|A compilation of this board's financial/economic posts From 43569 to 43593
Post 43569 by stardance Reply
This is TRUE PROPHECY........
How is this for PROPHECY?
I posted exactly what I thought the market would do WAY BACK in Febuary 2000 on this board.
Needless to say I was roasted.
The market did exactly what I said...read and see. The post is still on the RB server and the market charts
over the past 3 years are available anywhere.
The prophecy still has more to go.
By: stardance $$$$$
26 Feb 2000, 09:52 PM EST
Msg. 11170 of 43568
What the future holds?
The Dow and the market in general (in correspondence) have reached a very pivotal point here within the last few weeks (todays date: Feb 26,00). What we currently have is a bull market top signified by a very bearish broadening formation (or bear megaphone)on the weekly charts. Dow 9500-9600 are very critical support lines, but in this bearish megaphone- support lines are tentative at best. A break of 9550 or there abouts will signal a severe technical violation which may end the short term bull market. Support and bounce at 9550-9600 signifies bargain hunter buying before another retry at breaking the 9550-9600 line (which in my opinion will break). To add to this we have an engulfing bearish candle formation on the quarterly charts. Every one on the street is bracing and keeping very quiet, to allow them time to get out. Many of them see this pattern. Hush, hush! So where is support after a breakdown? I see retracement support at 8700 then 7700 then 6700. Retracing from the real beginning of the bull market in '95 to the last high. I may be conservative in my retracement allowances and these supports may be a little high depending on beginning retracement achorage date. Are you ready for the bear?
Because he may be ready to raid the bee hive for the honey.
PS: If it follows through as expected...you heard it here first
27 Feb 2000, 11:42 AM EST
Msg. 11171 of 43568
(This msg. is a reply to 11170 by stardance.)
are you short the market? You should be if you believe that nonsense in your post. The correction is just about over, great bargains abound, buy on sale now and reap the rewards, go long and prosper....and you didn't hear it here first.
By: Xpristo $
27 Feb 2000, 11:56 AM EST
Msg. 11172 of 43568
(This msg. is a reply to 11171 by NI4NI.)
Dow at 6500? What would that make the yield, PE ratio etc, people selling bonds to buy shares for the income?
I am all for intelligent discussion but...
Last big pull back was to 7900 I think started by the institutions, who when they saw nobody was selling were mighty embarassed!
Praps the market is frothy, praps we need a correction, but the "real economy" looks healthy to me. I wish i could make money writing scare articles.
Reminds of the guy from the prudent bear fund on CNBC, he sees the nasdaq at less than 2000 end of the year! Any takers?
27 Feb 2000, 08:02 PM EST
Msg. 11180 of 43568
(This msg. is a reply to 11179 by stardance.)
of course a correction to under 10k was expected. There is always a need for backfilling. The point is, the dow is now down 2k and there are screaming bargains all around the listed map. Time to buy...
By: Warstud $$$$$
27 Feb 2000, 09:55 PM EST
Msg. 11183 of 43568
(This msg. is a reply to 11179 by stardance.)
I too just stated an opinion, that of someone with a proven track record. Probably that of over a hundred years of investment experience that I feel is reliable information compared to a few months of your chart reading experience which dont mean didly squat. We've been through this interest rate scare before and the market continues to come screaming back. By the way if you could care less what I think why did you respond to my post? Also my charts tell me that you ought to get lost and spill your trash somewhere else because as far as I'm concerned your attitude is not wanted here!
MANY MORE DELUDED MINDS NOT LISTED...and probably very broke.
OT: Table ON TOPIC SUMMARY Oct 12, 2002
Post 43571 by ljpit Reply
And today FIBR is down 99.9172 %, from it's high of feb 29, 2000.
Last weeks press release:
Sorrento Networks Provides Update On Status of Capital Restructuring
Company Files Plan With Nasdaq to Achieve and Sustain Compliance with Market Listing Requirements
Friday October 4, 8:30 am ET
SAN DIEGO--(BUSINESS WIRE)--Oct. 4, 2002--Sorrento Networks (Nasdaq:FIBR - News), a leading supplier of intelligent optical networking solutions for metro and regional applications, announced that yesterday it filed a preliminary plan with Nasdaq that aims at achieving and sustaining compliance with all Nasdaq National Market listing requirements.
This plan includes the steps that the company is taking to modify its capital structure.
The company also reported that it has been actively engaged in discussions with the Series A preferred stockholders and the convertible debenture holders in order to restructure the company's obligations and improve its balance sheet.
Phil Arneson, chairman & chief executive officer, stated, "We have had several weeks of effort, and numerous meetings with convertible debenture holders and Series A preferred stockholders in New York City. Many critical challenges lie ahead, and while we cannot be certain that we will reach an agreement, we are working to achieve our objective of converting the debt and the preferred stockholder positions to equity."
