|A compilation of this board's financial/economic posts From 44825 to 44892
Post 44825 by lkorrow Reply
Roof, Decomp, they sound like a bunch of bandits. Seems like PDG/VVV wasn't treated fairly. Begs these questions, amongst others I'm sure:
Did VVV get its money back from PDG?
Was PDG empowered to even sell it to VVV?
Did PDG get paid off when VZ nationalized it?
Why did PDG want to sell in the first place?
When is the VZ court going to rule?
Will there be int'l pressure to reverse nationalization, which *seems* unethical?
Post 44826 by lkorrow Reply
Roof, Holy cow, it's just under 321 now . . .
OT: Table ON TOPIC SUMMARY Nov 7, 2002
Post 44828 by ttalknet2 Reply
Dollar cold; Euro on fire; Greenspan toothless
Pay no attention to the man behind the Fed Curtain.
The battle rages on. All charts are reaching extremes:
If there's one more bear market rally to come, will it be the last?
Will it be followed by the long-awaited real capitulation?
I think so myself, even though history says this is the best season
to go long.
uh, yeah, it's different this time, right? ;-)
Post 44829 by uponroof Reply
Russell On Gold and the Dollar
Dow Theory Letters
7 November, 2002
"...Dollar -- After hitting a closing high on Jan. 21 of 120.18, the Dollar Index plunged to a July 19 closing low of 105.03. A rally followed, which I termed a bearish "rising wedge" pattern. On October 29 the Dec. Dollar Index broke below its 50-day MA and over the last few days the Dec. Dollar Index broke below its September low. This leaves only one important level under the Dec. Dollar Index -- that low is the July 19 low of 105.03.
The 105.03 level is critical.
If the Dec. Dollar Index breaks below 105.03, I believe we could see another major leg down in the Dollar Index.
Gold and Silver -- The gold situation is quite interesting here. This morning Dec. gold opened up 2.50 moving to a high of 321.00. But surprise -- a few minutes later in came the sellers, and Dec. gold dropped back just below 320 again. It was almost too cute, too automatic, too predictable.
It's obvious that someone, some group, somebody, does NOT want gold above 320. Who the hell are they? Is it the Fed that wants to cover up its frantic attempts to reinflate. Is it the gold mining companies that are still hedged and therefore don't want gold to rise until they can get rid of the hedges? Is it the Commercials who are net short? Just who are they?
And does it matter? Look, I believe gold and gold shares are in the early accumulation phase of a bull market. The public doesn't want gold. The hedge funds aren't interested yet. The mutual funds don't have any gold shares and won't be interested in gold shares until gold hits the headlines.
So my position is to tell subscribers -- "Use this area to accumulate whatever gold and whatever gold shares you want to hold. Take this obvious gold manipulation as a chance to buy gold at what I consider "dirt cheap" levels.
What about silver? Punching in the gold/silver ratio chart on my computer, I see that gold outperformed silver from early January 2001 to October 10 of 2002. But since October 10 silver has actually outperformed gold.
I believe that as the bull market in gold continues and intensifies, silver will tend to go along with gold..."
uponroof- As I've said for sometime now, Russell is a recent convert to gold. He is not what I would consider a 'dyed in the wool gold bug'.....that's one big reason why I put so much stock in his words....Oh and let's not forget his track record in the broad market when it comes to calling major turns. As a reknown market analyst, with a hard earned 40 year network of subscribers, he is out a mile on this gold limb.
BTW- lots of talk this AM on CNBC wrt strong dollar politics. Previously this subject has been avoided or sidestepped for whatever reason. It seems the issue is now on the front burner which is good news for NAPM, the trade deficit, and perhaps gold.
Post 44830 by angus_mac01 Reply
RMEC~ 12.5 ….. up again
Its continuing on a major move up and is apparently the most traded stock on the OTC in the last few trading days. Can’t be covering at this point. Good news on the stock plus management buyback program.
They have brought on a New York banking firm according to the New York Times, but so far have only brought down the spread….Im looking for some short term news – funding announcement , etc.
Post 44831 by clo Reply
Good morning roof, CNBC Mark Haines wonders since Greenspan knows how the ECB behaves, (not lowering their interest rates) might Paul O'Neill change "Our" strong dollar policy?
The others on felt probably not as this would take a delicate balancing act to avoid panic...
More fodder to consider...
Enjoy your day ;)) clo
Post 44832 by pmcw Reply
The Semiconductor Industry Association (SIA) has trimmed its forecasts for global semiconductor sales in 2002 and 2003. It now expects sales to increase by 1.8% to US$141.0 billion in 2002 and 19.8% to US$168.9 billion in 2003. In June it had forecast 3.1% and 23.2% growth for the respective years. (Personally, I Still think they're on the high side. More on that later.)
Also today, AMD CEO said they will show 20% y/y growth in Q4. Big deal, most semi companies will show more.
TSMC thumbs its nose at Goldman Sachs and posts nearly a 20% sequential increase in October. Yesterday GS said the rumors of NVDA increasing their business at TSMC weren't true. Yea, right.
Post 44833 by pmcw Reply
tt, What do you suspect the Fed wanted the dollar to do in relation to other world currencies? What do you think the exchange rate was (euro and yen) in the spring of 2000? What do you think would have to happen for gold to sell for $3K per oz.? Regards, pmcw
PS: These (at least the last) are questions you might want to answer as well.
Post 44835 by pmcw Reply
Two pre-Thanksgiving events that have the power to move the stocks of companies upward that provide impressive presentations.
November 18-22 • Las Vegas, NV
Now in its 23rd year, Comdex returns to Las Vegas, NV in its usual week-prior-to-Thanksgiving slot. Along with miles of exhibit isles, Comdex's technology segments (designated exhibit-floor zones and educational programs) simplify your search for information on particular topics. This year's tech segments include information security, digital lifestyles, real-time enterprise, digital imaging and document management, Web services, networking, storage, eMobility and wireless, and IT services. Keynote speakers include Microsoft's Bill Gates, HP's Carly Fiorina, Sun Microsystem's Scott McNealy, AMD's Hector Ruiz, National Semiconductor's Brian Halla, Wolfram Research's Stephen Wolfram, and Fox Group's Peter Chernin (the first media executive to deliver a keynote speech at the conference).
