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ARCHIVED DISCUSSION FROM 8/17/2002
All times are U.S. Mountain Time
(Yesterday's Discussion.)
steady
(8/17/02; 22:36:13MT - usagold.com msg#: 83211)
hidden debt of the usa.
How Big Is the Government's Debt?
If we use the most common definition -- the sum total of all outstanding bonds held by the public -- the federal government debt stood at $3.3 trillion at the end of 2001. That amounts to $11,657 for each American. However, this explicit debt measure does not reflect the full magnitude of what the government owes. Looming just over the horizon -- and wholly ignored by current measures -- are the accumulated obligations to pay Medicare and Social Security benefits to the baby boom generation and other current program participants. Although not officially reported as debts, these implicit commitments dwarf the debt held by the public.
As of 2001, the accumulated entitlement obligations owed to all people (including all current workers) who have earned Social Security and Medicare benefits is $12.9 trillion for Social Security and $16.9 trillion for Medicare. [See Figure I.]
When these obligations are combined with the debt held by the public, the total burden equals $33.1 trillion, or 10 times the official debt measure.
This "total debt" is more than three times the size of the nation's total output in 2001, and amounts to $116,381 for every man, woman and child in America.
read the rest.........
steady
(8/17/02; 22:23:55MT - usagold.com msg#: 83210)
gold
i was strolling by a magazine rack when the cover of sept smart money caught my eye.... it was gold... gold bars on the cover nonetheless dang the public is being awoken to golds investment value, mainstream magazines featuring gold on the cover.... am i dreaming... no i didnt read the magazine they probably are here reading this site to get the info to put in the magazine!
Black Blade
(8/17/02; 21:54:21MT - usagold.com msg#: 83209)
Preparation - Food Storage
Considering the drought conditions in the western hemisphere (and parts of Asia) and reduced grain supply over the last couple of years and the draw down on supply, a good food storage program is worth looking into. Food prices are probably going to increase. I see that meat prices are going lower as feed prices are increasing and grazing lands are getting parched. Ranchers and farmers are culling herds now. I went by the local supermarket and I see sales on beef and pork, though I have plenty of game in the freezer. Another point to keep in mind is that as petroleum prices increase, so too will commercial pesticides and herbicides that will increase costs.
I keep a good stock of grains, dry goods and canned goods on hand that I get in bulk or by the case when on sale. It sure has been nice to not have to go to the store while sitting on the "Bone Pile". There are other items you can get to add to storage as well. Of course you can add a few of the more exotic items that keep well. I have a friend from the Azores who occasionally sets me up with a good supply of bacalao (salt cod) for my storage, though it requires a good soak to remove most the salt before preparation.
A recent report that I don't have on hand right now, discusses the current problems with fresh water supply in the states. Storing some water would not be a bad idea either. It is easy and not costly right now. No matter how it pans out, it isn't that difficult to take precautions. Anyway, it is just a part of an overall plan to be prepared just as we (or most of us anyway) prepare by accumulating precious metals as another layer of security.
Now to broil a couple of trout and make some saffron rice for dinner and a couple of cups of yerba maté.
- Black Blade
Waverider
(8/17/02; 21:12:25MT - usagold.com msg#: 83208)
MoVerMeg, Cyberbat
Lead? Why lead to ones investment portfolio? This is the first I've heard of it. TIA!
BTW, I've 50 lbs. of fresh wild salmon at the smokehouse and next weekend is set aside for home canning - time to reap the harvest from the summer and store up for the winter - it may be a long one! Cheers,
Waverider
silvester
(8/17/02; 20:19:52MT - usagold.com msg#: 83207)
No Subject
Often I wish we like thinkers lived closer together. Sometimes feel we are spread too thin.
cyberbat
(8/17/02; 20:07:58MT - usagold.com msg#: 83206)
Mutual Funds
I'm just wondering if the mutual fund industry would embezzel funds from their money market fund to pay for redemptions like the fed does with the s/s fund. Hmmmm, it may be time to get out of that too!!
Mo ver meg, lead was the first thing to go into my portfolio. You could call it a long term investment; very long. It will be the last to be drawn down upon, but I will not hesitate to do so in order to protect my other investments.
MO VER MEG
(8/17/02; 19:15:32MT - usagold.com msg#: 83205)
(No Subject)
A beautiful evening for each of us to take a moment and write a short note to our Congresspersons about CFTC complicity with the criminal derivative-producers. Be sure to keep copies. I told Chairman Newsome that I looked forward to sharing my correspondences with the upcoming Congressional investigation of the CFTC's involvement in this theft.
I also urge each reader this week to overcome procrastination with respect to picking up basic essentials (metals, fuel, food, tp, medicine, etc.). I topped off the barrels today and will do the pantry tomorrow. As Mad Mac said, "Be sure to add lead to your precious metals portfolio". I think the time is quite short.
Commitment conquers complacency.
MOVERMEG
Mr Gresham
(8/17/02; 19:05:53MT - usagold.com msg#: 83204)
What keeps people from rising up against Wall Street?
(Reflections on 84-year-old women put into tech mutual funds -- sheesh!)
The utter passivity of them -- I'm seeing clearly the "insiders'" view of the investing public as sheep to be sheared, then slaughtered in due time.
What keeps people from marching on Wall Street's plunderers with torches lit, and tar and feathers?
I think it is the shame that they could be looked at so callously; after all, this is their "LIFE'S SAVINGS" they've entrusted to these young men in suits! Their hard-earned dollars deserve respect, and so, those fine prospectuses reassure them (except for all the warnings, glanced over), they will receive same.
The idea that others could simply pillage them (well, 2% fees a year, anyway -- on NO earnings) and expect them to keep in line for it, would be too SHAMING for them to acknowledge at this time. It would be a violation at the deep level of challenging their love of country, and family, and work ethic that brought them to this time of wealth accumulated.
When their statement reads "$200,000" this year, instead of last year's "$280,000", they throw up their hands, "Oh well, that's the way it goes." Some greedy young man in a cheap suit just bought himself a new Porsche...
Mr Gresham
(8/17/02; 18:05:50MT - usagold.com msg#: 83203)
Where is EscapeTheMatrix lately?
Also GauntletRunner2?
For we are characters inside a great financial video (/pinball?) game, inside someone's screen, running about trying to find our escape.
(Spent this A.M. going over another l'il ol' lady's JPM trust statements, and trying to figure just where her money is, is a puzzlement indeed! To be disappeared with a mere mouseclick, I'm sure...)
Aristotle
(8/17/02; 17:28:22MT - usagold.com msg#: 83202)
Sir Belgian, it's great to find you so active today!
Let me put a HUGE echo on a comment from your first post today:
"As A/FOA, tried to make us understand that to get rid of the paper gold contract market...a "gigantic" trap must be set to finish this non physical trade once and for all. Gold is in my opinion, the only tangible not ment for substantial volumes of paper contract trades."
Beautifully said. If players get their fingers burnt SOOO BADLY on Gold papers that they thought would be a Sure Thing (as a leveraged investment), then the details would take care of themselves. Heck, it wouldn't even require an act of Congress to eliminate "counterfeit" (i.e. paper/contract/derivative) Gold -- the burnt hand teaches best the course of future action: =avoidance.
Of course, Congress will want to take some credit for "cleaning up the corruption" and will likely make de jure what has become de facto -- curbs on the trade of artificial Gold.
As you probably agree, nobody today *knows* what the proper price is for the value of Gold, because the vast impurities of paper Gold give us an impure price measurement of its value. Only at such a time that the impurities are "refined" away will we see what price the market assigns to the value of the little bit of real Gold that remains.
How many times have we had this drilled into our heads here, essentially -- "Only the Metal can provide the benefits of Gold. Paper is only paper."
