USAGOLD Discussion

SteveH

(07/03/2002; 01:40:59 MDT - Msg ID: 79776)

Power of the Purse Delegated to Fed

http://www.ny.frb.org/pihome/news/speeches/2002/mcd020702.htmlRemarks by

William J. McDonough
President and Chief Executive Officer
Federal Reserve Bank of New York

THE IMPORTANCE OF CENTRAL BANK INDEPENDENCE
IN ACHIEVING PRICE STABILITY

before the

National Bank of Poland

Warsaw, Poland

July 2, 2002

I am honored this afternoon to visit the National Bank of Poland and to address this distinguished group of central bankers and their guests. One timely issue confronting policymakers throughout the world is the proper scope for central bank independence. As is widely accepted, central banks that are both powerful and autonomous, yet at the same time responsive to the needs and wishes of their people, are fundamental not only to the economic development of all countries, but also to their political and economic stability.

Integral to economic development as well as to political and economic stability is a commitment to the liberty, dignity, and independence of people. These are ideals most countries share today. But liberty and independence, while precious, assume different form as they take root in countries throughout the world. How much liberty and independence do we give to people? How much is responsibility for governing people to be centralized? How much is sovereignty to be divided? In the United States, these are questions we continue to air and debate in public.

Today, I would like to share with you some of my views as to how these issues are reflected in the development of the Federal Reserve System and why I believe central bank independence is so vital to a country's economic development and its ability to control inflation. Independence has, perhaps, a special meaning in the context of the United States' experience with central banking. We as a nation were born primarily of individuals who set an independent course for themselves by leaving their own countries to seek a better life in the New World. Our country owes its growth, its prosperity, and its prominence to these individuals. How to preserve the individual liberty they sought and won has become an enduring theme in the history of the United States.

This history reflects the dynamic tension set forth in our Constitution of checks and balances to ensure that the powers of government do not alienate the rights of people. The responsibilities of government versus the rights of individuals, the centralization of power in the federal government versus its dispersal to the states, the mistrust of government versus faith in individuals are notions that are as alive in the Federal Reserve System today as they were when our republic was being shaped more than two centuries ago.

Compared with a number of other countries' experience with central banking, which goes back centuries, the Federal Reserve, at almost 90-years old, is a relative youth. Not widely known is that there were two earlier central banks in the United States prior to the creation of the Federal Reserve System in 1913. The first was chartered in 1791, the second in 1816. Each bank remained in operation for twenty years. It was not until repeated financial crises, however, with their associated business bankruptcies and general economic contractions, notably the panic of 1907, that the need for a central banking system found support in Congress.

The Federal Reserve Act was passed by Congress in 1913 with the goals of providing for a safer and more flexible banking and monetary system. One of its original purposes was to provide the country with an elastic currency--that is, one that would expand as appropriate to accommodate the need for additional transactions as production and spending grew. The Federal Reserve Act was also intended to establish facilities for discounting commercial credits and to improve the supervision of the banking system. More broadly, in establishing the Federal Reserve System, Congress sought to create an institution that would combine the benefits of public and private outlooks while insulating its functions from day-to-day political pressures.

The central banking system Congress put in place reflects the country's historic concerns, traceable to its early experiments with central banking, about a centralized government monopoly of the creation of money and the desire to disperse that control through a system incorporating regional diversity and private sector involvement. The Federal Reserve today is thus a regionally dispersed institution with both government and private interests represented in its ownership and control, a testament to the longstanding belief that formal involvement by the private sector is essential to the credibility and management of the nation's central bank.

Initially, the government was represented on the seven-member Board of Governors by the Secretary of the Treasury and the Comptroller of the Currency. In 1935, Congress removed these two officials from the Board in an effort to strengthen the Federal Reserve's independence from political pressures within the government. The seven governors who now comprise the Board are appointed by the President with the approval of the Senate. Each must come from a different geographic region, or district. Originally, Board members were appointed for ten-year terms so as to insulate them from short-term political pressures; the terms were increased to fourteen years in 1935.

To balance central oversight in Washington with regional and private sector input, Congress created twelve Federal Reserve district banks, each serving a geographic region. The creation of the district banks as separate corporate entities with local boards of directors and member banks as stockholders was a key aspect of the Federal Reserve Act.

The Reserve Bank directors, then as now, are one of the primary means by which the Federal Reserve Banks interact with the private sector on an ongoing basis. Six of the nine directors of each district bank are elected by the member banks; three are appointed by the Board of Governors. Of the nine directors, three represent banks and six represent the public, with particular consideration to the interests of agriculture, commerce, industry, services, labor, and consumers. The Reserve Bank presidents are appointed by the directors, subject to approval by the Board of Governors.

In the early decades of the Federal Reserve, responsibility for formulating and implementing monetary policy was not centralized in the Federal Open Market Committee, or FOMC, as it is today. Instead, the twelve district banks undertook open market operations and set the discount rate for banks in their areas, which required the Board's approval. In 1922, the district banks created their own committee to coordinate their open market activities. Since 1935, the FOMC has existed in its current form.

The debate surrounding the creation of the FOMC pitted some members of Congress who wanted only the Presidentially-appointed governors in Washington to set monetary policy against others who wanted the regional Reserve Banks to continue control of the Committee. The compromise reached allows all seven governors and the president of the Federal Reserve Bank of New York a permanent vote on the Committee but only four of the remaining eleven district bank presidents a vote at any time. This compromise reflects that delicate tension of checks and balances on centralized authority, which lies at the core of the Federal Reserve System today.

This brings me to consider the basic functions and goals of central banks in democratic countries. We all recognize that the ways central banks choose to carry out their functions and the importance they attach to specific instruments or tools to achieve their goals vary across countries. The degree of independence central banks have within their governments also varies across countries. These differences are to be expected. They reflect each country's individual history, traditions, financial market structures, and legal frameworks.

Nonetheless, I do believe that central banks in democracies the world over share certain basic functions and goals in common. What are these? First and foremost, a central bank's most time-honored duty is to formulate and implement monetary policy--with its twin goals of promoting domestic price stability while stimulating real growth. These goals remain at the core of central bank policy.

Integral to achieving price stability is the need for central banks to avoid the direct financing of government budget deficits. Central banks can't indulge in this practice and simultaneously hold inflation in check, over the long run. At the same time, central banks must strive to maintain positive real interest rates, which tend to increase private savings and discourage investments with low expected returns, thereby promoting growth in the economy.

Central banks implement monetary policy by affecting the growth of money and credit in the economy in response to deflationary or inflationary pressures as they arise. Central banks alter monetary policy through the use of a set of instruments, or tools. In the United States, these tools are grouped into three broad categories: 1) setting reserve requirements for banks, 2) setting the lending rate and making loans to commercial banks, and 3) buying and selling government securities or other government-guaranteed instruments. As lenders of last resort, central banks also stand ready to use the available policy instruments to forestall national liquidity crises and financial panics.

Another major responsibility of many central banks is to oversee, or have some participation in the oversight of, their banking and financial systems. A sound banking and financial structure is essential for an effective monetary policy. Confidence in the soundness of the banking and financial system is what mobilizes a society's savings, allows the savings to be channeled into productive investments, and encourages economic growth.

In the United States, the regulatory role of the Federal Reserve strengthens its ability to act as ultimate providers of liquidity to the financial system. Moreover, because monetary policy involves judgments about conditions in financial markets and financial institutions, including a detailed working knowledge of those markets and institutions, a major ingredient in the decision-making process comes from the direct, hands-on knowledge central banks gain through interaction with institutions under their supervision. I am firmly convinced that the Federal Reserve's hands-on involvement in bank supervision is integral to its ability to meet its monetary policy responsibilities and contain or forestall crises, if they emerge.

The third major function of central banks is to oversee the payments mechanism. A payments mechanism which is dependable and allows the efficient clearing and settlement of interbank transactions is crucial to a well-functioning financial system. Commercial banks participate directly in a country's payments system, extending short-term credit in their role as financial intermediaries in the payment, transfer, and settlement of financial instruments, including interbank deposits and government securities. Central banks participate directly in the payments system as well, in part because numerous types of payments, including large-value interbank transfers and check clearing settlements, are likely to occur across their books.

The central bank's participation in the payments system and its role as supervisor of the system enhance its ability to foresee and prevent or moderate financial disruptions. The payments system is a source of major credit risk because of the lags in time during which the processing of transactions takes place. During these intervals, one party extends credit to another pending the receipt of funds. These lags between the payments associated with both sides of a financial obligation, which can vary from hours to days, result in large, interwoven extensions of credit among financial institutions.

A payments gridlock or other financial disruption can arise from numerous sources, including the sudden failure of a major participant, credit concerns by some participants which make them reluctant to release payments, and various technical interruptions. Because a gridlock can spread rapidly throughout the financial system, central banks have a keen interest in avoiding a payments system disruption and ensuring that participants in the system manage their credit risks properly. In carrying out the functions of a central bank, we must ask ourselves why it is desirable that central banks in democracies have an important degree of political independence within government. I think we would all agree that central banks neither can nor should be fully independent of government, since it is governments--and not central banks--that hold final responsibility for the economic and financial policy of the country.

Nevertheless, some degree of central bank independence is critical. Why is this so?Basically, the greater the independence the central bank has, the less subject it is likely to be to short-term political pressures. Central banks under the direct day-to-day control of governments seem inevitably to be tempted to promote easy credit policies, particularly when elections are in view, or, even worse, to finance government budget deficits directly. While these policies may relieve certain short-term problems, such as high unemployment or difficulties in financing fiscal deficits, they ultimately result in higher inflation and the need for severe credit tightening in the future. Independence is also helpful to central banks in carrying out their supervisory responsibilities, by enabling them to resist pressures to relax or strengthen regulatory standards depending on political winds.

A number of studies in recent years have found some empirical basis for the desirability of central bank independence as well. Although these studies cannot prove causality, they do find that the greater the independence of the central bank, the lower the average level of inflation the country experiences and the less volatile the inflation rate.

Moreover, the fact that a country's central bank is independent is likely to enhance the credibility of that bank's commitment to price stability. This enhanced credibility, as one of my former colleagues on the Board of Governors has argued, may provide additional benefits. For example, this enhanced credibility may enable the central bank to reduce the cost of lowering inflation. Economists generally agree that if inflation is to be lower, monetary policy must reduce output for a while, relative to potential, by reducing aggregate demand. The output that is lost during the transition to lower inflation is a measure of the cost of reducing inflation. The faster expectations of inflation fall, the faster inflation itself will decline. The result will be lower costs to reducing inflation.

The credibility of a central bank's commitment to price stability is also important because a credible central bank may be more effective in conducting stabilization policy. A stimulative monetary policy in response to a slowdown in aggregate demand would be less likely to undermine a central bank's commitment to price stability when the central bank is independent. In addition, inflation expectations could be less likely to follow immediately were inflation to rise when a central bank is independent, easing the ability of the central bank to contain inflation.

In my view, controlling inflation is particularly important. When countries incur a significant level of public sector debt and run large budget deficits, fiscal policy is no longer available as a tool of macroeconomic policy. If fiscal policy is unavailable to address some of the social needs that confront so many economies throughout the world, it becomes especially important for inflation to remain under control, largely because of its regressive tax aspects.

In my view, price stability is therefore critical not only for the classic economic reasons but also because it takes on a greater social importance as well. The benefits to society of achieving price stability are all too often overlooked, which has allowed some unfortunate myths to flourish. One myth is that inflation is actually good for growth. This simply is not true. History teaches us that a necessary condition for winning the confidence of savers and investors is an environment in which prices remain reasonably stable, that is, prices
do not vary significantly over time. The ability to develop this environment requires the assurance that economic policymakers will be robust and consistent fighters against inflation.

Another myth says that inflation creates jobs, which is assumed to benefit the poor. This, too, is false. Inflation actually hurts the poor more than the wealthy. Those with less wealth have fewer financial alternatives and are likely to live on fixed incomes. This means that in an environment of rising prices, the purchasing power of their income is reduced and their standard of living may severely decline. Moreover, those who are lower on the economic ladder are often the last to be hired during economic good times and the first to lose their jobs during slowdowns that result from the need to reduce inflation.

Thus, it is in everybody's interest to keep prices stable and to maximize the job creation that accompanies growth. It not only is good economics, it also is good social policy. For better or worse, the task of keeping to this appropriate policy path often falls to the central bank. This is because the goals and long-term objectives of monetary policy can be more immune to political concerns, particularly near-term election considerations. That is why so many studies show that countries whose central banks have a high degree of independence from day-to-day political interference have had a far better record in terms of lower inflation and stronger growth.

But, we may reasonably ask, what exactly do we mean by central bank independence and how do we know it when we see it, recognizing, of course, that de jure measures of independence may not fully reflect de facto independence? Without being exhaustive, let me suggest a few answers and how they apply to the Federal Reserve System today.

One way to assess independence is to determine the extent to which the central bank enjoys freedom from the government in formulating and implementing its policies, particularly monetary policy. A key component of this measure of independence is the degree of freedom the central bank has to change official interest rates and select the mix of policy instruments and techniques it uses in undertaking open market operations. In these respects, I believe that Congress has provided the Federal Reserve with considerable scope for independently exercising its best judgment as to what monetary policy should be.

Another way to assess independence is to look at the procedures in place for central bank leaders to be nominated and dismissed. In the case of the Federal Reserve, staggered fourteen-year terms for governors clearly insulate the leadership from short-term political pressures and fears of falling out of grace politically. Moreover, once appointed, governors can be removed only for cause.

Still another way to measure independence has to do with the way the central bank finances itself. In the United States, the Federal Reserve System is self-financing, its earnings stemming principally from interest income on the portfolio of government securities it holds to conduct open market operations. Financing itself internally means that the Federal Reserve is not dependent on Congress for
annual appropriations and is therefore insulated from pressures that might otherwise flow from the "power of the purse."

Whatever their degree of independence, central banks typically are nonetheless created by and accountable to legislatures. In the United States, the Federal Reserve is accountable to Congress which has delegated to it specific powers Congress is granted by the Constitution. Congress thus retains the authority to oversee and instruct the Federal Reserve as it sees fit.

The Federal Reserve accounts to Congress in numerous formal and informal ways. There are continuous contacts between officials in the Federal Reserve and the government. Twice a year, the Federal Reserve reports to Congress on its monetary policy goals and its senior officials routinely appear before Congressional committees and sub-committees.

Over the years, Congress and the Administration have periodically sought to alter certain elements of the Federal Reserve. These efforts have contributed to many changes in the Federal Reserve's procedures and authority, in many cases allowing the Federal Reserve to evolve and keep pace with the needs of changing times. At no time, however, has the fundamental independence of the Federal Reserve been in jeopardy. The Federal Reserve's basic independence today is a widely shared value, which no one questions.

In reviewing the experience of central banking in the United States and the vital importance of an independent central bank, I cannot help but conclude that ultimately the only way central banks can achieve their goals and control inflation is if their integrity is without question and people have confidence in the policies they pursue. At the end of the day, it is public confidence that is a central bank's most precious commodity in a democracy.

Thank you.

Black Blade

(07/03/2002; 01:50:55 MDT - Msg ID: 79777)

USD Rallies - Gold Lower

http://www.mrci.com/qpnight.asp
It looks like the US dollar has strengthened against all other major currencies. The Japanese appear to have won the "Currency War" of the weaker currency. Now European countries want in on the fun and they too are falling sharply against the US dollar. US exporters are the big losers. However, the trade deficit will likely balloon unless the trend is reversed. This will play positively on the POG as well. Meanwhile the POG is slightly lower, petroleum is higher, and the US market indices are higher. All of which can change at the drop of a hat. We are just a "scandal" or "arrest" away from another market reversal.

- Black Blade

Black Blade

(07/03/2002; 01:56:22 MDT - Msg ID: 79778)

Asian and European Markets Rally

http://quote.yahoo.com/m2?u
Foreign markets are rallying on the stronger US dollar. The threat to exporters in foreign nations has subsided for now. It appears that equities trading on Wall Street could be "entertaining" today just before the 4 day weekend. To hold or not to hold. Hmmm...

- Black Blade

YGM

(07/03/2002; 02:01:30 MDT - Msg ID: 79779)

KTC....

I'm Not So Sure re Xerox & WorldCom.....But I'm far from an expert and the facts and figures are not nearly all tallied yet....Part of my supposition comes from earlier comments by Marketalk here...MarkeTalk (7/2/02; 14:32:40MT - usagold.com msg#: 79725)
and part from the comments by a 30 yr employee at a Xerox Stock Forum..(her 1000 shs average $54.00) (My Post # 79760) and many other comments of late on the final tally of Debt carried by Xerox as yet unknown.
Now you used the figures of $53 high for WorldCom in /99 and $24 High for Xerox in /00...but Xerox had a high of about $60++ in /99. I have no info re Xerox Bonds or Debt load but even if it is not a bigger scandal/financial loss than Wcom it will rock the already crumbling foundation of Wall St and put even more fear into Worldwide investors of US Dow and Nasdaq stocks...Each blue chip dominoe to fall will bring the US Stock Markets closer to the abyss and each one may be the one to send it over the edge NO?...Like I say you and most other market players probably have a better handle on all this than I, but I see trouble brewing and it won't end with the few dominoes we've seen fall...There's undoubtably much more to come......Thanks for your interest and discussion, I am learning as I go...YGM

KTC

(07/03/2002; 02:41:22 MDT - Msg ID: 79780)

YGM -- Xerox

I remember (may not be exact) Xerox now still has about 23B in debt, current market cap of Xerox is about 3B--4B. If you use the high of $60, it losed $30B during the bull market so the impact for overall market is smaller. Worldcom is still bigger, Xerox just is an older and more familiar name.

But I agree with you, any accounting probelm and big company goes belly up is not good to the Market phyche right now. But this is a good thing needed to wash out the excess of bull market. Besides, when market went down, then gold usually went up.

I own a thouand Xerox shares purchasing at 8, if it goes to zero, the lost is about 1/10th of the amount of money I lost in gold miming shares between 1993--2000. Many of my mining shares went to zero. But I kept maintaining a certain amount in mining shares (dumped all the hedgers and switched to non-hedgers in 2000) and finally make some back this year (but still not broke even yet). Reading at this forum help me stick in there.

YGM

(07/03/2002; 02:58:25 MDT - Msg ID: 79781)

KTC...

Well Hang in... The Gold & Silver Play is our Last Hope.....IMHOI got out of all stock plays in 95/96 during Bre-X fall...Lost about half but made good overall. Gotta get some Zzzzz's here, been writing up a Resume` tonite pertaining to Mining sector....Can't seem to get to an ending...Nowadays they're probably more inclined to hire me if I BS than if I tell the truth...Nah, he couldn't have done all that stuff...Oh well, we try....G'Nite....YGM.

Black Blade

(07/03/2002; 03:15:05 MDT - Msg ID: 79782)

U.S. Stocks Fall, Driving S&P 500 to Lowest Since January 1998

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APSIHYBOfVS5TLiBT
Snippit:

New York, July 2 (Bloomberg) -- U.S. stocks slumped, dragging the Standard & Poor's 500 Index to the lowest level in 4 1/2 years, led by semiconductor and pharmaceutical companies.

Black Blade: And the S&P 500 is still grossly overvalued. Also, just out is that Advanced Micro Devices (AMD) is crashing in Europe. Looks like something is happening with the stock. Looks like a very negative open on Wall Street if the sudden reversal in Market Index Futures are any indication. And Gold turned slightly positive.

Black Blade

(07/03/2002; 03:21:49 MDT - Msg ID: 79783)

Brazil's real chalks up new record low

http://news.bbc.co.uk/hi/english/business/newsid_2084000/2084550.stmTraders fear victory of left-wing candidate

Snippit:

Brazil's currency has hit new record lows as the financial markets panic over the possible victory of a left-wing candidate in October's presidential elections. The real, introduced in 1994, fell to 2.94 against the US dollar from Monday's record low close of 2.89, leaving the currency 21% below where it began 2002.

Black Blade: The smart ones have Gold and Silver portfolio insurance. The stupid ones will end up eating at the landfill and take care of the stray cat and dog problem.

Black Blade

(07/03/2002; 03:32:03 MDT - Msg ID: 79784)

Absolute Wealth Corrupts Absolutely

http://www.time.com/time/business/article/0,8599,269373,00.html
The boom of the 1920s spawned corporate misdoings that were ultimately unveiled when the economy fell to pieces. Sound familiar?

Snippit:

The country is now waking to the unpleasant reality that boom-era excesses and corporate malfeasance go hand in hand. When the wealth of the million richest U.S. families, the top one percent, expands too much over a decade or two of booming stock prices, the eventual result seems to be a taste for speculation and highly developed sense of "gimme" that winds up jeopardizing both the American economy and the vitality of the American democracy. Especially in corporations, this ethical erosion over the last 4-5 years is now coming home to roost.

Economic history has seen other such surges, and the classic U.S. example involves the perverse proportionality of how the binge of the 1920s was followed by a three-year wringing-out after the 1929 Crash. Thus it's highly relevant � and a little scary � that experts are beginning to compare current circumstances with the precedents of that era.

Black Blade: There are more comparisons to the 1929 market crash and the Great Depression than one can shake a ticker tape at. The recent accounting scandals and corporate malfeasance is just the tip of the iceberg. Where there's one cockroach there are probably more, and where there a several cockroaches then it's a sure bet that there's an infestation.

Black Blade

(07/03/2002; 03:39:16 MDT - Msg ID: 79785)

How many Enrons are there? More than people may think.

http://www.csmonitor.com/2002/0703/p03s02-usec.html
One-quarter of public firms have to amend reports after SEC review � a sign of widespread manipulation.

Snippit:

NEW YORK � It's one of the central questions behind the growing scandal in corporate America: Just how pervasive is the number fudging? Some believe the mistakes in financial reporting and accounting are limited to a handful of companies � an Enron here and a WorldCom there. Others see the balance-sheet manipulation as extensive. Now a new study finds that financial shenanigans may, in fact, be more widespread than many Americans are aware of.

Black Blade: Like I said about cockroaches, where there are several, it's a sure bet that there's an infestation. We should be hearing of earnings warnings over the next week before the bad news is officially released. Don't worry as companies are sure to meet or beat "substantially lowered" analysts consensus earnings estimates. Hmmm�

Black Blade

(07/03/2002; 04:10:25 MDT - Msg ID: 79786)

Corporate lies have broader implications

http://www.globeinvestor.com/servlet/ArticleNews/story/RTGAM/20020627/wmath27

Snippit:

It's an issue that affects more than just investors in one specific company, however. WorldCom shareholders may be the latest winners (or losers) of the 'Who's A Bigger Fraud' contest that seems to be under way in the United States at the moment, but the impact of such scandals is much broader than just one company or its shareholders. In a very real way, it affects not just the stock market, but the health of the economy itself.

WorldCom is a particularly good (or bad) example, because the fraud that it has been accused of perpetrating involved overstating its capital expenditures by a staggering $4-billion (U.S.) in a little over a year. The company apparently took money spent on routine maintenance of its network � such as upgrading of switches or paying other companies a fee for the use of their networks � and treated it as a long-term investment.

Black Blade: Turn on the lights and watch the cockroaches scatter. I have posted here in the past about phoney baloney accounting including booking such items as mentioned in the article. It is much worse than that. It involves the corrupt practice of pro forma earnings, operating earnings, synthetic leases, etc. Investors are slowing waking up to the chicanery on Wall Street and now realizes that they have been played for fools at the boiler rooms at Merrill Lynch, Goldman Sachs, Solomon Smith Barney, etc. We are coming to the end game. Load up on Gold and Silver portfolio insurance while it's still cheap. It's going to get mighty ugly.

Black Blade

(07/03/2002; 05:26:50 MDT - Msg ID: 79787)

British Government Loses 480 Million Euros on Ill-Timed Gold Sale

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=31015091&ID=cnniw≻ategory=Metals+%26+Minerals%3APrecious&
Snippit:

Jun. 30--The British government has admitted that it lost UKpound 300 million (E480 million) by the bad timing of its decision to sell off a chunk of Britain's gold reserves.
The Bank of England, under government instructions, sold 395 tonnes of gold as part of a restructuring of the United Kingdom's foreign currency reserves, announced in May 1999. The Bank used the money it raised to invest in a portfolio split between 40 percent in euros, 40 percent in dollars and 20 percent in yen. Gold has recently made a strong recovery on the world markets and the UK gold reserves were sold at the bottom of the market.

Black Blade: With the current Currency Wars underway we should see the toll rise as the double whammy of depreciating currencies and rising Gold hits home. A real "smooth move" by Captain Tony and First Mate Eddie George (aka "Little Buddy"). I have always found it "interesting" that politicians once elected become "experts" in everything overnight by virtue of winning the bi popularity contest. Well these "experts" just cost the British people a nice chunk of change.

Black Blade

(07/03/2002; 05:44:25 MDT - Msg ID: 79788)

Swaps And Options: The Next Investor Time Bombs?

http://www.forbes.com/2002/07/02/0702watch.html?partner=yahoo&referrer=
Snippit:

NEW YORK - Given the headlines of the past few months, most investors now regard corporate accounting as an exercise in creative writing, and ethics as joke. Unfortunately, the bad news might not be over. While swapping lowers borrowing costs today, Hesler fears that if the Fed begins to raise short-term rates, it will dramatically increase financing costs for these companies, perhaps causing some to default, which could send waves through credit markets and the economy. To be certain, says Hesler, it would significantly reduce earnings. "This means that short-term interest rates are much more important to the U.S. corporate bottom line than they were ten years ago," says Hesler. Hesler warns that these swaps are generally not disclosed to investors but could affect a large number of companies, especially banks.

Charles Allmon, editor of Growth Stock Outlook, has been pounding the table about the way companies account for stock option grants to employees. Allmon estimates that if companies treated options as expenses, than earnings on the S&P 500 would be 30% less than they are today. "It's crooked, and nobody wants to do anything about it," says Allmon. "Nobody's showing any leadership. It's taking this whole trust thing down the tubes." "Anytime you have options tied to stock prices, you're in trouble. You should link them to something like real profits," says Allmon, who adds that "if something isn't done to clean up this mess, George Bush is going to be a one-termer." Hesler does Allmon one better: "If the economy remains in recession when the next presidential election comes around, we may find that Hillary Clinton is on the slate with a better than even chance of becoming the first female U.S. president."

Black Blade: This is scary because I have said similar things (except about Hillary). Of course it was a Clinton that ran against a Bush with the slogan "It's the economy stupid". Actually I have said that George W. Bush would likely be the Herbert Hoover of our generation. It's going to get very ugly going forward.

BTW, market index futures are looking very ugly this morning.

LeSin

(07/03/2002; 05:46:27 MDT - Msg ID: 79789)

How Important are Comex, Tocom ? Russia Goes Around Them & Direct

http://www.neftegaz.ru/english/lenta/show.php?id=25128
Snip from near the end of the above article:

"The dynamically developing Southeast Asian market looks very promising to us," he said, adding that the company wanted to sell up to 25 percent of all metals it produced there.

"But in case of palladium, our main targets are U.S. car-making and electronic companies," Finsky said. "It is a large market, and we are interested in long-term ties with end-users on the American continent."

Finsky said that currently Norilsk saw no reason to sell palladium, used essentially in catalytic exhaust converters in the car industry, on the spot market it had abandoned in the second half of 2001 due to weak prices.

"We are not planning sales on the the spot (palladium) market ... which is practically nonexistent," Finsky said.
But Norilsk intended to continue spot sales of sister metal platinum, whose market is more liquid, he said.

Black Blade

(07/03/2002; 05:52:33 MDT - Msg ID: 79790)

Europe Awash In Red

http://quote.yahoo.com/m2?u
Europe looks ugly this morning on diminished confidence and earnings warnings. No economic recovery for Europe either.