November 18-22 • Boston, MA
ESC (EMbedded Systems Conference) offers almost 80 technical classes and tutorials comprising topics such as object-oriented design, programming, and real-time design. In addition, more than 100 vendors on the exhibit floor provide an opportunity to look into the latest embedded software and hardware products. Technologies at ESC include RTOSes, embedded Internet tools, SoCs, embedded controllers and microprocessors, emulators, simulators, DSPs, debuggers, compilers, system design tools, Embedded Java, networking tools, extreme programming (XP), Linux, Wireless, and security. Don't miss the keynote address by Nick Tredennick, well-known technologist, entrepreneur, and author, who will discuss Semiconductor Progress: Trends and Consequences
Post 44836 by Decomposed Reply
I'm seeing a lot of gloomy news in the pre-market this morning. With the exception of 7-11, everything looks bleak.
A little further, I found this:
[BORL] BORLAND SOFTWARE TO DISCLOSE EXEC STOCK DEALS IN 2 DAYS
I'm not sure how to take this news. Is it good, bad or neutral? Do any of you know whether it is unusual for a company to "Disclose Executive Stock Deals"? I doubt that Borland is under any pressure to disclose such deals, so I think there's a good chance that they're doing it to soothe shareholders.
Borland *is* a company with ethics. It's management is so Christian that it actually closes the company for two weeks every December. (Not that "Christian" and "ethical" are synonymous. That's for sure.) Have any of you ever heard of another company doing that??
Post 44837 by pmcw Reply
Decomp, Here in the midwest, many of my customers would close for two weeks starting before Christmas and ending after the new year. I encouraged employees to take at least a week of vacation during this time and used it to catch up.
I think it will be pretty common this year - not only in the US, but in the far east as well. This is why many semi houses are forecasting a flat Q4. They say it will essentially be shorted by two weeks.
It allows companies to control the vacation schedule for the bulk of earned vacation time, close during low productivity weeks (employees have their mind on the holidays, long department lunches, decorating, etc.). I see it as a win / win for companies and employees so long as one has enough vacation time to allocate during other times as they would like. Regards, pmcw
OT: pmcw what's your current take on STKR. You ha
Post 44839 by Decomposed Reply
On the Commodities Exchange division of the New York Mercantile Exchange, the December gold futures contract rose to a high of $323.30 an ounce, its highest level since Oct. 7. It traded lately at $322.60 an ounce, up $1.70.
Post 44840 by pmcw Reply
findit, You're exactly right - the very low volume makes it a very tough call. The technology they're developing has GREAT potential. It is significantly less costly for functions that are necessary in optical, but the question is one of demand.
I think there's money to be made trading STKR, but I also see them as having huge potential (coupled with very significant risk) in the longer term.
I expect telecom cap/ex will be focused in two areas in the coming year: System Maintenance and Metro
LU will likely do the best in the former and companies like NT and CSCO will do better in metro. The key area lacking in 2003 will be backbone. I believe CIEN is a strategic customer for STKR and they are primarily backbone. I don't know how they are doing with the metro folks, but feel they have the potential to do well there. Their products can significantly reduce the cost of DWDM implementation.
In the longer term, if they can stay healthy in the longer term, optics will continually move towards our desktops and if this happens quickly enough, STKR should be a rising star. Regards, pmcw
OT: The great irony is that now that we can clearl
OT: pmcw thanks much for your comments on STKR. I
Post 44843 by lkorrow Reply
Tin, The healthcare segment is getting crushed today, UNH is off over 8%. Trivia wise, Walter Mondale resigned from the UNH board to run for office.
Post 44844 by ttalknet2 Reply
pmcw, I suspect the Fed wanted the dollar to weaken as gradually as possible while euros and yen strengthen. Now the euro is near parity, but the yen still suffers.
I suspect the Fed also wanted to see a little price inflation via costlier (and fewer) imports, and to see some increased exports facilitated by a cheaper dollar. If this is indeed happening, someone else will have to speak up.
IF gold ever hits $3K per oz. I'll be shocked and surprized. In an environment that isn't way out of whack, I think selling would kick in at various rising prices and cap out around $1500. (Just a hunch.)
otoh, a rocketing gold price would indicate that the environment has become toxic. Many things could contribute, as presented below in no particular order of occurrence:
< Extreme terror event
< A war that goes badly
< Continued, rapid dollar deflation
< Economic deflation
< Deeply declining faith in dollars
< Oil producers suddenly demand payment in gold
< Mom & Pop discover gold again
< Bond market stalls and tops out
< Interest rates near zero
< A big bank(s) failure & rescue
Aside from all the bleak scenarios, some of which are pretty farout, one positive thing could boost gold while moving towards stability: Any major economy returns to some form of a gold standard, and that starts a new monetary trend worldwide. In our lifetimes? Ya never know!
Economic theory is often a mystery to me. The Austrian school seems to make the most sense, but it's not always easy to fathom.
Post 44845 by uponroof Reply
Hi clo....thanks for the greeting. It is beautiful here today. I took the daughter to school in my '69 440 six pack (vrooom! vroooooom!) and life is great.
Hope you've recovered from Tuesday. As I said, take heart. The dems get to play back seat driver with Bush much like the reps picked apart Clinton over those 8 years. Now don't misunderstand me, Clinton asked for everything he got and I don't think Bush is anything like Clinton. The point is, Bush has both houses and zero room for excuses. Most of what I've been reading alludes to hard times ahead for the repubs given the task at hand.
All sorts of talk these days with the mid terms now past. I saw Lindsay on CNBC yesterday deny resignation. Recall when Bush appointed him all were concerned he was not a typical Wall St insider. O'Neill, a manufacturer at heart (Alcoa CEO) is another outsider. Despite this disconnect they have catered to the paper kings in maintenance of the strong dollar these past few years.