This was the premise of my old post on the proper role of Gold in an imperfect world, and for emphasis, let me join in that view again to repeat your succinct remark:
"Gold is in my opinion, the only tangible not ment for substantial volumes of paper contract trades."
The sooner more people grasp the significance of this simple notion, the sooner the race will be on between two horses -- DeJure and DeFacto! We'll know that DeJure has won if we get the official "Lightning in the Night."
As the world turns, it is a wonderful ride to be on!
Gold. Get you some. --- Aristotle
Sierra Madre
(8/17/02; 16:57:21MT - usagold.com msg#: 83201)
Belgian - mcuh obliged for your thoughts!
This is the second time you devote considerable time to a query of mine. Thanks very much, indeed, for your kind attention.
Well, you may be quite right. I suppose it all boils down to just how "omnipotent" we feel the U.S.A. is. It's a question of perceptions, since we don't have access to the facts - if any human does have such access.
I ask my intuition to tell me what is the correct thinking in this matter, but my intuition has its cellular disconnected, apparently. No answer.
We shall just have to wait and see.
Here's another question: what if ONE country decided to allow free coinage of silver? It seems to me that might prick the dollar balloon as well. Argentina? Venezuela?
On a fun note: in one of your replies to me, you mentioned the "cadans" of debt. I understood perfectly; since I am a Spanish speaker, I related the word to "cadenas", meaning "chains". I had to smile! You write English vastly better than I could write French, so keep up the great, interesting posts!
Sierra
Belgian
(8/17/02; 16:52:23MT - usagold.com msg#: 83200)
Iranian oil for euro (BB) !
Is it co-incidence that this x-thieth trial ballon is lounged when Iran and Russia (second to OPEC) openly advertise their co-operation !!!-??? No it isn't ! Russia wants to have its finger in the pudding as it comes to co-balancing this globe's rapport de forces. First it was the NATO discussion. Now it is on the economic (monetary) front that Russia doesn't want to be denigrated (insulted/ridiculed). Who could imagine this oil for euro a couple of years ago ? It was A/FOA who teached us this !
First Iraq, then Iran and soon Saudi Arabia (BIS MEMBER !!!)
might announce the oil for euro, shocking phrase. Next is Russia. Then North sea oil and African oil might follow soon. Same oil for two different currencies during another transition period ? Or maybe better : cheap oil for euro and expensive oil for US$ (plus Gold) ? US$/euro temporary period of parity to facilitate the transition ?
AllanC
(8/17/02; 16:46:34MT - usagold.com msg#: 83199)
Sierra Madre's Question
@TownCrier
I was actually thinking along the same lines, the entity taking the other side of the trade is someone other than a mutual fund. That means it would probably be "a big fish" ie company itself, another company, major sockholders in a company, rich entrepreneur a la Soros, a bank, people who want a controlling interest in a company, PPT?...these are the types of investors who don't put money in mutual funds.And they are needed to keep the markets liquid. If liquidity were to dry up, then even a small fund redemption would send the market into a tailspin.
And just because these "big fish" are taking the other side of the trade does'nt mean they will be successful. Usually the majority of these types like to get in when stocks are fundamentally undervalued.
AllanC
TownCrier
(8/17/02; 16:43:35MT - usagold.com msg#: 83198)
Sierra Madre...
BINGO!
R.
Sierra Madre
(8/17/02; 16:39:50MT - usagold.com msg#: 83197)
Towncrier...thanks for clarifying what we are talking about....
So many confusions arise from imprecise statements!
I was talking about "A" mutual fund. Cash coming into a fund must be equal to cash going out, unless the cash position is drawn down.
If we take ALL the Mutual Funds together, then "outflows" balance "inflows" IF they are selling to each other. Net "Outflows" will be present if some of the Mutual Fund sales are back to the public, where the cash came from in the first place. In this case, the Mutual Fund industry is shrinking, for two reasons: One, the stocks they are holding are presssured downward in value, due to selling into the general market (not to each other) and Two, they are returning money to the public. Have I got it right this time?
When all the Mutual Funds find themselves pressured to return CASH to the public, it's going to be an ugly picture.
As I said, the process of going UP is very different from the process of going DOWN. Buyers disappear.
That brings up the question of the Fed. It seems to me the Fed would extend very ample credit to the Mutual Funds, to enable them to return money to the public, WITHOUT having to sell stock. Maybe already doing this? This would delay a collapse. But in the long run, the Fed would be stuck with a pile of highly overvalued stock given in collateral by the Mutual Funds. (I don't suppose the Fed cares much, one way or the other.)
The way things are these days, that's what I suppose will have to happen.
Thanks for the patience, Towncrier
Sierra
Belgian
(8/17/02; 16:26:26MT - usagold.com msg#: 83196)
@ Sierra Madre
You : If the US wins, Gold will be capped/managed for some more time.
I have my doubts about this logic.
A winning US means : the dollar remains unchallenged and keeps it purchasing power !? Your logic started from the premisse that it is only the US that is (has been) managing POG !!! I am afraid you have it wrong here and that other than US Gold Giants, will take care of POG, regardless if the US (the dollar) is winning. It is my opinion that today it is the POO which is challenging (provoking) the dollar's worth. If oil should fail...Gold will take over the job ?
Goldwar is the last war to be fought and therefore decisive.
It only suffice one Western Central Bank (BIS or outside BIS-candidate Eurolander) to announce it will officially buy (not sell) GOLD and the pressure is on even before one ounce is even purchased. That's what the mark to market is for !
IMVHO, a big fraction of this globe is after the dollar with increasing conviction. From who did China purchased Gold ? Why is Russia (central bank) accumulating its own mined Gold ? Why is China investing in Gold mining on its territory to substitute imports ?
As I've tried many times to do some simple math on how easy it is to corner the present paper gold trade for good...the dollar is given some extended lifetime for opportunistic, pragmatic reasons. A Gold buying panic is as easely managed as a Gold des-orientation. But one does not engage in such an enterprise on an "experimental" basis. The next BIG Gold-Act will be a relative transparent one and not the secret shufflings of the past.
Different Central Banks offered Gold reserves for forward sales. What if some of them decide, this management has come to its end ? The low POG was Good for the US$ and a strong US$ "WAS" good for other nation's prosperity. Do expect the reverse being organized when appropiate.
The history of Gold gives evidence that Gold has always been much more as what is officially (commonly) stated, that it is. Gold is POWER ! For a japanese or Saudi housewife and central banks as well.
It is my strongiest conviction that the US$ is encircled.
Geo-Politically, economically and monetary. The dollar has been the winner for the past 70 years. So *was* communism up until it suddenly crashed with the speed of light !
Gold's management needed a Berlin Wall and got one builded/constructed by ***temporary*** mutual interests.
That wall of shame was eradicated without one single shot fired. Same will happen to Gold. It will be set FREE with or without another period of victory for the US$!
Many researchers here on the forum do provide evidence of this evolution. The many Gold authorities, don't seem to see things "this" way. Find this very strange !
As if FREE GOLD seems to frighten them. Nevertheless, Sir Hamilton, in his recent essay, does mention 5.000$ per ounce as a starter for Free Gold's ultimate revaluation.
Please do remember sept. '99 as the WA -Gold spike ! How can we possibly make any time-guessing on such a big change ? Who possibly could have imagined the WTC-atrocity. And who could have dreamed of the US doing succesfully in Afghanistan what the Russians weren't able to do during 10 long years of fierce fighting. There are answers behind these paradoxes. The same goes for Gold's nearby future.
There are a lot of veryt good Gold essayists out there who can bring this message to the general public in a very easy to understand language. But they do hesitate. POG's future isn't beyond their 400$ > 600$ > 1.000$ horizon (to da moon). Why hasn't A/FOA projection of a POG 30.000$ never been questioned or even ridiculed ??? He made me think...think very deeply and search for understanding and evidence.