- Black Blade

misetich

(07/03/2002; 06:00:27 MDT - Msg ID: 79791)

US $ - Bottom Line: Living on the Edge

http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0Snip:

In the aggregate, portfolio inflows slowed to $38 billion in April, down from the sharp spike in March ($66.5 billion). Our theme of bifurcated US portfolio inflows was all too present in the April figures. For the month, diminished flows from Euroland were offset by surging flows from Asia, mostly from Japan. Inflows from Asia Ex-Japan were quite small relative to the past few months. The United Kingdom was a substantial source of capital in April, although the monthly total was less than half the level of the prior month.

Disillusionment in Europe

There is little doubt that the appetite among Euroland investors for US securities has abated. Indeed, inflows to the US from Euroland in the first four months of 2002 totaled just $7.5 billion compared with $25 billion for the same period a year ago. In April, net inflows totaled just $1.6 billion, among the weakest months of the past year. By asset class, Euroland investors were net sellers of Treasuries and nominal buyers of corporate bonds, agencies, and equities. Net equity purchases of $1.8 billion were at among the weakest levels (excluding September 2001) in more than two years.

Reflecting the growing disillusionment of European investors toward US securities, Euroland investors accounted for less than 6% of US inflows in the first four months of this year after accounting for nearly one-quarter of US inflows just a few years ago. Given the rise of the euro in the second quarter, we strongly suspect that Euroland investors continued to pare their US holdings in May and June. In fact, while the Enron debacle helped diminish confidence in US securities earlier this year, we can only assume that subsequent meltdowns at Tyco, WorldCom, and Xerox may have further soured investors on US assets.

Asian Dependence

As we have highlighted in prior dispatches, no country in Asia wants its currency to rally too quickly or too strongly against the dollar, on account of their underlying dependence on the US market for export growth. Asia's dependence has prompted central banks in Japan, Australia, South Korea, and other countries to buy dollar-denominated assets in an effort to stanch the dollar's decline.

Japan was the largest provider of portfolio capital to the US in April. Typically, Japanese investment in US securities slows at the end of its fiscal year (March) as investors sell foreign securities to build up their balance sheets at home. However, the beginning of the new fiscal year generally coincides with a return to foreign markets. In April, Japanese residents poured $13 billion into US securities, reversing the sell-off seen during the prior three months. This was a larger-than-usual surge compared with prior years, but much more is needed to offset the pullback in other regions.

Bottom Line: Living on the Edge

The trajectory of US portfolio inflows over the past few years has been nothing short of astonishing. Recall that over the 1999-2000 period, the external financing needs of the US were supported by strong inflows of both FDI (thanks to surging M&A inflows) and portfolio flows. This double-barreled financing was more than enough to cover the US current-account deficit and helped to boost US capital investment, consumer spending, and the value of US financial assets. In 2001, the bust in global M&A activity forced portfolio flows to do the heavy lifting of financing the US current-account deficit. In general, inflows were relatively balanced and emanated fairly uniformly from all regions. Thus far in 2002, portfolio inflows have continued to dominate overall capital flows, although flows from Euroland have narrowed, leaving Asia as the lender of last resort to the US. Against this backdrop, as long as Asia is willing to send capital to America, the US should avoid a capital shortage and potential dollar crash.

Misetich

Got gold?

misetich

(07/03/2002; 06:20:56 MDT - Msg ID: 79792)

South America - Contagion - Argentina, Brazil, Peru, Uraguay, Chile, Ecuador, Venezuela

http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0Snip:

In the past three months, as Latin currencies have suffered from turbulence in Brazil and dollar weakness, Chile's peso has lost nearly 10% of its value. Despite an improvement in the last two days of June, the pace of the peso's decline since April has been startling, as has the deterioration in the prices of Chilean assets in other markets. Although we remain cautious on our outlook for the Chilean economy, we see few "home-grown" reasons to justify the peso's recent weakness.

Indeed, Chile's recent saga serves as a warning sign to the region's watchers. Even in countries without the political difficulties seen in Argentina or Venezuela, the election uncertainty of Brazil, or the unrest seen in Peru, Chile's return to growth in 2002 remains complicated by the feedback from financial market turbulence in the region. And given the indiscriminate nature of the contagion, there is little guarantee that Chile's peso will not once again come under pressure in the weeks ahead. Although we reaffirm our end-year peso/US dollar forecast of 660, we would not be surprised to see the peso trade above 700 in the coming months and even retest levels near 720 seen late last year.
.............

The Chilean Peso/Brazilian Real Link

Despite the absence of the fiscal difficulties seen in Brazil and Argentina, and the political difficulties that have engulfed much of the region, Chile has been unable to escape contagion from Brazil. The clearest sign has been the link between real weakness and weakness in the Chilean peso. Although the trade linkages between Chile and the rest of Latin America (which would likely suffer first from greater turmoil in Brazil) may explain some of the weakness, we question whether Chile would suffer from a longer downturn in Brazil. Instead, we expect that a rebound in the US and global markets could compensate for any downturn in Chilean exports to the region and help the currency break its current Brazil link.

Misetich

The article writer is counting on a US economic recovery - they've been counting it on it for the past 18 months and still waiting -

Got gold?

miner49er

(07/03/2002; 06:51:01 MDT - Msg ID: 79793)

Congratulations to all the contest winners!

Aureo - well done! Nice Orwellian read... btw, what was the exchange rate to convert Oldbux for Newbux...?

Esteemed Castle Review Panel - thank you for considering my offering. Being among the honored silver recipients is good company to be associated with, indeed...

miner

Mr Gresham

(07/03/2002; 07:16:53 MDT - Msg ID: 79794)

SteveH -- Thanks

Thanks for posting McDonough's speech (I can't wait for the Polish translation!), but you must have been holding your stomach throughout reading it. As nauseating as it is, it's interesting to see the system's view of itself. Sort of. Well -- not really.

"The responsibilities of government versus the rights of individuals, the centralization of power in the federal government versus its dispersal to the states, the mistrust of government versus faith in individuals are notions that are as alive in the Federal Reserve System today as they were when our republic was being shaped more than two centuries ago."

They are what they are, doing what they set themselves up to do, or whatever they've evolved into while continually tapping into people's labor, savings, and productive efforts

McFiat. Over 50 Trillion Served. Still Indigestible. Yecch.

sector

(07/03/2002; 07:46:27 MDT - Msg ID: 79795)

Fed's McDonough on "Inflation Fighting"

Since June 1985 M3 has risen from $3.2 Trillion to $8Trillion [150%]In my view, price stability is therefore critical not only for the classic economic reasons but also because it takes on a greater social importance as well. The benefits to society of achieving price stability are all too often overlooked, which has allowed some unfortunate myths to flourish. One myth is that inflation is actually good for growth. This simply is not true. History teaches us that a necessary condition for winning the confidence of savers and investors is an environment in which prices remain reasonably stable, that is, pricesdo not vary significantly over time. The ability to develop this environment requires the assurance that economic policymakers will be robust and consistent fighters against inflation.

Another myth says that inflation creates jobs, which is assumed to benefit the poor. This, too, is false. Inflation actually hurts the poor more than the wealthy. Those with less wealth have fewer financial alternatives and are likely to live on fixed incomes. This means that in an environment of rising prices, the purchasing power of their income is reduced and their standard of living may severely decline. Moreover, those who are lower on the economic ladder are often the last to be hired during economic good times and the first to lose their jobs during slowdowns that result from the need to reduce inflation.

Thus, it is in everybody's interest to keep prices stable and to maximize the job creation that accompanies growth. It not only is good economics, it also is good social policy. For better or worse, the task of keeping to this appropriate policy path often falls to the central bank. This is because the goals and long-term objectives of monetary policy can be more immune to political concerns, particularly near-term election considerations. That is why so many studies show that countries whose central banks have a high degree of independence from day-to-day political interference have had a far better record in terms of lower inflation and stronger growth.
+++++++++++++++++++++++++++++

The rank hypocricy of this "Officer" can be seen in the actual numbers of inflation since 1985. If one chooses to measure from 1970 the loss in the dollar's purchasing power is 10X.

Absolute power corrupts absolutely...Mr. McDonough is a classic example....First Acolyte to the Master of the Universe.

"...monetary policy can be more immune to political concerns, particularly election considerations."

What Mr. McDonough really means here is that HE is immune from and resides above the election process.

Jimbo

(07/03/2002; 07:54:51 MDT - Msg ID: 79796)

@Psyops re. hapless "newbie"

I can assure you that I'm not a cabal shill posing as a hapless "newbie." Rather, I'm a middle-aged, self-employed gold stock investor who admittedly has been brainwashed for years, as you put it, "by the nice people on TV." I pose my continual questions not to sew seeds of doubt, but to better understand the forces in the domestic and world economy that determine the price of gold. Without a doubt, there are many investors like me who daily visit this forum to learn from you and others who have years of experience in gold. I urge you to be objective and realize that physical gold has not been perceived to be a viable investment by the general public for many, many years. Most investors have been brainwashed into believing gold is "too risky." Hell, you can't even buy physical and put it into your IRA. I urge you to be patient and forbearing with the "Jimbos" of the world who visit this forum to ask seemingly naive questions. In time, as they build confidence and knowledge, they, too, will buy physical. But they won't migrate from paper to physical if their questions are treated with intolerance. The cabal uses fear and mis-information to intimidate gold "newbies" such as myself and others. The well-informed posters on this forum need to continue to use sincerity and knowledge to undo the cabal's work. Many thanks to you, Psyops, and all the others who have helped me learn and progress.

Carl H

(07/03/2002; 08:13:24 MDT - Msg ID: 79797)

PPT at work

Yahoo headlines:

Advance Micro Cuts Sales Forecast Again
American Airlines Sees Job Cuts Over Time
Jobless Claims Lowest Since March 2001
Vivendi Clobbered, Seeks to Avert Crisis
Compuware Warns of Weaker Profit, Sales
Knight Trading Sees Losses, Cuts Staff
WorldCom CEO Says in Talks for Financing Options
HP, Compaq Europe Job Cuts Total 5,900

and of course, the DJIA opens up. For those from the US, isn't it nice to see our tax dollars being used for such noble purposes as manipulating financial markets to make things look "good" right before we take a holiday to celebrate the freedoms and liberties that we supposedly have.

Pizz

(07/03/2002; 08:36:56 MDT - Msg ID: 79798)

Musings

What will it take to get out of this mess?

The dollar's last (hyperinflationary) run. Corporate balance sheets are bloated and beyond repair, and deflation is not an option.

Wonder why European markets are fairing worse lately than Japan or US? It's the Euro and the cap on budget deficits.

Expect terrorists attack(s) in US soon. When the derivitives (PM's and financial) markets explode the banks and when the US economy really heads towards the bottom, expect reserve requirements at the banks to be suspended and massive government bailouts for the banks and major corprations.

It's what I think the markets are discounting.

Watch.

Pizz

The Hoople

(07/03/2002; 09:10:31 MDT - Msg ID: 79799)

Pizz

I figure the U.S. government is like Worldcom X 1,000. Worldcom has 30 billion of debt and maybe 3-5 billion of assets and is losing money hand over fist. Our government has 30(?) trillion of unfunded liabilities and a fraction of that as assets and is losing money hand over fist. The difference is the Fed can print confetti thereby transferring obligation to all of us. There will be 2 bailouts; 1 directly to industry sectors and the quiet kind where fiat gets debased 90%. Some "event" will have to explain this happening, it will never be a banksters fault.

Pizz

(07/03/2002; 10:04:00 MDT - Msg ID: 79800)

Hoople

Didn't have time before I left the house to post any reasons for my nearterm hyperinflationary predicitions, but here's what's happening out here in "trenches" land.

Insurance companies are on the ropes big time. Their investment income is going negative, they've survived on bond capital gains over the past couple years, but that dried up lately. Their stock portfolios are negative, their annuity business has been based upon the same "pie in the sky" projections as GM's (and others)pension plans have been, and claims are starting to go thru the roof. I've submitted more claims for theft and fraud in the past 6 months than I have for the previous 5 years. We're in renewal right now, and I'm forcasting we'll get half the coverage for twice the price. Business is going to have to self insure more, or go broke faster paying huge premiums.

Yesterday a national check guarantee company increased their minimum billing amounts five to ten fold (depending on the account). They usually work on a very small percentage of total value of checks called in. What does that tell you about the recovery?

If anyone out there thinks this government is going to sit back and let the "debt berg" implode the banks, insurance companies, and half of corporate America (yes, half because that's about my estimate of just how bad the inflated balance sheets are) they are just not being realistic.

The sad thing is that to remain in power, and to save face, the PTB need a trigger device, and so far the terrorists haven't been cooperative. I don't expect that to last for long, one way or the other. Desperate people do desperate things, and governments are not exempt.

My contrarian vision of the markets do not see a summer rally, cause most are expecting one, since we are deeply oversold. But we can get more oversold. I'm more prone to think of a fall rally after more selling (possibly a spike down due to an extranious "event") and then up, and up big as we inflate our way to a false prosperity and attempt to war our way out of this mess.

Not investment advice, just one man's opinion, subject to change as events unfold.

Pizz

barnaclebob

(07/03/2002; 10:14:23 MDT - Msg ID: 79801)

Why July 4 is significant to Islamists

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=28159Snips:

Bin Laden is trying to raise the entire Muslim world to Jihad. Creating the mystique of the Chosen is central to his goal, and symbolism is the greatest weapon in his arsenal (thus far). Consider what he said (twice) in his post-Sept. 11 video: "� after 80 years, the sword has come to America �" He was clearly referring to the resolution passed by the U.S. Congress endorsing the partition of Palestine (creation of a Zionist homeland) on Sept. 11, 1922.

We, in our narcissism, assume that July 4 is all about us. But to Muslims it is a day of ultimate triumph.

On July 4, 1197, Saladin (Salah al-Din) completely annihilated the 20,000-man Crusader army at the battle of the Horns of Hattin, driving the "Christians" from the Holy Land until the 20th century. And we can be sure it is not lost on bin Laden that Saladin won this battle in spite of the fact that the Crusaders carried with them the "True Cross" (the True Cross was a relic designated by Constantine's mother during the initial phase of the paganization of Christianity).

The first question is, do they? Recently, al-Qaida spokesman Abu Ghaith promised to kill 4,000,000 of us, referring to America as "Hubal." Hubal was the last and the largest of the 364 pagan gods in the Kaaba to be toppled by Muhammad (al-ilah, the predecessor to Allah, was left standing). The image of Hubal was so large that Ali (Muhammad's son and the first Imam) had to stand on the Prophet's shoulders to push it over.

Got Gold?

YGM

(07/03/2002; 10:22:05 MDT - Msg ID: 79802)

Jimbo (7/3/02; 07:54:51MT - usagold.com msg#: 79796)

Classy Post.....Hope I didn't come off sounding like a know it all w/ my reply to you re: Info sites etc....If so my apolog's.... While you're learning more here you've done a little teaching in the 'Class' dept....IMHO....YGM

Gandalf the White

(07/03/2002; 10:39:34 MDT - Msg ID: 79803)

WOWSERS Sir Pizz !! Are things really THAT "good" out there ?

Pizz (7/3/02; 10:04:00MT - usagold.com msg#: 79800)AND I thought that everyone realized that the "DARK CONTEST" was over ! That post about the present reality in The Emerald City is FRIGHTENING to say the least. Are there ANY rays of hope that you can throw out to appease the Hobbits a little ? Are TRUCK SALES at least holding steady?
Thanks
<;-)

The Hoople

(07/03/2002; 10:50:39 MDT - Msg ID: 79804)

Pizz

"1/2 the coverage at twice the price" - isn't that a 400% increase? My business is experiencing exactly this scenario.Dittos for health insurance. My agent after feebly blaming 9/11 admittted when I presed him it was poor investments just like you said. We have hyper-inflation of certain sectors yet rigged CPI's and PPI's mask the fraud. Imagine what scary things would happen to entitlements if they were being raised 10- 15% annually. No way they can reveal true inflation. It's as if gold is the only exit from the burning building and they are trying to seal it off to make sure no one gets out alive. At least we know where the door is.

kludge

(07/03/2002; 10:54:49 MDT - Msg ID: 79805)

(No Subject)

Hard to believe spot will close down going into a 4 day weekend in the US, particularly with stocks down and concerns of terrorism over the 4th. Ah well, think I'll add a little to the collection today, better safe....

BTW, Jimbo's NOT a cabal member - he's never at the meetings.

YGM

(07/03/2002; 10:55:44 MDT - Msg ID: 79806)

Black Blades Previous Post,..... Deserves a repost....."A Strong Heads Up" Report.

http://www.minesite.com/archives/features_archive/2002/July-2002/derivatives030702.htm***BTW...BB...Thanks for all your hard work here...YGM

Repost:
Date : July 3, 2002

North American Banks Under Growing Pressure From Gold Derivative Positions.

When someone returns to the bosom of their family after a long spell in jail reactions range over the whole spectrum. Some relations reject that person on the grounds that shame has been brought on the family; some ignore him as they find the situation embarrassing; some are over- effusive; and some are constructive and welcoming. So it is with gold. It has been off the financial scene for fourteen years or so and, as Andy Smith of Mitsui Precious Metals pointed out recently, it is not easy to think of gold from a bullish perspective after being a bear for all that time.

Last Friday was a case in point. The price of gold fell sharply and there was a shrill ululation from bankers and analysts claiming that the whole performance by gold in recent months was nothing more than a spike. Few of them, presumably, read the sanity written by Rhona O'Connell in her daily gold commentary from the World Gold Council on the following Monday: "After a steady morning in London, and opening in New York in a reasonably buoyant condition, the mood changed in gold at the end of New York trading last Friday with a rapid fall in prices towards the close of trading. Dealers report that volume was light, but the move was extremely fast and involved some stop-loss selling as key technical levels were severed. Prices fell by $5/ounce and regained $3 in as many minutes, before further liquidation developed in the Far East. Physical demand is in evidence at prevailing levels and with the dollar again under pressure in London this morning, conditions have calmed."

No signs of panic here from Ms O'Connell, just a report on a volatile market. Nobody in their right mind expects the price of any commodity, be it gold or pork bellies, to go up in a straight line. Profit takers always make an appearance and a correction results. In the gold market there is the added influence of international official intervention against leading currencies. In her gold commentary Rhona O'Connell said that, " The Fed and the ECB are both reported to have intervened in the currency markets last Friday in order to bolster the dollar, which looked above �120, but is now again below that level and under some pressure." Those with longish memories will remember just how useless such intervention proved to be in the last currency crisis - if anything it provided fuel for the flames.

This interplay between gold and paper currencies may be of academic interest to commentators, but is life and death to banks who have been making money in derivatives all the time gold has been in a bear market. Now the game has changed and a fascinating article has been published on a website called 321gold.com which claims that JP Morgan Chase & Co had notional amounts of derivative contracts outstanding which amounted to US$23.5 trillion as at the end of December 2001. To put this in context, the GDP of the United States is roughly US$10 trillion. And according to the Office of the Comptroller of the Currency JP Morgan had over US$41 billion of gold derivatives in this figure which represents around 65 per cent of all the gold derivatives held by US banks.

It also represents 149 million ounces of gold based on the price of US$279/oz as it then was. This is more than ten times the amount of UK gold sold by our deluded Chancellor between July 1999 and March 2002. There is little doubt that his action helped to keep a lid on gold during the period, so what chance would JP Morgan have of retrieving its position without sending the price through the roof? The figures above are the gross outstandings and no one knows the exact the position. Common sense, however, dictates that they were running a short book and the squeals from JP Morgan analysts every time the gold price rises confirm this. If this is the case the derivatives book could implode if gold rises to a certain level and there are guesstimates circling the market that it is no more than US$340/oz.

Small wonder then that the Royal Bank of Canada got its knickers in a twist recently when John Embry, a senior director who runs its Royal Precious Metals Fund, issued a report suggesting that central banks have, indeed, conspired to keep the price of gold low. RBC's position is nowhere near as big as JP Morgan's as it had total outstanding derivatives of only US$1.2 trillion and is one third the size. Nevertheless an implosion would do serious damage on a scale that is reflected in its decision to retract this research report which suggested that the price of gold is set for further steep rises.

This was a remarkably na�ve reaction as all it did was put the spotlight on RBC's vulnerability to gold. By so doing RBC raised memories of a certain Dinsa Mehta who was with JP Morgan for a long time and ran its gold book. Suddenly he was not there any more and the mystery of his departure led to rumours, doubtless wholly unjustified, that he had done a Keatley on the hedging position. Mark Keatley was the finance director who ran Ashanti's gold hedging programme which brought the company to its knees three years ago. In such circumstances these banks should take a lead from London stockbrokers Cazenove which simply closed ranks when under pressure during the Guinness fiasco. Panic is not a pretty sight.

--------------------------------------------------------------------------------

Pizz

(07/03/2002; 11:22:43 MDT - Msg ID: 79807)

Gandalf

Re: The Pacific NW. Yes, things are pretty bad out here. Boeing didn't move their corporate headquarters to Chicago for drill, and our dot.com Eastside surrounding Microsoft is being decimated. We're also pretty big on bio-tech, and that's starting to head south. Consider us the canary in the mine.

But my post was not meant to be regional. Look at the charts of all the European Stock Markets, and the dollar.
Every one has broken major neckline support and everyone seems to be heading for cash. THE STOCK MARKETS OF THE WORLD ARE LEADING INDICATORS, NO MATTER WHAT THE PTB TELL YOU. THEY ARE NOT DISCOUNTING ANY KIND OF GRADUAL RECOVERY. They're dicounting something bigger than any of us have seen.

If LTCM darn near took the world's financial markets down, what does anyone think is happening when our markets are down trillions, Europe down trillions, etc. Keep in mind, that these assets are part of our world-wide fractional banking system, insurance company reserve assets, pension fund assets, and on and on.

You cannot have ten's of trillions of dollars of asset value that are collateral for nearly everything just disappear without dire consequenses-because the liabilities are still there. Granted, we have derivitives that are supposed to insure against risk. But who is going to pay??

My guess is it will be the US government, cause it makes sense.

If my comments regarding a trigger device bother people, sorry. The mess is to big to clean up. It takes a team 2 years to clean up a small corporation, and that's with the resources and assets to do it. How do you clean up half of corporate America plus the government? You can't. Kind of like a forest fire out of control. You'll probably have to backfire half the assets to save the other half.

Something very big this way come, and again just MHO.

Pizz

TownCrier

(07/03/2002; 11:41:26 MDT - Msg ID: 79808)

Now THAT is funny!

http://www.non-sequitur.com/comics/2002/july/0703.jpgI received this today from a friend, and now hasten to pass it along, without further comment, for a special group of my friends and kinsmen here.

And to that small list of names I have in mind I say: I am sure you will take this precisely as I did -- bent over with laughter.

"Would you like fries with that standard?"

Randy

admin

(07/03/2002; 11:56:54 MDT - Msg ID: 79809)

The Daily Specials Board: For Immediate Delivery. . . .

The catch?

You can only find out what they are (and the prices) by picking up the phone. You'll want to speak with any one of these friendly folks:

Marie Ballard (ext.106)
Jonathan Kosares (ext.110)
George Cooper (ext.102)

First Come, First Served. Limited daily quantities of each item for immediate delivery. Items will come off the SPECIAL board as they are sold out.

Call us toll free (800) 869-5115

Pizz

(07/03/2002; 12:00:22 MDT - Msg ID: 79810)

Town Crier

Randy, thanks, but I'm laughing and crying at the same time.

The most profound statement (to me) over the last year was one that Belgian made during a discussion of Central Bank Gold reserves and my comment that we would go to a gold standard (I wasn't as "enlightened" as I am now.) He stated something to the effect that the US would probably hang on to our collective arrogance to the bitter end.

Hard to argue both your cartoon and his comment, nor will I try.

Thanks for the chuckle.

Pizz

YGM

(07/03/2002; 12:12:27 MDT - Msg ID: 79811)

If Only We Could Rent It From Vatican.....

http://www.ncbuy.com/news/wireless_news.html?qdate=2002-06-28&nav=VIEW&id=6F201I9E5U7020628Just to see the next couple months Financial Pages :>}

Pizz

(07/03/2002; 12:27:07 MDT - Msg ID: 79812)

YGM

That machine in my opinion has only been flashing two words.

GOT GOLD?

And the Vatican probably has plenty.

Pizz

Mr Gresham

(07/03/2002; 12:53:56 MDT - Msg ID: 79813)

Bugos from yesterday

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=13113Jimbo -- I second what YGM said. Your #79796 gives us that attitude correction reminder of the steps we took and other people must take: "sincerity and knowledge to undo the cabal's work".

Pizz -- you're belting 'em out today. "If LTCM...", "takes a team 2 years to clean up a small corporation", "Kind of like a forest fire out of control. You'll probably have to backfire half the assets to save the other half." (Forest fire analogy may be the image for this season, eh?) Insurance companies driving paying customers away 'cause their stock portfolios are down? Awww-w-w-w, weally? Poor baby!

barnaclebob -- Thanks for presenting the Islamic perspective for July 4 -- we need the regular eye-opener on that.

Bugos: (on the RBC flap): "The covert mandate of any central bank that intends on surviving the long term is to sustain the inflation and persuade the market that its currency is better than the one it (the market) might otherwise choose...the economic fact that the Fed's notes (US dollar) compete with gold for the prestigious role that money plays in any economy - to facilitate the free exchange of goods and services...

"To believe that central bankers are really willing to sell the rest of their gold reserves is what requires religion, for it is their only ammunition. Though they've been robbing us with a blank gun for years, it is paramount that people believe the gun is loaded.

"You see, it isn't the gold bulls that are religious, folks. It's the paper preachers that are. They are the ones constantly preaching falsities to solicit our full faith & credit.

" 'Buy and hold; Buy the dips; Stocks are not expensive over the long term; the dollar is money; money supply has to grow with the economy; inflation is measured by price indexes; aggregate computing power determines productivity; Greenspan is a capitalist.'

"These things are largely false but can work to an extent if we believe they will. They can all be made true by the economic participant's willingness to offer his or her faith. "

G: Faith is the ultimate valuer of an asset. What will people get up in the morning and go to work for? If one asset abuses their faith in it, they will move to another.

Carl H

(07/03/2002; 13:05:08 MDT - Msg ID: 79814)

PPT at work!

After spending most of the day negative, now the DJIA is positive. Looks like we will have a >9000 close for the holiday weekend.

Black Blade

(07/03/2002; 13:41:54 MDT - Msg ID: 79815)

Bankruptcy Filings Continue to Surge Even as Economy Improves

TownCrier

(07/03/2002; 13:49:26 MDT - Msg ID: 79816)

Commentary plus an idle thought to kick around...

Yesterday, Rhona O'Connell of the WGC (www.gold.org) offered the following comments on the gold market. It might be helpful perspective for any physical gold owner that finds themselves unduly rattled by the downward drift in gold price these past couple days:

"Funds were buyers throughout the New York session and the physical market in the Middle East has also been a buyer over the past 24 hours. This is constructive, given that price-sensitive physical markets normally stand aside in periods of volatility; this time the fall has generated bargain hunting.

"A similar situation applies in India...

"Indian traders are reporting that the recent fall in gold prices has rejuvenated the local market, with daily imports of ten tola bars, the favoured investment product, rising to 12,000-15,000 in the past few days. In early June imports had fallen to between 1,000 and 2,000 bars per day with demand being fed by locally recycled supply. The average in June and July 2001 was approximately 16,000 bars per day."

-------(end of WGC excerpt)--------

Additionally, the idle thought I wanted to toss out for general scorn and ridicule has to do with the generally accepted PPT ("Pluge Protection Team") of the federal government in conducting market interventions to help stabilize (or at least attenuate) adverse effects of market gyrations.

Just the other day I posted two Reuters articles regarding how the bond market has been a primary beneficiary these days from the weakness in the stock market. The reason I posted them at the time was merely to call attention to the oddity that bonds (long-term dollars) could be strengthening even as the spot-dollar (currency) was weakening -- both conditions being attributed to consequences of investor aversion to the risks in the U.S. stock market.

Intuition would have you think that as the bond market rallied, the spot-dollar would ultimately benefit, too; stocks (up or down) be damned.

Having said that, given the government's choice to "save" one market or the other, it seems to me that the bond market (being the bigger and more important of the two) would be the logical choice.

