Sun's future success is the process executives spelled out this week for selling in the recession. Sun is revamping the ways it seeks out new customers. The changes may help Sun boost sales in new markets, even if the tech industry's hangover lingers.

Sun (SUNW: news, chart, profile) executives demonstrated its long-awaited customer-briefing center at its Menlo Park, Calif. campus this week -- the largest of 70 centers Sun has in place worldwide. Each center is a place for Sun to display products for solving business problems in the manufacturing, government, health care, education, and retail, sectors -- areas where Sun desperately needs to build its market share.

The multi-million dollar Menlo Park facility, in particular, is a place for Sun's employees to join with other tech company talent to build customized solutions. The center, complete with Sun's top-of-the-line hardware, serves as a place for both salespeople and engineers to prove that all of their technology concepts work, both in practice and in theory, before customers plunk down any money.

Listening to McNealy, the new, customized sales method sounds all but surefire. He says Sun signs contracts 85 to 90 percent of the time when it first proves to customers that all the technology involved will work as planned. Executives won't say what percentage of all deals are closed through the customer centers, though.

Analysts conclude that Sun is working to do more business through its customer centers, and that they are already helping Sun to close a high percentage of deals. They are expected to take at least some business that would normally go to IBM. And they may even help Sun take some business away from high-priced consulting groups.

"The benefit to the customer is that you can try it, and you can develop a proof of a concept on someone else's dime," says Kevin Murphy, a research director for Gartner G2 in Stamford, Conn. "People are looking all over the place for ways to save money."

To be sure, new sales methods won't solve Sun's multitude of problems. The company still faces countless marketing and sales challenges. Management still relies on the woeful telecom industry for nearly half its sales. Sun is being forced to sell less expensive hardware that eats away at its core high-end Unix business. And the company is facing its most imposing hardware and services competition ever from the likes IBM and Hewlett-Packard.

Did I mention the exodus of more than a half-dozen executives?

The near term looks as bad, or worse. Sun's sales are expected to be to 15 percent lower than the previous year -- or at the low end of expectations. Analysts say the company's operating expenses could creep higher, resulting in more layoffs. And market statistics show IBM is making gains in the Unix market.

It's painful to even talk about the company's one-time wonderstock, which now trades at $3.50 -- less than the price of a hotdog at the ball game.

But this week, Sun's management showed that they have a grip on reality. They know what they need to do to close business.

Also, the company seems to have come a long way toward shedding Sun's reputation for arrogance. The selling process has changed dramatically from just a few years ago, when Sun sold equipment based on the strength of its hot hardware boxes, and on its slick marketing mantras.

Today, Sun executives know all too well that the old way of selling doesn't work. Being the dot in dot-com doesn't mean what it used to mean - if in fact it ever meant anything at all.

(Voluntary Disclosure: Position- No Position)

Post  41747  by  pmcw       Reply
jeff, All I can say for sure is between Q1 2003 and Q3 2005. If the Senate had acted in the best interests of America when they passed HR3090 it would have most certainly been Q3 2002. Regards, pmcw

PS: Qualification - we are talking about traditional wireline telecom

Post  41748  by  pacemakernj       Reply
Roof, that is truly scary stuff. I do follow the CRB index and have noticed its' rise. It's now coming up against a multi year high of 230. Since Jan 1 it is up 19.5%. A move above 230 and it would be very bullish. I now believe we are in this process of a new leg of what will be a major move of inflation. I believe that is what is being sewn. I know I have been on the fence between the inflation/deflation scenario but this move in the CRB is just too hard to ignore. I think the last shoe to drop as a confirmation of this will be the POG breaking the 330 barrier and staying above that. There is, imo, too much money coming online. The government begins it's new fiscal year in October and all that defense spending coupled with AG's printing machine will spur the economy. If not by the 4th quarter of this year most likely by the 1st quarter of next. All this is very good for gold, imo. I think this is what the charts are telling us. Pace.

Post  41749  by  Tampathom       Reply
USCENTCOM to move from Tampa to Qatar

"Fox By August Cole
The joint command running the U.S. antiterror campaign and other military efforts in Central Asia and the Mideast will reportedly begin packing up from Tampa, Fla. to head to Qatar after President Bush's Thursday address to the United Nations. Fox News, citing unnamed military sources, said Wednesday the shift of the U.S. Central Command would begin as soon as Friday. Qatar, tucked next to Navy stronghold Bahrain, is on Saudi Arabia's doorstep and is home to a significant air base."


Post  41750  by  pacemakernj       OT: Linda, nothing is more dangerous than a wounde

Post  41751  by  pmcw       Reply
The Imaginary Evils of Deflation

by Christopher Mayer

Deflation is popularly defined as a general fall in prices; it is the opposite of what most people generally think of as inflation. It is most commonly associated with the Depression and with the recent economic woes in Japan.

Perhaps as a result of this common association, or perhaps as a result of a more general weakness in the clarity of economic thought, deflation is often seen as something that brings calamitous consequences and as something that must be prevented.

One of the more surprising recent business best-sellers is a book titled Conquer the Crash, by Robert Prechter. It is surprising because the public does not often take to being told that disaster is around the corner. Optimism is the far sweeter fruit, more often indulged upon whether the facts justify it or not. Be that as it may, Prechter’s book calls for a deflationary depression and paints a rather dire picture of financial distress.

Deflation worries are gathering more and more attention. The Wall Street Journal recently ran a piece titled “Deflation Fears Make a Comeback,” in which it noted the fall in prices of selected goods but warned that “if deflation spreads into other segments of the economy, it could turn into a major problem.” Assuming a connection, the article mentioned financial hardships during the Great Depression and in Japan.

Not only is deflation seen as something that is harmful, but it is also viewed as something that must be prevented. Naturally, the Fed is envisioned as the institution that should do the job. A recent Fed paper titled “Preventing Deflation: Lessons from Japan’s Experience in the 1990s” takes it for granted that the Fed ought to take measures to avoid deflation.

There is something about monetary phenomena that make them a particularly misunderstood aspect of economic life. Deflation is no exception. There seems to be little understanding as to what it is, what causes it, and whether or not it is something that should be prevented.

Professor Joseph Salerno has done us all a favor with a well-written paper titled “An Austrian Taxonomy of Deflation” that makes it much easier to answer these questions and cut through the muddle of media hype and distortion.

The effects of deflation, like the quality of drinking water, cannot be considered without regard to its source. According to Salerno’s taxonomy, there are four basic causes of deflation.

The first is growth deflation, which stems from increases in efficiency and productivity. Assuming the supply and demand for dollars is unchanged, an increase in the quantity of goods produced will result in falling prices. In other words, the same amount of dollars can now purchase more goods. The common example of this deflation is to look at the falling prices for technological goods. The computing power a consumer can purchase for a dollar today is much greater than what could be purchased even a few years ago.

Growth deflation should be the prevailing trend in a healthy progressing economy. It is only because of years of rampant money supply growth, endemic under a fiat currency system, that inflation has become the accepted norm. As Salerno notes, “throughout the nineteenth century and up until the First World War, a mild deflationary trend prevailed in the industrialized nations as rapid growth in the supplies of goods outpaced the gradual growth in money supply that occurred under the classical gold standard.”

Growth deflation, then, is by no means harmful. It is the natural product of voluntary exchanges and the ever-increasing productivity that has become the hallmark of market economics even among it detractors.

The second type of deflation under Salerno’s taxonomy is cash-building deflation, which occurs when the demand for money increases. All other things being equal, an increase in the demand for cash will raise the price (i.e., the purchasing power) of the currency. Increased purchasing power implies a fall in prices.

Hence, this deflation, too, is a result of that action taken by free individuals to meet certain needs--the need for the additional security gained by holding more cash, for example. If one remembers that the ultimate basis for economic action is to satisfy human wants and needs, it is hard to imagine why cash-building deflation (called “hoarding” by its critics) is thought to be malign. From the perspective of the consumer doing the cash-holding, it is obviously not a bad thing. Clearly, a want or need is being satisfied.

Then there is bank credit deflation, which comes from the contraction of the money supply. Salerno writes that “the most familiar is a decline in the supply of money that results from a collapse or contraction of fractional-reserve banks that are called upon by their depositors en masse to redeem their notes and demand deposits in cash during financial crises.” The effect of such a collapse, holding other factors constant, is to increase the purchasing power of money.

Bank credit deflation, Salerno asserts, “has a salutary effect on the economy and enhances the welfare of market participants….Bank credit deflation is a benign and purgative market adjustment process.” Obviously, you cannot have a bank credit deflation without first having bank credit inflation. It is the inflation that creates all the malinvestments and excesses of the boom. Bank credit deflation is a force that works to correct those errors so the economy can profitably grow again. Despite the beneficial effect of bank runs and credit deflation in helping to check credit inflation, it is hard to imagine any widespread bank failures given the hyper-interventionist government we live with today and the ease with which money can be created.

While the money supply did contract during the Great Depression, Salerno notes that the stabilization policies of the Hoover and Roosevelt administrations “prevented the deflationary adjustment process from operating to effect the reallocation of resources demanded by property owners.” These attempts only hindered the recovery and worsened the depression.

Finally, there is confiscatory deflation, which is the only kind of deflation that is unequivocally bad for market participants. It is also the kind of deflation that is usually overlooked. Confiscatory deflation is forced deflation brought on by the exercise of political power.

The most recent example of this is the debacle that occurred in Argentina, when the government attempted to prop up the ailing peso (a victim of soaring money supply growth) by preventing or limiting the ability of Argentines to make withdrawals on their bank accounts. By preventing withdrawals, it was hoped that the bankrupt banking system could be saved--at the expense of millions of Argentines’ savings!

The events that followed are still fresh in our memory: riots, loss of life, property damage, the forced resignation of Argentina’s president--in short, chaos. Confiscatory deflation, in addition to being an act of outright thievery by a government, also is tremendously harmful to the market’s participants. It blocks them from meeting their wants and needs.

