Table On-Topic Summary - 16-Oct-2002
A compilation of this board's financial/economic posts From 43688 to 43743

Post  43688  by  lkorrow       Reply
kantbleveit, that's a really good point.

I published as I got it, but I'd make some changes, like modifying the last paragraph to strike "Christian." This is universal. I guess we know a Christian wrote it.

Post  43689  by  clo       Reply
OT,sort of...Campus Hypocrisy

The Washington Post recently reported that students and faculty at a growing number of universities are pressuring their schools "into selling their holdings in companies that do business with Israel, prompting a counter-campaign among Jewish groups that consider the effort part of a creeping tide of anti-Semitism on campus." Here's what I would say to both sides on this issue:

Memo to professors and students leading the divestiture campaign: Your campaign for divestiture from Israel is deeply dishonest and hypocritical, and any university that goes along with it does not deserve the title of institution of higher learning.

You are dishonest because to single out Israel as the only party to blame for the current impasse is to perpetrate a lie. Historians can debate whether the Camp David and Clinton peace proposals for a Palestinian state were for 85, 90, or 97 percent of the West Bank and Gaza. But what is not debatable is what the proper Palestinian response should have been. It should have been to tell Israel and America that their peace proposals were the first fair offer they had ever put forth, and although they still fell short of what Palestinians feel is a just two-state solution, Palestinians were now prepared to work with Israel and America to achieve that end. The proper response was not a Palestinian intifada and 100 suicide bombers, which are what brought Ariel Sharon to power.

It is shameful that at a time when some Palestinians are writing that they made a historic mistake in not nurturing the Clinton peace offer, pro-Palestinian professors and students in America and Europe pretend that the only reason the occupation persists is because of Israeli obstinacy. This approach will never gain the Palestinians a state, and those who dabble in it are simply prolonging Palestinian misery.

You are also hypocrites. How is it that Egypt imprisons the leading democracy advocate in the Arab world, after a phony trial, and not a single student group in America calls for divestiture from Egypt? (I'm not calling for it, but the silence is telling.) How is it that Syria occupies Lebanon for 25 years, chokes the life out of its democracy, and not a single student group calls for divestiture from Syria? How is it that Saudi Arabia denies its women the most basic human rights, and bans any other religion from being practiced publicly on its soil, and not a single student group calls for divestiture from Saudi Arabia?

Criticizing Israel is not anti-Semitic, and saying so is vile. But singling out Israel for opprobrium and international sanction — out of all proportion to any other party in the Middle East — is anti-Semitic, and not saying so is dishonest.

Memo to Israel's supporters: Just because there are anti-Semites who blame Israel for everything that is wrong does not mean that whatever Israel does is right, or in its self-interest, or just. The settlement policy Israel has been pursuing is going to lead to the demise of the Jewish state. No, settlements are not the reason for the Israeli-Palestinian conflict, but to think they do not exacerbate it, and are not locking Israel into a permanent occupation, is also dishonest.

If the settlers get their way, Israel will de facto or de jure annex the West Bank and Gaza. And if current Palestinian birth rates continue, by around the year 2010 there will be more Palestinians than Jews living in Israel, the West Bank and Gaza combined. When that happens, the demand of the college anti-Israel movements will change.

They won't bother anymore with divestiture. They will simply demand: "One Man, One Vote. Since Israel has de facto annexed the territories, and there is now just one political entity between Jordan and the Mediterranean, we want majority rule." If you think it is hard to defend Israel on campus today, imagine doing it in 2010, when the colonial settlers have so locked Israel into the territories it can rule them only by apartheid-like policies.

This is not a call for unilateral Israeli withdrawal. This is a call for everyone who wants Israel to remain a Jewish state — and not become a binational state — to urge President Bush to renew the U.S. push for a two-state solution. If you think the Bush team is doing Israel a favor with its diplomacy of benign neglect, if you think the only campaign Jews need to be involved in today is with hypocrites on U.S. college campuses — and not with extremists in their own camp — you too are telling yourselves a very big and dangerous lie.

Post  43690  by  pacemakernj       Reply
Is the market still overpriced? This from David Dreman...

Since Feb. 17, 2000 Alan Greenspans testimony before the Senate he spoke glowingly of the economy's miraculous growth and ever higher earning's estimates that analysts foresaw.

Let's start with the Nasdaq 100, representing the largest companies on Nasdaq and heavily weighted by large technology stocks. It has dropped a harrowing 82% from its high of a few weeks after AG testimony. This drop for the broad index is surpassed only by the 89% decline in the DJIA between 1929 and 1932. But that decline still doesn't make the Nasdaq cheap relative to earnings-there are no earnings.. The 100 collectively lost $18 billion on a GAAP basis in the 12 months ended June 30, and 5.5 billion in the first 6 months of 2002.

Not to worry. Tech executives use and analysts shamelessly pass along a mushy term called "operating earnings." For tech companies especially, the term can mean pretty much anything: net before (or after) depreciation and before or after interest, taxes or special charges. Most often, what they're trying to do is avoid the bad stuff and paint the prettiest picture, using abstract expressionism.

The result is a continuation of bubble era accounting Nasdaq 100 companies reported operating earnings of $11.6 billion in the first half, and the analysts are estimating $31.2 billion on this basis for the entire year. If you believe those analysts, that figure will jump 40% next year, making for one of the fastest and largest earnings turnarounds in US economic history. At recent prices (this column goes to press with the Nasdaq 100 at 832), the collective market capitalization of the big 100 companies is $999 billion, or 32 times their supposed 2002 operating net. A pretty rich multiple, particularly given that the bottom line (GAAP) number will almost certainly be red for 2002.