If you have in the past been willing to consider the PPT intevening to "buy" the stock market, is is really so big a leap for you to consider, possibly, that they might also (at critical times for the bond market and for the dollar itself) intervene to "sell" to help induce a broader stock market selloff? The small tail of the stock market thus being used negatively to wag the big dog of the bond market positively?

Whatever you choose to believe, there is no end to the possible paper games that can be played with you -- assuming that you are among the players at the table.

The comforting thing about physical gold is that you know the limitations (of its paper substitutes) can be streched only so far before the crisis/contraction returns value recognition (and prices) to be based upon the ownership of the physical supply only, not the imaginary contracted supply.

R.

Black Blade

(07/03/2002; 13:50:32 MDT - Msg ID: 79817)

Re: CarlH

The markets would like to see the Dow hold above the psychological level of 9,000 and the S&P above 948. The investment house coalition and governing agencies(President's Working Group on Financial Markets)are moving a lot of cash around. The trading volumes have been much higher over the last few days - although over half that yesterday was selling WorldCon shares. Looks like these psychological levels will be defended going into the weekend. It is "entertaining" though. Cheers!

- Black Blade

Got to get goodies together for tomorrow (ice, Negra Modelo and mammal flesh).

Chap X

(07/03/2002; 13:58:41 MDT - Msg ID: 79818)

Carl H / BB - Aint it the truth!!

And the Dow comes back from a 100+ negative to a positive close!

Simply amazing!

Wish I had a enough cash to buy puts on hundreds of these "great values". In a short time from now, a fortune will be made as a result.

Hope you all have a good 4th!

X

Chap X

(07/03/2002; 14:02:10 MDT - Msg ID: 79819)

Carl H / BB - Re last post

Meant to say... SELL SHORT on 100's of these "values", although puts as well....

X

Black Blade

(07/03/2002; 14:40:24 MDT - Msg ID: 79820)

Reason For Positive Market

The Trolls on CNBC say the reason that the markets rallied was because Home Depot shares jumped higher. I know the real reason though - There were no corporate or accounting scandals exposed today! ;-)

- Black Blade

misetich

(07/03/2002; 14:40:28 MDT - Msg ID: 79821)

Qwest's Junk Bond Credit Rating May Be Cut by Moody's

misetich

(07/03/2002; 14:48:18 MDT - Msg ID: 79822)

Searching for hints of "US economic recovery" - Bankruptcies Continue Surge

sector

(07/03/2002; 15:04:29 MDT - Msg ID: 79823)

@Jimbo Actually, You CAN Place Precious Metals in Your IRA Account

There's just a Mountain of paperwork.Your broker can get the rules and it pays to be physically near your broker's office AND the depository location for your metal.

Think of it as being similar to getting a driver's license.

misetich

(07/03/2002; 15:31:44 MDT - Msg ID: 79824)

Bush failed to follow US law on shares

http://news.bbc.co.uk/hi/english/business/newsid_2091000/2091642.stmSnip:

The White House has acknowledged that President Bush failed to follow the US law and disclose details of shares he sold when he was a company director.
A spokesman blamed it on a clerical mistake by company lawyers.

The US President's business dealings have sparked renewed interest since the accounting irregularities at WorldCom were revealed last week.

After those problems were announced, Mr Bush said he was angry with company directors who abused their position.

Now his own actions have been called into question.

Misetich

Old motto: Do as I say, not as I do

Got gold?

misetich

(07/03/2002; 15:38:44 MDT - Msg ID: 79825)

Equitable may pull all funds out of equities

http://money.independent.co.uk/personal_finance/invest_save/story.jsp?story=311750Snip:

Equitable Life is considering moving almost all of its funds out of the equity markets in a move that would, in effect, end its life as a with-profits fund.

The society, which slashed policy values on Monday by a further 20 per cent partly because of the continued fall of the FTSE 100, hinted yesterday that it might reduce the number of equities it holds to practically nothing in an attempt to create some stability for beleaguered policyholders.

Misetich

Times are changing- Best move by Equitable - better move would be to buy some gold for their portfolio

Got gold?

misetich

(07/03/2002; 15:46:58 MDT - Msg ID: 79826)

Congress questions SEC reports

http://money.cnn.com/2002/07/03/news/sec_tauzin/index.htmSnip:

WASHINGTON (Reuters) - A congressional committee Wednesday demanded to know how thoroughly the Securities and Exchange Commission has been checking the books of five U.S. corporations that in recent weeks have been rocked by scandal.

In a letter to SEC Chairman Harvey Pitt, Republican leaders of the House Energy and Commerce Committee requested SEC records and a report by July 9 on its policing of WorldCom Inc. (WCOME: up $0.12 to $0.22, Research, Estimates), Tyco International Ltd. (TYC: up $0.01 to $12.66, Research, Estimates), Global Crossing Ltd. (GBLXQ: Research, Estimates), Xerox Corp. (XRX: down $0.51 to $6.04, Research, Estimates), and Qwest Communications International Inc. (Q: down $0.23 to $1.70, Research, Estimates)

"The committee is profoundly disturbed about the recent string of allegations that companies...may have engaged in questionable accounting practices," wrote Rep. Billy Tauzin and Rep. James Greenwood in the letter to Pitt.

"We are conducting a full review of the issues surrounding the allegations of accounting improprieties and financial misrepresentation that have arisen in connection with the above-mentioned companies," the lawmakers said.

Tauzin and Greenwood asked Pitt whether the SEC reviewed any of the five companies' quarterly and annual financial reports from January 1998 until the date when the SEC launched investigations of each company.

They also asked about any SEC inquiries involving the five companies since 1998 and their outcomes, as well as for various records and correspondence involving the companies.

Finally, the lawmakers asked the commission to explain how it decides to investigate companies and how it decides which companies' financial records to review closely.

Misetich

While congress is at it, perhaps they should ask themselves why they're not investigating GATA and Reg Howe's claims on gold manipulation

Got gold?

(07/03/2002; 15:48:42 MDT - Msg ID: 79827)

Jimbo Mess 79796

Nice response, Jimbo! (yr 79796) The really funny thing is that some of this forum's posters take them selves so seriously they really do believe that so called 'cabal' people are posing as 'newbies' on this site to post dis-information. That's a hoot! I can just imagine senior staffers at Rothschilds, JPM etc rushing to their screens at 8am to see what Paper Avalanche is saying today�!!

The truth is more prosaic, Jimbo. As a 'newbie', if you question the 'authority' of the regular posters, or the general 'gold to the moon' philosophy of this board, either they'll blast you or freeze you out.

An example of the former is a post from an Aussie poster a couple of weeks ago, fed up with people with 'attitude', who got stuck into YGM for being (amongst other things) condescending. YGM took his bat & ball, went home and refused to play anymore ( but after numerous 'No, Don't Go's', was persuaded to return to the fold after 5 minutes, thank Heavens!) Haven't heard much from the Aussie poster though. No-one wanted him to stay.Not in the 'club' you see.

The latter - ignoring you or freezing you out - is particularly effective, and I've seen several people try a couple of times, then give up. I think I can be used as an example:

A week or so ago I posted, what I thought was very much on topic, commenting on a gold newsletter writer who said the charts showed an imminent drop in gold stocks. It turned out he was spot on, 100% right, and most GS are well down. I genuinely wanted to share this with the forum, and also said the same author indicated a much bigger fall was possible, and the charts showed gold going as low as $270.

One would think this would be of passing interest to a gold forum, but as far as I could see when I scrolled through next day, nary a comment! It wasn't what most of the posters on this board want to hear, so ignore it and it'll go away. Actually, I don't have a problem with that - the board belongs to the posters, and if that's how they want to play it, that's OK with me. But I can't see much use in preaching to the converted, and that's what's happening - you become insular and just tell each other what you want to hear. Not much value there.

Along comes a Jimbo (or a JJ) and you get blasted, or ignored. So be it. "Cabals" come in different shapes, sizes & forms.

Disclaimer & Admissions:
I am not a Troll (haven't been fishing for a while)
I am smug (I sold most of my GS at the top.)
I'm short the GI (gold will visit high mid 200's before vertical climb)
I am not in the "Cabal" ( wouldn't join any club that would have me as a member)

Thank you Gold Bugs, & Goodnight.

alanka

(07/03/2002; 15:49:48 MDT - Msg ID: 79828)

Gold Price

once again please somebody out there explain to me why the gold price did mot move up today? currency under pressure dow was under pressure. when is gold going to go though $330-00

(07/03/2002; 15:58:07 MDT - Msg ID: 79829)

(No Subject)

AlankaAlanka, what I said yesterday may have sounded flippant, but it's true. Markets don't do what they should do or what you expect them to do. Logic doesn't apply to markets because they are made up of many many people and many many people aren't logical or rational. Just when you KNOW the market is going up or down, it does the opposite. The market has a mind of it's own. That's what contrary investing is all about. Now's the time to short gold because every one thinks it's set for a rise but the market will do what the market will do - and catch most people out.

YGM

(07/03/2002; 15:58:43 MDT - Msg ID: 79830)

Nick...

Your mailbox is too full....YGM.

alanka

(07/03/2002; 16:09:59 MDT - Msg ID: 79831)

gold report kamal naqvi

>Kamal Naqvi: Precious metals expert, Macquarie Bank

By: Byron Kennedy

Posted: 2002/07/02 Tue 21:00 | � Moneyweb 1997-2002

MONEYWEB: The gold price has been under pressure over the past week or so and to put this weakness into some perspective is Kamal Naqvi, He's the precious metals specialist at Macquarie Bank. Kamal, the last time we spoke to you on this programme, back in January, gold was trading at $286 an ounce at the time, and you were quite confident that gold would push through $300 sometime this year. But were you surprised by the magnitude of the rally?
KAMAL NAQVI: I have to admit I was a little bit. I think I was looking at prices getting up to testing $315 and suspected that that would prove quite a hardy resistance. But the weakness that we saw in the equity market, then in the US dollar and also the extent of some of the statements from gold producers regarding [indistinct] in hedging were a little bit stronger than I had expected. And as a result, I think it did justify it's move up to a peak of just above $330 an ounce.

MONEYWEB: As you say, gold did threaten to crack through the $300 level, It's currently back at $314.50. What do you think is behind this latest bout of weakness?

KAMAL NAQVI: It's been interesting, the latest bout, given of course over the last two weeks it's seen further equity market weakness. And with the WorldCom scandal, followed then by Xerox and of course pressure on the US dollar, I think that one of the reasons why we haven't seen gold react as maybe it might have was because of timing. We've come up to the end of the quarter, the end of the financial year for some organisations, and also coming up just towards the July 4th holiday in the US, and I think that we saw a lot of profit-taking from funds that were already long gold and, indeed, probably making up for losses that they made in other markets. So I do suspect there was a bit of a timing issue for gold The other issue which is perhaps more of a problem is that many of the normal market participants, the CTAs, the funds, a number of the bank traders, are already long gold and it really needs to get significant worse for them to decide to go longer and we are still yet awaiting a more general move into gold. But I still remain fairly optimistic, over the next few months, that we can still see a new high for the year.

MONEYWEB: You did talk about investor confidence. It seems to be taking a knock almost on a daily basis in America. Surely we would have expected a rush to gold, following the likes of the WorldCom disaster?

KAMAL NAQVI: Yes. As I said, I don't think the timing was one of the reasons why we haven't quite seen that push. I think post the July 4th holiday will be a far better time to assess whether or not we are seeing a more of a move from investors, and particularly from some of the funds into gold, and I suspect it will be a much better reflection of the underlying sentiment. But I certainly do believe that if we see a continuation of the equity market losses that we have certainly seen over the last couple of weeks, and more pressure on the US dollar, with only really intervention resisting further weakness, then I do think gold will reflect that further, and indeed gold equities will also.

MONEYWEB: Do you think we could see another attack on the $330 level, given what you've said?

KAMAL NAQVI: I do expect that. I have to admit, I don't expect it very, very quickly. I think that what you will need to see is a move for maybe some of the more generalist funds to be concerned about underlying values, with furthermore significant losses in equity markets � talking about 10% losses in that. And under that circumstance, I think you could see a wider push, in which case getting through $330 in towards my target of $340 still seems quite obtainable. I see that happening over this quarter, as the most likely time, and then perhaps easing back towards the end of the year, as I and I guess a number of economists are expecting some sort of recovery, stabilising equity markets towards the end of the year.

MONEYWEB: Is there any danger of gold falling below $300 an ounce any time soon?

KAMAL NAQVI: I think it's unlikely. One of the interesting things that I've heard over the last week or so was, with that push down on Friday down to $310 and indeed before that, were a number of reports form Asia of quite good interest, if prices fell towards that level. And certainly when we saw that fall on Friday, there were a number of interested buyers in Asia, and there were also a number of investors and indeed some of the banks that are interested buyers on a significant dip, like we saw on Friday, and I think there's enough interest to withstand what I suspect would be a fairly modest amount of selling. I guess that's the other point. Is it unlike previous failed rallies in gold. This time around, most investors are going to be very weary about short-selling in the market in any size, because clearly we are seeing quite a bit of volatility, particularly on the upside, and I suspect that will restrict the level of short selling.

MONEYWEB: And when you talk about Asian banks, do you mean central banks in particular?

KAMAL NAQVI: No. I'm talking about Asian investors, Asian funds, looking to buy [indistinct] Asian central banks. I wrote a note this week just noting that Asian central banks have moved into US dollars in a significant manner, ever since the Asian crisis in '97, '98, and the possibility that in the current climate and the uncertainty over foreign exchange values, that they might consider increasing their level of reserves from 2% and less to something more significant in gold. But it has to be said, there has been absolutely no sign of that so far.

MONEYWEB: Making a call on gold is also like making a call on the dollar � how do you see that moving in the second part of this year?

KAMAL NAQVI: I think continued weakness for as long as the equity markets remain volatile and falling lower. I see very little in the short term to see that changing, I suspect that the economic data are going to continue to be mixed. Clearly further earnings results and concerns about accounting measures are only going to add to some of the downwards pressure. However, as I mentioned earlier before, I think towards the end of the year, we certainly are expecting things to stabilise and the early signs of a much more genuine recovery than what we saw earlier this year, and we think that will give the sort of support to earnings that's required for equities to stabilise and to start to improve. Indeed, I think the dollar will follow a very similar pattern.

MONEYWEB: Let's move away from gold. The last time we spoke to you, you were also quite bullish on platinum. That's a call that's also proved to be pretty much on the mark. It has done a bit better than you expected, but do you think the fundamental outlook is still pretty good for platinum?

KAMAL NAQVI: I'm still reasonably optimistic for the reasons we spoke of last time. I quite liked the demand outlook and I think supply, while increasing, will not come on line quite quick enough to feed prices back below $500. However, I think it is fair to say that demand, maybe, in terms of industrial demand, is not growing quite as quick as I would have liked. It's been offset by jewellery demand, particularly in China, holding up much, much stronger than I would have expected. However, like with base metals, the strength of the recovery is going to be very important for platinum demand, in particular. And if this recovery is even further delayed than we are currently seeing, then I think that will put some downward pressure on prices, even where they stand today, given that a lot of the supply and increase in South Africa seem to be coming right on line.

MONEYWEB: The platinum currently at around the $530 level, where do you see it finishing the year off?

KAMAL NAQVI: I think we will see it higher, I think we will see it up towards $575. Certainly I would expect to see it above $550 on the basis that demand, particularly industrial demand, will start to be coming through quite strong. I think it won't be until the second half of next year that we will see a lot of this new supply coming on line. I'm quite optimistic that the market will remain quite tight over the next six to nine months.

MONEYWEB: That was Kamal Naqvi, he's the precious metals specialist at Macquarie Bank, and still pretty bullish on both gold and platinum. He says platinum could go as high as high as $575 by year-end.

Carl H

(07/03/2002; 16:19:44 MDT - Msg ID: 79832)

alanka: Gold price.

The gold price is being manipulated. The Gold Antitrust Action Committee has uncovered a huge amount of evidence to support this claim over the past 3.5 years. I suggest you look at the link I posted in response to you yesterday.

Canuck

(07/03/2002; 16:22:30 MDT - Msg ID: 79833)

What is happening to the dollar???

Why the sudden reversal and booming up again?

(07/03/2002; 16:23:28 MDT - Msg ID: 79834)

(No Subject)

Testing... testing...he hasn't seen it yet, YGM

Mr Gresham

(07/03/2002; 16:25:49 MDT - Msg ID: 79835)

"wouldn't join any club that would have me as a member"

Smugness is only one attitude. Being the clever foil who's always catching EVERYONE else off base is another. Oh yes, everyone has a closed mind here -- except for the one who gets to flog everyone.

Setting yourself up on a pedestal, of whatever type, is pretty easy to do on a quick Internet "post and run" raid. (Very few of that type stick around a forum for long, but it's VERY interesting when they do. I'm betting we have room for even that around here, depending...)

Being a troll is all in your attitude. Your intention, to move the discussion forward, or block it with your own ego. Most trolls do not recognize their own obstructive presence, and have to be removed. Sorry. (Some are quite aware, and simply don't care about others. Hey -- I hate freeway lane-swervers, too.)

"wouldn't join any club that would have me as a member"

The above statement applies to forums as well as cabals. And if everyone had your approach to collective discourse, there would never have been a forum here for you to run to, post on, and (?) run away from.

When a Forum gets to be about the Forum, rather than about the topic that 95% of readers are spending their precious time to learn about, then the moderators are letting a few cheat the many. I'm also betting they won't do that.

Basically: Don't waste my time. Nearly everyone here is worth reading, and on busy days, it means skimming over great stuff I'd love to spend time with. Bad attitude? Costs me my time, AND my patience.

It IS all in your attitude. Dissenting views? Yeah, that's tender ground -- anywhere. How do we approach it? Flog everyone, up and down? Seems to be your approach, and explanation. I disagree. (Can ya handle it? Show us an example, bro...)

Try to be helpful, is what occurs to me. Try to read what others have poured themselves into, worked hard on. Show your appreciation for what goes on. Don't expect more out of it than you've put into it. In fact, most of what you will get out of it WILL be your own work, just as in school. Waiting for others to cheer you up and down? Just doesn't happen as much as ANYONE would like it to. (That's why I try to start out on the Appreciation note.)

Something about the Golden Rule, emphasizing the "as you would have them do unto you," rather than the "Do unto others..."

Places to go, thing to do. Click...

(07/03/2002; 16:45:09 MDT - Msg ID: 79836)

Mr Gresham

I was trying to make a point and inject a little humour. Looks like I missed on both counts with your good self.

I won't respond to name calling. This IS a good forum - but it's not perfect and I believe my comments are fair & valid - and shared by others who may not be regular posters. Try not to be so sensitive, Mr G.

Have a good 4th July

R Powell

(07/03/2002; 16:54:58 MDT - Msg ID: 79837)

alanka // JJ

Alanka, I believe there is a corrolation between the POG and the strength of the dollar but, like most financial or trading rules or so-called truisms, this one too falls far short of the always truisms like the certainty of death and taxes. There are a multitude of other things influencing the price of gold. Actually, the dollar gained strength today- up 0.56 to 107.55 on mrci's dollar index.
Gold, if viewed as a political, monetary commodity, may move up or down over longer time periods (much like currencies) than other seasonal-type commodities or even the currently favored stock sector. Watching every daily tick and down may drive you nuts. Myself, I'm immune to it as I was certified crazy long ago.

JJ. One of the little tricks our minds tend to play on us is to filter out any conflicting or negative information or input that is contrary to our established beliefs. A position or belief once taken seems to bias our interpretation of any and all information available after the position is established. We cheer loudly when news is favorable or substatiates our opinion. We tend to overlook or downplay any evidence contrary to the position taken. This is human nature and must be avoided as a trader. The ups are cheered and the downs are viewed as another reason to avoid all paper trades and invest in physical only. I do not agree with this but it is the overwhelming view here. I believe the analyst you mentioned based his downward POG prediction on technical analysis. Many have discussed at length with no clear cut conclusion, whether technical analysis can be applied to manipulated markets. Certainly long term charts are flawed by the fixed gold price of past years- fixed by government and the London Gold Pool. Now the fix is covert instead of openly published.
Please correct me if his opinion is otherwise based and tell us, if so, why this analyst sees POG falling once more to test the bottom?
Thanks
Rich

steady

(07/03/2002; 17:08:02 MDT - Msg ID: 79838)

ignored/not ignored who cares im honered

re Gandalf The Whites Question mesg #79803 are the truck sales holding steady? duno have to go ask the dealers. Thanks for including me though appreciate it!

Gandalf the White

(07/03/2002; 17:27:40 MDT - Msg ID: 79839)

Sir Steady !

YES, and the Hobbits love ya !
<;-)

slingshot

(07/03/2002; 17:32:21 MDT - Msg ID: 79840)

Gold to $200.00

Hold the stones, please.Getting Blasted or Frozen and Trolls runnning amuck on the forum gave me a chuckle.
Look there Jim Bob, a troll running amuck. Think we ought to Blast him? Please excuse my weird sense of humor. Anyhow.
What would the world/economy/ banking/ debt be like if Gold did drop to $200.00/ $100.00. Would the Die Hard Goldbug become extinct or would his surroundings only enforce his belief in Gold accumulation?

Congrats to the winners of "Dark Visions". Enjoyed all the entries.

R Powell

(07/03/2002; 17:48:21 MDT - Msg ID: 79841)

alanka // Moneyweb report // tomorrow's TV

Interesting. I wish he had given more reasons for his targeted POG $340 level. He mentioned the dollar's stength and equities which he sees firming or stabilizing.
I also wish the interviewer had asked him for an estimated POG target if the stock markets continue downward!
********
Quote of the day, received today by e-mail but the source does not give the date of the quote.
"Based on our model, we think the S+P 500 is more than 20% overvalued."
Abbey Cohen, Goldman, Sacks
******
For fans of Fleckenstein, tomorrow morning at 8:00 EST on the peoples' stock picking television channel. Also scheduled is an interview with Warren Buffett, I think at 10:00 EST (not sure on the times!). Sometimes when the markets are closed, CNBC has some interesting guests and plenty of time to get past the usual two questions and three stock picks.
Holiday tomorrow
So, for those not working, I can say
Happy Long Weekend!
Rich

darkhorse

(07/03/2002; 18:00:16 MDT - Msg ID: 79842)

just an observation...

"A week or so ago I posted, what I thought was very much on topic..." and later "...when I scrolled through next day, nary a comment!"

There's quite a bit of discussion that gets read and "digested" without any further comment...it's an arrogant attitude about your own posts/position (sound familiar?) that leads you to believe anybody has to respond

"The truth is more prosaic, Jimbo. As a 'newbie', if you question the 'authority' of the regular posters, or the general 'gold to the moon' philosophy of this board, either they'll blast you or freeze you out."

Yeah, a lot of that goin' on around here...you must have us confused with somebody next door.

Mr Gresham

(07/03/2002; 18:01:53 MDT - Msg ID: 79843)

Thanks, JJ!

Good answer -- I'll re-read and try to enter a more festive mood -- always room for improvement, as you've said.

Also, sorry -- you got my rant for the day, after hearing of my wife's new spending plans. Lost a bit o' sleep over that one last night. Welcome, and let's party on from here!

R Powell

(07/03/2002; 18:11:35 MDT - Msg ID: 79844)

slingshot

Trolls are always getting underfoot, aren't they? Use ice cubes for bait in this hot weather and then blast them. Or just give them enough ice cubes and they freeze up entirely. JJ has a point (and I know there are opposing views) but it's still good to see someone laughing.
One man's opinion of all this is to have fun, learn and hopefully profit. Be careful with the clam dip during food fights, it stains badly.
******
Your question, if POG goes down to $200 or $100 will goldbugs buy more or become extinct?
I can speak for myself only, concerning the silver that I'm partial towards. Unless I can discover a valid and fundamental reason why the POS should be lower, then any downside toward the $4.00 or even $3.50 level will see me stocking up with more.
Rich

R Powell

(07/03/2002; 18:38:30 MDT - Msg ID: 79845)

Markets closed tomorrow

Of course, for the fourth of July. Are they open again on Friday and, if so, how many active players will show up?
POG got ambushed in the last few minutes of trading last Friday, probably to help second quarter final numbers, especially marked-to-market positions of paper traders. We've also seen POG attacked recently during the very thin trading of the afterhours globex electronic trading.
If someone(s) wanted to counterattack, what better time than now, with US markets closed tomorrow and likely very thin action on Friday and then another shot overseas next Monday before our Monday Comex open? This is just "supposins" but not impossible. Anyone got a few extra billion to buy with? If Soros really thinks, as he says he does, that the US dollar is going to weaken further by 20-25%, then what would he do to capitalize on this?
Also, concerning honor among thieves, what's to keep one or more of the big gold shorts from secretly positioning long? They must be watching one another like gunfigthers facing off.
"Well boys, are you going to draw them pistols or you gona whistle Dixie?"
Notice-- this post must be read, studied and memorized for future reference but no response is required!
Rich

R Powell

(07/03/2002; 18:49:29 MDT - Msg ID: 79846)

Troll control

Hey slingshot, isn't Gandalf in charge of controling amuck running trolls? I know he almost singlehandedly put the orcs on the endangered species list. I thought that's why he filled the moat with crocs, to keep the troll population down. Crocs eat them at night when they venture too close for a drink.

Black Blade

(07/03/2002; 19:02:54 MDT - Msg ID: 79847)

P is a fact, E is negotiable

http://cbs.marketwatch.com/news/story.asp?guid=%7B628B54FC%2D7A4E%2D4652%2D9C85%2D802C95775252%7D&siteid=mktw
Amid the lies, stock market's retreat is gentle, so far

Snippit:

SAN FRANCISCO (CBS.MW) - How many times, during the good stock-market days, did we hear chart readers tell us the market was saying we're going higher? And higher. Until March 10, 2000, anyway. And how many times in these bad stock-market days have we heard chart readers tell us the market is going lower? And lower.

Everyone's a Galileo. With the wind at their backs, chart-readers and other market technicians always seem to have a leg up on the rest of us. Yet their methods rarely take into account the so-called fundamentals of the 8,000-plus companies that compose the U.S. stock market. Technicians can quote you chapter, page and verse of statistics: resistance, support, volume, put-call ratios, moving averages and so on. Yet their work rarely relies on earnings, profit margins, market share or return on capital.

McAvity, who sees gold's price going far higher in this corporate storm, says "the worst corporate scandals haven't yet surfaced. It isn't over yet." A technician himself, McAvity's hand-crafted charts and numbers go back 30 years, and more. So he puts his faith first in numbers, and then listens to what the CEOs and CFOs have to say to investors. "My old favorite still remains: On the question of P/Es, P is a fact, E is negotiable," McAvity says about stock prices and their earnings multiples. In other words, how do you handicap a horse when the jockey is cheating?

Black Blade: Being one who does not follow TA, I think that those who do are finding it impossible to get a read on the markets. On the other hand, I tend to follow FA from a "big picture" perspective. However, I also have been very critical of the corruption on Wall Street with regard to the phoney baloney accounting and use of such nebulous standards as pro forma accounting (something that ORO and I debated in the past). If anything we have only seen the tip of the iceberg. Once the layers are peeled back we will seen minions of cockroaches hiding behind the phoney data. Where there's a few cockroaches, it's an obvious bet that there are many more. The SEC reviewed corporate statements and found that over 25% public companies make mistakes in the filing of their reports. They also found that most of those mistakes turn out to be significant and material enough to affect the price of the stock when the company is forced to amend their statements. In fact there are so many problems that match those of Enron, WorldCon, Qwest and Global Crossing that the SEC plans on auditing every Fortune 500 firm this year. The market meltdown is going to get much worse. Best get prepared for the New Great Depression.

slingshot

(07/03/2002; 19:03:05 MDT - Msg ID: 79848)

R Powell

Expect the UnexpectedAll that I have read on this forum is the TA and fundamentals that Gold should move higher. There are the pullbacks resulting from profit taking and selling of gold into the market by CB"s or a shell game using paper to surpress the POG. The ride down to $250.00 POG was a learning experience for me. Should Gold slide down to $250.00 or below the outside factors, unemployment, high consumer debt, credit card defaults, mortage defaults and the general publics ignorance of gold and or unaceptance as a save haven for wealth, contribute to a compressed POG.
If the idea was to remove gold from the market to help increase POG, who will buy even at $100.00 per oz if they can not afford it. The time from point A to point B although elusive I feel is the controling factor. So as the POG slides the ability to accumulate decreases with unemployment, etc. Thus as we would believe more gold will be taken from the market it will actually decrease even at a lower price. Possibly defeating our intentions.
Lower silver prices since it would be more affordable will be the first to go. I will also take advantage of it ASAP.
IMO if gold went to $200.00 or even $100.00 I would not be so concern as to the price but, more concern what is going on around me.