Given this framework for understanding deflation, how likely is it that the U.S. economy will experience the sort of widespread deflation that worries so many observers? Salerno believes that there is little chance of that. Given the slow growth or recession expected in 2002, there would seem to be little risk of growth deflation for a while. Salerno cites some evidence of cash-building deflation, but this, he says, tends to be a short-term phenomenon. Looking at the money supply, there is the expansionary monetary policy of the Fed, coupled with the fact that “there is no evidence that Americans are losing confidence in the banking system.” Again, given the hyper-interventionist government of today, it is hard to imagine widespread bank failure, however beneficial the effects of such failures might be.

Salerno concludes that “an existing or imminent deflation in the U.S. is chimera conjured up by those unfamiliar with sound, Austrian monetary theory.” Whether or not a widespread deflation does hit the U.S. economy, given the analysis summarized here and assuming it is not of the confiscatory variety, it is certainly not something to fear or prevent.

Post  41752  by  IamCanadian       Reply
Clo, I think WM should push through 40 by the spring as the Dime acquisition becomes more accretive to earnings. But, they need to stop the buying spree and digest this stuff for a while. Only one other FI was better than WM at integration--BofA (Nations)--and it was close. Though they have a big outsourcing bill (about $100 Million I think), if the economy wanders a while, the other guys will be busy cutting what WM already doesn't have--huge backroom operations. BTW, they also have the best performing group of mutual funds last time I looked. Regards eh, IAC

Post  41753  by  maniati       OT: ...which is pretty much an admission by Tommy

Post  41754  by  jeffbas       Reply
pmcw, if it is Q3 2005, virtually all telecom equipment players will be bankrupt - LU, NT et al.

Post  41755  by  jeffbas       Reply
pace, it depends on your perspective. I suspect that the Federal Reserve and most everyone else would be delighted if rising commodity prices meant purchase of raw materials to meet rapidly accelerating orders. That would lead to more inflation, higher interest rates, and perhaps a rising gold price.

I doubt it. Rising food prices don't impress me with their long term inflationary impact. Rising oil prices are deflationary - like a tax increase. Falling interest rates suggest lack of concern, as they are an early-warning sign.

Post  41756  by  pmcw       Reply
Not necessarily. The best are reducing fixed costs so that they can operate profitably at lower levels. I predicted last spring that wireline (US only) spending would be off nearly 50%. When the figures come in, I'll bet I'm pretty close. The popular opinion then was a year over year drop of 37%. I see a strong potential for stabilization in 2003 with a chance for a uptick. The latter could be assured with a reasonable stimulus package from Congress.

I see T and WCOME being bought as a near certainty and FON as a wildcard. I also see consolidation in wireless, but I'm not sure which will be buyers and which will be acquired.

In the equipment provider world, I'm much less certain about NT's ability to remain solvent than I am LU. I also feel CSCO will continue to grow to compete with both. ADCT is also getting crushed, but has a nice pile of cash going forward. If someone falls into bankruptcy, they might end up being a buyer.

Right now, I think the entire traditional telecom world in focused much more on survival - either as a stand-alone company or as an acquisition - than they are on growing.

Regards, pmcw

Post  41757  by  wilful10       Reply

Post  41758  by  pmcw       Reply
jeff, You said rising oil prices are deflationary?????? I don't think so. This country was built on the premise of cheap communications and cheap transportation. If the cost of either is raised the cost of everything is increased. Rising oil prices were at the root of inflation in the 1970's. They were the spring under the spiral. Sure, guns to butter played a part, but IMO, it was not the root cause.

Rising oil prices can stem consumerism for a while, but any prolonged rise or rise of a substantial percentage that is more than perceived volatility, spirals through the economy in a very determined fashion. It raises the cost of everything which drives wages which raises the cost of everything which...................

Regards, pmcw

Post  41759  by  Tampathom       OT: From the standpoint of communications, I don'

Post  41760  by  jeffbas       Reply
Interesting comments on deflation, pmcw. His conclusion, “an existing or imminent deflation in the U.S. is chimera conjured up by those unfamiliar with sound, Austrian monetary theory” suggests that Prechter has pulled the usual writers' stunt of throwing a bunch of wild forecasts up against the wall (and sell some books or newsletters), and hope one sticks (so you can sell some more books or newsletters). My view of most of these folks (except the pmcw newsletter, of course) is that if their opinions were worth anything they would be making money privately and doing charitable good works publicly (which you do). Instead their real business is selling books, newsletters, and giving paid seminars and speeches.


I was inspired to attend church this morning by the anniversary of 9/11. I highly recommend it to any and all who were affected by this event, which is everyone in my area. It is good to reflect and remember on this occasion - particularly in that setting. Most communities are having evening services of various kinds as well.

Post  41761  by  jeffbas       Reply
pmcw, I think that I will stick with what I said, "Rising oil prices are deflationary - like a tax increase". While I of course agree that the first order effect is inflationary, I think that in a weak economy the extra money for these costs will come directly out of demand for something else (deflationary). In other words, we send another $1000 for gas and heating oil overseas, but spend $1000 less for something else at home (which has a bigger effect, if I remember my economics correctly).

Post  41762  by  pmcw       Reply
Beige Book Summary:

Beware of talking heads who either don't understand the data or simply want to give it a good spin. It essentially means nothing since there is absolutely nothing conclusive beyond what we already knew. One interesting point below is in bold.

Prepared at the Federal Reserve Bank of St. Louis and based on information collected before September 3, 2002. This document summarizes comments received from business and other contacts outside the Federal Reserve and is not a commentary on the views of the Federal Reserve officials.

District reports suggest that the growth of economic activity has slowed in recent weeks, with a good deal of variation across sectors. Although Atlanta and San Francisco reported modest improvement, most Districts indicated slow and uneven economic growth, with mixed or scattered experiences across sectors of the economy. Boston and Dallas reported little change in the overall level of economic activity.

Retail sales were generally mixed, although seven Districts reported strong sales of home furnishings or appliances. Three Districts attributed slow apparel sales to unseasonably warm weather. Back-to-school supplies were reported to have sold well in three Districts, although another District reported disappointing sales. All Districts noted that retail inventories were at desired levels, with some reporting that inventories are being kept leaner than in the past. Almost all Districts reported an increase in auto sales over 2001 levels, mostly due to aggressive financing and rebate incentives.

On the whole, manufacturing activity was sluggish, with a good deal of variation by industry and region. In particular, some Districts reported weakness in the high-tech and building materials industries, although other Districts reported strength in the auto and steel industries. The strength of the tourism sector varied across the Districts, with six indicating an increase in business and four reporting low or mixed activity. Almost all Districts noted that business travel has remained at a low level.

Most Districts reported little or no gain in employment in July and August, although three noted that the demand for temporary workers has strengthened. In most Districts, the prices of inputs and final goods increased slightly or remained flat. Despite few signs of pressures on wages, there was widespread concern about the effect that rising health care costs might have on labor costs.

Nearly all Districts reported strong residential sales and construction activity. On the other hand, commercial real estate markets remained weak. Banks in all Districts report strong demand for residential mortgages and refinancing, although business lending continued to be weak across the board. Credit quality was described as good and delinquency rates as either stable or declining.

Drought conditions have been adversely affecting crops and livestock through most of the West and large areas along the East Coast. The experience elsewhere was more mixed, with yields severely reduced in some areas and near-record levels in others. Oil prices have risen while natural gas prices have been largely unchanged. Natural gas inventories are expected to be at record high levels when the heating season begins.

Consumer Spending
The retail sales picture was mixed for the nation as a whole in July and August, with some Districts posting declines in sales and others noting slight gains over 2001 levels. Home furnishings and other home products were strong sellers in Kansas City, Atlanta, St. Louis, Cleveland, and New York. Some Districts noted robust sales of back-to-school items while others have been disappointed with sales so far. San Francisco and Boston reported strong demand for large appliances. Several Districts, including Cleveland, New York, and Philadelphia, noted that warm weather was responsible for sluggish sales of fall apparel; others reported that apparel sold well. All Districts noted that retail inventories are in line with expectations, although a few heard that retailers are maintaining leaner inventories than in the past. Chicago, Dallas, and Boston reported that discount stores have continued to register stronger sales than general merchandisers. While Minneapolis noted that mall traffic was strong in August, other Districts reported a drop-off. Overall, retailers are cautiously optimistic about the fall, expecting sales to be flat or slightly up from their 2001 levels.

Almost all Districts reported an increase in auto sales over 2001 levels, mostly due to the aggressive financing and rebate incentives offered. Inventories are at desired levels for most contacts, although many dealers are clearing out 2002 models to make room for 2003 models. Most Districts report that dealers are optimistic about sales for the next few months.

Manufacturing and Other Business Activity
Reports of manufacturing activity indicate that there was little to no growth in July and August, although Atlanta and St. Louis reported modest improvement. Some industries have struggled with sluggish orders while others have experienced moderate gains. Although several Districts noted that overall orders in the high-tech industry are still weak, demand for semiconductors has continued to improve in Dallas and San Francisco. pmcw comments: These happen to be two of the largest markets for semis on the planet. If the semi market in these areas is up and inventory is down, someone is building something and shipping it to customers. In the most recent release of GDP data, it is clear that IT spending is holding and is the only portion of cap/ex that really remains healthy Boston and Cleveland reported that residential appliance activity was up. While Philadelphia reported strong demand for construction materials, Dallas, Minneapolis, and Atlanta have seen declines in demand for these products. According to contacts in the Chicago, St. Louis, and Cleveland Districts, activity in the steel industry continued to increase. These Districts, along with Atlanta, also saw higher production of automobiles and automobile components. Richmond and Atlanta saw increases in orders and shipments of packing materials. New York reported a mild rebound in manufacturing activity in August after a dip in July, while the Kansas City manufacturing sector saw fewer signs of improvement in July and August. Several reports noted that positive attitudes still prevail, but manufacturers have become less optimistic than they were earlier in 2002.

