Table On-Topic Summary - 06-Nov-2002
A compilation of this board's financial/economic posts From 44657 to 44756



Post  44657  by  wilful       Reply
Kduff - As well as for those in MD and GA. EOM

Post  44658  by  tinljhtkh       OT: Yup!


Post  44659  by  lkorrow       Reply
Tin, the Senate too? CNN shows 48 R to 46 D, 51 required, but as of 12:52 AM. One thing's certain, if the President is captain of his ship, that's a lot of pressure. History will judge in a different manner and there will be few excuses for either action or inaction!

Pace, where are you, did you cave in and go to sleep?


Post  44660  by  Decomposed       OT: Table ON TOPIC SUMMARY Nov 5, 2002
Post  44661  by  pacemakernj       OT: Linda, I watched up until 2:15 AM when Carnaha


Post  44662  by  pacemakernj       Reply
Roof, I bought a ton of stock yesterday and have been loading up in anticipation of this. I was down to 20% cash as of yesterday and I'll put the last 15% in today. What a day. Pace.



Post  44663  by  lkorrow       Reply
OT" Pace, yes, quite a night, should be quite a market day!



Post  44664  by  angus_mac01       Reply
GMPW~
Is going on a multi state road show beginning in Philadelphia then Boston and New York. 19,20 and 21 respectively. Each forum will have approximately 150 to 200 brokers listening . This Microsoft supported company is about to be exposed




Post  44665  by  pmcw       Reply
pace, High fives dude!! Both houses and a Pitt bounus! Let's see the Fed follow through and CSCO give even modest guidance and the month will probably be better than I expected. Regards, pmcw


Post  44666  by  pacemakernj       OT: PMCW, at least to me this is a GREAT DAY! Now
Post  44667  by  pacemakernj       OT: PMCW, at least to me this is a GREAT DAY! Now
Post  44668  by  jeffbas       OT: "I knew we had done it"


Post  44669  by  uponroof       Reply
The CYA game begins with the dems...

Daschle, MacAuliff, Gebhardt will all be pointing fingers at each other. Al Gore will attempt to keep order (difficult given his lack of respect). Perhaps John Kerry will emerge as lead dog by default. Question is....does he want to leave the happiness of the Heinz fortune.

James Carville spent most of last night with a trash can over his head, Paul Begala had no answers. I have never seen the dems so disorganized! NEVER! They are void of explanations. Even the venom for conservatives they cast as 'evil' is missing. Please put a suicide watch on Babwa Striesand and the entire hollywood gang. BTW- Where is Alec Baldwin these days? Someone please stick a mike in his face. I'd love to hear him tear into his own party.

On the other hand, now the repubs have no excuses. They have to solve problems. This has all the earmarks of 'enough rope to hang yourself'. War, terrorism, economic crisis, moral decay, it's a full plate to be sure. GW and the repubs are now on the hot seat.

I wonder what, if any, influence this might have on the FED guvners? Politically deaf, but certainly not dumb?

Congrats pace!




Post  44670  by  pmcw       Reply
Prosperity rises from the system
By JERRY HEASTER
Columnist

This is an absolutely wonderful message. I not only encourage you to read it carefully, but to also share it with your friends - particularly young adults.

Regardless of the election results, America's prosperity depends not on those elected to office Tuesday, but the energy and ambition of a free citizenry seeking a better life for themselves and their progeny.

People don't get out of bed in the morning to pursue their economic sustenance because some political leader has inspired them to do so. Aside from those for whom work is an exercise in minimalist survival, most Americans are motivated by dreams of a better life for themselves and their families.

The fact that our political and economic freedom makes it easier to pursue our dreams is why many of us get so excited about casting our votes. Politics, however, becomes a dominating passion for some, leading them to a mistaken belief that politicians seek office in the spirit of public service.

Some career politicians may no doubt be motivated by altruism at the outset, but over time officeholding becomes a job like any other. In its own way, it's as much an entrepreneurial pursuit as nurturing a business. This is why political outcomes should be kept in perspective.

Just because your favorite candidate won Tuesday doesn't mean your life will be appreciably better. By the same token, if your favorite lost to a candidate you find anathema, it doesn't imply a setback for your economic fortunes.

Free enterprise isn't possible without political freedom. Nevertheless, it's always worth remembering that it's the freedom itself that is the critical component -- not the political outcome it produces. Thus, political freedom doesn't drive free enterprise's wealth-creating dynamic, but rather complements it.

This is true regardless of who wins office. The system so far has worked to prevent abuse of political power to the extent it would thwart our natural instinct to improve our lot. As a perceptive person once observed, our way of governance isn't perfect, but it's way ahead of any other system devised by humankind.

There's no denying the outcome of Tuesday's election will affect our economic lives. It just won't do so to the degree many Americans like to believe. No matter what your party affiliation or political bias, the reality is that economic prosperity usually occurs despite the deeds or misdeeds of elected leaders and their minions.

It's not the individuals in high office that promote economic prosperity, but the system itself. The system's most important functions are providing reasonable protection for private property and a legal framework for resolving disputes. As history has shown, no society has ever thrived economically or advanced technologically without these two critical components.

In a society as bountiful as ours, politics has evolved mostly into a tug and pull of deciding how to redistribute much of the humongous wealth the economic system creates. This makes many Americans uncomfortable, but it's inevitable. Fortunately, there's much bounty to go around, and the process is at least a democratic one.

When pondering our prosperity, though, remember this: Economic pursuits, not politics, remained the primary focus of most our lives Tuesday.




Post  44671  by  pacemakernj       OT: Jeffbas, I do agree with you about TD. But in
Post  44672  by  pacemakernj       OT: Roof the best thing we have going for us is th
Post  44673  by  jeffbas       OT: uponroof, I heard on the radio this morning th
Post  44674  by  uponroof       OT:jeff...good points
Post  44675  by  Decomposed       ot: re: "I've said before that before he's


Post  44676  by  Warstud       Reply
Chairman Harvey Pitt resigns : Following a series of missteps and call from Senate Majority Leader Tom Daschle that he be forced out, SEC Chairman Harvey Pitt tendered his resignation last night. Pres Bush is not expected to name a replacement immediately.


