Table On-Topic Summary - 23-Sep-2002
A compilation of this board's financial/economic posts From 42446 to 42524

Post  42446  by  Decomposed       Reply
re: Qwest

Qwest to restate $950 million

Revenue from swap transactions in 2000, 2001

By Shawn Young

Sept. 23 — Qwest Communications International Inc. said it plans to restate $950 million in revenue from mid-2000 and all of 2001. The $950 million to be restated was part of so-called swap transactions, which substantially boosted the Denver phone carrier’s apparent growth rate and are now a focus of investigations into Qwest’s accounting practices by the Securities and Exchange Commission and the Justice Department.

IN THE SWAPS, Qwest sold capacity on its optical-telecommunications network to another carrier and booked the revenue, while at the same time buying a nearly identical amount from the other company. Such transactions, which were used frequently by Qwest and carriers such as Global Crossing Ltd. and Level 3 Communications Inc. have come under suspicion as sham deals that had little purpose besides inflating revenue growth, which was the measure many analysts and investors used to judge the companies.

The SEC ruled last month that telecommunications companies acted improperly in booking swap revenue. Qwest said it accounted for the transaction in accordance with guidance it received from its former auditor, Arthur Andersen LLP. It is conducting a sweeping review of its accounting and has switched accounting firms, now working with KPMG LLP.

The company said it might also restate $531 million in revenue from cash sales of capacity on its networks.

The Rocky Mountain News reported earlier that Qwest planned to restate as much as $1 billion in revenue.

The company, which alerted investors to its intention to restate in July, said there has been no indication that the accounting problems stemmed from fraud. The problems arose, Qwest said, as it attempted to account for novel types of transactions for which the industry didn’t have clearly established accounting rules. The company is still reviewing its books and additional restatements are possible, particularly with regard to certain equipment sales and changes to the publishing schedule for its phone-directory business, which it is selling.

Qwest was among the most aggressive companies in using swaps and in booking revenue from long-term capacity sales in lump sums up front. Other carriers, including Global Crossing, typically booked the revenue from the multiyear deals in increments over time. The revenue from these types of sales represented 5.2% of Qwest’s total revenue in 2001 and 2.8% of revenue in 2000.

Maintaining impressive revenue growth was critical for companies such as Qwest, Global Crossing and WorldCom Inc. In the stock-market boom of the late 1990s the young, fast-growing telecommunications companies were among the hottest stocks, but their impressive growth now seems to have been achieved in part with the help of accounting gimmicks. Global Crossing and WorldCom both are in bankruptcy protection and WorldCom is suspected of having created the largest accounting fraud ever.

It remains unclear how much Qwest’s restatement accomplishes in its effort to reach a settlement with the SEC on its accounting problems. In June, Qwest’s former Chairman and Chief Executive Joseph Nacchio resigned under pressure amid growing concern about both the company’s accounting and the fundamental health of its business. The new leader, Richard Notebaert, and his hand-picked chief financial officer, Oren Shaffer, have been working to reach a settlement with regulators that would resolve the accounting investigations, which include a criminal probe by the Justice Department. At a meeting with analysts last week, Mr. Shaffer said negotiations are at a critical stage.

Qwest said it is restating only the results from after Qwest, a long-distance carrier, merged with the former U.S. West Inc., the regional Bell serving 14 Western and Mountain states in mid-2000. Qwest engaged in swaps and long-term capacity sales before the merger, and revenue from those deals was $1.3 billion in 1999 and the first half of 2000, the company said. Long-term capacity sales and swaps dried up in late 2001 and the company doesn’t expect such deals in 2002.

Post  42447  by  lkorrow       OT: Ark, it's nice to see some new data coming out
Post  42448  by  ferociousD       Clo:Schröder's-Thank You George

Post  42449  by  Briguy       Reply

My TABLE is NOT a place to be cussing out other people. You are more than welcome to post your opinions here, but as a courtesy I simply ask you tone down the rhetoric and inflammatory language. Because let me tell you friend, if you want to get into a pi--ing contest with people here, I will p--s you right off this thread.

Do you really want to open pandora's box Mr. M.D.? (LOL) My ####

Look here, there are many things wrong with our country. Only a fool would be naive enough to believe otherwise. However, we are a country that believes in freedom, plain and simple. And if that means we p-ss some people off, then too damn bad.

Very few people will ever claim we are the brightest country in the world- not even close as we have some really stupid people in this country. But do you see people from all over the world racing over to live in Europe like they do to America? Why not? In part, it's because we are the freest country in the world where stupid and smart can coexist.

The way I see it, it's long past time we told the irrelevant Turd Worlders at the UN to get the hell out of New York City, and way past time we got the US out of the socialist, communist, left-wing-wacko, pc-obsessed UN. Such a collection of losers, lowlifes, spineless cowards, parasites, liars, deviants, criminals, dictators, murderers, equivocating bitches, leeches, scumbags, degenerates, tree-huggers, greens, commies, socialist scum and all manner of undesirables, is beneath our National contempt.

In my opinion, many of your European leaders are as much of a disgrace- even more so in many cases- than ours. How do you explain this?

Oh...I guess it's typical American b.s. right? Maybe I'm misunderstanding you, but for you to imply America is evil and a bunch of murderers while Europe is just so righteous and above reproach is more funny than anything I've ever heard out of that wacko Carlin's mouth. The question must be asked, what the hell are European countries doing being members of the U.N. and such if 70% of you morons feel Bush is just like Sodomy Insane?

Here's what the Turd World UN lowlife commies want to do to the US and all sovereign nations around the world; read it, it'll make the hair on your neck stand-up...

Now, our President did as he was asked, taking his case for an attack on Iraq to the United Nations on Sept. 12...¬Found=true

Rather than allow the U.S. plan to be stalled by bureaucratic sandbagging from a bunch of bedwetting crybabies from the U.N. and European Union, Bush implied a harsh ultimatum to the United Nations: Either enforce the resolutions that you passed and that Iraq has mocked for over a decade or the United States essentially will abandon the institution. I say good damn riddance!

Bush essentially asked the various critics, which obviously includes yourself, "OK, you don't like our plan, what's yours?"

The general lame response from Europe, the Middle East and others was along the line of "we don't have an alternative plan besides more of the same, but that doesn't mean we have to like or support your plan. And your plan still has nothing to do with the war on al Qaeda."

What a fricken cop-out! You pal, are spineless along with all your other bedwitting aethist leaders over there! You say that "if some US marine sets foot on Dutch soil I will be most happy to slice his f####ng throat." Such mature big talk for an M.D. Oh, and that's a great solution to the worlds problems, NOT!

At least Bush, whether you like it or not, whether you agree with him or not, has the cohonas to stand up to this silly joke of a European Union and United Nations and say what he means. Which is alot more than I can say for the spineless leaders over in Europe! Cowards? When we open up a can of whoopa-- on Iraq, to keep the world SAFER, we will see who the REAL COWARDS are now won't we?! Your damn right we will! Your spineless leaders will be sitting on the sidelines! Bunch of chicken sh-ts!

Were you celebrating too?...

Take your crap somewhere else or I will simply ask admin to remove your membership!

Oh, and one other thing, I certainly don't blame you for being stupid. You are clearly in alot of company...

Oh know, someone called Islam stupid. BIG DAMN DEAL- bunch of whiners! This just goes to show how far France has sunk into stupidity, degeneracy and pc crap! Hey Mikey, c'mon over here, as we have the First Amendment protection!

Post  42450  by  ljpit       Reply
California Governor signs embryonic stem cell bill

Sacramento, California, September 22: California Governor Gray Davis on Sunday signed a Bill backing controversial human embryonic stem cell research.