Reports from the tourism sector were also mixed across Districts. St. Louis, Minneapolis, Atlanta, Kansas City, Chicago, and New York reported an increase in business, while Boston, Philadelphia, San Francisco, and Richmond observed low or mixed overall activity. Most Districts noted that the duration of leisure visits has declined and that visitors are spending less money per trip. Almost all Districts noted that the level of business travel is low, as is demand for air travel, which has been affecting hotel occupancy rates in some areas. Dallas reported that auditing activity was strong, as was the demand for some legal services. The Atlanta District noted that Mississippi gaming activity has been strong. Boston reported that the temporary employment industry and the majority of software and information technology services have seen flat-to-modest increases in sales and revenue this summer. Trucking firms in Maryland and North Carolina reported soft demand.

Labor Markets and Prices
Labor markets in several Districts -- Cleveland, Atlanta, Chicago, and Minneapolis -- showed little change since the last Beige Book. In New York, hiring remained sluggish, although some signs of a pickup were noted for August. Firms in Kansas City expressed little interest in new hiring as they wait for further signs of improvement in the economy. Many contacts in Chicago indicated a downward trend in the demand for workers in the retail sector while retail payrolls in Boston and Richmond held steady. Manufacturers in Richmond and St. Louis reported little new hiring, although one manufacturing contact in Chicago reported a modest increase between June and July. The majority of manufacturers in Boston expect only small changes in employment for the rest of 2002. The Boston and Richmond markets for temporary employment experienced stronger demand in recent weeks. In Dallas, call centers and light industrial and manufacturing firms have the most need for temporary labor. Overall, wages were reported to be flat, with virtually no reports of upward pressure on wages. Contacts in San Francisco, however, reported an abundant supply of labor and flat-to-slightly elevated wages.

Prices, too, remained unchanged, on average, although Atlanta, Dallas, Kansas City, and Boston reported an increase in steel prices. Prices of inputs and final goods increased slightly or remained flat in most Districts. The prices of building materials were said to be up in Atlanta, although San Francisco and Kansas City reported that these prices remained low in July and August. In almost all Districts there was concern about the rising cost of health insurance, which is leading some businesses to have higher labor costs.

Real Estate and Construction
Despite the weakness in commercial markets, most Districts, except for Dallas and Philadelphia, reported strong residential sales and construction activity. Contacts in Richmond and Cleveland attributed this vigorous activity to a favorable interest rate environment. In the Atlanta District, strong sales in some Florida markets have created a shortage of homes. July saw the highest number of monthly home closings for the Minneapolis-St. Paul area in five years. Existing home sales for July and August picked up in some Chicago markets. Prices for single-family homes in New York and Minneapolis were up in the second quarter from a year earlier, but apartment rents were reported to be lower than a year ago. Philadelphia and Dallas are the only Districts reporting less than robust residential sales. Real estate agents in Philadelphia reported an easing in the rate of sales in both new and existing homes for July and August. Total home sales remained unchanged in Dallas. Homes priced below $150,000 in Dallas continue to sell, but sales for higher-priced homes are slow. In Kansas City, sales and starts were also stronger for entry-level homes than for higher-priced homes.

Commercial real estate markets remained soft in Boston, Philadelphia, Chicago, Minneapolis, Kansas City, Dallas, and San Francisco. Boston, Philadelphia, Minneapolis, and Kansas City noted increased office vacancy rates for portions of their Districts while San Francisco reported unchanged vacancy rates for commercial and industrial space. New York, Richmond, Atlanta, and St. Louis indicated little or no overall change in commercial markets. Commercial construction opportunities slowed in Cleveland, St. Louis, Kansas City, and San Francisco. Commercial realtors and contractors in Kansas City and Boston do not see any signs of improvement in the near future.

Banking and Finance
Bank loan demand was generally mixed. However, Richmond, Atlanta, and Chicago reported a moderate rise and New York, Kansas City, and San Francisco reported an uneven experience. Demand for mortgages and refinancing remained high across the nation, with Richmond noting a marked increase. Contacts in Philadelphia expressed concern about the sustainability of real estate lending in the absence of growth in other sectors. Business lending continued to be weak in all of the reporting Districts. Demand for consumer loans has been strong in Chicago and Atlanta but mixed in New York and Philadelphia.

Delinquency rates were reported to be either stable or declining. However, credit standards have been tightened for commercial and industrial loans. St. Louis noted that such tightening has only occurred for small firms. Credit standards for other loans remained largely unchanged, except in Atlanta, which reported a tightening. Cleveland and Chicago reported no change in the quality of consumer or business loans; Philadelphia, however, noted a mild slippage.

Atlanta noted a surge in the number of borrowers looking to shorten the term of their loans. Cleveland reported increased competition across all lines of lending while San Francisco noted an increase only for low-risk lending.

Agriculture and Natural Resources
Drought conditions across much of the West and portions of the eastern United States have adversely affected both crops and livestock. Although recent rains have improved crop conditions in some areas, hot and dry weather during the middle of the year reduced the corn, soybean, and hay crops in parts of the Richmond, Chicago, Minneapolis, Dallas, and Kansas City Districts. As a result, bankers in the Kansas City District expect crop insurance payments to be a significant source of producers' income this year. Chicago noted that moisture conditions were notably less favorable for crops in Illinois and Indiana than elsewhere in the District, with contacts in central Illinois observing potential corn yields one-third lower than a year ago. In contrast, other portions of the Chicago District expect near-record corn and soybean yields; in addition, San Francisco reported that sales of fruits, vegetables, and nuts were high, spurred in part by strengthened export demand. Prospects for the cotton crop are good in Dallas and St. Louis, and the wheat harvest in Montana is expected to exceed significantly 2001's drought-ravaged crop.

Livestock producers in the Kansas City, Richmond, and Dallas Districts have been providing supplemental feed to livestock due to dry weather and poor pasture conditions. Richmond also indicated instances of hauling water to livestock. Richmond, Dallas, and San Francisco reported that livestock farmers were paring herds, with liquidation under way in some areas of the Dallas District.

Oil producers in the Dallas and Kansas City Districts reported increased oil prices, while natural gas prices, on average, were largely unchanged. Natural gas inventories declined slightly in the Dallas District but are expected to be at record high levels when the heating season begins. Reports from Dallas, Kansas City, and Minneapolis indicate that the count of active oil and gas drilling rigs remained unchanged in July and August. The Dallas District also noted that foreign drilling activity was down slightly but that revenues were up due to the complexity of the projects.

Post  41763  by  pacemakernj       Reply
Jeffbas, points well taken. But the problem, imo, is will AG support the economy by lower interest rates or protect the dollar higher interest rates and the ever increasing trade deficit. He is trying to walk a fine line. Hoping to keep the two from getting out of hand. Therein lies the case for gold. I think the dollar must weaken further. There is no way out other than to do just that. Therefore the case for gold grows. I believe that is exactly what the gold market is saying. AG has never gotten it exactly right and he will not be able to do it now either. JMO, Pace.

Post  41764  by  pacemakernj       OT: I just heard the most amazing thing. Get a loa

Post  41765  by  abveldeh       Reply

Mandela is a very wise man


Q: They were kicking with the fist, not the fingers. They were massing their forces.
Schwarzkopf: You're saying that, I'm not!

Q: No that's what Freddy Franks sat there and said. I mean, weren't they just following from the plan...?

Schwarzkopf: It appeared to everyone, it wasn't just me, it was everyone who was watching the unfolding in this battle that they appeared to be wedded to their initial plan which was one that would cause them to engage a numerically superior, well dug in, enemy in what would be a very tough fight, when in fact the enemy situation was changing before all of our eyes and yet they were continuing to execute the same plan. And that's what it appeared to all of us sitting in the war room.

Q: Freddy Franks eventually called you. Do you remember that conversation and what you said to him?

Schwarzkopf: I had not expected the call from Freddy .. because I had been dealing, as I quite properly should, I tried very hard not to jump the change in plan but Freddy had been told by John Yeosack that he ought to give me a call and let me know what was going on.

I then took Freddy's call and what he had told me was he.. he felt that he had gone up and around some Iraqi units and was going to attack down to the south to eliminate them before he continued on, and I then told him, at that time, "I don't want you going south. What I want you to do is I want you to go north and to the east because that's where the Republican Guard is and we're in an exploitation, we have to get these guys before they get away from us!"

Q: Tthe first engagement really, VII Corps and the Iraqis. Do you remember that? It was called 73 Easting subsequently. It was when they first made contact, when they started to fight.

Schwarzkopf: Well, you know, when VII Corps finally you know, engaged the enemy they did a marvellous job and I was quite relieved that they had finally gotten up there and gotten in contact with some of the Republican Guard and could start get on with the battle and, you know, pin these guys down.

And they did a good job when they got there, they did a very fine job when they got there.

Q: The night.. actually the night before you spoke to Freddy Franks, February the 26th, you got the news that the Iraqis were pulling out of Kuwait and the bombing of Highway Six started. Do you remember that? Why did you bomb them?

Schwarzkopf: Well, the first reason why we bombed the highway coming north out of Kuwait is because there was a great deal of military equipment on that highway and, again, I had given orders to all of my commanders that I wanted every piece of Iraqi equipment that we possibly could destroyed, because if we destroyed that Iraqi military equipment that was equipment that would not be around for them to use later on.

Secondly, the people that were running away from Kuwait were the people that had been inflicting the atrocities on the City of Kuwait, they were all military people and by the way, just about every vehicle that they were fleeing in was a vehicle that they had stolen from Kuwait.

So this was not a bunch of innocent people just trying to make their way back across the border er to Iraq, this was a bunch of.. of rapists, murderers and thugs who had raped and pillaged downtown Kuwait City and now were trying to get out of the country before they were caught.

Q: When you get to the final day of the war, February the 27th, the day in which the decision is taken ultimately to end it at the end of the following morning. Could you just paint a picture for me. How did the battlefield look that morning, February 27th, to you?

Schwarzkopf: Well it was more the evening of the 27th. By the evening of the 27th, 18th Airborne Corps had exploited all the waves of the Tigris and Euphrates area to the point where they were now swinging across to the east and were going to be able to drive very far forward and completely cut off the Iraqi forces that were in Kuwait.

Q: How does the battlefield look that morning? What sort of enemy are you dealing with, what have your guys achieved?