Slingshot----------------------------<>

Mr Gresham

(07/03/2002; 19:03:44 MDT - Msg ID: 79849)

Funloving Doomers on a Forum

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001ypbWell, I was trying to find the ones where music played on some threads, and cartoons danced. The Y2k'ers partied together, online, before _and_ after the dreaded date.

I can't even remember what "FRL" stood for, except "Fruitcake something League". Links are in this one to those threads, and I haven't checked them in -- years. See what happens when you don't buy a new computer often enough ;)

We fought some hard wars with the Troll Federation in those days, but y'know, they seemed to stay away from the party threads. Energy field around it, or some such. And back at work next day, saving the Universe or whatever, well, it wouldn't have been the same without 'em.

Next link, the Quest for Dieter...

Black Blade

(07/03/2002; 19:14:34 MDT - Msg ID: 79850)

Inflation fears rise as trade deficit jumps, foreign investors flee

http://www.uniontrib.com/news/business/20020701-9999_1n1deficit.html
Snippit:

Shaken by Wall Street's growing scandals and sickly profits, foreign investors are pulling the plug on their U.S. investments, adding to an outflow of cash that tops $1.25 billion a day. Some economists worry that if the exodus goes too far, it could threaten the underpinnings of the wobbly economy.

"This is an enormous problem that will become unsustainable within a very short period of time," said Mark Weisbrot, co-director of the Center for Economic and Policy Research in Washington, D.C.

If the trend continues, some economists warn, inflation could roar back to life. That would force the Federal Reserve to raise interest rates, which in turn would slow the economic recovery. "Foreigners don't have to sell their U.S. securities to have a tremendous impact on our economy," said James Welsh, who heads Welsh Money Management in Carlsbad. "They just have to stop buying."

Black Blade: I alluded to this yesterday in the DGMR when I discussed how Alan Greenspan and the Federal Reserve were "caught between a rock and a hard place". Raise rates or not and the outcome is still dire for the US economy and the only two sectors that are likely to benefit are energy and precious metals. Energy because "cheap energy" will be necessary to kick start the economy and precious metals because of the safe haven � flight to quality aspects. Also, the threat of terrorism and war are much greater now. We do live in "Interesting Times".

Definitely a good article to peruse (see link).

Mr Gresham

(07/03/2002; 19:25:04 MDT - Msg ID: 79851)

The Master Speaks: diEtER

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002DmfRemember Wolavka here? An Internet personality is a work of art, indeed. The consummate actor, who stays in character, and fields whatever comes by his tiny opening onto the universe...

On a thread (chosen, for illustration, at random) titled: "What's the use? Why prepare?" dIEtEr spake thusly:

wHY???? wHY InDEEd!!!!! aS SOOn aS YoU WEre BOrN ThE TrIP tO tHe grAVe beGaN, iS THaT Not sO????? wHY BOthER brUSHiNG YoUR TeeTH????? tO IDentIFy yOUr coRPsE?????? vITAmiNS????? WHo nEEdS THeM????? TheY OnLY POstPOnE THe INevITAbLe, cANnOT YoU SEe thAT????? tO HeLL WIth EAtINg!!!!! wHY BOthER?????? iT OnLY COmeS OuT THe oTHeR EnD In a FEw hOUrS ANywAY!!!!! dIETeR Has NoT LeFT His BEd siNCE THeSE TruTHS BecAME SELf-evIDENt!!!!!!! wHY SHouLD He???????

-- Dieter (questions@toask.com), September 06, 1999.

Someday, the biography of the Net's most Excellent sites shall be written, and, yes, we deserve a paragraph or so in it. It is the people together who make it so, and their joy in mutually creating something, where there was empty canvas before. A juicy topic, a wise host, and away we go...

slingshot

(07/03/2002; 19:26:36 MDT - Msg ID: 79852)

R Powell

Troll catchingYou are right. Gandalf has them under control. Jim Bob has a new refridgerator trap. Only problem is he can't find an outlet in the woods. :0)
Slingshot-----------------<>

Mr Gresham

(07/03/2002; 19:30:39 MDT - Msg ID: 79853)

Dieter's Farewell

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=002DqL"ParINg iS SUCh sWEEt sORRow Is it Not???? oF COUrSE IT is NOT!!!!! dILLwICk hYEnA!!!! hOW iN THe nAMe of tHE bLeeDINg eYeS Of diETeR CaN ParTIng bE SWeeT????? IDIot!!!!! hUh???? wELL??? gOOD mORniNG!!!! "

G: Sometimes the people you love the most hurt your eyes...

Have an explosive weekend, all. Independence is where YOU find it...

The Invisible Hand

(07/03/2002; 19:32:37 MDT - Msg ID: 79854)

Massaging of profits and the tax collector

If Enron, WorldCom, Vivendi, Xerox et alt. massaged their profits to increase their share price, did they not have a higher tax bill?
What am I missing?

YGM

(07/03/2002; 19:39:56 MDT - Msg ID: 79855)

JJ.....

Saw Your Post :>}}Hey you know alot of what you said makes sense (I Think?)(I just skimmed it) But it's not a ass-kissin club here...If I screw up I could have a regular/long time poster jump me just as quick or quicker than a lurker...They may just do it with out fan fare by email...When some one jumps from the bushes with snide criticism or name calling well that causes response. When you have so much free time as many to post and continually throw stuff out there, well the more you do the more chance of offending someone whether it be sensibilities or ego, no matter it gets someone riled...I myself NEVER freeze anyone out because I may not agree...Mostly it's because I feel some else is better siuted to giving the reply or I don't have the knowledge to respond even tho I think I know they're wrong...We all do our bit over time to stand for something as in beliefs in gold and Cabals etc...Maybe at times I sound condescending (among other things)cause I've had my beliefs and attitude re: Gold Markets for years and I've seen dozens if not hundreds of new posters come and go....Can't argue/educate them all, much less convince them to think like me nor want to...We're not all (me anyway) that well educated or very prolific writers/deep thinkers and as such can give conflicting or confusing signals to some folks unintentionally...Just like your post and your looking for a reply or response from YGM...I'm not sure how to take it, really don't care all that much anyway but here I am giving you a long winded reply in the interest of keeping an even keel in this place....I like it here, some like me some don't, but unless attacked I keep my opinions of other posters to myself or go head to head...I left with last dispute cause I felt YGM had worn out and was worn out...Time better spent with kids...AND it was the name calling over the Rumour questioning of the PM story that set me off...I hate to see any poster go and I read all personal thinking but not all news posts...The personal level is the most interesting and usually has more effect than news...Anyway I gotta go aaaand I'm not makin any sense as usual probably, but one thing to remember is YGM reads JJ, Jimbo and everybody else here and I do have respect and admiration for those who take the time to inform and ask questions....No respect for name calling over civil repudiation.....YGM.

slingshot

(07/03/2002; 19:45:39 MDT - Msg ID: 79856)

*******************************Whoop! There he is. Whoop! There he is.
Slingshot--------------<>

Camel

(07/03/2002; 19:52:59 MDT - Msg ID: 79857)

Tibet - Population Transfers

mdgc says:

"Camel has surely never been to Tibet. Had he been there, he would not suggest that there are now five million Chinese in Tibet and that their numbers exceed the Tibetans. This is certainly false, blatant anti-Chinese propaganda from the Tibetan Government in Exile."

***********

Camel: (compiled from several internet sources)

I dont' know why mdgc would be surprised if the PRC could conceive of mass population transfers as this was common during China's mass settlement campaigns in Manchuria in the late-19th century, and in East Turkestan during the 1950s.

Manchuria now has a population of 75 million Chinese to some three million Manchus; Inner Mongolia has about 8.5 million Chinese to two million Mongols and East Turkestan has seven million Chinese to about five million Uygurs.

In the days when these countries were opened up to Chinese settlement, roughly 100, 70, and 40 years ago respectively the policies of mass resettlement and assimilation were quite explicit, and even in the 1980s Chinese officials were still referring to the great opportunity the western regions held for absorbing China's expanding population

Such development is seen as natural in Chinese world views and is also regarded as necessary and beneficial to the "backward" peoples who could gain from assimilation with the Chinese. It is, however, contrary to international law as applied to occupied territories.

In 1952, Mao Zedong said: "There are hardly any Han (Chinese) in Tibet".(Selected Works of Mao, Vol. 5; p73; China Reconstructs, Sep 1987).

In 1990, the Chinese Governments census figures from The Present Population of the Tibetan Nationality in China (Zhang & Zhang 1994) claim the total non-Tibetan population to be approximately 4.2 million and the total Tibetan population to be 4.59 million.

Tibetan Government-in-Exile puts the present figure a bit higher,upwards of 7.6 million Chinese settlers in all Tibetan regions and considering that the rate of migration has increased dramatically over the last 12 years, this number is probably closer to the truth.

sector

(07/03/2002; 19:54:39 MDT - Msg ID: 79858)

@alanka Why Didn't Gold Go Up Today?...The short answer...

...because 20,000 contracts were sold today into our nascent rally.Folks who sell 20,000 contracts on the day before a long weekend [1,000,000 ounces transferred] are on a mission to lower the price of gold.

There is no TA or charting skills that are applicable to today's gold market...only fundamental knowledge [As Bleak Blade advises] of the price suppression game being played out by the Federal Reserve and Treasury with aide from their side kicks, JP Morgan, CitiBank, Deutsche Bank, Goldman Sachs and others.

They have a problem in that the World economy is a wreck, stocks are being sold for money market funds and those money market investments are just now seeking safe havens so the bad guys want to make it appear that gold is a bad bet.

That dog won't hunt any more. The World knows what is going on. The World knows that the bullion banks are in trouble with their gold derivatives, not to mention their 100s of Trillions of interest rates derivatives [Which are linked to gold].

The corporate borrowing, as evidenced by the Fed's own commercial paper chart [At their website], reveals the inescapable truth that a recovery is way over the time horizon, deep into 2003...if ever. There really isn't a recovery. The Fed is misleading the World...just like World Com did. Ken Lay and Alan Greenspan are one and the same. The European scuttlebutt is that ALL the US government econ figures are bogus.

But the story of Enron, World Com and many more like them to come has long political legs since the Demos think they have finally found a resonating issue...so a blizzard of media coverage is still in the future, thus ensuring further investor angst and anger. As people lose their life savings they will revisit gold over and over until they satisfy themselves that it is better than the alternatives...which it clearly is.

This atmosphere remains positive for gold since the manipulation truth refuses to be bottled up. It is that truth that will embolden large and small to investors support gold and prevent any return to $250. The central bank lies of 1997 are found out�they have already sold their vaults nearly dry. They are 26,000 tonnes light according to BIS gold derivative data. They are carrying gold losses and counting them as assets an accounting scam worse than World Com.

As or the Russians who "Bought" a NATO seat with 40 tonnes of gold to rescue the Fed [Currently almost all gone], they are too sharp to be conned by the Fed much longer...indeed they are known as the wisest traders in the commodities world. Even now they are busy issuing numerous conflicting press releases about bank gold sales to obfuscate things. One says yes one say no. Masters at work. They will keep their gold.

The trigger event of the gold bull of the late 70's and early 80s was the sudden buying shift of Dredsner Bank according to Ferdi Lips in his "Gold Wars". this switch caught the market by surprise and Dresdner profited handsomely because they were FIRST. China may be the wild card. Nobody can predict the trigger...but there will be one...the continuing failing economies guarantee it.

We should all watch for such a switch. Maybe it will be Dentsche Bank as they desperately seek a merger with Credit Suisse. DB has $50 Billion in gold derivatives or gold loans they must pay back at market prices [Posted at the Cafe this evening].

Paper Avalanche

(07/03/2002; 20:04:10 MDT - Msg ID: 79859)

Psyops - Day 2

I humbly present the following post to all of the valued members fo this forum to whom I owe an untold debt of gratitude for enlightening me to the invaluable information found on the gold trail.

I come to you as someone who previously spent over a year's worth of time monitoring, studying and participating on a forum hosted by a big name search engine for those interested in a particular gold mining company. The reason that I posted the message that I did last night directed specifically at Jimbo is as follows:

The MO (Motis Operandi) of anyone trying to undermine the fundamental premise of the message being delivered by a specific source, whether website, newspaper, etc. is to call into question the validity of the information presented relative to other more "accepted" sources.

The most effective way to do so is to co-opt the same general goal of the participants in said forum and then distract them from the primary goal (as well as distract others from joining the movement). After reviewing the previous posts from Jimbo, I could not help but wonder why questions, which were easily answered by doing a nominal amount of due diligence, given the plethora of information supplied by this fine forum, were even being asked, other than to sew the seeds of doubt in what was being presented on this forum.

When I was participating on the forum at unsaid website, there was an MO that I gleaned from seeing the pattern of forum participation relative to the price of the stock and/or gold. In a nutshell, it was as follows:

1. Provide a hapless newbie that simply asked questions as to why either the value of the stock, or gold itself, should rise.

2. Provide a persona for a supporter of the hapless newbie.

3. Provide a couple of ancillary supporters (hell, what does it cost to participate in a forum)

4. Have said hapless newbie appeal to the emotional aspect of his/her simplemindness and post a message so as to make the person bringing such things to light to appear as intollerant.

This was the MO for a poster at a yahoo site (sorry MK) that sought to distract and disinform.

Think about it.

How many of the questions posed by Jimbo (and/or those supporting Jimbo - JJ and alanka) could have been answered by simply educating one's self by reading the gold trail, etc.? To what end does it serve to ask questions to which the answers already exist other than to sew the seeds of doubt in the minds of those who have migrated to this webiste for the first time.

If I have offended anyone, please note that I do not care.

Best regards,
Paper Avalanche

YGM

(07/03/2002; 20:04:24 MDT - Msg ID: 79860)

Hey JJ...

Now that's a Odd thing to post here.....I'm short the GI (gold will visit high mid 200's before vertical climb)...JJ

**That comment comes seriously close to a comment that would get blasted out of the water by many on a pro Gold Forum looking for reality and fairness in Gold prices. Even moreso by the host who sells Gold. Who'll buy Gold Coin if they believe the price is going to drop 20%.....Anyways I did see humor in your post and I can laugh with you and at you and at myself....I hope 'Some' of your investments pan out but not all......YGM

YGM

(07/03/2002; 20:14:19 MDT - Msg ID: 79861)

Paper Avalanche....

and now we have "the other side" of the story....and it makes just as much sense to my addeled mind as any other....
Two lines tonite got me LOL....

"I'm short the GI (gold will visit high mid 200's before vertical climb)"
&
"If I have offended anyone, please note that I do not care."

Regards to you and all....YGM. (again the laughter starts in)

R Powell

(07/03/2002; 20:39:59 MDT - Msg ID: 79862)

Paper Avalanche

I find your reasoning intriquing.
You made a statement on a means (MO) that could be employed by "anyone trying to undermine the fundamental premise of the message being delivered by a specific source."
This implies that there is a "fundamental premise" of a "message being delivered by a specific source." This sounds like dogma or an unquestionable tenet required for membership to the club. Is delivering this message the reason for the existence of this forum?
"To undermine the fundamental premise" sounds like a serious offence.
May I ask what you consider that fundamental premise to be?
Rich

R Powell

(07/03/2002; 20:53:50 MDT - Msg ID: 79863)

sector

If it weren't for the sale of 20,000 contracts, there would have been buy orders for 20,000 contracts left unfilled. This number does not seem unusual for the daily volume. Were these large block sell orders late in the day?
Rich

sector

(07/03/2002; 21:04:38 MDT - Msg ID: 79864)

@RPowell 20,000 all at once from a single source, the same source who sold at the end of Friday's trade

I too have seen the straw men on other boards to which Paper avalanche alludeseom

Speedy

(07/03/2002; 21:05:06 MDT - Msg ID: 79865)

gold below 300

If GOLD drops below 300, I'm going to BUY 20,000 dollars worth of the shinny yellow metal!!!!!! But I personally do not see that happening, considering the BIG DOGS haven't started playing yet!!! Maybe next week we'll see some fire crackers go off!!!! GO GOLD

YGM

(07/03/2002; 21:24:56 MDT - Msg ID: 79866)

Speedy...

Big Dogs..."YES"...There's a gazillion $$ sidelined right now and alot of it probably in money markets, not doing too well...Just wait til we see all that cash head for the PM sector...Make the Nasduck bubble look pathetic...IMO as with many folks here when the Dow & Duck fall into the abyss the stampede will be awesome to behold....Go GOLD & "SILVER"

"GO GATA"

Paper Avalanche

(07/03/2002; 21:26:39 MDT - Msg ID: 79867)

To Rich / My fundamental premise

Greetings Sir Rich!

I have much admired your postings with respect to silver. I too am heavily invested in the white metal to the admonition otherwise by those on the gold trail.

You ask what I embrace as the "fundamental premise" relative to my earlier post.

My desire in posting what I did was not to establish a specific dogma or other codified set of unquestionable tenets required by anyone visiting this forum to participate in the exchange of ideas. Such a desire would be exclusive, arbitrary and counter to our implicit goal (specifically to educate people that they are their own masters and gold is simply a vehicle to deliver them from their current financial bondage).

My intent in my post this evening was to inform those who may have only participated in the exchange of ideas on this forum only, that our advesaries are well schooled in the art of presenting a "straw man" argument to deflate the momentun of a current movement.

I would imagine that the number of lurkers to this site has grown exponentially in the last 12 months. I would also imagine that such a growth in interest on the part of such lurkers to liquidate paper assets in order to purchase physical gold / silver has many of the PTB horrified.

That said, how much further of a stretch is it to postulate that said PTB might pay people to actively participate in very popular web site chat rooms so as to serve as a decoy?

The good news is that all decoy measures are temporary at best and the big boom in gold and silver prices is only one to two months away.

Take care and have a safe holiday weekend.
PA

mikal

(07/03/2002; 21:26:57 MDT - Msg ID: 79868)

@Sector

Re: msg# 79858 Thank you for that! It never ceases to amaze me what you can post.

R Powell

(07/03/2002; 21:33:32 MDT - Msg ID: 79869)

sector

I know the sellers have targeted the afterhours market and the last few minutes of trading time during regular hours. I also know you keep a careful watch on these occurances.
I'm wondering about the relative strength or resilence of gold. Does it take a larger number of block sell orders to depress POG now as opposed to a few years ago? Do you see this happening more often than in the past?
One more please, how do you differentiate between between the normal everyday selling and that intended only to depress POG?
Thanks,
Rich

YGM

(07/03/2002; 21:37:46 MDT - Msg ID: 79870)

mikal (07/03/02; 21:26:57MT - usagold.com msg#: 79868) Sector...

I'd like to 2nd that if I may....And thanks to you for all your input Mikal....RPowell, you're steadfast and continue to amaze....I think you missed your calling...Cement man indeed!. What a place this forum. 'Crockagators' and all..YGM

TheJuniorMiner

(07/03/2002; 21:40:42 MDT - Msg ID: 79871)

silver/Sector

Though I started my PM research it has led me to be more interested in the story behind silver. I would be greatly interested in all your thoughts on this subject Sector. I find it interesting that there is much less above ground silver than gold. It seems to be running a annual deficit around 100 million ounces/tr for the last 10 years. When do you think the above ground silver will not be able to fill the gap between mining/scrap and usage

My father tells me he followed this story in the mid 80's only to get completly disgusted, as I discussed this subject with him a few weeks ago.

As in Gold, the hedgers and shorts are all over it. But silver has an increadble demand and usage pattern well ahead of gold.

Any thought about this out there?

PS.
Talk about accounting tricks. The Government has been buying US treasuries with our Social Security contributions. Uses the funds to offset the budget deficit. And just think, our SS funds are tied up in that $5 trillion debt that needs to be repaid for us to get our Retirement money.

(07/03/2002; 21:42:32 MDT - Msg ID: 79872)

Thank you Gentlemen & Ladies

for a largely tolerant & good humoured response to my stir, sorry, post, especially YGM & Mr Gresham - a pleasure to be ranted at by you, Mr G.

R Powell - Rich, I can't say by what analysis the gold newsletter author arrived at $270 as I'm not an expert. However, he did get the current downturn right, and apparently has quite a solid track record, so (I at least) feel it's worth taking on board.

One only has to look at virtually any historical long term chart - metals, stocks, whatever, to see huge, usually unexpected swings. Whether manipulated or not, it's still the market and is valid as such. As many wise folk on this board have stated, with all that's going on around us, a dropping POG doesn't make any sense what so ever, but it's there, at $310.50 as I type. It should be $330 plus, but it 'aint.

There are a million reasons why it shouldn't go to $300 or $290 or less. If $310 is crazy, $290 would be just a little crazier. But when the bottom IS in, when ever that is, you'll need a ride on the Shuttle to keep up with the POG as it accelerates into the stratosphere. USA Gold will wonder what hit them as they struggle to fill orders.

Gotta go now, I see some ice cubes...whoops missed that one...oops there's another, darn it they're getting close...
dodged that one....SPLAT..

OOOhhh my head....

Speedy

(07/03/2002; 22:08:05 MDT - Msg ID: 79873)

PPT

Can anybody answer one question I have!! The question is.... How many times in the last 21 trading days has the PPT stepped in to save the markets from the abyss?

sector

(07/03/2002; 22:08:31 MDT - Msg ID: 79874)

@RPowell It's Different now...

It seems to take much more to drop pog than it once did.....the large spec longs are far more resolute these days because they know what id going on. The small specs still get whacked because...well...they are small.

Ordinary selling...it doesn't come with a neon sign for identification. But huge blocks timed at end-of-day or timed for obvious stock market stress points tell the tale just as Fed repos can be used to retroactively show that same market stress.

Why is it different now? Price discovery has occurred and the stock market is in an accelerating fall. Except for the Dow the other indexes are ramped down. The end of this World downward ramp is a Japan-like ocean bottom that will last a long time.

Can the cabal hang on? Sure but each new desperate move shows their position more clearly and attracts more sharks.

To me the main event is the final removal of Japan's savings insurance due in April 2003. The Japanese debt is growing and their economy is further being hurt by a stronger yen.

I think there may be a nationalization of banks there and a simultaneous deval of US and Japanese currencies.

YGM

(07/03/2002; 22:14:02 MDT - Msg ID: 79875)

GATA Email.....Bill Interviewed by Jim Puplava

http://www.financialsense.com/Experts/2002/Murphy_B.htm9:32p ET Wednesday, July 3, 2002

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy was interviewed today by
Jim Pupalava's "Financial Sense Newshour," which, with
the right audio programming, you can hear over the
Internet here:

http://www.financialsense.com/Experts/2002/Murphy_B.htm

Scroll toward the bottom left of the page and click on
"7-3-02 interview," below the image of a microphone.

Note what wonderful publicity Pupalava's "Financial Sense"
Internet site has given to GATA on this page. And while
you're there, check out the whole site:

http://www.financialsense.com

It has an amazing amount of information and commentary.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

DOWNUNDER

(07/03/2002; 22:18:44 MDT - Msg ID: 79876)

@ PAPER AVALANCHE - - - MY SUPPORT

Just a short note to say that overall I support your alert re the postings you highlighted.My radar alarm also went off after about the 3rd post from Jimbo requesting reassurances that his investments in Gold were going to be "safe". I felt that "first time" the questions were very relevent especially for a newcomer to Gold investing. We ALL have to battle the wall of worry when our investments are going the wrong way -- even after 2-3 years experience.

Jimbo's questions were answered with kindness,patience and understanding by many experienced forum members & I applaud them for that. However it is not expected that a poster will continually need a moral boost EVERY time the POG goes down.After all the same basic questions are being repeated
and it's hard to fathom why. The POG is going to wildly fluctuate -- get used to it & if thats too hard to handle then don't invest in this area.

R Powell

(07/03/2002; 22:33:37 MDT - Msg ID: 79877)

Paper Avalanche// silver// straw men

I'm glad to hear that you have a fondness for silver. There used to be a number of silver enthusiasts here but I fear our numbers have dwindled. Silver news has been very scarce but both houses of Congress have passed the bill required for the purchase of silver for the Philly mint. This now awaits Bush's signature. The amount of silver necessary for the coin program is small compared to overall usage but the government buying will give evidence to the belief that the 4.2-5.8 Billion ounces they once had- are almost all gone! This may shock many. Sometimes markets don't budge from the disclosure of important information but rather from what many would consider less impressive news. The market doesn't know how much silver the coin program uses versus total world use. It will just know that the government, for the first time in the memory of many, has to buy silver! Many will ask, "Who do they buy it from, isn't silver made in factories in China?
*******
Concerning "straw men", pure disruption is easily ended as a code is required to disrupt. Unfortunately, I have another to remember as massive, endless posting caused one of my regular visiting sites to institute coded access.
I would think that those trying to instill doubt would ask questions very similar to those very new to the subject. How does one identify intent? When repeatedly asked "Why did POG go down today" almost every day, is our friend asking, "POG down today, what's happening?" I don't know.
Also, if we talk among ourselves only, we will have very few questioning some opinions we hold in common. Sometimes conditions change which should force us to re-examine (to reaffirm or change) our opinions. We should not, I think, become complacent and "set in our ways" in all our thoughts. Some (not all, I know!) are subject to change. These I refer to may be more trading conditions than beliefs such as that honest money helps insure liberty.
My introduction to the silver situation was through Butler. I questioned him all the way, even searching for the sources of his statistics and facts. He and Morgan are among the most knowledgable silver analysts producing information and opinions that I'm aware of but I question them constantly. I have too much invested both financially and otherwise, to not constantly "play devil's advocate" with their writings and my own view of silver. My point is that perhaps even "straw men" can be useful forcing us to answer questions, perhaps clarifying understanding through explaining or, perhaps altering a previously held opinion. Pure disruption can be unpluged and innane disruptions can be, as has been mentioned, ignored.
There hasn't been too much news about silver but I'm always looking and appreciate every mention made here.
Thanks to all
Rich

YGM

(07/03/2002; 22:41:20 MDT - Msg ID: 79878)

DOWUNDER......

How TRUE!The POG is going to wildly fluctuate -- get used to it & if thats too hard to handle then don't invest in this area.

**If I let it get to me over the years and Dollars I've invested in Gold thru, Stocks, Mining and Physical I'd have ulcers on my ulcers...It a rocky road & not for faint of heart. Hopefully the road is getting shorter and smoother soon.....Regards...YGM

Mr Gresham

(07/03/2002; 23:03:44 MDT - Msg ID: 79879)

RPowell

Rich -- good posts today and a good blending of two topics just below.

I sure hope they get silver to a sellable point sooner rather than later -- every time I carry it, the straining muscles cry out to me that "silver is a YOUNG man's metal, fool". I imagine that old men (the ones with the big fortunes) prefer gold because they can hold more wealth per handful, and aren't as likely to throw their backs out. ;)

At the same time, it's kind of a thrill to be able to own a thousand of something valuable, isn't it?

Mr Gresham

(07/03/2002; 23:05:21 MDT - Msg ID: 79880)

Big OOOPS! for anti-Euro side in Britain

http://msnbc.com/news/775811.asp?pne=msnUsing Hitler in ad. Big flap. Dumb, dumber, dumbest. What were they thinking?