"We are going to be the only state in the nation to say it is appropriate for the state to embark on stem cell research and not limit it to adult stem cells," the Bill's author, state Senator Deborah Ortiz told a news conference on Sunday.

Last year President George W. Bush placed restrictions on federal funding for the research, which is opposed by a variety of groups -- including the Catholic Church.

Stem cells are believed to have the capacity to change into numerous types of cells and may hold out hope for treatment for an array of diseases from Parkinson's to cancer.

"As the country ages, I believe more and more Americans will see the value stem cell research has in enhancing quality of the lives of the people they love," Davis said after signing the Bill, which becomes law on January 1, 2003.

Opponents argue that creating a tiny embryo and keeping it alive only long enough to harvest its cells constitutes murder. They said work with adult stem cells, found in bone marrow and in various tissues, may be as promising, although many scientists say both routes need to be followed.

Davis was joined at a news conference by actor Christopher Reeve, best known for his portrayal of ‘Superman’ in a series of movies and Hollywood producer Jerry Zucker.

Reeve, paralyzed seven years ago when he was thrown from his horse, has become a stem cell research activist along with Zucker, whose teenage daughter has Type one diabetes.

The Bill allows stem cells from any source to be used while making research subject to a review and permitting process.


Post  42451  by  pacemakernj       OT: Abveldeh, could you do me a favor and explain

Post  42452  by  pacemakernj       Reply
Briguy, well done. Pace.

Post  42453  by  jeffbas       Reply
Briguy, those Europeans have pretty short memories. They did not mind it when we saved their asses in two world wars, and lost several hundred thousand dead doing it. Or how about the Marshall Plan to restore Europe. (Maybe this guy would have preferred Hitler and his solutions.) The good old USA gave them the freedom to pull this BS, and they try to forget it every chance they get.

Post  42454  by  Arkural       Reply
Kant-Isil-My Tgt=9-12, fwiw. eom

Post  42455  by  xixlxix       Reply
Just because Lycos Finance extended you the privilege of having your own message board, it doesn't mean you OWN IT and shall restrict the opinions and ideas expressed by any poster here. Your last post had more inflammatory language and profanities than any of 'abveldeh' previous posts...
This board has become a forum where people can debate their opinion of world affairs and it has attracted a lot of intelligent posters and numerous readers, myself included, and hopefully will continue to do so.
The sharing of information and views is what makes the board valuable, not the personal attacks, threats or personal insults. As long as we all keep this in mind, we'll all benefit from it.
The real world has enough worries already.

Post  42456  by  uponroof       Reply
RBA General Comments

The FED and it's member banks, now perverted well beyond original 1913 intent, have become the problem...not the solution.

Cash Flow

The money center banks are not lending. Money centers are large, international, US based banks, that are members of the US Federal Reserve System; i.e. JP Morgan, Citigroup, etc.

The US Federal Reserve, a privately owned central bank, was allowed to be privately created by an act of Congress in 1913. The member banks are the owners of the FED.

These FED member banks are taking the cash reserves placed in them by the FED during normal open market operations and using it to re-buy US Treasuries.

Normal open market operations are what the FED conducts daily and involves putting money into banks and taking money out of banks. This involves direct money supply manipulation and is separate from the Federal Open Market Committee, FOMC, rate adjustments of FED funds and FED discount rates which occur about every 6 weeks and get all of the media attention.

Open Market Operations are used to adjust the supply of money to banks.

The FOMC adjusts interest rates to manipulate the cost of money to banks.

The FOMC is the rate setting policy arm of the FED that was created by Congress in 1934 to help further smooth the supply and cost of money to the economy from the FED.

When these banks take the money that has been placed in them by the FED and use it to re-buy US Treasuries they have defeated the purpose of putting the money in the bank to begin with as well as the purpose of having a central bank.

In other words, the banks are now operating at cross purposes to the FED itself.

When the FED wants to increase corporate lending and borrowing activity it lowers the FED funds rate and increases money supply.

It increases money supply by removing interest accruing US Treasuries from their member banks; i.e. JP Morgan, Citigroup, etc., and replacing them with non-interest bearing Federal Reserve Notes, also called, although it is a misnomer, dollar bills.

The idea being that the banks now have to lend the cash; i.e. Federal Reserve Notes, out to companies in order to make money on it. This is the push side of the lending markets; i.e. lower rates and make money available.

The problem is that instead of lending the money out to corporate borrowers these banks are taking the cash and re-buying US treasuries on the bond market and even directly from the US Treasury, a publicly held institution, driving the Treasury yields down dramatically. The 10 year US treasury yield is at 3.71% as I write this, down another 7 basis points from Fridays close.

Remember, the FED replaced the Treasuries with cash to get the banks to lend in the first place.

When a bank holds US Treasuries it has, in essence and fact, made a loan to the US government or bought a loan from someone else that had already been made to the US government, a risk free loan at that.

But, if all the banks ever did was lend money to the US government they wouldn't serve any functional purpose, economically, socially or politically.

Coupled with this is the fact that these banks are also right now increasing their lending rates and qualifying standards to make it even more difficult for corporate borrowers to borrow money for capital spending needs.

This, even though the FED is making money cheaper to the banks.

One of the primary reasons for having a central bank, the US Fed, and for having that bank increase money supply and decrease rates; i.e. the cost of money, during economic slow downs, is to offset the slow down by making money more easily accessible.

When banks increase their commercial lending rates even as the FED is decreasing the cost of money to the banks the banks have broken their good faith responsibility to society as well as their legal obligation as FED members.

The bankers claim they are upholding their legal and financial responsibility to their shareholders, bondholders and depositors. This responsibility typically requires prudent, risk mitigating lending strategies. They offset the increasing risk of principal loss on new loans by restricting lending and increasing the cost of borrowing to compensate for it.

So, we have two seemingly opposing priorities.

Which of these two is the fiduciary responsibility of the bank is the question.

The answer is really very simple. The social obligation takes precedence and is the fiduciary obligation of the banks. This set of priorities was established in 1913 when the FED was created.

The other aspect of this that solidifies this set of priorities is the social obligation to the banks during a crisis.

If the banks abide by the social contract and act in a counter-cyclical manner during a crisis and they still lose money then society is obligated to bail them out; i.e. the tax payer foots the bill.

But, keep in mind that this requires that the banks abide by their FED member mandate and increase lending at reduced rates to their commercial clients.

Since it is, in essence and fact, public money that is being deposited into the banks by the FED these banks must abide by the FED mandate and pass this money along to their borrowing commercial clients at a rate reduction corresponding to that which was supplied to the banks by the FED.

As the FED lowers rates and puts money into the banks the banks have an obligation to do the same for their clients and pass the reduced cost of money on to them.

So, the banks responsibility to their shareholders and bondholders may only take precedence if they will not request or accept a tax payer funded bail out in the event of an internal crisis at the bank that is a direct result of the bank violating their good faith responsibility to society.

But, since the creation of the FED does not allow member banks to determine whether or not they will accept or reject a tax payer funded bail out the argument put forth by the banks is moot.

The FED and their money center bank members are in essence quasi-public institutions, just as are the GSE's, Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.

They are not distinct private institutions.

The S&L bail out made this clear as well. It was, and is to date, the largest publicly funded bail out of private financial institutions in US history and the largest one sided transfer of public funds to private firms in the history of the US, having cost tax payers about 130 billion dollars.

The consideration that allowed the banks to accept the tax payer funded S&L bail out, and still remain private, was that the crisis was caused by bank and S&L regulation. In essence and fact the argument was that the banks were held hostage to bad regulation and thus the public was responsible for the S&L collapse and subsequent need for tax payer funded cash infusions.

The government, as the argument goes, caused the problem so the government, funded by tax payers must pay for it.

All well and good.