Schwarzkopf: On the morning of the 27th all across the front we've engaged the enemy, the enemy is in complete withdrawal. We've accomplished all of our objectives on the western side, we've also accomplished our principle objectives on the eastern side. Kuwait City is being occupied and it looks like, as a matter of fact, we're just in a mopping up operation inflicting as many casualties on the enemy as we can and destroying as much of his military equipment.

Q: Colin Powell called you at three o clock, and you discussed how much more time was needed. Can you tell me the conversation? What happened?

Schwarzkopf: The exact conversation was-- "What.. what are your plans?" And I told him--"I plan to continue the operation as it was originally designed, and that is to continue with this envelopment movement that went over and drove all the way to the sea and cut off everybody below".

And he then asked me when I thought that would be completed and I told him that I thought that would be completed by the end of the day on the 28th. This was information that I'd asked my Army commander about and he had told by the end of the day of 28th.

And then he asked me-- "Could you stop tomorrow morning?"

And I did a very very quick mental calculation and basically said that we have accomplished all of our military ojectives and if need be we could stop tomorrow morning.

I will confess to you that part of that deliberation had to do with American casualties. We had accomplished what we'd accomplished with so few casualties and another day of the war, more or less, would only cause more people to die that didn't need to die.

So I said yes if he wanted us to stop the following morning I could stop, but I would have to have sufficient advance notice to make sure that the word got out to all of my troops.

And he said "OK fine. I will get back to you".

He then called me back later and we joked, we actually joked at the time about you know, I think I told him-- "If you stop this thing when you do it'll be the four day war or the three day war, or something like that which will then make it the most successful war in history!"

. Q: Well let me ask you about what do you remember saying to him about the five day war?

Schwarzkopf: Well, we had already talked about it in the war room when John Yeosock had told me that he felt that they could accomplish all their objectives by the night of the 28th and I don't know who it was, and maybe it was me who came up with the fact that "Hey, this is a five day war and up until now everybody has said, you know, the Six Day War was the greatest and most rapid victory there was and now, all of a sudden, we have a five day war!"

So it sort of had a good feeling about it and it was a joke and I just said to him I said "I hope you realise that this would be the five, you know, there'd be a five day war!" And he laughed and said "That's right".

He called me back subsequently and said "How about if we shut the war off at ..." midnight I guess it was, Washington time, which would of made it eight o clock in the morning our time or nine o clock in the morning or something like that. And I said "Fine. I once again have to get to my commanders to make sure that they can all do this but I think they can and unless I get back to you that'll be fine".

And then he made the comment "Well that'll make it a hundred hour war!" And I laughed and I said "Terrific!" You know, the whole conversation was a lighthearted one. We were both feeling very good about what was happening at that time.

And I checked with my commanders and they, in fact, assured me that they could meet those time lines and that's what transpired.

Q: You'd always been very concerned about getting the Republican Guard and it's clear from reading from your book that you regret you weren't able to get at them a bit more. Why didn't you say to Colin Powell "Hey, I'd really like to carry on longer, I'd like to finish off the Republican Guard. It's not a good time to stop".

Schwarzkopf: The truth of the matter is that when you're sitting where I'm sitting the picture of the battlefield is not that clear.

At that time I knew we'd inflicted a lot of casualties on them, I knew we'd been pounding them with air for over a month, the reports I was getting from the battlefield was that we were inflicting huge casualties on them. At that time we had reports of over fifty thousand prisoners, which turned out eventually to be eighty thousand prisoners. So every picture that had painted for me in my headquarters was that of an overwhelming success.

I did in fact call back and say"I hope you understand that that if we do stop this there are going to be pictures tomorrow of tanks going across the river back into Iraq intact" and he got back to me and said he had sent that message through and it had been acknowledged.

That's because, from my commanders, I'd had.. received word that tomorrow was going to be a turkey shoot and that this is in fact what they'd be going after.

In that regard Barry McCaffrey said to me, after the fact, he said "We stopped at the right time" he said "the battlefield was getting very murky. It was very hard to determine those people who were trying to surrender versus those people that were continuing to fight. We could have very easily had some war crimes on our hands by shooting people who were trying to give up and things were getting very confusing". So he endorsed the fact that we stopped when we did.

But there was no question about the fact that we had accomplished an overwhelming military victory. We had accomplished all of our objectives. We had inflicted great, great casualties and great damage to the Republican Guard. We had inflicted great damage to the Iraqi military force and we had ejected the Iraqis out of Kuwait and that, after all, was the purpose of it and we'd done it all with an amazingly low loss of life.

So I didn't have any compunctions about stopping and to this day I don't. It was a decision that had to be made at some point and that was as good a point as any.

Q: Did Colin Powell in either conversation.. or the first conversation say to you, as some people have implied to me, that "Hey, you know, the President feels it's time to stop. He's worried about the carnage" and you sort of reluctantly said "Yeh, well, if the President feels that let's do it".

Schwarzkopf: Absolutely not.

Q: Was it the impression given to you that the President wanted it stopped?

Schwarzkopf: Absolutely not. Absolutely not. Colin Powell did say to me at one point that the reporting has turned negative, that there are photographers all over the `highway of death' talking about the innocent people that have been killed on the `highway of death' and there is some concern in Washington about this kind of reportig and implied that that might have been driving the decision to stop when we did. But there was never any implication that the President thinks he wants to stop it now so therefore, you know, we ought to stop it.

Q: You had always wanted to destroy the Republican Guard. That first briefing you gave em you'd said to all you Generals "I don't want them degraded, I don't want them mistreated, I want them destroyed". And here was your opportunity, your forces were poised to encircle them entirely. Why did you draw back at this moment?

Schwarzkopf: Well, I don't consider it a drawing back. From the information that I had in my headquarters we had inflicted tremendous damage on the Republican Guard.

We had bombed them for over thirty days straight, we had attacked them and fought them, we had destroyed many many many pieces of equipment, we had attacked from the air during the ground campaign and inflicted great damage on them.

So I already felt that there were several divisions of the Republican Guard, it was reported to me, that had been destroyed. It wasn't a hundred percent destruction but had we been allowed to go on for one more day it would not have been a hundred percent destruction then.

Q: You would have had them then encircled entirely?

Schwarzkopf: Except those that had already managed to escape, and there had been a considerable flow across the bridges. Where we really had them was we had them up against the river and there were very few bridges to go across so the next day, had we chosen to go in there and bomb these huge concentration of forces, we could have inflicted a great deal of damage on them there.

Q: And then you've got the later call which was about ten thirty, could you describe what did Colin Powell say to you, what did you say to him?

Schwarzkopf: Colin Powell called -- it was late in the evening in our headquarters. He said-- "I'm at the White House. We've discussed ending the war in five days. Could you in fact execute a ceasefire if it was declared effective midnight Washington time tonight?" which would have been first thing in the morning our time.

I told him that I could live with that, that I had to contact all of my commanders to make absolutely sure that they could in fact execute those orders in the limited amount of time possible and, therefore, if that was the decision I needed to know as soon as possible but I was quite satisfied with that decision if the decision was made in Washington.

Q: Would you have liked the war to continue to be a five day war rather than an a hundred hour war?

Schwarzkopf: You mean in hindsight?

Q: Whichever, in hindsight or then.

Schwarzkopf: Well, as long as I'm allowed to live in this fantasy world of hindsight, I would have been delighted if the war would have continued on for another 24 hours and we had taken zero casualties! OK?

I mean, if the war was going to go on more people were going to be killed and, quite frankly, the driving force behind my saying that I could live with it, was the fact that if we went on another day we were going to kill some more of our people and we had already won an overwhelming victory with a minimum of casualties and that was good enough for me.

Q: But in your book you talk about.. "Well, if Freddy Franks had moved a bit faster, maybe we would have got at the Republican Guard". His line is "If you wanted to get at them so badly, why did you stop then?" Freddy Franks said "I was poised that night, I couldn't believe it when I was stopped. Tomorrow was going to be the decisive battle".

Schwarzkopf: The answer to that is quite simply that I didn't stop anything!

The President of the United States in Washington D.C. stopped it. It wasn't General Schwarzkopf that stopped anything!

Anybody who knows anything about the military knows that we have our masters and the decision was made in Washington to stop the war when it did. They asked me if I concurred in that decision and I did concur in that decision.

Q: They say they stopped it because you told them you'd achieved everything.

Schwarzkopf: We had achieved all of our military objectives.

Q: Let me rephrase this to you..... just for the record I'm trying to establish, did you feel that the driving force was coming from the White House or was it a matter of you saying "No no, we've done everything, let's finish it" or was it, as others have told me who were close to you, that you felt that the White House was saying "Hey, we'd really like to stop this".

Schwarzkopf: Oh there's no question about the fact that this was presented to me as a fait accompli in Washington.

It was Washington had made the decision that they wanted the war to stop at midnight and they were just calling me to find out if I had any violent objections. You know, it was never presented "Well, we'd like to stop it at midnight but if you don't concur with this then we'll let you go on all day tomorrow". That was not the case at all. It was quite the contrary, it was presented to me as a fait accomplit "Do you concur in this decision?"

And I'd already said that I can live with it and.. to them.. I'd said that to them before and I said it again "I can live with that decision". I didn't say that "Oh, I'm violently... I'm euphoric about this thing and it's absolutely the best of all possible worlds" and that sort of thing. Quite frankly I don't think anybody could have said that at the time because you don't have that clear a picture of what's going on in the battlefield.

Plain and simply, Washington came to me after we had won an overwhelming victory at a minimum loss of lives and said "We want to stop the war at midnight tonight. Do you have any problem with that?"

And my answer was "No I don't have any problem with that". So it's just that simple. There's no more or any less to it. OK? It's just plain and simply--that's the context in which the message was delivered and the answer that was given.

You know, the Iraqis went in to that war, OK, with 64 divisions I believe it was, forty four of those divisions ended up in Kuwait, OK? The total Iraqi army today consists of 24 divisions. It doesn't take a lot of imagination to figure out the amount of destruction to the Iraqi armed forces that took place in Desert Storm. I should say something else again, this is very important.

