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Welcome to the USAGOLD Gold Discussion Archives. The archives of this gold discussion forum are a treasure trove of information to educate investors about protecting their wealth through portfolio diversification with private gold ownership. The discussion forum also covers the wider issues of the past, present, and future role of gold in international monetary policy and the dynamics of the modern gold markets...   (Discussion Forum Hall of Fame) (The Gold Trail) ("Thoughts!" by ANOTHER)   The opinions posted by all guests are expressly their own and do not necessarily represent the views of the management or staff of USAGOLD - Centennial Precious Metals. The hosting of the public discussion shall therefore not be construed as an endorsement by USAGOLD - Centennial Precious Metals of any of the opinions posted here.

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ARCHIVED DISCUSSION FROM 9/18/2002
All times are U.S. Mountain Time

(Yesterday's Discussion.)

Gandalf the White (09/18/02; 23:40:01MT - usagold.com msg#: 85489)
WOWSERS !!! THE BIG "Happy Birthday" Essay Contest !!!!
TA TA TAT TAT TAT TAAAAAAAAAAAAAAAAAAA !!! <;-)
YES Indeed SIR MK, that is a Contest with prizes of "FREE GOLD" for the winners and even awards of "FREE SILVER" for the "First Time Posters". SOOOOO, "come on all", put on the THINKING HATS and read those RULES again ! Let us see how many of you "LURKERS" can become registered posters and COME ON IN ! BUT, beware of trying to pretend that you are a First Time Poster, in order to get the SILVER, as I will collect the Silver ML from your estate, if you try to trick the old Wiz.

AND, back to the drawing board there, Sir Slingshot !
Start reweaving !

REMEMBER the subject heading of
***** Happy Birthday O'Mighty Oaken Table of Yore *****

"THANKS AGAIN" SIR MK, and "Happy 4th Birthday" TABLEROUND !
<;-)


Black Blade (09/18/02; 22:56:58MT - usagold.com msg#: 85488)
U.S. vote on Iraq on fast track
http://www.msnbc.com/news/805226.asp

Snippit:

President Bush will send Congress a draft resolution Thursday that would authorize the White House to take military action against Iraq if the administration deems it necessary, a Bush aide said Wednesday. Earlier in the day, he called on Congress to quickly pass such a resolution, even as key U.N. members backed away from tough actions. Despite reluctance by Democratic members to get ahead of the U.N., representatives appeared set to vote on — and likely pass — a resolution by early October, authorizing force if Iraq does not meet U.S. demands.

Black Blade: Looks like Dubya might go it alone. Personnel and equipment are already being positioned.



davefinger (09/18/02; 22:26:45MT - usagold.com msg#: 85487)
Sovereign v Maple v ...
The Maple would have an edge in circumstances where purity was a concern, or the recipient is unaware of the specific properties of sovereigns and references are not at hand. Any feature of a specific form of bullion which facilitates liquidity/acceptance is a plus to me. Those factors being equal it would boil down to a matter of taste.

For instance, with bars the refiners hallmark would be the equivalent of being identified as a Maple or sovereign, and the assay marks the equivalent of the printed weight and fineness most bullion coin issues. The sovereign is/originally was not a bullion coin, but a circulation issue coin.

I'd imagine that in todays gold-barren circulation coin world, pretty much any gold issue would be considered bullion regardless of the jargon surrounding its release!



Black Blade (09/18/02; 22:24:32MT - usagold.com msg#: 85486)
Here come the warnings
http://money.cnn.com/2002/09/16/markets/warnings/index.htm

In a downbeat sign, the rate of 3Q earnings disappointments to surprises is on the rise.

Snippit:

NEW YORK (CNN/Money) - A deluge of details about corporate America's bleak summer are expected to flood the market in the weeks ahead as companies offer early looks at their September quarters. So far, of the 203 companies in the Standard & Poor's 500 index issuing third-quarter pre-announcements, 106 have warned on results while 42 have said their numbers will top forecasts. Fifty-five firms told investors they will meet Wall Street's financial targets, according to First Call. So far, there have been 2.5 warnings for every one upside surprise, up from the 1.1 ratio at this time in the second quarter, First Call said, and 2.0 at this time in the first quarter. "That indicates that we are going to have a tough pre-announcement season," said Hill, referring to the period that grows busier over the next three weeks and ebbs when companies start releasing third-quarter results in mid-October.


Black Blade: Looks like a tough time ahead for the stock markets.



MK (09/18/02; 22:21:58MT - usagold.com msg#: 85485)
Addition:
The contest ends Wednesday September 25th at 12 noon Mountain time.

Gandalf: If I forgot anything, my wizardrous friend, let me know and we'll get it straightened out.

Thanks, all.

Blackjack (09/18/02; 22:13:53MT - usagold.com msg#: 85484)
Lula is bad news for JPM
http://biz.yahoo.com/rf/020918/brazil_lula_usa_1.html
Supporters say Lula is a fiscally responsible social democrat but markets fear he is a radical leftist wolf in sheep's clothing.

The Workers' Party candidate seems on the verge of a first-round victory on Oct. 6 in Latin America's biggest country. Polls show he has almost twice the support of his nearest rival, market favorite Jose Serra of President Fernando Henrique Cardoso's Brazilian Social Democratic Party.

Analysts see Lula's rise as another sign Latin America is increasingly rejecting a decade of U.S.-encouraged free-market reforms that are perceived as having done little to improve living conditions for its inhabitants.
________________________________
JPM is in for months of bad news. Small debtor nations can't pay.



MK (09/18/02; 22:11:09MT - usagold.com msg#: 85483)
Happy Birthday O' Mighty Oaken Table of Yore. . . .
What to do. . . .What to do. . . . .Here's the dilemma: Is now the time for a contest? With so much extraordinary energy already emanating from in and around this sturdy table? What more can be said about it that hasn't already been said. How will a contest now make a difference? Yet. . . .wait a minute. . ."The Contest" has played an important role in attracting many of the very people who have made such an important and on-going contribution to this table that they have put the concept of a posting contest on the second shelf. Do I dare intrude? I visit here time and again, day after day, week after week, month after month. . . . .Oh my. . . .Well, you get the idea my fellow knights and ladies. . . . .There is a reason for all this. There is a reason why we are all here. Isn't there?

So the Call to Contest goes out: Yes!! Hear ye! Hear ye! Be it known that we will have a contest calling upon your most erudite and well-honed skills. And here's the Contest Question to be answered: Why do I return to this exalted place? Why do I keep coming back here? Hey, I watch CNBC. I read the Wall Street Journal. Barrons'. Forbes magazine. A half-down or so newsletters. But for some reason I keep coming back here. Why?

In your own words, and in as many as it takes: Why is that I find this Mightly Oaken Table of Yore so important? Why do I keep coming back??

Each post must be headed *****Happy Birthday O' Mighty Oaken Table of Yore*****

The prize will be a one ounce Austrian Philharmonic. The runners-up (two will be chosen) will receive a Queen Victoria British sovereign (which carries some scarcity value) -- a representative of the old world when gold was the primary form of international settlement. As always the prizes will go to those who best weave gold into their narrative. That is essential. (Perhaps even Slingshot can weave the Table into his final installment of the "Siege" epic!! We will count it as an entry, if he does. Ha Ha, Slingshot a challenge to your very credible story-telling skills.)

All first time posters will receive a one-ounce Silver Maple Leaf, but your post must be a contest entry. To receive your silver Maple Leaf you must e-mail marie@usagold.com telling her of your first time post and contest entry. We will check to make sure that your entry is truly your first post. Those found trying to circumvent the rules will be asked to send us a Silver Maple Leaf.