Joe Armstrong, chief financial officer, reinforced Arneson's comments by saying, "Many companies in the telecom industry are facing similar challenges with regard to financial restructuring. While there is no assurance that Nasdaq will accept our plan, we feel that the plan we proposed is the most appropriate to improve the Company's equity structure for meeting Nasdaq National Market listing requirements."
Arneson added, "Our goal is to emerge from this market downturn and from our capital restructuring efforts as a viable, healthy contender to participate in the anticipated resurgence of the metro bandwidth marketplace."
Sorrento Networks' GigaMux is a metro and regional dense wavelength division multiplexing (DWDM) platform that transforms any fiber plant into a high-performance, multi-protocol transmission network with up to 64 times the transmission capacity. GigaMux is a compact, flexible and cost-effective system based on a "pay-as-you-grow" architecture. Working in conjunction with GigaMux is the EPC product family, consisting of sub-rate aggregation multiplexers that increase bandwidth utilization by combining a wide variety of traffic for transmission over a single wavelength, including ESCON, Fibre Channel, Fast Ethernet, Gigabit Ethernet and SONET/SDH channels. For entry-level networks, Sorrento also offers JumpStart-400, a cost-effective 8-wavelength, coarse wavelength division multiplexing (CWDM) platform.
About Sorrento Networks
Sorrento Networks, headquartered in San Diego, is a leading supplier of intelligent optical networking solutions for metro and regional applications worldwide. Sorrento Networks' products support a wide range of protocols and network traffic over linear, ring and mesh topologies. Sorrento Networks' existing customer base and market focus includes communications carriers in the telecommunications, cable TV and utilities markets. The storage area network (SAN) market is addressed though alliances with SAN system integrators.
Recent news releases and additional information about Sorrento Networks can be found at www.sorrentonet.com.
Post 43572 by uponroof Reply
Spitzer squeezing Grubman for Citi's top brass...
"Be Very Afraid, Sandy"
From Barron's today [snip]
....."The focus on Citigroup seems to have gone much, much further than the focus on Merrill," says Ron Geffner, a New York lawyer and former SEC enforcement attorney.
It may even leave Citigroup and some of its executives open to charges of civil or criminal fraud -- if the evidence bears out what we've heard so far.
Some of that was telegraphed in a lawsuit Spitzer filed last week against five executives of telecommunications companies who did investment banking with SSB and to whom the firm allocated shares of stock in companies before they went public.
In a press release, Spitzer dubbed this "spinning" of IPO shares to favored SSB clients "an integral part of a fraudulent scheme to win new investment banking business."
Spitzer's latest complaint also detailed how banking fees influenced SSB's stock ratings; how analysts were compensated based on their contributions to I-banking, and, of course, how Grubman continued to recommend stocks of I-banking clients as the shares tumbled, in some cases to bankruptcy.
Jeffrey Haas, professor of securities law at New York Law School, defines fraud as "a knowing misstatement of a material fact upon which the other party relies to his or her detriment."
That "other party," of course, was the hapless retail investor who was naïve or trusting enough to follow a broker's tainted recommendations.
If SSB did what it is alleged to have done -- recommend stocks its analysts knew to be turkeys in order to get i-banking business and pressure analysts to write favorably about banking clients -- that would be well within the definition of fraud as spelled out in rule 10b-5 under the Securities Exchange Act, Haas says.
"If it's not down the middle of the fairway, it's certainly on the fairway," he adds. "If we have people telling people to do things, that's intent, it's not negligence."
"There's no question that the allegations -- if there's the evidence behind them -- fall squarely within 10b-5 fraud," says Jacob Frenkel, a former SEC enforcement attorney who now practices in Washington, D.C.
"Based on the allegations, civil and/or criminal fraud charges could follow," he adds. "The question is, against whom?"
Indeed. With Grubman now cooperating, all bets are off. And whether he likes it or not, scalps are precisely what prosecutors will demand to cut him a better deal.
"If he's not fingering higher-ups, then I'm hard-pressed to know what his cooperation [consists of]," says Frenkel. "In most high-end white-collar cases, the only currency a person has is the ability to spill the beans on somebody higher up the food chain."
The legal experts I spoke with see the most likely outcome as some sort of civil charges brought against Citigroup or SSB and civil and possibly criminal actions against some of the executives involved -- unless there's a settlement, of course.
How high could the prosecutors go? Theoretically, to the very top. Unthinkable? Hardly. But it's tough to make cases against CEOs.