What about the broader market? The S&P 500 is trading at 17.1 times 2002 operating earnings and 27 times the more conservative GAAP numbers. On 2003 estimates the index is priced at 14 times the $58 operating earnings and 22 times the $38 GAAP income. In both cases the estimates in question are "bottom up" numbers constructed from company by company forecasts, not the "top down" numbers constructed from macroeconomics.

P/E's are still not low, and still are built on overly sanguine estimates. In the 1990-1991 recession, for example, the S&P traded at a 14 multiple, and in the 1973 and 1974 bear market it was 7.

Post  43691  by  pmcw       Reply
Chips Developed by Bell Labs Will Enable Mobile Devices to Receive More Than 19 Megabits of Data Per Second On 3G Networks
Lucent Technologies' Chips Poised to Bring "BLAST" Multiple Input/Multiple Output Technology to Laptops, PDAs and Other Mobile Devices
Wednesday October 16, 7:32 am ET

MURRAY HILL. N.J.--(BUSINESS WIRE)--Oct. 16, 2002-- Lucent Technologies (NYSE: LU - News) today announced that Bell Labs, its research and development arm, has designed two prototype chips for mobile devices that implement its multiple input/multiple output (MIMO) wireless network technology, called Bell Labs Layered Space-Time (BLAST).

These chips, which conform to industry standards for size and power consumption, demonstrate that BLAST technology can be deployed in mobile devices commercially. In initial lab testing, the chips lived up to theoretical predictions, receiving data in a third-generation (3G) mobile network at a blazing 19.2 Megabits per second (Mbps). By comparison, today's fastest 3G networks, offer maximum speeds of roughly 2.5 Mbps.

BLAST uses multiple antennas at the terminal and base station to send and receive wireless signals at ultra-high speeds. When utilized in base station equipment and mobile devices, it permits higher-speed mobile data connections for notebook PCs and handheld data devices such as personal digital assistants (PDAs). This will enable mobile operators to provide higher-quality, higher-speed data services to a substantially greater number of subscribers than is possible with the best 3G network technology available today, increasing the value of their 3G investment dramatically.

"There has been a scramble around the world to put MIMO in silicon," said Ran Yan, vice president, Wireless Research at Bell Labs. "We believe ours are the world's first chips that can be used in handsets with four antennas, and therefore the first capable of such high transmission speeds. Not only have we proven the commercial feasibility of BLAST, but we've also verified the performance figures our researchers predicted when they first theorized that it might be possible to exploit interference to achieve faster and more efficient communications."

Lucent is also working to speed the commercial introduction of MIMO technology by making its family of Flexent® OneBTS(tm) base stations MIMO-ready. By doing so, a base station purchased today will provide mobile operators with a cost effective and seamless way to support this technology in the future when MIMO-enabled mobile devices become commercially available.

"The development of these chips offers tremendous promise as a key element of our effort to help our customers extend the value of their existing infrastructure investments," said Paul Mankiewich, chief technical officer of Lucent's Mobility Solutions Group. "This technology has the potential to greatly enhance the coverage, capacity and speed of 3G networks."

A Bell Labs research team in Sydney, Australia, designed the chips in collaboration with researchers at Bell Labs' Crawford Hill facility in New Jersey where BLAST was originally invented. The two chips have been tested successfully in four-antenna terminal configuration that also uses four transmit antennas at the base station. These chips, one for detecting BLAST signals and the other for decoding them, are small enough and consume so little power that they could be used in cell phones or laptop computers with minimal impact on battery life.

Lucent plans to license the chips' designs to mobile handset, PC card and other device manufacturers that may be interested in integrating MIMO into future products. The company is also working with 3G wireless standards groups to ensure that emerging MIMO standards support BLAST. Building on its success to date, the Bell Labs team also plans to use different modulation schemes and antenna configurations to achieve even higher data rates for future generations of BLAST chips.

How BLAST Works

BLAST technology essentially exploits a theoretical concept that many researchers believed was impossible. In most wireless environments, radio signals do not travel directly from transmitter to receiver, but are randomly scattered in transit before they reach the receiver. The prevailing view was that to have good reception, each of these signals needed to occupy a separate frequency, similar to the way in which radio or TV stations within a geographical area are allocated separate frequencies. Otherwise, the interference between stations operating on the same frequency would be too overwhelming to achieve quality communications.

But BLAST's inventors theorized, and later proved, that it is possible to have several transmissions occupying the same frequency band. Additionally, they realized that it is possible to use the scattering of these signals to enhance, rather than degrade, transmission accuracy by treating the scattered paths as separate, parallel sub-channels.

BLAST splits a single user's data stream into multiple sub-streams and uses an array of transmitter antennas to simultaneously launch the streams in parallel. All the sub-streams are transmitted in the same frequency band, so spectrum is used very efficiently. At the receiver, an array of antennas is again used to pick up the multiple transmitted sub-streams. Using the multiple antenna technique, the rate of transmission is increased roughly in proportion to the number of antennas used to transmit the signal.

This year, MIT's Technology Review magazine selected the original BLAST patent as one of its five "Patents to Watch" based on the belief that this invention could change the communications industry -- or possibly result in a new industry. In addition, the Research and Development Council of New Jersey will honor BLAST later this year by bestowing its prestigious Thomas Alva Edison Patent award for 2002 to BLAST's inventor, Gerard Foschini.

Bell Labs is the leading source of new communications technologies. It has generated more than 28,000 patents since 1925 and has played a pivotal role in inventing or perfecting key communications technologies, including transistors, digital networking and signal processing, lasers and fiber-optic communications systems, communications satellites, cellular telephony, electronic switching of calls, touch-tone dialing, and modems. Bell Labs scientists have received six Nobel Prizes in Physics, nine U.S. Medals of Science and eight U.S. Medals of Technology. For more information about Bell Labs, visit its Web site at

Lucent's Mobility Solutions Group is a leading global provider of mobile networking technologies, having deployed more than 70,000 spread-spectrum base stations for mobile operators worldwide.