R Powell

(07/03/2002; 23:08:39 MDT - Msg ID: 79881)

The JuniorMiner

May I suggest Butler's work, the SilverInstitute and David Morgan's work for starters on basic silver info. As far as I've been able to figure out, the most widely accepted and reliable(?) numbers come from GFMS's Silver Survey which listed 2001's deficit at 89 million ounces. 2002 will be the 13th consecutive deficit year. Most estimates guess that world supply is 300-500 million ounces including Buffett's 129.7 million and the 107 million listed as held by Comex.
The yearly production and total use are probably fairly well documented. What is unknown is from what amount of total world surplus we should subtract the last 13 years' deficit (about 1.5 billion ounces)? Who knew 50 years ago how much silver there was. Who knew or even gave it a thought as there was almost no demand then other than for jewelry and money? 5000 years of growing supply and then 50 years of massive usage to come close to running dry?
That this market can run an ongoing deficit without price rationing defies the laws of supply and demand. It is an ongoing puzzle. I'm constantly looking for the flaw in the scenario because if there isn't something we're overlooking, then someday soon the POS will skyrocket.
Hope this helps,
Rich

YGM

(07/03/2002; 23:15:25 MDT - Msg ID: 79882)

HAPPY "INDEPENDENCE DAY " USA

Truly the Home of the Brave & Land of the Free......Only in America could an organization like GATA be born...
The American Constitution and Continuing Fight for Basic Rights, Freedoms & Truths is still today an inspiration to the rest of the world. Regardless of Politics and Government of the day, Americans have more than enough to be rightly proud of......Have a safe and happy holiday all ....YGM

"GO GATA"

YGM

(07/03/2002; 23:23:13 MDT - Msg ID: 79883)

Of Interest....

A Small excerpt from tonites LeMetroPoleCafe.comExcerpt...

AN INTERESTING CONVERSATION
CONCERNING THE EURO: While in St. Petersburg late last week, we had a most interesting conversation regarding the euro with our friend and client, Boris Sirochkin. We discussed the US dollar's recent substantive weakness and we discussed the strong tendency on the part of St. Petersburgers to have owned US dollars over the past several years. Boris said that in the past two weeks he's noticed something quite extra-ordinary.

Clients in Russia have called to ask him about changing US dollars into euros. He said he'd not heard that question asked before! Further, and more interesting still was that he understood that for sizeable transactions moving US dollars into euros, those wishing to do so were suddenly paying 1.01 at a time when the euro was trading .9900. Those making the transactions asked only "how much could be done." They apparently were quite willing to swap dollars for euros at a discount to the spot rate.... a circumstance heretofore seen as wholly unlikely, if not wholly impossible, and certainly wholly imponderable.

What have we learned? We've learned that the psychology of the dollar has indeed changed, making it more and more likely that the dollar's trend has indeed changed. Further, we've learned that the Fed's problem in managing the monetary base will become even more disconcerting in the future. In the course of the past five years, we've argued that the Fed has had a problem managing the base, for much of the base's growth has been due to the demand for cash... much, if not most, of which has come from abroad. If Russians, who've been perhaps the most assiduous holders of US dollars in the past several years, suddenly wish to swap dollars for euros, the base is about to implode, and we fear that the authorities won't understand what it taking place until far too late.

-END-

DOWNUNDER

(07/03/2002; 23:39:45 MDT - Msg ID: 79884)

@ YGM - - - THANKS

Thanks for your comments AND for your research which is very
much appreciated --much more often than not. :) I too spend a fair bit of time as an activist,posting gold & silver related information to Jouralists & mining Co's.It's bloody frustrating & that's for sure -- but without it there would be even less of a turnaround than what's occuring.Keep up the good work Sir.

Aristotle

(07/04/2002; 00:23:52 MDT - Msg ID: 79885)

Selling that COMEX stuff down the river

I was almost *almost* among the brain surgeons and rocket scientists who "sold" COMEX Gold (contracts) today.

No, I didn't have a long position to liquidate (never have, never will.)

What I'm talking about is establishing an outright short. Plunking down my $1,350 margin per each and every contract on what could easily become a one way ride down to the Intrinsic Value (i.e., Zero) of these danged ol paper contract thingies.

I know, I know... one of you good-hearted (yet sweetly naive) souls will at this point surely chime in, "But Ari... the COMEX exchange promises -- PROMISES on their own good name -- to ensure against counterparty default! Therefore these contracts CAN'T be considered intrinsically worthless! Being short on COMEX Gold can be dangerous!"

To that I'd say the world is filled with danger. Now run along and play indoors where it's safe, my sweet innocent wearer of short pants, and leave the grown-ups to look each other eye-to-eye across the table until the weak side blinks.

I've said this before, as have many others, and I'll say it again now. It is naive to think that COMEX Gold futures -- merely private contract instruments overseen by a commercial enterprise (the Exchange) -- are immune from reaching their intrinsic value of zero simply because The Exchange stands behind them with their "full faith and credit."

Sheeeeeeeeeeesh!!! Where have I heard *that* one before?!

Ohhhhhhh YES! NOW I remember! There was once an entity, no less powerful than the United States Government itself (in fact, it WAS the Government) throughout the 1960's (and before) tried to put across the same scam. But even better than mere COMEX guarantees, these futures contracts were backed by the full faith and credit of the United States of America.

And you know what, folks?

That's right. They defaulted.

For those not quite up to speed on their history, the parallel I'm talking about here is the U.S. bond market, and the 1971-73 default on the Bretton Woods "Gold standard."

You see, if you'll allow me a bit of latitude, similar to the COMEX Gold futures contracts were the monetary bonds issued under the monetary system of that era. (Bretton Woods is where the post WWII treaty was held that established the international Gold-exchange standard in which the U.S. dollar was "guaranteed" to be exchangeable and as good as Gold at a rate of $35/oz.) As such, a person could plunk down a little bit of money (similar to a COMEX margin) to buy a bond -- a contract which promised (under the full faith and credit of the U.S.of A.) to give them future control of an even greater quantity of money/Gold. (That quantity being the principle PLUS interest, paid out in a schedule according to the terms of the bond contract.)

I submit to you, if the U.S. government can thumb its nose at contract participants no less prestigious and influential than its international trading partners (among others,) then it takes no stretch of the imagination to see COMEX doing the same to you under very similar circumstances, that being a crisis of confidence in the deliverable good of all those contract thingies.

And for those obstinate folks who think that a COMEX fallback plan of "cash settlement" is good enough to make the Long Gold contract worth their while/risk, listen to me now and do yourself this favor of FULL consideration. Those market participants in the wide world (yes, the grown-ups wearing the long pants) who have no faith in the dollar will short the dollar outright as a pure currency play. They won't piss away their resources through this pathetic little Exchange -- expressing their expectation of dollar demise through plunking down margin money on Long positions in COMEX Gold futures contracts. They simply don't play that way.

Yes, there are exceptions, but these exceptions don't set the trend, and the prevailing trend is for Gold paper -- Gold contracts backed by ANYBODY regardless of size or power -- to default and to diminish to the intrinsic value of the paper they are written on.

So why DIDN'T I plunk down my big fat wad of cash on margins for a bunch of COMEX Shorts?

Because there's a curious feature about your own money -- you can only spend it once. Given one alternative or the other, I decided it would be most beneficial to forego each payment of an initial Short margin for an outright purchase of 4 ounces of real Gold.

I can't say with any certainty when it will happen, but when the contract market does go into default, neither the Short side nor the Long side will benefit from the outcome. The way I figure it, with my latest tranche of spendable cash, I would be better off with an additional 40 ounces of Gold in my vault than holding ten Intrinsically Paper COMEX Gold contracts, be they Short OR Long!

Protest if you must, Mister Small Pants. The lesson of 1971 is apparently too big for you to fathom... "A problem for others," perhaps you'll say, one that only afflicts sailors who allow themselves to foolishly drift past the clear warning signs too close to the edge of the flat earth. You, of course, will surely *know* when to turn back.

The world is round, my friend... and we've been this way before.

Real Gold. Get you some. --- Aristotle

Black Blade

(07/04/2002; 00:41:43 MDT - Msg ID: 79886)

Pension Plunge

http://www.businessweek.com/magazine/content/02_27/b3790048.htm

Snippit:

What horrified some people most about the Enron Corp. collapse was the way its employees' retirement accounts got wiped out. The increasingly popular 401(k) is a pension plan in which employees are responsible for investing a tax-sheltered portion of their earnings and employers kick in matching funds or stock. In the booming 1990s, millions came to see their 401(k) plans as perpetual wealth-spinners.

They're anything but, say former BusinessWeek chief economist William Wolman and Anne Colamosca in The Great 401(k) Hoax. They argue that Americans have been hoodwinked by corporations and Wall Street into believing that investing savings in stocks will guarantee income enough for a comfortable retirement. But even at the end of the '90s, a decade in which stock prices quintupled, the average 401(k) account held just $46,740.

Worse, the authors say, there's strong evidence that stock market returns will probably average less than 2% a year throughout the first decade of the 21st century. They draw parallels to market bubbles that peaked in 1901, 1929, and 1966 and were followed by years of declining or stagnating stock prices.

Snippit: Better not get off the treadmill just yet. We will see many more retirements plans blow up. With nearly $7 Trillion of wealth gone to "money heaven", many have seen their hopes and dreams for a cozy retirement crushed and their finances destroyed beyond repair. This story is far from over. More wealth will be vaporized to "money heaven" before this "New Depression" wraps up.

steady

(07/04/2002; 00:50:16 MDT - Msg ID: 79887)

the return of the bi-metalic monetarysystem

http://www.gold-eagle.com/editorials_02/tlaga070402.html see link for the rest of the story.....
FOCUS ON STRATEGY

Copyright 2002 J.N. Tlaga

By defeating France in early summer of 1940, Nazi Germany acquired momentary window of opportunity to defeat England too, depending solely on Luftwaffe's ability to destroy Royal Air Force before the autumn storms would make landing across the English Channel impossible. But when relentless raids on RAF airfields brought Luftwaffe dangerously close to accomplishing this goal, Winston Churchill erased the German edge by ordering RAF to bomb civilian targets in Berlin. Enraged by this provocation, Adolf Hitler ordered around-the-clock bombardment of London in response, and thus RAF's time to breathe and England's ultimate victory in the Second World War were won by focusing foe's attention on the wrong target.

Why this masterful maneuver of England's most illustrious leader never found its way into history books? In order not to enlighten the masses that great powers and numbers, which are difficult to defeat by outright destruction, are easily thwarted by way of distraction. Distraction is the ultimate weapon of war and the ultimate instrument of politico-economic control. How does the fiat money elite, whose entire membership would fit into an opera house, manage to keep the six billion people of the planet Earth in their present state of subjugation? By keeping them distracted!

It would not serve any good purpose to receive Judge Lindsay's decision of March 26, 2002 in Howe vs BIS with anything but magnanimity. Merriam-Webster's Dictionary defines magnanimity as "loftiness of spirit enabling one to bear trouble calmly, to disdain meanness and pettiness, and to display a noble generosity".

In this spirit we should have no difficulties to grasp that when Judge Lindsay upheld the sovereign immunity of gold price manipulators, he in effect said that the proper remedy of the people aggrieved by such misdeeds lay not at law but in the realm of politics. Translated into colloquial format, the underlying message of his decision reads:

"You the people should not try to force administrative officials to correct their discretionary policies by suing them. Such an approach in effect merges the administrative branch of the government into judiciary one, and forces the judges to second-guess administrative decisions rather than to interpret the law. Because you have the power to elect public officials, you should not ask me, a trial judge, to tell them what to do; if you are not happy with their policy, you should throw them out of their offices in the next elections instead. And if you are unable or unwilling to do it, you deserve what you are getting. Don't ask me to pick up chestnuts from the open fire for you! Put your own fingers at risk!"

In this generous interpretation, Judge Lindsay's decision means that our attention should be focused on electing honest-money President and honest-money Congress, and we should allow no one to distract us from this objective, because any change of direction will in the end be like targeting London instead of RAF airbases.

Most emphatically, no effort should be made to relitigate gold price manipulation as a class action of gold mining companies against bullion banks, because two more years down this road, in the election year 2004, sovereign immunity will be invoked again. What the bullion banks need to do to avail themselves protection of the sovereign immunity veil all over again is to tell the truth:

"We are manipulating the price of gold upon request of Secretary of the Treasury and of the Chairman of the Federal Reserve Board as their agents and assigns, we are merely executing the policy of the President of the United States."

It were not the central banks that were drawn into gold-carry trade in order to save the leading bullion banks from their folly that brought them to the edge of the abyss - as an apocryphal or deliberately deceptive statement of Edward A. J. George, Governor of the Bank of England, tends to suggest. It were the bullion banks that were drawn into gold-carry trade by the central banks to execute a global policy decision to make the world safer for the fiat money regime. The fact, that the blueprint of this policy was "sold" in 1992 to then Governor of the State of Arkansas by then Co-Senior Partner and Co-Chairman of Goldman Sachs during a dinner meeting in New York, does not undermine this conclusion. There are plenty of similar dinners in Presidential election years. This is how the winners of incoming elections are actually selected, their campaigns charted, and their policies conformed. The point is, if Mr Clinton would have decided to renege on his promise after becoming the President of the United States, and would have refused to commit the gold reserves of US Treasury to this "strong dollar" policy (a code name for gold price manipulation), the bullion banks would not have been in the position to launch this policy on their own.

To be sure, every player in the "strong dollar" game always had his own ax or two to grind, but the fundamental purpose of the gold price manipulation has been and is to save the fiat dollar regime by converting it into trilateral euro-dollar-yen regime. Creating the source of cheap capital in the form of gold-carry trade to finance hedge funds operations was not the primary purpose; yen-carry trade was already supplying much more than gold-carry trade could ever hope to supply. The specter of collapse of the likes of Goldman Sachs would require no greater attention than actual collapse of Barring Brothers required. And LTCM was bailed out not because its insolvency would destroy world finances, but because its insolvency would expose the fact that central banks gold (and US Treasury's gold) was not being lent into gold-carry trade but outrightly sold in exchange for US Treasury securities.

In EURO AND GOLD PRICE MANIPULATION, PART II, I rushed to judgment that the probable purpose of sudden switch from de facto pegged gold price of $384 in 1995 to the suppression of the price of gold from early 1996 on was "to throw monkey wrench into development of euro". Obviously, I was wrong. The purpose was exactly opposite. It was to assist euro rather than to sabotage it.

Even though launching of euro would in the end displace hundreds of billions of Eurodollars, strategically, the fiat euro is the fiat dollar's natural ally, and the Anglo-American establishment, sitting on top of the world, has no choice but to upgrade the fiat dollar regime to euro-dollar-yen regime. The myth of euro's competition is being recycled for usual disinformation purposes to make the average Joe and Jane completely unaware of what is going on until it will be too late for their voting power to do anything about it.

Anglo-American establishment's imperial control of the world rests on the proposition that the world is ruled by those who buy, not those who sell. Anyone anywhere can always make cars as good as or better than General Motors, and anyone anywhere will always conform to the will of those who wield the power to buy. Herein lies raison d'etre of the Bank of England and its American subsidiary, the Federal Reserve System: without God-like power to create the world money out of thin air, the power to buy is naturally limited by the power to earn. This means that whoever will stay in control of the world fiat currency system long enough, will in the end own the planet Earth. Ever since 1717, England's elite has been driven and possessed by this thought alone. See: GOLD STANDARD = FIAT IN DISGUISE.

pluss the link to the rest of his work
http://www.gold-eagle.com/research/tlagandx.html

Aristotle

(07/04/2002; 00:52:11 MDT - Msg ID: 79888)

Independence Day!

A day for hammocks and beer, in peaceful repose with the knowledge that financial independence can be yours, too, for the straightforward price of buying personal property upon the Sovereign Isle of Gold Ownership.

Get you some. (And enjoy your only (hopefully "only" -- unless your second home is a diamond-shaped stadium) hotdog sandwich of the year... with lots golden mustard. A must!!!) --- Aristotle

Huh? Oh, nothing against 'dog sandwiches, it's just that you'll want to live a long healthy life to enjoy spending your Golden fortune. Keeling over suddenly simply will not do!

steady

(07/04/2002; 01:12:32 MDT - Msg ID: 79889)

more foreclosures

http://www.rense.com/general26/goth.htmDenver-Area Foreclosures
Go Through The Roof
Metro-area home foreclosures are headed for their highest level in 11 years, as the battered economy leads to a huge spike in homeowners defaulting on mortgages in the first half of the year.
got gold, give it a silver lining!

Black Blade

(07/04/2002; 02:07:03 MDT - Msg ID: 79890)

THE SUBTLE WAR - WHAT WHITES IN AFRICA DID AFTER THEY LOST

http://www.etherzone.com/2002/lamp070802.shtml
Snippit:

Prior to the year 2000 the world's Liberals were ever so smug about Zimbabwe and South Africa. They pointed their fingers at us whites in Africa and smugly told us that our worst fears had never been realised. Neither Zimbabwe nor South Africa had collapsed as we had said it would. We looked like fools, and those haughty liberals mocked us. We whites, having lost military and political power were trying to exist under regimes hostile to us, and so we just said nothing.

What I am about to tell you has never, to my knowledge, been written about anywhere. The blacks here have long suspected it, but no whites have ever come forth to openly talk about how we work against them. Let me tell you the real reason why Zimbabwe lasted as long as it did, and why South Africa and Namibia have not yet collapsed.

Black Blade: An interesting take from a former Rhodesian and current South African on the state of economic affairs both Zim and SA. For anyone concerned about investment in South Africa and the possibility of government intervention in the Gold mining business, this article may provide a little insight.

The CoinGuy

(07/04/2002; 02:28:21 MDT - Msg ID: 79891)

Aristotle...Felt a crack,But will take a step Forward in Faith and Truth

Aristotle,

Your response seemed straight from the heart in your usual style. I felt it might be beneficial to force a foot forward at this point. So I shall step away from the trunk of this tree i grasp so tightly. I have sensed the urgency in your message from the beginning of your return, and I post my heart felt warnings that others may benefit to the degree of their understanding, or disagree as their viewpoint may govern their feelings.

As an oft called "Market Maker", I have been stepping out on those thin paper limbs for quite some time and counter-balancing those paper trades you speak not so highly of.

I may live quite the reticent lifestyle, but I feel it is necessary to forward this opinion.

To not take my words to heart could possibly be the workings of a fool, yet life is elusive, I may be the fool myself. I only wish there were answers to these questions so that we may know what the future holds now, but why would life be worth living? Although my account, as well as my feelings on the matter hold true.

After the rhetoric's of life. Let's not be subtle, frankly put, and yes this is only my seasoned opinion. Until there is a divergence in paper backing, I, as well as others will be on the other side of those paper trades "some" believe to be executing with precision; and folks I wish you the best of luck in your trading, but there is no secret. The money to be made from paper executioners is rather liquid and free. This is including your paper stocks, very liquid at this stage of the game, and making for a great play from both sides of the fence, but the long term wealth holding may be elusive?

Barring elusiveness, paper profits have governed our physical purchases for some time.

Yet, to switch roles, it is of my utmost and sincere opinion that scooping up the physical metal at this point is a gift from the one above, and there isn't any lyrical stance where i could govern my opinions or your oppositions to satisfaction. Other than knowing history, and living through it well.

Only for Aristotles sacrifice do I step out with conjecture. Yet, as a human being, i wish all the best of luck with all posters endeavors, whether they be small or large...Silver or Gold. If my opinion be known, I would prefer the sun of the Gods.

This may be thought provoking to some. I carry one post from FOA on my desk that is well worn and has been read repeatedly, well worn with my desire for a future holding of my family, as well as the vision of what this/our future holds. It is a simple, but succinct post, and was addressed to Cavan some time back. Gold Trail post #77, I hope none are taking this lightly?

In reflection of all the past posts read, I'm aware some will consider the consequences of a currency that has already been thrown to the wind. Yet I believe most Americans will readily go down with this sinking ship. Their collective arses aren't large enough to plug the gaping hole in this currency's underbelly.

The consequences of this argument is not readily absorbed, but it is not on the resting of your laurels to consider, for it is not the fault of your own management. Time is truly on the side of the simple man here, yet there should be no haste in his soul. For now is the time to gather his fruits for the future. May his transition be prosperous to his family, friends and relatives besides. There is no time to waste.

saddened, but hopeful...Ari you are truly a gem in the eyes of my next generations future.

I've tried to leave plenty of ammunition, but I hope all was spent. Those that are in this game as I, are not alone, and will not be alone as time goes forward...

Happy 4th of July, may we keep our independence well into the future,

The CoinGuy

P.S. Congratulations to all contest winners. Miner49er, I continue to learn from you with a steady beat, although my heart cannot condense your speech as well as my wisdom. Kudos my friend...

Topaz

(07/04/2002; 04:33:34 MDT - Msg ID: 79892)

Fleshing out the upcoming Equities Megabubble.

This WILL BE my last post on the subject.....thanks one and all for toleratingRighto, hidden amongst all the doom and gloom there lie some fundamental signposts that, when added to the following, provide for a fait accompli, lay down misere DJIA Megabull.....and by my estimation there's about 4 hrs trading to get set.
Basic Plusses:
Signs of growth returning.
Capital spending on the increase.
Profit margins widening.
Price is "reasonable" in the p/e arena. (I'll get to the "E" directly)

Then we have the Bond market Yields (dropping) and Truckloads of Cash taking it in the neck.

All the above can be further researched via my NEW good friends Abby Jo or Larry. (wink)
Now for the kicker:
The $US was decimated recently and now (with some help from the PoG) is once again strengthening.....guess when it was at or near it's lowest....30/06/02.....The LAST day of the Q2 reporting period.
A co-incidence? or a pre determined mechanism for bolstering "E" in the upcoming reporting season? Foreign earned Q2 income went UP by 10% Simplex and no doubt a lot more Complex.
Chow down on that one for a few minutes....

Next, it is NOT AN OPTION for the DJIA to be BELOW it's 911 level on the Anniversary of that fateful day...to be so would send an unacceptable signal of capitulation to the ENEMY (whomever they are?) so all stops will be pulled to drive the Market to (at least) that height and - I'm thinking - a good bit higher.
The Patriotic thing to do....trade the upside, then, the INDEPENDENT thing to do.....cash out on, or shortly before/after, 91102, race in to CPM and convert to Bullion, at, I'm guessing, VERY reasonable prices.

Good luck and Happy Independence Day one and all.

Golden Bear

(07/04/2002; 04:48:39 MDT - Msg ID: 79893)

Aristotle (msg#: 79885)

Poignant message expressed clearly. Well done Sir Ari...

and let us not forget the deceit of 1934. Americans were ordered to surrender their bullion to the government, on which they received $20.67 per ounce. Once relieved of their wealth, FDR promptly raised the value to $35!

Thats right, the people were swindled to the tune of 75%! And if you could stomach that, then how about being forbidden to own this wealth of kings.

And the people have continued to allow themselves to be swindled through stealth - Inflation - to this day. Only a fool believes that contracts will be honoured in times of crisis.

In contrast, America was on a gold standard from 1834 to 1914 (except briefly from 1862-1879) where general price levels remained flat. Can you imagine what that's like..., gasoline stays the same price for over 50 years!
(information courtesy of Mr Lips' Gold Wars).

kludge

(07/04/2002; 05:53:16 MDT - Msg ID: 79894)

Paper Avalanche / All

"To what end does it serve to ask questions to which the answers already exist other than to sew the seeds of doubt in the minds of those who have migrated to this webiste for the first time."

If a couple posts can sow the seeds of doubt about an item whose value has endured for thousands of years, then I'd think those swayed were foolish. Those that need constant reassurance that their decision to buy physical may not know their history very well. Maybe they were the weak longs?

I've taken some moderate heat here for my view that gold is a means to store and transfer wealth through the generations and ages. That it's the ultimate conserative, long term investment and not a get rich quick scheme. As DOWNUNDER stated, it's current price will fluctuate, but I believe that viewed in terms of decades or generations it's value, it's convertability to other "real goods", will probably average out in the future to what it has always been in the past. And I believe it's value today is not far off from that average, although perhaps a little low.

With the wealth of good info here, and the obvious intelligence of the posters, I am perplexed that many seem to look at gold with the same eyes as a stock investment. "ooh, it's up today" or "awww, it's down". Where's my calculator so that I can figure out my unrecognized gain/loss?

Guess this is my "newbie" question, considering all the havok that would be caused by the true currency of the ages suddenly skyrocketing against any/all fiat - why would anyone desire it - which many here seem to? Greed, to the extent that we care not about anyone or anything else so long as we're rich? At what fiat level would you sell?

Personally, I'd rather just hold it for my life and pass it to my kids - with full disclosure to the IRS, of course... It's a no-brainer in my view, thousands of years of stability isn't likely to change in my lifetime - but if it should and gold skyrockets, then I was wise, rolling in wealth, and have a clear conscience.

Happy and safe 4th to all.

LeSin

(07/04/2002; 06:28:58 MDT - Msg ID: 79895)

Dependence or Independence?

Unhappy Dependence Day to all US Government Citizens

Happy Independence Day to all Americans!

"S"

CoBra(too)

(07/04/2002; 07:23:23 MDT - Msg ID: 79896)

Derivative Time Bomb looming - according to hedge fund manager

http://money.telegraph.co.uk/money/main.jhtml?xml=/money/2002/07/03/cndye03.xml&sSheet=/money/2002/07/03/ixcity.html- And the biggest of all may well be the gold derivative games, played by "the too big to fail for too long to bail"?

We'll see - cb2

And have a great independence day USA.

YGM

(07/04/2002; 07:33:29 MDT - Msg ID: 79897)

July 4th Email Message from GATA

RE: "GOLDS INDEPENDENCE DAY"The following email was sent last night to the GATA Strategic Army Command:

Hello GATA ARMY,

We only need one of these main stream buggers to shine the light on DRACULA.
When that happens and if we can cultivate an "industry crew" to ask some official questions to the Treasury and the Fed, the cabal is sunk.

Fineman is a "big league" guy who takes on these sort of things in his Newsweek feature stories. He may bite. He may not. If not, we move on. Chris and I have sent him missives and I spoke to him briefly. More importantly, the GATA Royal Air Force Pilot in our ARMY, the famed novelist Arthur Hailey, also has alerted Howard Fineman to the GATA story.

We are one BIG splash from winning the day. Let us attack like there is no tomorrow, especially with the Royal Bank of Canada report at our backs.

All the best and a happy 4th to all.
Bill

Attached:

Hello Howard again,

This is Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA). Yesterday, I did an interview with Jim Puplava, one of the most brilliant men on the financial scene (www.financialsense.com.).

If interested, you can read more on GATA and listen to the interview at:

http://www.financialsense.com/Experts/2002/Murphy_B.htm

As I mentioned to you in our brief conversation the other day, this gold mess dwarfs Watergate and Enron combined and I have THE PROOF to back it up. I have already been to Washington 5 times on this matter and met with the Speaker of House, Dennis Hastert, and James Saxton, who was chairman of the House Joint Economic Committee. If you are interested in JUST reviewing what evidence GATA has of the biggest fraud/scandals in the history of our great country, please let me know. I could be at your office in a heartbeat, with all of GATA's proof of the manipulation of the gold price laid out at your disposal.

I look forward to hearing from you.

All the best,

Bill Murphy
Chairman
GATA

*** Howard Fineman can be contacted at....
Fineman@newsweek.com

"GO GATA" "GO ARMY".......Email Mr. Fineman....YGM

**Again "Happy July 4th" to all my American Friends...Ken R.

Black Blade

(07/04/2002; 08:02:56 MDT - Msg ID: 79898)

Tice on CNBC

For anyone interested, David Tice of Prudent Bear Fund and Gold Bull is on CNBC. Should be interesting.

- Black Blade

Waverider

(07/04/2002; 08:07:02 MDT - Msg ID: 79899)

USAGOLD

My apologies for not acknowledging the French Angel earlier, but I have been in transit and am writing from Zurich.

Thank you very much...I am both humbled and honoured. A special thank you to Gandalf for all your work in making the competition possible, and to USAGold for hosting it. Thank you Michael. I think that by the time I return home from Switzerland I shall have a very special parcel waiting for me.