"It becomes more difficult as you move up the chain of command," says Robert J. Cleary, a partner at Proskauer Rose who prosecuted Robert Brennan of First Jersey Securities while a U.S. attorney in New Jersey. Top executives, he says, have "plausible deniability," and circumstantial evidence just won't cut it.
And perhaps that isn't even Spitzer's endgame.
"Spitzer doesn't want Sandy Weill," says Haas. "He wants a $200-million check and a [commitment by SSB] to change their ways."
For now, though, Spitzer and the prosecutors appear to be holding most of the cards -- and they don't look ready to fold, by a long shot.
That's probably why Prince is scrambling to settle while Spitzer turns up the heat. The firestorm of allegations and bad publicity is growing. Weill and Prince have to put it out quickly before it engulfs the entire company."
uponroof- Daschle going after Pitt has turned up the intensity from the likes of Spitzer. While Tom want's to politicize regulators, he's just inspired 'Elliot Ness' Spitzer.
Post 43573 by lkorrow Reply
Briguy, it really is amazing. LU went from a huge market share to what. I heard late in the week that Nortel said they expected revenue increases next year. Easy statment to make, but I wonder about the reality of it.
Post 43574 by nvrgivup Reply
With regard to the Templeton visit on the Rukerser show, I enjoyed hearing his comments about the excesses of the "bubble." He said the worst cases of excessive euphoria were in the IPO market. He explained that his strategy was to find out when the lock-out period of a recent IPO was ending. Then short the stock just before the lock-out expiration date (when the supply of stock in the market would greatly increase). Two years later, he would cover his short positions at 5 cents on the dollar. When he finished telling that story, he had a bright smile and looked more proud of himself than at any other time in the show, in my opinion.
Needless to say, Templeton is a genius. Think about it--- the conventional wisdom was that the only way to profit in the IPO market was to be given IPO shares by a friendly broker, an unlikely event unless you are a major player or insider. Then Templeton explained that anyone could profit in the IPO market--on the way down...
Post 43575 by pacemakernj Reply
Roof, thanks for those comments. IMO, we are now coming to a point with EVERYTHING. That is will corporate America begin to spend? Will the consumer hold up the economy? Will the FED cut rates at the next meeting? Will the stock market hold these levels? Will we attack Iraq? Will the Republicans or Dems take control of Congress? All questions that imo will be answered in the next few months. Until we get those answers neither gold nor stocks can make ANY appreciable headway. Regards, Pace.
Post 43576 by pacemakernj Reply
Nvr, I read that Templeton made about $100 million shorting the IPO market. That would put a smile on anyone's face. Pace.
Post 43577 by pacemakernj Reply
Stardance, kudos to you. Now what are your predictions for the future? Pace.
Post 43578 by srudek Reply
Economist-Causes of Booms and Busts frm 9/28 issue
The following article is excerpted from "The Economist" magazine. It lists the main theories which attempt to account for the boom/bust cycle. All the theories, but one, are basically dismissed with a single paragraph each -- as they should be, imo, if they failed to predict the 2000 stock Bubble and subsequent scope of the bust as inevitable. Austrian Theory gets the vast majority of the article and appears to be the theory upon which Economist is basing the foundation of its conjecture.
Bolding and underlining were added by moi.
I'm appreciative that The Economist has settled on AT as the best predictive model of our current dilemma. I'm a little frustrated that with regard to Central Bank responsibility for the Bubble/bust, the article says only "But because inflation was low (and because Austrian economics had long gone out of fashion), the Fed and the Bank of Japan failed to [raise interest rates]."
In a future article (tenatively entitled, "Where Has All the Inflation Gone?") I'm intending to present a model for thinking about "inflation" and state that inflation has, in fact, been mind-blowingly immense over the last ten years. If you thought we had low inflation you've been completely fooled by smoke and mirrors.
SURVEY: THE WORLD ECONOMY
Of shocks and horrors
Sep 26th 2002
From The Economist print edition
The causes of booms and busts
IN THE bible, Joseph tells the pharaoh to expect seven years of plenty followed by seven lean years. That was, perhaps, the first documented business cycle—and the first (and probably last) example of an accurate economic forecast. Recorded data on business cycles go back to the early 19th century, but economists still cannot agree about what causes contractions and expansions in economic activity.
Economists have come up with all sorts of explanations, from the effect of sunspot activity on climate to the alignment of planets and their magnetic forces. The current preference is to look for more down-to-earth causes, which come in two main varieties: those that explain the business cycle as a self-perpetuating process, and those that blame recessions on shocks or policy mistakes. The main theories are:
• Exogenous shocks. Recessions, it is argued, are caused by unexpected events, such as the rise in oil prices in the mid-1970s or, as some (incorrectly) tried to argue, the terrorist attacks on September 11th last year. If so, recessions are, by definition, totally unpredictable. They cannot be prevented, but once they have arrived governments can use fiscal and monetary policies to cushion demand.
