Table On-Topic Summary - 23-Oct-2002
A compilation of this board's financial/economic posts From 43985 to 44021

Post  43985  by  tinljhtkh       OT: Hi Table!

Post  43986  by  spirare       Reply
Msg from the High Command---11p ET Tuesday, October 22, 2002

Dear Friend of GATA and Gold:

GATA consultant Mike Bolser has extended his
documentation of what he calls the "pre-emptive
selling" of gold, linking it ever more firmly to
a U.S. government-sponsored scheme to deceive
the bond market about inflation and suppress
interest rates along with gold. Bolser's work
is as close to proof of the gold-price
suppression scheme as there is likely to be
until GATA Chairman Bill Murphy disguises
himself as a busboy, sneaks into the Masters
of the Universe Club, and slips sodium pentathol
into the vodka tonics of Messrs. Greenspan,
Rubin, and Summers.

Don't miss it, posted at Reg Howe's Internet
site here:

And after you've read it, send it to The Wall
Street Journal, The New York Times, and the
Financial Times, with a covering note reading:
"FYI, in case you're still interested in NEWS...."

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Price of GOLD*^^^

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

Post  43987  by  clo       Reply
Japan Delays Banking Changes

This is only page 1 of a 2 page article. clo


TOKYO, Oct. 22 — Heizo Takenaka, Japan's new economy czar, was forced late today to postpone his plan for sweeping changes in bank regulation to deal with the country's $420 billion mountain of bad bank loans, just before he was scheduled to lay it out in detail to reporters. The development, which took most people in Tokyo by surprise, appeared to have been engineered behind the scenes by a conservative alliance of bankers, bureaucrats and ruling-party legislators, who bitterly oppose Mr. Takenaka's plans to force the banks to recognize and write off bad loans much faster than they are now willing to do.

The bad-loan plan, developed by an 11-member task force of experts named by Mr. Takenaka when his responsibilities were expanded to include financial regulation early this month, would tighten the rules governing how banks count their capital and take away much of their discretion on which loans to classify as nonperforming.

Analysts say those changes would result in banks having to book losses so large that several of Japan's — and the world's — biggest institutions would be rendered insolvent. The plan would oblige those banks to accept public funds to shore up their balance sheets, and in doing so give the government the power to dismiss their managements, or in some cases to nationalize the banks completely.

Though called a postponement, today's action raised serious questions about whether Mr. Takenaka's plan would be allowed to proceed at all, or whether it would be delayed and watered down to the point of impotence, the fate of many past efforts to deal with the banking crisis.

Apparently unaware of the brewing rebellion against Mr. Takenaka's plans, a Bush administration official lavished praise on the minister by name in a press club luncheon speech today, and the minister's staff was still working through the afternoon to prepare for the minister's scheduled briefings with reporters in the evening.

But the cracks had already begun to open beneath Mr. Takenaka's feet. Mikio Aoki, an influential member of the upper house of Parliament, openly criticized Prime Minister Junichiro Koizumi today, saying that "what he lacks most is leadership vis-à-vis the economy," a remark that analysts later interpreted as a declaration of political war against Mr. Takenaka's plan.

Speaking to reporters, another ruling-party member of Parliament, Hideyuki Aizawa, said of Mr. Takenaka, "The party's worried about him pursuing his own radical way."Conservatives were rattled earlier this month when Mr. Takenaka broke with 12 years of cautious government policy and told reporters that he thought no bank or borrower was too big to be allowed to fail.

Though Japan's seven largest banking groups lost a combined $32.8 billion last fiscal year, they all exceed minimum capital requirements as they are now defined.
But analysts say that most of them would be in danger of failing to meet the requirements under Mr. Takenaka's plan. Most bank stocks fell today, as did the Japanese stock market generally.

Masashi Teranishi, president of UFJ Bank and chairman of the Japanese Bankers' Association, spoke out forcefully today against aspects of the plan, telling reporters at a news conference: "It's like being told we can suddenly use our hands and play American football, when all along we've been ordered to play soccer.
If the longstanding regulations were to change rapidly, it would cause confusion in the markets and among investors."His reference to America was pointed: Mr. Takenaka taught economics at Harvard University before joining the government, and his proposals are widely seen — and resented — as an attempt to impose on Japan an American approach to bank regulation.John B. Taylor, United States under secretary of the Treasury, told reporters in his luncheon speech today: "Minister Takenaka, I understand, has established some principles for dealing with nonperforming loans. I agree very much with these principles. They make sense, and we're supportive of those."

Post  43988  by  clo       Reply
Nissan Announces 84% Increase in Operating Profit; NISSAN 180 Achieves 10.6%
Operating Margin

TOKYO, Oct 23, 2002 (BUSINESS WIRE) -- Nissan Motor Company announced today
that it expects to report an 84% increase in operating profits for the first
half of fiscal year 2002
, to 348 billion yen (US $2.8 billion, euro 3.0
billion). Record profits are attributed to a combination of higher volumes from
new products, more efficient operations and lower purchasing costs.
With a
confident outlook for the second half, President and CEO Carlos Ghosn revised
the full-year operating profit upward by 30% from 553 billion yen to 720 billion
yen (US $5.8 billion, euro 6.2 billion).
The company will file its official
audited report on November 19, 2002.

"NISSAN 180 was built with the conviction that Nissan could move to its second
and final phase of revival -- that of lasting, profitable growth based on
attractive products and competitive performance," said Ghosn. "We have been
tenaciously laying the groundwork for growth, and today we see that growth is
here in a very challenging global market."

Ghosn also announced a three-year dividend policy that aims to triple Nissan's
annual dividend of 8 yen per share for fiscal year 2001 to 24 yen per share for
fiscal year 2004 by the end of NISSAN 180. He noted: "With five consecutive
half-years of increased profits, we have established Nissan's global return to
significant profitability. We want to make our dividend policy transparent and
consistent with our aim to be at the top level of profitability in the global
auto industry."

On expected revenue of 3.28 trillion yen (US $26.6 billion, euro 28.2 billion)
for the first half of the 2002 fiscal year, Nissan's operating income is
expected to be 348 billion yen (US $2.8 billion, euro 3.0 billion), an 84%
increase over the first half of FY 2001. The operating margin is expected to be
10.6% of net sales, led by increased volumes in the entry-level segment in Japan
as well as strong sales of the Altima and a rejuvenated Infiniti line in the
United States. The impact of foreign currency exchange was minimal, and lower
costs were tightly managed amid growth.

Nissan also reported that net automotive debt was reduced to 274 billion yen (US
$2.2 billion, euro 2.4 billion) in the first half, from 432 billion yen (US $3.5
billion, euro 3.7 billion) at the end of fiscal year 2001. The debt reduction
was realized by improved cash from operations as well as continued asset sales.

Globally, Nissan retail sales totaled 1,386,000 units in the first half of the
fiscal year, an increase of 7.5% from the same half-year period of FY 2001. This
solid performance is being sustained by Nissan's product plan, which will
introduce 28 all-new products in the three years of NISSAN 180. Twelve of those
products are being launched in the current fiscal year; six have been launched
to date.

In Japan, volume rose 12.1% to 383,000 units (including mini-cars). Entry-level
cars such as the new March and Moco have driven the increase. In the United
States, volume was up 8.3% to 378,000 units, with the Nissan Altima, Nissan 350Z
and Infiniti G35 selling at a strong pace. In Europe, sales declined 9.4% to
251,000 units from January to June as the company focused on profitability,
preparing for the launch of the new Micra in fiscal year 2003. General overseas
markets saw a 16.2% increase to 374,000 unit sales. In Mexico, volume is up
18.4%, led by the successful launch of the Platina. In China, volume is up 80%
to 36,000 unit sales.

Lower purchasing costs generated a positive contribution of 102 billion yen (US
$830 million, euro 880 million) to operating profits. Ghosn pointed out that the
increased volumes and the higher level of efficiency brought on by Nissan's
purchasing policy since 1999 are delivering significant benefits.