Now we have changing dynamics in play as lower rates (vs. ECB) equates to a lower dollar (vs. euro). The din from NAPM is deafening as they turn up the lobbying efforts on their repub buddies. Who will win, and why oh why is it so critical to maintain dollar dominance?.....
The dollar is the world's reserve currency. Transistioning from the dollar to the euro would cause enormous upheaval (loss of value) in countless countries. It must be done gradually with minimal panic.
But wait...Fighting this transition is the world's second largest economy. Japan must utilize the strong dollar to weaken the yen, in order to maintain exporting markets vs. China. Japan also holds more dollar denominated bonds than any other country on the planet. A lower buck would hurt Japan big time.
The more you look at the big picture, from any angle, and it becomes apparent all strategy is leading back to Asia and specifically China...who just sat down at the free enterprise table last year, yet might shortly dictate global economic health.
The times they are a changin' all over again.
ot: Lkorrow, Mondale Trivia
Post 44847 by pmcw Reply
tt, Thank you for taking the time to express your thoughts.
I happen to think that we will see gold at somewhere near $3K/oz.
In about 2075, that is.
In a little over 70 years, the dollar should be worth about a dime in today's standards and gold will probably be worth pretty much what it is today (in 2002 dollars). There are 2000 years of American currency history to support this forecast. In other words, the value of gold is constant and all other things change.
On 12/31/1999, it took 0.993 euros to buy a dollar. On 9/11/2001, it took 1.12 euros to buy a dollar. Today, it takes 0.991 euros. Japan, on the other hand, just can't seem to get traction, but the yen is also losing importance (if it ever really had any) as a world currency.
Anything can happen in the short term and hold for a short time. However, the longer term is quite predictable unless there is a macro change in the geo-political boundries and it negatively effects the US. We've lived through gold bubbles just as we have equity bubbles and now a debt (non-performing asset) bubble. But, as we know, bubbles burst and the trend takes over. What seems like a long time for some is just a brief moment for others. If the worst comes to pass, a jug of water or a single round of ammunition will be much more valuable than a ounce of gold. This is yet another example that virtually all the time, the utility of use will rule value.
OT: Decomposed, Mondale. Ain't that somethin' :-)
OT: What about McGovern?
Post 44850 by pmcw Reply
The irony about Mondale, beyond your great triva post, is that he portrays himself as out for the little guy. However, his law firm and his campaigns were heavily financed by the grain cartel Cargill. Cargill open market practices have spelled doom for many little (family) farmers. Regards, pmcw
Post 44851 by pmcw Reply
Cargill, BTW, is the largest private company in America - over $50B in sales! Regards, pmcw
Post 44852 by lkorrow Reply
From Roger Bentley on Gold:
This is also one of the reasons for the constant rumors surrounding JP Morgan and their risk in the gold markets. As gold prices go up JP Morgan loses previous gains their "carry" trades. I will rehash carry trades again this Sunday but I don't feel like writing about here again.
The bottom line is that as the world continues to slow one of the results is an increasing migration into gold to protect assets from probable reduction in the value of all other paper assets.
And this is one of the very real concerns for gold carry traders.
If investors begin en masse to buy gold, not out of expectations of returns, but simply to protect their principal it will become a self fulfilling prophecy.
The best analogy I can think of is "a watched pot never boils".
Now we know this isn't true but it brings up a good point. People watch the pot because they are anxious to get the hot water. Their expectations are very high and it seems like it takes forever to get their desired return; boiling water.
BUT, if they aren't thinking about the water boiling and simply put it on the stove and then go do other things it seems like it boils in no time.
Their expectations are very low and because of this their perception is that they received their desired return much more quickly.
Patience is a virtue and can be rewarding as well.
In other words if investors start buying gold without regard for returns and simply to protect assets it is an indication of lowered investment return expectations by investors as well as lower risk expectations.
Gold becomes the best returning investment primarily as a byproduct of the fact that it is perceived to be the least risky not because investors are buying it with expectations of returns.
Perhaps a better analogy although a little less friendly is the rebound date. When you are with someone you love or care for and that person decides to leave you the next person you become involved with is typically referred as the rebound.
The rebound is the person you are left with by default not because you were attracted to them but because they were there.
It is a reactive event rather than a proactive event. The new person becomes the beneficiary of the previous person leaving.
Now, maybe you will fall in love with this new person and maybe not. Maybe once you get to know this new person you will say; huh? why did I not consider this person before?
The reason you didn't was because you were "in love" with someone else or at least thought you were; and that consumed your time disallowed the consideration of others.
There are plenty of people dating each other not because they are attracted to each other but because they believe that person is found to be acceptable to their "friends", attributable typically to men; or they have money, attributable typically to women.
However, no matter what the reason, that relationship in general precludes the "real" consideration of other relationships UNTIL that relationship fails.
Investors relationship with paper assets has failed.
Now, don't get me wrong, it will eventually come back. Investors are not going to flee form paper assets forever. But right now the sheen is off and investors are open to new possibilities and new markets and new relationships.
Some are still trying to "repair" their relationship with paper assets like it's a catholic marriage. To each his own.
Back to the basics:
Lowered investment return expectations across all asset classes by default increases the number of potential investors for those asset classes considered to be risk mitigation plays.
As the number of potential investors for this expands the number of investors actually shifting into risk mitigation investments increases. A portion of those will go into gold.
Gold, contrary to popular belief, is a tiny market in comparison to paper assets, i.e. stocks and bonds.
Even a marginal shift in investment expectations, both risk and reward, resulting in buyers into gold could drive gold prices up dramatically.
Now, here's the catch.
Gold prices increasing causes a push back phenomenon to make it difficult for prices to continue rising.
The two primary things that occur are known as gold carry trades and gold forward selling.
As gold prices rise investment banks rent gold from holders of gold and then sell the rented gold in the open market to capture the increase in its price. They then take the proceeds from the sale and buy US treasuries. They use the dividend paid on the US treasuries to pay the rent on the gold. And what is left over is gravy. Pretty slick huh?
Forward sellers are typically mines that forward sell their future production as a means of ensuring cash flow stability. This is very common. Farmers do this with agricultural crops as well.