Gandalf, the great wizard at this Table Round, will serve as contest master, arbiter and answerer of all contest related questions. Gandalf, please post this call to contest daily.

Extra bonus points will be awarded to those who post an addendum to their "Happy Birthday" entry which answers this question: "We are now at the beginning stages of the BIG BREAKOUT in gold. . .True or False." The bonus entries do not have to be long, but they have to make a solid point. Please add the bonus entry to your Birthday post and start it with $$$BIG BREAKOUT -- "TRUE" or "FALSE" $$$$ (surrounded by dollar signs) -- depending on how you see it. The bonus points will not be awarded on where you stand as much as how well you state your case.

The contest begins now, goes through our birthday -- September 21st -- and ends next Wednesday, Sept 25, 2002.

Good luck to all and may the best poster win!!

Happy Birthday, my fellow goldmeisters and Table members.

Let the Contest begin. . . . . .

a nation of one (09/18/02; 22:10:29MT - usagold.com msg#: 85482)
well, actually, HERE is a link you might find interesting:
http://www.dovebid.com/Auctions/AuctionDetail.asp?auctionID=1480
...

a nation of one (09/18/02; 22:09:32MT - usagold.com msg#: 85481)
http://www.dovebid.com/Auctions/AuctionDetail.asp?auctionID=1480

Here is a link you might find interesting.

Kagamusha (09/18/02; 21:53:02MT - usagold.com msg#: 85480)
BOJ bailout
By habit I always check whats happening overnight in Japan. As I did that tonight, I wondered if perhaps the BOJ could just send me an e-mail each evening before the open and let me know where they intend to close it. It would be so much more productive than all those mouse clicks. I suppose, like a newsletter, they might have to charge, but it would be worth it!

Seriously, what a farce they have made of the entire financial structure. I guess continually rewarding failure is the short cut solution to pulling out of a depression.

Black Blade (09/18/02; 21:47:03MT - usagold.com msg#: 85479)
Bear Market Has `Long Way to Go': Taking Stock
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APYiLDBJ8QmVhciBN


Snippit:

New York, Sept. 18 (Bloomberg) -- Richard Russell was a boy the last time U.S. stocks fell for four consecutive years. The 78- year-old publisher of an investment newsletter says it may be time for a repeat performance. ``This bear market's got a long way to go,'' said Russell, who runs Dow Theory Letter in La Jolla, California. U.S. stocks, already headed to losses this year, are likely to keep falling in 2003, he said. That would be the first four-year losing streak for the Dow Jones Industrial Average and Standard & Poor's 500 Index since they fell from 1929 through 1932. The S&P 500 traded for 94 times its dividends at the peak in 2000, he calculated. It now sells for 55 times yield. He predicted it will sell for 14 times dividends when the bear market is over, mostly through declines in stock prices. Another prominent bearish voice is that of a bond investor. Bill Gross, manager of the $61 billion Pimco Total Return Fund, said this month that ``stocks stink and will continue to do so until they're priced appropriately.'' He predicted the Dow would be fairly valued at 5000, about 40 percent below yesterday's close. James Grant, editor of Grant's Interest Rate Observer, is another stock bear from the bond market. Stocks are ``anything but cheap,'' he said in an interview. ``It would be a very strange bear market that ends at these levels, after the gaudiest boom ever.''


Black Blade: I generally agree. The markets are grossly overvalued and the bear won't hibernate until the markets are reasonably priced. Yet earnings are falling off a cliff and debt is rising to all time records. It looks very "Grim". A "New Great Depression" is a definite possibility.



Chris Powell (09/18/02; 21:42:06MT - usagold.com msg#: 85478)
The bad guys are on the run now
http://groups.yahoo.com/group/gata/message/1233
Go, Army, beat Morgan! The financial world is
starting to talk about JPM's vulnerabilities,
including its short position in gold:

http://groups.yahoo.com/group/gata/message/1233

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@yahoogroups.com

a nation of one (09/18/02; 21:37:02MT - usagold.com msg#: 85477)
Re: misetich (09/18/02; 19:19:53MT - usagold.com msg#: 85458)

What is the meaning of this?

Snip: "A tighter fiscal policy appears to diminish the likelihood of a rapid adjustment of large current account deficits," the IMF said.

There are a number of problems with that statement.

1. "...the IMF said." How can the IMF say something? "IMF" is an acronym. It can't say anything. Some person has said what is in the quotes. Why don't they say that some person said it, and give the person's name? Is it because anonymity is desired? Why? Is there something dishonest going ot? If there isn't, why not give the person's name? See Number 2.
2. Secrecy. It goes with deceit.
3. The word 'appears' is used. Why use the word 'appears'? Does it or doesn't it '...diminish the likelyhood [etc.]?' If it does, omit 'appears' and change 'diminish' to 'diminishes.' (...diminishes the likelyhood....) Why is this important? See number 3.
4. Use of the word 'appears' is actually correct, because what is being said is not that the IMF believes that 'tighter fiscal policy diminishes the likelyhood of rapid adjustment....' What the IMF is really saying is that tighter fiscal policy gives the appearance of diminishing the likelyhood of rapid adjustment....' This means that the IMF knows that it doesn't really.
5. Well why is it then, that the IMF wishes to give the appearance of something which is not actually the case? See Number 6.
6. Plunder?


Black Blade (09/18/02; 21:34:29MT - usagold.com msg#: 85476)
Oil up on OPEC stance, tight supplies
http://cbs.marketwatch.com/news/story.asp?guid=%7B005194BA%2D7619%2D4CF8%2DB404%2D7E80D91BCB08%7D&siteid=mktw

OPEC to informally agrees to leave output levels alone

Snippit:

NEW YORK (CBS.MW) -- Crude futures prices closed above $29 a barrel Wednesday, lifted by an informal agreement by OPEC members to leave output levels unchanged and data that pegged U.S. crude supplies at their lowest level in a year and a half. Data reported by the Energy Department earlier Wednesday showed crude inventories, as of the week ended Sept. 13, had fallen by 5.4 million barrels. Late Tuesday, the American Petroleum Institute reported a 6.41-million barrel contraction. The nation's crude-oil inventories have now fallen by 15.3 million barrels in the last three weeks, and at 287.8 million barrels, they are at the lowest level since March 2001, the Energy Department said. The latest report "highlights the seriousness of just how tight supplies are heading into winter," said Todd Hultman of Dailyfutures.com. October natural gas climbed by 10.8 cents to stand at $3.787 per million British thermal units on expectations that a storm headed toward the Gulf of Mexico could disrupt gas output from the region.


Black Blade: If this winter is normal or very cold, it could get rather "interesting". Petroleum prices are certain to rise now and if war does break out, then $40 to $50/bbl oil is very possible. That's OK as it does not count toward the core rate of inflation to no need to worry.



Slowman (09/18/02; 21:20:41MT - usagold.com msg#: 85475)
Silvercollector/Sovereign
Just to give the specifics.
7.9881 grams (.2568 troy ounce)
Fineness 22 kt. .916 2/3
Fine gold content 7.3224 grams (.2354 troy oz.)
Hope this clears the argument.I own several of these myself plus angles, pandas roosters and swiss francs.
Good Luck.