But the bankers went further afterwards saying that if the banks were allowed to operate unfettered by 1930's New Deal legislation; i.e. Glass Stegall and many others, that they would be able to operate more efficiently and reduce their lending risks, thereby ensuring that another tax payer funded bail out would not be required.

Glass Stegall was the act, passed by Congress, and enacted in the early 1930's, that separated liabilities based financial firms; i.e. banks, from doing business with asset based financial firms; i.e. insurance companies and stock brokers.

As deregulation has been the US bi-partisan national political hallmark of the past 30 years the banks were given what they wanted and Glass Stegall was rescinded in October of 1998.

It was that recission which allowed Travelers Insurance, an asset based financial firm, led by Sandy Weill, to conclude it's April 1998 take over of Citicorp, one of the largest banks, i.e. liabilities based financial firms in the US and create CitiGroup.

It was this same deregulatory atmosphere of the time, 1990's, that allowed for the consolidation of two large money centers into one, JP Morgan and Chase. Which were themselves the amalgamated results of other large money centers.

Today banks are making a similar statement. The claim is that the risks of lending have increased faster than the FED has lowered the cost of money and the only way to compensate for that is to increase lending rates. The increased risks they claim are not economically driven but caused by corruption and dishonest borrowing practices by their clients; i.e. Enron, Global Crossing, AOL, etc.

This is where the moral hazard and social obligation come in as legal concerns.

Bankers are not omnipotent. They incurred a moral hazard and shared responsibility for having made bad loans regardless of the fact that they may have been lied to by some of their clients.

To increase the lending rates to all borrowers in an attempt offset the risks of lending to corrupt borrowers is an attempt to transfer the banks responsibility and past mistakes on to their current and future clients rather than to assume it themselves.

This can only result in further loan loss problems at the banks as previously honest and viable borrowers are now squeezed out of the capital markets because their competitors lied.

So, the FED is trying to fight the slow down and inherent increasing risk in lending money by making money cheaper to offset the risk. This is known as a counter-cyclical event; i.e. as risk goes up loan rates from the FED to the banks decreases.

However, this only works if the banks lend and the borrowers borrow. Neither is happening. In essence the FED is now fighting with its own members.

The banks are taking the money that is being put in them by the FED and they are turning around and re-buying US Treasuries on the open market, thereby making the FED's increase in money supply moot.

This allows the bank to arbitrage (risk free) the FED's increase in money supply and create risk free returns for themselves. They can borrow at the FED rate of 1.5%-1.75% and invest in US treasuries at 3%-4%, thereby creating a risk free return of 1.25% to 2.25%. And that is exactly what the banks are doing.

So, the FED, by lowering the FED funds rate and increasing money supply WITHOUT requiring the member banks to lend has in essence decreased the probability that the banks would lend. Because banks can create the risk free return they don't need to lend.

In other words the FED's rate reductions are resulting in the exact opposite of what it intended.

There are three options available to correct this issue. I will address them in descending order of preference here.

First, the FED can order the member banks to lend. This is the first thing that should be done and done immediately.

Second, the FED can open the FED discount window to corporations allowing them to bypass the banks and borrow directly from the FED. This would be self defeating as it would cause a crisis flee out of the US economy, dollar and markets.

Third, The FED can INCREASE the Fed Funds rate, thereby decreasing the risk free profit available to the banks and making it more probable that they will lend to companies to create returns. This would send a signal to investors that the FED is out of control of its own family, i.e. member banks, and cause a flee from the US economy, dollar, and markets.

So, why hasn't the FED taken an assertive public stance on this issue and urged member banks to lend?

I don't know.

What I do know is that there is now a restriction point in the way money is disseminated through the banks to the economy and that point of restriction is the banks themselves.

The pushing on the string scenario typically requires that there be few or no borrowers to lend to.

But, if the banks abided by their FED mandate and social contract and reduced their lending rates into this slow down and made money available to the economy in the counter-cyclical way they are obliged to as members of the FED this economy need not stall further.

It appears right now though that we are moving in the exact opposite direction. The failure of the FED to get its members to lend has validated the decision by these members not to lend and set the course for a potential tax payer funded bail out of unprecedented proportions.

The longer the economy is suffocated of the cash it needs the less likely it is to respond positively to the cash when it is made available.

In other words, if the FED does not get its members under control soon and force them to lend, this economy is going to face a self reinforcing negative deflationary spiral that could result in cascading bank failures and a world wide financial crisis.

This is even more ominous now that the world is in a ge-synchronous global slow down. The US banks ironically are in a better position than anywhere else in the world.

Japan has collapsed but has refused to acknowledge that fact yet.

Germany will collapse as the reforms necessary to salvage their banking system will not happen. The loss of legislative control of the Government by Shroeder, even though he was reelected, has in essence left Germany with a lame duck federal government.

The near term probability of negative economic and market developments all over the world from here is almost absolute.

Make sure you are protected.

Households: Another Quarter Older And Deeper In Debt
August 30, 2002

The Fed finally got around to releasing its second-quarter flow-of-funds data this week. And what did it show? Households went deeper into debt, and their net worth continued to sink. The economy is in a foot race. Will businesses start to spend more on plant, equipment, and labor before consumers collapse under their heavy debt loads? Although we do not expect consumers to collapse in the fourth quarter, we believe they will not continue to shop at their third quarter frenzied pace. We do not expect business to pick up the slack.

Post  42457  by  lkorrow       OT Hi Tin, if that was his routine, I wasn't payin
Post  42458  by  lkorrow       OT abveldeh, thanks. Your numbers sound exagerated

Post  42459  by  lkorrow       Reply
abveldeh, you got the country with the jihads wrong, it's not the U. S. It's too bad that is your perception.

Post  42460  by  Decomposed       ot: Short memories

Post  42461  by  tinljhtkh       Reply

nobody ever accused Table of having a lack of balance in the presentation of its views! They all have a place simply because we must respect the humanity of those who wish to express them!

I'll always remember the post about the great diversity of music--and how the poster liked to hear it from an old fashioned turn table instead of a CD player!

I hope that I never forget that as we go forward!




Post  42462  by  jeffbas       Reply
lkorrow, of course they are exaggerated. Have you ever noticed that as a general thesis on these threads, the more extreme the claims on anything the fewer the links backing it up. Too FEW civilian deaths was the problem in the Gulf War. It is much easier to use cruise missiles and shoot tanks in the desert from great distances than to go after combatants hiding behind civilians, as Israel has found out. We chose the easy way out, minimizing BOTH civilian and our military casualties, and failed to achieve an important objective. A lot more of both will die this time.

By the way, poison-gassing his own people tells you how much Saddam thinks civilian lives are worth. Besides, why is a European concerned about killing civilians - it didn't bother them in their own backyard (Bosnia). Once again, it took us to intervene to stop that genocide.

Post  42463  by  lkorrow       OT: abveldeh, boy do you have a warped perspective

Post  42464  by  uponroof       Reply
Sector falls ahead of broker earnings

btw-JPMC just bounced off $19.00

Post  42465  by  lkorrow       OT: abveldeh, just oil? We were bombed and threate

Post  42466  by  spirare       Reply
JP Morgan Chase & Co A Nightmare on Wall St

by Clive Maund
Clive Maund Archives
23 September, 2002

Any reader who has an interest in seeing gold go up is likely to enjoy reading this article. To put what I am about to write in an overall context I would like to draw readers' attention to my article "The Great Crash of 2002" which appeared in July in 321gold and Prudent Bear and a number of other sites. Here is an excerpt:

"I state now, without exaggeration, that I firmly believe that we are now about to witness, within the next few months, possibly within the next few weeks, the MOST DRAMATIC STOCK MARKET CRASH IN HISTORY, which will make the crash of '29 look like a Sunday School outing."