Both gold carry trades and forward selling however increase as gold prices rise which acts as a counter against the gold prices going up too much.
BUT, if the buyers of gold ever come into the market at a faster pace than the gold carry trades can be affected or the forward sellers can promise supply the gold price could continue to rise.
If the gold price can sustain itself above and estimated $350 level for an extended period of time though the momentum begins to build in the opposite direction. In other words as gold carry trading and forward selling makes it very difficult for prices to get above $350; once this occurs theses forces actually reverse themselves and begin to force the price higher instead of lower. I will explain.
The net cost of gold at JP Morgan is estimated at $350 an ounce across all of their gold carry trades. This means that they received an average of $350 an ounce when they sold the gold that they rented into the open market over the past several years.
But, because they sold gold that they rented they also obligated themselves to have to buy back that gold in the future to deliver back to the organization they rented the gold from.
In essence a gold carry trade is also a way of shorting. Shorting is profitable when prices are falling only. If gold prices begin rising the potential for JP Morgan to begin losing money on their trades FORCING them to buy the gold back increases. The buy back is called covering. And as they cover they drive the price further up.
It reminds me of the movie "The Right Stuff". The movie is about when Chuck Yeager broke the sound barrier in the X-1. As he approached the sound barrier there was a lot of violent shaking in the aircraft as it was being buffeted by the physical forces of air putting drag on the plane.
So the faster the plane went the greater the forces of drag trying to slow the plane down. But, once the plane got through the sound barrier it actually surged forward. A portion of the physical drag elements actually decreased as the plane went through the sound barrier.
You can think of $350 in gold as the sound barrier for gold. Some actually estimate it as low as $335 and as high as $375. I use $350 as a ball park.
The reason it is important to understand JP Morgan is because it represents over half of all of the gold carry trades in the world. They don't have a counter party to sell their positions to and even the attempt to do so could cause the price of gold to spike.
All right that's enough for today. Have a great weekend and I'll talk to you on Sunday.
OT: Private Companies
Post 44854 by wilful Reply
Big Mac to close 175 restaurants...
McDonald’s Announces Additional Plans to Optimize Its Existing Business; Reports October Sales
OAK BROOK, IL – McDonald’s Corporation announced today additional actions it plans to take to optimize its existing business. These actions are consistent with the plans the Company began outlining last month to emphasize sales growth at existing restaurants. In addition, the Company reported October sales.
Restructuring four countries and closing three countries.
Closing approximately 175 underperforming restaurants in about 10 other countries.
Eliminating 400-600 positions to control costs and reallocate resources.
Systemwide sales totaled $3.5 billion for October and $34.5 billion for the first ten months of 2002, up 3% and 2%, respectively in constant currencies.
McDonald’s expects these actions will reduce its fourth quarter 2002 pretax income by about $350-$425 million, most of which will be non-cash. The restructuring and closing of countries, together with the closing of underperforming restaurants, will comprise the vast majority of this amount.
Chairman and CEO Jack Greenberg said, “These actions are the right things to do for McDonald’s shareholders, the brand and our business. We remain focused on growing our existing restaurants’ sales and we’re committed to making the changes necessary to succeed in the challenging worldwide economic and competitive environments in which we operate. Our brand presence will remain strong, with more than 30,000 restaurants around the world.
“Sales improved in October compared with third quarter trends, particularly in the United States where our recent service and value efforts are clearly affecting the competition. However, we were targeting stronger results for the month as well as the entire fourth quarter. Given the charges described above and recent sales performance, we will not achieve our previously announced 2002 earnings per share target. Yet, I believe the decisions we’ve made over the past month will better enable us to focus on our existing assets, grow cash from operations and improve returns for shareholders. As a result, I remain very confident in our strategies, our brand, and our future prospects.”
Restructuring Ownership in Four Countries and Closing Three Countries
McDonald’s plans to restructure four international markets by transferring ownership to developmental licensees. Under the developmental license business structure, which McDonald’s successfully employs in more than 25 markets around the world, the licensees will own the business, including the real estate interest. While the Company will no longer have any capital invested in the four restructured markets, it will receive a royalty based on a percentage of sales. McDonald’s also plans to close operations in three small markets outside the U.S. These decisions were driven by the assessment that returns in these countries will continue to be below acceptable thresholds for the Company. Collectively, McDonald’s operates 200 restaurants in these seven countries in the Middle East and Latin America.
Underperforming Restaurant Closings
In an effort to further concentrate its efforts on assets that have the greatest potential, the Company has conducted a preliminary review of underperforming restaurants and expects to close about 175 units in the fourth quarter, over and above the usual number of closings that occur because of relocations, lease expirations, etc. These additional closings are concentrated in 10 countries.
To better control costs and reallocate resources, the Company expects to eliminate about 400-600 job positions, 200-250 of which are based in the U.S. The actual number of people affected will be less, as these reductions will be achieved in part through attrition and the elimination of open positions. The G&A savings from this action will support our continuing goal of limiting G&A growth to less than half the growth rate of Systemwide sales, including higher spending on strategic technology in 2003.
Systemwide sales totaled $3.5 billion for October 2002 and $34.5 billion for the first ten months of 2002, constant currency increases of 3% and 2%, respectively, compared with the same periods of 2001.(1) Comparable sales for Brand McDonald’s for both periods were as follows:
Brand McDonald's Comparable Sales(2) Increase/(Decrease)
October 31, 2002 Ten months ended
October 31, 2002
U.S. (0.6)% (1.5)%
Europe (2.2) 1.6
APMEA (4.5) (8.8)
Latin America 7.5 (1.3)
Canada (1.3) (2.0)
Brand McDonald’s (1.3) (2.0)
(1) Information in constant currencies excludes the effect of foreign currency translation on reported results, except for hyperinflationary economies, whose functional currency is the U.S. Dollar. Constant currency results are calculated by translating the current year results at prior year monthly average exchange rates.
(2) Comparable sales represent the percent change in constant currency sales from the same period in the prior year for restaurants in operation at least thirteen months.