Black Blade (09/18/02; 21:17:36MT - usagold.com msg#: 85474)
Market WrapUp – Puplava
http://www.financialsense.com/Market/wrapup.htm


Snippit:

Financial Stress & Systemic Risk

Today the bank of Japan announced it would start buying stocks from banks laden with $200 billion in shares. The actions by Japan's central bank are the third rescue operation in four years. The bank will buy shares directly from the hemorrhaging portfolios of major banks. In Japan the process of monetizing financial assets has begun. It remains only a question of time before similar operations begin here in the US. J.P. Morgan stunned the financial markets with news that its earnings would be far below expectations due to a quadrupling of bad loans of $1.4 billion during Q3. Trading profits at the bank fell from $1.1 billion from the previous quarter to just under $100 million. This is a bank in deep trouble and in all the wrong places. The markets shouldn't have been stunned by the news. Anyone with an IQ over 100 should be able to look at Morgan's derivative book, now at over $25.9 trillion, and see this isn't a bank, but a hedge fund--a hedge fund that makes LTCM and Enron look like t-bill money market funds. Look at the risks taken by LTCM and Enron and then multiply that by a power of 10. This bank looks, acts and resembles a hedge fund run on steroids, methamphetamines, and caffeine.


Black Blade: Reiterates what has been said, but puts it in just the right words. JP Morgan Chase & Co. looks to be on the verge of "implosion". Yes, a $26 trillion derivative book does make LTCM and Enron combined look like childs play. Yikes!!!



Black Blade (09/18/02; 21:01:30MT - usagold.com msg#: 85473)
Tokyo stocks bask in glow of BOJ stock-buying plan
http://biz.yahoo.com/rf/020918/markets_japan_stocks_10.html

Snippit:

TOKYO, Sept 19 (Reuters) - Tokyo's Nikkei average surged more than three percent by mid-session on Thursday, with banks at the head of a broad market advance after the Bank of Japan said it would take the bold step of directly buying stocks from banks. The BOJ announced the unprecedented plan in the dying minutes of trade on Wednesday in what analysts said was a move to stave off a financial crisis before the end of the fiscal first half on September 30 and to help reduce banks' vulnerability to swings in the stock market.


Black Blade: Desperate times call for desperate measures perhaps. Time to suck in the last few gullible investors before picking their pockets one more time.




silvercollector (09/18/02; 20:55:53MT - usagold.com msg#: 85472)
Thanks davefinger
I buy Sovereign's at $120 CDN which I calculate at $120/7.32=$16.39/gm.

He buys 1/4 oz. bullion at $130 CDN which I calculate at
$130/(31.103/4) = $16.72/gm.

The Sovereign seems to be slightly cheaper. Good choice/bad choice. Why?

Black Blade (09/18/02; 20:53:48MT - usagold.com msg#: 85471)
Pressure on JP Morgan CEO; Losses Mount
http://biz.yahoo.com/rb/020918/financial_jpmorgan_8.html


Snippit:

NEW YORK (Reuters) - J.P. Morgan Chase & Co. Inc. (NYSE:JPM) Chief Executive William Harrison -- considered one of Wall Street's stars when he helped create the country's No. 2 banking company -- now is fighting for his professional life. The top bank's sharp profit warning, which knocked the stock down as much as 13 percent on Wednesday, caps a stream of bad news from J.P. Morgan Chase since its December 2000 merger and puts pressure on upper management to turn results around. "What's a gracious way of saying the bank has had trouble generating reliable earnings? ... At some point the board is going to demonstrate some concern on that subject," UBS Warburg analyst Diane Glossman said. "If you get either a continued weakness in capital markets and/or execution problems, it wouldn't be surprising to see management changes." J.P. Morgan Chase on Tuesday night said its third-quarter earnings would be well below the second quarter's due to steep losses on loans to telecommunications and cable firms and misplaced trading bets. The bank was a leading lender to telecom companies, partly using its large balance sheet to court such clients and win investment banking business.

Rating agency Standard & Poor's -- which downgraded the bank's debt on Tuesday, making it more costly for J.P. Morgan Chase to borrow money -- said the bank could face another downgrade if a trading slump persists past the fourth quarter. "We don't think the worst is over for the company," said S&P analyst Tanya Azarchs. "There is considerable risk there will be a repeat of another bad quarter in the future." J.P. Morgan Chase has faced fire for questionable financings it set up for bankrupt energy trader Enron Corp. (Other OTC:ENRNQ.PK). It has lost money in Argentina, in its own investment portfolio, in trading and in capital markets areas like advising on stock offerings. Some wonder if it compromised lending standards to attract telecom banking deals. "They took too many risks for the size of their balance sheet," Rosinus said. "They took oversized risks and that's what they're paying for."


Black Blade: This is just the tip of the iceberg. Citigroup and several other banks face similar problems. The US banking crisis is only eclipsed by that of Japan's insolvent banking system. The article does not even touch on the huge gold derivatives position either, however, it may be alluded to with such comments as: "They took too many risks for the size of their balance sheet." and "They took oversized risks and that's what they're paying for."



Black Blade (09/18/02; 20:51:19MT - usagold.com msg#: 85470)
After Hours Stock Crash
http://data.island.com/ds/data/toplist/index.jsp?filter=all&width=555&tabs=true&links=false&sort=tradedshares&order=asc&html=false&ah=false&rows=100

A look at after hours trading look ugly tonight. However, the worst is the crash of EDS (-36.1%) and IBM (-7.52%) shares (not on list). Also, it appears that Japanese investors are "eating it up" as they hope that the BOJ will continue to prop up the Nikkei by buying shares from failed Japanese banks. That could also mean $billions leaving US markets and headed back home. Just another nail in the coffin for the US stock markets.

- Black Blade

a nation of one (09/18/02; 20:25:29MT - usagold.com msg#: 85469)
to Henri (9/18/02; 10:57:27MT - usagold.com msg#: 85428)

Your statment: "Certainly the Chinese communists have brutally overtaken ancient Tibet and desecrated much if not all of its essential cultural treasures, but I don't think it can be said that they have widely repopulated either it or the Mongolian provinces."

It is too soon to tell.

I found your input very valuable.


DOWNUNDER (09/18/02; 20:01:58MT - usagold.com msg#: 85468)
@ ANDURIL- - - RE GOLD
Hi there.I always follow your comments with interest -although they tend to be a bit cryptic for my limited knowledge. Would you mind taking the time to give us your thoughts as to when the POG & silver will break free. Aso how do you expect the rulers of the universe to react etc ?

a nation of one (09/18/02; 19:48:26MT - usagold.com msg#: 85467)
Just waking up (9/18/02; 01:22:19MT - usagold.com msg#: 85405)

That could be one way of saying it.

sector (09/18/02; 19:46:31MT - usagold.com msg#: 85466)
Los Angeles Dockworkers Begin Slowdown on Port Cargo
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_box.ht&s2=ad_right1_topfin&bt=ad_position1_topfin&box=ad_box_all&tag=financial&middle=ad_frame2_topfin&s=APYjf7BYQTG9zIEFu

09/18 16:19

By Rip Watson
San Francisco, Sept. 18 (Bloomberg) -- Dockworkers at the Port of Los Angeles began a work slowdown that may disrupt cargo shipments to retailers and other businesses, an ocean carriers group said.

The International Longshore and Warehouse Union and the carriers, represented by the Pacific Maritime Association, have been in a contract dispute for several months. The shipping group's statement said Stevedoring Services of America, operator of cargo terminals in 150 ports, was the target of the slowdown.

The Port of Los Angeles is the busiest U.S. international cargo terminal, handling at least 5 million container shipments of furniture, clothing, toys and other products last year to retailers such as Wal-Mart Stores Inc., Gap Inc. and Target Corp. A 10-day shutdown of West Coast ports might cost the U.S. economy as much as $19.4 billion, consultant Martin Associates has said.

``The union is playing with fire and appears to be willing to jeopardize America's economic interests by initiating hit-and-run tactics against members of the PMA,'' said Joseph Miniace, chief executive officer of the carriers group, in a statement.