Ghosn also highlighted the company's recent investment in China, emphasizing
Nissan's commitment to plan for future profitable growth beyond NISSAN 180. On
September 19 Nissan announced that it would invest 8.55 billion RMB (JPY 120.4
billion, US $1.03 billion) into a new partnership with Dongfeng Motor
Corporation. Dongfeng Motor Co., Ltd., is targeting 550,000 unit sales by 2006
-- 220,000 of which will be Nissan-branded passenger cars -- and 900,000 within
10 years.

Revised Financial Forecast:

Based on expected stronger volumes in the second half, the company revised its
volume forecast upward by 1.7% to 2,838,000 and filed a revised financial
forecast with the Tokyo Stock Exchange.

Full-year revenues are expected to reach 6.8 trillion yen (US $55.2 billion,
euro 58.5 billion), an increase of 9.7% from FY 2001, and operating profits to
be 720 billion yen (US $5.8 billion, euro 6.2 billion), a 47% increase. The
operating margin is expected to be 10.6%, a margin improvement of 2.7 points
over FY 2001. Ordinary profit is forecasted to be 660 billion yen (US $5.4
billion, euro 5.7 billion), a 59% increase, as financial costs are minimized due
to lower debt, and the net profit after tax is expected to be 490 billion yen
(US $4.0 billion, euro 4.2 billion), an improvement of 32%. Net automotive debt
is forecasted to fall to 80 billion yen (US $650 million, euro 690 million) by
the end of the fiscal year, down from 432 billion yen at the end of the prior
fiscal year. The forecast for the second half maintains the current assumption
that the dollar would remain at 125 yen and the rate of the euro would reach 120

Note: Amounts in dollar and euro are translated for the convenience of the
reader only at the rate of 123.1 yen/dollar and 116.3 yen/euro, the average rate
for the first half of fiscal year 2002.

CONTACT: Nissan Motor Company
Gerry Spahn, +81 (0)3-5565-2208 (Tokyo)
Scott Vazin, +1-310-771-5631 (Los Angeles)
Frank Shepherd, +33 (0)1-30-13-6765 (Paris)

Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.

Copyright (C) 2002 Business Wire. All rights reserved.

Post  43989  by  uponroof       Reply
Citigroup Chief Sanford Weill
To Testify in Probe of Salomon

Spitzer's new game, 'Rolling CEO's' starts very soon. I wonder if Weill has anything on Rubin and for that matter if Spitzer has the stones to go after him? Grubman must've worked a deal of some sort now that Weill is lined up. Should be quite interesting as they all run for cover, at each others expense.



The New York attorney general's office, stepping up pressure on Citigroup Inc., will question Chairman and Chief Executive Sanford I. Weill after gathering new evidence in its broad investigation into research activities at the financial-services giant, people familiar with the matter say.

Attorney General Eliot Spitzer has informed Citigroup lawyers that the interests of the firm and Mr. Weill may have diverged in the investigation, the people say. The move signals that his office could be considering legal action against Mr. Weill personally, in addition to Citigroup, the people say.

It also could be a prosecutorial tool to put additional pressure on Citigroup to agree to a settlement involving a substantial penalty and a significant overhaul of its operations.

It isn't clear what new information the attorney general has uncovered. But people familiar with the matter say it broadly falls under Mr. Weill's activities involving the firm's rating of AT&T Corp., on whose board Mr. Weill serves. He recently announced he is resigning the seat.

Mr. Weill has offered to provide information to Mr. Spitzer's office, in addition to other prosecutors and Wall Street regulators pursuing inquiries into his role in analysts' conflicts at the firm, the people familiar with the matter said. Mr. Weill offered his cooperation after being informed about the notice to Citigroup that his interests and the company's may no longer be the same.

The enforcement arm of the National Association of Securities Dealers already had requested that Mr. Weill give a deposition, in a meeting set for Oct. 31, people familiar with the matter say. An NASD spokesman had no comment. Mr. Weill also has offered to talk to the Manhattan U.S. Attorney's office and the Securities and Exchange Commission, which also are pursuing investigations into Salomon's activities, a person familiar with the matter says.

"Under the direction of Sandy Weill, Citigroup has consistently cooperated with all regulators in the research investigations," a Citigroup spokeswoman said Tuesday. "We expected various regulators would want to hear from Sandy himself as we move toward the resolution of these matters. The scheduling of his appearance is an important step toward this end."

Mr. Weill recently brought in two prominent lawyers, Lawrence B. Pedowitz and John F. Savarese of the New York law firm of Wachtell, Lipton, Rosen & Katz, to represent him; both are former assistant U.S. attorneys. Martin Lipton, a founding partner of the firm and longtime friend of Mr. Weill's, said in a statement: "The notion that there could be any charge against Sandy Weill is inconceivable. There is no divergence between the interests of Sandy and Citigroup."

But the attorney general's office considered the notice to Citigroup an official warning, a person familiar with the matter says. A spokesman for Mr. Spitzer said: "We have a multiagency investigation under way. Mr. Weill has offered to meet with us, and we believe and he believes he has relevant information and we welcome his cooperation."

The separate focus on Mr. Weill, one of Wall Street's most powerful executives, marks a turn in the attorney general's probe into activities at Citigroup and its Salomon Smith Barney securities-firm unit. At issue is whether Salomon published overly optimistic research on telecommunications-company stocks during the market bubble of the late 1990s to win lucrative investment-banking contracts, misleading investors who bought these shares.

The five-month-long investigation -- widely regarded as the most aggressive one now looking into analysts' conflicts -- initially focused on the role of Salomon's former star telecom analyst Jack Grubman and a handful of other senior executives in touting stocks and maintaining business relationships with telecom companies. At issue is the extent to which they may have led investors to buy once high-flying stocks that have since tumbled.

The new development in the investigation raises the stakes for Citigroup, which faces a withering spotlight from various securities regulators over whether its research was tainted and whether its transactions with corporations and top corporate executives illegally helped the firm win lucrative underwriting contracts. Mr. Weill's offer to talk underscores how serious he is about seeking quick resolution of the issues raised in the probe.

Salomon already has offered to separate its investment-banking and research operations -- though not sever them completely -- as well as pay a fine that could total hundreds of millions of dollars. In its negotiations with Mr. Spitzer and regulators, Citigroup has used lawyers from the firm Wilmer, Cutler & Pickering, including its well-known partner Lewis Liman.

Mr. Spitzer's office is investigating the role played by Mr. Weill in Salomon's rating of AT&T, including a controversial upgrade made by Mr. Grubman in the fall of 1999, just before the telephone giant was planning a massive stock sale to finance its wireless unit. AT&T CEO C. Michael Armstrong is a longtime Citigroup board member.

Mr. Grubman, who is cooperating in Mr. Spitzer's probe, has said he changed his rating back in 1999 of a "hold" to the equivalent of a "strong buy" after what he regarded as nudging from Mr. Weill. Salomon Smith Barney ultimately won a top underwriting spot on the wireless deal and earned close to $45 million for its work. A few months after the deal, Mr. Grubman downgraded the stock.

Among the items Mr. Spitzer is reviewing is an apology Mr. Grubman wrote after he had omitted AT&T, a Salomon banking client, from a list of the top telecom players of the future. The analyst addressed his note of regret to Mr. Weill -- who, according to people close to the situation, had demanded the apology.

Citigroup representatives have said in the past that Mr. Weill "never told any analyst what to write."

The interviewing of Mr. Weill and other discussions between Citigroup and Mr. Spitzer's office could affect burgeoning discussions by that office, the Securities and Exchange Commission and other regulators over how to overhaul Wall Street's research practices to avoid rampant conflicts. Citigroup is a leading force in these talks with prosecutors and regulators, and the extraction of a drastic settlement from the firm could raise the bar for what its rivals will have to change.

Regulators looking to craft new regulations involving Wall Street research are scheduled to meet Thursday with officials from top securities firms to hash out plans that could include the creation of a new oversight board that would fund independent research to be used by major brokerage firms that deal with small investors, according to people close to the matter.

