Table On-Topic Summary - 09-Nov-2002
A compilation of this board's financial/economic posts From 44893 to 44920

Post  44893  by  Decomposed       OT: Table ON TOPIC SUMMARY Nov 8, 2002

Post  44894  by  Decomposed       Reply
On-Topic Summary Fans, PLEASE READ

I will be out of town (New England) for the next two weeks and don't expect to have regular access to the internet. Therefore, I won't be running the nightly summaries of Table's on-topic posts until I return, on or around November 23rd -- at which point I'll play catch-up by generating all the summaries I missed and posting them to the internet in one, big, annoying batch.

Meanwhile, you *CAN* generate these summaries yourself. It's simple, (though there's a catch I'll get to in a minute.)

Just go to
and enter the day's starting and ending post numbers.

The "catch" is that limits the amount of CPU usage a "submit" can devour in a single request. This evening, for instance, when I tried to process Table posts 44825 to 44892, freecfm terminated my run when it reached number 44888. So it read only 63 or the 67 posts and then decided that enough is enough. YOUR OWN RESULTS WILL ALMOST CERTAINLY VARY.

Keep this in mind if you run list_table.cfm by yourself. It might look fine at the top, but the bottom could be chopped off. One solution would be to run list_table.cfm two or more times. Another, of course, is to live with (or without) it until I get back.

If it's any consolation, I'm sure I'll shed a tear or two for all of you, too... as I'm slogging down beers and munching on 2lb Maine lobsters and clam chowder at the former Bull & Finch Pub.

Post  44895  by  lkorrow       OT: Anyone ever take a long walk off a short pier?

Post  44896  by  Arkural       Reply
Super-Com-Puter. No position?...........!

Post  44897  by  Arkural       Reply
Some mechanism, pays the wee folk.

Post  44898  by  Arkural       Reply
You coulda had a V-8, or 6, or even a 4.

Post  44899  by  Arkural       Reply
Keep eye on Ja.Pan & co., something w/ bank insties??

Post  44900  by  Arkural       Reply
20-072-062-21-11 If it comes to pass, I'll explain.

Post  44901  by  motordavid       OT: And,Speaking of Politics,

Post  44902  by  uponroof       Reply
FED considers penalty for not spending!

No kidding.... a penalty for saving and not spending! Sort of a 'use it or lose it' stimulus package.

Hold a dollar bill up to the light. See the strip inside? It's a magnetic tape which will record the age of the dollar (along with some other interesting facts) which can easily be retrieved by instruments at banks. In other words, your money is bugged!

Now this is a long shot, and I seriously doubt it will ever come to anything, but just the fact that it was proposed by the FED (and is already in place!) gives pause for concern.

BTW how do you think gold, under no 'penalty system', would perform in such a draconian economic stimulus environment?

A good look at deflation and inside the FED.


Inside the Fed, Deflation
Is Drawing a Closer Look

Stumped for a Cure, Officials Study How
To Keep Prices From Falling in First Place



Alan Greenspan and his colleagues at the Federal Reserve have spent their professional lives fighting inflation. But in the fall of 1999, central bank officials gathered at a country inn in Woodstock, Vt., to talk about the opposite: What would they do if faced with deflation, or widespread falling prices, and they already had cut interest rates to zero?

Deflation is dangerous because it makes it hard to boost the economy by cutting interest rates, and because it makes debt, now at a postwar high in the U.S., harder to repay.

At Woodstock, researchers brainstormed about possible ways the Fed could spur spending, such as adding a magnetic strip to dollar bills that would cause their value to drop the longer they stayed in one's wallet.

At the time the chance of deflation in the U.S. seemed remote. Inflation was low, but the economy was booming and the Fed had lifted short-term interest rates above 5%.

Today, deflation no longer seems so remote.

Prices of consumer goods, as opposed to services, are falling for the first time since 1960. By the Fed's preferred measure, overall inflation was just 1.8% in the year through August. Fed policy makers have cut short-term interest rates to a 41-year low of 1.75%, and investors expect them to cut rates again in coming months to as low as 1.25% -- perhaps starting at their meeting Wednesday.