Certain forward-looking statements are included in this release. They use such words as "may," "will," "expect," "believe," "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this release. These forward-looking statements involve a number of risks and uncertainties. The following are some of the factors that could cause actual results to differ materially from those expressed in or underlying our forward-looking statements: the effectiveness of operating and technology initiatives and advertising and promotional efforts, as well as changes in: global and local business and economic conditions; currency exchange and interest rates; food, labor and other operating costs; political or economic instability in local markets; competition; consumer preferences, spending patterns and demographic trends; legislation and governmental regulation; and accounting policies and practices. The foregoing list of important factors is not exclusive.
The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Printer friendly version of this release: MCD_PR110802.doc
28k doc 7 sec download
OT: pmcw, well if the jacka$$, oops I mean, Gephar
Post 44856 by pdowd Reply
I see you are a twin peaks fan -- please explain David Lynch's latest movie , "Mullholand Drive" to me. That movie was one of the biggest wastes of 16m/m film I have ever seen !! Thanks- PD.
PS. My wife can really do that with a cherry stem !!!!!!!!! No kidding !!!!!!!!!!
OT: Unlike Walter Mondale, George McGovern actuall
Post 44859 by jeffbas Reply
pmcw, I am not so sure of the long term gold price. If you use Linda's source and go to the longest period historical gold chart, that is one bad looking chart. I would bet almost anything that if we have riproaring deflation and economic collapse the price of gold is going DOWN!
OT: Pace RE: Louisiana Senatorial Race
OT: The only 2 David Lynch creations that I could
Post 44862 by pmcw Reply
jeff, During the last 75 years we've had deflation and inflation and an average inflation rate of just over 3%. I don't see any reason to believe the next 75 will be any different.
RBA cracks me up sometimes. Today, he's obvoiusly happy inside - he can now resume his booming re-fi biz. However, he swings from forecasting inflation and deflation pretty rapidly and sometimes doesn't realize that gold goes down (in dollar terms) if there is deflation. He started to get it right today when he somewhat advised investors that gold was just a hedged store of value.
OT: Tin !!
Post 44865 by tinljhtkh Reply
A lot of that UNH crush effect is a spill over from Tenet Healthcare and their continuing problems! UNH or HCA might very well be good buys before long because their fundamentals are pretty good! One of the problems in this sector is what is going to happen to Medicare reimbursements and co-pays as the government redefines what it is going to pay and in what time period that will happen! Delaying payments for service has always been one way to close the funding gap!
Many of the problems in this sector are interconnected up to a point because problems in one area ripple on through to other areas as individual patients move around in the health care system! A doctor gets involved and moves people through the feeding chain from initial consultation to home nursing care on to nursing home care to hospitalizations of various kinds and the prescription medicines that invariably accompany most all of it! We have people trapped in HMO's due to coverage requirements stuck with physicians that they would just as soon not have! The retirement of a trusted doctor can create a crisis of confidence that may take years to overcome!
The elderly seem to face this passage from segment to segment and doctor to doctor more than anyone else, for obvious reasons.
Hospitals get concerned because of their occupancy levels and they fight with the managed care providers over what kind and duration of care needs to be provided! Some physicians try to tweak the system for monetary gain either for themselves or the institutions that they represent while others fight the good fight to try to get the best care that they can for their patients. There is the constant fight over preventative care! The health care provider’s line up against the doc's as they try to control costs while the doc's want to prevent as much as they can.
It is a very mixed bag depending, as much as anything, on the age of the doctor and what their philosophy of care is!
Some doctors are worried more about avoiding malpractice suits than anything else depending on their past exposure to this horror! So many of the procedures put in place are there as much to avoid malpractice as to provide the very best of care! Where we used to have the old family physician that treated everything, we now have the age of specialization where the level of care may vary from one specialization to another as a patient moves through the health care chain! Never has the concept that the best idea is to watch over your own health interests been more appropriate than it is now! There is an isolation inherent in all of this specialization and you really have to wonder just who is in charge! Do they read the charts correctly? Is the reason for being referred understood by the doctor you are referred too? Does the referring doctor understand what the specialist has recommended? What is the difference in the intelligence levels among these various individuals? Some of the best and the brightest are found in the hospital emergency rooms around the nation. Like M*A*S*H's Hawkeye Pierce, they handle the frontline work and then are unlikely to see the person that they helped ever again! They must shake their heads at what they see coming through the doors that started their way from some other part of the healthcare system!
Another problem facing this group is Medicaid reimbursement! With the problems that the various states are getting into with their budget shortfalls, there may very well be money problems cropping up all over the place after the first of the year! It is interesting to note that the states, according to some statistics, control about 15 percent of the national GDP, and they are going to have to make some very harsh spending decisions very quickly as they face up to budget shortfalls of various degrees!
The electorate punished the governors more than anyone else for the economic problems facing the nation in Tuesdays election, putting Democrats in charge of the governors mansion in several key states including Pennsylvania, Michigan and my own state of Illinois, for the first time since 1976! The problems that they face may very well bode badly for them as they have to make some of these difficult spending cuts that will affect human services, education and even retirement benefits and medical care for the elderly! It is so odd to note that so many Republican governors made their names when they dealt effectively with overspending in the decade of the 80's and the 90's on the state level even before the federal government began to control its own spending--at least for a while! Will these traditionally free spenders be up to the task at hand?
As we move even further into the post Enron period, the past and current problems that the healthcare group faces makes one wonder just what the future of many sectors is going to look like in the coming years. The first Bush claimed to have a computerized medical claim system ready to go that was going to cut down on the amount of fraud, particularly in Medicare and Medicaid. Looking at the track records of HCA and Tenet over the last few years, along with some others, you have to wonder just what it really accomplished! If fraud really were limited, how bad would it have been if no reforms had been put in place? Both HCA and Tenet have had problems and they are the two top acute care providers in the country! It now seems that regulators are zeroing in on specific hospitals, but the damage to the corporate bottom lines is still pretty severe!