Post  44677  by  Decomposed       ot: Another cookie thrown to the Republicans by t


Post  44678  by  pmcw       Reply
STAA, Remember exactly two months ago when I suggested STAA as a good buy when it opened at $3.05?

http://ragingbull.lycos.com/mboard/boards.cgi?board=TABLE&read=41492

After running up a bit more than 10% it dropped back into the $2's and started trading a bit more volume. I felt pretty good about their progress on ICL's so I bought a few more shares. Take a look at it today. :o) I'm gonna sell a few of the $3.05 shares for a quick 40% profit, but hold some of those bought in the mid $2's in hopes of a two bagger.

IMO, one of the most compelling reasons to look at STAA is the CEO. If you want to read up on him go to google.com and search for . There had to be a good reason for this guy to abandon his position with B&L. I see Lou DiNardo going to XICO as a similar story. Regards, pmcw




Post  44679  by  maniati       Reply
O4D: Are you asking the question because you are not sure whether options might be reported differently than stocks? I assume that is your motivation, however, based on your other post, I don't know if you are also raising the issue of whether day trading affects the way you report.

For now, I will keep things simple and assume that you are not a day trader, and you simply want to know whether options trades are reported any differently than stocks.

The answer to that is that you should report your options gains/losses on Schedule D (capital gains & losses) in much the same way that you report gains/losses on stocks. There can be some minor differences, but it's still Schedule D that you want.

For more info on reporting options trades, I strongly suggest that you look at the following publication:

http://www.irs.gov/pub/irs-pdf/p550.pdf

It contains a section on options - see index on first page.

I'm not familiar with IB.






Post  44680  by  maniati       Reply
OCU: Nice call on Pitt! eom


Post  44681  by  pacemakernj       OT: Decomp, I realize that. But I am confident tha
Post  44682  by  pacemakernj       OT: Decomp, it's a beautiful thing. I can't wait t


Post  44683  by  Czechsinthemail       Reply
Re: generic drugs

Here is some information about how FDA regulations have led to abuses of patent law by pharmaceutical companies:

http://www.cato.org/pubs/regulation/regv24n4/v24n4-2.pdf

We'll see how the money politics plays out on this issue going forward. There is big money in health care companies that benefit from the lower drug costs generics balanced against the large pharmaceutical companies.




Post  44684  by  lkorrow       Reply
Well, they just declared that the recession ended in September (cnbc). Not that I'm unhappy with this revelation, but I thought they declared there was no recession long ago. Between this and the employment numbers, it looks like we're being taken for a ride. Again.



Post  44685  by  jbennett53       Reply
pacemakernj, Let us hope that was not a Fruedian slip. "" will have to deal with what I hope is glowing legacy. Pace.""

Post  44686  by  Decomposed       ot: Beyond words
Post  44687  by  pacemakernj       OT: JB, just having some fun. Pace. eom.


Post  44688  by  wilful       Reply
Sure would be great to have some of this pass:

[Ueland said Republicans are waiting for Bush to signal that they should move forward with a package of tax cuts aimed at investors, including proposals increasing the amount of stock losses that can be deducted from income taxes, raising the contribution limit on retirement accounts and cutting or eliminating taxes on stock dividends.

Bush has also promised proposals to curb lawsuits, especially malpractice suits, and some kind of effort to cut back business regulations, possibly on Superfund environmental cleanups. ]

At least NOW - some chance of passage exists.

:-)

W.


Post  44689  by  pacemakernj       OT: Wilful, tort reform is an absolute must. Pace.


Post  44690  by  wilful       Reply
Recession Over?

Business News
Wednesday, Nov. 6, 2002
Need More Time on Recession Call - NBER


WASHINGTON (Reuters) - The private-sector panel that dates
U.S. recessions sounded a note of concern on the economy on
Wednesday, saying it needs more time to feel confident that the
downturn that began in March of last year has come to an end.
"The behavior of the economy in the first eight months of
2002 indicates that the decline in activity that began last
year may have come to an end," the National Bureau of Economic
Research's Business Cycle Dating Committee said in a memo
posted on its Web site.
"But recent data indicate that additional time is needed to
be confident about the interpretation of the movements of the
economy last year and this year," it said.
The panel -- widely seen as the arbiter of U.S. business
cycle peaks and troughs -- noted both the modest growth in
employment from May through August of this year and the small
declines in September and October. The Labor Department said
last week that nonfarm payrolls fell by 5,000 last month after
a drop of 13,000 in September.
"Any decline in employment is a bad sign in an economy with
a normal upward trend in employment," panel chairman Robert
Hall told Reuters.
While most economists believe the recession drew to a close
sometime near the end of last year, the panel has said it would
make no decision on whether it had ended until it concluded
that any possible subsequent downturn would mark a separate
recession and not a continuation of the past one.
In its latest memo, the panel also noted that real personal
income had generally grown over the last year, falling slightly
in July and rising a bit in August.
Concerns over a renewed bout of economic weakness have led
to an expectation in financial markets that the Federal Reserve
would lower short-term interest rates a notch on Wednesday to
try to give the economy a boost.

BREAKING NEW GROUND
Hall, a professor at Stanford University, said the panel's
work has been made more difficult by the apparent strength in
U.S. productivity, or output per worker. As productivity rises,
businesses can increase production without hiring new workers.
"Our approach to deciding between one and two recessions is
based primarily on the principle that it is two recessions if
activity surpassed its previous peak between the two
contractions and one recession if not," Hall said.
"We have not developed a position, however, on how to
define activity in an economy where output is growing relative
to employment thanks to high productivity growth," he added.
"This situation is unprecedented, so the committee will
have to enter new territory," he said.




