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ARCHIVED DISCUSSION FROM 9/1/2002
All times are U.S. Mountain Time
(Yesterday's Discussion.)
DOWNUNDER
(09/01/02; 23:06:16MT - usagold.com msg#: 84128)
IF YOU READ NOTHING ELSE TODAY - - READ THIS !
http://www.lemetropolecafe.com/hemingway_table.cfm?cfid=353342&cftoken=99894749&pid=2460
(War) Drums Keep Pounding Rhythm To My Brain
Ed STEER's commentry posted at Le Metropole Cafe is an absolute classic. He wraps it all together in a very convincing manner---It won't end pretty! Guess we all know that but this wraps it up well.
Black Blade
(09/01/02; 21:43:30MT - usagold.com msg#: 84127)
Asia Starts Off Ugly
http://quote.yahoo.com/m2?u
Asian markets go negative early tonight. Meanwhile is nearly flat on light trade. There probably won't be much movement in gold as traders will be waitring for direction from Wall Street and the markets will be closed for the Labor Day holiday. If the precious metals make any significant move it will likely be due to currency and stock market flucuations in Europe.
- Black Blade
Waverider
(09/01/02; 20:59:05MT - usagold.com msg#: 84126)
Slingshot
A pleasure to read good Sir! The plot thickens...enter Stephen the Great....
Waverider :)
Black Blade
(09/01/02; 20:38:21MT - usagold.com msg#: 84125)
"The Barbarous Relic Files" - Trove of gold coins given to owners' descendant
http://www.yomiuri.co.jp/newse/20020831wo33.htm
Snippit:
Police have decided that an 86-year-old man from Toyama is entitled to a large number of koban (gold oval coins) and other coins unearthed at a construction site in Oyabe, Toyama Prefecture, in March, after finding that the cache belonged to a wealthy local farmer who was an ancestor of the man. The excavated koban coins from the Edo period (1603-1868) and other gold coins from the Meiji era (1868-1912) are worth about 39 million yen, according to numismatists. Police had held the coins as lost property since March. Family lore had it that gold coins were buried on the property. The 1,295 coins include oval coins of the Keicho era (1596-1615), which overlaps the early Edo period, and 10-yen gold coins of the early Meiji era.
Black Blade: Don't you just hate it when those "barbarous relics" pop up and ruin a nice little excavation project? Hmmm…
MK
(09/01/02; 20:05:15MT - usagold.com msg#: 84124)
Rich. . . .The Imposter at INO
Rich, the individual at INO is an imposter and I have contacted the owners over there (who are friends of mine) to find out who this person is. He, she, it is obviously trying to use my reputation for his/her/its own purposes. Once I have the person's name and contact information, I'll turn it over to the lawyers.
I find the use of my name for these purposes insidious and the claims you cited for gold and silver's performance preposterous. Thanks for bringing it to my attention.
Once again, I do not favor gold as a speculative investment. I see it as a long term portfolio insurance against a multitude of potential economic and political disasters gathering like the Horsemen on our collective horizons -- not the least of which being local currency erosion no matter where you live. ('Tis the times!!) Any time you see speculators using my name to promote enticing the unwary to gamble on gold, you know its not me. That's not where I'm coming from. . . . . . . . . Better to own ten ounces of gold bought and paid for than a thousand controlled by gold's opposition for which they've issued you a piece of paper. If we do see gold at $1000, it will not be coincident with a pretty economic picture. Like any insurance, I own it with the hope I'll never have to use it. At the same time given the nature of the modern economy, I believe we are going to have to use it someday.
Thanks for the heads up, Rich. . . .
MK
sector
(09/01/02; 20:01:09MT - usagold.com msg#: 84123)
Bulgarian Counterfeiters Stay Ahead
http://www.nytimes.com/aponline/international/AP-Knockoff-Republic.html
By THE ASSOCIATED PRESS
Filed at 1:12 p.m. ET
SOFIA, Bulgaria (AP) -- Benjamin Franklin never looked so good.
His jowls are missing some wrinkles, his smirk is Mona Lisa sly and sexy, and he's sporting a Kirk Douglas dimple on his chin. At least that's how he appears on the $100 bill on Rumyan Chobanov's desk.
It's a fake, but few would notice. The engraving is crisp, the paper feels convincing to the touch, and the note sports enough watermarks and other security features to pass for the real thing at a grocery store in Detroit or Des Moines.
``It's really not that well-made, but an American citizen would probably accept such a bank note,'' said Chobanov, chief teller at Bulgaria's central bank and an expert on counterfeiting.
In this knockoff republic -- a Balkan bargain basement where you can sniff out a $150 bottle of Chanel No. 5 for $35 or snag a pirate copy of Eminem's latest CD for $3.50 -- bogus bills have become Bulgaria's claim to fame.