In a way, the situation in the healthcare system mirrors what all of corporate America faces! There is institutionalized fraud affecting the highest officials in the organization, isolated geographic instances that should be detected by the system but often aren't, inadequate regulation that too often occurs after the facts of the horrors come out, and simple incompetence from the highest levels on down to the doctors office front door! It is fascinating to see just how much technology has helped in diagnosis contrasted with how much fraud and incompetence it has been unable to prevent.
I think that I need an aspirin after writing this! I'm also going to hit the treadmill extra hard today! I’m also more impressed with Lucy’s veterinary clinic all the time! They seem very honest. Every time her chart comes up on the computer I see the flashing message that says, “bites”! In healthcare, at all levels, honesty should come first even if it hurts!
PS--As I finished this post, the CEO of Tenet Healthcare was interviewed on CNBC and admitted that he had no idea until two weeks ago that his corporation had problems with outlier payments even though a good computer system and some simple analysis might have told him so! It is always a better management system to inspect than to expect!
Post 44866 by wilful Reply
Aye, fight and you may die, run and you'll live. At least a while.
And dying in your beds many years from now, would you be willing to Trade all the days from this day to that for one chance, just One Chance - to come back here and tell our enemies that they may take our lives, but they'll never take our freedom.
Post 44867 by tinljhtkh Reply
"As far as the Revolution I am talking about-It has already started right under your nose and you are oblivious to it. What do you think motivated those wacko Snipers? Money -------the "have nots" taking from the "haves". Look what just 2 wackjobs did to the DC area."
I think--pdowd--that you have already made some misestimations if you think that I am oblivious to much of anything!
"There are millions of armed and dangerous wackos all over the country that will have learned by their mistakes, and who are so dastardly and mean that they would make Muhhamed and Malvo look like "Humanatarians of the Year".
That's comforting to know!
"You are gonna need more than your biting satirical wit to survive "The Revolution" when it comes to a Gated Community or Luxury Condo in your area ! Are you ready to lock and load? I am!
There are plenty of senior NRA members with undiagnosed Alzhiemers out there who are heavily armed. At least that is a comforting thought!"
A picture may be worth a thousand words! The one you have just painted makes me thankful that I've written over a million words on this board in the last couple of years! I think that my wit may be among our best chances to move on through this period of time! At least it encouraged you to speak to me and communication among all groups may be our only way out of this mess!
"There are millions of armed and dangerous wackos all over the country that will have learned by their mistakes, and who are so dastardly and mean that they would make Muhhamed and Malvo look like "Humanatarians of the Year"."
If that is true, then the only way out for all of us is for you to have a place at the table, just as you have had here!
I believe you and your cherry stem story! What we have to determine is just how many cherry stems knots it takes to create the cancer that I described! Everything has its consequences, even cherry stems! Once we cut down the cherry tree, however, we can never regraft it back together again! And, admitting to having done it isn't going to make any difference as we watch it wither and die there on the ground of revolution! When it's gone, there will be no more cherries for any of us to enjoy in whatever way we choose because choice itself will also have withered away!
PS--I can see no way that this is an off-topic discussion so I am going to give it the respect that it deserves! If any of what you say is true, it will end up being the only topic left to discuss!
Post 44868 by CHILAR4567 Reply
pdowd, since nobody else answered your question about "Mullholland Drive", please allow me this
quick analysis. After seeing the movie and trying
to figure out what the hell it was all about,it finally came to my realization that a great deal of the movie
was really a dream. The clue is towards the end when the girl is shown waking in a bedroom. I guess it's one of those things you have to see a few times.
PS quit bragging about what your wife can do. LOL
Post 44869 by Briguy Reply
I know the stock has looked weak this year, but since I am a long term investor, I don't mind the short term dips. As a matter of fact, I just added more to my portfolio and purchased 470 shares at $26.54. It may go lower, but that will just open up an even better buying oppty for long term investors.
Post 44870 by JAZZMAN Reply
tinljhtkh: Greetings: Have printed out your posts 44793-44865! Post 44793 entitled "Some post election comments", is a gem and should be required reading for everyone. Have you ever had the crazy notion of running for public office? I would love to E-Mail you some time. I can be reached at Jazzman700@hotmail.com if you don't mind giving me an e-mail address. If not, I will post right here! Thanks for just being yourself-I for one really enjoy your observations, as well as PNCW, and the other great people on this board! Best to yah! Jazzy.
OT: As Gil Scott Heron pointed out-
OT: If it weren't for the fact that so many innoce
Post 44876 by lkorrow Reply
pmcw, jeff, I still think we'll muddle through, but if the worst case deflation/capitulation scenario played out here, wouldn't global non-commercial demand spike?
Post 44877 by tinljhtkh Reply
I'll e-mail you some time soon! Trying to do a little investing and keep up the posting schedule that I do here is pretty much a full time job!
Yes, I've thought about it (running for office) but not since around 1976! I'm too old and ugly to think about it now! I enjoy the writing so I'll just continue to do that!
I didn't give you a Sherman, however!
Keep posting! We enjoy your company! ;-)
Post 44878 by pacemakernj Reply
Linda, not all healthcare got hammered today. I got a piece of the new IPO Wellchoice (WC) it was up a couple of dollars above the offer. You may want to look at it. It was supposed to be up to 32-34 range but the THC news really put a damper on it. Pace.
OT: Pdowd, thanks. Pace. eom.
OT: I guess we would all have to agree that this s
Post 44881 by lkorrow Reply
Tin, helath care is a disaster aea, I'll say a viper pit, since I saw part of Raiders yet again yesterday. Yes, two asprins and a nap! I know someone who challenged her doctor on several invalid charges and the doctor said if you don't like the way we handle Medicate, perhaps you should go elsewhere. Perhaps the government should outsource it, there could be many benefits to the got't, private sector and patients too!
Well, old UNH sunk over 8%, did a retracement, and went back down again. They have great growth projections for next year, on the order of 20-30%. Had a fleeting thought that there might be a fear of biological warfare as Iraq heats up, in conjunction with the Tenet thing. But that doesn't seem likely. The news was good (at least a start), i. e., inspectors. Hopefully he cooperates. I don't know how this works, but voting alone may not put sadam in a cooperative mood. He's severely unbalanced.