Post  44691  by  jeffbas       OT: I wouldn't get too excited yet. The Republican


Post  44692  by  lkorrow       Reply
Decomposed, that's beyond words, alright.

And the (Fed) drum roll begins. . . .




Post  44693  by  Czechsinthemail       Reply
The market's bad breadth

By Mark Hulbert, CBS.MarketWatch.com
Last Update: 12:03 AM ET Nov. 6, 2002

ANNANDALE, Va. (CBS.MW) -- Here's another entry for Ripley's Believe It Or Not: Even though the stock market in October turned in one of its strongest performances in years, the NYSE's Advance/Decline line actually declined for the month.

This suggests that the strong rally off the Oct. 9 lows was concentrated in a relatively few stocks.

The A/D line is calculated by adding to the previous day's level the number of the next day's advancing issues and subtracting the number that declined. It therefore measures the breadth of the market's movements. The rallies that are based most broadly are those that are accompanied by a strongly rising A/D line.

This was not the case for the rally off the Oct. 9 stock market low. As of that low, the A/D line for stocks trading on the NYSE stood more than 6,200 units below where it was at the end of September. The rally that subsequently ensued made up only some of this deficit: As of the end of October, the NYSE A/D line still stood 781 units below where it was a month earlier.

Though many advisers have noticed other ways in which the market's rally has been weak, few have focused on the NYSE A/D line's net decline during October.

One newsletter editor who has noticed is Gerald Appel, of Systems & Forecasts. And though his timing models officially are bullish, Appel concedes that factors such as the weak A/D data are causing him to have his doubts. As a result, he says, he has started to take some profits in some of his managed accounts.

Divergences between the market indices and the A/D line are created in part because those indices do not reflect the performance of the average stock.

On the contrary, a relatively small number of larger-cap stocks dominate most of the major market benchmarks. When those stocks perform poorly, as they did during much of this bear market, those averages paint too gloomy a picture. But when those stocks perform well, as they did during October, the market averages will paint too rosy a picture.

The large-cap dominance of the October rally is well illustrated by the various stock indices calculated by Frank Russell & Company. In contrast to the Dow's 10.6 percent gain during October, for example, the Russell 2000 index -- representing 2,000 small and mid-cap companies -- gained just 3.2 percent.

Producing more than twice as good an October return -- 7.4 percent, to be exact -- was the Russell 1000 index, which consists of the 1,000 publicly traded U.S. companies with the largest market caps. And better still was the return of the Russell Top 200 Index, which represents the 200 largest-cap companies.

It gained 9.4 percent during October -- or nearly three times more than the Russell 2000 index.

A similar story is told in the Nasdaq market. Most over-the-counter stocks in October gained only a small fraction of the 13.5 percent by which the Nasdaq Composite rose. That index was able to gain that much only because it is dominated by a small number of large-cap stocks that did well during October, such as Microsoft, Intel and Cisco.

None of this is to suggest that the rally can't continue, or that the rally couldn't blossom into something much more broadly based. But in the meantime it's important for you to be aware of the true underlying state of the market. And at least so far this market's rally has been produced by a relatively small number of stocks.

http://cbs.marketwatch.com/news/story.asp?guid=%7BCF89D372%2D08DF%2D47CC%2D8E07%2DB17E7CF5FC24%7D&siteid=mktw




Post  44694  by  lkorrow       Reply
Dow swinging up fast on 50 bp drop.



Post  44695  by  wilful       Reply
Fed drops rate a half point. eom



Post  44696  by  pmcw       Reply
For immediate release

The Federal Open Market Committee decided today to lower its target for the federal funds rate by 50 basis points to 1 1/4 percent. In a related action, the Board of Governors approved a 50 basis point reduction in the discount rate to 3/4 percent.

The Committee continues to believe that an accommodative stance of monetary policy, coupled with still-robust underlying growth in productivity, is providing important ongoing support to economic activity. However, incoming economic data have tended to confirm that greater uncertainty, in part attributable to heightened geopolitical risks, is currently inhibiting spending, production, and employment. Inflation and inflation expectations remain well contained.

In these circumstances, the Committee believes that today's additional monetary easing should prove helpful as the economy works its way through this current soft spot. With this action, the Committee believes that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are balanced with respect to the prospects for both goals in the foreseeable future.

Voting for the FOMC monetary policy action were Alan Greenspan, Chairman; William J. McDonough, Vice Chairman; Ben S. Bernanke, Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jerry L. Jordan; Donald L. Kohn, Robert D. McTeer, Jr.; Mark W. Olson; Anthony M. Santomero, and Gary H. Stern.

In taking the discount rate action, the Federal Reserve Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Dallas and New York.







Post  44697  by  Decomposed       Reply
Federal Reserve Cuts Interest Rates -Point




Post  44698  by  maniati       Reply
1/2 point cut. Here's the Fed's statement....

http://www.federalreserve.gov/boarddocs/press/monetary/2002/20021106/default.htm

For immediate release

The Federal Open Market Committee decided today to lower its target for the federal funds rate by 50 basis points to 1 1/4 percent. In a related action, the Board of Governors approved a 50 basis point reduction in the discount rate to 3/4 percent.

The Committee continues to believe that an accommodative stance of monetary policy, coupled with still-robust underlying growth in productivity, is providing important ongoing support to economic activity. However, incoming economic data have tended to confirm that greater uncertainty, in part attributable to heightened geopolitical risks, is currently inhibiting spending, production, and employment. Inflation and inflation expectations remain well contained.

In these circumstances, the Committee believes that today's additional monetary easing should prove helpful as the economy works its way through this current soft spot. With this action, the Committee believes that, against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are balanced with respect to the prospects for both goals in the foreseeable future.

Voting for the FOMC monetary policy action were Alan Greenspan, Chairman; William J. McDonough, Vice Chairman; Ben S. Bernanke, Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jerry L. Jordan; Donald L. Kohn, Robert D. McTeer, Jr.; Mark W. Olson; Anthony M. Santomero, and Gary H. Stern.