It is within this context that we are seeing the stock of the New York bank JP Morgan Chase [JPM] - the second largest bank in America - plunging.

There has been a lot of talk circulating these past months to the effect that JP Morgan is a leading member of a cartel holding huge net short positions in gold derivatives and who therefore have a vested interest in holding down the gold price and, in collusion with central banks, who are fighting to defend the fiat money system, dump gold on the market whenever it looks like it will break through a key chart point. In fact, the Office of the Comptroller of the Currency lists JP Morgan Chase as the largest holder of gold derivatives. The reason that they got themselves into this position is historical. They were involved in forward selling gold, which they regarded as a non-performing asset, throughout the 90's to extract value before the price fell further. Elaborate schemes were hatched to free up the value locked up in this "dead asset," which they regarded as mouldering uselessly in underground vaults while other assets were soaring.

From what I have heard there has also been some very convoluted and strange accounting employed to tap the value of the yellow metal. The end result of all this scheming would appear to be huge net short positions in gold / gold derivatives built up by banks such as JP Morgan and also plundered bank vaults. Furthermore, a vicious circle has developed in recent times, due to the developing bull market in gold, which is forcing banks to dump their dwindling supplies of bullion on the market at critical points in an attempt to save themselves from being buried by their huge short positions, even though they know they are selling a rising asset. Of course, if JP Morgan is net short gold derivatives in a big way and gold goes up a lot, they are going to be facing a rather large bill, to put it mildly, and that's just one of their major problems.

My first thought when I looked at the long-term chart for JP Morgan was "How could anybody in their right mind buy a stock with a chart like this?" I think the buyers, short term traders aside, must either be fresh out of college, drunk, spending other people's money, or, more likely, a combination of the three. The long-term chart is horrific. With the overall market looking awful, ripe for a crash, I see no other direction for this stock than down. Ordinarily one would expect this stock to find support in the mid-teens, sufficient to halt the decline, but I believe it will plough on down into single figures for the following reasons; the first and most important reason is that the overall market is, I believe, about to go into all-out crash mode and if that happens this will be savaged.

The next big reason is that the bond market bubble is getting ever closer to popping, which will result in gargantuan and well-deserved losses for a lot of lenders. I'll give you an example of the crass stupidity of lenders; the housing market bubble in the US is topping out and is about to deflate. Even now householders are being permitted to borrow against the full paper value of their homes and, with an imaginative revaluation of the property, MORE THAN the paper value of their homes. In common with US business generally, the US consumer is spent out and fully loaded with debt - so what happens when unemployment increases sharply, house prices fall and foreign investors dump all US securities including bonds, the dollar crashes and interest rates have to rise? I'll tell you - the average householder will turn round and say "Can't pay - won't pay!" and the lender's only recourse will be to kick the families out of their houses (trying to dodge bullets as they do so) and then try to sell the property in a collapsing property market, either that, or swallow hard and accept that the debt will probably never be repaid. This is JUST ONE EXAMPLE of a default scenario among countless others. The whole system is awash with credit - DEBTS THAT CAN NEVER BE AND WILL NEVER BE REPAID. In other words, bond holders will be left holding one gigantic bag - stuffed full of worthless piles of paper!

Now I know that banks like JP Morgan won't be the only ones left holding the bag, because they have been crafty enough to farm out a lot of this now rapidly-souring debt to other unsuspecting takers, such as hedge funds, insurance companies, pension funds, institutional investors and mutual funds through syndication. This syndication of loans has enabled the banks to ramp up their lending activities, since less of their own capital was on the line per deal. Lending standards have also deteriorated with leveraged and sub-standard loans making up an ever-greater percentage of syndicated loans. But, my point is that they are all going to get clobbered.

Another massive problem facing JP Morgan is that they have, by some estimates, more than $20 trillion of derivatives on their books. Yes, that's TRILLION not BILLION. I don't know about you, but I can't even imagine a sum of money so vast, and, you know, I think that might be at the root of the problem. I don't think the management at JP Morgan could comprehend it either, it's so vast it's almost meaningless. "You'd like another $150 billion in dollar call spreads? Consider it done, Mr Rodriguez - shall I book that to Burkina Faso Leveraged Investments Ltd as usual?"

Compared to the gigantic derivative exposure, the $12 billion of loans to cable and telecom companies seems trifling. Given that, with respect to derivatives, about 2% of a bank's total exposure is viewed as being at risk, this means that JP Morgan is potentially liable to the tune of $400 billion, which is considerably larger than the bank's stock market capitalisation of $37 billion.

Yet another problem facing JP Morgan is that, as I understand it, they are facing a not-inconsiderable amount of litigation.

Now let's turn to a technical appraisal of the chart for JP Morgan's stock. As I said above, the long-term chart is a horror trip. Take a look now at this long-term chart, shown above. Here we can see how the price ramped up in the mid-late 90's, to reach a bubble top, where smart money had a year or two to unload. It has since been falling at about the same rate as it went up. The whole thing is a remarkably symmetrical cone shape. Note the very heavy volume on the decline this year, record volume, which is a most bearish indication. This suggests to me that the trading range of the 1980's is unlikely to provide much relief or support.

Looking now at the shorter term one year chart we can see, firstly, the steadily downtrending 200-day moving average, which has throughout the year provided a clear and unequivocal warning that this stock should have been sold on rallies, the decline in January and February on heavy volume providing a further warning. There is an interesting example of a selling climax in late July, the deeply oversold condition being signalled by a week of exceptional volatility on huge volume, coupled with a yawning gap between the price and the 200-day moving average.

At first glance it is tempting to compare the trading of recent days with that in late July, but there are some important differences. First of all, volatility is nowhere near as great, and volume, although very heavy on a couple of days is, in aggregate, significantly less. Certainly, it is oversold, but I don't think that this will save it this time round, mainly because the outlook for the market as a whole is so bad over the short- and medium-term. The best that can be hoped for is a trading range or a weak rally for a few weeks at most to alleviate the oversold condition. On Friday Sept 20th the September 20 strike put contract expired worthless with an open interest equivalent to almost 2 million shares of JP Morgan. Of course, we realize that it was just a coincidence that the price of the stock closed a shade above $20 on Friday.

JP Morgan Chase is such a large institution and so important that I really don't know how other banks, the financial community as a whole, and the government will react as it plunges deeper into the abyss. At some point an effort may be made to bail it out, but it seems to me that that effort would cost far more than the bank is worth.

I reserve my deepest sympathy for those ordinary, hard working employees (and their families) at JPM Chase who played no part in tunnelling under their own company and were probably oblivious to what was going on at higher levels.

To conclude, I consider this stock to be a very bad risk. In the months ahead of us I expect the price to continue to fall into single figures. The outlook for this organisation is grim and some very difficult decisions are going to have to be faced.

JP Morgan Chase code JPM (NYSE)
closing price: $20.18 on 20 September 2002

Clive Maund

Kaufbeuren, Germany 23 September 2002

Clive Maund is an English technical analyst, holding a diploma from the Society of Technical Analysts, Cambridge and living in southern Bavaria, Germany where he trades US markets.

Disclosure:- I have no personal financial interest in this stock. I have not received any payment for writing this report. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Charts courtesy of BigCharts

321gold Miami USA



TA LT higher highs and higher lows
4 Strong Bull waves to go*^*^*^*^

Bull Wave Breakout soon to follow*^*^*^*^*^

Dollar Index Cash (NYBOT:DXY0)
TA LT lower highs and lower lows...
3 bear waves left...

TA ST small 5th bull wave correction
soon complete, followed by
continuation of the LT bear waves...