Oh yes, the US$ can win another race. Gold will win the whole contest. Thanks Sierra !
TownCrier
(8/17/02; 16:12:03MT - usagold.com msg#: 83195)
Looks like I need to learn to type faster.
R.
misetich
(8/17/02; 16:10:54MT - usagold.com msg#: 83194)
mikal
"Perhaps they've thought of doing all this, and more just for starters."
*******
No question they will pounce on the opportunity and do their thing. However, there appears to be dark clouds on the horizon - the timing of event - is of one question - perhaps "all the preparation" has been laid out - and contingency plans are in place -
Is it the Feds agenda or "someonelse"? Guessing the latter
Got gold?
TownCrier
(8/17/02; 16:09:26MT - usagold.com msg#: 83193)
Sierra Madre #83185 -- fund cash flows
When you first raised this point a week ago, I tried to clear up your confusion but failed. So here's another go at it, in different words.
You are mistaken when you say. "The "outflows" of funds MUST be the same as the "inflow" of funds. ... there is NO WAY more cash can come from redemptions, than is going IN from new purchases."
It seems that you are assuming -- incorrectly -- that funds can only sell their assets to other funds.
The latter half of the excerpted phrase is true enough, but you must look at the whole body of the stock market and its participants, not just the fraction involving the funds.
If a citizen wants to exit his position in a mutual fund, (and for simplicity we'll assume that fund's sole holdings is IBM) then to provide the cash the fund might sell some of its IBM stock to the wide participants on the stock exchange. A net outflow of money from mutual funds would mean that the IBM stock was bought by someone other than another mutual fund.
Was I successful in being clearer this time? If not, show me where I've failed and either I'll chip away at to your advantage or else you'll succeed in teaching me the error of my thoughts.
R.
Black Blade
(8/17/02; 15:32:18MT - usagold.com msg#: 83192)
Re: Sierra Madre
Actually the stock may not be "worthless" but could be sold at a lower price. That is if the fund sells their "losers". At some lower price someone may consider the stock reasonably priced at lower levels. This selling will in turn put downward pressure on share prices.
Now I really got to go to slay some fish before the late afternoon winds pick up. Cheers!
- Black Blade
Sierra Madre
(8/17/02; 15:32:16MT - usagold.com msg#: 83191)
More comments on the Mutual Fund situation:
Yes, the Mutual Fund industry must be shrinking, a way of saying that they are "net sellers" of stocks. The public handed over billions to the Funds, they bought stocks and forced the prices up. Now, the public wants its money back. So, the Funds have to sell. Selling forces prices down, so the money being returned to the public is going to be less than was invested. Hmmm
And buying and selling are not symmetric. When the Funds were buying they bought from each other, splendidly, profusely. Up went prices.
Now, they are in "selling mode"; but, while the Funds were so chummny on the way up, they are certainly NOT going to be good friends helping out, on the way down! Every man for himself!
And, ff not other Funds, who is going to buy the massive amounts of stock that is going to be dumped shortly?
The Fed?
Interesting, or as you would say, BB, "Grim".
Sierra
darkhorse
(8/17/02; 15:27:50MT - usagold.com msg#: 83190)
@Sierra
This might just be too simple of an example, or maybe even my own stupidity, but consider this:
I invest in a mutual fund with (pick a number) other people. We all invest the same amount...same stocks, same number, same value. After a series of serious pullbacks in the SM I decide the wheat is more of a golden shade (ok, admittedly I'm really reaching to include our favorites here) elsewhere. If everybody else in that fund wants to stay and ride things out but I pull what's left of my money out of that fund, that is a fund redemption. Nobody else has to take my spot. Loss of value from shrinking stock prices is one thing...people pulling their money out and fewer/nobody else putting their money in is net redemptions.
Sierra Madre
(8/17/02; 15:21:39MT - usagold.com msg#: 83189)
Thanks Black Blade, for responding...
In other words, I am right? After cash position at Mutual Fund is gone, only way to redeem (pay out cash) is to sell Mutual Fund stock to someone else, who puts up the money that is going out. If no one puts up the money, no cash goes out in redemption, because the stock has turned worthless.
Hmmm...
Mutual Funds....not a good place to be.
Sierra
Black Blade
(8/17/02; 15:15:07MT - usagold.com msg#: 83188)
Re: Sierra Madre
The current flow of cash into funds has decreased, while the flows out of funds are forcing redemptions of current stock/bond holdings. The funds are shrinking. Fidelity Magellan (the largest fund) has had large redemptions that have made the news over the last few months. The cash reserves in several funds have been depleted and now shares must be sold to meet redemptions.
- Black Blade
Black Blade
(8/17/02; 15:07:18MT - usagold.com msg#: 83187)
Greenspan's judgement is questioned as US recovery falters
http://www.examiner.ie/pport/web/business/Full_Story/did-sgcM5letzyIGU.asp
FEDERAL US chairman Alan Greenspan has backed himself into a corner.
Snippit:
For the past 18 months he has been hailed as a genius, but the recovery he looked to have engineered looks to have blown up in his face. If true then watch out for further carnage on global stock markets in the near future. By slashing US interest rates to 40 year lows, at 1.75% over the past 18 months, he kept the US consumer buying and prevented the economy from going into serious recession. To date that seems to have been the case, but the cracks are beginning to appear yet again. Critics argue the cracks never disappeared. They point out that the citizens of the US have moved from being net savers to net borrowers. And they fear that when US interest rates start to move back up that millions of people will be over extended. Concern also is growing that the much vaunted recovery in the US is not emerging. Just a month back he told Congress that the recovery was underway. Earlier this week he said the total opposite and said the prospects of another cut in interest rates had increased.
Black Blade: The economy has been afloat on cheaper rates as consumers mortgaged to the hilt and burying themselves under record levels of debt that they will never likely be able to pay off. This time when the markets sink and consumer spending subsides, we should see the US experience the same problems as Japan or even worse – remember the Great Depression? Most likely not. But it is a growing possibility.
Off to slay some more fish!!!
Sierra Madre
(8/17/02; 15:01:19MT - usagold.com msg#: 83186)
Belgian: Comments on US self-isolation
Sir Belgian:
Derivatives don't only occur in finance. They occur in politics as well...
A certain group of people have had for a very long time, a policy of "Us against the World".
This same group has enormous power in the U.S., and the U.S. attitude of "U.S.A. against the World" is a derivative of the Master Group psychology.
Capish? What does this have to do with gold? USA wins: gold is suppressed for a few more years. USA loses: gold to the moon.
Sierra
Sierra Madre
(8/17/02; 14:48:58MT - usagold.com msg#: 83185)
So-called "outflows" of funds from Stock Mutual Funds...
Black blade: allow me again to question this concept of "funds" outflowing from the Mutual Funds through redemptions. Excusa me, but you see...
The "outflows" of funds MUST be the same as the "inflow" of funds. The "outflows" CANNOT be greater; or at least, the limit by which they can be greater, is the cash position of the Mutual Fund(s). When the cash position is gone, there is NO WAY more cash can come from redemptions, than is going IN from new purchases.
So, some more intelligent people are getting out, and other less intelligent people are making their exodus possible.
As for volume being low: all it takes to vaporize the value of a stock, is a tiny amount of stock selling for next to nothing, because THERE ARE NO BUYERS. In that case, there was a collapse in the value and there was, practically speaking, NO EXODUS of funds.
The whole Mutual Fund edifice can crash in value, when no buyers turn up with the cash, to allow the scared holders to get out.