In taking the discount rate action, the Federal Reserve Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Dallas and New York.




Post  44699  by  maniati       OT: Decomp, pmcw: Pretty funny. :-)


Post  44700  by  TheNewGuyInTown       Reply
How will Fed-cut affect mortgage rates ??

Will this be a good thing or bad in terms of mortgage rates

Thanks




Post  44701  by  tinljhtkh       Reply
And now

there are but five bullets left in Sir Alan's gun! And we have a war yet to fight!

Regards,

Tin




Post  44702  by  lkorrow       Reply
Traders say "geopolitical risk" dampens rally . . .

Looks like the excitement of the day is slowing Lycos servers and thus all the duplicate posts. Clicking refresh helps.


Post  44703  by  pacemakernj       OT: Holy Cow! I am telling you with the R's in cha


Post  44704  by  tinljhtkh       Reply
The ghost of November 6th!

http://money.cnn.com/2001/11/06/economy/fed/

Regards,

Tin




Post  44705  by  Warstud       Reply
The Economy is in trouble..

I smell Deflation!!




Post  44706  by  lkorrow       Reply
Pace, watch your cash, the economy hasn't turned around overnight. This may not be the high, but it's not the low. A good start, though, a positive step!


Post  44707  by  wilful       OT: Pace - Recall late last nite - someone advised


Post  44708  by  lkorrow       Reply
New guy, Depends on whether they pass the savings through and drop mortgage rates. pmcw said this could help the banks absorb bad debt, something I hadn't thought of. Refinancing has also dried up. The banks might just sit on it. Still a benefit for them.

p. s. heard commercial RE market is slumping big time




Post  44709  by  pmcw       Reply
lk, You're exactly right - there's a new wild card (war) in the deck. However, I think we'll soon see the market get "used" to it. The message with the cut was much as I expected - not pointing strongly to any new weakness. However, I would have strongly preferred a quarter point cut.

I got my fall rally already in October. That leaves me somewhat concerned as to what might be left to serve this month (before Thanksgiving). I sold a ton of calls into the surge and made some fortunate trades. I fully expect to buy back some of the calls and shares I sold at lower prices before Christmas.

I think the real news of the day could be after the close with CSCO. If they have positive guidance it will do more for the market, at least short term, than many might imagine. Regards, pmcw




Post  44710  by  wilful       Reply
TNGIT - Usually, the mortgage rates follow

the direction of the fed rates,, but not immediately. This should be a "good thing" in terms of mortgage rates.

W.




Post  44711  by  lkorrow       Reply
Tin, It's not over 'til it's over . . .

"Critics of the House package say it focuses too much on giving money to corporations, which probably won't step up production until they know people will buy their products. Critics say it doesn't do enough to encourage consumers, who fuel two-thirds of the U.S. economy, to spend. . . .

In the end, only consumer spending, however it is spurred, can stop a recession, and consumers still face a great deal of uncertainty in the continuing war on terrorism and job security."





Post  44712  by  lkorrow       Reply
pmcw, think you're right about CSCO, they have come to represent the mood of tech. and investors. I would think they'll turn in a decent quarter. Not sure when the Pension issues are expected to hit companies, maybe 4Q?

Also heard there will be tax loss selling with a twist, setting up future writeoffs to use against gains as the market recovers. Guess that's a good sign, in that investor sentiment might be improving. Does not necessarily mean the economy will deliver on the hopes, however. Hope it does, but it is a wildcard that you, et. al., have described out here.




Post  44713  by  lkorrow       Reply
Dollar took a drop straight down. Gold hasn't come accross, though.

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=i&w=15&t=f&a=12




Post  44714  by  pacemakernj       Reply
Wilful, you bet I did. There is no way this economy goes in the tank. BUY NOW we're going to 9500 on the DJIA and 1650-1700 on the NAZ. I can't tell you how many positives I see with the R's in charge. People are too stunned right now. There has been too much news to absorb at once. But when it does we'll take off. Count on it! Pace.



Post  44715  by  pacemakernj       Reply
Roof, where are you? What did I tell you. The Fed had a choice to either protect the dollar or lift the economy. Well we got the answer today. It's the economy. Did I not say that all central bankers will choose inflation over deflation/depression. Well we are getting that answer. I am now an unabashed bull. There is so much stimulus being built into the market this economy will come roaring back. You watch by the New Year. Corporate America will start to spend. I am really pumped. Pace.



Post  44716  by  pacemakernj       Reply
Linda, be patient gold will come around. We will break the $330 mark soon. Pace.



Post  44717  by  jbennett53       Reply
pacemaker, I can't see companies increasing spending when faced with news articles like this. IMO we have more down than up in the near term especially with the ridiculous move by the FED today. One thing you are right about is it will be a climate like this when we hit bottom and begin a new secular BULL.

http://biz.yahoo.com/rb/021106/economy_consumers_debt_5.html

Rate Cut No Balm for Debt-Laden Consumers
Wednesday November 6, 2:55 pm ET
By Dena Aubin

NEW YORK (Reuters) - For all too many Americans struggling to dig out from debt, Wednesday's surprisingly big cut in interest rates by the Federal Reserve may help very little, experts say.
Personal bankruptcy rates are rising, job growth has stalled and consumer debt is at an all-time high. So it's unclear -- even after the Fed cut rates by an aggressive one-half percentage point -- whether the tapped-out consumers can do much more to keep the economy humming.

"More and more Americans are living life styles they can't afford using borrowed money," said Steve Rhode, president of Myvesta, a financial crisis center in Rockville, Maryland. "It's not just credit cards -- it's homes too big for them to afford, cars too big for them to afford."

Said G. Ray Warner, resident scholar at the American Bankruptcy Institute, "We may actually be hitting the point where the average American consumer doesn't want to acquire more credit regardless of rates."

Consumers have powered two-thirds of U.S. economic growth in recent quarters, and much of that spending has relied on borrowed money. Eleven interest rate cuts by the Fed last year kept consumer spending robust, but that came at a troubling cost.