You know, maybe it is the `objectives' word we're talking about. When the military talks in terms of objectives, you know, there are various objectives all across the map that you plan to attack and take, OK. Objectives does mean all the subtle inferences.. I mean the subtle accomplishments that you expect to accomplish all the way through.

So perhaps in focusing too much on the word we have accomplished all our objectives, we are losing sight of what we're really talking about.

Q: I guess the key thing I'm coming back to is this. When I talked to the people who were sat in that room, in the White House.... Baker, Cheney, Richard Haass, Gates and Scowcroft and various other people who were sitting there.... They say yes there was concern on the part of Colin Powell about the slaughter. There was no concern among the politicians...What you're telling me rather turns that on its head.

Schwarzkopf: Wait a minute. Wait. Just a minute now. Realistically, it is not a military decision to go to war any more than it is a military decision to end a war. The decision to go to war and the decision to end a war is completely, totally and one hundred percent a political decision. Period.

The military doesn't decide to go to war, the military does not decide to end a war. OK? This is a political decision made by governments of nations based upon information that's given to them.

So anyone who says it was a military decision to end the war is a cop out artist, that's what it is. OK, it's just that simple. Again, I wasn't in the room, any more than I was in the room on the 6th October briefing that I dearly wished I had been there, but I wasn't there. So I know nothing about what went on in that room. I know what I said, I know what said to me on the other end of the telephone and I have explained a thousand times how that came down.

Q: If you had been in the room and not talking through someone else, what would you have said directly to the President? What would you have said to him?

Schwarzkopf: I haven't the slightest idea because that's a hypothetical question. I would have been anwering a question that was asked of me and a lot of it would have had to do with the context and the way the question was asked.

One more time, one more time, OK? The question was posed to me, OK?

"What are you going to do tomorrow?""We are going to continue to execute the plan as it is written," OK? "That will give us a five day war. Would you have any objection to stopping the war tomorrow morning?" That means I'm going to stand up and say "No, I absolutely insist we go on with the war for another twelve or fourteen hours".

You realise, I hope, that we are talking eight hours, is what we're talking, OK? The war ended at eight o clock in the morning our time, or nine o clock in the morning, it otherwise would have ended at five o clock in the afternoon. So the total time frame we're talking about is eight lousy hours and it's been blown totally out of proportion, totally out of proportion.

But "Do you have any objection?"

I said "No, I can live with that". I didn't say "I'm euphoric about it, that's wonderful". I was just damned glad to have the victory in our hands with the minimum loss of casualties and I was willing to settle for that because that's a hell of a lot more than anybody's had in war in as long as I can remember. OK? So that's where it stood and it's something that we should all be damned proud of rather than making a ridiculous issue about whether or not the war went on for eight more hours.

Quite frankly, had the war gone on for eight more hours it would have had absolutely zero impact on the course of history that took place after that event. Zero impact. History would have been exactly the same, the only thing that's different is we probably would have killed a whole lot more Iraqis and we probably would have lost a lot more lives on the part of the United States and its allies.

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Post  41766  by  oldCADuser       Reply
PMCW, This could be...

"Although several Districts noted that overall orders in the high-tech industry are still weak, demand for semiconductors has continued to improve in Dallas and San Francisco."

...military hardware inspired demand, particularly in the Dallas area as I think you will find that the primary manufacturing location for cruise missiles is in the Dallas/Ft. Worth area.


Post  41767  by  tinljhtkh       OT: OCU!
Post  41768  by  lkorrow       OT: I understood that, the exports of Amsterdam ar
Post  41769  by  StockmanI7       OT: Re: Mandela is a wise man

Post  41770  by  pmcw       Reply
With all the consolidation in the military hardware industry happening mostly after I left the industry, I'm a bit behind the curve in knowing what is being built where. I sold into Cruise, DSLAM and TOW in the midwest. Cruise components were built in St. Louis and Cedar Rapids (Rockwell).

I'm confident that Rockwell's business in CR is very healthy right now (mostly communications) and I wouldn't be surprised to here the same of anyone in telemetry and smart weapons. However, northern California, which does have a reasonable military content, accounts for roughly 17% of the US market and is dominated by IT / telecom content.

Bottom Line: While I realize that military semi use is most likely picking up, it doesn't make up much of the market any more. IT / telecom, networking, PC, automotive and even wireless and wirefree are substantially larger markets now. Therefore, even a substantial increase in military spending would show a very nominal impact on the total market.

Regards, pmcw

Post  41771  by  lkorrow       OT Pace, agreed.

Post  41772  by  abveldeh       Reply
Het overschot steeg ondanks het feit dat de export in juli met 4,5% daalde ten opzichte van de voorgaande maand. De import daalde met 7,3% echter nog sterker.

The German trade surplus rose despite the fact that the export in juli declined by 4.5% compared to the previous month. However imports declined by 7.3% even stronger

Post  41773  by  oldCADuser       OT: It's like deja vu all over again:

Post  41774  by  maniati       Reply
pmcw: I do agree that the deflation issue is overblown, but I also think there are some mistakes in that article. They are not mistakes that make deflation any worse than the author states, but it's probably worth exploring the article a bit.

First, I agree with the general proposition that deflation is not something that people should be fearing in the current economic climate, and that really is the main thrust of the article. I think there is some confusion of cause and effect that have some people unnecessarily alarmed.

Yes, one sees deflation during depressions, but it does not follow that, if we have deflation, then we will have a depression. That's just faulty logic. Deflation results from the depression, not the other way around. So, deflation does not cause depression. At the same time, deflation could be caused by factors that are not coincident with depression; therefore, the existence of deflation is not proof of a depression.

There is nothing magic that happens if/when the CPI goes negative. Such an event does not turn the economy upside down. Consider this example: compare and contrast the difference between 1/4% inflation and 1/4% deflation. That's just 1/2% difference between the two. Intuitively, it doesn't make sense that those two scenarios would produce wildly different results within the economy, right?

If that example isn't convincing, then consider the difference between .001% inflation and .001% deflation. Now, that difference is clearly less than even the margin of error in our data-gathering ability, so it cannot have any noticeable consequence on our economy. Yet, in one case, the CPI would be positive, while, in the other case, it would be negative. So, clearly there is no "discontinuity" in economic outcomes around the point where inflation = 0. In other words, nothing "special" happens precisely at that point where the change in CPI = 0.

Now, if we're talking about a large drop in the CPI, representing a large rate of deflation, that would be more disruptive. But, by the same token, a large increase would also be disruptive.

Therefore, I don't see the issue so much as whether the change is positive or negative, but, rather, whether the changes are large or small. That's really the issue to be concerned about, isn't it? No one is alarmed about a low rate of inflation, but no one wants a high rate of inflation. I don't see why that shouldn't be true of deflation, as well.

During a depression, one sees a significant drop in final demand. That has the result that goods are not being bought, even when prices are cut sharply. So, deflation follows the drop in demand. And the concern is that the drop in prices will cause a drop in profits, which, in turn, will cause layoffs and wage deflation, which results in a vicious cycle. Coupled with large amounts of consumer and corporate debt, the reduced profits and layoffs cause numerous personal and corporate bankruptcies.

I think people are right to be concerned about the current debt levels, but it does not follow that we are headed for a depression. We haven't seen any indication that final demand is going to fall completely off a cliff, which is what we would need in order to start contemplating a depression. Unless and until we see signs that that is going to happen, then I don't see where a little deflation is a big problem.

That also means that, going forward, we need to be looking at final demand. That's the bigger issue. It's not the CPI. We could have a recession and not have deflation. That's happened before. I'm not making a prediction; I'm just saying that the status of final demand should be more important than whether changes in the CPI are positive or negative.

Now, let's look at a few things in the article that I take issue with.

First, I question this "cash-hoarding" theory of deflation. I suppose I ought to check into the "Austrian school" some more, but it appears to be based on a model in which cash is viewed as a commodity. Deflation, then, means that prices go down because people would rather have cash than the goods. At least, that is what the author is suggesting.

However, while I can see how that would be true when talking about investing in different asset classes, I have to question that reasoning when we are talking about the purchase of, say, non-durable goods. I do not believe that the deflation during the Great Depression was caused by people hoarding cash. I think the problem was that a tremendous amount of wealth was destroyed, and jobs were lost. The result was that a lot of people had very little of any kind of wealth with which to buy anything.

The argument seems to confuse money with wealth. It's the wealth that wasn't there. Had it been there, in whatever form, it could have been exchanged for money, which then could have been used to purchase goods. When an uninsured bank fails, that results not only in a contraction of the money supply, but also in a decrease in wealth.

Poverty is a lack of wealth, not just a lack of money. You could have no cash, but own a million shares of MSFT, and you would not be poor. During the Great Depression, lots of people had virtually nothing.

So, the problem was not that they were hoarding cash.

I would have to think that, if one measured the price of goods in terms of other asset classes, one might actually find inflation in the price of those goods. Something worth looking into.

Then, there's this:

One of the more surprising recent business best-sellers is a book titled Conquer the Crash, by Robert Prechter. It is surprising because the public does not often take to being told that disaster is around the corner. Optimism is the far sweeter fruit, more often indulged upon whether the facts justify it or not. Be that as it may, Prechter’s book calls for a deflationary depression and paints a rather dire picture of financial distress.

Is the author of the article falling into the very trap that he cautions about? Prechter is predicting not just deflation, but depression as well. That's a different story. If he were predicting only deflation, then I would say, "So what?" But, he cannot be criticized for furthering the "deflation" hysteria when what he is really predicting is a depression. I'm not going to get into the "depression" debate in this post. I simply want to point out that, even if one believes Prechter, then "deflation" is still the least of our worries. To put it another way, while the author might be right that Prechter is an alarmist, he's really more of an alarmist about a depression; the deflation in incidental.

I also take issue with the author's description of "confiscatory deflation." There's two problems with his example of Argentina. The first is that the devaluation of the peso is inflationary, not deflationary. So, the author seems to be 180 degrees wrong on that. Second, preventing access to bank accounts is confiscatory, I suppose, but it is neither "confiscatory deflation" nor "confiscatory inflation." The change in the price levels is completely separate from the government policy that bars access to bank accounts. It's not the government's bank account policy that caused the changes in the price level. The price level was affected for other reasons. So, I don't see how that bank policy is descriptive of any type of price level change.