Also congratulations to all of the other winners and to everyone who entered. What a fun event to participate in. Thank you again USAGOLD. Cheers,

Waverider

YGM

(07/04/2002; 08:54:11 MDT - Msg ID: 79900)

A Preview of the Future.....

http://www.rockymountainnews.com/drmn/real_estate/article/0,1299,DRMN_414_1242052,00.htmlExcerpt:

Foreclosures soar
Weak economy could spur highest level in 11 years

By John Rebchook, Rocky Mountain News
July 2, 2002

Metro-area home foreclosures are headed for their highest level in 11 years, as the battered economy leads to a huge spike in homeowners defaulting on mortgages in the first half of the year.

Foreclosures rose by 53.7 percent in the first six months of the year, compared with the same period in 2001, assuming that Denver and Jefferson counties continue the same pace of previous months. Those two counties have not tallied their foreclosures through June.

Adams, Arapahoe, Boulder, Broomfield and Douglas counties report a total of 2,130 foreclosures in the first half of the year, compared with 1,365 foreclosures through June of last year, a 57 percent increase.

Toss in expected foreclosures from Denver and Jefferson counties and the number in the seven-county region rises to more than 3,500 through June of this year, compared with 2,306 in the first half of 2001.

That would be the most yearly foreclosures since 5,379 in 1992.

Whatever the final number, the trend is clear: Foreclosures are going through the roof.

Cont'd @ Link....

sector

(07/04/2002; 09:53:42 MDT - Msg ID: 79901)

@ Aristotle COMEX Default? But...But...But

There are allot of "Buts" in COMEX paperWith $71 Billion in gold derivatives. US banks are as strung out as cokeheads. They have converted their real gold or the Treasury's real gold into paper and there it is...a sitting duck...way underwater.

As for specs thinking they can get their gold back from the COMEX "Warehouses"? This bullion is the inventory of individual corporations and people who KNOW the value of gold and they most certainly would NOT give it up in any emergency...which would be the case during very high COMEX volatility.

So...should there be a squeeze, COMEX will default plain and simple and the contract holders will get nada except FRNs.

The real deal is the metal, the beautiful metal. It's the most prime undeveloped real estate one can ever find. It is a shield in times of social unrest.

BTW predicting unrest as a result of trillions in financial losses is easy. The hard part is getting up off one's duff and actually painting a CLEAR picture of the future. We don't need a n ME war to upset things. We don't need heightened awareness of Greenspan's relentless inflation. We don't even need more political and ideological division nor do we need the potent catalyst of massive Wall Street and Washington corruption to trigger social unrest.

The falling stock market will do it that all by itself. Pension funds will be decimated as a direct result of the SM fall and pensioners will develop that "Deer-in-the-headlights" look. Add a little more reality about their vanishing social security fund and voila! A CLEAR bleak future and the big blame game cranks UP. Vote the bums out? Citizens already know Washington is powerless.

Need more? How 'bout those Japanese? Wrecked banks and senior citizens who stand to be World-Class chumps in a "Government bailout"...$1.2 Trillion in their life savings confiscated for the "Good of the country" [Watch for preparations later this year].

COMEX default? Set your watch baby. Buy the popcorn,�pull up the chaise lounge. The warning clue is the departure of Wendy Gramm [CFTC] and her estimable husband, Senate Banking heavyweight, Phil Gramm [Who personally knows ALL about GoldGate]...gettin outa Dodge along with Minority Whip, J.C. Watts [R-OK].

They will shut off COMEX gold and silver when the heat gets up there around $340...no more trading. You want gold? Try Mumbai, Shanghai, London [Maybe], Tokyo [Perhaps] ...oh yeah Istanbul�you can pop over there and get all the gold you want. But don't expect to bring it back IN the US without hefty tariffs. As for the Treasury's gold bullion trade�it will dry up as the Treasury cuts overtime and goes on a two-and-a-half-day workweek.

Au-some

(07/04/2002; 10:57:59 MDT - Msg ID: 79902)

(No Subject)

Happy Fourth!
Congrats to all winners...
And thanks to YGM for the Puplava/Murphy link. Check it out.

The Traveler

(07/04/2002; 11:22:27 MDT - Msg ID: 79903)

Zero hour may be sooner than you think

Quotes by OPEC President Rilwanu Lukman from his opening remarks to the OPEC meeting in Vienna late last month as reported by Petroleum Finance Week.

"After a period of ascendancy stretching back years, it appears that the dollar is finally weakening vis-�-vis other leading currencies � notably the Euro and the Yen."

"For oil producers, it could easily mean a reduction in the real value of the revenue they receive from sales of petroleum on world markets."

OPEC sees the future of the dollar and the repercussions of its fall from grace. Do you?

Black Blade

(07/04/2002; 11:40:55 MDT - Msg ID: 79904)

Gold Talk on CNBC

I see that there has been some talk of gold on CNBC today. Bob Pisani said he has had a lot of gold questions from the email today. The word is getting out.

BTW, the Daily Gold Market Report is updated with the gold market activity over the last 24 hours.

- Black Blade

Safe and happy 4th all...

Mr Gresham

(07/04/2002; 12:17:57 MDT - Msg ID: 79905)

Topaz, CoinGuy, sector

Topaz -- please don't take your contrarian's contrarian viewpoint away -- I need the regular corrective to help me "peek around the corner" at the opposition's next possible moves.

CoinGuy -- quite a post, and yes, that #77 is the keeper.

sector, sector, sector! Contest's over! No, actually -- a recitation like yours, done in a good rhythm, is like poetry, music. "prime undeveloped real estate" -- good! And as always, we need the contrast to the "Deer-in-the-headlights" majority around us. Because that is still the music the loudspeakers on the plaza are blasting out at all us proles. Keep on keepin' on.

In fact the danger of complacency occurred to me this A.M. in a new light -- focusing too much on our PM preps, what else is going bye-bye that we need to cover? I'll stop here, but it is obvious that the basic instincts of self-preservation have been lulled to sleep in those around us, and I hope it is not catching!

I get a feeling of "Oh no, not THAT again" but y'know, that 1998-99 period of Y2k prep was one of unusual clarity for me, as it seemed that the people I was hanging out with online were dissecting society and re-designing (an alternative future) from the ground up. A wealth of survival -- or call it "living well in hard times" -- info was collected and shared by all...

oops, gotta go. Reality beckons...

Troy Boy

(07/04/2002; 13:54:21 MDT - Msg ID: 79906)

Happy fireworks day

A hard hitting read for the dayWhile fireworks are sold legally in Florida, most counties, municipalities and incorporated zones ban the igniting of the fireworks with legal action against the law breaker. So while you are having fun tonight be careful.
I found the following document and thought I might pass it on as it reflects on the case of freedom in the US and what we celebrate today for, supposedly.

Gary North's REALITY CHECK

Issue 155 July 4, 2002

HAPPY FIREWORKS DAY

The best way to destroy the public's memory of an
important event is to make it into an American national
holiday.

Every Christmas, Americans celebrate the arrival of a
bearded, red-suited Communist who looks suspiciously like
Karl Marx, and who gives presents to everyone, irrespective
of race, color, creed, or national origin. Parents tell
their children that only good little boys and girls are so
rewarded, but the kids catch on fast: they're going to get
some of the loot, no matter what. Also, they never think
that their share of the booty is fair. This prepares them
to be voters.

Then there is Easter, the celebration of a rabbit who,
for some unexplained reason, hides colored hard-boiled
chicken eggs in everyone's back yard and on the White
House's lawn.

On New Year's Day, people recover from hangovers by
watching the Rose Parade, a TV show so excruciatingly
boring that it looks as though it was produced by PBS with
a major government grant. (Note: it was to comment on the
Rose Parade that national TV networks first brought in
women to serve as "colorful" co-anchors, something for
which the original producers will answer for on judgment
day.) Later in the day, tens of millions of men watch
college football bowl games, most of which settle nothing,
but one of which unofficially determines which major team
was the best during the season -- an exclusively past-
oriented celebration for the new year.

On Thanksgiving Day, only those people give thanks
whose favorite college football team wins the annual Big
Game with the school's major rival.

On Presidents Day, we celebrate the birth of two men
with two things in common: they were born in February, and
they were twice elected President. Because we combine
their birthdays, we learn nothing about either of them.

On Labor Day, nobody works.

On Memorial Day, nobody remembers World War I.

Because there has been insufficient time to transform
the holiday into something else, Martin Luther King Day
still officially honors the birth of Michael King (aka
Martin Luther King, Jr.). About 80% of Americans do their
best to forget, and 10% -- immigrants -- never knew.

This brings me to the Fourth of July. There are no
Fourth of July parades on TV, or anywhere else, as far as I
know. I cannot remember any in my youth.

We have all heard the phrase, "a Fourth of July
oration." Maybe in my parents' day, or my grandparents'
day, but not in mine. I do not recall ever hearing a
single patriotic speech on the Fourth of July.

On July Fourth, we set off fireworks. But fireworks
have nothing to do with the great event of the Fourth of
July. Fireworks are associated with the national anthem,
which was composed for British War II (1812), not British
War I.

Public fireworks are almost always funded by tax
money, since there is no way to keep non-paying viewers
from watching. But as government expenditures go,
fireworks should be the model for all government
expenditures: only once a year, no full-time employees,
funded locally, benefits are not means-tested, access is
first come-first served, no politician gets any credit, no
mailing lists are involved, and Congress always shuts down
during the show.

MOVIES

Americans get most of their knowledge of history from
movies.

Think of the movies about the American Revolution that
were made in Hollywood's golden era. There was. . . .

I can't think of any.

There were a few swashbucklers that were set in the
late eighteenth century, but none of them is about
defending the traditional rights of Englishmen.

I don't count "Johnny Tremain," a 1957 Disney film
based on Catherine Drinker Bowen's novel. It was Hal
Stalmaster's first and last movie. He later decided --
wisely, I think -- that he could make more money as an
actors' agent than as an actor, especially since his
brother owns one of Hollywood's major casting agencies.
The movie isn't bad, but ultimately it was a "Luana Patten,
almost grown up" movie, which did not bode well for it.
(Miss Patten was Disney's late 1940's version of Shirley
Temple, except that she couldn't dance or sing.)

Of course, there is "The Patriot." It doesn't deal
with ideology. It's initially the story of a politically
uninvolved man who is trying to save his son from a
murderous Redcoat. A similar theme governs "Revolution,"
with Al Pacino. It is about a man who wanted no part of
the war, but whose son gets persuaded to sign up, so he
signs up to protect his son. His patriotism grows out of
the war experience. It does not precede it.

"The Last of the Mohicans" is about Mohicans. Its
soundtrack is more memorable than its script.

There are more movies about Wyatt Earp than about
Thomas Jefferson or George Washington.

Let's face it: movies about people who write with
quills don't make a lot of money. This is why there are
not many French Revolution movies, either.

THE WORLD WE HAVE LOST

For most Americans, the story of the American
Revolution is more like a series of museum displays with
toy soldiers than a series of events that grab our
collective imagination. Other than George Washington, the
most famous general of the American Revolution is Benedict
Arnold. In third place is Gentleman Johnny Burgoyne. He
was a Brit, and he is famous only because of "Gentleman."

In my library are boxes of microcards. Each card
contains tiny images of up to 200 pages. On these cards is
every document published in the United States from 1639 to
1811. Yet I rarely consult those cards. I have shelves of
books on the American Revolution. I rarely pull one of
them down and read it. I read McCullough's "John Adams,"
but so did a million other people -- or at least they
bought the book. Thirty years ago, I earned a Ph.D. with a
specialty in colonial American history, although my sub-
specialty was New England, 1630-1720, not the American
Revolution. But even for me, the events and the issues of
1776 have faded. Think of the average American high school
graduate, whose history class spent two weeks on the
American Revolution two decades ago.

There was a slogan: "No taxation without
representation." How did that slogan turn out? In 1776,
there was no income tax. So, we got our representation,
but taxes today are at 40% of our income. Washington
extracts 25% of the nation's output. In 1776, taxes
imposed by the British were in the range of 1% in the
North, and possibly 3% in the South. I'm ready to make a
deal: I'll give up being represented in Washington, but
I'll get to keep 74% of my income. I'll work out
something else with state and local politicians. Just get
Washington out of my pocket.

Jefferson put these words into the Declaration of
Independence:

He has erected a multitude of New Offices, and
sent hither swarms of Officers to harrass our
people, and eat out their substance.

He had no idea. Not counting troops, who were here to
defend the Western territory from the French after 1763,
the number of British officials was probably well under a
thousand. They resided mainly in port cities, where they
collected customs (import taxes): Boston, New York,
Philadelphia, and Charleston. The average American had
never met a British official in 1776.

By any modern standard, in any nation, what Jefferson
wrote in the Declaration to prove the tyranny of King
George III would be regarded by voters today as a
libertarian revolution beyond the dreams of any elected
politician, including Ron Paul. Voters would
unquestionably destroy the political career of anyone who
would call for the restoration of King George's tyranny,
which voters would see as the destruction of their economic
security, which they believe is provided only by
politicians and each other's tax money.

I have therefore revised the Declaration of
Independence, in order to make it conform to the prevailing
American view of liberty and justice for all. You may read
my revision here:

http://www.lewrockwell.com/north/north110.html

This is why the documents of the American Revolution
make no sense to us. We read the words and marvel at the
courage of those who risked their lives, fortunes and
sacred honor by signing the Declaration. But we cannot
really understand why they did it. We live under a self-
imposed tyranny so vast, so all-encompassing by the
standards of 18th-century British politics, that we cannot
imagine risking everything we own in order to throw off the
level of government interference suffered by the average
American businessman in 1776, let alone the average farmer.

If we could start politically where the Continental
Congress started in 1775, we would call home the members of
that Congress. We would regard as crazy anyone who was
willing to risk a war of secession for the sake of throwing
off an import tax system that imposed a 1% burden on our
income.

The Declaration of Independence points a finger at us,
and shouts from the grave on behalf of the 56 signers:
"What have you done? What have you surrendered in our
name? What, in the name of Nature and Nature's God, do you
people think liberty is all about?"

We have no clue. American voters surrender more
liberty in one session of Congress than the colonists
surrendered to the British crown/Parliament from 1700 to
1776.

We do not read the documents of the American
Revolution. They make us uneasy and even guilty when we
understand them, and most of the time, we do not understand
them. They use language that is above us. The common
discourse of American politics in 1776 was beyond what most
university faculty members are capable of understanding.

You think I'm exaggerating. I'm not. My friend
Bertel Sparks used to teach in the Duke University Law
School. Every year, he conducted an experiment. He wanted
to put his first year law students -- among the cream of
the crop of American college graduates -- in their place.

He assigned an extract from Blackstone's Commentaries
on the Laws of England. This was the most important legal
document of the American Revolution era. It was written in
the 1760's. Every American lawyer read all four volumes.
It was read by American lawyers for a generation after the
Revolution. Sparks would assign a section on the rights of
property. He made them take it home, and then return to
class, ready to discuss it.

When they returned, they could not discuss it. The
language was too foreign. The concepts were too foreign.
The students were utterly confused.

Then Sparks would hold up the source of the extract
from Blackstone. The source was the Sixth McGuffey reader,
the most popular American public school textbook series of
the second half of the 19th century.

That put the kiddies in their place.

If you want to be put in your place, pick up a copy of
the Sixth McGuffey reader and try to read it.

Try to read the "Federalist Papers." These were
newspaper columns written to persuade the voters of New
York to elect representatives to ratify the Constitution.
These essays were political tracts. They were aimed at the
average voter. Few college graduates could get through
them today, so students are not asked to read them in their
American history course, which isn't required for
graduation anyway.

* * * * * * * * * * * * * * * * * * * * * * * * * * *

WHAT HAVE WE DONE TO OURSELVES?

Our march into what Jefferson would have described as
tyranny has been a self-imposed march. Voters today would
be unwilling to go to war to restore the Declaration's
ideal of liberty. In fact, Americans would go to war to
keep from having the Declaration's ideal of liberty from
being imposed on us. By today's standards, King George III
was indeed a madman: a libertarian madman, a character out
of an Ayn Rand novel that never got published. On politics
and economics, Jefferson was madder than King George.

Forty years ago, Stan Freberg produced an LP record,
"Stan Freberg Presents the United States of America." It
was a musical. Freberg is one of America's great comic
geniuses, but he spent most of his career after 1962
creating advertisements.

In the musical, Thomas Jefferson comes to Ben Franklin
to persuade him to sign the Declaration. Franklin reads it
over briefly. Then he refuses to sign. Why not? asks
Jefferson. "It sounds a little pinko to me," Franklin
replies. Also, there was the question of spelling.
Franklin asks: "Life, liberty, and the perfuit of
happineff?"

It was a funny skit, and the music was really good.
(The song for the first Thanksgiving, "Take an Indian to
Lunch," remains my favorite.) But "pinko," Jefferson
wasn't. Calling for secession was not the same as calling
for a social revolution. The revolutionaries were calling
for secession in the name of traditional rights of
Englishmen. They were calling for a reversal of a slow-
motion political revolution by the Parliament, an erosion
of political rights. They saw themselves as conservatives
involved in a counter-revolution.

They won the battle. We have lost the war.

Generation after generation, Americans have imposed
taxation with representation. We could use less taxation
and less representation. But voters believe in lots of
representation and lots of taxation to match. Voters elect
more politicians, who then hire far more officials, than
King George ever thought about sending to the colonies.

Voters send these politicians off to the various
capital cities with a mandate: "Bring more swag back home
than those other crooks extract from us." Voters hand a
credit card to their representatives and tell them: "Make
sure the bill that you send to us at the end of the year is
less than the value of the loot that you send to us." So,
the bills keep getting bigger. We think Garrison Keeler is
funny with his description of Lake Wobegon: "Where all the
children are above average." But we all want our elected
representatives to keep our tax bills below average.

Cartoonist Walt Kelly drew "Pogo" for decades. "Pogo"
was probably the most politically sophisticated of all
American comic strips, including "Doonesbury," although not
the funniest. Kelly immortalized a phrase, which he put
into the mouth of Pogo Possum: "We have met the enemy and
he is us." The statement rings true because it is true.
We did it to ourselves.

This is why the American Revolution seems like a
museum display. Our hearts may be with those men of old,
but our minds are not. We live in a fundamentally
different world. Europe is on the far side of Marx and
Engels, while we are on the far side of Wilson and
Roosevelt.

My professor, Robert Nisbet, remarked in an
autobiographical passage in one of his books that when he
was born, in 1913, the only contact that most Americans had
with the Federal Government was the Post Office. It was in
that year that the first income tax forms were mailed out.
Take a look at the original Form 1040. Consider that the
average American family in 1913 earned less than $1,000 a
year. Then look at the tax rates.

http://www.salestax.org/library/1913form1040.html

We say that we want our high school graduates to be
familiar with American history. But do we? Really? The
history of America is the story of our surrender to a
philosophy of government that was alien to the West in
1776. What Jefferson regarded as a tyranny worth dying to
oppose, American voters today regard as a world so unjust
economically that no moral person would want to live in it,
let alone risk his life and wealth to obtain it for himself
and his posterity.

Voters get what they think they really want. When
things turn out badly, they re-think what it is that they
really want.

What the signers of the Declaration of Independence
really wanted was the right of self-government, beginning
with individual self-government. To achieve this, they
demanded the right of home rule politically. They fought a
war to attain this.

We have used home rule to place above us men whose
views of the rights of citizens Jefferson would have
regarded as beyond anything King George III dreamed of in
his madness.

Millions of voters who regard the present social and
political order as morally valid are not interested in
telling the story of the Revolution from the words of those
who began the fight. They elect Superintendants of Public
Instruction to hire teachers who also do not like that
story. The senior bureaucrats then ask these teachers to
abandon the teaching of the story of America prior to 1900,
and substitute social studies.

I am not exaggerating. The battle at the state level
to retain the teaching of American history prior to 1900
has been going on in Texas high schools for over a decade.
Texas public schools buy so many textbooks that what Texas
does -- along with New York, California, and Illinois --
determines what the rest of the nation's students will be
taught. The state of Texas allows a committee that
includes laymen to sit in judgment on the textbooks. This
is why Mel and Norma Gabler have been able to inflict so
much economic pain on liberal textbook publishers for the
last 25 years. But theirs is at best a holding action.

http://members.aol.com/TxtbkRevws/about.htm

http://members.aol.com/TxtbkRevws/moreinfo.htm

CONCLUSION

The story of America is the story of this nation's
self-imposed abandonment of the Declaration of
Independence. This is why the story of the Declaration is
rarely taught in school, and is taught badly when it is
taught.

If you want to re-gain your liberty, a good place to
begin is with the primary source documents of the world
that existed a century before the Declaration was written,
before the kings of England meddled very much in colonial
affairs. It is hard to believe, but Jefferson would have
been regarded as a little bit pinko in 1676.

That is the world we have lost. Fireworks won't get
it back.

Home schooling just might.

darkhorse

(07/04/2002; 14:16:23 MDT - Msg ID: 79907)

Discovery channel this afternoon

Y'all oughta check out the show they're running about Fort Knox. It's somewhat long in the tooth, but listen to some of the crap they shell out about physical audits and who they "hired" to do them. I haven't heard this much crap coming out of my TV since the last presidential conventions. This should air again a couple times tonight and into early tomorrow morning.

USAGOLD / Centennial Precious Metals, Inc.

(07/04/2002; 15:34:37 MDT - Msg ID: 79908)

Have a Happy 4th of July -- An Independence Day thought...

"For as long as cannons have thundered,
they have echoed
with the sound of men yearning for gold."

-- R. Strauss

Black Blade

(07/04/2002; 16:20:29 MDT - Msg ID: 79909)

The Barbarous Relic Files - Sea hunt for Cromwell's stolen gold

http://www.telegraph.co.uk/news/main.jhtml;$sessionid$3C2KF3IAALPCZQFIQMGSFFWAVCBQWIV0?xml=/news/2002/07/04/ntreas04.xml&sSheet=/news/2002/07/04/ixhome.html&_requestid=594727&_requestid=610359
Snippit:

A search for a fleet of 60 sunken Cromwellian ships carrying treasure worth up to �2.5 billion was launched in the River Tay yesterday. Scientists and bounty hunters hope to locate the fleet, which sank in stormy seas at the mouth of the river, after Oliver Cromwell's troops had sacked Dundee in 1651 and slaughtered 500 people.

Historic documents show that the ships were laden with the treasures of wealthy families from Angus, Fife, Perthshire and Edinburgh, which had been taken to Dundee for safekeeping. Yesterday the Coventry-based diving firm of Subsea Explorer began a 10-week search for the cache, which has been lying at the bottom of the Tay for more than 350 years.

Ornamental plates, gold and silver coins and religious artefacts plundered from churches and monasteries all over Scotland are believed to make up the riches on the seabed. General Monck's army devastated Dundee as part of Cromwell's campaign to suppress Royalist support in Dundee, Aberdeen and Stirling.

Black Blade: This appears to be quite an effort over a few "barbarous relics". Hmmm�

Black Blade

(07/04/2002; 16:36:15 MDT - Msg ID: 79910)

Newmont predicts gold in multi-year uptrend

http://www.nationalpost.com/financialpost/story.html?id={6B773E44-BD86-478B-818F-FE83928A3145}Newmont predicts gold in multi-year uptrend
U.S. dollar decline, trade deficit drive appreciation

Snippit:

MONTREAL - Pierre Lassonde, president of Newmont Mining Corp., the world's biggest gold miner, said yesterday the metal is in a "multi-year" uptrend because of weakness in the U.S. economy and political turmoil. "Gold at around US$320 an ounce is already at a five-year high with the U.S. current account deficit running at an unsustainable 5% of gross domestic product and a 10% decline in the U.S. dollar," he said in an interview before receiving the Ecole Polytechnique's 24th Prix M�rite for professional excellence.

"I base my prediction on fundamentals and it'll take two years to wring the excesses out of the U.S. system," said Mr. Lassonde, co-founder of Franco-Nevada Mining Corp. Ltd. and former manager of two successful gold funds. "There are more WorldComs to come." The U.S. needs a US$1.3-billion daily inflow of foreign currencies to maintain its former exchange rate but is getting only half that with the collapsing stock market, economic uncertainty, rock-bottom interest rates and an international flight to bullion, he said.

Black Blade: He also states that the increasing money supply will result in high rates of inflation. I agree that we are in a long term trend of higher gold prices. We may find some short term resistance as bankers and fund managers desperately search for a way out of the derivatives hole they dug for themselves.

Mr Gresham

(07/04/2002; 17:17:00 MDT - Msg ID: 79911)

Holy Gibberish Batman!

Troy Boy -- Thanks -- GN really hit it today. The big big BIG picture. Battle won; war lost. Founding Fathers have been sold out. No reason why the biggest Empire on earth would not also contain the most corruption, veiled of course by the finest rhetoric ever deployable in its service. Conduct the rest of your life accordingly...

Did Rumsfeld really say this? (as quoted by Bill Bonner): Donald Rumsfeld reflects on the WAT: "There are no
knowns," said the Secretary of Defense. "There are
things we know that we know. There are known unknowns,
that is to say there are things we now know we don't
know. But there are also unknown unknowns, things we do
not know we don't know."

We are truly through the Looking Glass -- and not in Kansas anymore, either. (But then, I'd say, "destroying the village" -- in Vietnam -- "in order to save it" was pretty far gone, too.) Idiots with guns -- no wonder Gladiator was such a hit -- Man In Combat has comparatively looked pretty pathetic since gunpowder arrived.

Bonner continues: "The people of Kakarak rediscovered a "known" a couple of days ago: a bomb dropped from an American warplane into a wedding party does a lot of damage. Le Monde reports as many as 40 people killed.

"*** What will happen next? What unknown unknown unknowns
await the unwary? Will the gods look with favor on
people who drop bombs on nuptial ceremonies? ..."

Was Osama's name on the invite list, d'ya think? (What a tip-off!)

What was ANYBODY thinking?

Hmmmm...I smell BOB-e-que, comin' through my window!

misetich

(07/04/2002; 18:07:55 MDT - Msg ID: 79912)

ECB Duisenberg: No Discussion of Correct Size of FX/Gold Rsvs

Full article - subscription

ECB Duisenberg: No Discussion of Correct Size of FX/Gold Rsvs> Jul 4 / 9:32 EDT

LUXEMBOURG (MktNews) - ECB President Wim Duisenberg said Thursday
there is currently no discussion concerning the appropriate size of
foreign currency and gold reserves in the euro-system.

Asked at the press conference following the ECB's governing council
meeting how much foreign currency and gold a strong euro currency
requires, Duisenberg said the euro system contained enough foreign
currency reserves to cope with "any disaster."

"Inside the euro-system, there is no discussion and there can also
be no conclusion about what precisely should be the appropriate size of
the reserves of the euro system," Duisenberg said.

"We are in the happy position that the euro system contains or
holds so much foreign currency reserves that it will at all times be
equipped to meet any disaster which might loom over the horizon.

"The holdings are no prohibition for whatever action we might want
to take," he said.

Duisenberg noted the foreign currency and gold reserves of the euro
system are "inherited from the past, sometimes during hundreds of
years," he said.

--Frankfurt Newsroom. Tel: +49-69-720-142 Email: fftmail@marketnews.com

[TOPICS: M$$EC$,MT$$$$,M$X$$$,M$$FX$]

Misetich

Duisenberg said the euro system contained enough foreign
currency reserves to cope with "any disaster." -Duisenberg noted the foreign currency and gold reserves of the euro
system are "inherited from the past, sometimes during hundreds of years," he said

Euro system has gold to cope with "any disaster" - do you?

Black Blade

(07/04/2002; 18:29:28 MDT - Msg ID: 79913)

More Wall Street Jobs Threatened

http://biz.yahoo.com/rb/020704/markets_stocks_brokerages_1.html
Snippit:

NEW YORK (Reuters) - Wall Street firms have pinned their hopes on a stock market rebound to boost business, but they could end up cutting thousands more jobs if things don't get better.Major U.S. stock gauges are at multiyear lows amid high-profile accounting scandals, corporate profit worries and distrust of Wall Street itself. Still, even after a vicious series of layoffs, there are 118,000 more jobs on Wall Street today than five years ago.