The slowdown has halted rail operations at the Los Angeles port, Pacific Maritime spokesman Steve Sugerman said.
++++++++++++++++++++++++++++++

More dreadful news for the economy.


davefinger (09/18/02; 19:43:15MT - usagold.com msg#: 85465)
Sovereign weight
According to the Krause catalog:

7.9881g
.917 fine gold
.2354oz gold (7.32g = 31.103 * .2354)


a nation of one (09/18/02; 19:36:45MT - usagold.com msg#: 85464)
jpm, the man

John Pierpont Morgan identified four things which he believed typically come before what he called 'panics.'

1. Swelling inventories.
2. Excessive debt.
3. Volatile markets.
3. Overpriced stocks.

I think we have all four of these now.



silvercollector (09/18/02; 19:36:16MT - usagold.com msg#: 85463)
Sovereign
A friend of mine and I had a heated debate today. Does a Sovereign contain 8 gm of gold with a high purity weighing slighty more than 8 gm or does it weigh 8 gm with a high purity thus having slighty less than 8 gm of gold?

TIA

Topaz (09/18/02; 19:32:18MT - usagold.com msg#: 85462)
War and Peace
Almost drowned out by the beat of War Drums here in the West, an unprecedented move for Peace has been taking place in a large part of the East.
Nth and Sth Korea are working feverishly to heal old wounds with the opening of Road and Rail links - Japanese PM Koisumi's recent visit to N Korea hailed as a huge success - China in consiliatory talks with the Dali Lama of Tibet - Tamil's with the Sri Lankan Gov't...can India Pakistan be far behind?
...meanwhile, "in the dead of night" OPEC Ministers meet in Osaka, Japan....all the talk is "will they or won't they" change production targets...NO talk (mediawise) of settlement changes (Euro or "basket") and benign currency markets as of this minute would indicate no change there...we'll keep watching tho.

Sleep soundly fellow goldhearts... the world turns beneath you.

misetich (09/18/02; 19:28:42MT - usagold.com msg#: 85461)
Euro catches on in Russia
http://news.bbc.co.uk/2/hi/business/2264012.stm
Snip:

Russians are buying more euros than dollars for the first time since the new European currency became available, according to the central bank.

The swing may signal the weakening grip in Russia of the US currency which has dominated the economy here for most of the past decade.

It comes after a 15% fall of the dollar against the euro this year.
...........
In July, the Russian Government was forced to issue a warning to Russians not to dump their dollars, when the dollar fell below the euro for the first time.

But despite the current change in attitude towards the euro, the dollar will continue to play a significant role in the Russian economy.

Almost two-thirds of Russia's exports are of dollar priced natural resources.
********
Misetich

Russians - European Market are a logical choice - it shouldn't surprise if natural resources (Oil) will be priced in Euros soon

Got gold?



silvercollector (09/18/02; 19:24:21MT - usagold.com msg#: 85460)
Please confirm
A major player that I associate with told me today that silver 'is scarce' and gold is 'disappearing' and is headed up by at least $25 by year-end.

The story yesterday of India's 40% decrease in physical buying (last quarter) is alarming. Anybody close to the physical buying/selling 'heartbeat' have any comments?

TIA

a nation of one (09/18/02; 19:21:33MT - usagold.com msg#: 85459)
To Zhisheng (9/18/02; 00:30:01MT - usagold.com msg#: 85400)
oh I forgot:

Plato informed us, by way of Socrates, not by stating it, but by getting us to recognize in our own minds that virtue is nothing else but knowledge. Knowledge of what? Knowledge of that which helps us live and survive. Good must be this. And evil must be everything else. What other kind of power is there, besides this one particular aspect of virtue?

misetich (09/18/02; 19:19:53MT - usagold.com msg#: 85458)
IMF Again Warns Global Curr Acct Balances Threaten Growth
http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=2&u=/dowjones/20020919/bs_dowjones/200209182015000956
Snip:

WASHINGTON -(Dow Jones)- Current account imbalances may eventually disrupt global financial stability and economic growth, and require urgent policy changes in the U.S., Europe, Japan and the east Asian region to reduce the threat, according to an International Monetary Fund ( news - web sites) report.
In its latest World Economic Outlook, part of which was released Wednesday, the IMF said that governments can adopt policies to lessen the risks of an abrupt turnaround in trade and financial flows, with the accompanying exchange rate turmoil.

"A rapid adjustment could result in a diminution in global growth if lower demand in the deficit countries is not offset by higher demand elsewhere, significant dislocation in tradable good sectors around the world, protectionist pressures and changes in wealth," the IMF said. Current account balances, the broadest gauge of a nation's trade that incorporates goods, services and financial transactions, were a focus of talks at the last IMF gathering in April. Since then, the dollar has depreciated about 10% against both the euro and the yen, a development that should contribute to a reduction in trade imbalances. Still, the imbalances remain a concern for the medium term, the IMF said.

Figures reported earlier this month showed the U.S. current account gap widened to $130 billion for the second quarter, or about 5% of gross domestic product. IMF and European officials have warned that such a large deficit isn't sustainable, and a sharp reversal could wreak havoc on the world economy. The IMF notes that the current account imbalances among the U.S., Europe and Asia have reached levels unseen among industrial countries in the postwar period.

U.S. officials have argued that the deficit is the result of international investors' preference for assets in the relatively more dynamic and productive U.S. economy, and any attempt to actively reduce it would only destroy economic growth and jobs. While most of the debate has focused on the U.S. deficit, the IMF pointed out in its latest study that "one country's deficit is another country's surplus."
..........
Contrary to Treasury Secretary Paul O'Neill's assertion that the U.S. can do little to affect the current account gap, the IMF said the U.S. should reduce budget deficits, which have climbed sharply higher in recent months as Congress raised spending and the weaker economy lowered revenues.

"A tighter fiscal policy appears to diminish the likelihood of a rapid adjustment of large current account deficits," the IMF said.

Further, the U.S. could lower the risk of a sharp and dramatic reversal in the current account imbalance by taking action to restore investor confidence in U.S. capital markets, including reforms of accounting rules and enforcement procedures, and steps to raise private saving, the IMF said.

Reviewing the experience of other countries with similarly high deficits, the IMF concluded that it is extremely rare for a country to run a current account deficit as large and for as long as the U.S. has managed to sustain. It is all but certain that the scale of current account imbalances won't continue, the IMF said.
*********
Misetich

Wouldn't want to be a holder of US $

Got gold?


a nation of one (09/18/02; 19:11:42MT - usagold.com msg#: 85457)
to Zhisheng (9/18/02; 00:30:01MT - usagold.com msg#: 85400)

No offense has been taken. I like a challenge. It shows that someone is listening. Also, responses such as those you made require that I keep my writing accurate, which forces me to improve my knowledge and my work.

Your point on Chaucer is very sharp.

In modern English, as translated by Theodore Morrison (1949):

"As soon as April pierces to the root
The drought of March, and bathes each bud and shoot
Through every vein of sap with gentle showers
From whose engendering liquor spring to flowers;
...."

We of western mind tend sometimes more outwardly to passion than to reflection. We seek for ways to state large causes simply, desire that our expressions require no more of others than what is minimally necessary. It is in simple rhyme that the muses speak most clearly. As Beethoven said, "Perfection is in the trifles, but perfection is no trifle." Bach said, "God is in the details." People today say it is the devil. But it is people who have changed, not that which is in the details.



I laughed. Thanks.


misetich (09/18/02; 19:10:38MT - usagold.com msg#: 85456)
Group not sure recession is really over
http://www.boston.com/dailyglobe2/261/business/Group_not_sure_recession_is_really_over+.shtml
Snip:

WASHINGTON - The private group that monitors the ups and downs of the US economy says it still isn't sure the recession is over.
Employment and income gains along with other data ''indicate that the decline in activity that began last year may have come to an end,'' the business cycle dating committee of the National Bureau of Economic Research said on its Web site. The committee said it will withhold judgment until it concludes ''that a hypothetical subsequent downturn would be a separate recession, not a continuation of the past one.''
..........
Misetich

Double dip?