Ed. Note: High-resolution images of the BLAST chips and members of the research team are available for download at:

Lucent Technologies, headquartered in Murray Hill, N.J., USA, designs and delivers networks for the world's largest communications service providers. Backed by Bell Labs research and development, Lucent relies on its strengths in mobility, optical, data and voice networking technologies as well as software and services to develop next-generation networks. The company's systems, services and software are designed to help customers quickly deploy and better manage their networks and create new, revenue-generating services that help businesses and consumers. For more information on Lucent Technologies, visit its Web site at

Post  43692  by  oldCADuser       OT: A few comments:

Post  43693  by  uponroof       Reply
lipstick at JPM...

Looks like they are finally reducing derivatives? But what really stands out is the 'exclusion' from the balance sheet of 240 billion in "unfunded loan commitments".

(a) Excludes unfunded commercial lending-related commitments
totaling $240 billion at September 30, 2002, $241 billion at
June 30, 2002 and $248 billion at September 30, 2001. Unused
advised lines of credit totaling $18 billion at September 30,
2002 and June 30, 2002, and $20 billion at September 30, 2001
are included within these unfunded commercial lending-related

That's a fairly large number to be on the hook for in this climate. Recall the KMart situation where all related parties knew bankrupcy was inevitable. KMart had guaranteed foreclosure loan agreements, designed during their heyday which few anticipated as necessary. Well....they became necessary and were exercised just prior to force manure. Sort of a cash parachute courtesy of their bank who footed the bill. I wonder how much of JPM's 240 billion has similar roots in non performing clauses? Not to mention South America.


A little more perspective...

16 Oct 2002, 07:50 AM EDT Msg. 1830 of 1831

J.P. Morgan Chase Third-Quarter Profit Falls 91 Percent

By Michael Nol

New York, Oct. 16 (Bloomberg) -- J.P. Morgan Chase & Co., the second-biggest U.S. bank, said third-quarter profit fell 91 percent to $40 million, or 1 cent a share.

Net income fell from $449 million, or 22 cents a share, in last year's third quarter, the company said in a statement distributed by Business Wire.

J.P. Morgan shares rose $1.73 to $18.61 yesterday in New York Stock Exchange composite trading. The stock is down 49 percent this year, making it the worst performer in the Dow Jones Industrial Average.

Good Luck


Post  43694  by  maniati       Reply
Boy, INTC really knows how to rain on a parade. Is there any other company out there that is as consistently bad at meeting its numbers?

Gloomy forecasts I can understand. So, if MOT and KO see weakness ahead, there's not much you can do.

But INTC missing their numbers all the time is just ridiculous. And if I had any INTC stock I'd be really pissed. Even so, it's still really annoying.

Don't get me wrong, it's not that I thought the past few days was anything other than a bear market rally. But, I just wanted to get a little more mileage out of it.

Ok, I'm done venting. Sorry. :-)

Post  43695  by  StockmanI7       OT: Clo: Campus Hypocrisy
Post  43696  by  Decomposed       OT: Table ON TOPIC SUMMARY Oct 15, 2002

Post  43697  by  jeffbas       Reply
pacemaker, his reference to the 1973-74 bear market to make a valuation point about this market is either stupid or intellectually dishonest. Note the following two references:

Long term treasury rates were 8 percent then on their way up to 13% years later. Inflation rates were near 10% then, not to be materially reduced for the better part of 10 more years. No wonder that P/E's were so low with such stiff (and rising) competition from Treasuries and such an unstable, inflationary environment.

A more honest assessment would be that valuations are still too high today because the major increase in financial difficulty/bankruptcy risk that many companies are seeing should give a major increase in risk premiums in stocks (lower prices) because they are an inferior class on the balance sheet. This wasn't even an issue in 1973-74, when a "guns-and-butter" economy caused other problems (inflation), not widespread economic weakness. I see the 1930's as a more relevant example, about which I have no data.

Post  43698  by  Briguy       Reply
Prospective of Life...

can change in a single heartbeat. Folks, I will be away from the box for a while. I just received word my father had a heart attack and it's serious. I guess he is in critical but stable condition but risk of death is real. What makes this frightening is he is only 59 years old.

I'm not passing this along so that you will feel sorry for me. Rather, I'm passing this along because I want to leave you all a message. And that message is this: if you haven't told your mother or father or brother or sister or your close friends or uncles or aunts or anyone that is close to you that you LOVE them, I suggest you do it NOW! Don't wait until it is too late.

Until I get back, I wish you all the best.

Take care,


Post  43699  by  Decomposed       ot: srudek,

Post  43700  by  weevil       Reply
pmcw: LU: R U going to nibble? eom

Post  43701  by  lkorrow       Reply
from The Wall Street Journal

Wednesday, Oct. 16, 2002

MOTOROLA CUT its fourth-quarter and 2003 sales and earnings projections, citing slow demand for wireless infrastructure, broadband equipment and

Post  43702  by  lkorrow       OT: Finnish Police Say Suspect Used Chat Room on B

Post  43703  by  Decomposed       Reply

Very sorry to hear about your Dad. Please keep us informed on how he, and you, fare. Until then, I'll be thinking about you both and keeping my fingers crossed.

Post  43704  by  clo       Reply
Briguy, you & your family are in my prayers.

And your message of "love" is an important reminder. clo

Post  43705  by  lkorrow       Reply
Lucent May Deplete $4.4 Billion in Cash by 2004, Analysts Say
By Emma Moody

Murray Hill, New Jersey, Oct. 15 (Bloomberg) -- Lucent Technologies Inc., once the world's biggest seller of telecommunications equipment, may spend its $4.4 billion of cash before the end of next year, analysts say.