Anyway, having said that, I want to reiterate my agreement with the general proposition that the "deflation" scare is overblown, because that was the main point to take away from the article.

Post  41775  by  srudek       Reply
pmcw/jeffbas: Interesting Deflation article. I recently purchased a lot of books by economists of the Austrian school, as I think they've given the most thorough thought to trade cycles and their logic is pretty staightforward.

I'd agree that deflation shouldn't be something to normally be feared as it is "corrective"; Lousy businesses and spendthrift consumers need to achieve bankruptcy. However, in this sense, illness and even death can be considered "corrective". Not fearing death too much seems like a good idea to me, but telling myself that doesn't really help those butterflies in the stomache.

If the government had only caused minimal inflation over the last 30 years it would be a lot easier just embracing deflation and getting it over with -- it would be analogous to a cold or slight flu. But I suspect a correction of 800-1000% inflation in 30 years might require something stronger and longer lasting than an economic cold. I suspect that the author of your article (available on, btw) would agree and would also say we shouldn't fear it but should just accept our correction and stop whining.

jeffbas: Not to defend Prechter too much, but to my knowledge he has not been "throwing things against the wall to see what sticks". Prechter was very, very clear even back in the early 1980's that we were in for disinflationary super bull market which would take the Dow to at least 4,000 and gold to current levels or lower (a pretty remarkable and completely "ridiculous" prediction at the time) followed by a mother of all bear markets which would, almost certainly result in a deflationary "Depression" (meaning something at least equivalent to the 1929-45 period).

You may accuse Prechter of lots of things, but the guy has remarkable "integrity" in the sense that he has stuck with an extremely precise prediction right from the beginning and, from what I've seen, has not attempted to "shuck and jive" to cover his mistakes, nor twist his historical words fit the actual reality, nor change his prediction to fit what people wanted to hear nor what would sell.

Growth deflation, then, is by no means harmful. It is the natural product of voluntary exchanges and the ever-increasing productivity that has become the hallmark of market economics even among it detractors.
. . .
Then there is bank credit deflation, which comes from the contraction of the money supply. Salerno writes that “the most familiar is a decline in the supply of money that results from a collapse or contraction of fractional-reserve banks that are called upon by their depositors en masse to redeem their notes and demand deposits in cash during financial crises.” The effect of such a collapse, holding other factors constant, is to increase the purchasing power of money.

Bank credit deflation, Salerno asserts, “has a salutary effect on the economy and enhances the welfare of market participants….Bank credit deflation is a benign and purgative market adjustment process.” Obviously, you cannot have a bank credit deflation without first having bank credit inflation.

I don't think that Salerno's saying a "benign" deflation (deflation from anything but govenment confiscation) is pleasant, merely that its in the best long-term interests of a healthy economy. Attempting to escape the correction at any cost, as our government/society has been doing, just causes more pernicious and systemic damage. At least that's the Austrian position, as best I understand it right now. This is a very interesting time to be alive; I think we may finally get to the bottom of whether the Keynesians or the Austrians are most correct.

Please keep in mind, however, that government and bankers have an enormous vested interest in retaining unbridled ability to inflate the currency. To use Jeffbas's distinction, they have an agenda and an exceedingly strong bias to see whatever they want to see and do whatever they have to do to maintain the status quo and their positions of power and wealth.

Post  41776  by  pmcw       Reply
Stock / IDNX:

I almost forgot to thank you for the link. I had missed that part of the story. What source do you monitor that provided that story? Regards, pmcw

Post  41777  by  danking_70       OT: Sept. 12, 2002 HIGH NOON

Post  41778  by  pmcw       Reply
What's Up From SEMI - Industry Research & Statistics

September 2002

2002 Industry Forecasts

From the vantage point of mid-year, the three industry analysts at the Silicon Valley Lunch Forum (August 15) are in agreement that 2002 will be the second year of the downturn with very positive growth in 2003.

Dan Hutcheson of VLSI Research, Inc. revised their forecast for 2002, forecasting +2.2 percent growth in semiconductor revenue and a –23.8 percent decline in equipment revenue. Hutcheson compared the present economic crisis with 1929 (Depression), saying 'we are facing one of the worst economic crisis that we have ever seen.' He added, 'the capital buying cycle in the second-half may not happen.' In 2003, they project +19.8 percent growth in semiconductor revenue and +22.3 percent growth in equipment sales.

Bill McClean of IC Insights, Inc. projects a –5 percent decline in electronic system sales, a +4 percent rise in semiconductor sales and a –22 percent decline in semiconductor equipment in 2002. Semiconductor materials are expected to grow 12 percent this year. While he forecasts no new net MOS capacity added in 2002, he sees strong chip unit growth of 19 percent in 2002. He compared 2002 with 1997 which was also the second year after the downturn. In 1997, the market for ICs went up 4 percent but unit volume rose 22 percent. For 2003, IC Insights forecasts a semiconductor market increase of 24 percent and a semiconductor equipment increase of 39 percent.

Bob Johnson of Gartner Dataquest sees electronic sales at +4 percent this year, semiconductor sales of +3 percent and semiconductor equipment sales down -19 percent in 2002. They project strong silicon sales in 2002 with 16 percent growth. Their message is that the economy is recovering, but that there is a lot of uncertainty about when and how rapidly the upturn will materialize. He noted that while 300 mm, which is projected to account for 35 percent of equipment sales this year, is considered a capacity buy and is not immune to continued spending contraction in 2002 if semiconductor demand picks up slower than anticipated. The DQ forecast for 2003 is +9.5 percent growth in electronic equipment sales, +26 percent semiconductor sales and +44 percent growth in equipment sales.

Carl Johnson of INFRASTRUCTURE was the panel moderator. The SEMI forum drew about 270 attendees in San Jose.

Bottom Line: Volume is going to be up significantly this year, but due to significant ASP declines, sales will be up only slightly. From a year over year perspective, I'm surprised that 2002 will be that good. Remember, Q1 of 2001 wasn't all that bad.

All those forecasting stated clearly that they forecast strong growth in 2003. Actually, they forecast generally more than I expect. I think much of the 2003 growth will come from improved ASP's and that that trend should continue for at least another year. The reason is clear - there equipment purchases have been off significantly. When demand returns (unit volume continues to grow) it will squeeze supply and prices will increase. Simple supply and demand - semi prices are very sensitive to this theory of price elasticity (high fixed cost and low variable costs).

I feel we will start seeing some encouraging words come from the semi space when they start making their Q3 reports in October. Due to this, I think easing into positions during the next few weeks might prove to be a wise allocation of funds. (Note: I would be very cautious of companies that are dedicated to wireline telecom and focus on players with diversified markets. My focus targets have not changed, but I might add a little to some of my favorite strategic semi plays if they return to recent lows.)

Regards, pmcw

Post  41779  by  pdowd       Reply
Rebels with a cause
Commentary: Mid-managers may drive tech-spending rise
By Chris Pummer,
Last Update: 10:27 AM ET Sept. 11, 2002

SAN FRANCISCO (CBS.MW) -- For three years now, America's midlevel managers have been forced to continuously resolve an equation that doesn't readily compute -- how to do more with less.

Stocks falter on day of remembrance
U.S. bows its head, keeps on its toes
Financial sector races to fix the damage
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As a result of layoffs and hiring freezes, they've struggled to maintain staff morale and productivity levels -- the human component of any successful business enterprise. And as a result of limits on major technology initiatives, they're saddled with overtaxed information-technology systems as spent as four-year-old PCs, and often work overtime just to ensure a faulty system can greet the following dawn.

Many middle managers are about to reach the breaking point. Their growing restiveness may serve as the catalyst to the next tech-spending and productivity surge as they press top executives to give them greater support.

"What frustrates middle managers is that someone is just trying to get a job done and is being inhibited by the technology," said Barbara Gomolski, an analyst with IT research firm Gartner. "The trouble is, CEOs and CFOs don't look at technology as an investment now, they only see it as an expense."

No respect

Major companies still let chief information officers largely call the shots on how available tech spending is deployed, experts say. As a result, they've yet to fully recognize the role middle managers can play in identifying needed technology improvements.

Denigrated as the bloat of the U.S. capitalist system in the 1980s, middle managers came to be seen as overpaid paper pushers -- and many were. But as their ranks thinned during the 1990s, they became overseers of the computer systems that made many of them obsolete, and in the process became literate enough to grasp the opportunities that technological innovation affords.

Any demands for renewed tech-spending in the year ahead will face certain obstacles from the Three C's -- chief financial officers still maintaining a death grip on company coffers, chief executives suffering from short-term vision and chief information officers who've been reduced to custodians of systems ill-equipped for the work ahead.

In this environment, middle managers could sooner convince the CEO's office to buy skyboxes at a professional sports stadium as hire for a vacant position, let alone a newly created one. Human resources carry hefty long-term costs in pay and benefits, and the wild card is always how well an unknown human commodity will perform.

Technology upgrades, on the other hand, carry limited costs and their impact is clearly measurable. Yet senior executives routinely deny requests for hardware or software purchases if the expense doesn't produce immediate revenue gains or, better yet, inure directly to the bottom line.

Middle managers were gaining increased autonomy on tech spending in the late 1990s, but most CFOs revoked their purchasing authority within the last two years. You can't blame the CFOs -- in this climate, for them, capital preservation is Job One.

CIOs, meanwhile, have turned sheepish. Because their grand initiatives fell short, they're now laying low and taking directions, when they should be out asking middle managers "Hey, what have you learned about your system's shortcomings in the last three years and what can WE do for YOU!"

Ultimately, it's the CEOs now gumming up the works, in part because many feel shortchanged by the massive amounts spent on the latest-and-greatest technology that didn't deliver.

"You're left with a lot of failures like CRM (customer relationship management) solutions that leave a bad taste in CEOs' mouths," said Matt Schwartz, who teaches a seminar called "Managing IT Costs" for the American Management Association.