The U.S. economy is struggling with the collapse of a gigantic stock mania. Sinking prices for telecom services, to name just one conspicuous example, are already making it harder for some businesses to support their heavy debts.

Overseas, Japan is in its fourth year of declining prices even with interest rates near zero, a result of a decade of economic stagnation that followed the bursting of its real-estate and stock bubble. China has experienced intermittent deflation since 1999 and a few economists think Germany may be close. The International Monetary Fund projects that inflation in industrialized countries this year will hit 1.4%, its lowest level in more than 40 years.

Fed officials and most private economists still think deflation is highly unlikely. While the Fed is expected to cut rates either Wednesday or in December, that's more out of concern about slow growth, not deflation. Most Fed officials feel that the 1.75 points of rate-cutting room they have left is plenty to get the economy growing briskly again.

Still, they are all thinking more about deflation. "Whereas this possibility wasn't even on radar screens in past recoveries, it is in the range of plausible risks now," Al Broaddus, president of the Federal Reserve Bank of Richmond said last month. "We need to be alert to this risk."

Shouldn't consumers be happy when prices fall? That depends on what causes deflation. When technological progress leads to rising productivity, or output per hour of work, the economy can produce more each year with the same workers and equipment, and companies can cut prices while increasing sales. Between 1865 and 1879, manufacturing output rose 6% a year while prices fell by 3% a year. Wages were basically unchanged.

Deflation is more worrisome when it results from declining demand, as it did during the Great Depression when prices tumbled 24% between 1929 and 1933, bankruptcies mounted, thousands of banks failed and the unemployment rate hit 25%.

It is a central banker's nightmare. William McDonough, the 68-year-old president of the Federal Reserve Bank of New York, recalls his father taking him in the late 1930s to see breadlines and "people in jail who were there for stealing food for their families." The Depression, he said in a speech in March, "was a very real thing to the people who created the Federal Reserve's mandate and they never wanted it to happen again."

The 1930s demonstrate that deflation is most dangerous when debt burdens are heavy, as they were in the 1920s and are today. "When a deflation occurs ... without any great volume of debt, the resulting evils are much less," Yale University economist Irving Fisher wrote in 1933. "It is the combination of both ... which works the greatest havoc."

A company borrows on the assumption that rising sales volumes and prices will enable it to repay the debt. As prices fall, it becomes more difficult to make payments on debt. A company may be forced to cut wages or jobs, or go bankrupt. The same applies to households that suffer falling income and have to cut spending to service debts. If too many businesses and households do this, the result is depressed demand that fuels further deflation. "The more the economic boat tips, the more it tends to tip," Mr. Fisher wrote.

Another risk from deflation is that consumers may delay spending because they expect goods and services to get cheaper. However, there's little evidence that has ever happened -- even in Japan.

More troublesome is that deflation makes it impossible for a central bank seeking to jump-start the economy to get inflation-adjusted interest rates -- the ones that economically matter -- below zero. (When inflation is at 3% and the Fed cuts rates to 2%, the inflation-adjusted rate is minus 1%.) For that reason, modern central bankers consider a low inflation rate -- typically between 1% and 3% -- ideal. The U.S. is now in the lower part of that range.

Most economists say it would take another massive shock, such as the Sept. 11 terrorist attacks, or demand persistently growing slower than supply to create so much excess capacity that prices fall. Macroeconomic Advisers LLC, a St. Louis, Mo., consulting firm, estimates the economy would have to get so bad over the next four years that it pushes unemployment up to 7.5% from the current 5.7%. "It's a pretty ugly scenario that's required," says the firm's chairman, Joel Prakken.

The odds of deflation also are damped by the fact that inflation has been low and stable for years. As long as businesses and consumers expect that to continue, and set prices and wages accordingly, the deflation risks are diminished.