Got gold?

misetich (09/18/02; 19:00:28MT - usagold.com msg#: 85455)
Brazil markets fall as polls stoke election fears
http://www.forbes.com/newswire/2002/09/18/rtr725082.html
Snip:

SAO PAULO, Brazil, Sept 18 (Reuters) - Brazil's battered financial markets took another pounding on Wednesday after the country's left- leaning presidential front-runner shot higher in the polls, stoking investor fears that he might win the first round vote on Oct. 6.

The country's currency, the real <BRBY>, sank 3.1 percent to 3.355 per dollar, settling in the red for the fifth straight session and at its weakest level since July 31, when it closed at an all-time low of 3.47. With Wednesday's losses, the beleaguered real has now shed more than 30 percent of its value against the greenback in the year-to-date
********
Misetich

Brazil - the last straw that breaks the camel's (JP Morgan) back? $2.6 billion

Citi exposure is huge!

Got gold?

misetich (09/18/02; 18:53:57MT - usagold.com msg#: 85454)
U.S. swap spreads pop wider on JP Morgan's blues
http://www.forbes.com/newswire/2002/09/18/rtr725126.html
Snip:

NEW YORK, Sept 18 (Reuters) - Spreads on U.S. dollar
interest rate swaps widened on Wednesday as credit rating
downgrades to J.P. Morgan Chase raised new worries about credit
quality at the nation's second largest banking company.
..........
But traders said the pop in spreads was not significant.
Many market players remain focused on news of Fannie Mae's

(nyse: FNM - news - people) hefty need to buy duration -- either through swaps,
Treasuries or mortgages -- to correct its swelling mismatch
that hit an all-time month-end high in August at minus 14
months.

Some analysts estimated that Fannie Mae would have to
purchase as much as $110 billion in the equivalent of 10-year
exposure to get its duration gap back within its stated target
of minus six to plus six months.

"You've got to worry about Fannie," said trader at a U.S.
bank. "The view is that Fannie has to go long a lot of
duration."
.............
Fannie's troubles were underscored by Freddie releasing
data showing that its duration gap -- how its assets like
mortgages, now being redeemed through booming refinancings
, match liabilities like debt -- stood at zero months.

"Either Fannie is taking on more risk than Freddie or
Freddie is better at hedging their portfolio," the trader
said.
**********
Misetich
JP Morgan dividend cut is a certainty causing additonal selling pressure

Fannie Mae - its only the beginning stage of the eventual GSE's bubble burst

Got gold?


Andúril (09/18/02; 18:38:25MT - usagold.com msg#: 85453)
Greenspan's higher wire
Leigh, first understand that Welteke looks down on another realm, facing different winds from the common storm that threaten less damage. To keep balance, Greenspan must toil harder and with farther to fall in ruin. -repatriation-

If among those who know the score there were ANY hope he could wealther the storm and save his realm, the knighthood would wait to mark this better crowning achievement. The best that could be done HAS ALREADY been done, thus the KBE honor NOW for "outstanding contribution to global economic stability."

Among those that know, the best expectation is that it shall all be down from here... too late for honors of the soon to be forgotten past.

You say "Many people believe..."

To that the press today reports your Undersecretary Fisher offering a comment that applies.

R Powell (09/18/02; 18:18:32MT - usagold.com msg#: 85452)
Afterhours
JPM/C holding up over $20/share.
EDS down from its regular hours close of $36.46 to $24.20 in afterhours trading.
Big Blue (IBM) down in afterhours by about $3/share
Interesting, entertaining and scary.
Got Gold? Got Silver?



slingshot (09/18/02; 18:01:31MT - usagold.com msg#: 85451)
Waverider
Ending
The Dance of the Veils should be told from a feminine perspective and an adjunct as you call it would be fine.
As I said before, the story is come almost to conclusion. Just one more episode. The Final Battle. I have gained great insight into what is involved in creating such a story. Have encountered some of my short commings and maybe some strenghts. Giving life to characters is no simple task if the story is be alive. I did pick the beginning and end. The fun was in between and how each days news, a guess here and there played well for the story. To extend it would make it more complex and lose its value.

Can you Imagine a Siege Engine 2? One more ROCKY and I would have screamed.:0)
Slingshot--------------<>

misetich (09/18/02; 17:46:21MT - usagold.com msg#: 85450)
Andúril
To understand Welteke and Greenspan tightrope problem is not difficult - it is the solution that is beyond the grasp - Your enlightment would be much appreciated

misetich (09/18/02; 17:14:55MT - usagold.com msg#: 85449)
Reality Check: US Machine Tool Execs Say Conditions Dire (2
http://www.economeister.com/reg/popup/single_story.jsp?prod=62&banner=mainwire_features
Snip:

NEW YORK (MktNews) - Cole described rumors that the more than 2000
commercial aircraft now parked in Southwest deserts are "being
cannibalized for parts," making the situation still tougher for
suppliers who in the past weathered downturns by extending the life of
aircraft. Meanwhile, prices are spiraling lower.

"Every order goes into a buyer's market, and they know it. They
just keep after you until they find the bottom," Cole said.
..........
Mikulec added that any machine tool sold to automotive manufactures
today won't be used for another two years, and no automaker he knows of
has planned for that far ahead.
.........
"Car companies are not spending on (research and development) the
way they used to spend - they're not introducing any new models," the
source said. He argues that the 15 new models that GM professes to be
introducing are new in name only, with no significant changes to capture
the public's attention, while Ford won't be doing any introducing until
2005.

"All the demand pull comes from incentives - they're only competing
on price," he said. As they push prices down, they outsource their core
competency to ever-cheaper suppliers, some of whom go out of business
because of lowball bids.

"Detroit tells people to buy American, they go to Congress and ask
to limit imports, and then they turn around and buy all-foreign
equipment," he said.

"They destroy their supplier base by making them go through five
rounds of bids then awarding the contract to the one most desperate to
win," he said. "Meanwhile, the accountants keep asking how do we reduce
costs more? But you can't cost-cut your way to a competitive advantage
forever. It's a very short-term strategy. At some point you have to
develop a better product that people want to buy. They have no product
differentiation strategy."
*********
Misetich

In a word the outlook is "Grim"

Got gold?

Leigh (09/18/02; 17:12:18MT - usagold.com msg#: 85448)
Anduril
Here's what I don't understand. How can Greenspan be walking a high wire when all of this (the bubble and its collapse) appears to have been planned? Many people believe that the Asian crisis, the Argentinian crisis, and possibly the coming U.S. crisis are contrived situations to impoverish the world's citizens and take away their sovereignty. So, assuming that Greenspan knows all of this, why should he be worried? Why isn't he rubbing his hands together in gleeful expectation?

misetich (09/18/02; 17:05:52MT - usagold.com msg#: 85447)
S&P: JPMorgan Chase Negative Outlook Time Horizon 3 Years
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1032369780000&sn=1&banner=mainwire
Snip:

NEW YORK (MktNews) - Credit analysts at Standard & Poor's Corp.
expect to maintain J.P. Morgan Chase's negative credit outlook for at
least the next three years due to the cyclical nature of its business
and almost $15.0 billion in credit and private equity telecommunications
sector loan exposure.

Speaking on a conference call Wednesday, lead analyst Tanya Azarchs
saw the firm's credit costs rising as much as 50%, and systemic loan
quality deterioration. She made particular reference to JPM's
"worrisome" and "uncharacteristically" weak trading performance this
year, which has added to the bank's financial problems.