• Keynesian theory. John Maynard Keynes blamed recessions on the inherent instability of investment caused by “animal spirits”: swings in the mood of producers, from optimism to pessimism. As investment slumps, jobs and household incomes fall, amplifying the initial drop in demand. Unemployment rises because workers will not accept the pay cuts required to price the jobless back into work. So, to bring the economy back to full employment, the government needs to pursue expansionary policies.
• Real business-cycle theory. This theory, which emerged in the early 1980s, sees productivity shocks as the cause of economic fluctuations. For example, if productivity falls, current returns decline, says the theory, so workers and firms choose to work less and take more leisure. Rather than explaining the cycle in terms of market failure, as Keynes did, real business-cycle theory views a recession as the optimal response by households and firms to a shift in productivity. If so, there is no point in governments stimulating the economy. But most economists find this theory hard to swallow. Mike Mussa, a former chief economist at the IMF, and now at the Institute for International Economics, describes it as “the theory according to which the 1930s should be known not as the Great Depression, but the Great Vacation.”
• Policy mistakes. The late Rudi Dornbusch, an economist at the Massachusetts Institute of Technology, once remarked: “None of the postwar expansions died of old age, they were all murdered by the Fed.” Almost every recession since 1945, with the exception of last year's, was preceded by a sharp rise in inflation that forced central banks to raise interest rates. The first mistake was to allow economies to overheat; the second to slam on the brakes too hard. This theory gave rise to the popular belief that recessions could be avoided so long as governments pursued prudent monetary policies to keep inflation low and stable. Yet the recessions in Japan after the 1980s bubble and America more recently suggest that price stability does not prevent booms and busts.
• Austrian business-cycle theory. This is the oldest, developed by Austrian economists such as Ludwig von Mises and Friedrich Hayek in the early 20th century. Unlike Keynes, who thought recessions were caused by insufficient demand, these economists put them down to excess supply brought about by overinvestment. As a result of mutually reinforcing movements in credit, investment and profits, each boom contains the seeds of the subsequent recession and each recession the seeds of the subsequent boom.
According to Hayek, output fluctuates because the short-term interest rate for loans diverges from the “natural” or equilibrium interest rate—the rate at which the supply of saving from households equals the demand for investment funds by firms. If central banks hold interest rates below this rate, credit and investment will rise too rapidly, and consumers will not save enough. This creates a mismatch between future output (which will increase as a result of higher investment) and future spending (which will fall as a result of lower saving today). Cheap credit and inflated profit expectations cause both overinvestment and “malinvestment” in the wrong kind of capital. The mismatch between saving and investment will eventually push up interest rates, making some previous investments unprofitable. Too much capacity will also reduce profits. Investment collapses, ushering in a recession. As excess capacity is cut, profits rise and investment eventually recovers.
According to this theory, central banks would not be able to avoid a downturn by heading off a rise in interest rates. The only way to prevent the cycle from turning is to inject ever more credit, which becomes unsustainable. A recession is inevitable, and indeed necessary to correct the imbalance between saving and investment.
A tour of the Austrian Alps
In the second half of the 20th century, self-perpetuating theories of the business cycle were almost completely ignored in favour of theories that stressed shocks or policy mistakes. Most recessions were caused largely by economies overheating, forcing central banks to raise interest rates. Now, however, the fall in inflation has brought the inherently cyclical behaviour of credit, investment and profits to the fore.
In the late 1990s inflation rose only slightly, leading most economists to believe that growth would continue in America. Only a few economists, such as John Makin, at the American Enterprise Institute, and Stephen King, at HSBC, recognised that this cycle was different: that it was an investment-led boom that carried the seeds of its own destruction.
The recent business cycles in both America and Japan displayed many “Austrian” features. Hayek argued that the natural rate of interest could rise if faster productivity growth increased expectations about profits and hence investment opportunities. This is what happened in Japan in the 1980s and in America in the 1990s. If such a shift in investment occurs, central banks need to raise interest rates. But because inflation was low (and because Austrian economics had long gone out of fashion), the Fed and the Bank of Japan failed to do so. The cost of capital therefore fell below its expected return, fuelling a surge in credit, equity prices and investment.
Investment normally accounts for about one-sixth of America's GDP, but during the three years to 2000 the investment boom pushed up its share of GDP growth to one-third. Overinvestment caused the return on capital to decline. Anybody who looked at the profits of corporate America in 2000, as reported in the national accounts (which allow for the true cost of stock options) rather than by the companies themselves, should have seen trouble coming. Profits had been falling since 1998, as before every previous recession (see chart 2). Investment will not rebound until excess capacity has been cleared and profits have improved.