Black Blade: It looks a lot like there is plenty of fat to trim on Wall Street. There's just way too many nonessential bankers and brokers. BTW, with online investing who the hell needs a broker these days? Arn't they redundant?

sector

(07/04/2002; 18:34:09 MDT - Msg ID: 79914)

LA Airport Fatal Ticket Counter Attack..Israeli El Al was the target... from debka.com

...the dead shooter was a 52 year old arabYakov Aminov, 46, and 20-year Old Ground Hostess �
Both from Los Angeles � Died in Shooting
Attack Thursday at El Al Ticket Counter of
Los Angeles Airport

The Gunman Described as Arab Aged 52
Was Shot Dead by El Al Security Guards
Haim Sapir, Head of El Al Security, Sustained
Stab Wounds When He Tackled Gunman

Six More Wounded from Line Waiting to Board
El Al 106 to Tel Aviv Via Toronto

FBI Takes over Investigation, Holds One or Two Suspects,
Declines to Ascribe Attack to Terrorists

Israeli Official Spokesmen Insist This Was Act of Terror

In Separate Incident Thursday,
Pilot of El Al Flight 615 from Tel Aviv to Moscow
Reports Ground-to-Air Missile Shooting Past
Right Side of His Plane and Bright Flash
Plane Landed Safely in Moscow
+++++++++++++++++++++++++
Note the part where the FBI declines to link the attack to terrorists...the most chilling part of the story.

Black Blade

(07/04/2002; 18:40:44 MDT - Msg ID: 79915)

Four convicted of armed robbery have their hands and legs amputated.

http://biz.yahoo.com/ap/020704/libya_sharia_amputations_1.html
Snippit:

CAIRO, Egypt (AP) -- Libyan authorities have amputated the right hands and left legs of four armed robbers in accordance with Islamic law, Libyan radio reported Thursday. The four men had been convicted of robbing a Chinese oil exploration company in the district of Muradah, 750 kilometers (470 miles) southeast of the Libyan capital of Tripoli, on April 30. They assaulted members of the company's personnel, fired shots to frighten them and stole vehicles, telecommunications sets, food and fuel, the state radio said in a report monitored by the British Broadcasting Corp.

Black Blade: Well at least it would solve the prison overcrowding problem. Something to consider � come now, lets give these guys a hand. Hmmm�

sector

(07/04/2002; 18:59:59 MDT - Msg ID: 79916)

India/Pak Tensions...On the Way Back Up

http://www.jang.com.pk/thenews/index.htmlIndian army warns of action if Pakistan does not end 'terrorism'

New Delhi rules out further de-escalation

NEW DELHI: India's army chief said on Thursday New Delhi would be left with no option but to take "some action" if Pakistan did not end cross-border infiltration into disputed Kashmir.

"My troops are there (at the border). Their troops are on the border," said General S Padmanabhan, as quoted by the Press Trust of India (PTI) news agency. "The reason for which we stood out there for six to seven months now is that we wanted this infiltration and cross-border terrorism to stop ... it continues. If it does not stop ... we have to take some action."
[�]
He said despite the promises made by President Pervez Musharraf to end infiltration, there had been five recently aborted attempts by militants to cross the Line of Control. According to army estimates, around 107 militants had sneaked into Kashmir in recent weeks, he added.
++++++++++++++++++++++++++++

Try to see clearly into the future.

timbervision

(07/04/2002; 23:49:14 MDT - Msg ID: 79917)

Belgian, miner49'er, Aristotle, ....... et al

http://www.gold-eagle.com/editorials_02/tlaga070402.htmlIn the provided link, the author seems to discount the inevitability of the eventual revaluation of gold. What do you think of his "In reality" points? What is he missing?

....""Not a few among us have been distracted into endless driving around intellectual cul-de-sac centered on the belief that gold price manipulation must inevitably collapse into a financial meltdown of infernal proportions, by which the market forces will ultimately reassert themselves and will thwart the machinations of the gold cabal when gold will hit again $800 per ounce or more. It is not the first time in history for the helpless to seek solace in the concept of inevitability of the triumph of good over evil. In reality: (1) central bank gold is sold outrightly for US Treasury securities which means that central banks will never call in their gold "loans"; (2) some trillion dollars were erased by NASDAQ dot.com bubble alone which means Regular Joes and Plain Janes simply cannot buy physical gold; (3) Congressionally injected compulsory cash settlement clauses into gold contracts will ratify already existing practice to allow orderly unwinding of the gold derivatives pyramids if those invested in paper gold would elect en masse to take physical delivery.

Similar innocence about the real state of affairs is present in the thought that derivative pyramid of notional value exceeding twenty trillion dollars accumulated by JP Morgan Chase must lead to cataclysmic downfall of the entire financial system. In reality, when divided by the outlandish leverage ratios (inadvertently disclosed by LTCM debacle) this score of trillions translates into few scores of billions, which can be settled with few clicks on Alan Greenspan's computer. (When pyramid of derivatives is netted, no one is "too big to bail"; whatever was done by a few clicks on Alan Greenspan's computer, can be undone by a few clicks on Alan Greenspan's computer.) Furthermore, derivatives written by JP Morgan Chase are mostly interest rate derivatives written from the position of advance notice of the interest rate changes, meaning, no risk is involved because the entire game is played under the roof of one and the same rigged casino.""....

Black Blade

(07/05/2002; 00:19:19 MDT - Msg ID: 79918)

Hedge fund manager warns of derivatives time bomb

http://money.telegraph.co.uk/money/main.jhtml?xml=/money/2002/07/03/cndye03.xml&sSheet=/money/2002/07/03/ixcity.html
Snippit:

Tony Dye, the fund manager dubbed Dr Doom for his pessimistic outlook on stock markets during the technology boom, warned yesterday of a "lurking time bomb" of creative accounting in the derivatives market. The value of contracts in the over-the-counter derivatives market has hit $110 trillion (�72 trillion), he said, with the market now worth three times the global economy.

Now an independent hedge fund manager, Mr Dye reckoned that the end of 10 years of a bull market in the 1990s was exposing "the aggressiveness of chief executives and accountants in creating fictitious numbers". He warned: "We're getting into that period when we'll see all the fraudulent practices come to the surface. I'd like to remind people that in 1991-1992, people didn't realise that Japanese banks were almost bankrupt."

Black Blade: I have already posted this, however, it is worth another look.

Black Blade

(07/05/2002; 00:30:04 MDT - Msg ID: 79919)

Argentina Central Bank Says 50% of Banks May Close, Papers Say

http://quote.bloomberg.com/fgcgi.cgi?touch=1&btitle=Top%20News&T=sa_content.ht&s=APSQ2exTtQXJnZW50
Snippit:

Buenos Aires, July 4 (Bloomberg) -- Half of Argentina's 86 banks may shut or be merged during the next several months as the country attempts to rebuild its financial system after defaulting on debt and devaluing the peso, Central Bank President Aldo Pignanelli told newspapers.

Black Blade: Looks bad for Argentina. Many Argentines are going to lose everything. Definitely, get outta debt (and stay outta debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. If it can happen in the European-style oasis of Argentina, it can happen about anywhere. Next is Brazil, Colombia, Uruguay and Venezuela.

Black Blade

(07/05/2002; 00:44:30 MDT - Msg ID: 79920)

Why It's Not A Bottom

http://www.comstockfunds.com/index.cfm?act=Newsletter.cfm&CFID=1465543&CFTOKEN=98037047&category=Comstock%20Daily%20Comment≠wsletterid=761&menugroup=Home&aol=1

Snippit:

In our view the market is still along way from making a major bottom. Summing up our recent comments, here are our reasons.

Black Blade: Short concise to the point article. Exactly what I have been saying. The US markets have a very long way to go yet before hitting bottom. As I watched CNBC yesterday, I noticed that reporter Bob Pissani appeared to be beside himself wondering why almost all the emails were so pessimistic about the US economy and stocks in general, Nearly all the call in viewers were people who lost big in the market and who saw diminished returns on their 401K statements. This must have been a surprise to the trolls at CNBC as nearly every caller had no confidence in Wall Street. Bob Pissani also noted that there was a large number of people inquiring about Gold and Real estate as alternatives. Yet poor old Bob had no clue as to what to think. This market crash has much further to go.

Black Blade

(07/05/2002; 00:53:50 MDT - Msg ID: 79921)

Sour markets hit mutual funds hard - Net redemptions soar

http://www.nationalpost.com/financialpost/story.html?id={CE0CB275-D26B-4240-B458-0A02A5C11D37}
Snippit:

The sour mood in the stock markets hit the country's mutual fund industry with a thud last month, as managers reported more than $1-billion in net redemptions -- a massive jump from May and one of the worst months on record. "It appears investors' lack of confidence in the markets is the major contributing factor to the declining sales," said Tom Hockin, IFIC president and chief executive. June marks the third straight month in which investors took more money out of mutual funds than they entrusted to them, and it represented a radical increase in the volume of redemptions, to the deepest level since at least the mid-1990s.

Black Blade: It is called "running for the exits". Investors have lost confidence in the alleged "economic recovery". When investors cash out their 401K investments into money market funds (actually many have), then we will eventually see the so-called capitulation of the investor. We have not even come close yet.

Black Blade

(07/05/2002; 01:02:23 MDT - Msg ID: 79922)

401(k) proves risky business

http://www.boston.com/dailyglobe2/185/business/401_k_proves_risky_business+.shtml
Snippit:

Lots of new investment ideas hatched and thrived during the relentlessly bullish stock market of the past 20 years. Defined contribution retirement plans were near the top of the list. Unlike traditional pensions, these plans offer no guarantees on an eventual benefit. Some defined contribution plans are a supplemental benefit but many others are not.

Black Blade: Nothing in life is certain. That includes long term retirement investments. The only one you can count on in life is yourself.

Black Blade

(07/05/2002; 01:07:08 MDT - Msg ID: 79923)

Crash Test

http://www.msnbc.com/news/776029.asp
Snippit:

As markets dip to their lowest level in years, some wonder whether the crisis in corporate confidence could trigger a far more serious downturn.

Black Blade: Where there's one cockroach, there are definitely many more.

Black Blade

(07/05/2002; 01:14:33 MDT - Msg ID: 79924)

New SEC Order Forces CEOs to Swear Firm's Numbers are Correct

http://biz.yahoo.com/djus/020705/200207050050000033_2.html

A new SEC order requires CEOs and finance chiefs to swear under oath in writing that the numbers in their companies' financial reports are correct, Friday's Wall Street Journal reported. In a little-noticed move amid the din of corporate-accounting scandals, the Securities and Exchange Commission last week implemented the order that could have major implications -- civil penalties or jail time -- for errant chief executive officers and chief financial officers at the nation's biggest companies. It also could lead to a spate of financial restatements in the next few weeks as companies scramble to review their recent results....

Black Blade: It appears that these charlatans wit the title CEO could do time if they follow in the footsteps of Ken Lay, Jeff Skilling, etc., as well they should.

Black Blade

(07/05/2002; 01:25:24 MDT - Msg ID: 79925)

'Corporate America has been lying for years'

http://www.observer.co.uk/business/story/0,6903,746373,00.html
The victims: Disillusioned small investors are giving up on equities and turning to cash

Snippit:

The poisonous fallout from the WorldCom collapse will further undermine the confidence of millions of homeowners, pension savers and small-time share traders in a financial system already shaken by scandals. 'This time no one believes earnings. Corporate America has been lying for years.'

Black Blade: If you haven't already, bail out while you can. It will definitely get much worse. Go defensive until the carnage is over. These cockroaches are everywhere in American business. There will be more scandals � especially now that the SEC has required a review of corporate balance sheets and the "Big Five" (formerly "Big Five") accounting firms are less likely to cook the books in the current environment. It's going to get very ugly. Who can blame the small investor for making tracks with his cash? They are simply fed up. You know some of that cash will find its way to precious metals.

Black Blade

(07/05/2002; 01:57:02 MDT - Msg ID: 79926)

AurionGold rejects Placer Dome bid

http://biz.yahoo.com/rc/020705/minerals_aurion_placer_2.html
Snippit:

SYDNEY, July 5 (Reuters) - Takeover target AurionGold Ltd said on Friday it recommended shareholders reject a scrip takeover offer from Canada's Placer Dome Inc (Toronto:PDG.TO), saying the market continued to top Placer's bid by a large margin. "Each of your directors who has an interest in AurionGold shares intends to reject the offer, and does not intend to sell on market," chairman Dick Warburton said in a statement.

Black Blade: Jilted and left at the alter. These two mega hedgers were well suited to each other. Hmmm�

Black Blade

(07/05/2002; 03:13:19 MDT - Msg ID: 79927)

"Scandal Of The Day" - Qwest Focus Of Criminal Probe

Just out on the wire is that Qwest Communications is the focus of an FBI led criminal probe. No details are released yet. This follows on news that SBC will pay a $27 million fine for cheating customers. Not a good day for telecoms.

Markets futures are screaming higher with the DOW up 100 points, Nasdaq up 15 and the S&P 500 up 11. However, the premarket action is extremely thin so it could change rapidly and violently before the open.

"Interesting Times"

- Black Blade

steady

(07/05/2002; 04:51:55 MDT - Msg ID: 79928)

NEWS MEDIA SILVER BLACKOUT!

http://www.silver-investor.com/NEWSMEDIASILVERBLACKOUT.htm its kinda long but it does show the relationships . kinda like a chain of command for the oppression. interesting weekend reading material.\

snip
Be assured at the outset that the following report is far from complete; and that certain details not mentioned here are subject to being released at a future date, possibly at another website if appropriate. This is not a limitation on the part of Silver Investor; rather, at this time, the threshold of controversy needs to be expanded to a certain boundary and no further. Sorry to tantalize you! In case anyone has wondered---I have never functioned as an informal voice on behalf of any silver company, there is no editorial consultation; views expressed are those of private investor and concerned individual. For the time being, consider this as an introductory outline of subversion in the mass media concerning the precious metals markets, and what kind of noises we may expect to hear from these allegedly distinguished sources (the awards they have come from one another) as silver enters (visible) crisis phase in 2002 and triggers earthquakes and lightening also in gold and platinum. This subversion consists mainly in what they have failed to tell the public---that these markets are manipulated, and a crisis is unavoidable. What little is said about silver is mostly falsehoods---there are few new uses for silver, demand is falling, and the fundamentals are poor or weak.

Black Blade

(07/05/2002; 06:37:41 MDT - Msg ID: 79929)

"Bone Pile" Grows

Just over the wire - Unemployment for June grows to 5.9%. March and April revised downward to losses from positive job growth. This is definitely not good as the last couple of months show a continued trend of job losses. It is difficult to have job creation in a deepening recession. Now analysts (per CNBC) are calling for more job losses in the second half of the second half of the year.

- Black Blade

YGM

(07/05/2002; 08:30:26 MDT - Msg ID: 79930)

Looks like a great day for the Cashing Out Crowd....

Lots of Buyers 'Think' it's a Great Day Also....Guess it just may be a buying day if you can outlive the BearMarket for possibly years to come. What a wild bunch investors are. Just as diverse in opinions as the 'Anal-ysts' they continue to feed and hang from....YGM

"Gold has no Opinion, just Reality of Sound Money"
"GO GATA"

goldquest

(07/05/2002; 08:47:43 MDT - Msg ID: 79931)

Stock Decline to Resume on Monday

http://home.flash.net/~rhmjr/index.htmlA bleak picture if you are not in PMs.

sector

(07/05/2002; 09:31:26 MDT - Msg ID: 79932)

IMF chief hints at action on the dollar...[A Gold Proxy]

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1025793319713&p=1012571727088By Scheherazade Daneshkhu and Chris Giles in London
Published: July 4 2002 22:13 | Last Updated: July 4 2002 22:13

The International Monetary Fund could seek international co-ordination of exchange rates if nervousness in currency markets led to a run on the dollar, Horst K�hler, IMF managing director, signalled on Thursday.

In an interview with the Financial Times, Mr K�hler said he was cautious about advocating intervention but, if the dollar were to fall rapidly and in a disorderly fashion, "no intervention at all is not the right answer".

The dollar has fallen by 12 per cent against the euro since January, almost reaching parity last week. On Thursday, it rose slightly, ending European trading at $0.9793 to the euro.

But risks to the dollar continue as currency markets remain nervous about the state of the US economy and, in particular, the current account deficit.

The last time exchange rates were co-ordinated was in September 2000 when central bank intervention slowed the slide of the euro. The current US administration has been opposed to currency intervention, maintaining that the market should determine exchange rates. Japan has frequently intervened to weaken the yen.

The IMF supported intervention in the 1980s through the Plaza and Louvre international agreements but large-scale global currency management fell out of favour in the 1990s.
+++++++++++++++++++++++++++++++++++++++++++++++++++++

Another bluster from the IMF. After steam rolling Argentina they now set their sights on the currency markets.

Statements such as this are equivalent to those by Ernst Weltke of the Bundesbank that Germany will sell it's gold. Never mind that they have already sold it.

Though this release covers the $USD, it really is about gold and as such is another example of cabal weakness. I have been waiting for something like this as a CLEAR signal that the Russian gold "Ammo clip" has run out and now must be replaced by jawboning.

RobotGuy

(07/05/2002; 09:43:17 MDT - Msg ID: 79933)

Alas! Forgive me for I have been on vacation.

A close friend of mine from Italy was looking at a one ounce silver maple leaf I had sitting out, and I know he likes Canadian coins so I gave it to him. Low and behold it appears as if the silver maple leaf may wander right back to me!

Thank-you Gandalf for all of your hard work, and the panel of judges of which I wouldn't be paid to be a member. Your task was a gruelling one at best.

I can honestly say that I am honoured to be considered for such a prize.

Cogratulations all winners!!

I shall now return to the largest freshwater beach in all of the world and soak up more golden rays!

Cheers!

RobotGuy

YGM

(07/05/2002; 10:08:22 MDT - Msg ID: 79934)

Noteworthy.....Thanks (justingold.2)

http://www2.marketwatch.com/news/story.asp?guid=%7B956B3D22%2DD570%2D4AF8%2DB634%2D27253CBBED68%7D&siteid=mktwThe World Gold Council, which sponsors gold-denominated bonds, is working on plans for an exchange-traded fund for the actual metal. If the council, a trade group, succeeds in navigating regulatory waters, investors would be able to buy gold in the shape of a security at any time during the U.S. market day.

http://www2.marketwatch.com/news/story.asp?guid=%7B956B3D22%2DD570%2D4AF8%2DB634%2D27253CBBED68%7D&siteid=mktw

del Norte

(07/05/2002; 10:29:46 MDT - Msg ID: 79935)

gold and silver portfolio insurance

Tell me about gold and silver portfolio insurance? How does it work? Who sell it? Recommended co.'s? How much is the coverage? Thanks. del Norte.

Gandalf the White

(07/05/2002; 11:08:26 MDT - Msg ID: 79936)

WELCOME Sir Del Norte ! (and now some suggestions)

del Norte (07/05/02; 10:29:46MT - usagold.com msg#: 79935)
gold and silver portfolio insurance
======
YES, USAGOLD/Centennial Precious Metals sells this type "insurance" !! This is not as you are thinking, BUT PHYSICAL inhand Gold and/or Silver coins and/or BULLION !!
Please stick around the TABLEROUND for a while and you will understand better why one needs such "portfolio insurance" !!! AND, if you desire referrences, ask anyone from Argentina or Turkey.
<;-)

Chris Powell

(07/05/2002; 11:18:30 MDT - Msg ID: 79937)

Another analyst agrees that U.S. government is capping gold secretly

http://groups.yahoo.com/group/gata/message/1169Gold Stock Analyst's John Doody agrees that
the U.S. government is intervening surreptitiously
in the stock and gold markets:

http://groups.yahoo.com/group/gata/message/1169

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

Mr Gresham

(07/05/2002; 12:05:28 MDT - Msg ID: 79938)

steady's link below

detailing the media blackout on silver, and showing -- page after page after page -- the institutional and family links to the fortunes -- old and new -- and their control of media, banking, and many other industries.

My overwhelming impression is "What a pool of SHARKS the financial world is!", for us little guys to be swimming in. Yeah, we might have a nice day at the beach Saturday, and get eaten on Sunday. These people may nibble at each other once in awhile, but it's for sure the markets do not bend rules in OUR directions to save our paltry sums. No, when WE go down, we're OUT -- until the county tags our toe and puts us away.

Just that these last 10 years or so, a lot of little guys got to feel pretty big. They can't BEGIN to know the PIRATES (literally!) they've gotten themselves in with.

All the more reason to have your assets close at hand in a time of turmoil. Those other ones look like all risk -- and no reward.

YGM

(07/05/2002; 13:46:56 MDT - Msg ID: 79939)

WorldCom Discussion Board

http://www.marketwatch.com/discussions/msgIndex.asp?siteId=yhoo&boardId=17921Lurking like spys is a two way st....There's a discussion board for every soon to be bone pile Co out there and some of the posts are revealing......Have a great wkend all..YGM

Huascar

(07/05/2002; 13:51:27 MDT - Msg ID: 79940)

The spring is getting coiled

OK, first post. I think the correction isn't over yet, but we're already past the halfway mark, and we're getting closer to it's end every day. If the XAU stays at 69, 65 or goes down to 60, who knows.... What I do know is that the lower it goes, the higher it will come back.

We are just experiencing an intermediate term correction. Gold in US$ peaked a month ago, but in Euros, it peaked in February, made a triple top through May, broke down big time during June, and may have started to consolidate.

I think watching the chart of gold in Euros is key here.

YGM

(07/05/2002; 14:02:32 MDT - Msg ID: 79941)

Huascar (07/05/02; 13:51:27MT - usagold.com msg#: 79940)

"Welcome" to this fine but quiet (today) place.....Sounds like you know your stuff...Keep em coming. We definately need more technical opinions around here.
IMNSHO...YGM.

YGM

(07/05/2002; 14:13:33 MDT - Msg ID: 79942)

Calgary Stampede Time......

http://www.stampede.coolattractions.com/Well, it's 80 above and I don't care about the 'Duck'
Got windows in my truck, and I'm off to the Rodeo!!!

Black Blade

(07/05/2002; 14:14:13 MDT - Msg ID: 79943)

A Picture Is Worth A Thousand Words

http://news.bbc.co.uk/hi/english/business/newsid_2093000/2093844.stm
What is the state of the world's stock markets? - see link

Paper Avalanche

(07/05/2002; 14:19:02 MDT - Msg ID: 79944)

PPT / ESF popped the clutch today

painting the tape on low volume is not too hard to do when everyone is away on vacation.

If I were a betting man (and I am), I would bet that we are sub 9,000 again on the DOW within ten trading days. All of the foreigners who have been yanking their capital from US$ markets over the past few months and may have been out of the office today will no doubt see any spike as an opportunity.

Paper Avalanche - it's not just a handle, it's the mathematically inevtiable outcome of a debt based, fiat paper moeny system.

I tried to post this a few minutes ago, and magically as I was about to post this, my computer turned off. Hmmmmm.....

Black Blade

(07/05/2002; 14:36:03 MDT - Msg ID: 79945)

IMF warns over dollar collapse

http://news.bbc.co.uk/hi/english/business/newsid_2097000/2097064.stm
IMF's Koehler: Guardian of global financial markets

Snippit:

The head of the International Monetary Fund, Horst Koehler, has warned that central banks worldwide might need to work together to prop up the US dollar.

Black Blade: That's right. We Americans need more intervention to prop up the US dollar so other countries can benefit. Sheesh.

kludge

(07/05/2002; 14:43:36 MDT - Msg ID: 79946)

Welcome

79930Yes, welcome Huascar!

I too will enjoy reading any technical analysis you care to share, good or bad, short term or long term.

kludge

Henri

(07/05/2002; 14:45:27 MDT - Msg ID: 79947)

Test?

Success!

USAGOLD / Centennial Precious Metals, Inc.

(07/05/2002; 14:52:24 MDT - Msg ID: 79948)

In bookstores for $14.95 (plus tax). Get it here for ONLY $5.95 ($3 postage)!

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

ABCs of Gold by MK "Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.

"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'

"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

TownCrier

(07/05/2002; 15:12:16 MDT - Msg ID: 79949)

Fed Stats -- money supply grows

http://biz.yahoo.com/rf/020705/economy_fed_moneysupply_table_1.htmlYou can call these numbers "money" but you sure can't call it "wealth".

R.

Gandalf the White

(07/05/2002; 15:36:55 MDT - Msg ID: 79950)

WELCOME Sir Huascar !!

Huascar (07/05/02; 13:51:27MT - usagold.com msg#: 79940)
The spring is getting coiled
OK, first post.
===
Looks as if you and the Hobbits are reading the same Crystal Ball ! They love to compare notes with people like you. Don't be a stranger to the FORUM now that you are here.
---
BTW that reminds me !! -- WHERE are you "The Stranger" ? LOST again ?
<;-)

Paper Avalanche

(07/05/2002; 17:25:36 MDT - Msg ID: 79951)

Off topic - a tribute to a truly inspirational man

I was cooking some stir fry dinner when I heard the name Bill Porter as part of a promo for an upcoming movie to air on one of Ted Turner's stations (can't remember if TBS or TNT). In any event, for anyone who has not heard the Bill Porter story, he is one of the truly most inspirational men to have ever lived. If you are in sales, especially, as am I, you will appreciate the Bill Porter story. I was fortunate enough to have been taping a 20/20 story about five years ago when Hugh Downs and Barbara Walters were running the show. It was on that episode of 20/20 that they interviewed Bill Porter, a man who, despite a number of physical conditions that would otherwise encourage others to give up early in life, chose a profession, sales, where he had to overcome his physical impairments to walk from door to door to sell household goods. The Bill Porter story has inspired me the way no other story, or recount of the life of any other person alive today, has. About once a year, when I am ready to call it quits in sales (it is a grind), I put in the VCR tape of the Bill Porter story from that 20/20 episode and it does something to both make me appreciate the few talents that I do have as well as feel like a complete heel for complaining about my job.

I am not a sales man by nature, yet I am relatively successful in sales. This is not a result of any particular talent that I possess. The fact is that I possess few if any talents that make a sales person successful. Rather, I draw my energy to continue to pursue sales from the stories and admonitions of a few men who have lived before me or continue to be alive today. Among them I include:

Bill Porter - that I may never take for granted those few talents that I have, and to never let my lack of particular talents deter me from striving to succeed.

Rush Limbaugh - that I may always strive to achieve a level of excellence as can only be measured by goals that I have set for myself

Thomas Jefferson - to always recognize that eternal vigilence is the price of liberty

My dad - to always realize that nothing too good or too bad lasts too long and to treat every man with respect and dignity

To that end, I strongly encourage anyone who has ever faced any degree of adversity in their lives, whether in a sales position or not, to watch the Bill Porter story which is scheduled to air Sunday, July 14th at 8:00 pm EST on one of Ted's stations.

Have a terrific weekend.
Paper Avalanche

Paper Avalanche

(07/05/2002; 17:34:20 MDT - Msg ID: 79952)

I found a link on google - Bill Porter

http://www.tnt.tv/Title/View4/0,5878,341694%7C3133%7C3195~,00.html

We are but hobbits following in the footsteps of giants on this forum. I am proud to acknowledge Bill Porter as a hobbit who has set a tremendous example for each and every one of us as to how we should set goals in our lives and never, ever retreat from doing what it takes to accomplish those goals despite what obstacles befall us before or after we embark on the journey to excellence.

My thanks to the forum for your indulgence in allowing me to post this.

PA

sector

(07/05/2002; 19:16:42 MDT - Msg ID: 79953)

David Tice and His Latest Essay...A Classic

http://www.newsmax.com/archives/articles/2002/7/3/184149.shtml[...]
The upshot has been an unprecedented explosion of non-productive debt, along with an underlying maladjusted economy with little capacity for generating sufficient cash flows when these speculative flows inevitably reverse.