"We think that the key for maintaining its present ratings will be
earnings sustainability and not an issue of capital," said Azarchs.
"The time horizon for JPM's negative outlook is three years, or less if
they improve (financially) in that time."

Late Tuesday, Standard & Poor's said it had lowered its ratings on
JPM and its units and removed them from CreditWatch, where they were
placed Aug. 15, 2002.

JPM's counterparty credit ratings were lowered to
single-'A'-plus/'A-1' from double-'A'-minus/'A-1'-plus, while the
long-term counterparty credit rating of its lead bank, JPMorganChase
Bank, was lowered to double-'A'-minus from double-'A'. JPMorgan Chase
Bank's short-term counterparty credit rating of 'A-1'-plus was affirmed.

According to S&P's statement Tuesday, JPM made clear in its recent
announcement that its performance will be considerably below Standard &
Poor's expectations at the start of the year on several fronts.

The deterioration in loan quality (a 20% increase in non-performing
assets was announced for the third quarter) and therefore the growth in
credit costs will be at least double the 20% that Standard & Poor's
expected for all of 2002.

In addition, uncertainties remain about JPM's ultimate ability to
collect on $1.1 billion it is owed under surety bonds and a letter of
credit covering its exposure to Enron Corp. Other litigation and
investigations surrounding its activities with Enron and, to a lesser
extent, other underwriting activities, will continue to produce headline
risk and even potential financial costs.

Azarchs added that while JPM has adequate capital and reserves to
counter a downturn, the institution is suffering from the cyclical
nature of the financial markets, investment banking activities, and
trading operations.

The S&P analyst expressed some surprise at the amount of trading
losses the firm had suffered this year, describing them as
"uncharacteristic" and "worrisome," adding that JPM suffered its
greatest trading losses this year in July and August.

The losses, however, were not within any one sector, but rather
across the board and within several sectors, she explained.

"We have also not received any indication that J.P. Morgan Chase
suffered substantial gold trading losses."

Azarchs explained that there have been widespread rumors the a
large investment banking firm had "lost its shirt" in gold trading this
past summer.

On a positive note, Azarchs explained that JPM remains strong
financially with adequate loan loss reserves, and sees the chances as
"reasonable" that the firm will make $4.0 billion in revenue next year.

She would not speculate on any pending management changes.

*******
Misetich

It only the beginning of denials

Got gold?

Posted in its entirity for fair use and educational purposes

misetich (09/18/02; 16:49:48MT - usagold.com msg#: 85446)
Headline Updates -
Various Sources
WARNING - Today's headlines restricted to holders of physical gold - as they can be assured of a good nite rest

Fitch Cuts Reliant's Debt to Junk
Cisco: Order Backlog Has Fallen 30 Pct
Kodak Is Wary on Earnings in 2002
EDS Slashes Third-Quarter Profit Outlook
Investors Worry Lucent Faces Shaky Future
JP Morgan Shares Sink After Warning
Oracle Shares Slump on Profit Plunge
OPEC To Continue Output Levels
North American chip equipment orders fall
Japan Central Bank Mulls Buying Plan
S&P cuts Nortel ratings deeper into junk

******
Misetich

To be continued ...

Got gold?


Waverider (9/18/02; 16:41:11MT - usagold.com msg#: 85445)
DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.html
Excellent DMR - not to be missed!

Waverider (9/18/02; 16:40:00MT - usagold.com msg#: 85444)
Slingshot
Please Slingshot, not a rewrite...only an adjunct...of course the Dance needs to be told from the feminine perspective! I howled last night when I read your latest episode - it was absolutely delightful (except of course, the unfortunate demise of my dance ensemble!) Have you really an ending to the story? This is far too much fun...I hope it's provided some entertainment for the readers here. Cheers,
Waverider

Andúril (9/18/02; 16:34:41MT - usagold.com msg#: 85443)
Misetich comments
Do not discount that in his publicity Welteke may have had his mind on objectives aware of situations more dire than any that you might imagine. That you do not see the problem but only "absurdity" is a measure of success for his efforts, is it not?

Do not think for a moment that Greenspan is not himself walking a wire much higher still.

misetich (9/18/02; 16:33:32MT - usagold.com msg#: 85442)
Economy Rating Drops-Now Its Worst in Eight Years
http://abcnews.go.com/sections/business/DailyNews/abcmoneypoll020918.html
Snip:

N E W Y O R K, Sept. 18 — Public ratings of the national economy slipped to their lowest this week in eight years, and overall consumer confidence dropped back to match its worst of 2002 — previously unseen since April 1996.
Just 30 percent of Americans now rate the national economy positively, the fewest since October 1994. Confidence in the economy has fallen by 15 points just since March. It peaked at 80 percent positive in the go-go days of January 2000.
*********
Misetich

It'll get worse as a new round of layoffs is around the corner

Got gold?

misetich (9/18/02; 16:11:23MT - usagold.com msg#: 85441)
World central banks far from taking Japan's tack
http://www.forbes.com/newswire/2002/09/18/rtr725000.html
Snip:

NEW YORK, Sept 18 (Reuters) - The Bank of Japan's startling plan to buy stock from banks to shore up the Japanese financial system raises the question of whether a crisis could ever prompt similar actions by other central banks.

The Federal Reserve and the European Central Bank are a long way from facing anything like the banking industry troubles, deflationary cycle and decade of moribund growth that has led the BOJ to propose such a radical step.
"It's a very risky business that Japan is undertaking," said Carl Weinberg, chief economist at High Frequency Economics.

In buying shares, the central bank will take positions in the very financial market it is supposed to ensure operates smoothly.
.............

German banks are worst hit. Their bad loans, crushing costs, stagnant economic growth and huge industrial shareholdings when equity markets are tumbling are damaging profits. The Bundesbank warned this week that the problems were only getting worse.

Bundesbank President Ernst Welteke floated the idea earlier this year that the bank might consider selling part of its gold reserves and reinvest the proceeds in shares.

But his comment was met with surprise among analysts, since equities are not normally used as an investment vehicle for official reserves. They are traditionally kept in highly liquid, or easy-to-sell, assets.
..........
"Central banks have to maintain a pretty strong credibility and it's not their realm to start dealing in the stock market," said Standard & Poor's MMS senior economist Kim Rupert.

Minutes of one Fed meeting earlier this year referred to "unconventional measures" that policy-makers might consider if interest rates got close to zero, sparking speculation about just what officials meant. Analysts doubt they had stocks in mind.
.........
**********
Misetich
Central bankers are fighting a losing war - gold is too powerful an enemy -
time and time again central bankers have tried invain to fight the markets and invariably they have lost all creditability

Ernst Welteke is an example of an irresponsible banker - the mere suggestion of selling REAL assets (gold) to preserve inflated non-exhistent values borders not only on abusurdity but plain nuts

Got gold?





Black Blade (9/18/02; 15:09:15MT - usagold.com msg#: 85440)
Pump and Prime on CNBC

I see that Wachovia's Chief Economic Strategist Ron Smyth is spreading his own rumor on CNBC. He says that earnings are increasing year on year and that should be good reason to invest. Hooey - only in his wildest "pro forma" induced hallucinations!

- Black Blade

Off to the gym and maybe slay a beast!

TownCrier (9/18/02; 15:03:19MT - usagold.com msg#: 85439)
"Rumors like the ones you seem to be believing aren't worth spit."
http://uk.biz.yahoo.com/020918/80/d9wlx.html
WASHINGTON, Sept 18 (Reuters) - U.S. Treasury Undersecretary Peter Fisher on Wednesday dismissed rumors that the Treasury would reopen the 30-year bond, sales of which were canceled last year.