Strict Austrian-school disciples would argue that because the current downturn is due to overinvestment, the Fed's repeated easing of interest rates is wrong; it delays the correction of past excesses. The present economic and financial disruption is needed to bring saving and investment back into balance. But most economists today would accept that in the face of a severe recession central banks need to act. Even the Austrian economists recognised that a collapse in confidence could push the economy into a much deeper recession than necessary. Monetary and fiscal policy therefore still has a role—not to avoid recession, but to head off a downward economic spiral.
Many economists still do not accept that this recession has been quite different from all previous post-war cycles, and that the shape of the recovery will therefore also be different. Investment-led downturns tend to last longer because it takes much more time to eliminate financial excesses than to tame inflation. High debts and excess capacity will restrain growth.
The complete rejection of Austrian-school ideas over the past half-century partly reflected a desire by economists to develop a framework that could explain all business cycles. The truth is that there is no single cause of cycles. Sometimes an oil-price shock or a policy mistake may trigger a recession, but the endogenous movements in credit, investment and profits are also always at play. Indeed, the Austrian cycle may become more common again if, as this survey will argue, financial liberalisation has made bubbles in credit and investment more likely.
Post 43579 by lkorrow Reply
Pace, it certainly is tenuous. The low inventories are in our favor this time.
Post 43580 by jeffbas Reply
uponroof, is there any reason that the Federal Reserve couldn't just sit on the price of gold until JPM's loans all have matured?
OT: Mandela has gone off the reservation.
OT: Latest Muslim Antics in Bali
OT: Relevant words from the Noble Peace Prize win
Post 43584 by danking_70 Reply
Maniati re latest muslim antics
Did you know that Indonesian President Megawati Sukarnoputri was targetted for assasination by these terrorists?
Usually they are just killing Christians and Chinese in Indonesia, but they must have moved on to bigger (read foreign) targets.
It should also be noted that Singapore and Malaysia are frustrated with Indonesia's half-hearted (ASSED) effort and dealing with this very serious regional problem.
Here's some interesting reading I've found on an Aussie blogger's webpage. ( http://timblair.blogspot.com )
US ambassador saw writing on wall a month ago
Akbar Tandjung Regrets US Plan to Withdraw Its Staff from Indonesia
12 Oct 2002 20:36:30 WIB
This speech was given Saturday. Supposedly a few hours before the Terrorist attack in Bali. Which foot do you suppose had to be removed?
"TEMPO Interactive, Balikpapan, East Kalimantan:House of Representatives (DPR) Speaker Akbar Tandjung has said that he regrets the US government’s plan to withdraw all of its representative staff from Indonesia.
Tandjung said he considered there was no proof that Indonesia was unsafe and therefore there was no reason for the USA to carry out its plan.
Tandjung, who is also the Chairman of the Golkar party, made this statement to reporters on Saturday (12/10) following the inauguration of members of East Kalimantan’s Golkar party youth movement in Balikpapan.
As reported earlier, the Koran Tempo daily newspaper in its Saturday (12/10) edition quoted a report in the Washington Post daily newspaper that the US government threatened to withdraw all its staff from Indonesia if Indonesian security officials were not serious about revealing the terrorist network considered to be a threat to US citizens’ safety.
Tandjung also regretted the stance taken by the US government as he considered the USA of having received incorrect information about Indonesia.
He went on to say that it was difficult to prove that Indonesia has been used as a terrorist hideout.
“Even if such allegation was proven, Indonesian security forces would be able to settle the matter immediately,” said Tandjung.
He also suggested that President Megawati Soekarnoputri’s administration take an immediate stance on the matter and convince foreign countries about the real facts regarding Indonesia.
This way, other countries will not plan to withdraw their representative staff as the USA is threatening to do. (Rusman – Tempo News Room) "
Here's some info on the terror group Jemaah Islamiyah. I wonder if they're poor and oppressed too or if they just really want a Pan-Islamic State? I suspect you already understand what it really is about. ;-)
"Bali blast suspect lives openly in Indonesia
AFP [ SUNDAY, OCTOBER 13, 2002 04:03:54 PM ]
KUALA LUMPUR: The Islamic militant group Jemaah Islamiyah (JI), named by Australia as a suspect in the bombing massacre in Bali, is an al-Qaeda linked group whose alleged leader lives openly in Indonesia despite intense international pressure for his arrest.
Warnings that JI was planning major terrorist attacks have come thick and fast recently, from countries including Malaysia, Singapore and Australia.