I think there is a great confusion between the amounts of stock trading hands at progressively lower prices, with "funds outflow". As I say, no "inflow", then no "outflow". Price is another thing, requires only a scarcity of buyers to produce a collapse in value.
Your thoughts?
Sierra
steady
(8/17/02; 14:36:43MT - usagold.com msg#: 83184)
(No Subject)
http://www.wn.com/s/sitemap/index.html
a usefull link?
Black Blade
(8/17/02; 14:25:38MT - usagold.com msg#: 83183)
Iran Mulls Dropping Dollar As Currency Of Oil Sales
http://biz.yahoo.com/djus/020817/200208170829000004_1.html
Snippit:
TEHRAN -(Dow Jones)- Iran is considering whether to change the currency basis of its crude oil sale from the U.S. dollar to the euro to avert losses from the declining value of the dollar against major world currencies, managing director of the National Iranian Oil Co., Seyyed Mehdi Mir-Moezzi, said in remarks published Saturday. "Decision making in connection to the continuation of transactions in dollars is being considered in a committee set up at the Central bank of Iran," the local daily Hamshahri quoted Mir-Moezzi as saying.
Black Blade: This isn't completely unexpected. Other ME oil producers are considering doing the same. It is partly the falling dollar and also the growing antagonism between the US and the Middle Eastern countries. The dollar has lost its status as a "premier" currency and is likely to be only considered as part of a "basket" of currencies in foreign reserves.
Black Blade
(8/17/02; 14:16:37MT - usagold.com msg#: 83182)
Investors Not Biting on Bullish Bait
http://biz.yahoo.com/rb/020817/column_stocks_week_1.html
Snippit:
NEW YORK (Reuters) - "Come back in, the water's fine," say Wall Street experts. But investors have gotten wiser, and they're not biting on this bullish bait from analysts who have been collectively wrong for so long. Investors have been scorched many times by the stock market and a whopping $7 trillion of their wealth has gone up in smoke since early 2000. With people intensely risk averse, a new conservatism is developing among investors. Many are convinced the market is not the smart place for their money, and they're ignoring the warning that they may miss out on the next great bull market.
"Repairing of damaged portfolios and rebuilding net worth is the story of upcoming months," says Asha Bangalore, economist for Northern Trust Co. "The extravagant years belong to the past." Indeed, investors flirting with retirement and even those in their mid-50s are preserving what's left of their shriveled 401(k) money. It will take years, with any luck, for some people to rebuild the wealth lost during the 2 1/2-year bear market. A tornado of fund redemptions -- Wall Street lingo for selling of mutual funds -- has fueled the steepest and most severe market slump in two generations. There was an outflow from stock funds of $1.9 billion through the week of Aug. 7 and nearly $41 billion ran out in July, the biggest monthly drain since AMG Data Services started collecting the data in 1992. The exodus of money will restrict the ability of fund managers to buy more stocks, which could throw a wet blanket on the market's recovery for a long time. Feeling betrayed, investors may be reluctant to again risk their retirement money. Many have been fooled too many times by head-fake rallies since the crash began in March 2000.
Black Blade: Indeed, consumer spending is slowing and that has several Wall Street commentators worried. Corporations have already stopped spending. Wall Streeters are now debating whether this market recovery "has legs". Meanwhile outflows from funds are still strongly outpacing inflows. Most days trading volume on Wall Street has been pathetic. Until corporate "actual" real earnings materialize, there is unlikely to be much of a recovery. So far most of the activity appears to be confined to investment institutions. This is not blanket buying by the general public. As investors watch their remaining wealth vaporize the outflows from funds will continue and consumers will spend less. The large unemployment announcements will also dampen consumer spending as fear sets in. In a word – "Grim"
Belgian
(8/17/02; 12:58:40MT - usagold.com msg#: 83181)
Re :
@ JCTEX : Indeed Sir, no-one, taxpayer or not, will ever pay back any fraction of debt. Interesting to know how taxpaying is divided percentage wise. Thanks.
@ Misetech : Y're doing a great job here with your research, delivered on our plates. Thanks !
The US's rejection of its membership of the "International Criminal Court", is some more, strong, evidence of how the dollar-block is drifting away from the international community (euro-symphatizers). Israel + Afghanistan bombing would come as first cases. Idem dito for Russia strengthening ties with everyone except the US !
How far will the US go in isolating itself, politically/economically ? How must the dollar go to hide its mis-management and oil (standard) dependance ? All this, only 50 years after the allied forces landed on D-day ! TG/A/FOA : The dollar is at the end of its lifetime !?
mikal
(8/17/02; 12:09:50MT - usagold.com msg#: 83180)
@misetich
"JPM the Feds worst nightmare" I would agree with that statement were it not for the opportunities it presents them. As Belgian has said today, a recourse could involve nationalization or currency devaluation. Perhaps they've thought of doing all this, and more just for starters.
barnaclebob
(8/17/02; 11:46:01MT - usagold.com msg#: 83179)
The Axis of Corporate Evil
http://www.hereinreality.com/news/axis.html#5
In what appears to be an attempted corporate takeover of America, the same names keep coming up time and again. Click on the numbers or scroll down to see the connections.
Note: This chart does not touch on campaign spending. Bush/Cheney represent the State Department. Many of the seeds of this evil axis were sown during the Bush, Sr. and Clinton administrations.
Ouch! Got Gold?
USAGOLD / Centennial Precious Metals, Inc.
(8/17/02; 11:16:48MT - usagold.com msg#: 83178)
Put a foundation under your portfolio diversification decisions
http://www.usagold.com/cpm/abcs.html
 | The ABCs of Gold Investing"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.
|
misetich
(8/17/02; 10:34:24MT - usagold.com msg#: 83177)
Stock plunges a sign of worse to come - Investment banks face derivatives nightmare, says critic
http://cbs.marketwatch.com/news/story.asp?guid=%7BCBA46288%2D845B%2D48F4%2DAA9F%2D65D467F9C7F4%7D&siteid=mktw
Snip:
SAN FRANCISCO (CBS.MW) -- Where there's red ink in a stock price, there's trouble -- and that bodes ill for the largest U.S. investment banks.
There is overwhelming evidence this year that a company's plunging equity is almost always a sign of worse to come. Shares of Tyco (TYC: news, chart, profile) dropped precipitously, to levels no one thought possible, earlier this year. Only to keep falling, again and again, on repeated rounds of horrible charges leveled against the company's accountants and its top executive.
.............
The big question for most of us is when other shoes will drop on companies whose shares are reflecting deep trouble. This applies, of course, to Vivendi and other media companies that face a cash-flow crisis, always a red flag to banks and bond holders.
The world's largest investment banks are almost surely next on the hit list of endlessly falling equities. Standard & Poor's Ratings Services just said it may cut credit ratings on Merrill Lynch, Morgan Stanley (MWD: news, chart, profile) and J.P. Morgan Chase (JPM: news, chart, profile). See story.
S&P's credit analyst pointed to "the deteriorating environment for the profitability of the investment banking industry." Other banks, Goldman Sachs Group (GS: news, chart, profile) and Lehman Bros. (LEH: news, chart, profile), also face downgrades in S&P's review of these big banks' short-term credit ratings.
............
J.P. Morgan Chase and other large banks have suffered rapid losses in the value of their common stocks. J.P. Morgan has been hit especially hard, with its shares off as much as 40 percent since July 1 as the specter of derivatives-related losses haunts the halls of the New York institution.
***********
Misetich
JP Morgan will be hard pressed in the next several months. Debt provisions will rise, as earnings will undoubtedly shrink - dividend cut on the horizon -
JP Morgan the Feds worst nightmare
Got gold?