Now that the European Union's common currency is in circulation, shadowy counterfeiters who've managed to stay one step ahead of technology and the law have added 100-euro notes to their bag of tricks.
Interpol and the Secret Service contend the $100 notes rival those that roll off the presses at the U.S. Treasury.
++++++++++++++++++++++++++++
Pay close attention to the argument for a "new" currency based upon the "anti-counter fitting" premise.
The conventional laser/inkjet printer watermark is surface-applied and visible, the Crane paper [Used by the US Treasury for its bills], interstitial watermark is not and is therefore immune to counter-fitting--Andrew Jackson's stylish coif not withstanding.
This piece floated by the AP may be an early warning that a US currency devaluation is not far off.
GATA has information originating from deep within the Administration that is very pessimistic on the economy AND the DOW. A breakdown to say...6000 in the DOW may take the last sandbag from the financial dike.
If the Admin is to alleviate the mounting debt and mitigate litigation exposures at critical derivatives-laden Federal Reserve banks, they must fashion a plan to dilute that debt in a rapid manner. The Fed simply cannot survive the failure of JPM or Citi Bank via litigation or other mounting pressures. In other words they don't have the luxury of steady inflation since their risks are at specific banks with near-term deadline structures.
A deval of the three major currencies fits the bill. Gold would "Float" as it did after President Nixon repudiated the US gold debt in 1971. The Admin might introduce onerous regulations of its internal trade--anything is possible now that we see a President whirling outside of all normal policy trajectories.
Even Bob Dole chimed in on the side of reason in the Iraq war push. Colin Powell is rumored to be stepping down as SECSTATE in January 2003.
The frenetic, haphazard manner in which the putative Iraq war has been presented to the public, Congress and the World suggests that another very bad, and so far unarticulated threat is yet to be revealed. The threat could be economic or terrorist-related. Whatever the threat to the US is, the Administration's outward military plan to deal with it is draconian in the main.
If Mr. Bush is willing to engage in an internally AND externally unpopular war he must also be willing, by inference, to engage in an unpopular solution to a host of chronic economic problems—one of which could be a devaluation that would be spun as a new currency set of bills and an "Adjustment" to US long-term debt [Including time deposits]. Why not take all the hits at once?
Moreover, Mr. Greenspan seemed on Friday to have already delivered his "I did everything I could" defense.
It's almost as if they have already abandoned the twin paths of economic and military reason—all to avoid an inevitable financial disaster and consequent loss of face wrought by a decade of greed, corruption and especially arrogance.
To overtly take the oil via installed puppets, at great loss of life, to save a US gluttonous lifestyle, in front of the World is to cross a threshold that harbors a universe of future instability and pain.
Socrates964
(09/01/02; 18:40:19MT - usagold.com msg#: 84122)
Belgian
agree with your analysis, but it was never my intention to suggest that 1888 prices should act as a benchmark (if PPP doesn't work in space - i.e. between countries, why should it work in time - no a priori reason).
Having said this, I do think that this kind of price comparison is useful as a refutation of arguments that the POG is at fair values based on correction by cumulative inflation since WWII;
I also think that there is something to be learned from looking at 'rich peoples' prices' over the ages, since these incorporate a vanity/snob element, and are hence the least likely to be rigidly correlated to oil prices.
MO VER MEG
(09/01/02; 18:35:54MT - usagold.com msg#: 84121)
R Powell
About 20 of them in different months.
I invested in these after doing the physical thing.
I would like to have about 100 of those big door stops.
My commodities broker deals with grain and has no solid information on silver delivery. I shall keep looking.
MOVERMEG
slingshot
(09/01/02; 18:25:45MT - usagold.com msg#: 84120)
Siege Engine
Gold above $300.00
It was an early rise for Gandalf and Bonfir for they would have some distance to travel before reaching their destination. Shadowfax was saddled by Gandalf but Bonfir preferred to walk and Gandalf decided to do the same. As it turned out walking gave them the time to uncover the beauties of the valley. Large oak trees with cooling shade. Blackberry bushes for a treat along the way. Deer which came to drink from the stream and the ever playful squirrels moving from tree to tree giving warning chips as the intruders came closer. Bonfir would point out various plants and tell Gandalf of their medicial value contained in the root, buds and leaves.The two men conversed as if they were old friends. An internal kinship between them. The pressing issues were set aside and all in the world was right. After some time they come upon a waterfall that gave life to the stream. Bonfir entered the water and Gandalf and Shadowfax followed him. On the other side was a path leading behind the thundering water and they disappeared behind the watery curtain. They walked along the passage as the water rushed pass them till a large cave entrance was before them.