Credit quality has slumped, for one thing, so rates on credit cards and other loans may remain high, despite the Fed's decision to cut short-term rates to 1.25 percent from four-decade lows of 1.75 percent.

U.S. consumers were on the hook for $1.73 trillion in credit card bills, auto loans and other loans excluding mortgages through the end of August, according to the Federal Reserve, up from $1.67 trillion at the end of last year and $1.56 trillion at the end of 2000.

A critical factor ahead is how many people lose their jobs as the U.S. economy recovers slowly and sluggishly. The Fed's action reflected clear concern that the recovery is losing steam. Take a job away from the thousands of over-extended consumers and you have a recipe for rising credit defaults and personal bankruptcies.

"A rise by unemployment above the most recent peak of 6 percent in April 2002 to 6.5 percent would be a warning sign," said John Lonski, chief economist for rating agency Moody's Investors Service.

CREDIT HOUSE OF CARDS

Debt loads, as a percentage of disposable income, hit 14.39 percent at the end of last year, at least a two-decade high, the Federal Reserve reported. Personal bankruptcies rose by 8.6 percent to a record 1.47 million for the 12-month period ending June 30, according to the Administrative Office of the U.S. Courts.

Slumping credit quality has not yet sparked a broad consumer credit crunch or exerted a significant drag on growth, economists say. Yet some worry that if layoffs increase, more consumers will run into trouble paying bills, and a deeper cutback in spending will result.

The latest dive in consumer sentiment, which in October plunged to its lowest reading since 1993, suggests that debt repayment has become more burdensome, some economists believe.

A cut in interest rates could give a lift to consumer sentiment, and it will trim some borrowing costs, consumer experts say. About one-half of credit card loans are tied to variable rates, and those will fall slightly, according to the Consumer Federation of America.

"But credit card companies can turn around and increase the formula they use to calculate that rate," said Stephen Brobeck, the Consumer Federation's executive director.

HIGH-RISK DEBT SWELLS

Despite a 4.75 percent reduction in short-term rates by the Fed last year, rates on bank credit cards fell by just 1.35 percent on average, according the Consumer Federation.

According to Sara Johnson, managing director for economic forecasting firm Global Insight: "The problem is accumulated past debt, much of which is at rates that will not respond to the cut."

Another problem is growing risk on outstanding debt.

"One of the big determining factors for the rates you're charged is the risk pool you're in," said Myvesta's Rhode. "If the credit card company has labeled you as less than a prime, prime credit risk, then interest rates are probably not going to go down much at all."

Many credit card contracts also have floors on interest rates, and those were hit some time ago, said Warner of the American Bankruptcy Institute.

During the boom years of the late 1990s, companies showered consumers with easy credit, and many lent money to riskier customers, said Johnson of Global Insight.

"There was tremendous growth in lending to high-risk households," she said. "Now that we've come through a period of recession, we're seeing more defaults and delinquencies as a result of job losses."

Yet there are signs that consumers are ready to break their debt habit as they face a sluggish recovery and stagnant job market. In a recent survey by the Cambridge Consumer Credit Index, about 85 percent of consumers said they expected to trim debt over the next month, while only 15 percent said they expected to add.

A rate cut may not change that cautious view.

"It's doubtful that a rate cut will significantly diminish uncertainties regarding the outlook for consumer spending," said Lonski, the Moody's chief economist. "It by no means will assure a significantly stronger holiday shopping season."




Post  44718  by  pacemakernj       Reply
JB, that's what the rate cuts are for. For some time now I have been saying the dollar must weaken which will help the manufacturing sector. The rate cuts help that. Throw in some soon to be very big stimulus and believe me in 12 months people will start talking about inflation. Keep an eye on industrials that will tell the story. If things like paper, chemicals, commodities start to move in the next 6 months that will confirm we are coming out of the funk we are in. Regards, Pace.



Post  44719  by  pmcw       Reply
pace, I think I know where thestreet.com gets its few good ideas. They just released an article "Hanging on the Third Leg of the Trifecta". ;o) Regards, pmcw



Post  44720  by  pmcw       Reply

Cisco Systems Reports First Quarter Earnings
Wednesday November 6, 4:08 pm ET

SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 6, 2002--Cisco Systems (Nasdaq:CSCO - News)
Q1 Revenues: $4.8 Billion
Q1 Operating Cash Flow: $1.1 Billion
Q1 Earnings Per Share: $0.08 GAAP; $0.14 Pro Forma

First call was $0.13 and $4.8B. Let's see how the conference call unfolds.

Regards, pmcw





Post  44721  by  pacemakernj       Reply
Are there any believer's out there yet? Now this Cisco news. I am telling you when people wake up tomarrow they'll be buying. Regards, Pace.



Post  44722  by  Decomposed       Reply
Pace,

I bought more XICO at $3.00 right after the rate cut was announced, then lost a bundle as it fell to $2.90 over the next five minutes. So I left in disgust and ate lunch.

Now, at day's end, I'm happy to see that XICO is back to my buy point. Not exactly the behavior I'd expected.

It makes SENSE for the market to advance tomorrow. But, on the other hand, the Street's already had time to digest everything except the Cisco news. Normally, once the anticipated news is out, it's time to sell.

Am I a believer? Nope. Just a hoper. And if I don't like the way things look in a day or two, I'll be a seller.





Post  44723  by  wilful       Reply
Two economist's opinions:

[ Economist: Fed move makes sense by Julie Rannazzisi
"The Fed believes it has done enough. This move makes total sense. I have commented many times in the past that if you are going to move 25 basis points, you might as do something meaningful and move 50 basis points. The Fed did that," said Joel Naroff, chief economist at Naroff Economic Advisors. ]

[Fed cut pointless; time for Congress to act: economist by Rex Nutting
The Fed's 50 basis point rate cut won't accomplish much beyond soothing frightened investors for a few days, said Richard Yamarone, economist at Argus Research. "Further accommodation has to come from the fiscal side," he said. Congress should "wake up" and accelerate tax cuts or provide investment tax credits, Yamarone said.]