Waverider
(8/17/02; 10:22:04MT - usagold.com msg#: 83176)
DeRonin: Saudi
I was reading on some of the Arab newssites that the suit seeks ''in excess of $100 trillion''. The Globe and Mail reported one trillion. The lead attorney said the money would likely come from assets held by the defendants in the United States. I agree - regardless of the merits of the lawsuit, if it were me named as a defendent I would be repatriating my assets ASAP. Meanwhile, the suit will act to further erode ME-US relations. Cheers,
Waverider
Golden Bear
(8/17/02; 10:13:12MT - usagold.com msg#: 83175)
The Collapse of the Inverse Pyramids
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=14623
Snippit:
"..... Since its demise four years ago, Long Term Capital Management has become a lightening rod for debate over the use of derivatives and the general stability of the U.S. financial system.˙ This discussion has been focused almost entirely on the use of leveraged trading instruments, liquidity and the implications of counter-party risk.˙ It is understandable that most of the debate has been centered on financial system issues, given the scope of what occurred.˙ However, the big picture has been almost entirely missed.˙ LTCM?s capital structure and corporate strategy have been treated as unique and a fascinating anomaly.˙ Nothing could be farther from the truth.˙ LTCM was merely an advanced model of the newly designed U.S. corporation.˙ This design is the byproduct of a long revolution in academic theory and business practice that treasures belief in the supremacy of debt-financing and efficient market theory.˙ LTCM, Enron and Worldcom have to this point been treated as industry-specific or corruption-related stories.˙ This analysis misses the most important point: all these companies shared the same capital structure and finance philosophy; and this approach that is now dominant throughout corporate America is doomed to fail massively....."
----------------------------
GB: Excellent analysis of why the Bear market has only just begun....companies using massive debt to chase business opportunities that were vanishing...˙
misetich
(8/17/02; 10:06:04MT - usagold.com msg#: 83174)
Al-Watan: intellectuals stress Saudi Arabia's unity, condemns US intervention
http://www.arabicnews.com/ansub/Daily/Day/020816/2002081601.html
Snip:
Several intellectuals in Saudi Arabia are embarking on collecting signatures of a draft statement under the title "together in the trench of honored," in which they reject all forms of intervention in the internal affairs of any country in the world, calling on all "honest people" to "unmask and condemn what have been there in the American administration of thoughts on interfering in the Kingdom's affairs under titles and justifications like drying the springs of terrorism and human rights issues."
The Saudi daily al-Watan said on Wednesday that the statement's draft stresses "commitment to the Kingdom's unity and sovereignty and resisting all forms of interference in our affairs." However, Saudi- American relations increasing in tension last week after the Washington Post spoke of a report submitted to the Pentagon which described the Kingdom as an "enemy" state and a supporter of terrorism. The American administration, later, denied this report.
.............
The statement's draft condemned the "policy of power and arrogance and the double- standard policy practiced by the American government against people, and their results in flagrant violations of principles of right and justice at the economic, political, cultural and security levels." The statement indicated the US rejection to ratify several international agreements like Durban and Kyoto agreements besides its rejection to take part in the membership of the "International Criminal Court."
The statement draft also supports the statements made by German intellectuals and the message of the American citizens to their friends in Europe and others, all rejecting the alleged moral justifications concerning the war which has been launched under the titles of fighting terrorism in several areas of the world.
*************
Misetich
War of words is heating up. Perhaps cooler heads will prevail.
Iran, Iraq, SaudiArabia, Venezuela are all major oil producers at odds with US administration - in various degrees
How long before oil is priced in Euros?
Got gold?
misetich
(8/17/02; 09:33:58MT - usagold.com msg#: 83173)
Bond Outlook [by bridport & cie, August 14th 2002]
http://www.bridport.ch/BridPublic/news.html
Snip:
It is also hardly rational economic leadership when the best the US President can do is go on television to state that he "believes in America". Imagine for a moment if any European politician came out with "I believe in the UK (or France, or Germany or whatever)" as an argument to boost the stock markets. Unthinkable, thank goodness, is it not?
.............
Corporate bond markets are not just showing volatility, but reflecting the growing unwillingness to lend, the emerging credit crunch and the absence of new issues as spreads balloon. It is a sign, if any more were needed, that financial market readjustment to reality is far from over.
One fine day, perhaps, playing games will cease and the USA will get on with what it is so good at: being: a dynamic, entrepreneurial and wealth creating society, where earning rather than "making" money predominates. The current trend to call in the old guard to replace flamboyant (and often devious) CEOs is heartily to be welcomed.
.............
Harvard economist, Ricardo Hausman, shares with us a belief that if Paul O'Neill is involved, a problem cannot be far away. Hausman rightly points out that if, first you say that handouts create moral hazard and the cash goes to Switzerland anyway (just how out-of-date can a man's views be?), and then you say that a country, in this case, Brazil, is really deserving of an IMF rescue, you just might make markets more confused than ever. Could it be that Mr. O'Neill is less interested in saving Brazil than in helping US banks rid themselves of Brazilian debt at the most favourable terms?
Our earlier warnings about the dangers of deflation remain valid, and leave us in no doubt that long-maturity Government bonds are the place to be.
*********
Misetich
I wonder which government bonds the writer is suggesting - Argentina, Brazil, Turkey, Columbia, Chile, Venenzuela, Paraguay, Uraguay, South East Asia, Japan, Russia?
PHYSICAL GOLD in time of crisis - get some
Got gold?
misetich
(8/17/02; 09:16:40MT - usagold.com msg#: 83172)
Brazil Fails to Get U.S., IMF Help in Keeping Bankers Lending
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Latest%20Columns&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APVx__BRMQnJhemls
Snip:
Washington, Aug. 16 (Bloomberg) -- In November 1998, Stanley Fischer, then second-in-charge at the International Monetary Fund, had lunch at Manhattan's Links Club with executives of the largest U.S. banks and urged them to keep lending to Brazil.
The IMF had just announced a $42 billion aid package to bolster the country's reserves after Russia's debt default, and the fund needed the bankers' support.
``People were impressed and the prospects looked pretty clear and so the banks were asked not to make the situation worse,'' said Ernest Stern, former J.P. Morgan Chase & Co. managing director who attended the lunch. The IMF thought ``the government would be helped if people didn't head for the exits.''
The IMF isn't asking banks to make the same sacrifice now. After unveiling a $30 billion pledge last week to help Brazil avert a debt default, the fund and the U.S. Treasury haven't pressured banks to keep financing Brazilian borrowers.
............
``The IMF has given Brazilians, foreign banks and speculators a $16 billion exit visa to take money out of the country,'' said Adam Lerrick, who helped write a U.S. congressional report two years ago that argued against multibillion-dollar IMF bailouts.
The fund pledged $6 billion this year and allowed the central bank to tap $10 billion more of its reserves to buy its currency. Brazil will have access to $24 billion next year if it meets economic targets.
............
As a result, Brazil's benchmark bond and currency are worth less than they were when the IMF aid was announced last week. The currency has lost a fifth of its value since May; bonds have fallen 30 percent.
U.S. banks, including Citigroup and J.P. Morgan Chase had $27.5 billion of exposure in Brazil as of the end of March.
.............
Brazilian exporters are so squeezed by the lack of financing that the trade minister Wednesday pledged that the central bank and state development bank will provide as much as $2 billion in export loans this year.
That amount is dwarfed by what private lenders are pulling out. The central bank said lenders transferred $1.25 billion out of the country for non-residents and multinational companies in July, twice what they had a month earlier.
Citigroup, which has a branch network in Brazil, cut loans and other commitments in the country by $2.1 billion to $9.3 billion at the end of June from the first quarter, regulatory filings show.
Bank of Nova Scotia, the first international bank to abandon Argentina, is now only renewing about 30 percent of Brazilian trade-finance contracts, according to Eduardo Klurfan, who runs the bank's Brazil operations.