Several investigators, including Mr. Spitzer's office, also have focused on allegations of IPO "spinning" at Salomon -- allotting lucrative shares in initial public offerings to executives who help determine who gets their company's banking business. Earlier in the summer, Mr. Spitzer began an inquiry into Mr. Weill's role in the AT&T offering, subpoenaing documents from the company.

Write to Charles Gasparino at

Updated October 23, 2002 12:15 a.m. EDT


Opps...this just in. Weill playing hard to get...perhaps he wants a better deal. Rumor has it he is holding out for witness protection be safely stowed away on the Angels middle relief staff.;jsessionid=UC0JFFNTG1XEWCRBAE0CFEY?type=businessnews&StoryID=1618114

Post  43990  by  weevil       Reply
pmcw..what is your next buy price for ISIL & HLIT?? Thanks eom

Post  43991  by  pacemakernj       OT: Clo, there is always hope for both of us. Pace
Post  43992  by  srudek       ot GMO Smallpox & dangerous technologies

Post  43993  by  pmcw       Reply
wee, Due to the vast number of shares I bought of both as they bottomed - my "next buy" points are considerably lower than the current prices. If I didn't buy so much ISIL really cheap I would probably try to get one in today. I have a very strong feeling the call will be considerably better than the price indicates. I think most of the negative reports we've read recently are kind of like a ws post - it's just an attempt to find negative news on ISIL.

If I get lucky, I'm hoping HLIT drops just below a buck and XICO below $2 soon. That would make me a certain buyer.

Regards, pmcw

Post  43994  by  pacemakernj       Reply
Linda, RE: China, you will continue to see stories like the one you just posted. This story will run for decades. While we have to use our much needed financial resources to fight the world war on terror the Chinese continue their assault on the world markets. They will not contribute one lousy nickel. In fact, as your post alluded to they may even be aiding the enemy. Call this the law of unintended consequences. We pursued these guys for 30 years to open up their markets and become more democratic. Well did it work!

As for America, well the Cisco stuff points to a larger issue. That is what will happen to those high paying jobs? If Cisco cannot compete on the world stage and they must drop their prices what will happen to those six figure jobs? You guessed it they'll be gone. Cisco will export those jobs overseas at a fraction of the cost. This is very subtle stuff here. You really don't see this happening right away. It is a process that evolves. Then one day you look up and bamm, all those jobs are gone! Meanwhile our standard of living will continue to fall. It must because the party in this country is over. Globalization might raise the less fortunate but at a price of weakening the stronger. I am not saying that this is necessarily bad but the result of unintended consequences that I think very few of us have really thought out is final conclusion. Pace.

Post  43995  by  Decomposed       OT: Table ON TOPIC SUMMARY Oct 22, 2002
Post  43996  by  pacemakernj       OT: Maniati, RE: SEC funding...

Post  43997  by  weevil       Reply
pmcw ..Thanks..Weevil..eom

Post  43998  by  lkorrow       Reply
Pace, what a situation. eom.

Post  43999  by  lkorrow       Reply
New WorldCom Losses Hint at a Disputed Future

The regional Bell giants are telling anyone who will listen that a revamped WorldCom could plunge the entire industry back into the destructive price wars from which it is only now emerging. Some of the regional Bell allies in research institutes are even suggesting that the Federal Communications Commission strip WorldCom of its licenses and essentially shut the company down.

Yesterday, in its first financial report since an accounting scandal resulted in the company's filing for bankruptcy protection in July, WorldCom said it lost $429 million in July and August, while recording revenue of about $4.9 billion in that period.

The report of such a big loss might be expected to cheer WorldCom's competitors. But it could also undermine the arguments by the Bell companies and their allies that the government ought to place restrictions on WorldCom if it emerges from bankruptcy protection with most or all of its $42 billion debt wiped off the books.

Without the need to service a debt load comparable to those of its competitors, the new WorldCom could afford to cut prices — particularly in lucrative business markets — far below those of other carriers, the Bells say.

"We have a problem with companies that use bankruptcy as a way of cleansing themselves of all their sins and then driving prices down," Ivan G. Seidenberg, chief executive of Verizon Communications, the nation's biggest local phone company, said at an industry conference in Washington yesterday.

Full story:

Post  44000  by  lkorrow       Reply
Newmont mining to restate 12 quarters of results
Wednesday October 23, 9:39 am ET

DENVER, Oct 23 (Reuters) - Newmont Mining Corp. (NYSE:NEM - News; Toronto:NMC.TO - News), the world's largest gold miner, on Wednesday said it would restate 12 quarters of earnings to correct the accounting of forward gold sales and purchase contracts dating back to 1999.

The company, based in Denver, said the correction comes after a review by PricewaterhouseCoopers LLP of its accounting policies and would result in the restatement of its earnings from the third quarter of 1999 to the second quarter of 2002.


PricewaterhouseCoopers replaced Arthur Andersen LLP., the firm that has been embattled since last year's collapse of Enron Corp., as the company's accountant in May 2002.

The restatement will widen its loss for 1999, 2000 and 2001 by a total of about $6 million, the company said. For the first half of 2002, net income will be cut by about $500,000.

Following the review, Newmont said that it has concluded that the prepaid forward sales contract did not meet the technical criteria to be accounted for in the manner reflected in its financial statements.

Post  44001  by  danking_70       OT: One of the problems with Government workers. <

Post  44002  by  pacemakernj       Reply
Roof, RE: China...

Before I start thanks for those kind words. Glad to hear you are busy. Keep it up!

There is another point here that I missed but in reading that post hit me like bolt of lightening. What the Chinese are doing is exactly what the Japanese did after WWII. If you recall the Japanese identified a few key industries that they would "go after". They were electronics, auto's, steel and probably a few other's. After WWII MacArthur was the military head of state. He reorganized the entire country based on US principal's and ideals. Mac brought in some of America's brightest business minds. People like Demming. The Japanese so revered Demming they have an award every year for the company that best exemplifies his ideals. It now appears that the Chinese are doing the very same thing only with chips and manufacturing. They are using western technology to build their infrastructure wrt chip manufacturing. This is dangerous, imo. If China becomes the chip making capital of the world and it appears they want to be this could be another body blow to the American economy.

As for America, I think these people that come to our country and learn at our finest universities, work at our finest corporations and leave. Well call me selfish but it's a slap in the face to us. They leave these oppressed countries come here make millions and give nothing back. Well that ticks me off. When my grandparents came to this country from Italy they never looked back. Yes they brought their culture but they became AMERICANS, damm it! They didn't leave to go back to the "former country". In fact my father served in WWII for six years. Also a stint in his "home country". What the heck is going on here. Is there not any pride in becoming a United States citizen. Do these foreigners come here to make money and just get up and leave? It appears that it is so. Furthermore it is not just the Chinese, but everyone including these Muslims. It's just outrageous. Doesn't anyone see this? They take our money and send it back. Then we have to go fight these ######## and we're the hated one's. Where's the outrage? I think there is an element in this country that is REALLY Anti-American. You know the Cal-Berkley gang or the nuts that write articles about "why they hate us" crap. Like it's our fault. It really pisses me off! We're hated yet we have to go clean up every mess these liberals create. The latest now N. Korea. Aw, heck I'm rambling. Anyway, I want to put America first. This love affair by our multinationals with China is imo, dangerous. The consequences of which we will not know for some time to come until sadly my friend it is too late. Pace.

Post  44003  by  maniati       OT: roof: So, in a nutshell, this Ed Bugos (the on
Post  44004  by  clo       OT:Dennis Miller on The Midde East/Israel

Post  44005  by  Decomposed       Reply
re: Yu-Gi-Oh!

Against my own better judgement... (I don't like tipping my hand with regard to the VSE game, but I think this tip might prove lucrative in reality. That definitely takes priority.)

I've been keeping my eyes open for several weeks for what the hot Christmas craze will be this year. I've only come up with one thing, and there's been VERY little news about it so far. That "thing" is an incredibly popular Japanese trading card game called Yu-Gi-Oh! based on a new cartoon that only just made it to the U.S.