All three have pointed to Indonesian Islamic cleric Abubakar Ba'asyir as a leader of the organisation, but the Indonesian government has said it has no evidence against him.
Less than a week ago, Australian Foreign Minister Alexander Downer said during a regional meeting in Malaysia: "The organisation that we are most concerned about is a group called Jemaah Islamiyah. We think Ba'asyir is a significant figure in JI."
On Sunday, after the blast at Indonesia's Bali tourist resort killed at least 187 people, many of them believed to be Australians, Downer said: "Jemaah Islamiyah does have links to al-Qaeda and it's conceivable that an organisation like that could be behind this action."
Australia is one of Washington's staunchest supporters in the war launched against al-Qaeda following the September 11 terrorist attacks on the United States.
Ba'asyir, 64, is a self-confessed admirer of al-Qaeda leader Osama Bin Laden, but says Jemaah Islamiyah does not exist and he has no links to terrorism.
Malaysia, a neighbouring Muslim state, says differently.
Two weeks ago, police chief Norian Mai, announcing the arrest of a "prime" terror suspect, said he was a member of the Malaysian Militant Group (KMM) which was linked to JI.
"We believe they receive instructions from the same figures as quoted by Singapore, that is Hambali and Abubakar Ba'asyir. These two are the leaders of the movement," Norian said.
The whereabouts of Hambali, an Indonesian Islamic fundamentalist also known as Riduan Isamuddin, are unknown. He is described as being in charge of the JI in Malaysia and Singapore, and is suspected of having direct links to al-Qaeda.
Singapore has accused JI of plotting attacks on several Western targets in the island nation, including the Australian embassy, and has arrested 32 alleged JI militants.
It says JI aims to create a theocratic Islamic state covering Malaysia, Indonesia, Singapore, the southern Philippines island of Mindanao and Brunei.
The grey-bearded Ba'asyir is chairman of the Indonesian Mujahidin Council, an umbrella organization advocating Islamic law in the sprawling archipelago.
He speaks regularly to the media and announced two weeks ago he was suing Time magazine for defamation after it carried an article linking him to terrorist activities.
The magazine said it based its story on a CIA report about statements by former Indonesian resident, Kuwaiti Omar al-Faruq, who had allegedly admitted under interrogation in US custody to being al-Qaeda's top representative in Southeast Asia.
"It's all lies," Ba'asyir said.
The United States issued repeated warnings in recent months over fears Indonesia, the world's most populous Muslim nation, may be home to al-Qaeda sympathisers.
After months of official denials, senior Indonesian military officials late in September said they believed al-Qaeda may have a limited network in the country.
Last week, the US ambassador to Indonesia reportedly warned that he could withdraw some embassy staff unless authorities improved security after a September 23 grenade explosion near an embassy residence.
And Australia sent security alerts to all its foreign missions on last Friday reminding them to keep high vigilance for possible attacks by al-Qaeda and linked groups. "
Post 43585 by uponroof Reply
jeffbas...yeah, it's called 'illegal'
Good obseservation by you as the FED certainly has the resources....however, the climate is changing for such illegal manuevering. The stink in the private sector would be like perfume compared to the smell attached to gummint market intervention. "Sitting on the POG" through illegal sales or loans in this environment, with Spitzer, Pitt et al under such high focus is risky business.
Let's not forget...
The gold being "sat on" is not the property of the Central Banks....worse, it certainly isn't the property of the Bullion Banks to whom these less than ethical gold 'loans' have been made. The gold belongs to the people of the respective countries yet the CB's and BB's are playing fast and loose with it through fractionally based swaps and loans which INTENTIONALLY depress it's price on the open market. It's the epitome of a paper derivative scam which negatively influences the physical price.
Aside from that, the FED is only one CB...albeit the largest holder of gold. The other CB's are not amused with the current state of monetary affairs on the global scale. The influence of the FED is diminishing as is the dollar. It won't take much to bring about a defection or two wrt the current CB lock step on gold.
Here's a question for you...
Is the US gummint working to save the dollar's inflated position in the forex exchange despite the need to depreciate for the good of GDP internals? The list of respected economists and analysts calling for a lower dollar (by up to 25%) increases, yet no indication from Mr. O'Neill that a policy change is in the works....why? Could it be that there is much more at stake than popularly understood?
Back to CB's and GOLD
Here's something out just today on CB gold control by Mr. James Sinclair who writes for Forbes on occassion. Mr Sinclair called the top of the gold market in 1980 to within a few dollars and days.
October 13th 2002
Central Banks Can/Will Control POG Forever?
The greatest concern of gold investors is the gnawing suspicion that manipulation of the gold market can and will control it's price (POG) forever. Anyone that ignores this influence or claims that it does not exist in the gold market is grossly uniformed of what is a clear reality or a government employee at any level.