Merrill Lynch & Co. analyst Tal Liani predicts Lucent will be out of money by December 2003. CIBC World Markets analyst Steve Kamman figures it could be earlier. Wachovia Securities Inc.'s Stephen Koffler forecast a ``dangerously low'' cash level within a year.

Chief Executive Officer Patricia Russo, who is slashing thousands of jobs to keep Lucent solvent, predicts the company will have more than $2 billion in cash on Sept. 30, 2003, and will have pared losses by then. Analysts say it's just as likely that Lucent, which began its fiscal year Oct. 1 with $4.4 billion, will need extra financing, break up or file for bankruptcy.

``Next year will be a terrible year, and I'm not sure the company is ready for that,'' said Merrill's Liani, who has a ``neutral'' rating on Lucent shares and doesn't own the stock.

Russo and analysts differ over how much further sales will slide in the next 12 months. The CEO is bracing for a 2003 decline in the ``20 percent range,'' she said Friday, indicating annual sales may fall as low as $9.8 billion. Lucent intends to return to profitability, before certain costs, with quarterly sales of $2.5 billion at some point in fiscal 2003.

CIBC's Kamman said his figures indicate Murray Hill, New Jersey-based Lucent will have used up the $4.4 billion by the middle to the end of the 2003 calendar year and will have to rely on bank loans. He rates Lucent stock ``underweight'' and doesn't own the shares.

`Sufficient Liquidity'

Lucent won't run out of money, Russo said. ``We have more than sufficient liquidity to fund operations,'' she said in an interview Friday.

Some investors aren't as optimistic.

``I don't know how they get out of this,'' said Walter Casey, an analyst a Banc One Investment Advisors, which owns Lucent shares. A bankruptcy filing isn't imminent, he said.

``It's a roll of the dice about whether they're going to make it or not,'' said John Fruit, who helps manage $5 billion of bonds, including Lucent debt, at US Bancorp Asset Management.

Shareholders probably will be the biggest losers if there is any financial restructuring, Kamman said. Typically, shareholders receive nothing in a bankruptcy. Any sale of Lucent businesses probably will fetch low prices, Wachovia's Koffler wrote in a report.

``It's difficult to see there's any way that you would want to own equity in this scenario,'' Kamman said.

New Loan

Lucent last week canceled a $1.5 billion line of credit and another $500 million facility to head off a default and is in talks for a smaller bank loan. Kamman assumes the company will obtain a credit line of about $750 million, and will have burned through its cash and as much as $250 million of the bank line by the end of December 2003.

Merrill's Liani estimates Lucent's cost-cutting will widen gross margin -- the difference between what the company charges for products and how much it costs to make them -- to 28 percent by September 2003, from the negative 15 percent he expects for September 2002.

Such an improvement, which would leave Lucent with $800 million in the bank, would be ``hard to achieve,'' Liani said. If the gross margin reaches 20 percent, the company will have $480 million of cash by September 2003 and none by Dec. 31, 2003.

``We don't think they are going to grow the gross margin enough,'' Liani said. ``They think they will.''

His most upbeat assumption leaves Lucent unprofitable until September 2004, a year later than Russo's prediction.


Wachovia's Koffler said Lucent will become ``a likely breakup candidate,'' with the company's businesses being sold.

New bank financing isn't assured, analysts said.

``Lucent's going to have to present a very clear and very believable story,'' said Bruce Hyman, an analyst at Standard & Poor's who cut his rating on Lucent debt deeper into junk, to B- from B. ``If the banks don't see that, they'll ask: `Why do it?'''

The 10,000 job reductions announced Friday -- decreasing the workforce to 35,000, less than a third of what it was two years ago -- will help Lucent contend with lower sales, Russo said.

Revenue from customers such as Verizon Communications Inc. and Sprint Corp. fell by almost half in fiscal 2002 as telephone companies pared spending amid slower demand for their services.

Lucent stock has plunged to less than $1, putting it at risk of a delisting by the New York Stock Exchange. The shares rose 11 cents to 69 cents at 4:01 p.m. in New York Stock Exchange composite trading yesterday, their 13th straight close below $1.

The company's bonds now trade at half their levels of two months ago. Lucent 7 1/4 percent coupon notes maturing in 2006 were bid at 37.5 cents on the dollar this morning.

``It feels like we are trying to fly a 747 through a storm and change the engines at the same time,'' Russo said on a conference call Friday.

Post  43706  by  jeffbas       Reply
It is sort of ironic. Twenty years or so ago government loans bailed out Chrysler. Now, with Lucent possibly even more important to the national interest than Chrysler, the corporate corruption issue will likely make it difficult for something similar to even be discussed.

Post  43707  by  clo       Reply
*** end of story ***

Post  43708  by  danking_70       OT: For all you fans of Mystery Science Theatre <

Post  43709  by  stockmom       Reply
Sun Micro Credit Rating Lowered By Standard & Poor's (Update1)
By Dan Goodin

Santa Clara, California, Oct. 16 (Bloomberg) -- Sun Microsystems Inc., whose server computers run business networks and Web sites, received a reduced credit rating from Standard & Poor's on concern about weak profitability.

S&P cut Sun to an investment-grade BBB from BBB+ affecting $1.4 billion in debt, saying the company's profitability will be weaker and less predictable. S&P said Microsoft Corp.'s Windows operating system and the free Linux operating system raise doubt about whether buyers will want Sun's costlier products.

Sun had a net loss of $587 million in the year that ended in June on sales that plunged 32 percent as businesses, dealing with their own falling profits, put off computer-related purchases. Sun tomorrow will report a loss of 4 cents before certain costs on sales little changed from a year earlier, the average analyst estimates in a Thomson First Call survey.

The shares of Santa Clara, California-based Sun fell 32 cents, or 10 percent, to $2.77 at 1:08 p.m. New York time on the Nasdaq Stock Market.