CALVF Risning from oversold conditions - bullish

Current Price of Gold

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

Post  42467  by  pmcw       Reply
roof, The conclusion of your post said exactly what I've been saying for months. Since I feel this is the issue of the day, I'll repeat this short point:

"Households: Another Quarter Older And Deeper In Debt
August 30, 2002

The Fed finally got around to releasing its second-quarter flow-of-funds data this week. And what did it show? Households went deeper into debt, and their net worth continued to sink. The economy is in a foot race. Will businesses start to spend more on plant, equipment, and labor before consumers collapse under their heavy debt loads? Although we do not expect consumers to collapse in the fourth quarter, we believe they will not continue to shop at their third quarter frenzied pace. We do not expect business to pick up the slack."

I don't feel businesses will pick up this slack anytime soon unless there is some stimulus by Congress. The central problem with business is debt; more specifically debt that is owed on assets that don't provide enough revenue to cover the service on the debt. To put this into income producing real estate terms it's like renting houses for half of one's monthly payment - more of an expensive hobby than a real business. The clear solution is to either reduce the service on the debt (bankruptcy, reorganization, etc.) or to create an atmosphere where the assets can be more productive. Obviously, the latter is the best solution and this is why a favor targeted stimulus packages designed to accommodate this goal.

Clearly, I feel the above part of your post is right-on. However, the paragraphs leading up to this conclusion were 180 degrees out of synch with the conclusion. Since you "bolded" these comments you must feel they have merit. They follow:

"But, if the banks abided by their FED mandate and social contract and reduced their lending rates into this slow down and made money available to the economy in the counter-cyclical way they are obliged to as members of the FED this economy need not stall further.

It appears right now though that we are moving in the exact opposite direction. The failure of the FED to get its members to lend has validated the decision by these members not to lend and set the course for a potential tax payer funded bail out of unprecedented proportions.

The longer the economy is suffocated of the cash it needs the less likely it is to respond positively to the cash when it is made available.

In other words, if the FED does not get its members under control soon and force them to lend, this economy is going to face a self reinforcing negative deflationary spiral that could result in cascading bank failures and a world wide financial crisis."

It seems to me that the conclusion indicates that consumer debt is in fact expanding yet the set up for the conclusion says that the banks are not making funds available. This can't be in terms of consumer debt and I don't see businesses lining up to increase cap/ex or expand so I don't feel they are turning away industrial customers either. Can you explain why you felt these paragraphs are important or even factual?

The way I see it the times to Fed bash were in 1998 when they were dropping rates for the wrong reasons (maybe) or in 2000 when they were raising rates for the wrong reasons (definitely). Today I see the interrelations to be as follows:

1) The FED is in fact keeping us above water. Low interest rates are facilitating a housing boom (both new construction and remolding). Housing expansion is facilitating a boom in durable goods sales. This supports a huge chunk of US labor and keeps employment higher than we would otherwise expect.

2) Low interest rates are keeping industries that typically operate with significant leverage and those who are buried in debt afloat. This includes automotive which supports a huge down-line set of suppliers. Through keeping these industries viable we are keeping employment higher than would otherwise be possible.

3) Due to the time it is taking and will continue to take industry to work off debt that is a result of poorly performing assets, cap/ex is limping at best. This precludes us from enjoying "full" employment. Without this sector working there is not enough confidence to stimulate spending on "non-durable" goods. Virtually every discretionary non-durable category, including food, is down year to date. Even WMT is guiding to the low end of their range. Once people move from Macy's to Wal-Mart the only step left is to stop buying.

As I've said in the past, this could go either way. However, the dangers that could feed a downward spiral are increasing.

1) If the ratio of durable to non-durable continues to favor durable or if non-durable continues to shrink it will be evidence the consumer is slowing giving up and that the next slip will be in durable goods and housing.

2) If cap/ex doesn't show signs of improvement we will probably start seeing evidence of a slip in non-durable goods and this will create a spiral.

Clearly, the traction we need is improved consumer confidence that is supported by increased employment in the sectors supporting cap/ex demand. Cap/ex spending is typically based on long term commitments of build and installation and therefore fundamental to the creation of employment confidence.

Before you vote this year, ask those running specifically what they will do to stimulate cap/ex spending. If their answer isn't strong and specific, they aren't fit for the job. Since I see the DNC and Tom Daschle as central figures blocking our progress I encourage you to also consider that a vote for any Democrat Senator is also a vote for Tom Daschle. As long as he leads the Senate we can expect more of the same.

Regards, pmcw

Post  42468  by  Arkural       Reply
OT-lk-Cell ding-a-ling-Yea, read and posted similar info regarding your mention of the wire business long ago. In short I avoid all microwave tech, as much as possible, among other some techs/electrics. I received a marked heads-up on this many yrs ago.

It depends how they view/determine what 'normal' is. e.g.
Any pre-disposition, genetically that is, can be enhanced either, yea or nay, relative to the environment envelope the individual lives within and equally important, the thoughts/attitude of the person. Food too has some influence but thoughts are the primary concern, then the environment, Imo. These influences are little understood by the masses and are abused by those controlling the masses, ahem, certain other groups. Other conditions prevail in diseases/sicknesses, being assailed by concentrated microwaves, magnetic fields and such will prove less than healthy conditions. Cell phones currently appear to be quietly adjusting their potential 'risk', however I post these things because many of the readers here use these devices. Last yr, or was it two yrs ago, I posted along article on the cell phone issue, the same issue then hit the wires a couple days or weeks later.


As to your query~~well, I thought that was a hint, ;).
The wider Truth exposed of and in the world and it's changing, revolving humanity (and even of its relativity in solar system, among others) would most certainly cause a poignant 'friction' in, at the very least, the emotional strata of life. I wrote a bit on this but have decided to hold off on posting might appear some day, but not now.
Suffice it to say, Nature in all its inter-connectedness has a way of slamming ones table in no uncertain terms and Nature inevitably seeks a balance, because, it is a Law, it is Truth and it is NOT separate from human kind, even though human kind thinks it is so by the illusion it creates of stability or security. Though humanity and those ladened in devious desires of myopism and quick-pops they see as eternity (though lame) seek to rule, ALL of their attempts will run futile in the scope of tomorrows beyond even your furthest imagination, until the collective act 'gets it together'. Eventually, like wind wearing away rock, erosion is the result of transformation that was occluded, prior to or within the process.

p.s. I do recall that news blip on Noah's ark last yr, thx.

Post  42469  by  lkorrow       Reply
Tin, certainly food for thought and important issues. But I don't see how we can let one evil madman who is determined to destroy us prevail. Blackpox, nuclear bombs. Where does it end? There are those that wish to solve world problems, others that wish to create them. Saddam obviously is the latter.

Post  42470  by  Tampathom       OT: Washington Strangely Overt About Covert War
Post  42471  by  united_division       OT: Wondering just what's on Israels mind or incas

Post  42472  by  snapits       Reply
decomposed, this is typical of GE products. Not at all unusual.

(Voluntary Disclosure: Position- No Position)

Post  42473  by  united_division       Reply
I'm sure glad i'm taking your advice and not some of these other people. lol

Post  42474  by  Roy001       Reply
Bravo for being civil and to the point.

Post  42475  by  uponroof       Reply
pmcw..RBA Daily Observations
thanks for getting back. Some very good observations of your own:

"...It seems to me that the conclusion indicates that consumer debt is in fact expanding yet the set up for the conclusion says that the banks are not making funds available. This can't be in terms of consumer debt and I don't see businesses lining up to increase cap/ex or expand so I don't feel they are turning away industrial customers either. Can you explain why you felt these paragraphs are important or even factual?..."


uponroof- Not sure if 'the conclusion' is as you say the conclusion of the post. The post is from Roger Bently Arnold's daily commentary which typically touches on multiple subjects worth consideration. The continuity you attach to the two subjects does not appear to be warranted as the email in it's originality does not flow from one into the other, rather it seems to address them as different subjects.