They were about to enter a place few have seen. Gandalf entered, bringing back memories of "Under The Mountain". Soon the tunnel gave way to vaulted ceilings and collums with fine decorations.Floors turned from rough rock to polished floors, which reflected the light of torches showing them the way. A large door was before them and opened as they came near.A man came from within and assuring Shadowfaxes safety took him by the reigns. When they entered Gandalf could see people on both sides of the hall. He was curious for they wore clothes he had never seen before. Their complections were from dark to white. They had hair of gold while some had hair as black as obsidian. He then knew the tales of old were true.
The whisperings revealed he was the stranger who threw balls of light. The gathering widen at the end of the room and there stood several men. There was no throne or steps to assend.
They stood as equals and looked at Bonfir and Gandalf as they approached. A few steps before them Bonfir stopped and one of the men spoke.
Gandalf the White, Welcome. May your stay be a pleasant one.
To You Bonfir,welcome home and thank you for the safe passage of the wizard.Turning to Gandalf once again he said,You have many questions and I hope to have the answers you seek.There is little time and your quest is a heavy one.
My name is Stephen the Great, and I will help you if I can.
Gandalf giving a slight bow spoke, Thank you Stephen the Great. Gandalf was then motioned to follow him and Bonfir stayed behind. They all entered a small room containing a round table and chairs and when all were seated Stepen the Great spoke directly to Gandalf.
You have come a long way in your life Gandalf, and we have heard of your ventures. Because of your knowledge of the forces of nature and how you have use them to do good, we have allowed you into our home. I see you are somewhat surprized by my remarks and how we know of you. Let me say that a pointed hat does not make a wizard. Many have sought our help, few receive it. We have been here many years and are the outcasts of our brothers in life for we all searched for a higher understanding of the world.It is the common thread that binds us.
We have seen your power at the castle gate,against the Lord of the Castle and the King with No Name.We watched the siege and the burning of the trebuchet.The injury of your messenger and the dangerous ride to save his life by one of the Ladies. Lady Waverider is her name, is it not? And yes, Your mercy, to help those who asked for mercy. When others would have put them to death.
Good wizard, your actions have spoke well of you and you company long before you have come here.
But your quest to FREE GOLD will not be an easy task. The King with No Name, has spread his power far and wide. Consuming those who fail to see his trap. He holds Gold close to his heart, but proclaims it is worthless.The people believing this give up their gold for a promise and his protection and they have neither.
Gandalf the White, the King with No Name does not know all.The forces which he can not see or control are against him. He will fall and Gold will be SET FREE.
There was a short pause and then Stephen the Great asked to have some food and drink brought to them.
Hungry, Gandalf the White?
Indeed I am, answered Gandalf.
R Powell
(09/01/02; 17:57:30MT - usagold.com msg#: 84119)
Gold and silver price predictions // M.K.
were given as $1,000/ounce for gold by Dec. 2003 and $10.00/ounce for silver in the September to October timeframe.
So what Rich, someone is always giving predictions somewhere? I thought these from Saturday's INO forum were noteworthy as the poster's handle is M. Kosares. Note- anyone can post there using any handle he/she wants. I hope that particular M. Kosares is clairvoyant.
Rich
kasperjack
(09/01/02; 16:49:37MT - usagold.com msg#: 84118)
mining veb reports
NEW YORK -- Global collaboration among JP Morgan's top analysts shows that gold producers
lightened their hedge books by 365 tonnes, or 11.7 million ounces in the half year to end
June; equivalent to a little under a fifth of all new gold extracted in the period. Total
dehedging for this year could exceed 500 tonnes, or 16.1 million ounces, leaving roughly
2,520 tonnes (81.1moz) committed to hedging by the leading producers. Put options protect a
further 2,480 tonnes (79.7moz).
The accelerated dehedging occurred in the wake of the collapse of the gold contango last
year and US interest rates remaining in the basement. The analysts – John Bridges (New York),
Geoff Breen (Sydney) and James Wellsted (Johannesburg) – don't see much room for further
cuts for the rest of the year, although Placer Dome got in early with a 52.9 tonne (1.7moz /
20% of committed ounces) reduction announced on Thursday last week.
R Powell
(09/01/02; 16:08:57MT - usagold.com msg#: 84117)
MO VER MEG
Question answered.
I see in 84113 that you did say that you have futures. Perhaps a call and some questions to your broker could answer the logistics involved with taking Comex delivery. Now, at $6-7.00/ounce but bought at $4.70 some contracts could be offset for the fiat needed to take delivery of the rest.
I'm curious. If you find out about delivery procedures, please let us know. I've no clue but do know it can be done.