All the way from "making total sense" to "pointless".

Well, who sez they have to agree anyway?

:-)

W.






Post  44724  by  uponroof       Reply
pace...Bear correction
is what is going on here.

But what the heck do I know!

As good as it gets, at this point in time, is simply a bear correction....NOT A NEW BULL MARKET. That said, I expected a much better jump on the rate news, especially on the heels of the reps political successes. That weak bounce is telling us something.

Market action the last few months has generated out of increased chart reading. Fundamentals, like your trifecta, will have to fight back to the fore of committed investors consideration.

The dollar dropped today and there are those who still see this cut as a panic move....I am one of them. While trying to interpret what others may think in their simple minds we assume we are wiser then they. IMHO there are very few naive investors left out there after such a thorough raping of the masses.

What will Bush do?

Bush will now confidently attack this slumping economy. But...Lindsay will be the next to submit his resignation. That will send more mixed signals about the economy. NAPM, those abused stepchildren of our society, will be satisfied, or at least considered strongly, within the new economic advisory team. That means the dollar will continue to correct, and more mixed economic signals. What will the investor do?

All in all, IMHO, it's a traders market for another 6 months minimum. Oh and let's not forget this coming rally is a very good launch point for the Iraq invasion. In other words, up up up for a few days/weeks and then be prepared for anything.

BTW-What the heck do I know! I will be watching Russell and a few others in the coming days, and post their thoughts when necessary.

Good Luck

Cheers





Post  44725  by  lkorrow       Reply
Pace, didn't have long to wait. Gold except KRY and GDI caught up with the dollar action after all, posting nice gains. AU did nicely up 3.6% and NEM posted a small gain, up .5%. NEM, I presume, should tale off after earnings. Not too sure on how de-hedging expenses might factor into that, though, if at all.

Wouldn't gold breaking $330 put a few banks under? Sounds like all he11 will break lose with Chase's derivative position?

Read your posts to wiful and roof. You're probably right, tend to forget the market is a leading indicator. Good luck, knock em dead, but watch out for Iraq news.




Post  44726  by  pmcw       Reply
CSCO guidance is top line flat to down 4% ($4.8 to $4.6). Pro forma EPS wasn't forecasted, but comments about lower operating costs, improved productivity and higher GP lead me to guess flat at $0.14 to maybe as low at $0.13. Current estimates are top line up $100B at $4.9B and profits at $0.13.

General comments lead the audience to understand that customers are less clear about guidance and CSCO is therefore being more conservative than they were entering the quarter that just closed.

One sign I always look for is the percentage of the analysts that start their question with a compliment on the conference call (quarter's performance). So far the answer is easy - 0%!

Ahh, the analysts finally got them to comment on B:B - it is down and noticeably below 1:1. However, October showed some pick-up. Latin America is down considerably (now 4% of business versus 6% two quarters ago) as is Germany. They expect the US to initiate a recovery (when it happens) - first in commercial sectors and last in the service provider space. Personally, I feel certain changes in FCC regulation could accelerate the service provider sector. State governments are in particular trouble (remember my post this week on that subject). Federal government (US and ROW) is strong and expected to increase (I think this is a sure thing with the R's in charge). Security products are growing at sequential double digit rates. CSCO is pushing security software features towards their core products (switches, routers, etc.).

As a side note for ALTR and XLNX shareholders - CSCO echoed their long term trend to migrate towards ASIC's and away from programmable logic. Sure, there is some movement, but don't think for a moment that they will abandon programmable solutions.

Personally, I feel optimism could easily pick up during this quarter. My bet is that spending will start to pick up or at least visibility will become better (improved upward) during the quarter. On balance, the short term is not forecasted clearly, but the long term strategy (marketing and operations) is very solid. Due to this I will look to enrich my position in December, if there is a sell off (maybe December), at $11 or less.

Regards, pmcw




Post  44727  by  lkorrow       Reply
Pace, what kind of stimulus?



Post  44728  by  jeffbas       Reply
lkorrow, "setting up future [tax] writeoffs" can be super-stupid depending on your state's tax laws. For example, a state like NJ has an income tax based on gross positive sources of income only (with minor deductions) and does not follow the Federal approach. Thus, if you take $100,000 of capital losses this year and $100,000 of gains next year, you will pay a net of zero on your Federal (because of the carryover feature) and pay over 6% to NJ on the gain next year.

Of course, investment decisions should never be driven by taxes - but most folks are dealing with stocks worth pennies. The only thing I am wondering about is if it is worthwhile to end up with $10,000 of losses, as we might see a retroactive law increasing the amount for 2002.




Post  44729  by  pacemakernj       Reply
Linda, more tax cuts coming in '03. More government spending plus the fed goosing M1 back up to double digit growth. Part of my reason why I still think we'll need another 25bp cut is we need to get a negative real rate. That will do the trick, imho. You get rates below the inflation rate which is what I believe is required and you'll see this economy fly. JMO, Pace.

Post  44730  by  pacemakernj       OT: Linda, that attack on Iraq will be good news n


Post  44731  by  pacemakernj       Reply
Decomp, I would agree with that. Pace. eom



Post  44732  by  pacemakernj       Reply
Roof, I agree. But you can make a lot of money in these bear market rallies and that is all I am saying. I'd be careful though, cap ex spending could be making a comeback just as the consumer is going in the tank. That would be very good news. Check out the action in the telco area. Stocks are flying. We could be onto something here. The 50 bp easing was a good step. The fed will cut 25bp in Dec and call it a day. JMO. Pace.

Post  44733  by  pacemakernj       OT: PMCW, if you're play the ponies and I have fro


Post  44734  by  oldCADuser       Reply
Thanks,...