Aside from that, I believe Arnold is criticizing the FED and it's member banks for the separate issue of their self concern rather than public concern. They are putting entity interests ahead of public interests under the excuse of protecting taxpayers from their bailout...which may in fact be what they are inciting...hence the problem of policy weakness from the top.

The fault as I see it is the FED's inability to implement member bank policy as it was intended. Businesses are not lining up to borrow in part because the 'member banks' are dragging down the economy through long term, poor policy decisions...which ultimately go back to policy changes such as gold standard and Glass Steagall abandonment.

As businesses hunker down, FED a part of the speculative economy, seek to protect themslves from the overwhelming whiplash they designed, rather than extend the whip. Downward spiral comes to mind.

The Arnold letter is free and daily. Check it out in it's entirety daily. Sorry for posting only a portion which may have confused.

Post  42476  by  kantbleveit       Reply
ark-thx 4 your input.eom

Post  42477  by  tinljhtkh       Reply

Rumsfeld just said that the German Chancellor's reelection has poisoned relationships between Germany and the United States! Does he want them to try for 2 out of 3? Those German American relations have been poisoned before--Mustard gas in WWI and the gas ovens in WWII!

We had best be looking at those German elections as we prepare to vote this fall in the United States! And somebody had better tell Rumsfeld to keep his mouth shut! Or better yet--simply retire! It's apparently alright for the Republicans to work the war angle here in the United States but it's not alright for the Germans to work it in reverse in their elections! There are those among us who don't really like to tolerate dissent and disagreement, particularly in time of "war!"

This world situation that we face is not some preppy game, and Saddam is but a pawn! It's one thing to tackle Saddam! It's quite another to tackle Germany! This is getting out of hand in a hurry! If the European Union decides to cool relations with us, our economy is down the tubes! If you look at the German economy right now, you see the possible early beginnings of a replay of the Twentieth century all over again! Look at Japan--they couldn't sell their bond issue last week! If they have to raise rates in order to sell those bonds, their money may just decide to go home! We have a non-existent recovery now and that really isn't going to help! Remember that Culmus, a good German, just left this board! What if the German's started to pull their money?

If you want to see an axis of economic evil, I can show you a real one! It starts in Tokyo, runs across a united and strong China, on up through the former Soviet Union and across a united Europe before it crosses and extends down through Africa before moving across the South Atlantic and on up through South America! Remember the problems with Venezuela earlier this year when a supposedly discredited government was returned to power within 48 hours when hundreds of thousands marched armed out of the slums?

I am American and I love my country but I'll tell you this: We've had a generation or two who've had things just about the way that they want them and have seldom ever been told no! It is better to hear it from people like me who love and care than it is from more events like we saw on September 11, 2001!

It's just my personal opinion, but I see a rapidly developing situation here with enormous implications for each and every human being both here in America and around the world!




Post  42478  by  jeffbas       Reply
spirare, that commentary you quoted borders on hysterical in my opinion. He can't have it both ways. If the economy gets weaker, long term rates (including mortgage rates) will drop further and another few million Americans will be able to afford a house for the first time, and another ten million (or whatever) will refinance their mortgages, further improving their balance sheets and capacity to buy other stuff. I would be more worried about housing if he forecast a rising interest rate scenario.

Also his forecast for JPM does not pass the test of history, which is that large troubled banks quietly get taken over with government assistance.

pmcw, I aggree with your comments in a recent post. As far as I can see banks are trying to shovel money out the door. I get 0% initial rate offers all the time now. Also, I particularly agree with your political comments. Daschle sees (correctly in my opinion) the possibility that Bush will be the Herbert Hoover of the 21st century and intends to make sure it happens, at the expense of the country. Really, really contemptible. Unfortunately, I think that Bush is too stupid to see both his and the country's exposure, and does not have the Treasury Secretary or other economic advisors to shape him up, in order to make it a major political issue.

Post  42479  by  Tampathom       OT: Germany, Rumsfeld, and German support
Post  42480  by  lkorrow       OT: jeffbas, Unfortunately I guess you're right, t
Post  42481  by  lkorrow       OT: Ark, looking foreard to your possible post. N
Post  42482  by  danking_70       OT: Tampa, two comments.

Post  42483  by  pmcw       Reply
roof, You've made some very general comments about the Fed not acting in our best interests. However, they have been so general that they don't provide an opportunity to discuss specific things you feel they are doing that are bad. Of course, you could be talking about any policy that is not aimed at a return to the gold standard as being bad and therefore rationalize that all policy not in line with this goal are bad for the country. Since I see nearly a zero chance of such a reversion I don't see where protracted debate is a good investment.

The non-sequitur I pointed out is still valid regardless if the comments were intended to be a part of the same message or just the same person "talking" in two distinctly separate venues. In one case he says that the banks won't loan and in the other he says that the debt is still expanding. If one was true the other would seem false - true? ;o)

Regards, pmcw

Post  42484  by  Tampathom       Reply

Granted, Mossad is not my favorite intelligence source as Israel has every reason to paint any opponent as a terrosit threat to the U.S. They are, however, one of the few sources of human intelligence we have in the region, so we have to make do with what we have.

Post  42485  by  danking_70       Reply
Tampa, don't forget to read my comments on Stratfor. EOM.


Post  42486  by  danking_70       OT: IRAQ IS CONCERNED WITH THE POPULARITY OF A NEW

Post  42487  by  danking_70       Reply
Tampa re: Iraq's support of terror.

I don't know how I could have forgotten. Two Words:


Post  42488  by  Tampathom       Reply
I don't argue the point. Bush's speech was masterful and turned opinion in his favor. It was a shot across the bow of the U.N., which is largely irrelevant except in the minds of internationalists. It also set the stage for the "Bush" doctrine. However, I don't cede the point that the war against Iraq has little to do with Al Queda or terrorism in general. It's about WMD, and perhaps other things. (

Post  42489  by  nacl01       Reply
Second Job

I read in the paper yesterday that Daschle just got $500,000 as an advance on a book he is writing. Maybe he is just too busy to debate issues right now.


Post  42490  by  zonemlp3       Reply
Regardless he's the Harbinger of Doom,
I feel sorry for the guy, it's all caving in around him. I just hope it turns around and the US gets a handle on the 10000 Al Queada that are living amongst us. Since the Al Queada never liked Saddam maybe GWB can work it out a deal to have them take him out and a moratorium, or is really about the Oil? Nahhh...

Post  42491  by  Warstud       Reply
Semiconductor index touches new four-year low : -- Technical -- SOX index -- currently trading at 239 -- is touching its worst levels since October of 1998. Sector leader Intel (INTC -4.6%) leading the way lower today as it has broken to a new 52-week low.

Post  42492  by  danking_70       OT: About the Oil?

Post  42493  by  pmcw       Reply
Pfizer CEO Questions Push To Mandate Options Expensing
Monday September 23, 1:57 pm ET


NEW YORK -(Dow Jones)- Pfizer Corp.'s chairman and chief executive questioned the wisdom of the current headlong rush by corporations to expense options, saying that mandating new accounting treatment doesn't address fundamental investor concerns.

Shareholders want to know whether options are being used responsibly and whether they are helping improve companies' performance, Henry A. McKinnell Jr. told a group of pension fund investors gathered for the Council of Institutional Investors' semiannual meeting in New York. Expensing options doesn't answer those questions, he said.