Tilted Toward Deflation

But a few economists think current economic circumstances are tilted toward deflation. The 43% plunge in stock prices since early 2000 will pressure households for years to spend less and save more. Should home values also see a major decline, families' ability to repay mortgages and spend on other items would fall further.

Deflation doubters say the U.S. won't suffer deflation again because the Fed won't let it. "There's a much exaggerated concern about deflation. It's not a serious prospect," asserts Nobel Laureate Milton Friedman, now at the Hoover Institution. Mr. Friedman, the best-known proponent of the view that prices rise and fall with the quantity of money in circulation, says, "The cure for deflation is very simple. Print money." At the moment, with the money supply growing briskly, he argues, "Inflation is still a much more serious problem than deflation."

Scholars blame the deflation in the 1930s on the Fed's refusal to accept responsibility for maintaining stable prices. The Fed instead was focused on keeping the dollar's value in gold fixed, says Mr. Friedman, who adds, "Today's Federal Reserve is not going to repeat the mistakes of the Federal Reserve of the 1930s."

Since at least 1997, the Fed's professional staff has been studying deflation and the problem of how a central bank stimulates the economy once interest rates are already at zero. Mr. Greenspan and other Fed policy makers have been thinking more about it lately. They devoted a chunk of their January policy meeting to the subject. New Fed governor Ben Bernanke, a Princeton University economist who has studied the 1930s, is to give a speech on deflation later this month called "Making Sure It Doesn't Happen Here."

Deflation today would likely be more serious than when prices declined in 1949 or 1955 because Americans are so much more in hock. Total debt, excluding the federal government, now equals 158% of gross national product. The last time debt rose to that level was in the late 1920s. Indeed, both the 1920s and 1990s saw a surge in new forms of debt-financed consumption -- installment plans in the 1920s, "cash out" mortgage refinancings in the 1990s.

But the fact that consumer debt has doubled since the 1950s to 90% of personal income isn't of great concern to Fed officials. They attribute it to a more sophisticated financial industry that has made credit easier to get, and to the rise in home ownership which means many people have substituted mortgage payments for rent.

During the Depression, mortgage default was a cause of considerable hardship, because of the structure of the mortgage market, says Kent Colton of Harvard University's Joint Center for Housing Studies. Homeowners generally had to pay the entire principal back in five to 10 years. If they couldn't refinance, they defaulted. At the depths of the Depression, some 40% of mortgages were in default. The defaults and declining home values also contributed to the failure of thousands of banks and thrifts.

Now, thanks to mortgage insurance and the creation of mortgage agencies Fannie Mae and Freddie Mac, homeowners can pay their mortgages down over 30 years and easily refinance to take advantage of lower interest rates. While delinquencies on both credit-card and mortgage payments are on the rise, the problems have been concentrated among subprime borrowers, or those with poor credit.

The corporate debt burden, which has also doubled since the 1950s to 89% of revenue, is more worrisome. One indicator of investors' concern about companies' ability to pay back the debt is that yields on medium-quality corporate bonds are 2.7 percentage points higher than those on safe Treasurys -- the widest spread since 1986. "Companies simply aren't coming up with the cash flow they thought they would when they took on the debt," says John Lonski, chief economist at Moody's Investors Service.

Automobiles illustrate the pressures. In the 1950s, car prices rose about 0.5 percentage points a year faster than inflation, says Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich. Car makers' productivity was rising rapidly, and sales were advancing 3% to 4% a year. In today's dollars, manufacturers earned about $1,500 per vehicle. Today productivity is growing more slowly, the world is awash in idle auto factories and a strong dollar is holding down the price of imported vehicles. As a result, Mr. McAlinden says, new car prices have fallen 0.2% a year since 1996 and profits per vehicle are down to about $400.

That is making investors increasingly nervous about auto makers' ability to repay huge debts, which are mostly to finance customers' car purchases. As recently as 1980, Ford Motor Co. had the highest available credit rating; now, its bonds trade as if they were junk. In the 1930s, Mr. McAlinden says, "we had both deflation and absolute falling demand. This time we just have falling prices." So far. A renewed recession, which would drive down auto sales, is "the most frightening prospect this industry cares about," Mr. McAlinden says.