J.P. Morgan's Stern said the situation in Brazil is different from four years ago. ``The confidence is not there and capital is leaking out,'' he said.
.................
Before coming into office, President George W. Bush accused the IMF of acting as a welfare agency for banks.
``I don't want to see the IMF out there as a way to say to world bankers, `If you make a bad loan, we'll bail you out,''' Bush said in a presidential debate in October 2000.
*****************
Misetich
Quote
``The IMF has given Brazilians, foreign banks and speculators a $16 billion exit visa to take money out of the country,'' said Adam Lerrick, who helped write a U.S. congressional report two years ago that argued against multibillion-dollar IMF bailouts.
End of quote
It is a question of when not if - Brazil's debt default-
Got gold?
misetich
(8/17/02; 08:56:00MT - usagold.com msg#: 83171)
Survey: 17% of CFOs Have Been Pressured
http://www.cfo.com/article/1,5309,7502,00.html
Snip:
However, the survey also suggests that many companies must do much more. Over half (54 percent) of the 141 respondents say they report pro forma results in quarterly earnings releases, but 18 percent of those that use pro forma don't reconcile those results to U.S. generally accepted accounting principles (GAAP), even though the Securities and Exchange Commission has advised companies to do so. Even more troubling, 17 percent of all respondents report being pressured to misrepresent their results by their companies' CEOs during the past five years
...............
Misetich
The article does not identify which companies have been surveyed - however - it should not surprise that accountants are being pressured by their senior managers to misrepresent their results.
Accountants, CFO and other financial executives either lose their jobs or do whatever they're told or perhaps "convinced and persuaded" to fudge numbers - aided by crooked auditors and lawyers who "legalize" the felonious transactions
The last 7-8 years has seen a tremendous increase in creative accounting measures - as rules, laws, are being stretched and stretched to the maximum bringing the whole economic systems and financial system into disarray
The fallacy of attempting to "save the markets" without the necessary reforms will make things worse - as the whole moral, ethical foundation has been corrupted.
Attempts to jawbone to add "confidence" to a ponzi scheme- is irresponsible and doomed to fail
A little insurance - PHYSICAL GOLD- to a investment portfolio's is a prudent strategy
Got gold?
JCTex
(8/17/02; 08:28:13MT - usagold.com msg#: 83170)
Belgian--debt/dollar/gold....who?
Good post. Let's add a little more to the soup:
Who is going to amortize all of that U.S. debt?
Forget "per capita", "per capita" doesn't pay taxes; taxpayers do.
In 1999, there were a total of 126,009,000 tax returns filed; of those, 1,260,000 [top 1%] paid 36.2% of the total taxes, 6,300,000 [top 5%] paid 55.5% of the total taxes, 12,601,000 [top 10%] paid 66.5% of the total taxes, 31,502,000 [top 25%] paid 83.5% of the total taxes, and 63,004 [top 50%] paid 96.0% of the total taxes.
One other thing, that $6 trillion debt number is the "play-like" debt; you know, the one with the "off-budget" numbers. Yeah right, let's "play-like" we aren't going to pay those gray panthers their social security. I want a picture of the politicians that come up with that one.
For those of you that want to play with these numbers, I pulled them off of www.taxfoundation.org.
I am not at my desk and don't have a calculator, but when you amortize those debt numbers and divide them up among the bill-payers [taxpayers] of this country, you come up with some really sad stuff.
misetich
(8/17/02; 06:08:05MT - usagold.com msg#: 83169)
Russia, Iraq Plan Deal to Bolster Ties -Economic Pact May Complicate U.S. Action Against Baghdad
http://www.washingtonpost.com/wp-dyn/articles/A28520-2002Aug16.html
Snip:
By Peter Baker
Washington Post Foreign Service
Saturday, August 17, 2002; Page A01
MOSCOW, Aug. 16 -- Russia and Iraq plan to sign a new five-year economic cooperation agreement worth $40 billion, reinforcing Moscow's close ties to Baghdad even as the United States weighs a military attack to drive Iraqi President Saddam Hussein from power, Iraqi and Russian officials said today.
Russia's apparent refusal to abandon its longtime ally, despite vigorous U.S. efforts to isolate Iraq, could make it even more difficult for the United States to rally Russian and other skeptical world leaders behind any invasion.
The five-year agreement will deal with cooperation in a variety of fields -- foremost oil, but also electrical energy, chemical products, irrigation, railroad construction and transportation, according to officials here. Soviet or Russian specialists built much of the infrastructure in Iraq, and so Baghdad wants Russian expertise to help repair or upgrade it.
Russia has continued to strengthen ties with all three of the countries branded the "axis of evil" by President Bush: Iran, Iraq and North Korea. Despite President Vladimir Putin's friendship with Bush and support for the war on terrorism, Moscow last month released a separate plan calling for increased nuclear cooperation with Iran and this week invited North Korea's leader to visit Russia.
............
"Without question, there will be a big ceremony," said Khalaf, the Iraqi ambassador. "Just recently, they informed me that it will be at the end of August." Iraqi officials want to hold it in Baghdad, he added, as a way for the Russians to show "moral support."
The disclosure of the economic agreement with Iraq follows the release of a Russian blueprint for expanding ties with neighboring Iran as well. That document, signed by Kasyanov, envisioned Russia building five additional civilian nuclear reactors in Iran in addition to the one already under construction at Bushehr. Top Bush aides complained to Russian officials that such cooperation could help Iran develop nuclear weapons.
**************
Misetich
Self serving Ruskies - complicate matters
Got gold?
misetich
(8/17/02; 05:53:03MT - usagold.com msg#: 83168)
President Moves to Spur Investors -
http://www.washingtonpost.com/wp-dyn/articles/A28067-2002Aug16.html
Snip:
"I am going to analyze and think about some of the suggestions so that when I announce them, it will be well thought out, it will be a part of a long-term plan. . . . We're thinking about all options," the president said.
.........
Bush referred to the measure in the shorthand of the market cognoscenti, saying he was looking at "expensing losses, increasing expenses of losses, accelerating the 401(k) contribution limits -- in other words, making it easier for people to put more money in their 401(k)s quicker."
...........
The official said the ideas Bush mentioned have long been under consideration, but the forum in Waco "gave us a chance to bring those issues to the forefront." Aides said they feel strongly that the corporate responsibility bill Bush signed last month will reassure investors, making this an ideal time for new incentives
...........
A Treasury official confirmed that tax analysts are working up proposals designed to lure investors back into the stock market, as well as to ease the pain of those burned by Wall Street's slide. All of the proposals were floated publicly by discount brokerage magnate Charles Schwab at the president's economic forum.
............
Misetich
"Lure investors back into the stock market" interesting comment - insatiable greed - as trillions and trillions of investors hard earned $ have evaporated
Somebody should advise Bush and Co. that the Stock Market is overvalued - and that the nation's economic growth is anemic - if any at all- and that Greenspan is out of bullets, as is the Treasury- as 11 interest rates cuts and tax cuts have not done the trick
A few months ago Bush & Co wanted to invest Social Security into the stock markets
A lot of Waco's ideas (pardon the pun)
Got gold?
De Ronin
(8/17/02; 04:37:05MT - usagold.com msg#: 83167)
Lawsuit against the Saudis for 9/11
Although the viability of the huge lawsuit against the Saudis for 9/11 might be tenuous at best, wouldn't it serve as an impetus for them to withdraw funds from direct investment into the US equity and bond markets? Inconjunction with the prospects of a weakening dollar, and toppy stock and bond market, why would any Mideast investors want to leave funds and accounts here for potential confiscation? Recent lawsuits against tobacco firms and such have set the big buck precedents. Any judgement with the plantiffs could establish another precedent on attaching to foreign wealth invested here.