"I see the current debate on expensing options running the risk of emphasizing form over substance," said McKinnell, who has an MBA and Ph.D. from Stanford University's business school. He said he's not necessarily opposed to the idea of expensing options, if that's what investors want. But he expressed skepticism about the ability to value employee stock options, noting a lack of uniform methodology. "I don't know how to do it," he said about measuring the expense of options. Still, McKinnell predicted that expensing options would be mandated across the board by early next year.

pmcw comment: It seems some want to say that an employee option has a value similar to a open market call option and therefore can be calculated by using the Bull Scholes formula that was developed to value European options. (EU options trade differently than American options in that they can only be exercised on the expiration date.) This doesn't hold water since an option purchased on the open market can be traded at any time and an employee option can not be traded. This liquidity is a substantial portion of the option's value and therefore should not be included in any value calculation for an employee option. These flaws aside, the point is there is no out of pocket expense (income statement expense) for the corporation. Therefore, there is no accurate way to reflect an expense that does not exist.

McKinnell said more important is whether companies allow shareholders to vote on stock option plans, which Pfizer already allows. Currently, proposals are pending that would require shareholder input into most stock option plans.

McKinnell also lashed out at those colleagues who are currently embroiled in financial scandals. "I'm mad as hell at so-called corporate leaders who abuse their responsibility and power," he said. "They put greed, ego and personal gain ahead of investors, employees and the public."

Regardless of the color of a person's collar, "we need to find the wrongdoers and punish them, the faster the better," he said.

Fielding a wide-ranging set of questions from the audience, McKinnell also agreed with the sentiment that corporate executives had not spoken out enough about the current scandals plaguing corporate America. "I feel the same way. Where are the other leaders? The outrage is equally strong in the CEO community, but very few people are speaking out on this subject, partly because we have no credibility."

In a response that may have came as a surprise to the audience, in which activist investors were well-represented, McKinnell said his first impression of a push by investors for companies to include investor nominees as well as management's slate of directors in corporate proxies was positive.

"I have no problem with that. I believe in democracy. All of us are smarter than any one of us," he said, adding that one concern he would have would be if a firebrand were elected and "antagonized everyone in the boardroom."

pmcw comment: This is very similar to the proposal I made that would require companies to include a director elected only by retail shareholders - no votes or nominations from insiders or institutions. I like the fact that it is getting some attention. In addition, I feel this board member should be a member of the compensation committee and be given a section in all quarterly and annual reports to include their thoughts about the company.

Regards, pmcw

Post  42494  by  Czechsinthemail       OT: pmcw,
Post  42495  by  allbright       OT: So does this mean then that our National Parks
Post  42496  by  ljpit       OT: srudek, what can we realistically do to improv

Post  42497  by  lkorrow       Reply

Rumsfield said that, wow. Well, he and the Admin either regret it or don't. Maybe he was trying to shake up the Germans enough to discuss it seriously with us, who knows. May or may not be a good tactic. Rumsfield knows the [terrorism] stakes better than any of us ever will. Maybe the Germans are continuing to let terrorists operate within their country(?). I think our hair would curl if its straight or straighten if it's curled if we knew what was going on in thew world. One gets a small idea while observing the graying of our Presidents [hair] while in office.

If the Germans bailed out of the U. S., they'd be shooting themselves in the foot. I presume we're they're biggest market. A global economic depression is not what anyone needs. I didn't follow why you think every country in the world is an axis of economic evil.

I would never challenge your love of Country (and I don't think you think I did) and I am American and love my country too. Thank God for our ability to discuss issues freely! On, "It is better to hear it from people like me who love and care than it is from more events like we saw on September 11, 2001!," my thinking has evolved to consider that we can get rid of terrorism now or suffer worst consequences later.

Meanwhile, we've got more cororate nonsense -- El Paso and Adelphia. . . .

"A grand jury indicted members of Adelphia's founding family and other former executives on charges they looted the company out of hundreds of millions of dollars" WSJ

Post  42498  by  ljpit       ot: decomposed, yes that was funny. :) For what i
Post  42499  by  StockmanI7       OT: Tin, German elections and the truth
Post  42500  by  lkorrow       OT: Tampathom, sure glad you posted that! eom
Post  42501  by  ljpit       OT: briguy, the UN has been irrelevant for decades
Post  42502  by  lkorrow       OT: Dan, A working President!
Post  42503  by  lkorrow       OT: Danking, You're right, tax breaks for hybrid c
Post  42504  by  danking_70       OT: Ikorrow
Post  42505  by  pmcw       OT: Czech, I'm glad we agree - at least half way.
Post  42506  by  ttalknet2       OT: Zero emission autos
Post  42507  by  danking_70       OT: The Iranian String Quartet
Post  42508  by  ljpit       OT: czech, indict Saddam

Post  42509  by  lkorrow       Reply
ttalknet2, I found the story I had been searching for on toxic air pollution in L. A. (pmcw, this is the story I mentioned to you). If this isn't a business case for solar, air cars, etc., I don't know what is.

Air cars could provide quite a benefit too. There are cities with successful leasing programs for hybrid cars today for people going to train stations. Imagine traffic banned in cities, except by air car. I'm visualizing checking these things out like you would a cart in airport arrivals and they never leave the city. Obviously not well thought out, but imagine the possibilities!

I would like this air car company to hook up with LQMT, maybe they could use their light/cheap material instead of aluminum. I don't know if it's cheaper, but it's worth exploring.

Tuesday, September 17, 2002
By Reuters

LOS ANGELES — A two-week-old baby in the Los Angeles area has already been exposed to more toxic air pollution than the U.S. government deems acceptable as a cancer risk over a lifetime, according to a report Monday by an environmental campaign group.
The study of air pollution in California by the National Environmental Trust also said that even if a young child moved away from California, or if the air had been cleaned up by the time he or she reached adulthood, "the potential (cancer) risk that a child rapidly accumulates in California from simply breathing will not go away."

California, known to be the nation's smoggiest state, already has a potential cancer risk to adults that is hundreds of times above levels seen as acceptable by the Environmental Protection Agency. But the report said children were more vulnerable to pollutants than adults because, pound for pound, they breathe more air, drink more water, eat more food, and play outdoors more than adults.

"A baby born in California will be exposed to such high levels of toxic air contaminants that the child will exceed the Environmental Protection Agency's (EPA) lifetime acceptable exposure level for cancer at a very early age and will exceed the lifetime acceptable exposure level by many multiples by age 18," the Washington D.C.–based environmental campaign group said.

The "Toxic Beginnings" study divided California into five geographical areas. It concluded that in Los Angeles an infant would have reached the EPA's one chance in 1 million limit of contracting cancer from contaminants in 12 days, and in Sacramento it would take 23 days.

It said diesel exhaust — from trucks and cars, school buses, and farm and construction equipment — was still the worst source of air pollution. But it also took into account chemicals emitted by dry cleaners and factories as well as pesticides, adhesives, and lubricant oils.

The National Environmental Trust urged federal and state policy makers to make cleaning up the air a priority. "The overwhelming policy implication of these findings can be reduced to one word: URGENCY," it said.

It recommended that regional and local governments emphasize alternative technologies and fuels, replace diesel school buses and other municipal vehicles with cleaner alternative fuel models, and enforce existing laws on fuel emissions.