What would the Fed do if it confronted imminent deflation? A study by 13 Fed economists this summer concluded that Japanese policy makers didn't see deflation coming until it was too late to prevent it. The authors concluded that "when inflation and interest rates have fallen close to zero, and the risk of deflation is high," policy makers should respond more aggressively than economic forecasts suggest. If the Fed lowers interest rates too little, deflation could result, rendering the Fed less potent. If the Fed overdoes it, it can always raise rates later to suppress the unwanted inflation, the study says.

Less Relevant?

Fed officials argue that they applied these lessons last year, cutting rates 11 times, and say the lessons are less relevant now, with the economy growing, albeit slowly. But Martin Barnes, editor of the Bank Credit Analyst, a Montreal-based forecasting journal, warns that prices received by most businesses are already declining. While a near-term rate cut by the Fed might help, he says, it "is not going to prevent deflationary pressure from intensifying over the next few months."

The federal government could also fight deflation by boosting spending or cutting taxes, though the recent surge in the government's budget deficit could make that more difficult.

If the Fed cut its target for short-term interest rates to zero, and still feared deflation, its next steps are largely untried. It could purchase large quantities of government bonds to lower long-term interest rates and perhaps prompt investors to shift assets to stocks. It could purchase more government securities from banks, leaving banks flush with newly created cash to lend. It could try to create inflation by purchasing foreign currencies to drive down the dollar and push up the price of imports.

But Fed economists who studied these strategies in late 2000 were skeptical. If interest rates were zero, then even if the Fed did pump banks full of cash by purchasing government securities, the banks would have little profit incentive to risk lending out the money -- the return from leaving it in their vaults would be the same. Indeed, the Bank of Japan has tried this "quantitative easing" for the past year, and the economy is still in a slump. Driving down the dollar would fail if other countries tried to depreciate their currencies, too.

Other proposals, some possibly not legal, were for the Fed to lend to private companies or buy things such as stocks, real estate or even goods and services, such as used cars. And then there are those magnetic strips. Marvin Goodfriend, a top economist at the Richmond Fed, proposed at the Woodstock conference that a way to stimulate the economy if interest rates are already at zero is to levy a fee on banks that keep cash on deposit with the Fed rather than lending it out, and to find a way to make currency worth less the longer it goes unspent -- thus the magnetic strips. When someone deposited a bank note, a "carry tax" would be deducted according to how long it had been since it was withdrawn. These charges for holding on to cash would effectively create negative interest rates.

"Asking people to carry around some one-dollar bills that are worth 99.4 cents and some that are worth 98.4 cents would be a terrible nuisance," Alan Blinder, a former Fed vice chairman, observed at the Woodstock meeting. He added, "Prevention is far better than the cure."


Post  44903  by  pmcw       Reply
Bullish Signs are Popping Up All Over

Uncle Fearless is known in KC as an ultra-conservative investor. His recent decision to jump back into the market because of other bullish signs might in fact be the most bullish indicator of all.

I'm back in the market I missed

Make of this what you will as a market indicator, but Uncle Fearless moved half of the Heaster Hoard back into stocks Monday after five years on the sidelines.

The decision in the late summer of 1997 to put all discretionary 401(k) funds -- which represents my entire investable holdings -- into the money market was guided by one consideration: As good as the stock market looked, it was getting too squirrelly for comfort. As things turned out, it was still about a year and a half from the top, but there are no regrets.

As one of Wall Street's most successful investors once observed, tongue in cheek no doubt, his biggest mistake was always getting in too late and getting out too early. So, while the past five years have generated nothing more than pitifully small interest returns, the Heaster Hoard's principal is still intact.

This ain't no small thing considering what's happened to those who lingered too long at the party.

What triggered the decision to move half my MMF money into a couple of Vanguard's equity index funds? While market timing has never been a guiding tenet, the timing felt right, and equities seem overdue for a good run.