If I was that one Saudi Royal family prince who has been such a high profile investor here, I'd be nervous as hell.
The true undereported story of the year is the adverse shift in US/Saudi relations. I don't think people realize how much Saudi pro-western oil production policy has contributed to our last 2 decades of prosperity. If there's a pending clash of cultures, we are energy vulnerable.
Belgian
(8/17/02; 04:35:46MT - usagold.com msg#: 83166)
The "TRILLION" dance.
38 TRILLION US$ Bonds, relatively easy, to obtain that correct figure, by simply adding up all the existing $-bonds in circulation. This 38 Trillion do carry an average interest rate of let's say 6%. 6% on 38 Trillion = 2,28 Trillion US$ added to the already existing pile of dollar-confetti.
how much is 2,28 trillion $ ? Well, almost, twice as much money than the present worth of all Gold ever mined !!!
140.000 tonnes of Gold x 10.000 $/Kg = 1,4 trillion dollars ! (1 tonne =1.000 Kg) : Proportions !!!
US national debt is (officially) 6 Trillion US$ or 4 times the present worth of all the Gold ever mined !
Total euro debt is "much" less than the 6 Trillion US debt and has 50% more Gold to mark to market, behind it !(8.000 US-tonnes - 12.000 Euro-tonnes). Proportions !!!
Is the above, sufficient, to suggest that Gold-Management is related to the struggle between the aging dollar and the coming euro !? Is this sufficient to explain the un-explicable behavior of JPM/C/GS/DB on Gold derivatives, set on track with the help of some central banks ?
Or more to the point : Isn't it because of the *euro* that the US$ had to find a way to extend its lifetime ?
This is never mentioned when gold-authorities discuss the derivative situation at JPM/C and Co. Or in other words : If the euro would have been a death born child...the massive Gold intervention would, probably, never have existed ? Hereout follows the logical question if Gold-Intervention only dates from the late ninethies or existed already from 1980 onwards, in different intensity of course ?
There never was a danger of having US-citizens, leaving the dollar for euro. But there are more dollars outside the US than inside. Consequently, the outside dollar piles needed even *more* Gold intervention than the inside pile. Also knowing that when the dollar's purchasing power would decline...US citizens would flight into Gold rather than any other possible currency (euro). Euroland's central banks *forcing* the biggest US private banks (?) to slowly fall into the Gold (derivative) trap !? As A/FOA, tried to make us understand that to get rid of the paper gold contract market...a "gigantic" trap must be set to finish this non physical trade once and for all. Gold is in my opinion, the only tangible not ment for substantial volumes of paper contract trades. And all the blablablah about Gold being a death asset is nonsense. The idiocy of putting life into Physical Gold with paper-contracts, is promoted with a well targetted purpose.
There must already be a plan for bailing out JPM/C and eventually others who were so cooperative. A covered nationalisation ŕ la Japan ? Or a more simple deus ex machina, unknown to us ? Such as a massive, in one go, overnight, devaluation of the US$ IN ORDER TO DECIMATE ALL DEBT AT ONCE ?
Black Blade
(8/17/02; 03:54:24MT - usagold.com msg#: 83165)
Sting Operation Could Be Tip of Iceberg
http://biz.yahoo.com/rb/020816/financial_stockfraud_1.html
Snippit:
NEW YORK (Reuters) - A two-year federal sting operation led to a mass indictment this week of 58 stockbrokers and corporate executives on charges of stock fraud and money-laundering. It's just the tip of the iceberg, lawyers say.
Black Blade: Tip of the iceberg indeed.
Nomad
(8/17/02; 01:45:15MT - usagold.com msg#: 83164)
Humor ...
http://www.satirewire.com/news/aug02/oaths.shtml
INVESTORS QUESTION "ELVIS," "DONALD DUCK,"
"TUPAC" SIGNATURES ON CORPORATE OATHS
CEOs Blame Rush to File for Accidentally Signing Wrong Names
New York, N.Y. (SatireWire.com) — While the SEC and President Bush lauded corporate executives for certifying their financial statements, investor groups poring over the pledges since the Wednesday deadline said they couldn't help but notice that nearly half the CEOs and CFOs did not appear to have signed their own names.
Among the nearly 700 oaths filed so far are those signed by General Motors' CEO "Elvis," energy firm Nucor's "Troilus" and "Cressida," and Merrill Lynch's chief executive "Clifford the Big Red Dog."
"Maybe the executives didn't understand, but the idea was that whoever's signature was on the certification would be personally liable if the company books turned out to be false," said investor advocate Jeremy Toft. "If they don't sign their own names, it kind of defeats the purpose."
"Oh damn," responded AOL Time Warner CEO Richard Parsons, who said he must have "accidentally" signed "Yoda" in his rush to get the forms in.
"Typo," added Citigroup CEO Sanford Weill, who confirmed that no one named "Capt. Jean Luc Picard" actually works for the company. Citigroup CFO "Jane Austen" could not be reached for comment.
While consumer advocates were skeptical of the signatures, SEC Chairman Harvey Pitt defended the submissions he has seen so far. "I've only looked at a couple of the filings, but I see here that according to WorldCom, it's run by Donald Duck and Sponge Bob. That sounds right to me."
However, Sen. Paul Sarbanes, who co-sponsored the bill requiring the certifications, was livid. "So if, for instance, Amgen's financials turn out to be false, shareholders are supposed to sue Cotton Mather"? he asked. "If that's the case, we'd be better off eliminating the oaths and going back to the old way."
"Will you sign a pledge to that effect?" replied Interpublic Group CEO John "Led Zeppelin" Dooner.
Black Blade
(8/17/02; 01:14:41MT - usagold.com msg#: 83163)
Saudis 'should reconsider US ties'
http://news.bbc.co.uk/2/hi/middle_east/2198156.stm
Snippit:
A Saudi newspaper close to the government has called for a review of the kingdom's long-standing and close relationship with the United States. We must question those who think that America is our strategic option that cannot be substituted
Al-Riyadh
A front-page editorial in Al-Riyadh newspaper says there is a need to revise Saudi Arabia's international strategic relations. The article comes only a day after relatives of victims of the 11 September attacks launched a big lawsuit against people they accuse of helping finance the al-Qaeda network, including members of the Saudi royal family. Although the paper does not refer to this, it does mention a recent Pentagon briefing during which oil-rich Saudi Arabia was accused of being a supporter of terrorism and an enemy of the US. The Pentagon subsequently tried to distance itself from the briefing given to one of its advisory groups, and Saudi Arabia dismissed reports of tension in its relations with the US. Saudi Foreign Minister Prince Saud al-Faisal played down the incident, blaming elements within the Bush administration who "unfortunately" sought to shake the traditional strong ties between the two countries.
'Blackmail
"We must question those who think that America is our strategic option that cannot be substituted. Those will put us in a narrow space, and their [belief] is not supported by objective justification," the Al-Riyadh editorial said on Friday. According to French news agency AFP, only two out of nearly a dozen Saudi dailies carried details of the lawsuit filed in Washington on Thursday. One of those which did carry the story, Okaz, branded the suit as "the largest operation of blackmail plotted by secret hands". The lawsuit alleged that Saudi money has "for years been funnelled to encourage radical anti-Americanism as well as to fund the al-Qaeda terrorists".
Black Blade: So what if they counter sue in Saudi for the same amount. Do the awards offset? Or do the Saudis just set higher oil prices as punishment? After all they control about 25% of the world oil supply. Short of war with Saudi I don't see any way to enforce a successful suit. Hmmm…
Black Blade
(8/17/02; 00:41:37MT - usagold.com msg#: 83162)
Why Bush is Eyeing 'Rogue State' Oil
http://allafrica.com/stories/200208160086.html
Snippit:
With both oil-rich Central Asia, the Middle East riddled with conflict and US voters' continued distaste for new domestic oil exploitation, Washington is getting serious about changing its policy toward Africa. The Bush administration is looking for oil in former "rogue" nations Libya and the Sudan. The reason for this policy shift is that most of the world's major oil sources - the Middle East, Central Asia and the Andean nations - are now riddled with violent conflicts.