Rich
R Powell
(09/01/02; 15:49:06MT - usagold.com msg#: 84116)
MO VER MEG
I like your thinking of taking supply off Comex and often wonder why someone of means (big money) doesn't initiate a squeeze on the shorts. That it hasn't happened begs the question, "Is our fundamental analysis- that silver supplies are dangerously low- correct? Why hasn't the market already reacted even without an increase in manipulated buying?" I've some theories but no facts.
I don't believe the different world silver exchanges reflect the POS according to the law of supply and demand at this time. When they do is when POS will rise. Many analysts believe that the spot price may have to actually exceed the exchange price to awaken the market players to the fundamental facts. If this condition happens it will not exist for long as any such price divergence will bring in the arbitrage money immediately. But, this event will shock the market and prices much higher in the blink of an eye. I am holding futures positions and have considered how to deal with them if this scenario occurs. Emotions will run high when POG and POS run much higher. Emotions and trading are like drinking and driving- not a good combination! Comex has placed a clause in small print limiting their obligation to delivery of 7.5 million ounces in metal form per month. That is, they have granted themselves the option of fiat settlement if necessary beyond this limit. Comex is a paper game with paper rules. It offers potential leveraged profits along with risk, especially for those seeking physical delivery. However, beware that it is (imho)presently a small, thinly traded, easily manipulated casino but with the potential for the dealers to lose control.
I wish you good luck with your purchase. Consider the ability to resell your purchase when considering what form of silver to buy or hold physical forever and let the futures' profits supply the fiat. That's my dream. Do you now hold futures?
Happy holiday
Rich
MO VER MEG
(09/01/02; 14:53:47MT - usagold.com msg#: 84115)
R Powell
Thanks for responding. I appreciate everything you told me.
I am thinking out loud here, but lets say I have silver futures contracts covering 100,000 ounces (20 contracts) and say silver was up to $6.00 or $7.00 by the end of the contract. Now, I can liquidate and take profits or since my basis is in the $4.70 range, I would have some working room to purchase the physical.
If I buy physical in that quantity, I would like to disrupt the COMEX supply as much as possible (boy, if I ever hit the lotto, silver would spike for a couple of days).
It seems as though my next step is to find a bank willing to help me make the purchase.
Perhaps Michael K. can help me out?
Again, thanks for your help.
MOVERMEG
R Powell
(09/01/02; 14:31:25MT - usagold.com msg#: 84114)
MO VER MEG // silver delivery
I tried last year to obtain a loan to buy 1000 ounce silver bars. I found a refining source that had bars for sale at an incredibly good price but they would only sell to dealers or banks who held an account with them. Neither of the two banks the refiner mentioned would consider loaning money for silver to be held in the bank as collateral for the loan. The bank investment officer said no amount of downpayment was sufficient as the bank no longer dealt with metals at all.
However, I'd be willing to bet M.K. could broker any amount of silver you wish to buy, delivered to your door. I don't work for CPM and can not speak for them but delivery of metal to clients is their daily business. It seems logical to speak to them. Delivery off Comex requires you to make arrangements for pickup and transportation to wherever you wish to keep your stash. Or, you can "take" delivery from Comex in paper form while storing your silver with them. Comex may end up as the "sellor of last resort" as silver supplies are consumed. The supplier of the round silver blanks needed for the government's coin program has begun to build inventory even though official government buying is not scheduled until next year. I doubt that this silver will come from Comex but this is just my opinion.
Note to CPM- Please e-mail me if you would like more information concerning my source of silver bars. I've no idea if you already broker through them and it's none of my business but if my information can help, it's your's for the asking.
Rich
MO VER MEG
(09/01/02; 13:43:32MT - usagold.com msg#: 84113)
Buying Silver
I must believe that someone (besides me) is buying silver futures and thinking about taking delivery. It is the absolute sharpest tool available to pith the CABAL.
I could sure use some advice on taking delivery - pitfalls etc. Anyone have a thought on this or maybe a good site?
How about taking possession in another country? Since trust is earned and dishonesty yields paranoia, this seems reasonable to me at this time (things have really slid a long way for parinoia to seem reasonable).
MOVERMEG
Gandalf the White
(09/01/02; 13:29:19MT - usagold.com msg#: 84112)
Suggested reading from the First Brithday Contest !
Leigh (09/21/99; 18:32:38MDT - Msg ID:14075)
O Mighty Oaken Table of Yore
We assemble together this evening, attired in festive garb and chattering excitedly as the celebration begins. It is the first anniversary of our beloved Table Round. Torches cast a hazy golden glow throughout the Hall, and we see that much care has been put forth to make our meeting place lovely and inviting. As we look around, we see faces unfamiliar to us, and yet...curiously, we feel a deep sense of closeness to one another. Excitement builds as we introduce ourselves, and hugs are exchanged. We laugh happily as we hear cries of: "You're just the way I imagined! How delightful it is to meet you at last!"