Speaking of cobras and tort reform, here we have good ole -- patriotic to his bank account -- Donald Trump sueing NYC for $500 million.
Post 44882 by oldCADuser Reply
Behind every silver lining there's a dark cloud:
Money funds to cut fees to avoid breaking the buck
Friday November 8, 4:41 pm ET
By Jonathan Stempel
NEW YORK, Nov 8 (Reuters) - Dozens, if not hundreds, of U.S. money market mutual funds are likely to cut their fees to keep their yields from falling close to, or below, zero.
The Federal Reserve's surprise decision on Nov. 6 to slash its key federal funds rate 0.5 percentage point to 1.25 choose how to keep their shareholders above water -- and by how much.
"A lot of funds will have to make that decision," said Peter Rizzo, a Standard & Poor's director in money fund ratings. "The rolldown of their current maturities will give them time to act."
It takes about a month for a rate cut to be reflected in yields, as funds replace maturing debt with lower-yielding debt. Money funds are designed to maintain a constant $1 share value -- falling below that, because the yield has turned negative, is known as "breaking the buck."
Seventy-three funds already yield less than 0.5 percent and appear most at risk of breaking the buck, according to iMoneyNet Inc. of Westborough, Massachusetts. More than 300 other funds with over $150 billion of assets are also in position to see their yields dip under 0.5 percent, it said.
That yield would generate annual dividends of $12.50 on a $2,500 investment.
Robert Plaze, an associate director in the Securities and Exchange Commission's division of investment management, which regulates money funds, said some funds in high-expense variable annuities have broken the buck this year -- though those funds need not distribute income each year for tax purposes.
He said the SEC is talking with fund sponsors about yields on traditional money funds, where such losses now appear far less likely. "As far as we know," he said, "none of the fund companies expects to let their share values fall below one dollar."
LOW YIELDS, MANY FUNDS
Of the 73 funds, with a combined $4.9 billion of assets, yielding less than 0.5 percent, the Class "B" shares of the John Hancock Money Market Fund carry the lowest yield, at 0.02 percent. John Hancock did not immediately return calls seeking comment on how it plans to keep the yield above zero.
Sixty-five funds with about $15.8 billion of assets have yields between 0.5 percent and 0.75 percent, while 246 funds with about $130.4 billion of assets yield between 0.76 percent and 1 percent, iMoneyNet said. The average taxable money fund yields 1.21 percent, and tax-free fund 1.22 percent, it said.
Many low-yielding funds are broker-sold "B" or "C" shares, which carry marketing expenses on top of management fees.
Columbia Management Group, the asset management arm of FleetBoston Financial Corp.(NYSE:FBF - News), has three money funds with $150 million of assets that yield 0.25 percent or 0.4 percent -- the "B" and "C" shares of the Liberty Money Market Fund and the "B" shares of the Liberty Municipal Money Market Fund.
"We are committed to not breaking the buck," said John Ullman, a Columbia spokesman. "It has been our practice to maintain at least a 0.25 percent yield, and we will continue to assess the situation."
Retail shares of most giant funds, such as the $57.4 billion Fidelity Cash Reserves which yields 1.48 percent, and the $50.7 billion Vanguard Prime Money Market Fund, which yields 1.47 percent, carry higher yields.
The average fund charges 0.61 percent a year, and 59 percent of all funds waive some expenses, iMoneyNet said.
Some investors might not stick around. Retail money fund assets have this year shrunk $111 billion to about $1 trillion, and up to $150 billion more may exit in 2003, said Peter Crane, iMoneyNet's vice president and managing editor.
"In looking historically at asset flows, there is a major psychological positive for yields of 5 percent or higher, and a major negative when yields fall below 2 percent," said Crane. "The 1 percent level is going to be the last straw for many."
A small money fund did break the buck in 1994, falling to 94 cents because of bad investments. The SEC's Plaza said if a fund broke the buck now, investors should feel less pain.
"We're talking a matter of a fraction of a penny per share," he said. "Investors have to have a sense of perspective. Money funds are still the safest type of mutual fund investment they can make. It still involves risk, which is why we make the companies deliver prospectuses to investors. Investors who want complete safety have to explore other investment options."
Crane and other analysts said investors may look to banks for higher-yielding, if sometimes less liquid, alternatives.
For the original item, go to:
OT: CHILAR4567 !!
OT: Excellent and about time...
OT: Need Maniati's legal interpretation...
Post 44886 by uponroof Reply
By Michael Kosares
Centennial Precious Metals
Some time back I pointed out that banks would
have difficulties in a low- to zero-interest-rate
environment in that profits would be squeezed as
interest rate differentials narrowed. For example,
to make enough money to support a bank at a 0.25
percent spread, a bank's loan book would have to
swell beyond any measure of prudence. To survive,
banks will have to charge more for the various
services they offer. That's why you saw the drop
in bank sector stocks yesterday, including J.P.
But what about money market funds that do not have
the luxury of charging for services as banks do?
Today's Financial Times has an article titled, "Fed
rate cut puts squeeze on money market funds." We learn
that the 0.5 percent interest rate plunge threatens
savers like you and me far beyond what we may have
imagined when the cuts were announced. As we open our
future money-market account statements, we are going
to see something that is sure to cause a sinking
feeling -- the rate of return in many cases will
have fallen below 1 percent!
This raises the specter of "breaking the buck" --
that is, asset values falling in money market funds
below $1, causing investors to actually lose money on
their money fund investments.
Forget about "real rate of return." We are now
courting the prospect of not even receiving a
"nominal rate of return" in our savings. The
Financial Times article pooh-poohs the prospect,
then immediately talks of money-market funds merging
to survive. Never in the modern financial structure
have we had an interest rate environment near zero.
This is all new ground, and no one in the banking
industry has a clue where this is going to take us.
According to the FT, Bruce Bent, the founder of
money-market funds, warns investors "to take the
opportunity to look at the quality of their funds
as they struggle to maintain the status quo."