"Rumors like the ones you seem to be believing aren't worth spit," he told reporters after a
speech.

...Fisher's response came after rumors had swirled in the bond market earlier in the day... However, most traders dismissed the talk, finding it hard to believe the government would risk pushing long-term yields at a time when refinancing was playing such a crucial role in supporting consumer spending.

-----(click url for more)-----

Yesterday I was discussing this very thing over a cup of coffee at a friend's -- an Argentine newly arrived from his native country. Just for fun, and to emphasize a point, I asked him if he thought there would be anyone willing to buy and hold a 30-year Argentine bond at any rate. "No way" was his response, without hesitation.

Additionally, he said that private trading in physical gold was becoming a very noticable feature in the social landscape.

A word to the wise.

R.

Black Blade (9/18/02; 14:59:20MT - usagold.com msg#: 85438)
After Hours Stock Crash

Two stocks report lower earnings. IBM and EDS are crashing hard in after hours trading. Today the stock market was propped up by a program trade for "asset allocation" where bonds were sold and stocks were purchased resulting in a quick rebound in late trading action. Then really crept back in and stocks resumed the steady decline until the market close. Now we see several stocks tumbling lower and gold shares regaining lost ground though gold is slightly lower on access trade. It should be "interesting" to see how Asian markets react tonight. Will they continue to crash or will they rebound on false hopes because of the late market rebound on Wall street? Also, now that Japanese have had time to digest the desperate actions of the BOJ last night - will the Nikkei continue to recover or will fear over the true state of the Japanese economy take a toll? There is a lot to consider in tonight's trading action. Meanwhile geopolitical tensions and global market jitters could move precious metals tonight. "Interesting Times"

- Black Blade

slingshot (9/18/02; 14:57:22MT - usagold.com msg#: 85437)
Waverider
OOOOOPS
Don't have to worry about the King with No Name when Slingshots around.

When I read Gandalfs Not To Worry comment I reread the last post of the story. Yepper. I single handedly knocked off Ladies Leigh and Siochaina. Sorry Ladies, I did not mean to do that to you. Kind of like the commerical where the man was painting the end zone for the K.C. Chiefs and the player says to the man, Nice job ,but who are the Chefs? Great Gobbaly gook the painter mutters to himself.

Fantastic rewrite Waverider.
Slingshot-------------<>

sector (9/18/02; 13:41:30MT - usagold.com msg#: 85436)
Snap Shot of JP Morgan Chase - Earnings Down 90% vs. Previous quarter, Downgraded to AA-
Morgan Stanley Analysis:
J.P.Morgan Chase & Co. - September 18, 2002

Summary and Investment Conclusion

JPM reported today that it would significantly miss 3Q02 estimates. In concert with this announcement, JPM's credit ratings were reduced by Standard & Poor's. Specifically, the Bank moved to AA- from AA, while the Holding Co. went to A+ from AA-. We had been low on the Street at $0.50 for 3Q02 (versus consensus of $0.54), but we clearly were not cautious enough.

The magnitude of the deterioration in credit costs was somewhat of a surprise (particularly in Europe; see below for details), but $100 million in total trading revenues for the first two months of the quarter versus $1.1 billion for 2Q02 was the real outlier (and remember we had significantly lowered trading revenue expectations after meeting with the company just a few weeks ago).

Given today's announcements, which we detail below, we are reducing our 3Q02 estimate to $0.04 from $0.50. All told, our 2002 EPS declines to $1.61 from $2.24. In 2003, we think that the company can earn $2.76, compared to our "old" estimate of $2.90. At the moment, the First Call consensus estimates for 2002 and 2003 are $2.30 and $2.96, respectively. We retain our Equal-weight rating. We have not been bullish on this stock, but we regret that we did not fully recognize that its attractive yield and low PE were nothing more than a classic value trap.

the near-term, we think that the stock settles between stated book of $20.93 per share and tangible book (including mortgage servicing rights, or MSRs) $16.00.

Key Issues

What did we miss? What we missed was that JP Morgan's trading business earned just $100 million through the first two months of the third quarter, compared to $1.1 billion during 2Q02. Management attributed the losses in trading to correlated risks, though we think JPM's equity derivative business, its convertible business, and other parts of its proprietary trading unit are to blame.

What was worse than expected? We had been using a managed provision estimate of $1,235 million, but we have raised it to $2,200 million following the management-led conference call this afternoon. In the prior quarter it was $1,155 million, and in 3Q01 it was $1,015 million. Included in our ‘new’ estimate is $300 million for commercial-related reserve strengthening.

Without question, we can now say convincingly that the demise of WCOM was somewhat of a Shot Heard ‘Round the World. Why? Because it accelerated the ultimate demise of weak credits in soft spots of the economy, including media, telecom, and cable. Also, its bankruptcy extended risk aversion from Wall Street to Main Street, with the end result being increased risk aversion.

Maybe we are assigning too much significance to one event, but — otherwise — we would have a hard time explaining how management at JPM failed to identify seriously softening credit trends in the early months of 2002.

What was not addressed in release?

This quarter did not include another commentary on the company's sizeable private equity portfolio, which totaled $8.2 billion in 2Q02, including approximately $1.4 billion in telecom and media-related investments. On the call, management indicated that results in this division were being impacted more by lack of realization versus further deterioration in investments,
particularly in the TMT sector. We find this statement somewhat surprising, given that today's release says that credit losses "primarily reflect adverse actions during the quarter by several firms in the telecom and cable sectors, and a more negative view of the outlook for other firms in these sectors."

Does this announcement affect JPM's derivatives business?

In our view, JPM's troubles are not new news, but we do believe that the severity of the problems is somewhat surprising. As such, we would expect increased scrutiny of JPM's derivatives franchise in the near-term. Importantly, though, despite S&P's downgrade, JPM (the Bank) is still one notch above what we view as critical levels (i.e., AA- is still respectable). However, the company now has less wiggle room, and we think that it could additional pressure on management to reconsider its dividend policy by late
2002/early 2003.
+++++++++++++++++

As the DOW turns positive and JPM closes above $20, more recruits are signing up for the "Manipulation News" at GATA so that they can be better advised how everything in a rigged financial World works. [See GATA.org]

Note that many central banks REQUIRE an AA rating in order to be a couynter party. JPM no longer HAS an AA rating and will have to remove its own counter parties that hold to this rule.

Like Enron, JPM has now run afoul of the ratings agencies with its plummeting earnings, down 90% vs. the previous quarter and the demand to sell even more assets to stay afloat.

Perhaps there are fewer folks buying their paper? Bad sign for Q4 2003...what with a war on deck.


sector (9/18/02; 12:39:18MT - usagold.com msg#: 85435)
[Japanese]FSA delays bank refund cap until Sept. 1
Yomiuri Shimbun

The imposition of a full-scale refund limit on bank deposits, earlier scheduled for April 1, will be postponed five months to Sept. 1, the Financial Services Agency said Wednesday.

The so-called payoff system limits government-guaranteed refunds for time and savings deposits to 10 million yen and accrued interest per bank and per depositor in the event of a bank collapse.

The payoff system for time deposits has been in effect since April 1.

FSA officials said they would finalize the five-month postponement plan of a full-scale payoff system in consultation with the three ruling parties.

In light of the need on the part of financial institutions to program their computer systems to make a smooth transition to the full-scale payoff system, there should be a five month "grace period" beyond the earlier scheduled launch date of April 1, agency officials said.

Prior to Sept. 1, the FSA will design a new type of savings account that will be eligible for full government protection even after the Sept. 1 enforcement of the payoff system, they said.