September 11 changed everything - even in the world of oil. Mr George Bush Sr thought that the collapse of the Soviet Union had increased the chances of obtaining a new ocean of oil and natural gas in Central Asia. But with his son's war on terrorism, the Central Asian option is now up in the air. The only chances left anywhere in the world are in Africa. American oil companies are clearly envisaging an African substitute for their lost Central Asia. That region would begin in the Persian Gulf and extend through a vast African expanse, deep into Nigeria.
Black Blade: How things change. It is all about oil. Former enemies become friends and former friends become enemies over the most crucial commodity of all – oil. We could see some strange alliances and even war over oil. Meanwhile, the US continues to gear up for the inevitable war with Iraq even though we are likely to anger other ME oil producers.
Black Blade
(8/17/02; 00:16:23MT - usagold.com msg#: 83161)
Liberty writes off $5.1bn from investments
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185784043&p=1012571727183
Snippit:
Liberty Media, the investment company controlled by John Malone, continued to suffer from the collapse in media stocks, as it revealed a total $5.1bn in write-downs of investments in the first half of 2002. Sharp falls in the value of its stakes in AOL Time Warner, News Corp and Sprint PCS pushed Liberty into an overall loss of $4.6bn for the six months to the end of June. This compares with a loss of $2.3bn in the same period in 2001.
Black Blade: A little hard to hide unless they use "pro forma" accounting. With all these $billions vaporized daily the media and investors are becoming numbed to such reports. Ah well, what's a few $billion here and there anymore?
Blackjack
(8/17/02; 00:14:17MT - usagold.com msg#: 83160)
US economy in dire state
Tokyo, Aug. 17 (Bloomberg) -- The end of the Japanese summer holiday next week may boost stock trading from a 7 1/2-month low. It probably won't help stock prices.
A strengthening yen and a slowing U.S. economic recovery may hamper gains of exporters such as Sony Corp. The yen rose 9 percent against the dollar in the past three months, denting the value of exporters' overseas earnings. A U.S. index of leading indicators probably declined in July.
``There are concerns about the currency, and there is no catalyst that will convince investors to look at exporters,'' said Makoto Sakuma, who manages $850 million at Asahi Life Asset Management Co. ``It's becoming clear that the U.S. economy is in a dire state and may fall into recession next year, hurting exporters.''
Black Blade
(8/17/02; 00:12:48MT - usagold.com msg#: 83159)
Tyco, Others Face $60 Bln in Payments on Convertibles
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APVzIgxVPVHljbywg
Snippit:
London, Aug. 16 (Bloomberg) -- Tyco International Ltd., Vivendi Universal SA and more than 50 other companies around the world may have at least $60 billion in unexpected cash payments due by the end of next year. That's the amount of convertible bonds they may be forced to redeem because tumbling share prices eliminated investors' incentive to exchange the debt for stock. Tyco investors can force the company to pay them $2.3 billion in February because its bonds can only be converted into stock at or above $115.05. The shares closed yesterday at $13.26.
Black Blade: This should get "interesting".
Black Blade
(8/17/02; 00:11:11MT - usagold.com msg#: 83158)
Citigroup Faces Probes Following Grubman's Departure
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&middle=ad_frame2_topfin&s=APVyztBZrQ2l0aWdy
Snippit:
New York, Aug. 16 (Bloomberg) -- Jack Grubman, the star telecommunications analyst at Citigroup Inc., resigned under pressure amid allegations he misled investors by issuing favorable stock ratings to win investment banking work. The legal challenges against his former employer his actions instigated remain.
Citigroup faces criminal probes, a congressional subpoena, regulatory investigations and more than two dozen lawsuits over allegations that Grubman violated rules by functioning as an investment banker while he was employed as an analyst at the firm's Salomon Smith Barney unit.
Grubman's resignation ``isn't going to change any liability that Salomon may have,'' said John Coffee, a securities law professor at Columbia University. ``No organization can avoid liability for conduct of their agents when they were in office by later seeing them resign.''
Black Blade: I see shareholder lawsuits in their future. Thankfully they unloaded this charlatan, however, it cost the shareholders $32.2 million more. The big boss, former Secretary of the Treasury Robert Rubin still has questions to answer about his role in the Enron scandal.
Nomad
(8/17/02; 00:08:18MT - usagold.com msg#: 83157)
Gold Manipulation Gets Mainstream Press ...
http://cbs.marketwatch.com/news/story.asp?guid=%7BCBA46288%2D845B%2D48F4%2DAA9F%2D65D467F9C7F4%7D&siteid=mktw
Nomad : I can't believe you guys missed this :) A few months
ago it would have been ALL over this site ...
Gold Meddling !
Big banks may face big problems, including how they manage the gold market, writes Thom Calandra.
Bill Murphy, a gold advocate, has long warned his subscribers about the dangers of a massive bank default tied to tricky interest-rate and bullion derivatives. J.P. Morgan Chase is the largest issuer of gold-linked derivatives in this country. The contracts are designed to help gold companies, central banks and others manage -- and some say mismanage -- the market for gold.
"The S&P credit counter-party downgrade of J.P. Morgan Chase is significant," Murphy, editor of pro-gold publisher LeMetropoleCafe, tells me. Murphy is also chairman of the Gold Anti-Trust Action Committee, a nonprofit group that believes investment banks and government agencies, including the U.S. Treasury Department, have been depressing the price of gold for years in an effort to keep interest rates low and currencies sound. The banks and agencies also profit from gold-lending practices that benefited for years from sub-$300 gold prices, Murphy and his growing number of followers charge.
"Not only do the banks have potentially huge gold derivative problems, but that could set off an interest-rate derivative problem," Murphy said Friday. "Morgan has something like $23 trillion in derivative positions on their books, according to the Office of the Comptroller of the Currency. It is the norm to account for 2 percent of those derivatives to be at risk. That is a mighty big number."
Black Blade
(8/17/02; 00:08:14MT - usagold.com msg#: 83156)
AOL, Charter Communications, and Others Face SEC Probes
http://www.cfo.com/article/1,5309,7567,00.html
Snippit:
The Securities and Exchange Commission has expanded its investigation into AOL Time Warner's accounting practices, turning it into one of the largest corporate investigations, according to the Financial Times. Charter Communications officials acknowledged on Friday that it has received a grand jury subpoena requesting documents relating to the company's past and present customers as well as its policies and procedures relating to the accounting of various costs. More than two dozen companies failed to certify fully or asked for postponements. The certification requirement affected only companies that operate on calendar years. Altogether 947 of the largest companies must meet the SEC's onetime order by December 2. Of course, by the end of the year, all 14,000 companies overseen by the SEC—including foreign issuers of debt and equity—must certify their financials, under provisions of the recently signed Sarbanes-Oxley Act, which will become effective by August 29. The SEC's requirement that 947 companies certify the accuracy of their financial statements is independent of the provision from the Sarbanes-Oxley Act and is a one-shot deal.
Black Blade: The current spate of accounting and corporate malfeasance scandals is just the tip of the iceberg. As corporate executives were cooking the books to reflect phantom earnings, they were also selling stock options while the suckers were left holding the bag when it all came undone. It is doubtful that all the cockroaches have been found. It is rumored that AOL is under the microscope now and it does not look very good. They are cutting their losses with a major management shakeup. This could be the next Enron.
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