Our host motions us to the Table, and we take our places. We can see our group as a whole now. There are old friends and new ones, very distinguished guests and happy-go-lucky souls. It is a group that anywhere else might seem incongruous, but we hold each member dear. Our talk becomes subdued as we keep an open ear for the voice of our host. At last he rises and says, "Forum members, I have a most wonderful surprise for you this evening! May I introduce to you, Sir FOA!" We stare at the door in open-mouthed expectation, and a smiling gentleman walks in. He grasps the outstretched hands of those whom he passes, and walks to the head of the table. "Thank you, Mr. Kosares," he says. "I am honored to be here tonight. It has been a most interesting year, and I have enjoyed sharing it with all of you. But I did not come alone this evening. I have brought with me a man who has a strong love for mankind, one who holds much wisdom and a deep sense of honor. I am proud to be called the Friend of ANOTHER!" We Forum members jump to our feet as Sir ANOTHER enters the room. We cannot seem to stop applauding as we gaze upon the kindly face of the one whose thoughts have inspired and guided us for so long.
Our celebration lasts for many hours, yet each moment is touched with a sense of magic. We who entered the Hall as strangers have become the very dearest of friends. Throughout the past year, we have shared each other's concerns, suffered together, helped one another in our quest for knowledge. Daily we learn more about each other. We admire strengths and have compassion on weakness. Tonight we have much to celebrate, and it is to our USAGOLD Forum fellows that we instinctively turn. The lure of the mighty Table Round is overwhelming. It keeps us up late at night, and it beckons us in our sleep. We happily obey its call, knowing that our Forum friends are always glad to hear from us. May there be many, many more years of comraderie for us all at the Oaken Table of Yore!
===
Note: -- This deep thinking and heartfelt posting from Lady Leigh was one of the first entries in the FIRST USAGOLD Porum's "Birthday Contest".
Getting the picture ?
<;-)
Belgian
(09/01/02; 12:44:05MT - usagold.com msg#: 84111)
The future purchasing power (PP) of Gold ?
The present PP of Gold is quasi in line with the "official" COL (cost of living). Official, that is completely falsified. This falsification increased gradually over the past decades. In Euroland the COL-index, excludes energy and many other heavely taxed items as sigarettes and other items that are cataloged as basic needs (rights). These falsifications are absolutely necessary to hide the real COL and to prevent a faster currency depreciation through what is commonly called, inflation.
The COL-index has also been strongly moderated by the recycling effect of taxation reaching maximums. Production of real goods/services in places where currencies have depreciated to very little purchasing power and highly exposed to continued, rotating competition pressure.
No better example than goldmining that is done in countries where there's even not enough to print the virtual worthless confetti.
How can we possibly guess the real price and in what currency for any given product, with all these falsifications still going/growing strong/stronger ?
With a POO above 30$, all transport in Euroland stopped and desert oil advised us to lower taxes (75%) on the refined, rather than accepting the social implications (humhum) of a higher POO ! Now what will happen to the whole of price-structures when POO goes from 30$ to 100$ in the not too distant future ? Time out for any kind of falsification and day of reckoning. Chaos and panic. Unmanageble crisis situation on a global scale and the real meaning of hyperinflation will become clear. Financial collapse wich cannot be overcome with a general devaluation but simply by abandoning the old confetti to be replaced with a new one. It is the POO that can speed up the slower detoriation proces of the debt-growth.
The above very likely evolution doesn't give us a clue on the future purchasing power of Gold in numerical certainties. How will the debtbergs be erased or melted ?
How "hyper" will inflation be as to keep things moving or bluntly re-started ? Can an emerging new reserve-currency
be referred to the old ones (x times PP)?
How much default will be tolerated in proportion to devalued (hyperinflated) roll overs ? How much volume on production of real goods/services will be left in proportion to the new volume of new (revalued) currency (currencies) ? Financial collapse and its consequences (psychological impacts) are not to be calculated in advance.
Can the Argentina aftermath serve as a model of what might come ? But we will not be dealing with a local currency with limited impact but with "The" reserve currency, the US$ !
In chaos and panic, Gold's purchasing power is to be trusted, because it will have broken FREE. Free to protect and save. Reconsider its 25 fold revaluation within 10 years (1971 > 1980). Today it will be a multiple of those 25 times. It will not only compensate for lost purchasing power but will be FREE as to prevent the same mismanagement of the past. Free to signal that Gold Holders TRUST OR DISTRUST the rulers, any rulers.