The company with the trading card rights in the U.S. is Konami (KNM), a conglomerate that's big in the Japanese game industry. It trades on INCREDIBLY low volume... just 4,800 shares traded so far today. Today, the stock is off over 4%, btw, putting it at about its low since it debuted on the NYSE just a few weeks ago.

This one's definitely a long shot, but one that I think could have a huge payoff as I think that Yu-Gi-Oh! is about to bust on the American scene about the way that Pokemon did.

Read on: (This is a marketwatch archived article, so I can't post the URL.)

Konami's Yu-Gi-Oh spells profit
Trading-card boom delights Japanese software firm
By Mariko Ando,
Last Update: 4:00 AM ET Oct. 7, 2002

TOKYO (CBS.MW) -- Supported by the huge success of its "Yu-Gi-Oh" trading card games, Japanese game software maker Konami is likely to post robust profit this year, according to a published report.

Konami is expected to report a net profit of 8.3 billion yen ($69 million) in the fiscal year through next March, the New York Times reported Monday, citing Zachary Liggett, an analyst for WestLB Panmure Securities.

The figure is 18.5 percent higher than the company's own forecast in May of 7 billion yen profit. Konami reported a profit of 13.6 billion yen in the business year ended March 31.

Konami's shares (JP:9766: news, chart, profile) rose 2.2 percent 2,995 yen. The stock is up 35 percent since early August, when it hit a year-to-date Tokyo low of 2,160 yen.

Last Monday, Konami's American Depositary Receipts (KNM: news, chart, profile) debuted on the New York Stock Exchange. The ADRs jumped 5 percent Friday to $23.90, ending the week down 7.5 percent.

Yu-Gi-Oh, which translates as "Game King," is based on a Japanese comic book series. The story centers on a boy named Yu-Gi who fights virtual monsters whose powers derive from an ancient "millennium puzzle" that his grandfather helps him solve.

Yu-Gi-Oh cards, which show monsters and the exotic weapons used to battle them, debuted in the U.S. earlier this year and are riding a wave of popularity, according to the Times report. The game has surpassed Pokemon in popularity in the U.S., the report said, citing Comics and Games Retailer magazine.

Tops in game software

Konami is also performing well at home. In terms of sales in Japan, Konami became the country's No.1 game software maker in the April-September period on a domestic sales basis, surpassing the industry leader Nintendo (NTDOY: news, chart, profile), according to the Enterbrain magazine.

Konami, which ranked No.2 a year ago, sold 3.2 million copies of its games between April and September, thanks to solid sales of "World Soccer Winning Eleven6" designed for Sony's (SNE: news, chart, profile) PlayStation 2 machine, said Enterbrain.The figure surpassed the 2.4 million games sold by Nintendo, which suffered from weak demand for its "Super Mario Sunshine" title. Bandai (BNDCY: news, chart, profile) took the No.3 spot, selling 1.7 million copies, the magazine said.

Post  44006  by  lkorrow       Reply
The frog comes to mind. Well, I guess this is not a good indicator for renewable energy companies, short term, although even solar seems to be getting something of a boost in usage here and there. Damn the torpedos, full speed ahead.

Climate Talks Will Shift Focus From Emissions

The latest round of international talks on global warming begins today in New Delhi, with delegates focused more on ways to adapt to changes than on cutting emissions of gases that scientists say are the main cause of rising temperatures.

Instead of looking mostly at ways to reduce the level of heat-trapping gases, then, the 10-day conference "will discuss how to build greater capacity, especially in developing countries, for minimizing vulnerabilities and

preparing for worsening droughts, floods, storms, health emergencies, and other expected impacts," said a statement issued by the United Nations, which supervises the talks.

Full story:

Post  44007  by  StockmanI7       OT: Dennis Miller on The Midde East/Israel
Post  44008  by  jbennett53       OT srudek, I would ask if it is so easy to do how
Post  44009  by  danking_70       OT: Gunmen Hold 700 Hostage In Moscow Theatre
Post  44010  by  danking_70       OT: Stonewall, crumbling
Post  44011  by  danking_70       OT: A French-Russian Veto?

Post  44012  by  danking_70       Reply
Analysis: 'Stupidity pact' crumbles as euro's foundation stone

The fiscal rules underpinning the single currency have been publically called into question and face being re-written

By Stephen Castle in Brussels
23 October 2002

For the first time in its brief life, the impenetrable rulebook underpinning the European single currency has a nickname, and it is not one that will please its architects.

Damned by the European Commission president, Romano Prodi, as "stupid", the credibility of the euro's foundation stone – the so-called stability and growth pact – could hardly be lower this week. In Brussels it is now being called the "stupidity pact".

Whether Mr Prodi meant to say what he did in the French daily Le Monde, and whether he was wise to do so, remains open to question. But many people accept Mr Prodi's explanation that he has merely said in public what others whisper in private.

Less than three years after the launch of the euro, and less than 10 months after the introduction of notes and coins, the rules surrounding the currency are in tatters.

Faced with the chill winds of an economic downturn, the stability and growth pact has proved about as much use as a string vest. The ceilings it lays down have been breached by one country, Portugal, and are about to be broken by the eurozone's biggest economy, Germany. Meanwhile, France has thumbed its nose at the pact, defying both moral and political pressure to fall in line with its objectives, and Italy is giving cause for concern.

The rulebook's failings have been both economic and political, and significant reform in both areas is now inevitable.

Conceived in the run-up to the launch of the single currency, the stability pact was a German-inspired creation, the baby of the then German finance minister, Theo Waigel. With its strong deutschmark and record of low inflation, Germany's financial community signed up to the euro only reluctantly. The quid pro quo was a set of rules that would ensure Germany's economic might was not undermined by Italy's profligacy. Public spending, inflation and interest rates would be kept low.

The pact has two central features. First, members of the euro must move their public finances into surplus or close to balance in the medium term. Second, there is a budget deficit ceiling of 3 per cent of gross domestic product. If broken consistently this can expose nations to hefty fines. The economic plans of member states, including those outside the euro, are subject to the European Commission's scrutiny. All countries must agree a set of broad economic policy guidelines.

The first sign of trouble arrived last year when Ireland's pre-election tax-cutting budget was deemed by Brussels to be a threat to an economy in danger of overheating. But the real test came with the economic slowdown that has left the continent's big economies in stagnant growth.

In June, the Portuguese government admitted that its 2001 deficit had breached the ceiling, eventually owning up to a figure of 4.1 per cent. Last week, Germany said it would probably exceed 3 per cent (speculation is that it might be as high as 3.7 per cent).

In September, the European Commission decided to retreat in the face of the inevitable, giving France, Germany and Italy an extra two years to meet their target of getting public finances close to a balance.

If that was sensible economics it was contentious politics because it infuriated Spain, the Netherlands and most small member states which are already close to balance. Why, they asked, should we make sacrifices only to see the big countries indulged?

While the economics behind the pact have been found wanting, its political weakness has also become apparent. Discipline is imposed by a combination of peer group pressure and rulings from the European Commission.

But the authorities in Brussels have found themselves increasingly impotent. Under the current rules, nations that risk breaching the 3 per cent deficit limit should be given an "early warning". Yet the European Commission can only recommend such a rebuke to finance ministers who approve it.

When, in January this year, Germany faced such a threat, it lobbied other member states to prevent the warning being issued. Earlier this month, France defied the unanimous criticism of all 11 other eurozone finance ministers by announcing it was in no hurry to start reducing its deficit. All of which has left the pact exposed to an extraordinary barrage of criticism from large and small countries.

The French government has waged a war of attrition against the pact, demanding the right to boost growth and job creation in tougher economic climate. Britain's Chancellor, Gordon Brown, has criticised the pact, arguing that it does not distinguish sufficiently between current spending and investment in infrastructure.

Pascal Lamy, one of France's European Commissioners, described the rules as "medieval" and suggested that the UK's regime was preferable. Then came Mr Prodi's famous blunt words to Le Monde: "I know very well that the stability pact is stupid like all rigid decisions."