Post  43710  by  spirare       Reply
CALVF Going To ROCK*^^^^^^^^^^^^^^^


RE: Dollar goes down... falling off the cliff...

***Precious metals look to gain in the intermediate to longer term as the Euro Investors seek out CALVF
hard assets for wealth preservation.***

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

Post  43711  by  maniati       Reply
Briguy: And the best to you, too, and especially your dad.

Post  43712  by  stockmom       Reply
My thoughts and prayers are with you

Post  43713  by  danking_70       Reply
Briguy: Thoughts are with you and your family. EOM

Post  43714  by  srudek       ot De-re war declaration

Post  43715  by  jeffbas       Reply
"Dollar goes down... falling off the cliff... "

WHAT?! That dollar chart you show is about as inconclusive as you can get as to where the dollar is going next! In fact, when I first saw it, before I had any idea what it showed, my initial reaction was that was potentially a nice reversal pattern.

As far as your gold chart goes, That is a pretty obvious double top pattern, so far. If gold drops below 305 I would be VERY nervous if I were you. (Pray for war.)

Your comments remind me of the recent Nobel prize in economics, where the winner showed that an owner of something generally liked it way better than someone who did not own it.

Post  43716  by  srudek       ot DE: link to constitution- I was thinking about

Post  43717  by  oldCADuser       Reply
Couldn't agree with you more,...

"And if I had any INTC stock I'd be really pissed."

...but I don't own any Intel however I do have some AMD and every time Intel sneezes, AMD catches a cold.


Post  43718  by  clo       Reply
maniati, maybe IBM can get that marching parade music going again?

Or will it be too late? What do you think?

Glad this rain isn't snow... Much to be grateful for ;)) clo

Post  43719  by  srudek       ot De-Too bad I wasn't around to help write the Co
Post  43720  by  oldCADuser       OT: I hope that all does turn out well for you and
Post  43721  by  Decomposed       ot: A lot of good rhetoric, srudek, but you weren

Post  43722  by  pmcw       Reply
Missing their numbers all the time???

Not according to my records:

For Q4 2001 they surprised on the high side by over 35%, Q1 2002 they hit the number on the screws, Q's 2&3 they came in under the number. From my perspective, this doesn't qualify as "all the time".

I'm not defending INTC as much as I'm correcting a popular myth. Historically, INTC has managed their numbers fairly well. Now, the company OCU mentioned (AMD) has always (OK, just for the last decade and a half) been a walking disaster. Since the day Jerry Sanders founded AMD his core mission has been to beat another company. First it was Fairchild, then it was any company that made EPROMS and for the last decade or so it's been INTC. Beating another company is fine, but as a strategy it stinks.

INTC today is about as graceful as a 800lb gorilla on spiked heels. However, if they can get the behemoth under control and/or if their strategic markets turn it will again be a cash printing machine.

Regards, pmcw

Post  43723  by  PinzaTodd       Reply
$.02 EPS, excluding items

Revenue of $1.44B.

Including one-time charges (including "reversal of a portion of a previous executive compensation expense"), Apple lost $.13 on the quarter.

734K units shipped.

Post  43724  by  PinzaTodd       Reply
Sorry, wrong board. EOM

Post  43725  by  tinljhtkh       Reply
Prayers that it all

works out for you!

I lost both of my parents in an eight month period of time in 1998 and 1999 but they were both past eighty years of age when their time came to go!

Its interesting how message boards can hide the generational differences between all of us! Your dad is only six years older than I am so it hits home in more than one way! I picked up the newspaper last Saturday--hadn't read them in a couple of days--and an old friend of 20 plus years was being buried just as I was reading of his passage. So I can identify very readily with the idea of keeping in closer touch with those that you care about! He had bypass surgery in 2000 and thought that he had a new lease on life but cancer claimed him at 54!

It is always better to sign the visitation book before the messenger takes away the eyes who would understand just how much your signature really meant!

I used to be envious of the twelve years that my brother had with my parents before I came along and now I treasure every moment that I get to spend with him as I watch him slowly begin to travel down the same road that my father took in his sunset years. It is amazing, however, just what the human spirit can overcome before the final departure date finally arrives! An elderly lady in the town that I call home, when told that hospice had been called in, simply looked up at her relatives and said "I'm prepared to go but I just hate to leave the party!"




Post  43726  by  pricegriz       Reply

I pondered for a while before replying to Briguy, wishing to support and reasure at this very difficult but hopefully transition to better times.

I did not want to just blandly offer reassurance for his current troubles but also wanted to give a posative approach for the future.

I read your offering, which said it all, and would ask to be allowed to "second that emotion".


Post  43727  by  cowdog       Reply
Is Iraq a gamble worth taking?

The whole world knows it's only about stealing oil. This Administration is only making fools of themselves by pretending that it isn't and their dishonesty is not fairing well with many Americans as well as people in other nations. It is better to be up front with what is going on like Bill Seidman so that an honest debate about this action can take place. The fact that the Administration will not allow an honest debate is the primary indication that their planning is flawed.

Seidman argues that taking over the Iraqi oil fields will be bullish. Perhaps he has an argument and perhaps not. If everything goes perfectly, as envisioned, then he may be right, but everyone knows that things rarely go as planned. If things start to go wrong, then our economy, now on the verge of collapse, will do so before any benefit accrues.

Using the recent example of Afghanistan, it is obvious that no intended pipeline can be built there in the immediate future because the country has deteriorated into a state of anarchy and widespread hate for the US invaders. If this example were to hold true in Iraq, then it would be expected that resistance to an invasion would make it impossible to build and maintain the production infrastructure necessary for extraction and importation for at least the intermediate future. Therefore an continuing occupation could well be a huge expense without much economic benefit. Like Afghans and the Palestinians, most people will resist occupation as it is in their nature and in the case of the Palestinians, resistance has continued for over 50 years without the Israeli occupiers being able to make effective use of the lands that they occupy.