A further prosperity contraction and giving back on what was (falsely) acquired, will not be tolerated by the general public. Even if it was possible to manage such a transition period as interlude for a relance. There are not enough alternatives to replace substantial amounts of crude oil. Even very expensive crude. There are still enough reserves of oil to discourage the intensive research on alternatives (fuel cells and other). And who is going to pay for such a vast renewal on infrastructures. See what happened to the web and telco's.
Today I received a colorfull invitation for attending a national investors symposium. Guess what is pictured on the frontpage...wafers of Gold bullion ! This with only one Gold advocate out of the seven top analysts/speakers (financial koelies).
TownCrier
(09/01/02; 11:29:19MT - usagold.com msg#: 84110)
This is what our elected officials see when they look at their voters
http://www.sunspot.net/business/bal-te.jobs01sep01.story?coll=bal%2Dbusiness%2Dheadlines
September 1, 2002
AP WASHINGTON -- Many Americans this Labor Day are thankful just to have jobs.
...The list of large employers seeking bankruptcy protection is formidable: Kmart, Polaroid, Enron Corp., WorldCom Inc., US Airways and more. Companies recently announcing layoffs include American Airlines, Charles Schwab, Williams Cos., Coca-Cola and Nokia.
--------------
You can almost hear the printing presses rolling out their "solution" for this pesky economic illness.
Gold is your immunization against the ill-effects of their "cure".
R.
a nation of one
(09/01/02; 11:21:33MT - usagold.com msg#: 84109)
response to Socrates964 (09/01/02; 06:29:36MT - usagold.com msg#: 84095)
Several years ago I read that one of the things that brought down Ancient Rome was an annual inflation rate of 3% that continued for a hundred years. In another place, previous to that, I encountered the information that throughout human history it has been the case far more often than not, that when a person bought a new home, he could rely on its value declining from the time that he bought it, not increasing. From this it may be surmised that ours are not ordinary circumstances, and, further, with some imagination perhaps, that conditions which prevail now are not coincidental or accidental or incidental but managed, controlled, even contrived for this very purpose, namely, to increase the wealth of some at the expense of others. Not to mention living off the rich land of North America and aggressively expanding without regard to desireable objectives for more than five hundred years, as our people have now done. Sorry, but once I evaluate the reliability of a source, I have seldom made a practice of retaining it. I may change this habit. But at this point that is how it has been.
TownCrier
(09/01/02; 11:20:29MT - usagold.com msg#: 84108)
In a nutshell
http://www.ocregister.com/business/boyd0901cci.shtml
(Universal Press Syndicate -- September 1, 2002)
Price-earnings ratios on stocks seem to have nowhere to grow and are prone to rising interest rates if the economy picks up steam. Plus, a strengthening dollar could depress the overseas profits of globally oriented U.S. firms, putting a damper on earnings growth. "There's nothing the economy could do to make me consider the S&P 500 a good buy here," says Ben Inker, asset-allocation director of Grentham, Mayo, Van Otterloo.
---------
Smart investors know the government will not sit idly while the economy weakens and slides down a hole. The government players will TRY to do SOMETHING. They have the ability to print, and they will throw new money at the problems, in effect forcing everyone to contribute to a more evenly shared loss, spread through inflation. This is a primary reason why investors continue to shift their portfolios in favor of gold. Call Centennial next week for assistance with your allocation.
R.
misetich
(09/01/02; 11:20:22MT - usagold.com msg#: 84107)
Crisis at Citi - As the stock slips, loans sour, scandals surface, and conflicts proliferate, Sandy Weill's legacy as architect of the universal bank is on the line
http://www.businessweek.com/magazine/content/02_36/b3798008.htm
Snip:
The most pressing of these problems are the scandals rocking Wall Street. It's starting to look as though the very model of the financial conglomerate is fundamentally flawed. Sprawling institutions such as Citi, J.P. Morgan Chase, Merrill Lynch, and others are riddled with conflicts of interest, compounded by abuses by aggressive bankers. Consider how banks and brokers have used loans as loss leaders to win lucrative investment-banking assignments or how they have cobbled together dubious structured-finance deals that have helped corporate clients mask their true condition. Or how research analysts at some firms have hyped the stocks of banking clients to investors even as they disparaged them in private e-mails. In the latest revelation, Citi's Salomon Smith Barney (SSB) investment-banking subsidiary gave telecom CEOs preferential access to shares of hot initial public offerings that could be flipped in hours or days at great profit. All of these schemes were designed to lock in fees at the expense of smaller shareholders who, in many cases, were stuck holding worthless securities.
............