I have answered this question based on my experience of Central Banks' activities from 1968 to 1981 in which I was a major participant that:
1/ Smaller, yet influential central banks around the world for economic and/or political reasons did in 1968-1981 and will defect from the Club purposes of major Central Banks either passively or actively, but publicly.
2/ I maintain that markets in either a primary bull or primary bear are stronger than any central bank and all central banks together. Nothing financially, individually or as a group with common interest, is stronger than the intention of a primary bull or bear market in anything.
3/ Never in history can any example be found wherein any manipulative interest was able to reverse permanently a primary bull or primary bear market intention to exist and intention to establish price-wise its existence.
4/ Manipulative attempts by any interest of any size to prevent a primary bull or bear market always create a long top or bottom base formation. This results in what is known as a "Coiled" market. Once it establishes the primary bull or bear move, it moves in orders of magnitude greater than would have occurred in the first place.
Examples of the Defections of Central Banks Surfaces
A/ It must be kept in mind that nothing financial occurs in India without the direction of the Indian Reserve Bank, their central bank. Since it is traditional in India to keep one's savings and liquidity in gold, this development is bullish long- term for the price of gold. It also must be noted that Indians historically are world class speculators/gamblers.
Banks Allowed To Consider Gold, Forex Limits As One
The Financial Express [India]
Mumbai, October 11:
The latest circular, thus, removes this requirement and considers the
open position in both gold and foreign exchange as one, giving clear
indication that gold will now be treated similar to foreign currencies.
The latest move will have wider implications on the use and treatment of
the precious yellow metal in the country. The move is expected to see
the emergence of trading in gold, both physical and gold certificates
(paper gold as it is commonly known), not permitted currently. And gold
would then be traded as forex is traded.
B/ It is expected that the official Gold Dinar will surface as a gold backed currency with 28 participating Islamic countries on or before June 2003. Should this occur, the major wealth in the Islamic world will enter a gold backed currency block.
Gold is still working in price-terms to create what could turn out to be a technical formation titled "Tea Cup with Handle." Please refer to your reference books, particularly Edwards and McGee. You will find examples of this formation as a dynamic launching pad for outstanding price appreciation, most usually. Add to this that there is, IMO, at what could be the top of the "Handle" on the "Tea Cup" formation what is called in the discipline of Point & Figures technical analysis a "Catapult." I point this out because it is so very early for developments like the defection of central banks from the anti-gold party line. It may well mark the birth of Asian Central Banks into more senior roles in the coming years. This should be expected as the population base of Asia coming into a more function capacity as a consumer of goods and services necessitates that central banks of India, China, Pakistan and Islamic countries have their own financial agendas and not remain the minor children of the major G10 central banks. The kids grew up and are about to make their own lives based on their own perception of money & credit. Mom & Dad G10 central banks are about to have empty nest syndrome. Gold is Money. Asia, Dr. No and Hung Fat knew that for many years. They have positioned themselves and now they are about to enjoy their ascendancy. Those who have the gold make the rules!
President Roosevelt, who gave us the Gold Bull Market of the 1930s by his economic policies, edict of gold price set and desire to assist the Treasury/Fed to increase the then money supply said of the then general economic situation, "All you have to Fear is Fear itself."
To the new people in gold who gave us the present negative reaction in gold shares primarily for no reason whatsoever, I would give a caution. In the price of gold and gold shares "All you have to Fear is Fear itself." For your own interest and the interest of the market learn simple Technical
Analysis. That is, simply learn up trends, down trends, support and resistance. If you knew that and only used a ruler, you could have beaten this gold market to your advantage. Had you bought & sold on my various recent
VIP postings, you would now be laughing and holding out a bag to catch your favorite gold share cheaply. I will do my level best to give you 1/3 buy and sell heads-up postings. HD Schultz (www.hsletter.com) offers an excellent email gold share trading service. Marty Pring (www.pring.com) offers an excellent overall technical email service with strong focus on gold and gold shares. I have no financial interest in either but great professional respect for both. However the bottom line is you must not depend on others (not even me) without doing your own homework, if only to understand the words. If you do not own the Edward's & McGee book (or similar text) and a simple ruler you are not doing your homework. You do not therefore deserve to win. Sorry!
Question: Are, and why are gold leases rising now?
Answer: We have to be cautious because, Kitco.com, the main web page reporting on lease rates hasn't been consistently correct. They have reported all four of the recent four nonexistent increases in the gold lease rate. The only other source on the web reports daily hypothetical gold lease rates, which need not have anything to do with real gold lease rates. Clearly, I am not the most favored person at the gold cartel trading desks, so all I can do is ask Kitco if they got it right this time. Today is Sunday.