Even if an effective occupation can be achieved and oil produced in large quantities, the economic benefits would be short lived according to the Huppert Curve which shows the amount of remaining oil in the world. Oil usage would naturally increase in the short term and along with it increased waste on inefficient transportation methods, leading to more oil dependence and greater pollution, global warming and economic damage. Oil, a finite resource, would be depleted more rapidly, making the transition away from an exhausted resource all the more stressful and traumatic. Plastics, a necessary commodity, would become scarce and expensive in the future due to the continued waste of oil on inefficient transportation, home heating and such.

It has become an American trait to think only in the short term. CEO's are only concerned with the next quarter's results and not with the longer term welfare of their companies. They are forced to behave in such a manner by a investment community and a Wall Street that attaches severe penalties to those that think otherwise. A CEO that has consecutive bad quarters will likely be shown the door. This Administration is composed of ex-CEO's that have been trained to think in this manner. However nations must conduct themselves differently. National leadership must consider much more than quarterly bonuses. They must act to preserve the best interests of the nation both in the present and in the distant future.

Bush entered office saying that he would run the country as a business and is doing just that. It is a bad idea, even if one discounts the simply criminal manner in which US business is conducted today. Administration CEO's have the stealing part down pat. It is the getting out of the bank alive and with the money part that is in doubt.

Post  43728  by  pacemakernj       OT: Jeffbas, I thought you might comment on the af
Post  43729  by  pacemakernj       OT: Hope all goes ok, I will say a prayer for you
Post  43730  by  danking_70       OT: Srudek

Post  43731  by  pacemakernj       Reply
OCU/Maniati, I did own Intel today and sold it promptly at $14. I was happy with the fill. I also covered my Oct 15 calls as well. I did manage to make some money so I am not all that upset but I was up major dollars yesterday. As they say what a difference a day makes! Pace.

Post  43732  by  jeffbas       Reply
pace, exactly! Which is precisely why I included my last paragraph.

ATML got down to 58 cents, way below prices of other recent cycles, not because current results are so much worse than prior cycles but because the outlook isn't good enough to have any confidence that substantial debt coming due within the next few years can be paid off. No one is willing to assume these days that companies can just roll it over.

My strong view is that financially sound companies with modest cyclical risk will not see valuations anything remotely like 1973-74, because of the difference in inflation and interest rate levels. However, the others (like technology) will probably see valuation levels BELOW 1973-74 levels, because of survival issue discounts. As I noted, I suspect the Thirties is probably the relevant time period for comparison (and definitely not the Seventies).

Post  43733  by  lkorrow       Reply
Jeff, an interesting observation, they are or were a lot more valuable than another car company. I'm not sure what LU does anymore, they spun off so much. You wonder what's left of their half of the old Bell Labs too. I was very concerned when AT&T started re-focusing them on applied research, cutting back on pure research. I suppose universities and startups are where the action is now. They must have a lot of talent, though, maybe Bill Gates will pick them up. Seems like LU must be needed to maintain a huge imbedded base of equipment sold to carriers like AT&T. And I think they still do carrier telephone systems like the 5ESS.

You wonder how they could have dug so deep a hole. But building their own multi-million dollar golf courses offers a clue. A really tough market for them now.

Post  43734  by  lkorrow       Reply
PinzaTodd, Apple have some good advertising, imho . . .

Post  43735  by  lkorrow       Reply
Briguy, your note hit a cord, as I have an elderly mother. She is fortunately doing well, but there is that inevitable thing that faces us all and I worry. I too hope your father will be alright and thank you for the reminder of what is most important in life. Take care, Linda

Post  43736  by  pacemakernj       OT: News Flash: North Korea admits to making nucle
Post  43737  by  Decomposed       ot: Smallpox

Post  43738  by  Arkural       Reply
OT-lk, I suggest you read this....


U.S.: N. Korea admits nuke program

Pyongyang official said to dismiss 1994 anti-nuclear treaty


WASHINGTON, Oct. 16 - The White House confirmed Wednesday night that North
Korea had acknowledged that it has a uranium-enrichment program, which U.S.
officials believe would be used only to develop a nuclear bomb. Pyongyang
also told U.S. diplomats that it believed it was no longer beholden to the
anti-nuclear agreement signed in 1994 during the Clinton administration, the
official said on condition of anonymity.

THE DISCLOSURE, which stunned senior administration officials, is
certain to chill U.S.-North Korean relations. President Bush had labeled the
country part of the "axis of evil" - along with Iraq and Iran - but hopes
were raised that the reclusive nation wanted to build international ties
when Bush sent Assistant Secretary of State James Kelly to Pyongyang for
security talks.
Kelly visited North Korea on Oct. 3-5 and demanded that it address
global concerns about its nuclear and other weapons programs.
In response, the Pyongyang government accused Bush's special envoy of
making "threatening remarks." The United States did not comment on the

Under a 1994 agreement with the United States, North Korea promised
to give up its nuclear weapons program, and it promised to allow inspections
to verify that it did not have the material needed to build such weapons. In
return, a coalition of countries, including the United States, is building a
light-water nuclear reactor in North Korea.
But Pyongyang has yet to allow the inspections, drawing criticism
from the Bush administration. The source said Kelly also raised with North
Korea evidence that North Korea might uranium-enrichment program. The
program, which the United States believes would be used only to develop a
nuclear bomb, began under the Clinton administration, according to the

Unexpectedly, North Korea confirmed the allegation.
The administration has not decided how to respond. "We're going to
keep talking," the official said.