It is far too early to write off Weill, but his personal vulnerability to the reform movement now rolling over Corporate America was underscored recently when Spitzer broadened his investigation of SSB to include the Citi CEO. The immediate issue is whether Weill pressured star research analyst Jack Grubman to upgrade his rating on AT&T from "neutral" to "buy" to help SSB win a lucrative underwriting assignment from the telecom giant in 2000. Weill declined to be interviewed, but a Citigroup spokesman says that he never told any of SSB's research analysts what to do and that any suggestion to the contrary is "outrageous and untrue."
.........
Weill did not begin to answer his own challenge publicly until after Citigroup was raked over the coals at a Senate hearing into Enron on July 23-24. Members of the Permanent Subcommittee on Investigations accused both Citi and J.P. Morgan Chase of helping Enron to mask its deteriorating finances by arranging $8 billion in "pre-pay" transactions--loans artfully contrived to look like commodity purchases. Internal e-mails obtained by the committee seemed to show that SSB bankers allowed Enron to improperly account for one such 1999 financing in order to keep $125 million off its books.
...........
Misetich
Citi - JP Morgan etc. represent a portion of a whole bunch of rotten apples in the bushel - and the worst is still to come for them
Got gold?
misetich
(09/01/02; 11:07:19MT - usagold.com msg#: 84106)
The Hard Consequences of Easy Loans - In the '90s, banks lent freely to corporations and syndicated the risk. Now, as debtors default, small investors could be hurt
http://www.businessweek.com/bwdaily/dnflash/aug2002/nf20020828_0019.htm
Snip:
Little-noticed changes in the ways banks indemnified their lending risks during the 1990s have left huge loans in the portfolios of bond mutual funds and hedge funds -- loans that are turning out to be far more volatile than anyone expected. Many of them were concentrated in the troubled telecom and energy-trading sectors. While the loans' losses don't come close to those experienced in the stock or high-yield bond markets, pressure could rise to require more disclosure to investors of the terms and conditions attached to company debt.
..........
As the 1990s progressed into the New Millennium, an increasing amount of that borrowed money came from banks. In 1991, a total of $234 billion of syndicated bank loans was issued, according to bank-loan information company Loan Pricing Corp (LPC). In 2000, issuance peaked at $1.2 trillion before slipping back in 2001 to $1.1 trillion.
That amount outpaced corporate-bond issuance, which totaled $879 billion in 2001, according to the Bond Market Assn. In the first half of 2002, $527 billion in bank loans were granted, far outstripping bond issuance.
................
INTRICATE COVENANTS. The syndication process also has some drawbacks, however. First and foremost, it seems to have allowed higher-risk companies to obtain more debt than they could have otherwise, increasing the potential for defaults and bankruptcies down the road. "To the degree that you can diversify risks, then credit becomes more widely available," says John Lonski, chief economist at Moody's Investor Services.
Indeed, the amount of "leveraged," or below-investment-grade loans, has made up an increasingly large percentage of total syndicated loans over the past decade, according to LPC. Bank lending is still very dependent on relationships between the lender and the borrower, so these loans are often structured much more intricately than stock and bond offerings, including little-known covenants that don't need to be reported in financial statements.
Several of this year's high-profile bankruptcies were triggered when a company failed to meet a specific hurdle, and its bank loan or line of credit was suddenly withdrawn. At Pacific Gas & Electric, banks withdrew financing when the utility's debt rating was downgraded, causing it to default on its bonds and notes. Some of the covenants are equivalent to telling a homeowner that if he or she loses his or her job, the mortgage must be repaid in full, says Lonski.
............
DISAPPEARING EQUITY. Inflated equity markets also encouraged more lending, points out Lonski, since many companies could boast low debt-to-equity ratios -- even though they were losing money. "The gross overvaluation of U.S. common stock made it possible for companies to take on so much debt," says Lonski. Corporate debt outstanding as a percentage of the market value of stocks in the first quarter of 2000 was actually quite low -- just 28%. In contrast, in the third quarter of 1990, debt totaled 94% of the market value of common equity, says Lonski.
..........
Most of the fixed-income community is quick to point out that so far in this recession, debt losses have been minor compared to earlier cycles. Of course, if the economy deteriorates and syndicated bank loans trigger more bankruptcies, investors will be less forgiving. For now, the process of syndication, which allowed banks to lend risky companies huge amounts of money, is one piece of the New Economy puzzle investors should understand - - and watch closely.
**********
Misetich
The worst is still to come from the bubble burst - and it won't be long before a bank derivative blow up occurs
Physical Gold shines the most during turbulent times - Get some
Got gold?