So if the rulebook – the very thing that was supposed to sustain public confidence in the euro – has been torn up, where does this leave the euro? One of the most surprising elements of the row is how little it has damaged the currency, with the foreign exchange markets appearing to view the debate as part of the evolution of a young currency.

As Chris Huhne, the economic spokesman for the Liberal group in the European Parliament, puts it: "So far, the markets have not reacted badly. They would probably react worse if they thought the stability pact was going to be applied in a crude way." The lack of action in the markets should buy time for reform which is now vital.

Mr Prodi's aides argue that his comments were deliberately timed to influence an inquiry into the future of Europe which is being chaired by the former French president, Valéry Giscard d'Estaing.

The pact faces even more challenges because its economic policy framework will have to apply to the 10 new countries that plan to join the EU in 2004 (even though they will not be inside the euro for several years). These are much more varied economies than those of the current 15 nations.

The Commission wants a greater role in co-ordination of economic policy and the power, for example, to issue early warnings to countries without having to get the approval of finance ministers. That will end some of the political weakness of the current system.

It also wants to have more flexibility in interpreting the rules. The European Commissioner for economic and monetary affairs, Pedro Solbes, is sympathetic to pleas from nations with low debt (such as the UK) who want to run deficits for several years. He also wants to take account of the investment in infrastructure, although officials are wary about exempting some areas of spending from the calculation of deficits, fearing this will offer too many loopholes.

In short, we are likely to see the emergence of a new code which would keep the main elements of the pact, including the 3 per cent deficit ceiling, but give more latitude for economies to adapt to changing economic circumstances.

There is a consensus that the revised pact should force nations to cut deficits when times are good, allowing them more leeway during recessions. Most policy-makers also want to encourage investment in infrastructure rather than current expenditure.

None of this makes things simple for Tony Blair as he contemplates bringing Britain into the euro. On the one hand, such turbulence and uncertainty may complicate the prospects of a referendum on British membership. But on the other, it is likely to bring about the very changes demanded by Mr Brown to smooth Britain's entry into the single currency.


February 2002

EU finance ministers block the European Commission's attempts to use the stability and growth pact to rap Germany's knuckles with an "early warning" over its rising budget deficit.

June 2002

France says it will take until 2004 to balance its budget with a growth rate of 3 per cent a year.

July 2002

Commission criticises Italian accounting system.

Portugal becomes the first country to break the rule limiting national deficits to 3 per cent of GDP.

August 2002

Italian cabinet ministers call for a weakening of the rules of the stability pact. Giuliano Urbani, the culture minister, says the EU should be stimulating growth not demanding cuts.

September 2002

Commission admits that Germany, France, Italy and Portugal will not make the grade by 2004 and gives the four countries until 2006 to achieve balanced budgets.

October 2002

France defiantly refuses to cut its deficit in 2003, putting domestic concerns above the common good of the eurozone.

Germany admits it has breached the 3 per cent deficit limit in 2002.

Romano Prodi, the Commission president, tells Le Monde the stability pact is "stupid".

Post  44013  by  lkorrow       Reply
Breaking news, white box truck stopped with an armed man inside. Don't know yet if it's the one. Let's hope it's over.

Post  44014  by  srudek       Reply
Barron's-on length/severity of avg Bear Mkts

This Week From Barron's
Through the Past, Darkly

By James T. Kahn
October 21, 2002

WHO'S READY FOR a terrible bear market lasting a decade or more? Not the general public, many of whom still think a fair sampling of historical stock- market trends can be viewed in the last 20 years. These people will be surprised. A 20- year horizon has led them to believe in platitudes that have only begun to go wrong: "You can't time the market," "buy and hold," and "bear markets tend to be brief."

Brief? From 1966-82, the Dow lost an average of 1½% a year for over 16 years-in nominal terms. But in real terms, prices of homes, gasoline, cars, and nearly everything else increased by a factor of eight during this period of record-setting inflation; a dollar put into the stock market in 1966 could buy only 12½ cents of goods by the time it came out in 1982.
. . .

Post  44015  by  lkorrow       OT: More info, the truck wasn't stopped, they're l

Post  44016  by  pmcw       Reply
sr, Did you believe what the Barron's article you posted said without taking a look at the easily available data? I always thought you were much less gullible than that. ;o)

The gross total change for the CPI from 1966 through 1982 did not increase the price of goods by a factor of eight as the brief you included claimed. It increase the prices by a factor of 3.04.

If you take a look at the data you posted about long term market performance in a previous post from you, that included inflation, you would see that $1 invested in 1966 would be worth an inflation adjusted $0.52 in 1982. Kahn claims it would be worth only $0.125. However, why stop at 1982? If they let it ride through the end of 2001 it would be worth an inflation adjusted $4.11. (Note all return data is per the chart you posted which I've not checked against real S&P500 data adjusted for inflation. I suspect that, if anything, it is on the low side. I've seen few exercises that correctly account for reinvested dividends.)

Please don't get me wrong, I could easily make a case against stocks and not resort to using utter lies. I would still have to distort the data or make really stupid assumptions, but I could make a much better case than Kahn.

The real point is that no one with half a lick of sense would invest all their money in anything (other than potentially their own business) on one day, over one week, one month or even one year. Stock market investors tend to invest over a lifetime of earnings. Show me any twenty, thirty or, even more realistically, forty year period in the market where an person making regular investments doesn't beat every other passive method of investing that is generally available to the average Joe or Jane.

Let's take a look at what Joe and Jane might expect if they did start at the beginning of the 1966 bear.


Start Date: 1/1/1966
Investments: Equal Amounts (Adjusted for Inflation) Deposited Each January 1st* through 1/1/1995
Total Return on Investment Adjusted for Inflation: 327% based on the average daily balance. Not bad considering it covers the worst inflationary time in American history. Taken on out through the end of 2001 the return steps up to the historical level of just over 7% per year after inflation.

* I used January 1st to make calculating the average daily balance easy. Actually the deposits would be made on the first day the market was open.

Back when you posted the huge matrix showing the historic returns on stocks for "X" number of years I extracted data that you could use to complete an unbiased evaluation of stock market returns (similar to the one above). Evidently you didn't think it to be worth your time. That's ok, I know you don't care for the market and have other ways to invest. However, it perplexes me as to why you waste your time reading such trash as this Kahn manifesto. If you want to really learn something about market history, why not invest your time studying publicly available data and come to your own conclusions?

Regards, pmcw

Post  44017  by  rdb14       Reply
Everybody's riveted to the T.V., Huh.


Post  44018  by  srudek       Reply
pmcw: re Barron's article

I confess, my research skills -- on the net or otherwise -- for "easily available data" are pretty weak; that is one reason why my responses to some challenges are slow. Also, since I browse through a lot of articles, spending more time reading than I probably should, I confess I am not as critical as I might be. Generally I figure (1) if something is published by a major magazine such as Barrons, the author and editor have been reasonably careful about their facts and (2) you, jeffbas, and maniati are likely to catch anything they miss. ;-) Anyway, just because I post something doesn't mean I endorse it either philosophically or factually.

I'm not proud of my poor research skills; if you know of a good course or book on how to more effectively use the net, I'd like to avail myself of it.

I actually began writing a response to your comments on the matrix but I got sidetracked and put it aside, intending to complete it later. I actually started constructing an excel spreadsheet with your figures before I concluded your input data was really arbitrary and unrealistic anyway, so why was I going to spend all the time designing a spreadsheet to crunch? (e.g.: as I recall, your starting salary seemed absurdly high -- anyone who could afford to "save" thousands of dollars a year in the early 1900's was rich to begin with. Your proposed inflation rate for the early 1900's seemed much, much too high -- we were on a gold standard then. You didn't allow for those years when the stock market tanked and large numbers of companies flat out went backrupt and the Dow components just get "reselected" but your hypothetical investor likely lost everything -- as Ben Graham did.)