"OCU: Nice call on Pitt! eom"

...although I really expected him to wait until today (Wednesday), but then as one person put it yesterday, "it will be buried under all the election news".

BTW, the hotel I was at last night did not have any high-speed internet connection and I was not about to try and keep up with all of this on a dial-up line (note that I'm back at the Admiral's Club at O'Hare waiting for my flight to SoCal).

As for the election, I have to congratulate all of you would who supported, AND THEN BACKED UP THAT SUPPORT WITH A VOTE, your winning candidates. While most of mine lost :-( they did get my vote, so I guess I did my part in preserving what makes America great, and ANY day you can do that CAN'T be considered a bad day.

OCU





Post  44735  by  wilful       Reply
jeff - RE your example of capital gains

versus capital losses - I don't think that is how it works, on the federal level (IRS) anyway. I think you are limited to an annual deduction, carried from Sched D to the front page of 1040 - of $3000 - with the remainder of the loss to be carried forward to the next year or years, with a max write-off of just 3000 each year. Am I wrong?

W.




Post  44736  by  jbennett53       Reply
pacemaker, The attack on Iraq is pure madness, nothing good will come from it. I sincerely hope you do not have small children. You may find yourself looking into your own eyes full of horror with nothing to say and wondering if a bullet would be best.



Post  44737  by  lkorrow       Reply
Thanks Jeff, I'd put more emphasis on Federal over State, since Federal taxes are higher, but I hear you. I'm hoping for the $10K loss provision this year. I suspect it would be in the plan to help get sentiment back on track.



Post  44738  by  lkorrow       Reply
Pace, I hope you're right! I can't see a good 4Q, but there's potential in '03.



Post  44739  by  lkorrow       Reply
Pace, I wasn't watching, but understand before and during the Gulf War, the markets tanked, then rallied after it was evident it was in the bag. This one could follow the same track, if we're forced into it. I heard something about the U. N. coming across with something, but didn't catch it. Maybe it will prove a non-issue. Still don't think 4Q will be all that good, most companies run out of budget by then. But I have a feeling there's a plan in play to put us back on track. There's a lot of institutional money that can be put to work when the time is right. I'm thinking we'll see one more leg down, then a nice recovery next year. At least that's what I'm hoping! If gold knocks out Chase, it seems like all bets are off.




Post  44740  by  weevil       Reply
To the Table...Please read...As one of the largest lurkers on this thread who very seldom can add anything of value to the the conversations, allow me the opportunity to shed some light. First,I am of a very lower middle class family (educators). Second, lost 80% of my future retirement at 40 years of age. With that said, I have been slowly rebuilding my portfolio with my own DD and pmcw and others. Today was the first day that I finally see some glimmer of hope in my future finances.

The point that I'm trying to add to the conversation is this: I have been saving, scrimping and have had my family on a tight budget for 2 years now. I am absolutely about ready to explode trying to keep from going 100% long.

Now, if I am considered the every day Joe Blow making a decent living through education and I'm starting to get in the mood to reinvest, where does that put the other 200 million people?

I'm thinking Pace is on to something on the bull market. I still say we'll have some dips but from one average American I think we have hit bottom and are on the way back. Just remember, when us small guys come back into our Roths, IRA's, etc, and begin day trading again, the market's gonna scream! Even us poor folks keep a lot of money under our mattresses.

I think we're too close to a serious bull market to try and play out the next few dips and then buy.
Summary: I live in an extremely poverty stricken area of the country and I definitely, positively, am seeing some sunshine. Even if the markets stay flat, John Q. Public is still putting $100 bills under his mattress to invest SOON. Thanks for listening. I hope to have helped someone on their decision making in the next month or two.




Post  44741  by  lkorrow       Reply
weevil, you'll probably hear from others, buy my opinion is wait until after 4Q earnings, you have too much too lose. Someone correct me if I'm wrong, but my understanding is the vast majority of 401K people let it ride and continued to contribute. I don't know if that's the case since June or so, perhaps more bailed. There is a great deal of institutional money on the sidelines. When and if it comes back into play is an open question. If you've been listening to pmcw, he's saying we're on a razor blade and can be torn to shreads! Best wishes, Linda



Post  44742  by  pmcw       Reply
wee, Thanks for the kind mention and for dedicating your life to teaching. I can't think of a more honorable profession. If you don't mind me asking, what do you teach?

To give specific advice is a very personal matter. In other words, there is a significant amount of personal data to consider. Even if it was available, I don't feel it can be communicated properly without looking someone in the eye and trying to understand the sorts of risks they can handle. Most of the people I know would like financial comfort much more than they would wealth. Believe it or not, they are typically two very different things.

I realize you aren't asking for a personal financial plan, but I get pretty nervous when making suggestions to those considering making a wholesale change in their allocations. This is particularly true when losses have the potential to alter the style and comfort they enjoy for the balance of their life.

Disclaimers aside, I posted on 10/1 that I thought many stocks would see their lows for the foreseeable future during October. I still think that was a fairly good assessment and will quite likely be proven as a good prediction. However, the fed doesn't cut the discount rate by a half a point when they see everything as hunky-dory and the war wild card is still in the deck. In other words, there is still considerable risk in the air even though all the ingrediants are in place for a successful recovery.

About the best advise I can give anyone comes in two pieces.

1) Clearly define your goals (quantify them) in a way you can easily explain them to a loved one. Don't box yourself in; define a minimum acceptable goal, a mid-range goal and one that provides for a few more dreams. Making the most you can is a non-goal and will nearly always lead to trouble. Once you have your goals, build a realistic strategy (not banking on market beating returns) that is likely to support at least your minimum acceptable goal. The big difference between how you attack the different goals will have to do with a little luck in the market, acceptance of risk and how much you plan to tuck away each month for investments.

2) Please don't try to catch the bottoms and put everything in at once. This will not only make you a nervous wreck and detract from other parts of your life, it can also lead you to making emotional decisions which are most often mistakes. Consider a plan that will alter your allocations over time and place a reasonable amount each month to work. Since it sounds as though you have a heavy cash allocation right now, you might want to front end load the plan - I think there will be some nice dips during December, but I don't suggest getting in a hurry. All too often, emotions make us want to buy as the market goes up and sell after it's gone down.