I can say one thing for certain: My gold holdings
went up 1 percent just in the past few days. I know
my money market funds are going to come in right
around 1 percent, but more probably lower. These
are the kind of numbers that will cause a radical
shift in capital allocation all over the globe --
and in the United States among millions of savers
who no longer can count on the dollar to provide
The very dour look of Alan Greenspan as pictured
in today's Financial Times tells the story better
than any words I can put on this page. As a Wall
Street friend said to me yesterday, " Alan doesn't
know how to walk away."
By the way, I see the European Central Bank hold on
interest rates as temporary -- much dissent on the
ECB board, we hear. Much like the Fed before the big
cut. Waiting for the nation-states to demonstrate
fiscal integrity is not going to hold up in the current
Euroland political environment. Gold demand will gather
pace on both sides of the Atlantic as the realization
sets in that no paper is good paper these days.
Post 44887 by uponroof Reply
The rumour that won't die:
Investors keep worry about
J.P. Morgan's gold hedging exposure
By Steve Maich
National Post / Financial Post, Canada
Friday, November 08, 2002
The rumour that J.P. Morgan Chase & Co. is facing massive
losses on gold derivative exposure is the market conspiracy
theory that will not die.
J.P. Morgan insisted yet again yesterday that its
derivative exposure remains minimal, calling the latest rumours "false and irresponsible." But that didn't stop investors from driving the shares down 6.6 percent yesterday.
Despite the denials, thousands of investors and analysts
suspect J.P. Morgan has more on the line than it's
letting on. Just as they did when Barrick Gold Corp. and
Placer Dome Inc. slipped last summer on concerns about
their extensive hedging strategies, investors are
complaining about a lack of transparency in derivatives
trading, and a general distrust of complex financial
One former brokerage credit officer, now working
as an independent analyst, said the market has very
little faith in assurances about risk exposure when
they aren't backed up by hard data.
"To see what some of these companies have as real
exposure and then hear their public statements, it just
boggles the mind sometimes," he said. "You just don't
know, and that's the point."
J.P. Morgan became heavily involved in forward gold
contracts in the 1990s when the commodity price was
in a slow decline. Market watchers at the time said gold
was going nowhere in the new global economic environment,
and the derivatives market allowed banks like J.P. Morgan to
extract profits from a marooned asset class.
As far as most analysts are concerned, J.P. Morgan's
massive derivatives program amounted to a short position
on the price of gold. And with gold prices up 17.5
percent in the past year, speculation is swirling that
the bank is now taking a serious pounding.
How big the losses are, is a matter of endless debate.
David Hendler, a bond analyst at Creditsights Inc., an
independent research firm in New York, discussed the
gold question in a Sept. 23 report to clients. He concluded
that there is not enough public information released by the
bank to precisely determine the risks, but there are a few
clues that suggest reasons for concern.
First and foremost is J.P. Morgan's extensive participation
in the derivatives market, he said. In all, the bank holds
about US$26-trillion in futures and options contracts, or
roughly 50 percent of the overall market. That's more than
twice the size of the entire annual U.S. gross domestic
J.P. Morgan has reduced its gold contracts over the past
year, but it is still relatively overexposed compared to other
major banks, Mr. Hendler said. At the end of the second
quarter Morgan's gold contracts were worth US$45-billion
on a notional basis. Citigroup, the largest financial services
company with about 50% more total assets than J.P. Morgan,
has just US$12-billion in gold derivatives.
Notional value isn't a true reflection of the bank's risk, because it refers to the potential maximum value of
a contract. But even a writeoff of 5 percent of its
total gold contract would represent a loss in excess of US$2-billion, greater than the bank's total net
income in 2001.
Like all banks, J.P. Morgan has stress-tested its
portfolio and insists that even in its worst-case
"value at risk" scenario, its gold contracts would cut
just US1 cent per share from its 2003 earnings. But,
like all banks, it refuses to go into the specifics
of trading strategies, or how they arrive at their
risk models, as these are proprietary secrets.
If the denials are starting to ring hollow, it's because
J.P. Morgan has had to issue so many of them in recent months.
The bank is trying to recover US$965-million in losses
from doomed derivatives transactions with Enron Corp. The insurance companies involved maintain the deals were
tantamount to fraud and they've refused to pay. The
bank also faces a variety of lawsuits arising from its
role as financier to Enron and WorldCom Inc. The bank
has denied all allegations of wrongdoing, and so
far hasn't taken a provision for the potential losses,
insisting that they'll be vindicated.
Back in July, Kathy Shanley, an analyst at Gimme Credit, an
independent bond research firm, said "there is no way to
responsibly quantify the ultimate financial impact of the
J.P. Morgan is also at the centre of a Securities and
Exchange Commission investigation into allegations that
the bank forced clients to buy more shares of bank-led
IPOs in the aftermarket to ensure new issues surged in
their first few days of trading. Again, executives have
denied the charges, but investors are well aware that
Credit Suisse First Boston paid US$100-million
last year to settle similar charges.
For a bank that saw third-quarter profits plunge 91
percent thanks to a slew of credit writeoffs, all the outstanding questions are creating an unappealing picture.
In an environment like this, whispers about multi-billion
dollar derivatives losses are finding fertile ground
among nervous shareholders.
Have a great weekend all!
Post 44888 by lkorrow Reply
Pace, WC's profitable already too. Nice way to kick off the company. Take a look at their chart, there was a net $100 million outflow today.
I had parked in gold so I could focus on other work. But, I have come to the conclusion KRY's not the kind of risk I should be taking when I could put the money to work. It sounds like nationalization is business as usual in VZ, not a good sign for potential buyers. But that's a lot of gold.
KRY was up a penny today, but on a $40K outflow. That's about double what I used to see when I was watching early on. Kind of low volume, though. Let's see, BigCharts shows a net $2 million inflow for the last month, about a $300K outflow over the last two weeks. Ha, I'll sell and it'll skyrocket.
Post 44889 by lkorrow Reply
Pace, a p. s., Thomson shows strong institutional buying. Almost all the action was in the AM.
ot PDOWD I hope you are reciprocal. :-)
OT: Well, there are always surprises in NYC, is to
OT: You better believe it !!!! EOM.