I probably might have done the spreadsheet anyway, out of curiosity, except I've played around with compound interest calculations enough to get the drift of where we'd end up. You've given presentations on the power of compound interest. So have I. With your assumptions, I roughly figured I would have ended up the richest person in the history of the world. Am I right? If I'm even remotely correct about the outcome, then your assumptions were obviously grossly unrealistic. Warren Buffett has devoted his life to doing, basically, what you and I have conjectured -- he's rich, but not a fraction as rich as your assumptions would have made your hypothetical, dumb investor. And Warren ain't dumb, by a long shot. BTW, Warren doesn't follow your "invest every year" strategy. Ben Graham told him to get out of the market in 1966 -- as I recall, he stayed out until he bought part of the Washington Post, I think around 1972-73. I think timing the market regarding major trends would have enormously magnified gains. And, yes, I absolutely think major market trends can be timed.

Regarding your comment The real point is that no one with half a lick of sense would invest all their money in anything (other than potentially their own business) on one day, over one week, one month or even one year. Stock market investors tend to invest over a lifetime of earnings. Although I absolutely agree that spreading out your bets over time would be far smarter than compressing them, I think you'd find that, in fact, a LOT of people do exactly what you're saying (and I'm agreeing) they shouldn't. I suspect we'd find, for example, that the majority of stock market investors only got active during the latter part of the 90's. I know my parents put ALL of their money in to the stock market in 1969 -- because that's what "everyone" said they should do -- and are, in fact, a real world case of what you say nobody does. Lots and lots of people do what you say nobody does. Going beyond this, I expect that without all these fools jumping in at the end of the party, stock market "average" returns would be enormously lower -- the Dow would have never made it past 5000, imo and the Nasdaq would have topped somewhere below 1000.

My sincere apologies for not responding in a timely manner to your prior post. I know you put good time into writing your comments and the conversation would have been enriching.

P.S. maniati: I'm intending to continue with our economics "chats". I'm working on something now, it may take a bit.

Post  44019  by  uponroof       Reply

my compliments to you sir for some really outstanding posts over the past few months. Between you, pace, srudek and pmcw (to name a few) there is some incredibly enlightend and opinionated information being offered.

As for your specific question/statement regarding the Bugos article I must remind you....

Everything, and I mean everything, ever offered as an explanation as to why anything, and I mean anything, ever happens wrt gold,....will always, and I mean always, include nothing less than a spectacular underlying ulterior motive.

Now I say that tongue in cheek as a gold bull fully recognizing the truth that we gold bulls are always searching for the bogeyman. Unfortunately, given the stakes involved (which includes all the paper money in the world) much of those motives often have some basis in fact.

While I certainly don't believe Bush is wholly commited to war as a result of domestic economic strife, I do think it is an influencing factor in the grand scheme of things.

As for Howard Buffet.... I thought the quote interesting and actually posted it as a teaser to a very good article (IMHO). Dollar/yen/gold dynamics and the possible impact of a coming dollar devaluation is very pertinent to much of what's been offered here over the months.

Are we are headed for some sort of 'flation'? It would seem so given the time devoted to it's speculation by media big mahoffs driving the global discussion.

Is Real Estate inflated, and will it be a catalyst? Or will Chinese imports rule the day? I'll keep reading here for the I certainly don't have any myself. Thanks.

Good Luck


Post  44020  by  pmcw       Reply
sr, I can see you have a deep mistrust for most things concerning stocks - unless of course - they are of a negative nature. It's perfectly natural for us to gravitate towards things that match our predisposed opinion. However, it is much more rewarding to investigate without prejudice.

I certainly didn't attempt to set you up at all with the data I provided in my post of about a month ago. I'm a bit hurt that you feel I would go to that much effort to share knowledge and do so in a fashion that would prove nothing more than deceptions can work both ways. By that I mean that the posts to which I responded are clear deceptions. No, I've found that fighting with the truth is the best and most powerful weapon one can use against those who use devious means to support a flawed conclusion.

Since you mentioned you printed out my data from the previous post I won't bother rehashing it here. I will, however, address your point about $1,000 per year being to high as a starting point if one was to use the data from 1900. The stating point is only relevant to the time of now. The ending point for a 1900 start was 1947 and if I was going to adjust the starting point for each year for inflation I would have to do the same with the finish and all point in between. I think it is better to use historic return data against currently relevant numbers when one wants to provide a feel for the times.

I've not run the numbers that include adjusting asset allocations in the fashion I suggested simply because it complicates the matter a bit more than what I wanted to tackle tonight. Quite honestly, I had not even run the equity numbers before, but as a result of the previous exercises I had run in the past, I had a very good feel for the outcome.

As I mentioned, the net inflation adjusted investment is roughly (from memory) just over $225K. It is invested over a period of 47 years with the majority invested during the last 25% of the timeline (in other words estimating the average daily balance is not simply halving the investment).

All the following results are inflation adjusted:

Worst outcome: $678K (ending in 1982)
Years where the total is less than $1M: 9
Years between $1M and $2M: 25
Years between $2M and $3M: 16
Years over $3M: 3
Best outcome: $3.2M (ending in 1965)

Clearly, the 1966 to 1982 bear (there was actually a huge bubble in 1973 and several bulls along the road) was the worst of them all when inflation was taken into consideration.

I hope this helps you better understand the realities of the market and my personality a bit better. Regards, pmcw

Post  44021  by  uponroof       Reply
Roger Bentley Arnold & Midas Report

General Comments

The German equities markets have dropped 3.8% and 3.5% respectively in the last two days.

Japanese markets fell over 3% on Tuesday and were sideways on Wednesday.

Tuesday in the US the DOW closed down about 1%.

What is most interesting about this is that the 10 year treasury yield did not move. In other words the surge of money out of the 10 year treasury over the past week which allowed the yields to rise by 75 basis points appears initially to not be coming back to the US treasury market.

I don't think this will last long.

As the Japanese and German economies sink I believe there will be an increasing migration of money out of their economies and into the perceived safe haven of US treasuries and the dollar.

Which means that even if the FED continues to expand money supply, as they have been, the immediate result will not be inflation, rising long term treasury yields or a depreciated dollar.

All of which would typically result from an increase in money supply.

Not this time.

I was talking to Tom O'Brien yesterday about this on his radio show. He believes there are strong technical reasons for the 10 year treasury yield to continue to rise from here.

He may very well be right.

By the way, Tom is a straight shooter. Which makes his advice worth gold itself. His clients are his newsletter subscribers and radio show listeners. You don't have to wonder if there is a hidden agenda in his advice. You can listen to his radio show and find out more about him at

I am not a technician and will not challenge a technical expert like Tom on that issue.

However, I believe there is a much stronger fundamental case to be made for decreasing 10 year treasury yields than for increasing 10 year treasury yields from here.

The geo-synchronous economic slow down is continuing. The resulting flight of long term investment dollars from paper assets of all kinds is increasing. The flight into the perceived safety of US treasuries and other safe havens, like gold and raw land is increasing.

The resulting reduction in money available to transact business is increasing causing a world wide competitive race to depreciate currencies and slash prices in order to attract money and sell goods.

This is the result of deflation.

Deflation today is a world wide event and is showing no signs of abating and every sign of accelerating.

Competitive currency depreciations should cause gold to consistently increase in price from here.

There is a lot of back ground noise going on causing confusion in the markets right now.

That back ground noise is the optimism about the potential growth path for the US Economy from here.

I have heard and read several economists predictions of steadily growing economic activity; especially in the US.

All I can say about this is that I don't see it and I don't understand the logic behind it.

Maybe they are right and maybe I am wrong. But, I don't think so.

Credit Spreads

S&P finally ways in by themselves. Click on the title below or the URL at the bottom of the article to get the graphics as well.