Post  42510  by  lkorrow       OT: Sorry, managed to delete the title somehow.
Post  42511  by  clo       OT: Belfast To Boston by James Taylor

Post  42512  by  pacemakernj       Reply
Roof, you've got it nailed. Now one other thing, sell all your bank stocks now! There are some strange things happening right before my eyes. 1) Banks stocks now account for 21% of the S&P 500. Not good. Any time a sector gets that much weight look out below. 2) I mentioned to you about the yield curve and how important it is to watch. I now believe AG WILL NOT lower rates this week. Because the long end is continuing its steady decline. Thus the flattening aspect I mentioned. He's playing Russian Roulette. He won't cut short rates because at this point what good would it do. So he protects the dollar. The long end is getting a flight to quality ONLY because where else can you put your money. Japan? Europe is a mess! Asia, no way. The USA my friend that's it. Furthermore, it is my opinion that insurance companies are buying huge chunks of T-Bonds as a safe haven. They have gotten so burned by corporates that they are staying away. Hence the huge spread between corporates and US Treasuries. 3) It's over for the real estate market. Let me be the first to call it. It's finished. I was worried back in June when I noticed the supply not moving that well here in northern NJ. Well I spoke to someone well versed in NYC RE and he said it has already stopped there. In addition, imo, banks will stop the refinancing boom. In the last two weeks I've noticed very little advertising by local S&L's with regard to refi's. Even though rates have dropped the banks are not dropping their rates accordingly. Which tells me they want to or have to continue to hold these spreads where they are because if they lower them any more that will eat into their profit margins. This means that we've seen all the moves for the consumer out of refi. You watch how fast this things grinds to a halt. 4) Today Steelcase the largest office furniture manufacturer reported a wider than expected loss and moving forward the 4th quarter will be worse. They cited that a double dip is here and it is reflected in their sales and earnings.

I am now convinced the last bastion of hope the mighty US consumer will begin to unravel. Thus a sell call on all retail, auto, housing and banking stocks. Anything related to the consumer will, imo be crushed. Gold will win the day. There simply is no place left to go. I will report on the gold conference tomarrow and let you know how things went. Good Luck, Pace.

Post  42513  by  tinljhtkh       OT: StockmanI7!
Post  42514  by  pacemakernj       OT: Linda, all I can say it's about time. Mr. and
Post  42515  by  tinljhtkh       OT: "L"

Post  42516  by  Arkural       Reply
Mkt tgt-Forget about those (lousy) index tgt's I updated, and have an ice cream cone or some popcorn instead. BUT, watch for the bounce any time now......

re:My comment on security-Invn is breaking out off the 50ema, yet again, heck of a chart, notable RS over many weeks. Wonder how far it'll get this time.


Don't hold your breath on a "possible post." :) Btw, it's not because of your presence here but of some others. I acknowledge your interest though.

Post  42517  by  tinljhtkh       Reply

It was such a great analysis until you got gold fever again right at the end!

What do you think of Fanny's newly reported problems that might require buying 100 billion dollars of bonds just to restore that 14 month imbalance between mortgage expiries and where she sits now? Do you think that we're sitting on a bond bubble getting ready to burst or just between a rock and a hard place all the way around?

If it all starts to slow down like it so suddenly did not all that long ago this could really get messy! Challenger Gray and Christmas reported on CNBC today that there are now as many white collar workers out there looking for work as there are otherwise! There is no job creation going on and the looking time is extending on out to about 3 1/2 months as people are getting in each others way looking for work! And then there are those who have just given up and are drawing down their assets as they try to figure it all out! The nasdaq broke below its support today and if it doesn't recover the prevailing wisdom says that it will begin to drag the NYSE down with it! Then there are those who still think that its over valued even then! I am now no longer going to capitalize the nasdaq anymore because it can no longer meet the requirements due to lost capitalization--or something like that!

The wisdom on the positive side that I'm hearing is beginning to be the same wisdom that has been said too many times before! Its the start of the new fall season and they need to come with some new wisdom because the old reruns start to get really stale after so many times around the track! Maybe they can have a new series entitled "8 reasons why you should date my stock!" ;-)




Post  42518  by  pmcw       Reply
pace, SCS certainly disappointed those who've not been listening to employment reports or cap/ex forecasts, but you had them pegged all along. I'm mean, why would anyone expect office furniture to do well when there are fewer employees to fill desks?

What was surprising from my perspective was that their top line increased sequentially ($659.3M from $643.1M). Is this a seasonal expectation? I would think the summer would normally be on the light side. Clearly they've lost some pricing power or possibly sales have shifted to lower end stuff. Can you elaborate on these issues?

Regards, pmcw

Post  42519  by  lkorrow       OT: Pace, you bet, that was my point. He's got my

Post  42520  by  tinljhtkh       Reply

"do so in French or any other foreign language where we are equal"

Why don't you just post them up in what ever language you feel comfortable in other than English and we'll leave it at that!

Those of us who want to read them can use Griz's translator!

You can paste it in yourself at the end of each post! Maybe you'll do better at expressing your thoughts that way and we can all get the chance to have a little language lesson because you're sure not helping the cause any operating at the disadvantage that you are now! What I've been reading sure is losing something in translation because I know that you can do far better than what you've been posting here!Why don't you sit over here next to me and we can trade French lessons while I brush you up on history and philosophy! I know that we could help one another out!




Post  42521  by  Arkural       Reply
E-mini S&P (etc) futures may be of interest to some. Heard it was gettin' popular.


The S&P 500 Stock Index has long been the benchmark by which professionals measure portfolio performance. The Standard & Poor's Corporation designed and maintains the S&P 500 to be an accurate proxy for a diversified equity portfolio. The Index is based on the stock prices of 500 large-capitalization companies. The S&P 500 is capitalization-weighted, representing the market value of all outstanding common shares of the firms listed (share price x shares outstanding). This means that a change in the price of any one stock influences the index in proportion to the relative market value of that firm's outstanding shares.

Post  42522  by  uponroof       Reply
pace...JPM and El Paso

A good example of what's out there lurking in the banking sector. Touches on what RBA wrote today. Nice to see some others in the media, even if it's Mr. Cramer, picking up on this systemic weakness which just doesn't seen to go away.

J.P. Morgan Loan Keeps El Paso on Life Support
Monday September 23, 3:11 pm ET

By James J. Cramer,

Here's how it starts: El Paso (NYSE:EP - News) gets in trouble for power merchandising, which turns out to be not much of a business. J.P. Morgan (NYSE:JPM - News), which loaned money to El Paso, has to decide whether to cut El Paso off. If El Paso gets cut off, then J.P. Morgan has to move El Paso to noncreditworthy status.

That, however, would freak out the markets even more. So what can J.P. Morgan do? Lend more to El Paso, which is what it looks like will happen now....


uponroof- systemic risk like never before thanks to poor FED policy decisions....always in favor of fantasy fractions in the fractional reserve world of phoney figures. Understandable when printing ink and wood pulp is the only hindrence to 'expanding the economy'.

pace...Very much looking forward to your eyewitness report of the NYC Gold Conference. You are the man! Thanks.

Post  42523  by  pmcw       Reply
Cisco Systems Hosts ``Speaker Series'' Educational Webcast: Wireless LAN
Monday September 23, 8:05 pm ET

SAN JOSE, Calif.--(BUSINESS WIRE)--Sept. 23, 2002--Cisco Systems (Nasdaq:CSCO - News) will host another session of its monthly "Speaker Series" webcasts, with corresponding slide presentation, on Thursday September 26th, 2002, at 1:45 PM (PDT).
Please join Bill Rossi, Vice-President and General Manager of Wireless Networking, as he discusses recent developments in the Wireless LAN market. Bill will address growth opportunities in this important market, and will discuss the emergence of Wi-Fi (802.11 wireless networks) as the next Internet.

No previously unannounced issues will be discussed in this webcast.


Date: Thursday, September 26, 2002

Time: 1:45 PM (PDT); 4:45 PM (EDT)

Listen and watch via the Internet:

We will offer live and replay audio broadcast of the conference call,
with synchronized slides, at:

To Dial in for the Live Call:

Within the U.S: 877-709-5341
Outside the U.S: 212-287-1855


No RSVP is necessary


Playback of the Speaker Series, with synchronized slides, will be
available on the Cisco Systems website at:

Post  42524  by  ttalknet2       OT: Sighting - First Christmas commercial