TownCrier
(09/01/02; 11:07:11MT - usagold.com msg#: 84105)
Same story everywhere? To whom is your portfolio entrusted?
http://www.business.scotsman.com/index.cfm?id=969962002
(scotsman, 1 Sept 2002) -- THE cry of the old City hands in the dying days of the last millennium was that the Square Mile was populated by youngsters who had never seen a bear market. Today the complaint is that the investment houses are full of youngsters who have never seen a bull market. It is now 30 months since the pin of reality touched the balloon of inflated share prices and the long bull run ended. A bear market is defined as a 20% fall, but we have now had that and had it all over again to put us in double-bear territory.
And during that slide in share prices, City houses have cut their cloth to suit today's straitened style. The old hands remain because it is they who are doing the cutting, but the thirtysomethings that arrived on the post-yuppie wave are being edged out and replaced by even younger equivalents on much-reduced salaries and promises of bonuses based on improbable performance.
----------------
With the proper use of gold you don't have to be an active gamer or risk your stakes with a rookie.
R.
Gandalf the White
(09/01/02; 10:56:33MT - usagold.com msg#: 84104)
A MONTH of Celebrations !!!
Second NOTICE to "Lurkers" !
HEAR YE, HEAR YE !!!
September is hereby declared as the USAGOLD Forum's MONTH of Celebrations !! The Castle decorations have begun and the music (under the direction of PH in LA) is warming up.
BIG plans are being finalized in the Throne Room and the SECOND call for ALL LURKERS to Read the "Forum Decorum Rules", and make that FREE REGISTRATION request to obtain posting privileges, has sounded.
WHY all the hoopla and hustle bustle, one asks ?
Could it be the Celebration of the Forum's forthcoming Fourth Year Birthday ?
YEP ! AND, the rumor is that the Castle's Treasury Vault is overloaded and that true WEALTH will be shared amongst the Goldhearts of THIS Castle.
First will be a GOLD PRICE SETTLEMENT Contest, with REQUIRED statement of thought on a specific question.
(Watch for the announcement soon.)
THEN after the end of that Contest, "THE BIG CONTEST" will cap off the MONTH. Details of "THE BIG CONTEST" will be announced my SIR MK himself. (However, rumors are that preliminary historical hints may be leaked from the Tower.)
<;-)
misetich
(09/01/02; 10:40:18MT - usagold.com msg#: 84103)
Eliot Spitzer: "Stay Tuned"- The aggressive New York AG who hit Merrill with a $100 million fine and is now probing Citigroup talks about modern banking's conflicts
http://www.businessweek.com/bwdaily/dnflash/aug2002/nf20020830_4805.htm
Snip:
Now, Spitzer is going after Citigroup (C ), its investment bank, Salomon Smith Barney, and its CEO Sandy Weill. At issue, controversial former SSB analyst Jack Grubman, who changed his recommendation on AT&T in November, 1999, from neutral to buy. Citigroup won a $10.6 billion deal to underwrite AT&T's tracking stock in April, 2000, and Grubman lowered his rating months later.
Weill has been drawn into the controversy because he sat on AT&T's board at the time. AT&T was subpoenaed on Aug. 23 concerning the investigation.
............
Q: Ultimately, Merrill seems to have gotten off with little more than a small fine. That's what analysts speculate will happen with Citi, too.
A: It's too early to say, but keep in mind the $100 million that Merrill is paying is only a fraction of what they will pay in [lawsuit] settlements in the next few years. The market cap took a huge hit.
And some of the conflicts that have been revealed have had a real negative effect on the balance sheets of these financial-services firms. One of the consequences [of the conflicts] may have been misguided loans made to investment-banking clients.
Q: You can't help but wonder where the bank regulators were in all this. Though bank balance sheets are healthy, the banks certainly took on some serious reputational risks.
A: There have been several lapses at least. The internal compliance departments at the firms have been absent, the regulators from the SEC to the OCC [Office of the Comptroller of the Currency] to others have not been visible. [We need to rethink] how we examine the banking system.
Q: Any suggestions?
A: No, I'm going to stick with what I know here.
Q: One could infer from the Merrill settlement that disgorgement -- getting investors' money back, by, for example, establishing restitution pools that companies must pay into -- isn't one of your priorities.
A: I'd say stay tuned.
********
Misetich
Worth repeating.......
Quote
A: There have been several lapses at least. The internal compliance departments at the firms have been absent, the regulators from the SEC to the OCC [Office of the Comptroller of the Currency] to others have not been visible. [We need to rethink] how we examine the banking system.
End of quote
Got gold?
USAGOLD / Centennial Precious Metals, Inc.
(09/01/02; 10:30:52MT - usagold.com msg#: 84102)
$5.95 online (save $9 plus tax and time vs. in-store purchase!)
http://www.usagold.com/cpm/abcs.html
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