U.S. Credit Spreads Widen and Volatility Rises

NEW YORK (Standard & Poor's) October 21, 2002—Volatility in U.S. industrial credit spreads increased significantly in the third quarter of 2002 and continued to widen in early October. Overall volatility, measured by the standard deviation of daily changes in credit spreads, can mask the divergence of specific industries, such as energy and automotive. Both investment-grade and speculative-grade credit spreads rose to their highest level for the year on October 10, at 213 and 1,011 basis points respectively, reminiscent of the record 1990-1991 highs. However, this earlier period was markedly different with 10-year Treasury rates in excess of eight percent compared to current rates below four percent—a 40-year low. Importantly, within investment grade, ‘BBB’ credit spreads widened the most within the third quarter, increasing 49 basis points, although ‘AA’ credit spreads experienced greater volatility. Not surprisingly, ‘CCC’ credit spreads—with heightened default concerns—widened the most and experienced the greatest volatility within the speculative-grade category. Both speculative-grade and investment-grade credit spreads will remain vulnerable for the remainder of this year and into 2003 due to recurring ‘headline risk’ of questionable accounting and trading practices as well as renewed concern about the strength in the underlying economic fundamentals, hampering the credit turnaround.


Date Index Value* (Credit Spread Level/Divisor) Credit Spread Level(bps) Divisor Duration (years)
10/22 1477.2 935.7 0.63345 3.9
10/21 1476.6 935.3 0.63345 3.9
10/18 1491.3 944.7 0.63345 3.9
10/17 1491.0 944.5 0.63345 3.9
10/16 1497.2 948.4

The parade to refinance

Homeowners, Shilling and others say, may find themselves owing more than their homes are worth.

Shilling says that lenders, who have made refinancing much simpler and less expensive than ever before, will change their tune as foreclosures continue to mount.

Last month, the number of US foreclosures in process hit 1.23 percent, the highest level in 30 years, according to the Mortgage Bankers Association.

Fannie Mae, the nation's largest home mortgage financer, has already announced a fee increase on cash-out refinance mortgages effective Feb. 1.




October 23 - Gold $311.90 down 80 cents - Silver $4.39 down 1 cent

Former U.S. Treasury Secretary Summers Confronted By GATA ARMY

Gold and silver were comatose. The most fun came via this email late last evening from a student at Harvard University:

Dear Mr. Powell, Mr. Howe, and Mr. Murphy,

This evening I had the opportunity to ask Larry Summers about potential ESF involvement in the Gold market at a public forum in a "town hall" type meeting at Lowell House at Harvard I have been following GATA nearly since its beginning, and I have spoken with Mr. Howe in the past.

Here is a basic transcript of the questions. I did not tape it, but I wrote it down afterwards and asked around to make sure my transcription was correct.

TF: Some libertarians and AIDS activists here at Harvard have been reexamining the behavior of gold prices in the late 90's during your tenure at Treasury and a connection to a paper you wrote about Gibson's Paradox in 1985. We feel that Treasury's denials

of gold market intervention fail to fully cover the Emergency Stabilization Fund or ESF. Therefore, I would like ask whether the ESF was involved in any gold transactions, either directly, in coordination with bullion banks, or as a party with outside agents?

LS: Normally I get asked about issues relating to (lists university issues) section sizes, admissions policy, etc.....I haven't issued a financial denial in a long time.

TF: Well, it's a yes or no question.

LS: The answer is no. Not through the ESF. There were no secret transactions. No off balance sheet transactions. No. Absolutely Nothing... But I'm glad that you're reading my old paper.

TF: It's brilliant. So how then do you explain the divergence from the Gibson Paradox inverse relation of gold prices and long-term interest rates since 1995?

LS: Well, what's the problem? Are gold prices too low or too high?

TF: Too low.

LS: Well, that probably has something to do with gold losing its luster as an asset class.

This is fairly close to the questioning word for word. Although, there is a fair amount of fluff that I can't recall exactly. But, if Summers has never issued a direct denial, I think here you have it.

And, don't worry, these meetings are usually fairly confrontational as it is. People ask him about divestment from Israel, various corporations, racial issues, globalizations issues, etc. However, I'm glad that I at least inserted the virus in his mind that people are still worried about this.

I still believe as I have told Reg that the future of GATA depends on universities and student activism. I have a lot of ideas how to approach this.


I thought it interesting the way Summers:

*Phrased his answer: not through the ESF.
*Did not explain the divergence of gold and long-term interest rates as per Gibson’s Paradox.
*Queried as to whether gold prices are too high or too low. Yeah right, as if he doesn't know.
In addition, gold demand has outstripped mine supply by more than 1200 tonnes per year for many years. Gold has not lost its luster as an asset class. Gold demand is firm and growing around the world. It is only the rigging operations of The Gold Cartel that are holding the price down – and Summers knows it.

Anyway, good work Todd. I can assure you that your question shook him up a bit.

The John Brimelow Report

Indian ex duty premiums: AM $2.65, PM $2.63, with world gold at $312.50 and $313. Solidly above legal import point. Generally the dealers exposed to the Eastern physical trade are notably more confident of gold’s holding than other observers. Dow Jones from Sydney quotes a Rothschild bullion trader there to the effect that "Tuesday's trade demonstrated the existence of physical demand at US$310/oz.", while Standard NY feels bold enough to say:

"with support looking solid under $310.00, the festive season approaching and an easing in the (over) bought conditions of late, the medium term direction certainly appears to favour a rally back towards $320.00."

Tokyo continues to frustrate, however. A promising rally at the opening was abruptly routed by a sudden, not easily explained surge in the yen, which enabled
the Trade houses to smash the market in arbitrage trade. The active contract closed down 3 yen; overall volume was the equivalent of 18,563 Comex lots and open interest fell by 357 Comex equivalent. (NY traded 23,075 yesterday: open interest rose 1,472 contracts.)

Clearly what bothers Western oriented dealers is the readiness of selling on any rally: one notes for instance that, gold having had the temerity to rise in overnight dealings, Comex is estimating 16,000 contracts have already traded today by 11am.

So this is an appropriate moment to consider one of the more important gold market research papers in some time: Mike Bolser’s posting today on The Golden
Sextant analyzing the curious symmetry between the growth of the JPM group’s derivative exposure and pivotal events in the gold market:

"Executive Summary"
"A June 1996 high standard deviation preemptive selling episode brought about a downward directional change in the 200-day moving average of gold prices. Immediately following that change in trend, the two banks that later became J.P. Morgan Chase reported unprecedented one-time growth spurts in their interest rate derivatives, which are related to gold prices.
Trading patterns in gold and interest rate derivatives are presented and striking correlations are shown, suggesting that a larger macro-economic strategy involving interest rates has been associated with gold and preemptive selling. This strategy has also impacted the interest rate sensitive government-sponsored enterprises. Current, deteriorating economic fundamentals are displayed, further suggesting that the gold and interest rate strategy is under duress. In closing, the work of currency crisis experts relating to exhaustion of gold reserves during unsustainable policy periods is briefly discussed."
See :


Speaking of Mike Bolser:

Hi Bill:

I’ve been asked to opine which way the Fed will move rates. So, here goes...

Recently, three Federal Reserve Board Governors publicly stated that "Rates were low enough". Of the three possible actions: lower, stand pat or raise, I think that the last is the least likely to occur due to its crushing effect on companies that borrow and lend for a living. Those businesses would hit the wall with a rate rise. The GSEs and the consumer who extracts housing equity to live are at the head of this class. The stock markets would not at all like a rate rise as it would hurt the brokerage’s ability to obtain financial repo funding which is the grease for Wall Street’s wheels and that quickly point the DOW at 5,000.

Speculation suggests that the Fed is having an internal debate over whether to lower again or to stand pat with rates. With rates rising on the long end of the maturities [With the latest "Rally"], another cut would introduce a noticeable jump in spreads [The gap between Fed Funds rates and the 2, 5, 10, 20 and 30 year treasury bonds]. They don’t want spreads to widen in US treasuries (They are already moving in that direction with corporate debt). But the housing bubble is very precarious even with refis running at full tilt. Will the Fed cut to try and keep that going?

It’s a toss-up but the Master is still Master until he isn’t anymore.