The Koreas were divided after World War II and remained that way at
the end of the inconclusive Korean War from 1950 to 1953. A truce, but not a
peace agreement, was signed to end the fighting, but technically North and
South Korea are still at war. About 37,000 U.S. troops are stationed in
South Korea as a deterrent against the North.
Pyongyang has been making renewed diplomatic overtures in recent
After months of tension with South Korea, the North resumed
high-level talks in August that restarted stalled reconciliation efforts on
the Korean peninsula, which is divided by the most heavily armed border in
the world.
Most recently, Pyongyang admitted that it had kidnapped Japanese
youngsters in the 1970s and 1980s and used them as spies. Some of those who
survived were allowed to visit their families in Japan after several

This is a breaking news story. Please check back for more
information.'s Kari Huus, The Associated Press and Reuters contributed
to this report.


Watch out now (+ in yrs ahead), Truth is coming up from the rear and it will give no quarter.

Post  43739  by  wilful10       OT: A little humour -

Post  43740  by  maniati       Reply

srudek: Answers to some of your questions....

I'll put your comments/questions in bold.

I've begun reading Soros' The Crisis of Global Capitalism. He says economics is a "social science" and, as with other social sciences, is not really scientific at all, as human behavior is "reflexive" (his term): thinking changes reality even as reality changes thinking in a non-equilibrating feedback loop. That makes sense to me and explains that saying "history doesn't repeat . . . but it rhymes". Have you read much Soros?

No, I haven't. Sounds interesting, though. I agree that economics is more of a social science than a "hard science." Not much question about that. Planetary motion does not change simply because someone describes its behavior, but human behavior can change simply out of its awareness of that behavior. Still, even in the hard sciences, the answers you get are a function of the questions you ask, and Heizenberg demonstrated that, even in the physical sciences, one can not always be a detached observer.

I think a lot of economic inquiry is of questionable relevance and use; it asks questions that I don't much care about. I have seen many attempts, especially in microeconomics, to quantify what I consider the unquantifiable. Nothing makes me cringe more than trying to turn non-science into science. (BTW, I’ve seen lawyers do it many times.) Usually, the result is simply to turn non-science into nonsense. :-)

But, on the other hand, I certainly think it makes sense to want to understand, for example, how business cycles work. That’s an important issue. It’s still not hard science, but I don’t see why one can not still develop theories, gather data, identify relationships, and attempt to develop some sort of model, preferably causal, but at least empirical.

A lot of the empirical work done in economics is premised on the idea that certain phenomena might be statistically discernable in the aggregate, even though the underlying mechanism of each individual event might not be entirely clear. This underlies work done under the heading of econometrics or statistics. For example, it's not the case that every person who refinanced a loan did so because he was motivated by lower interest rates to cut down on his monthly cash outflow. Some people might have refinanced primarily because they needed to take out equity to use for some other reason, and found it cheaper to do it that way than to take out a home equity line or second mortgage. Or, perhaps their credit rating improved substantially, thereby making them eligible for a lower rate. So, they might have refinanced even if interest rates were higher. Nevertheless, in the aggregate, there is a correlation between interest rate levels and refinancings. But, one of the problems one sometimes sees is people mixing empirical models with causal analysis. They are distinct things. It would always be nice to find a causal model that explains an empirical relationship, but, at the very least one should not confuse the two.

As for social systems being "reflexive," I agree. I guess I tend to think of social systems as exhibiting self-awareness. So, you can try to engineer a social system a certain way, but the system, itself, is going to have its say in the matter! But, I'm not a big believer in sociology. The system might "exhibit" a consciousness, but, in my view, that's still only an aggregation of individual effects. So, I believe more in psychology than in sociology. (BTW, is that considered "A.T." thinking? I'm thinking it might be.)

As long as I have your attention, I could use some help in attempting to understand money/currency impact on prices and, specifically, economic thought about things such as "credit".

Before we go any further, let's talk about what makes money "money." It is widely said that money has 4 characteristics: 1) it is a medium of exchange; 2) it is a store of value; 3) it is a unit of account; and 4) it is a standard of deferred payment. However, while all 4 are characteristic of money, #'s 2, 3, and 4 are characteristic of other things as well. What really distinguishes money from other assets is #1. The reason people debate whether to use currency, or M1, or M2, or M3, or MZM, etc., is because of disagreements as to how well #1 is satisfied by those various definitions of money.

Now, the entire macroeconomic foundation for the theory of how money relates to GDP, interest rates, inflation and unemployment is predicated on characteristic #1. In a nutshell, the theory goes as follows:

The primary reason for holding money is to support the transactions that are required by daily living (both for people and businesses). Were it not for that, people would rather store their wealth some place where it would earn them some kind of return. As real economic income/output grows, people require more money (due to more and/or larger transactions). So, there is a positive relationship between real output and the demand for money.

At the same time, there is an inverse relationship between the demand for money and interest rates. That is because, the higher the interest rate, the greater the demand for bonds or other interest-paying investments. As rates go up, so does the opportunity cost of holding money, so people try to cut down their money balances and put that wealth in interest-paying assets.

So, you have this basic notion of an equilibrium condition involving 1) the supply of money, 2) the supply of interest-bearing assets (e.g., bonds), 3) the interest rate, and 4) the level of real output. Change any one of those, and all the rest change as well, as a new equilibrium is established. (I'm not getting into short-run vs. long-run effects here, just to keep it simple.)

(BTW, don't confuse money with wealth. Yes, money is an asset; it's something that has a limited supply that people want. But, when the Fed expands the money supply - say, by purchasing government bonds - it is not "creating" wealth out of thin air. Some people get worked up because they think that's what the Fed is doing, and they think it's a sham because wealth cannot just get created out of thin air. However, that is incorrect. The Fed is not even claiming to be creating wealth. The net wealth of the system does not change when the Fed buys or sells bonds in the open market, nor does it change when the government sells its debt directly to the Fed. Those events are not wealth-creating, and there's no one who is saying otherwise. Some people might mistakenly think otherwise, or they might mistakenly think that's what the Fed is trying to do, but those people would be wrong on both counts. Fed open market operations don't increase the net wealth of the system any more than you change the net wealth of the system by going into a casino and exchanging a $100 bill for chips. Yet, the misconception persists.)