As a short-term consideration, the period from Nov. 1 through April 30 has been the best time to invest in stocks over the past half century. Research by Yale Hirsch shows that $10,000 invested during those six months would have grown by more than $415,000; the same $10,000 invested from May 1 to Oct. 31 would have generated a profit of just over $1,700.

As a medium-term consideration, the last two years of the presidential administrations since 1832 have produced a net gain of more than 722 percent, Hirsch notes in his Stock Trader's Almanac. The net gain during the first two years of these administrations has been only about 250 percent.

Hirsch also says the historical record of pre-election years implies the potential for a 50 percent jump from this year's bottom to next year's high. If history delivers on its potential promise, it could mean a Dow Jones industrial average flirting with 11,000 in 2003.

As a long-term consideration, this will be the market's third straight down year, and that hasn't happened since Uncle Fearless was in nappies. What happened last year or this year isn't supposed to influence what the market does next year, but it's unthinkable to me that the broad market will be down four consecutive years.

Then there are the intangibles. Business Week, for instance, recently warned how "The Bulls May Get Trampled." It would have been a better omen if it had been a cover story, but there's no better harbinger of improving fortunes ahead than Business Week or any of the other major U.S. periodicals waxing bearish.

Another personal intangible has to do with the psychic dimension of being involved in the daily hurly-burly of the stock market. I really missed being out of the market.

Although half the hoard is still lying fallow in the principal protection program, what's in play is a critical component of the retirement nest egg. It may be more risk than is prudent for someone near traditional retirement age, but, by doggies, it sure is exhilarating to be back in the game.

Post  44904  by  clo       Reply
Oh Tin! maybe you could pen for some politicans?

Just think of it...
Maybe they would "get it" by osmosis?
It's worth a try... ;)) clo

Post  44905  by  oldCADuser       OT: It was just a matter of time:
Post  44906  by  pmcw       OT: pace, You mentioned the other day your opinion

Post  44907  by  pmcw       Reply
An Update to Random Thoughts and Odds Originally Posted 10/1
Original comments in italics

The Republicans take both houses of Congress (100% House / 51% Senate)
Done Deal - Had it been a one seat victory, I feel there would have been several highly contested races. However, the victory was so solid not even the DNC wanted to waste their time.

Daschle is replaced by Lott and we are still unhappy (51% / 100% if the Republicans take the Senate)
Did anyone hear Lott's first speech - he said homeland security was not the first agenda to pass. It's not that there aren't other votes that they can't pass quickly that shouldn't come first, it's just his arrogant way of presenting the issue. I figured it would take him at least a few weeks to eat a foot, but he's a pro at digesting shoe leather. I'll bet GW tells him soon what the agenda will be for the Senate. Lott will still be stupid and annoying, but Lott will also get in line.

Greenspan drops rates in November (90% a quarter point / 25% a half point)
I would have preferred a quarter percent. I think the market would have taken it in stride and not tried to look for hidden meanings. However, after considering what lies ahead, maybe getting the half point on the books now was a good idea. I don't think the larger than broadly expected cut carries even the majority of the blame for the currently soft market. Clearly, CSCO and a long list of companies reporting limited visibility and a flat, at best, Q4 lead the reasons for the market malaise, but the half point cut punctuated the questions already in the mix.

We see a substantial rally (
TBD - Since we saw a significantly more substantial October rally than I expected the November rally is certainly more questionable than before. However, I will only move down my odds to 67% from 75%. This means I feel the odds of the S&P500 cresting 1K, over 365 on the SOXX and the DOW topping 9,700 before by the end of the month are 3 to 2.

Many stocks see their low for the foreseeable future before the next scheduled FOMC statement in November (50%)
TBD, but it appears this might have been a very solid forecast less than two weeks before the low. I'll bet I'm going to be very glad I was buying going into October and stepped up my purchases during the first two weeks of October.