Therefore to answer your question, I will review for you what makes the gold lease rate rise and what is the main ingredient today that will influence the rate.
The theoretical gold lease rate is the difference between Libor (the British inter-bank rate for the period in question) minus the gold forward contangos (difference between cash and forward price of gold for the period in question up to one year). Therefore the theoretical gold lease rate formula is Libor (minus) Catango=Lease Rate.
The real gold lease rate is the above theoretical gold lease rate, plus or minus supply and demand for gold leases. It is for this reason that the one-year gold lease rate ran up to above 9% during the Ashanti Derivative Hedging Crisis.
Gold leases are therefore determined by:
1/ The Forward rate of gold for the period, the catango.
2/ The Libor inter-bank lending rate for the period.
3/ Supply and Demand for gold leases.
What is happening, now?
1/ The forward gold rate (contango) had expanded slightly but not enough to be a serious ingredient to higher gold lease rates.
2/ I expect Libor to rise but I am totally alone on that expectation. However on the theoretical level one could offset the other between numbers 1 & 2.
3/ I believe any gold producer that seriously increased their derivative gold hedging via gold leases at this time even to finance a non-recourse gold loan for development of a new promising gold project would ignite a fierce stockholder revolution that could reach the proxy war level.
Therefore that leaves only the Supply Side of the gold lease equation to influence the gold lease rate. That means the willingness of the Central Bank who are the gold lease sources to re-grant gold leases, as they all expire yearly. The supply side of the gold lease also represents central banks' willingness to grant new gold leases. However the demand for new gold leases is now dead in the water, therefore higher lease rates cannot be affected by that factor of supply/demand. That leaves only one viable possible reason for an increase in the gold lease rate. That factor would be the lack of the willingness of some, probably not major, central banks to continually and into infinity renew by re-grant the gold leases that mature yearly for all eternity. It should be remembered that during the Ashanti Crisis it was a minor Islamic central bank that declared it was willing to fill all leasing demands that broke the lease rate and in turn help gold off the $350 level. Most certainly the central banks representing the 28 Islamic countries planning to join in the Gold Dinar strategy of June 2003, would not renew gold leases now. As a result of the highly publicized derivative credit downgrades, made by major credit rating services on international commercial banking operations that are the gold cartel dealers, smaller central banks will be concerned about many current gold dealer' s creditworthiness. These secondary central banks will defect from the Club of Central Bankers by failing to automatically regrant gold leases. As a result, the gold cartel dealers who generally have accepted in their deals with gold lease clients the legal/financial responsibility to provide the roll-over of the gold lease for their clients will have to seek a new gold lease elsewhere. This new gold lease demand with a lower gold lease supply due to credit downgrade revelations is what I see as the primary reason for any new rise in rates. Has this occurred? We shall see, but 1.6%, the reported level, even if it is factual is still a pitifully low cost of money. Yet if it exists, it has a TA implication which would be important.
Post 43586 by jbennett53 Reply
OT, danking, You state,"Mandela has gone off the reservation." That's all anyone needs to know about YOU. You are the "N" word, Disease have been with man since the dawn of time, and so has religion. Disease is a destroyer of bodies, religion is a destroyer of minds. The absolute perfection of evil is religion. It is the sickness of religion that could be the downfall of Mankind. Dispose of the religious and Man will flourish. Take your .223 and begin the cure.
OT: Latest score from the Jets/Sharks friendly.
OT: JB, I bet you didn't even read the article.
Post 43589 by stardance Reply
Today is OCT 13 2002. It appears from this point that the Dow gradually heads down to 6740. There it will be whiplashed around and then proceed to explode to the upside into 2003. If this occurs, Gold goes sub 300 and falls like a rock. The world economy is in the crapper except for parts of europe, so any rally that ensues is not based on fundamentals it will be based on potential recovery, which I dont see happening for years out. The "big bear" is still not here and when it comes the majority of people will be starving in the streets. The big bear should show up in the next two decades. Sure there will be rebound rallies until it comes, so get it while its here, it wont always be. The material age is ending and the "consumer" will be no more. Consumption mentality is a idealogy being requisitioned to the dust bin. Consider the new economy that will be built and invest accordingly.
To see my earlier predictions from year 2000 see post 43569 on this board.
OT: Indonesia produces about 0.6 Bln barrels of oi
Post 43592 by lkorrow Reply
roof, Interesting post, I did wonder how leasing factored in. Are you sure central bank "manipulation" of gold is illegal? I wouldn't question the statement, but I could have sworn I saw Alan Greenspan on TV many months ago saying they do.
OT: Sunday ramblings—Of power and the Nobel quest