Loosen up

More importantly, Schwartz says, it's a matter of how much faith -- or lack of it -- CEOs have that the economy will rebound sharply in 2003. A CEO's outlook affects the strength of his or her company, and by extension, the recovery, every bit as much as consumer and investor confidence.

Those confident that the U.S. economy will come back strong next year, and willing to whistle off the watchdogs in the CFOs office, stand to benefit most by taking a lead in their industry on adopting new technology.

"It takes just one company in an industry to get it started," said Mark Zander, chief economist at "Others will quickly come on board, and almost overnight this economy is going to be revved up."

Gartner sees corporate tech spending rising a modest 5 percent in 2003, up from 1 percent growth this year. The estimated $1 trillion total spending will be put to broader, more productive use than in recent years, such as wasted e-commerce efforts in 2000 and Y2K-preparation in 1999.

At least one corporate technology buyer argues a spending resurgence will occur only when top executives return some authority to middle managers.

"The challenge is which projects you move ahead on," Schwartz said. "CEOs have to start thinking about the benefit to the end users as opposed to the immediate benefit to shareholders."

Said John Scheaffer, chief executive of Chicago-based computer-systems seller Sysix: "Whether it's because they're timid or skittish, some CEOs are being very tight with the purse strings and that's not always warranted.

"When the mid-level managers are given the go ahead for project acquisitions, you're going to see some immediate uptakes in productivity, and probably steady growth from there."

Post  41780  by  oldCADuser       OT: We lost another sports hero, from an era when

Post  41781  by  spirare       Reply
September 11 2002, Spot gold in New York settled lower at $316.40 an ounce, down by $1.40 an
ounce from yesterday?s close.
Trading got a late start as the markets remained
closed in the morning hours to mark the anniversary of the September 11 terrorist
attacks on the World Trade Center and the Pentagon.
The price of gold slipped
while the New York markets were closed, however, the price rebounded slightly
to close lower on a shortened trading session and very light volume.
Gold was
also pressured by the stronger U.S. dollar and firmer stock market.
"The risk for
more selling is real and could send gold lower, but we expect physical buying and
profit taking to prevent any price collapse," said Frederic Panizzutti.
For now though, "the U.S. dollar and stock market could again become dominant factors
for the gold price in the absence of any other news."
The markets remain nervous
about the potential of renewed terrorist activity and rising geopolitical tensions.
Indeed, in India this morning the law minister of Indian Kashmir and three of his
associates were assassinated by suspected separatists.
Actual trading in the gold
market as with all markets has been muted since the recent run up in the gold
price as the nation focuses on the September 11 anniversary observations.
US President George W. Bush is scheduled to address the Union Nations on
tomorrow on Iraq's weapons of mass destruction capability and violation of UN
The price of gold could react on the president?s speech if it appears
that war with Iraq will be inevitable.

London gold was fixed this afternoon at $315.50 an ounce, down from $317.15
an ounce at the morning fixing.
"Although gold has succumbed to some profit
taking overnight, the metals looks set to be supported/move higher as we
approach the anniversary of the 9-11 attack on the US and the expectations of an
attack on Iraq intensifies," said UBS Warburg in a daily update.
"It's pretty quiet.
In the run up to today nobody wanted to be short, so everyone was long and gold
got caught on the long side," one European trader said.
"We have to wait and get
through today and look at gold again after September 11, but with the high oil
price, nobody really wants to stay short of gold," the trader added.
Gold continued on its period of consolidation and its price retreated in thin conditions as
investors unwound some of the positions taken ahead of the September 11
anniversary, dealers said. The US has raised its security alert status by one level
to "orange" and all markets are understandably trading in light volumes, noted
Rhona O'Connell at the World Gold Council.
Earlier in the day, prices touched a
high of $318.6 per ounce, possibly in response to increased tension in Asia, noted

Earlier Gold closed at U.S. $317.65 an ounce on Wednesday in Hong Kong,
down 15 cents from Tuesday's close of $317.80.
Spot gold fell Wednesday in
Asia from overnight prices in New York, as profit taking by long-position holders
emerged for the second consecutive day, said traders.
The price of gold pulled
back in spite of U.S. government warnings of possible terrorist attacks and raising
the terror alert to its second highest level (?orange alert?) and closing some
overseas embassies, after receiving intelligence of possible attacks against U.S.
overseas interests.
"Gold's down because nothing's happened," said a European
bank trader.
In addition, a slightly weaker Japanese yen against the U.S. dollar
led some Japanese to sell gold on the spot market, a Sydney-based trader said.
The price of gold could surge should U.S.
President George W. Bush's speech to
the U.N. Thursday give any indication of a likely war declaration on Iraq.
Yet there are others who believe that the price of gold should move higher on the
"There are two things driving the market:
the fundamentals and the
sentiment of very short-term uncertainty," said Geoff Bell, head of global mining at
BNP Paribas Equities (Australia).
"We would expect to see a better rally than
anything we've seen in the last four to five years because the impediments then
were more uncertain," he said.
The fundamentals of the gold market are in good
shape, Bell said.


There really isn?t any news as traders and investors were sidelined for
the observances associated with the September 11 memorials. Fears eased as no
terrorist acts emerged.

There were a few minor incidents around the world such
as the assassination of the Indian law minister and twelve of his associates in
Kashmir by Muslim separatists.

There was also a standoff between Pakistani
police and armed criminals in an upscale neighborhood that was at first thought to
be a possible terrorist act.

The U.S. closed several embassies around the world
because of possible threats of terrorist activity and the U.S. Navy kept a close
eye on oil shipping as another possible threat to sink oil tankers was taken

Tomorrow President George W. Bush will make his case before he
United Nations on the reasons for military intervention in Iraq.

We really do live in
a changed world since the attacks one year ago.

Trading in the precious metals markets was limited due to Wall Street?s late start
as the morning session was cancelled and volume was almost nonexistent (just
slightly over 300,000,000 shares traded on the NYSE for example).

Gold trading
in Asia and Europe was muted as no one had any interest in doing business
without the U.S. markets providing leadership.

All eyes will be on the president?s
speech tomorrow so trading in the international gold markets tonight will likely
remain constrained.

Meanwhile the fundamentals for higher gold prices remain in

Food and energy prices have been rising due to drought and stability
concerns in the Middle East.

The pressure now appears to be on inflationary
pressures that could derail any economic recovery as the world struggles to
emerge from global economic recession.

U.S. stock markets remain under
pressure, as corporate earnings growth is nearly nonexistent, that is ?actual? or
?net? earnings ? not the dubious measures of ?pro forma? or ?operating? earnings.

Consumer and corporate spending has fallen off sharply and consumer and
corporate debt levels are at all time records.

The stock markets will likely remain
under pressure unless debt is reduced and earnings materialize.

The U.S. dollar is
admittedly overvalued and will likely continue to weaken against the world?s
remaining major currencies as pointed out by billionaire George Soros.

Short of more terrorist activity and war, gold will track movements in the stock markets
and the U.S. dollar in the short term to intermediate term.

Longer term the threats
are an economic relapse or acceleration into a much deeper economic recession.

***The logic of precious metals as portfolio insurance is undeniable.***

* * *

To All ... My opinion on where we are at ... For CALVF I'm calling this Primary Cycle 2, Wave 1, Intermediate Wave 4 ... therefore one may expect a retracement here ... Estimated time of completion would be 1 week ... IMO wave 5 will be explosive to the upside ... Spot Gold will break the old high ... CALVF will break the old high ...

By: sckpak $$$$$


Current Price of Gold


War on Terrorism

The victims demand it.
The families demand it.
America demands it.
Freedom demands it.


THIS is what our Nation is responding to.
Please remember that in the difficult times ahead.

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

Post  41782  by  pricegriz       OT: PD - Middle Management

Post  41783  by  spirare       Reply
On Target To Produce 500,000 Ounces At $65/oz

(G.TO) Goldcorp Inc.: Impressive Operating Results Continue At Red
Lake On Target To Produce 500,000 Ounces At $65/oz
Source: Business Wire
Publication date: 2002-09-11

(NYSE:GG)(TSX:G) is pleased to announce that its Red Lake Mine
continues to achieve impressive operating results and to meet its targets.
Analysts and investors touring the operation today heard that for the eight
months ended August 31, 2002 the mine produced 349,714 ounces of gold.
This was the result of processing 162,000 tons of ore at a grade of 2.26
ounces of gold per ton (opt) with a recovery of 90.7%. This total also
included 3,837 ounces of gold produced from concentrate, which is being
processed at Barrick Gold Corp.'s Goldstrike facility in Nevada. Goldcorp
remains committed to producing 25,000 ounces of gold from Red Lake
concentrate in 2002 and is on track to meet its 2002 production goal for Red
Lake of 500,000 ounces of gold at a cash cost of $65 per ounce.

The full text of material presented during this tour is available on Goldcorp's
website at

Goldcorp's Red Lake Mine is believed to be the richest gold mine in the
world. The company is in excellent financial condition, with no debt and
positive free cash flow and earnings. Goldcorp is North America's largest
unhedged gold company, which allows its shareholders to participate fully in
a rising gold price environment. Goldcorp's shares are listed on the New
York and Toronto Stock Exchanges under the trading symbols of GG and
G, respectively and its options trade on the American Stock Exchange
(AMEX), the Chicago Board of Options Exchange (CBOE) and the Pacific
Stock Exchange (PCX) in the United States and on the Montreal
Exchange (MX) in Canada.

Goldcorp Inc.

Corporate Office:

145 King St. West, Suite 2700

Toronto, Ontario

Canada, M5H 1J8

Publication date: 2002-09-11

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

Post  41784  by  firered1       Reply
I have been trying to evaluate the need for the US to invade Iraq. Here is an interesting article I found on how the US uses its arrogance and might.

Declassified documents point to US war crimes in Iraq

by Stephen Gowans

The United States is knowingly violating Article 54 of the Geneva
Convention which prohibits any country from undermining "objects
indispensable to the survival of (another country's) civilian
including drinking water installations and supplies, says Thomas Nagy,
business professor at George Washington University.