The market melts down to NASDAQ
Time to adjust this one slightly. > 1,000 (30%) down from 50%.

Whether this happens or not, the NASDAQ hits over 1,500 in 2003 (90%)

The SOX trades for over 400 in 2003 (90%) over 500 (50%)

Semi sales will

Everything melts down and we go into a world wide depression (10%)

We recover from our currently directionless malaise and enter a bull market (10%)
Time to adjust this one upwards to 30%

We sputter along without definite direction (like manaiti said) seeing huge index swings (80%)
Time to adjust this down to 60%

VZ, SBC and/or BLS buy a LD company (T, FON, WCOME) during the next twelve months (one buy 90% / two buys 30%)

Broadband deregulation gets ugly and there's greater pressure to either get it done or regulate converged cable (99%)

Since WCOME is all but dead (or owned by another) Lott finally lets broadband deregulation through (75%)

HLIT, ISIL and XICO double from their current level before the close of 2003 (90%)
TBD - For HLIT this means $2.56, for XICO $6.84 and for ISIL $25.74. Personally, I feel I'm being conservative at only 90%. I've seen few times when 12 month 2 baggers were more obvious. HLIT could easily end up a ten bagger ($12.80) in 2003. Of course, this upside is balanced by a much higher risk of not performing when compared to ISIL and XICO.

Regards, pmcw

Post  44908  by  lkorrow       Reply
Some notes from Louis Rukeyser's interview of Barton Biggs, Morgan Stanley's chief global strategist quickly keyed in last night:

Market wanted Republican victory – why didn’t celebrate, don’t know

Switched to bullish last summer because stocks came down a lot

Recommends CSCO EMC INTC and other technology stocks

Expects rally until Jan, S&P 500 1000-1100, Dow 9500-10000

In 3-4 months, expects goon news out of tech. -- book to bill better, backlogs

Huge bear market rally, but overall it's still a bear market

Doesn’t think we’ll hit prior lows

Put money in overweight stocks – Big us pharmaceuticals, tech, insurance (still has pricing power), financial services, investment banks

Would sell defensive stocks – consumer prod, food cosmetics, toiletries, housing, they will do less well

Boom in new housing is coming to end

Deflation is a risk for the first time in our lifetimes

What would turn him bearish? If we have a double dip. Nominal GDP declines below 0, he will be wrong about the bull

With rate cuts consumer will be ok

A war with Iraq would be bullish for market -- initially down, but will win quickly. Oil will spike.

Gold – uncertainty, don’t know inflation/deflation, recovery; some potential as a safe haven; he's not a gold bug; would NOT put 5% of assets in gold

Another leg down on dollar. Others are not cutting, this will be bullish for US stocks and improve our competitive position.

Sadam in exile or coup in Iraq bringing oil down would be a very positive development for the world economy.

Post  44909  by  oldCADuser       OT: You know what,...

Post  44910  by  lkorrow       Reply
Ark, Not Japan, but

I have watched the emerging markets fund in my 401K program rise +10-16+% ytd through June, then slowly drop back to -19% ytd in October and now it has recovered to -8%. It was pretty much the only fund with a major gain this year. Small caps were up a bit for awhile there, but faded fast.

I just took a peak at what they're invested in -- 28%, S. Korea; 9.9%, S. Africa; 9.6%, Taiwan; 8.4%, 8.4% Mexico; 7.1%, China; 6.9% Russia; . . .

It says competition from China will continue to cause deflation and deny many companies pricing power, but the downside is likely to be limited in most markets, since valuations were approaching post Sept 11 lows (written 3Q2002).

And, Cray/Sandia Red Storm, 2004! I have tracked PAYX in the past. They're absorbing an acqusition. Looks interesting too.

Post  44911  by  pmcw       OT: OCU

Post  44912  by  lkorrow       Reply
pmcw, Not to worry, there's an eagle out there on that precarious perch with you.

Post  44913  by  pmcw       Reply
In mid-2000, the DOE released a report stating that their research leads them to believe that there is enough "harvestable" wind in a few Midwestern states to power the entire country. Since then, leveraging this natural resource has been the dream and mission of a young man from my community.