I hope you don't think I'm trying to be a "teacher", I just wanted to share what I would tell any friend who asked the same question. I hope some of the other regulars put in their two cents and, who knows, you might get a dime's worth of advice. ;o)

Best of Luck, pmcw




Post  44743  by  pmcw       Reply
OCU, You may not have hit it on the screws, but it was certainly straight down the middle of the fairway. Very good call.

I couldn't believe the turnout in KS. It was great. My friend who was running for Lt. Governor didn't make it (still got 47%) and we got a real dolt for Governor, but outside my state I was very happy. I really got partisan this year for the first time in my life. However, I want to give Bush a chance to get his policies through. I've never prayed harder for a man I don't even know to make good decisions. If he doesn't, he will be gone and the control of both houses will likely switch in two years. And, at our age, two years passes pretty quickly. ;o)

Oh, I almost forgot. You should look back at my first or second post today. It's an article from Jerry Heaster. He comes up with a good one each week, but I only share those I think are particularly special. This one is a "clip and save".

Regards, pmcw




Post  44744  by  weevil       Reply
pmcw & Ik....what I'm trying to say is I'm coming down on the bull side of the fence. Matter Of fact if I took my hat off you would see 3 feet of horns. I have hit bottom and I am on the way back. The future looks a lot brighter from down here. My family will soon be back into the spending mode. New cars, computer, teenage boy who is coming into the Romeo stage and ....well we are tired of being being bearish time to start spending and thats what the country needs. LOL



Post  44745  by  Arkural       Reply
weevil-From the age bracket you lead others to interpret, my opinion is, odds are that you're likely to have plenty of time to make hay while the sun shines in the mkt, if it does shine, for an extended period of time. Currently, I'd bet this is not a long term (several yrs) bull mkt run, Imo. Instead, I'd lean towards, the mkt is in a bearish cycle until ample numerical/mkt data spells it out in a clear comprehensible manner that a so-called new bull mkt is in charge. Historically long term bear mkts are known for slamming the spike and slamming the dunk, hence, generally speaking many (emotional biased) buyers (moths) attracted to the hype (fire), if not careful, are left with, well something less than what they had prior to their pursuit.
However this does not mean that a 'mini-bull' may not have legs for several months.
Blind investing, as in, the go-go late 90's is passe' until further notice from the spin, meaning, one has to watch the ducks with at least one eye.
Being on an 'extended' edge can have its victories when tenacity/integrity (etc) out lives or surmounts the (challenging) elements of what is actually causing the 'edge'. In other words there is something to be said for, mind over matter......................................besides, , , I don't mind and it don't matter!

From where I sit, I see little that belittles true (good intentions) education, in any way!




Post  44746  by  pmcw       Reply
wil, It's currently $3K in excess of capital gains. There is no limit on the carry forward or time to write it all off. I think what Jeff was mentioning was the special stepped up write-off that was proposed for this year. However, like he said, states are strange animals and many need money so I don't see them offering any specials. Regards, pmcw



Post  44747  by  pmcw       Reply
wee, It's good to see you smile. Regards, pmcw



Post  44748  by  weevil       Reply
Ark...Oh yea, I have plenty of time to come back and make hay....no "old lady stocks" for me. Whoops wait a minute...I am putting monthly deposits in WOGSX which in the 90's I never never never have done, stocks only for me. Well, the last few years I have had the opportunity to get a h3ll of an education, very costly I might add, now if we are going into the next bull run, it remains to be seen if I learned anything....but as a pupil of this investment junk.... I AM READY TO BE TESTED! LOL



Post  44749  by  Arkural       Reply
weevil-Rrrroger that. All one can do is the best they can, at the moment they are doing it, that is, if they are inclined, that-a-wayyyy.

Cost, like many things, is relative.

Imagine, one day far off in the distance in a place not like this earth, you might thank your-(conscious)-self for some of your own decisions. :-)

Cheers!






Post  44750  by  lkorrow       Reply
weevil, I admire your hard work and patriotic intentions. And I hope the market's in step with your plans! I would still set stops. :-)



Post  44751  by  weevil       Reply
Ik....yep 50% of my 80% loss was due to my slow pace at comprehending the concept..."never play naked in the jungle of NASDQ". The other 50% loss had something to do with the lesson that dealt with falling knives,poor catching and blood everywhere. I'm pretty sure I have both of those concepts down pat now. LOL




Post  44752  by  jeffbas       Reply
wilful, you are right, but what I said was correct. If you take $100,000 losses in year 1 you writeoff $3,000 and carry over $97,000. Then when you make $100,000 in year 2 you pay tax on $3,000. As I said, "You will pay a net of zero on your Federal (because of the carryover feature)" - aside from any difference in your marginal rate between the two years. It is far from zero with respect to how the state tax works in NJ (where there is no deduction of losses and no carryover), which is why I said you need to understand your state tax rules before taking more than the maximum Federal amount you can deduct ($3,000 for now).



Post  44753  by  jeffbas       Reply
lkorrow, I must not have made myself clear. It is not a matter of emphasizing Federal over State because of rate differences. It is an issue of unnecessarily costing yourself money in the future by taking more than the max Federal loss amount, if you live in a state with rules like NJ.



Post  44754  by  jeffbas       Reply
lkorrow, I am curious as to why you "would still set stops". You don't buy companies you know well enough or like well enough to be delighted to buy more of if they were to be cut in half? Or are you just a trader and not an investor? If I had bought IBM recently at $55, I would have been delighted if it had dropped to $28, where I could have doubled my $$$ investment and tripled my shares.

Post  44755  by  optimistic4dollars       OT: maniati: Great TAX Software
Post  44756  by  optimistic4dollars       OT: Decomposed! Need your help