Also, since you are looking at how money affects price levels, a word about inflation. Inflation to an economist is defined typically as an increase in price levels of goods/services produced in the economy.

Note #1: I include services because there is such a thing as wage inflation. Obviously, the CPI doesn't include wages; that's just a select basket of goods. But I would assume that, for example, the GNP Deflator does include wage inflation. (I have not verified this, but it stands to reason that it would have to.)

Note #2: Inflation does not include price increases in other, pre-existing assets. Inflation does not include the increase in the value of your house, your coin collection, a used car, or a second-hand computer.

If you want to include other asset categories in inflation, you can do that, but then you're talking about something different from what most economists are talking about. That's ok, but be careful that you don't try to plug your customized definition of inflation into an economic model that defines inflation very differently, because you would then be violating the model assumptions.

(Just so you know, unless I explicitly say otherwise, any time I talk about inflation, I am talking about price increases in goods (or services) contemporaneously produced in the economy, and I'm not talking about prices of assets previously produced or acquired.)

Obviously, if all we had was money (dollar bills and coins) the impact of inflating money would be easy to follow.

Well, maybe not as easy as you think, even in a world as simple as that. In the long run, when the economy is at "full employment" (which is less than 100%) equilibrium, then the % growth in the money supply will be equal to the rate of inflation plus the % growth in real output times the income elasticity of money demand. Mgrowth = Inflation + (RealGNPGrowth * IncElasOfDemand). That's in the long run. Initially, inflation will likely be less than the % increase in the money supply, then overshoot its long-run equilibrium value, then eventually converge on the long-run equilibrium. Meanwhile, employment, GDP and interest rates will also be affected. And, of course, the results are somewhat different if the economy is not initially in long-run equilibrium.

More or less. :-)

With checking accounts and long-term deposits (what I usually call "currency" when aggregated with money), the picture clouds a little, but is still pretty straightforward.

Well, that assumes that what I just described above is something that you would consider “straightforward.” :-) But, the good news is that these other components of the money supply that you mentioned don't really change the underlying theory, so what I described above doesn't change on account of these other components.

But what about credit and quasi-"currency" such as stock options.

It seems to me such instruments would be similar enough to money that they should be included in any thoughtful analysis of "inflation".

Ok, this is a bit tricky. Credit, itself, strictly speaking, is not part of the money supply. However, the use of the credit is a part of the money supply. So, for example, let's say you owe Citibank $5,000 on your credit card. Your debt to Citibank is not part of the money supply. However, all those transactions in which you used your card resulted in the payee's bank account increasing by the value of the transaction, and those bank account increases (which also total $5000) do result in an increase in the money supply. It makes no difference if you use your credit card to get a cash advance; that also results in an increase in the money supply. But, it's the currency you now hold in your hand that is the increase – not what you owe on your card. And, of course, that assumes you have used a credit card. If you used a debit card, that would not result in a change in the money supply.

So, if you were to try to count the value of demand deposits, currency, etc., etc., and then add to that the value of debt owed in the form of commercial credit, then, for purposes of computing the money supply, you would be double counting.

You also asked about stock options. As you know, a stock option is a derivative security whose value is a function of the price of the underlying stock (among other things).

Let's work from the bottom up. Are equities money? I don't think so. Even equities are insufficiently liquid to be a medium of exchange, which, as I said, is the defining characteristic of money. They are also a terrible unit of account, because of the way their value fluctuates.

Well, options are even more thinly traded than equities. They fluctuate in price even more than equities. Most importantly, they expire! So, options are an even worse medium of exchange or unit of account than equities. And employee stock options are worse still, because they have severe restrictions on their ability to be sold, they are difficult to value, they expire, and they can be subject to vesting. So, yes they have value, and yes, they are awarded in lieu of money. But options lack most of the characteristics of money, including the most important one.

Getting back to first principles, when you look at what the characteristics of an asset need to be in order for it to qualify as money for purposes of macroeconomic theory (including inflation), I would have to say that stock options do not fit the bill.

I have a hypothesis that enabling money market funds, vastly increased credit access, and wide-dissemination of stock options is equivalent to the private printing of VAST quantities of "currency" by "private parties" (not much different than the private printing of money in the 1800's, which caused such a mess).

If this is so, then -- combined with A.T. models as I currently understand them -- I believe it would explain most everything we've been going through recently. If this is so then there has been ENORMOUS inflation. The inflation has already occurred. Why don't we see it? Well, AT covers that pretty well. ;-)

I'm not exactly sure what you mean when you say "A.T. covers that pretty well." Could you explain that? I don't want to make any incorrect assumptions about what you're saying, and I'm still learning about what ideas are included in A.T. In the meantime, I wouldn't presume to pass judgement on your theory until I fully understand it.

Let me know how full of beans I am...

Obviously, I'm still waiting to hear a few of the details on the theory. But, even if it turns out I disagree, and I don't know that, that doesn't make you full of beans. Also, I think it's great that you have this interest in economics. I have really been enjoying this discussion immensely.

...but be gentle, ok?

That wasn't so bad, was it? :-)

BTW, in the future, I promise to keep my answers a little shorter. :-)

Post  43741  by  Arkural       Reply
Ibm-current low for 02'=54.01

Oct 10 2002
H-58.48 L-54.01 C-57.58 Vol-13,186,200

Post  43742  by  lkorrow       OT: Ark, North Korea has been extremely disturbing

Post  43743  by  maldinero       Reply
Speaking of IBM, this may be welcome news, especially if the other guys follow suit.