Deriving power from the wind is not without detractors or totally pollution free. The farms I've seen can be quite noisy and they certainly take away from the view of nature. However, on balance, they are one of the credible answers for reducing emissions of greenhouse gases and freeing us from the current level of dependence on foreign oil. See the following link for more information:

Regards, pmcw

Post  44914  by  lkorrow       Reply
pmcw, nice site. It's astounding how the momentum is building for wind power and other renewable energy sources (and I don't mean nuclear!). Not too astounding, considering GE bought ENE's wind turbine business awhile back. And now there are incentives for the power companies, who also see it as a means of reducing the unit cost of power and increasing their profits. While the U. S. didn't sign Koyoto with good reason, GWB recognizes the problem and we're on the move! Right now, it's also being driven by state mandates for percentages of power generation to be green.

I happened across an article on harnessing tidal power today and was surprised to see the artist's conception. It's a "windmill!" Somehow I pictured something different. Maybe some of the new offshore wind systems that are being proposed all over the place will have underwater and above water propellers! Why not use the whole length., some of these things are over 300' high. Maybe there's good and bad altitudes for wind generation, I don't know, but someone should look into it!

Post  44915  by  jeffbas       Reply
pmcw, if the economy is still bad 2 years from now, I predict that there will be a complete turnover - President, House and Senate. However, if the economy is solid and foreign affairs (including Iraq) and any terrorist attacks have been managed well (note I did not say without casualties), he will be unbeatable.

Post  44916  by  wilful       Reply
Silicon Valley's Jobless Rate 7.9 Percent

SAN FRANCISCO (Reuters) - The technology downturn continues to hammer California's Silicon Valley, where the unemployment rate in October was 7.9 percent, the highest level since 1983 and well above last month's statewide average of 6.4 percent.

State officials on Friday said unemployment in Santa Clara County, the heart of the Silicon Valley high-tech hub, was unchanged in October from September, but they revised the September rate up to 7.9 percent from an initial 7.7 percent.

The recent levels reflect the fallout from sharply reduced demand for technology goods and services over the past two years that has led to scores of layoffs in Silicon Valley, where the jobless rate had been as low as 1.3 percent in December 2000.

Sunnyvale, California-based Advanced Micro Devices Inc. (AMD.N) said on Thursday it would take a charge of several hundred million dollars in the fourth quarter as it cuts jobs and costs in a bid to return to profitability.

AMD, the chief rival to Intel Corp. (INTC.O) in the market for microprocessors, did not detail the number of jobs it would cut, but its chief financial officer said the headcount reduction would be significant.

In contrast to Silicon Valley, other major California urban areas saw their local jobless rates improve last month, helping the state's overall 6.4 percent October unemployment rate hold steady from September.

In San Francisco, which has seen its once red-hot dot-com industry evaporate and has suffered as financial services firms cut jobs, the October unemployment rate was 6.7 percent, compared with 6.9 percent in September.

The jobless rate in Los Angeles County fell in October to 6.1 percent from 6.5 percent the prior month, and in neighboring Orange County the October unemployment rate narrowed to 4 percent from 4.1 percent in September. San Diego County's 4.2 percent unemployment rate was unchanged from September.

© Copyright Reuters Ltd. All rights reserved. The information contained In this news report may not be published, broadcast or otherwise distributed without the prior written authority of Reuters Ltd.

11/09/2002 14:18

Post  44917  by  oldCADuser       OT: Trust me,...

Post  44918  by  rdb14       Reply
Speaking of wind power, in my little N.J. town the mayor has been lobbying to construct 32 energy producing windmills in an abandoned quarry. Predictions are that our town will be energy self-sufficient by 2004 and we will be selling power back to PSE&G, enabling a nice cut in taxes with the revenue (which remains to be seen).


Post  44920  by  ferociousD       OCD- Harding and Reagan compete for the worst