One thing is clear with respect to gold however, the cabal has two and only two decisions before them: (1) Keep selling physical metal until it’s all gone which will produce unmitigated financial chaos or (2) Stop now and save some in order to at least attempt to hold the subsequent gold price rise at some manageable level say $500-$600 per ounce. The latter may be ushered in with a devaluation of sorts against certain currencies and gold by the levitated $USD.

An important key in the Fed Watch game is to weigh the bank "Mergers". First JPMorgan and Chase Manhattan. Now Bank One [$189 Billion in assets] is rumored to be "Assimilating" JPM [$581 Billion assets, OCC]. These increasingly bizarre Federal Reserve actions to "Rescue" derivative-laden institutions are un-mistakable symptoms of duress. They are also victories for GATA.

Kindest Regards

Michael Bolser
2215 Summit View Drive
Valrico, Florida 33594

Another gold derivatives problem crops up:

Newmont mining to restate 12 quarters of results

10/23/2002 9:39:14 AM

DENVER, Oct 23 (Reuters) - Newmont Mining Corp. (NEM) (CA:NMC) , the world's largest gold miner, on Wednesday said it would restate 12 quarters of earnings to correct the accounting of forward gold sales and purchase contracts dating back to 1999.
The company, based in Denver, said the correction comes after a review by PricewaterhouseCoopers LLP of its accounting policies and would result in the restatement of its earnings from the third quarter of 1999 to the second quarter of 2002.
PricewaterhouseCoopers replaced Arthur Andersen LLP., the firm that has been embattled since last year's collapse of Enron Corp., as the company's accountant in May 2002.
The restatement will widen its loss for 1999, 2000 and 2001 by a total of about $6 million, the company said. For the first half of 2002, net income will be cut by about $500,000.
Following the review, Newmont said that it has concluded that the prepaid forward sales contract did not meet the technical criteria to be accounted for in the manner reflected in its financial statements.


It’s good that Arthur Andersen was canned or another gold truth would still be hidden from the investing public. Murky work Newmont.

Mahathir steps up plan to use gold dinar to trade with Islamic countries

KUALA LUMPUR (AFX-ASIA) - Prime Minister Mahathir Mohamed is stepping up plans to use the gold dinar to trade with participating Islamic countries by proposing establishing a team to study the scheme.

Malaysia plans to use the gold dinar mechanism to facilitate financial settlements between participating Islamic nations in gold, while at the same time increasing trade among Islamic nations.

"I will propose to the Cabinet and if they agree, I will ask Bank Negara to establish a secretariat for the gold dinar (facility). Iran seems to be interested so we will contact them," Mahathir said at a press conference.

He added that Malaysia is still in the process of explaining the concept of using the gold dinar to other Islamic countries.

He said participating countries may have to revise their laws to comply with international financial regulations.

Mahathir said Malaysia is looking for Islamic countries with a strong financial and economic background as participants.

He added that the gold dinar will be valued according to the market price.


Throw up your hands time with the US stock market. I believe it rallied today on continued bad economic news, bad enough to stir talk of an interest rate cut in two weeks.

U.S. Economy: Fed Says Economy, Retail Sales Weak
By Brendan Murray

Washington, Oct. 23 (Bloomberg) -- U.S. economic growth was slow entering the final quarter of the year because of flattening retail sales, stalled manufacturing and lackluster hiring, the Federal Reserve said.
``Most districts reported that economic activity remained sluggish in September and early October,'' the Fed said in its latest regional economic report card, known as the beige book.
``Retail sales were weak across the nation, including some declines in motor vehicle sales from very high levels,'' the report said.
``Most districts noted that manufacturing activity had declined or grown more slowly.''
Fed officials in recent speeches have said they don't expect a pickup in the economy before next year. William Poole, president of the Federal Reserve Bank of St. Louis said today ``the overall economy is growing modestly, recovering all too slowly from last year's recession.'' -END-

JPM was tanking badly, down almost $1 when the stock market did one of its patented late turnarounds. Morgan closed at $19.77, down 14 cents. For the second day in a row, it sold off on the closing bell AS the DOW was rallying.

The stock markets in Germany and England were belted. No late rallies over there.

Not a day goes by lately when I am not reporting on the LOUSY economic news.
Word came in to me from Europe that not one painting was sold during a recent German art festival. That never happened before.

Then this:

By Jeremy Grant in Chicago
Financial Times; Oct 23, 2002

Jeff Barry, sales manager at the Jacobs' Twin car dealership, says he has never seen anything like it in 25 years in the business: "It was as if the water was shut off on October 1."

After months of strength, the North American vehicle market - the world's largest - is slowing sharply.

Given that the US car industry accounts for 4 per cent of the country's gross domestic product, it is one sign that US consumer fatigue may finally be setting in.

The implications for the US economy could be worrying.

Much of its residual strength has been due to healthy consumer spending on housing and vehicles. Detroit's "big three" carmakers - General Motors, Ford and Chrysler, now a unit of DaimlerChrysler - have helped. Cars are, on average, more affordable than they have ever been, thanks to generous financing incentives.

JD Power & Associates, a California-based automotive consultancy, confirmed last week that sales were down "dramatically" this month.


Laurie McGuirk from Aussie Land:

GE have gotta be a huge worry to the market( and the Fed). It is well known in derivative circles that this company is a bigger derivatives shop than Enron ever was (probably bigger than most banks).What is not too well noted is that they are totally unregulated compared to a financial institution. The Fed will let GE fall over but wont let a bank fall over, just watch. GE has no FDIC backstops etc. The Fed wont want the confidence crush that a JPM failure would bring. GE,no different to Enron!.

Financial stocks everywhere getting belted(except the US ... For the next week or so)....The financial system is creaking under the stresses of bad loans, excessive debt and unsound money.

Greenspan came out with some drivel about productivity increases. He still has wiped the egg off his face on this stuff from a few years back.

Bloombergs say Disney leads the way up.... isnt there a place in Disney called Fantasyland??? Thats where this market is. Dow up 30 points on the day at 5am.... if this closes up it will be a miracle even greater than the productivity miracle that Greenspan championed as he tried to justify the Tech bubble of in 1999.....10 mins to go and looks like the loaves and the fishes all round! ... and at the end of play and a bloke just jumped out of his wheelchair. Dow up 45.

Gold closed at $312.25 ,Silver down a cent as well. CRB still above 225 and looking like may test 240 in the coming few weeks/month. El Nino isnt going away. Crops are getting destroyed all around the globe either flood or drought or whatever. We see it here in Australia where so much of our farmland is just dust and dirt from drought. Canada is no different from what I hear. The farms of the world are in trouble.

The SMH said in their inflation article... "The drought contributed to a 12.1 per cent jump in vegetable prices in the quarter, The figures showed that a drought-related increase in livestock slaughter pushed down meat prices." The meat wont last long here! So prices are going to rise heaps. Price rises are inevitable across every sector of the economy due to the massive amounts of debt and "money" created at unprecedented recent and current rates. Sometime, one day, the wheel has to either stop, or spin out of control. Either way it will hurt.

Gold and silver stocks all off between 2% - 7% . Silver Standard rose 2% and was the only green on one of the screens.


A good note to end on:
Goldman Forecasts Gold Supply to Fall 200 Tons in 2003, FT Says
By Sri Jegarajah

Singapore, Oct. 23 (Bloomberg) -- Global gold supply may fall next year by about 200 tons as producers reduce the volume of the metal they sell in forward markets, even if bullion prices fall, the Financial Times said, citing Goldman Sachs Group Inc.

Gold miners this year have become net buyers, securing physical supply by buying back gold which was previously sold in the forward market, the paper said, citing Daniel McConvey, vice- president of global investment research at the investment bank.

``We do not expect a return to hedging if the gold price dips over the next year,'' McConvey said in the report. ``Rather, we expect that downward moves in the gold price will be met with stronger hedge buybacks.'' -END-

Gold demand is expected to increase 300 tonnes in China alone next year. Add another 200 tonnes of gold supply decrease here and you get the picture for next year. The Gold Cartel is in BIG trouble!!