Writing in the September 2001 issue of The Progressive, Nagy cites
recently declassified documents that show the United States was aware
the civilian health consequences of destroying Iraq's drinking water
sanitation systems in the Gulf War, and knew that sanctions would
the Iraqi government from repairing the degraded facilities.

During the Gulf War, coalition forces bombed Iraq's eight multi-purpose
dams, destroying flood control systems, irrigation, municipal and
industrial water storage, and hydroelectric power. Major pumping
were targeted, and municipal water and sewage facilities were

Article 54 of the Geneva Convention prohibits attacks on "drinking
installations and supplies and irrigation works."

Nagy says that not only did the United States deliberately destroy
drinking water and sanitation facilities, it knew sanctions would
Iraq from rebuilding, and that epidemics would ensue.

One document, written soon after the bombing, warned that sanctions
prevent Iraq from importing "water treatment replacement parts and some
essential chemicals" leading to "increased incidences, if not
of disease."

Another document lists the most likely diseases: "diarrheal diseases
(particularly children); acute respiratory illnesses (colds and
influenza); typhoid; hepatitis A (particularly children); measles,
diphtheria, and pertussis (particularly children); meningitis,
meningococcal (particularly children); cholera (possible, but less

Then U.S. Navy Secretary John Lehman estimated that 200,000 Iraqis died
the Gulf War, but many more have died since. UNICEF estimates that well
over a million Iraqis have died as a result of the U.S-led sanctions
regime, in place for the last decade. Some 500,000 children have died,
an estimated 4,000 die from various preventable, sanctions-related
diseases, every month, says the U.N. agency.

Despite the massive human toll, the United States continues to support
sanctions regime, arguing that sanctions won't be lifted until U.N.
inspectors are free to return to Iraq to verify that the country has
itself of weapons of mass destruction.

American Scott Ritter, a former U.N. arms inspector, claims that Iraq
effectively disarmed, and has been for some time.

And deaths from sanctions exceed those from weapons of mass
Political scientists John and Karl Mueller say that sanctions have
"contributed to more deaths during the post Cold War era than all the
weapons of mass destruction throughout history," including deaths at
Hiroshima and Nagasaki.

At one point, former U.S. Secretary of State Madeleine Albright said
despite the civilian deaths the sanctions were "worth it."

Meanwhile, Israel, a U.S. ally in the region, is widely believed to
an arsenal of 200 nuclear weapons. While in violation of countless U.N.
Resolutions ordering its withdrawal from the Occupied Territories,
faces no sanctions and no order to disarm. Amnesty International, which
has warned that Israel's crackdown on the latest Palestinian uprising,
Intifada, borders on war crimes, recently condemned Tel Aviv for its
"utter disregard for human life in the Occupied Territories" and for
violations of international law. And yet even calls for intervention as
mild as placing international observers in the Occupied Territories
been rebuffed.

The Gulf War erupted after Iraq invaded neighboring Kuwait. After the
the United Nations imposed sanctions, ordering Iraq to disarm. Iraq's
violation of international law in invading its neighbor was cited for
harsh treatment. But critics of the policy say that punishment for
violations of international law are being meted out unevenly and
hypocritically. Israel's innumerable transgressions go unpunished,
governments that have fallen out with Washington, often over investment
debt repayment issues, are treated severely.

Moreover, say critics, the United States itself has a long track record
violating international law. Washington's undermining of Iraq's water
treatment and sanitation facilities in violation of the Geneva

is just one of many recent transgressions, including the bombing of
Yugoslavia, Sudan, Afghanistan, and the continued bombing of Iraq.

U.S.-led NATO forces also targeted civilian infrastructure in
At one point, U.S. Air Force General Michael Short explained that
bombing campaign was aimed at causing misery in the civilian
"If you wake up in the morning," said Short, "and you have no power to
your house and no gas to your stove and the bridge you take to work is
down and will be lying in the Danube for the next 20 years, I think you
begin to ask, 'Hey, Slobo, what's this all about? How much more of this
we have to withstand?'"

NATO forces used depleted uranium munitions in Yugoslavia, as did
coalition forces in Iraq. Depleted uranium may be toxic, and may be
responsible for an epidemic of cancers and birth defects that have
in Iraq over the last decade. Some have charged that Gulf War syndrome,
cluster of mysterious and debilitating illnesses suffered by U.S. and
allied soldiers, is related to depleted uranium. Others point to the
contamination of soil, water and air by carcinogenic effluent from
destroyed industrial facilities and chemical plants as being

Nagy says that what is most disturbing about the documents is that they
reveal a U.S. government concerned more with the potential negative
publicity of the deaths, than with the deaths themselves. Dealing with
public relations downside of massive killing is a common theme in U.S.
foreign policy. During the Gulf War a bomb that hit a marketplace and
killed civilians led CBS News correspondent Dan Rather to remark: "We
be sure that Saddam Hussein will make propaganda of these casualties."
Frequent reference is made in the documents Nagy has uncovered to the
potential for Iraq to use epidemics for propaganda purposes.

When Nagy sent the documents to the media last fall, only two reporters
wrote lengthy articles. One was Felicity Arbuthnot, who wrote in
Scotland's The Sunday Herald that the "US-led allied forces
destroyed Iraq's water supply during the Gulf War flagrantly breaking
Geneva Convention and causing thousand of civilian deaths." Despite
seriousness of the allegations, and their being backed up by official
documents, the story quickly fizzled.

Mr. Steve Gowans is a writer and political activist who lives in


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Post  41785  by  Knochenschinken       Reply

The article you read is not balanced or objective. It appears to have been written by a youngster who is just discovering that war is hell. Hats off to the little guy for figuring this out, but this is not exactly news to the rest of us.

If a regime wants its attacker to refrain from damaging its civilian drinking water supplies, it needs to separate those supplies from legitimate military targets. If a regime wants its attacker to refrain from hitting schools and orphanages, it needs to separate military installations from those institutions. If a regime commingles facilities, it is asking for trouble. The Geneva Conventions do not sanction human shields and asset commingling. Nor were the Geneva Conventions designed to assist a regime that puts its own people in the line of attack.

Post  41786  by  spirare       Reply



Warm words for bin Laden as Muslim fundamentalists gather
Wed Sep 11, 2:18 PM ET

By DONNA ABU-NASR, Associated Press Writer

LONDON - As much of the world paused Wednesday to mourn the victims of the Sept. 11 attacks, a group of Islamic militants
gathered to discuss the "positive outcomes" of the violence they claim to reject, and to praise the aims of Osama bin Laden (news - web sites).

Sheik Omar Bakri Mohammed of the radical group Al-Muhajiroun said the meeting at Finsbury Park
Mosque, titled "Sept. 11, 2001:

A Towering Day in History," argues that the attacks were justified
because Muslims must defend themselves against armed aggression.

Al-Muhajiroun says its goal is to make Britain an Islamic state.

The Syrian-born Mohammed had warm words for bin Laden and the al-Qaida network, though he said
he disagreed with their violent tactics.

"Nobody loves them but the believers, nobody hates them but the hypocrites," Mohammed said.

"I don't believe in using violence, but Muslims have the right to defend themselves," Mohammed told journalists before the

A dozen or so men with kaffiyehs over their faces stood on the steps of the north London mosque, barring about 50 journalists
from entering.

Mohammed said the meeting was not associated with al-Qaida.

"We don't know who they are. We share the same beliefs, the same divine texts, we pray in the same direction to Mecca, we
share the same purpose of life and objectives, but we don't share their structure or their method," Mohammed said.

"Definitely al-Qaida has got rational justification for what they did on Sept. 11. Maybe I disagree with them, but they have the right
to fight back especially after they (the United States) bombed Sudan, then they bombed Afghanistan ( news - web sites)."

The United States in 1998 launched a cruise missile strike on a Sudanese pharmaceutical plant suspected of making chemical
weapons. The attack was retaliation for the bombings of American embassies in Kenya and Tanzania, linked by U.S. officials to

Abu Hamza al-Masri, a cleric at the Finsbury Park mosque, said this Sept. 11 "is not a day of rejoicing."

"It's a day of thinking and rethinking and getting the message out. I know many Muslims are oppressed. This is not a day to
celebrate," said al-Masri.

The Egyptian-born cleric, who lost his hands and left eye fighting the former Soviet-backed government in Afghanistan, is a prayer
leader at the mosque, and denies supporting terrorism.

Al-Masri is wanted in Yemen on terror charges, and his funds were frozen by the U.S. Treasury for his alleged membership in the
Islamic Army of Aden. That organization is linked to al-Qaida and claimed responsibility for the bombing of the USS Cole ( news -
web sites) in Yemen in October 2000, in which 17 American sailors were killed.

He has had British citizenship since 1985, and is protected by British law from extradition to Yemen.

Al-Masri said the meeting had a message for U.S. President George W. Bush ( news - web sites).

"We are telling that crazy man to stop. Don't use the war beyond your borders," al-Masri said.

In a statement on its Web site, al-Muhajiroun said the event aimed at "analyzing and highlighting the lessons which can be
derived from the incident" and the subsequent shifts in relationships between Muslims and non-Muslims and between nations.

"The event will discuss the positive outcomes from the 11th September not least of which is the clear crystallization of the two
camps of Islam and Kufr (non-Islam), of believers and hypocrites and of those who follow the Messenger Muhammad and his
companions (the salafis) and those deviant from this path," the statement said.

The meeting a smattering of protests.

A dozen people apparently opposed to al-Muhajiroun demonstrated on one side of the street. "Keep Britain out of foreign wars,
keep foreign wars out of Britain," said a banner which bore the logo of the anti-immigrant the British National Party.

Opposite that group was a counter-demonstration mounted by about 30 Anti-Nazi League, chanting "Nazi scum, off our streets!"

Ps. all the diaperheads should be rounded up and kept under strict locked up controll!!!

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Post  41787  by  spirare       Reply
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CALVF will follow the GoldBull*^*^*^*^*^

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the same vein structure.
It will be very exciting for calvf do some exploration.
Calvf spent more than $10 million to increase the production capacity...

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