The planned account, primarily for financial settlements such as utility bill payments, likely will not pay any interest, the officials said.

Cash in the ordinary deposit accounts will be protected in full until the end of August, according to the agency.

However, the FSA plan is expected to attract some opposition as there is a strong body of opinion within the ruling coalition parties that the planned lifting of the freeze on the refund ceiling on savings deposits should be scrapped permanently to ensure the stability of the nation's financial system.
+++++++++++++++++++++

Looks like the LDP is having second thoughts about shafting retirees by removing their savings insurance.

They obviously couldn't bail out the banks by massive inflationary government purchase of NKK225 stocks [As they did today] and not continue to insure at least a PORTION of elder Japanese savings deposits.

With each passing day both the US and Japan find less and less operating room to continue their numerous financial market rigs.

Pizz (9/18/02; 11:54:06MT - usagold.com msg#: 85434)
Coin Guy
I've taken a bit of a break also to watch jpm. Just hit 20 suprise, suprise.

It's the little things you can see on the tape and level II that really make you wonder. Like when the bids dry up and you've got a .10 or .12 spread and then you see a new bid come in .10 above any other bid.

And to answer my previous question on odds, no self-respecting bookie would give odds on this market.

close will be interesting today. Now, if I was one of the counterparties with a $20 trigger price (assuming there are such things and the rumors are true, I think I'd be selling the heck out of JPM so I could get my money back first, while they still have some. course on the other side I'd be selling the heck out of gold too, at least until I got my money out.

Bet the boys at the FED are watching this one real close too.

regards,

Pizz

TownCrier (9/18/02; 11:52:31MT - usagold.com msg#: 85433)
Thoughts for the budding economists at the Table
http://allafrica.com/stories/200209180475.html
Excerpts:

Business Day (Johannesburg, September 18, 2002) -- FINANCE Minister Trevor Manuel has raised what may be the first official doubt about the wisdom of applying ever-increasing interest rates to stem rising inflation.

...August inflation figures ... rose to an unexpectedly sharp 10.8%...

...Manuel also appeared to pass responsibility to Reserve Bank governor Tito Mboweni, saying it was up to the Bank to decide whether or not to use an escape clause to avoid having to meet increasingly impossible inflation targets next year and in 2004.

"The logic is there in the letter (authorising the inflation targeting policy) from me to the governor. It is that you cannot impose punitive adjustments on the economy when there is actually nothing you can do about it.

"For as long as there is a risk of war against Iraq, you are going to have an oil price of about $28 a barrel, and if the war actually happens you are going to find a spike above $40 a barrel.

"Now you can put up interest rates another 10% and it is not going to make a difference," he said.

-----(click url for full article)-----

Bottom line: gold is what it is, and it can outpace the field when the chips are down. Believe it.

R.


TownCrier (9/18/02; 11:41:05MT - usagold.com msg#: 85432)
African inertia toward single currency
http://allafrica.com/stories/200209180465.html
A thought-provoking article. Should help you conjure up echoes and understanding of ANOTHER's admonition:

"today, your wealth, is not what your currency say it is"

Consequently, a wide world of experienced savers hold gold and know it for what it is. True wealth.

R.

Chris Powell (9/18/02; 11:39:41MT - usagold.com msg#: 85431)
GATA spreads Morgan horror story
http://groups.yahoo.com/group/gata/message/1231
GATA Chairman Murphy spreads the Morgan horror
story via CBSMarketWatch:

http://groups.yahoo.com/group/gata/message/1231

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@yahoogroups.com

The CoinGuy (9/18/02; 11:32:31MT - usagold.com msg#: 85430)
Pizz
Watching this closely myself. Look at that Volume. Huge! Interesting week so far, whats next?

Still sticking with my 330-340 call, although all might not agree. I'd prefer the physical metal separate in pricing from the contract price, until then, I'll just watch the action on the charts. Would also prefer this is dragged out as long as possible. Accumulation is never completed.

Just think, people who have read this site were/are prepared for a lot of this in advance. I continue to read on a daily basis. Great Stuff, especially Sector as of late. Very informative posts.

ALL: On another topic: Was listening to a precious metals show this morning, the "radio personality" was mentioning their is spot shortages of $20 Libs, and Gaudens. I called around, and it seems the smaller dealers are having some troubles filling orders. All commented, "Business in Great", but the larger dealers I spoke to seemed to be a little more liquid in their inventories. Although, mostly common dates were/are available. The scarce or rare dates are just that. Scarce and rare.

This is why it pays to know a well connected dealer. Customers at two places I spoke with are waiting in line right now. Michael has the connections and the character to service your needs properly. I'd take advantage of this before the market gets too hot for the small guys to handle. Didn't mean to turn this into an online infomercial, just felt the necessity to mention this, so you don' get caught with your financial pants down.

Best Regards,

The CoinGuy

Pizz (9/18/02; 11:17:34MT - usagold.com msg#: 85429)
JPM
I wonder what odd the bookies are giving on whether JPM closes below 20 today.

Right now we're at 19.68 and rising.

Big money and probably some of our tax dollars at work.

Will be interesting to watch.

Pizz

Henri (9/18/02; 10:57:27MT - usagold.com msg#: 85428)
"a nation of one" and Zhisheng
I have been following your thread "china thoughts" with interest and wish to throw in some thoughts if you do not mind me adding to your scholarly analyses.

Certainly not to refute anything said in the aforementioned thread, language has always presented a problem for the Chinese in their integration with the west both in business and culture. The very old style of text which Lao Tzu recorded the "Tao Te Ching" is very difficult to read even for very well educated Chinese today. At the time it was written down, well predating the Confucian intervention, this Taoist body of knowledge was perhaps many thousands of years old already and handed down through oral tradition (like the works of Homer). Once written, only scholars had access and it is itself merely a translation of that body of knowledge. In its own words as recorded by Lao Tzu and subsequently widely interpreted, it mentions in its opening phrases that "…the Tao that can be told is not the true Tao…" One would presume that this line of thought carries over into the written as well. That Taoist thought is much older than and constitutes the basis of much of the philosophy underlying Tibetan and other forms of Buddism is an issue of conjecture.

Certainly the Chinese communists have brutally overtaken ancient Tibet and desecrated much if not all of its essential cultural treasures, but I don't think it can be said that they have widely repopulated either it or the Mongolian provinces.

The written language of china today although "modernized" is still based upon symbology and as such stubbornly resists translation into latin derivatives the basis of western prose. The characters are ambiguous at best as to meaning which can be modified by adjoining text and are clarified in speaking by intonation.

The problem of meaningful translation is particularly difficult in business where much of it is conducted between "honorable counterparties (triads) and very little of the agreements are "written down". The concept of contractual relations is a new and difficult concept for the Chinese but essential for doing business in the west. With over 5000 individual characters and derivatives, the Chinese language has presented particular difficulties in being easily "computerized". Recent stroke sequencing encodement however has reduced these formidable constraints in widespread introduction of the digital world into mainstream Chinese life.

With such a complex and colorful language of hidden meaning and heady intent, it is no wonder they seek to cling to gold as a basis of reality and an expression of personal wealth


Sierra Madre (9/18/02; 10:19:53MT - usagold.com msg#: 85427)
Zhisheng: your question re the Albert Pike quote, last night

I took the quote from a paper written by someone who is a careful writer - the place in "Morals and Dogma" where the words appear, was not mentioned. I agree, the context would be interesting.

I have the book, but it is not where I am presently, so I cannot search for the quote now, unfortunately. I will do so in a few weeks time - if I can remember.

Sierra

USAGOLD / Centennial Precious Metals, Inc. (9/18/02; 10:06:41MT - usagold.com msg#: 85426)
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