Like Argentina, we see in the U.S. all the necessary ingredients for an inevitable run against U.S. financial claims. Again paralleling Argentina, debt growth has greatly surpassed GDP growth, while consumption and not true economic investment has been driving economic "output."
[�]
The Treasury's monthly report of "Foreign Purchases and Sales of U.S. Long-Term Securities" shows net monthly inflows into U.S. securities averaged $53.6 billion during the fourth quarter and $42 billion for all of 2001.

For the first two months of 2002, net flows have ebbed markedly to $14.6 billion. After being net monthly buyers of $12.7 billion in Treasuries during the fourth quarter, foreigners have turned sellers to the tune of $8.5 billion. During 2001, foreign-sourced purchases accounted for a monthly average of $13.8 billion of agency bonds and $19.7 billion of U.S. corporates.
[�]
As the legendary credit authority Henry Kaufman warned:

"The integrity of credit is being chipped away by a financial revolution that is helping to lower credit standards and muting the responsibilities of both debtors and creditors.
[�]
Derivative players that were selling default protection for pennies on the dollar (believing their derivative book was diversified, that only a fraction of industry debt would eventually default, and that recoveries from these limited number of bankruptcies would be significant) are now faced with a much different equation: a general industry collapse and the possibility of upwards of a dollar of loss on a dollar of insurance written (as opposed to pennies!). Credit loss models can be thrown out the window as potential losses quickly grow exponentially.
[�]
The ongoing collapse of the telecom/technology bubble will result in unprecedented credit losses. The Fed has responded aggressively to the bursting tech bubble by accommodating a much larger bubble.
[�]
We are witnessing a dysfunctional system having set course for a serious financial accident. The U.S. bubble economy requires continuing credit excess to sustain boom-time demand and to maintain inflated asset prices.
+++++++++++++++++++++++++++++++++++++
Here is the foundation of the coming gold bull market. There can be no escape for the foolish Fed�no out for the trapped Treasury...nor the impotent IMF.

Each time one feels a pang of doubt, let him or her return to this essay and reread it over and over again.

Mr Gresham

(07/05/2002; 19:17:06 MDT - Msg ID: 79954)

Mannfm11 sighting

http://216.46.231.211/boards/user/non-frames/message.asp?forumid=4&messageid=131015&threadid=131015Always a good read...who's the other fan here -- OldYeller?

Off to get a coffee, and savor words of wisdom. Doug Noland should be along soon, too...

Mr Gresham

(07/05/2002; 19:25:09 MDT - Msg ID: 79955)

USAGOLD: Coin premium?

Michael -- are there signs of a shortage beginning? I haven't watched coin premiums very seriously, and you're there everyday...

barnaclebob

(07/05/2002; 20:26:15 MDT - Msg ID: 79956)

''High treason in the U.S. government''

http://www.yellowtimes.org/article.php?sid=444&mode=threadℴ=0They came for the "suspected" terrorists, and I didn't object -
For I wasn't a "suspected" terrorist;
They came for those of Middle Eastern descent, and I didn't object -
For I wasn't of Middle Eastern descent;
They came for the unpatriotic, and I didn't object -
For I was not unpatriotic;
They came for the dissenters and activists, and I didn't object -
For I wasn't a dissenter or an activist;
"They came for the Communists, and I didn't object -
For I wasn't a Communist;
They came for the Socialists, and I didn't object -
For I wasn't a Socialist;
They came for the labor leaders, and I didn't object -
For I wasn't a labor leader;
They came for the Jews, and I didn't object -
For I wasn't a Jew;
Then they came for me -
And there was no one left to object."

Paper Avalanche

(07/05/2002; 20:49:50 MDT - Msg ID: 79957)

This will put me first in line to the camps

I do realize that this, and many forums, are actively monitored for various reasons by our good friends at the NSA, FBI, CIA, etc. However, I find it important to post the entirety of barnaclebob's previous post for the review of all who lurk or participate on this forum. See you at the camps:

By Doreen Miller
YellowTimes.org Columnist (United States)

(YellowTimes.org) � Q: Just who is a terrorist?
A: Anyone (non-U.S. citizen or U.S. citizen alike) Attorney General Ashcroft designates as one.

Q: On what evidence can Ashcroft designate someone as a terrorist?
A: Mere suspicion and hearsay.

Q: What legal rights and Constitutional protections does someone detained on the grounds of being a suspected terrorist have?
A: Next to none.

It may be difficult for some hard-core, patriotic Americans to believe the veracity of the preceding question and answer series, but the answers to the questions are based upon the implications and dangerous ramifications of the USA PATRIOT Act (USAPA) that was passed last October by so-called congressional representatives who never bothered to read or debate it.

It slipped through at the midnight hour under the cover of darkness, voted on by men and women engulfed in a terrifying atmosphere of shock, fear, mass media hysteria, and suspiciously targeted anthrax mailings.

U.S. government officials would have us believe that this 342-page, complexly nuanced document was allegedly crafted after September 11 in the time span of a little over a month. To accomplish this feat would have required the in-depth study of fifteen other lengthy acts and statutes which it modifies and amends.

The act's extremely clever yet highly misleading acronym USA PATRIOT, which stands for "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism," is an obvious attempt to intimidate and brand as "unpatriotic" and treasonous anyone who might dare to question its alarmingly overreaching provisions.

In light of the egregious evisceration of the Bill of Rights that this law undertakes, those who blindly supported and signed this blatantly unconstitutional act into law should be collectively condemned and charged for high treason to the Constitution and the people of the United States of America.

Careful perusal of the USAPA reveals that it defiantly and maliciously tramples on:

The First Amendment - the people's right to exercise freedom of religion, speech and peaceful assembly "to petition the Government for a redress of grievances"
The Fourth Amendment - the right "to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures" whereby warrants - only to be issued upon "probable cause" - must be specific as to place to be searched and persons or things to be seized
The Fifth, Sixth and Fourteenth amendments - which outline the right to due process - a trial by one's peers, to face one's accuser as well as view the evidence against oneself, and to have an attorney
The Eighth Amendment - which safeguards the people against excessive bale and fines, or cruel and unusual punishment
Under sections 411 and 802 in the USAPA, a terrorist is loosely defined as anyone being "a representative of a foreign terrorist organization, as designated by the Secretary of State," and domestically, anyone engaging in "activities that - involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any state; APPEAR to be intended to intimidate or coerce a civilian population; TO INFLUENCE THE POLICY OF A GOVERNMENT BY INTIMIDATION OR COERCION..." [capitals mine]

The inclusion of the word "appear" leaves interpretation of the law wide open to subjectivity and personal whim, as anyone can rightfully claim something "appears" to be intended for a particular purpose. Note also that our first amendment right to gather in protest against what we may see as unjust government policies could easily fall under the concept of "influencing" government policy by "intimidation or coercion."

Anyone participating in activist groups such as Greenpeace, Earth Liberation Front, People for the Ethical Treatment of Animals, or in protests like the 1999 demonstration in Seattle against the WTO could find himself suddenly stripped of his rights by the simple act of being declared a "terrorist" in keeping with the definition of this law. Under section 803 of this Act, even the simple act of giving food or shelter to a friend who may have been involved in any of the aforementioned activities could, in turn, have you incriminated and branded as a "terrorist" as well.

The USA Patriot Act absolutely shreds to bits the fourth amendment. Section 213 permits so-called "sneak and peek" searches. Translated, that means the government has the right to go into your home while you are away, copy your hard drive, files, or whatever, gather and take any information or items they please without ever serving you notice since "the execution of a warrant may have adverse effect." They can then delay serving you notice for up to 90 days after the fact. These newfangled warrants can now be issued for a flimsy "reasonable cause," further undermining the much more difficult to achieve "probable cause" stipulation of the fourth amendment.

Sections 216, 217 and 218 allow for unrestricted wiretapping, the tracing and spying on email messages and internet activities of anyone anywhere in the USA without the need to obtain a court order as long as "the information likely to be obtained... is relevant to an ongoing criminal investigation." How nebulous can that get? A lawyer of any worth would be able to argue the "relevance" of anything to an unspecified "ongoing criminal investigation." Kiss your protection from "unreasonable searches" good-bye and say hello to Big Brother USA.

If you think this law applies only to foreign nationals, think again. Jos� Padilla, although by no means a model U.S.-born citizen, had his civil rights stripped from him this past May just by Ashcroft's uttering the magic words, "enemy combatant" and "suspected terrorist." To this day, no solid evidence has been produced to substantiate Ashcroft's claims - neither bomb parts, nor bomb assembly instructions, nor any plans or maps of intended strike areas.

A "suspected terrorist," according to section 112, needs only to be "certified" by the Attorney General on "reasonable grounds" that he "believes" someone to be engaged in terrorist activities. Again, no solid evidence is required, only a belief or suspicion suffices.

Section 236A gives the Attorney General unprecedented powers untouchable by any court, whereby he may detain a suspect in increments of up to six months at a time if he believes the suspect's release would threaten national security, or the safety of the community or any person. "At the Attorney General's discretion" [read: personal whims], "NO court shall have jurisdiction to review, by habeas corpus, petition, or otherwise, any such action or decision." [capitals mine]

In other words, the Attorney General's word is sacrosanct! To give one man such grave and all-encompassing power over the fate of any other individual is akin to what happens in fascist police states, not in a free and openly democratic society.

Whatever happened to one's right to face one's accuser, to have a fair trial by one's peers, to be allowed to view the evidence against oneself, or to have an attorney?

Is it not cruel and unusual punishment to be denied your civil rights, to be considered guilty until you can "prove yourself innocent" - which is, in fact, very difficult to do - to be held in prison on "secret evidence" for months or years on end with no access to a lawyer and no chance of defending yourself against false and unfounded accusations?

I heard President Bush on the news a few weeks ago boasting that the U.S. has so far "captured and detained over 2,400 suspected terrorists." Yet, by most accounts, most people being detained were initially brought in on minor violations (which in a saner world would not have resulted in incarceration), and have not had any terrorist-related charges brought against them.

To this day, it is my understanding that fewer than a dozen have actually been connected to any terrorist activity. Is that what a democracy does: imprison whole groups of people to catch the fewer than 1 percent who are actually committing criminal acts?

The USA PATRIOT Act also includes under the "crimes of terrorism" umbrella the destruction of property even if no one is hurt (section 808), telemarketing fraud (section 1011), as well as any kind of computer hacking (section 217). Under the rubric of "guilt by association," this act also permits the denial of entry to and even the imprisonment of "the spouse or child of an inadmissible alien" who's been "designated" as a terrorist within the past five years (section 211).

The FBI can now legitimately demand access to anyone's business, medical, student, bank, library or any other personal records in order "to protect against ... clandestine intelligence activities." (Sec. 501) The Associated Press reported on June 25 that the FBI has been reviewing the library records of several hundred individuals in libraries across the nation using a quick and largely secret process which is now legal under the PATRIOT Act.

Judith Krug, the American Library Association's director for intellectual freedom, in a straight-forward statement is quoted as saying, "... these records and information can be had with so little reason or explanation. It's super secret, and anyone who wants to talk about what the FBI did at their library faces prosecution. That has nothing to do with patriotism."

It seems we must now extend Ashcroft's warning about watching what we say in public to include what we may read as well. It is really not such a large leap to imagine our hyperparanoid government beginning to imprison people suspected of "aiding and abetting the enemy" based upon their "unpatriotic" ideologies and choice of reading material.

The USA PATRIOT Act creates and allows for a virtual police state with little to no judicial oversight. We, as a nation, are literally treading the razor's edge when it comes to flirting with the grave dangers inherent in giving up our rights for the empty promises of "safety" and "national security" masquerading under the guise of a "patriotic" PATRIOT Act. Once we fall off that edge, reclaiming and reinstating our rights, authority and power as "WE THE PEOPLE" of this great nation might prove very difficult.

The next obvious question is: just what can the average person do? Across this nation, wise and enlightened individuals have been forming groups to fight the injustices that the PATRIOT Act imposes on us. Resolutions have been passed unanimously by city councils in Amherst, Leverett, Northampton, Ann Arbor, Berkeley, Denver, and Cambridge. Other cities and towns are in the process of preparing their own resolutions and gathering signatures on petitions to protect our civil liberties against the offenses of this Act.

The Northampton Bill of Rights Defense Committee's website, (www.gjf.org/NBORDC), offers a wide range of organizing tools, links, and information about similar campaigns around the country to help you get started in your own community.

A rally in Boston this past June 22 kicked off a movement in Massachusetts to gather 100,000 signatures to petition our Mass. congressional delegates to introduce a bill that would call for the repeal or amendment of those sections of the PATRIOT Act that stand in clear violation of our constitutional rights. For more information or to get involved, you may contact the ACLU of Massachusetts at 617-482-3170 x 314.

At this critical juncture, to sit back and na�vely trust our government officials to protect anything other than maintaining their own uncontested, ill-gotten power is to risk losing the very liberties, rights, and freedoms our founding fathers fought so hard to procure for each and every one of us.

If we don't stand up for our rights, then who will? If we don't demand the extension of these same rights to all people within our borders, then we are nothing but accomplices in the hypocritical, haphazard, and biased application of our nation's core principles of democracy and equal rights.

In closing admonition, I have taken the liberty of adding a few lines to an excerpt taken from a sermon given in various times and places by Martin Niemoller, 1892-1984, a Protestant pastor in Nazi Germany:

They came for the "suspected" terrorists, and I didn't object -
For I wasn't a "suspected" terrorist;
They came for those of Middle Eastern descent, and I didn't object -
For I wasn't of Middle Eastern descent;
They came for the unpatriotic, and I didn't object -
For I was not unpatriotic;
They came for the dissenters and activists, and I didn't object -
For I wasn't a dissenter or an activist;
"They came for the Communists, and I didn't object -
For I wasn't a Communist;
They came for the Socialists, and I didn't object -
For I wasn't a Socialist;
They came for the labor leaders, and I didn't object -
For I wasn't a labor leader;
They came for the Jews, and I didn't object -
For I wasn't a Jew;
Then they came for me -
And there was no one left to object."

Addendum: For those who may be interested, the final official version of the USA PATRIOT Act can be found at the following site: http://216.110.42.179/docs/usa.act.final.102401.html

[Doreen Miller lived, studied, worked and traveled abroad for several years, and is currently a Senior Lecturer and educator of international students. She dedicates part of her time to serving the elderly and Alzheimer patients. Mother, musician and poet, she pursues an avid interest in Buddhist and Eastern philosophy. She advocates human rights, social justice, fair trade, and environmental protection. Doreen lives in the United States.]

Doreen Miller encourages your comments: dmiller@YellowTimes.org

YellowTimes.org encourages its material to be reproduced, reprinted, or broadcast provided that any such reproduction must identify the original source, http://www.YellowTimes.org. Internet web links to http://www.YellowTimes.org are appreciated.

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Sign up below!

Paper Avalanche

(07/05/2002; 21:15:27 MDT - Msg ID: 79958)

What sucks about being a gold bug

I guess what sucks the most about being a gold bug is that you so dearly love the very principals as stated in the Constitution and the Bill of Rights only to realize that 99%+ of the population is oblivivious to the rights that were initially provided to them by the many men who fought and died to secure those rights.

How many people even know that the Federal Reserve Bank is a private corporation?

I will likely go the way of all others who have opposed tyrrany (William Wallace, Martin Luther King, JFK and many others who are unknown).

I know that to openly post such opposition to the powers that be is essentially signing my own death warrant, but I cannot bring myself to simply accept the status quo and arbitrarily consign my God given rights to those who have no claim upon them.

That is the fear which is struck in the hearts of the paper money cabal, that persons such as myself might opt to no longer participate in the ill-conceived and highly manipulated credit system that sucks the very life blood of those who seek only to be free.

I pray to my God that I may be given the strength to remain free in light of the efforts of those who seek to subjugate me.

Paper Avalanche - not only a cool handle, but the mathematically inevitable outcome of a debt-based, fiat paper monetary system

Speedy

(07/05/2002; 21:30:32 MDT - Msg ID: 79959)

to the camps!!!

Paper Avalanche, you are not the only one out there who feels the way you do!! I too will be there in camp, knowing the life I choose{Christ ONLY} and the way I feel inside about our fine government,and those who enslave the people like they do!!!!!!

Chap X

(07/05/2002; 21:31:44 MDT - Msg ID: 79960)

Paper Avalanche

"Is that what a democracy does"

"Are you naive enough to think we live in a democracy"
Gordon Gecko - Wall Street - 1987

And a few more (but not limited to) goodies.....

On Sept. 14th, 2001, President George W. Bush declared a state of national emergency, enumerated the
statutes under which he would now be operating, and began issuing numerous Executive Orders. Here's a snapshot of what powers each of those statutes give to the President.-

The White House
For Immediate Release
Office of the Press Secretary
September14,2001

********************************************

EXECUTIVE ORDER 10990 allows the government to take over all modes of transportation and control of highways and seaports.

EXECUTIVE ORDER 10995 allows the government to seize and control the communication media.

EXECUTIVE ORDER 10997 allows the government to take over all electrical power, gas, petroleum, fuels and minerals.

EXECUTIVE ORDER 10998 allows the government to take over all food resources and farms.

EXECUTIVE ORDER 11000 allows the government to mobilize civilians into work brigades under government supervision.

EXECUTIVE ORDER 11001 allows the government to take over all health, education and welfare functions.

EXECUTIVE ORDER 11002 designates the Postmaster General to operate a national registration of all persons.

EXECUTIVE ORDER 11003 allows the government to take over all airports and aircraft, including commercial aircraft.

EXECUTIVE ORDER 11004 allows the Housing and Finance Authority to relocate communities, build new housing with public funds, designate areas to be abandoned, and establish new locations for populations.

EXECUTIVE ORDER 11005 allows the government to take over railroads, inland
waterways and public storage facilities.

EXECUTIVE ORDER 11051 specifies the responsibility of the Office of Emergency Planning and gives authorization to put all Executive Orders in to effect in times of increased international tensions and economic or financial crisis.

EXECUTIVE ORDER 11310 grants authority to the Department of Justice to enforce the plans set out in Executive Orders, to institute industrial support, to establish judicial and legislative liaison, to control
all aliens, to operate penal and correctional institutions, and to advise and assist the President.

EXECUTIVE ORDER 11049 assigns emergency preparedness function to federal departments and agencies, consolidating 21 operative Executive Orders issued over a fifteen-year period.

EXECUTIVE ORDER 11921 allows the Federal Emergency Preparedness Agency to develop plans to establish control over the mechanisms of production and distribution, of energy sources, wages, salaries, credit and the flow of money in U.S. financial institution in any undefined national emergency. It also provides that when a state of emergency is declared by the President, Congress cannot review the action for six months.

Black Blade

(07/05/2002; 21:37:30 MDT - Msg ID: 79961)

Scandals make it harder for companies to raise cash

http://www.usatoday.com/money/general/2002/07/05/2002-07-05-corp-bonds.htm
Snippit:

WASHINGTON � The investor confidence sag stemming from corporate accounting scandals is making it harder for companies, even those unrelated to the firms in question, to raise cash in the key corporate bond market. That is likely to put a damper on already weak business spending, the key piece of the economic puzzle that is lagging other sectors, especially consumer buying. While that alone won't be enough to bring the USA back into recession, it is acting as a drag on an already soft rebound, analysts say. "It slows the recovery down," says Barry Evans, John Hancock Funds' chief fixed income officer.

Economists say most of the blame for the spread increase goes to the accounting scandals. "Investors have found they can't trust anybody," says Stephen Slifer, chief U.S. economist at Lehman Bros. "You can't trust the company to be reporting earnings honestly. You can't trust the accountants, you can't trust your broker, you can't trust Martha Stewart." So, he says investors think, " 'Why buy a corporate bond?' Just buy a house or put the money under your mattress."

Black Blade: It should be no surprise that confidence is so low and companies can't raise cash. Scandals are now a daily occurrence. Unfortunately we are perhaps becoming complacent and should we let our guard down, we will see a lot of unnecessary suffering. Today's positive market action is more likely a "dead cat bounce".

Paper Avalanche

(07/05/2002; 21:46:06 MDT - Msg ID: 79962)

Executive Order 11110

If I am not mistaken, this is the EO that JFK issued which essentially abolished the Fed vis a vis the re-establishment of a silver standard for the US$. If memory serves me, he was assinated five months after issuing said EO. The EO was never enforced.

PA

Paper Avalanche

(07/05/2002; 21:49:17 MDT - Msg ID: 79963)

Per google, I am correct - here is the link

http://www.bridgeoflove.com/bookstore/icke/magazine/vol14/research/kennedy-fed-res.html

Paper Avalanche

(07/05/2002; 21:51:26 MDT - Msg ID: 79964)

better link

http://www.bridgeoflove.com/bookstore/icke/magazine/vol14/research/kennedy-fed-res.htmla quicker link

Topaz

(07/05/2002; 22:38:44 MDT - Msg ID: 79965)

Mr Gresham et al

I'll be splattering these here Walls with Graffiti for some time to come Mr G - just gonna refrain from Marketmania predicting - (did you see the indices today, If Alcoa "beats the Street" by 25% it's off to the Races)....sheeeesh, just can't help myself!!

Black Blade

(07/05/2002; 22:58:43 MDT - Msg ID: 79966)

All in a day's graft in the US

http://www.nzherald.co.nz/storydisplay.cfm?storyID=2050529&thesection=news&thesubsection=world

Snippit:

It's a pity George W. Bush hails from Texas and not New York, because it might be interesting to hear his thoughts on "honest graft" and how this venerable institution has fallen from favour these past few years in the Big Apple. Modest, moderate corruption was almost considered a good thing in its day - an unofficial reward, for example, to cap the careers of relatively honest cops. If an officer kept his nose out of real mischief, ignored hookers and gambling but busted heroin dealers, he might get to spend his last few years policing the flesh pits of Times Square, where a retirement fund could really blossom.

"No more hamburgers," one NYPD veteran is said to have exclaimed when his transfer arrived. "It's my turn for tenderloin." It was his contribution to the language, for that is the name America's red light districts have borne ever since. The Tenderloin - it's a location and a state of mind: the place to collect a red-meat reward for righteous dishonesty.

Black Blade: An amusing take on US corruption from the Kiwi side.

Mr Gresham

(07/05/2002; 23:00:07 MDT - Msg ID: 79967)

barnaclebob

http://www.gjf.org/NBORDC/Thanks for the link to the "Patriot" act essay at yellowtimes. It took me awhile to be able to stand reading anything about it.

R.Powell & other Valley folk (link above -- who was our other Hamp dweller?): Look who is raising the Spirit of Shays! "Resolutions have been passed unanimously by city councils in Amherst, Leverett, Northampton, Ann Arbor, Berkeley, Denver, and Cambridge. Other cities and towns are in the process of preparing their own resolutions and gathering signatures on petitions to protect our civil liberties against the offenses of this Act."

I would say that there either isn't as much of a terrorist threat as thought 9 months ago, or it is being quietly neutralized through normal police/intelligence work. I doubt that the provisions of this bill hit the mark in this particular time of need, and will overshoot it and cost us bigtime in the long run -- or even sooner. It really looks like "something else" coattailing on a national emergency, manufactured or genuine. And all brought to you by "The Gang That Couldn't Budget Straight."

This is really a case where you have to have your LIBERTIES in place in advance of the next emergency, not LAWS that violate them, because the tides running afterward will not be friendly to Liberty.

Mr Gresham

(07/05/2002; 23:19:11 MDT - Msg ID: 79968)

Doug Noland on NextBank meltdown

http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=13186Including a chronology of how a "New Economy" "business model" fleeced investors and ultimately taxpayers. Tip o' th' iceberg to ya!

Horatio

(07/05/2002; 23:27:09 MDT - Msg ID: 79969)

Argentina

Government proposes to to convert cash in the bank to bonds..
The U.S. did the same thing in the 30's,if you had a 1 year bond,they made it a 5 year bond.If you had a 10 year Bond ,they made it a 10 year bond.The result was an immediate loss of the present value of your holding whatever it was.A 30 year Bond might sell for 150.00 even though the value at maturity is 1000.00.So if you had 1000 dollars cash in an Argentine bank and they converted it to a 30 year bond ,you could sell it for 150.00 now.....Don't worry your moneys good,you just have to wait 30 years to get it back and who knows what it will buy in thirty years.Ill venture a guess that $ 1000 in thirty years will buy what 150.00 buys now!!Some deal...

Horatio

(07/05/2002; 23:35:12 MDT - Msg ID: 79970)

Argentina

If they convert cash to bonds its a clear sign they have chosen DEPRESSION over inflation.
I believe after consultation with the U.S. they have decided as the U.S. did in the 30's to do this because history shows .......Wild inflation brings with it an overthrow of the government.Depression does not bring about an overthrow of the government,just demands for more socialism and redistribution of wealth,clearly the preferred choice for governments.

Horatio

(07/05/2002; 23:46:54 MDT - Msg ID: 79971)

contraction

Conversion from cash to bonds will cause a rapid CONTRACTION in the money supply just as it did in the U.S. in the thirtys.The failures of many banks was a result of this contraction ,not the other way around as they would have you believe.All those Dollars floating around and printing press money will be contracted in the same manner,when they get ready to do it.A contraction of the money supply ,zero interest rates,credit drying up are all part of the same plan to avoid hyper- inflation and an overthrow of the government..

Horatio

(07/06/2002; 00:08:11 MDT - Msg ID: 79972)

Watch Argentina !

When the currency contracts everyone wants out!Give me my cash!Everything stops while everybody scrambles for cash and golds soars,because it can't be devalued or inflated .It becomes the currency of choice.You can't save cash because it gets converted to a bond ,you can spend it for something tangable and get good value or you can convert it to a currency like gold.All paper currencys will be revalued in the same way ,there will be no safe paper.Then gold MAY be reinstated as a backing in order to restore confidence in paper again.
Gold and Silver are always used as collateral against new financing of wars or backing of currencys until confidence is restored and then the backing is removed and used somewhere else for the same purpose,to restore confidence......

Black Blade

(07/06/2002; 00:08:49 MDT - Msg ID: 79973)

Jobless Ranks Grow Amid Sluggish Hiring

http://biz.yahoo.com/rb/020705/economy_1.html
Snippit:

WASHINGTON (Reuters) - The U.S. unemployment rate ticked higher in June amid stubbornly sluggish hiring, a sign the road back to full economic health could be long and rocky. Employers outside the farm sector added a paltry 36,000 workers to their payrolls last month, the Labor Department said on Friday -- less than half what economists had expected. Moreover, the department ratcheted down its data for April and May to show jobs growth of just 3,000 over those two months, compared to a total rise of 47,000 reported earlier. With the jobs market still so frail, the unemployment rate rose to 5.9 percent in June from 5.8 percent a month earlier.

Black Blade: Lets see here. Jobs were added and the unemployment rate grew. What the report does not mention is that many are no longer counted as unemployed because they don't qualify for benefits or the unemployment benefits have run out. Also many have simply given up looking for work while living off of savings, mortgages, or declining investments. Notice that nearly every revision of unemployment data has been a downward revision.

BTW, the rise in the markets yesterday are now being attributed to relief that there were no terrorist acts on the July 4th holiday. However, when real traders and investors return on Monday the markets could do a 180.

Black Blade

(07/06/2002; 00:43:54 MDT - Msg ID: 79974)

Dollar Rises Against Euro

http://biz.yahoo.com/ap/020705/dollar_1.html
Snippit:

NEW YORK (AP) -- Cheered by hefty gains in U.S. equities, the dollar edged higher against its key counterparts Friday, gaining against the euro for the fifth straight day -- its longest advancing streak on the European currency in a year. After looking like it was stuck on a one-way trip lower for the past couple of months, the dollar's gains on the euro have suddenly made talk that the single currency is about to shatter parity with the greenback seem premature.

"The problem for the dollar has been capital flows and there's little on the immediate horizon to suggest capital flows are going to start coming into the U.S.," said Robert Sinche, head of global currency strategy at Citibank. "The dollar had a bit of a recovery this week but there's very little in the fundamental environment to support the dollar over the next three months," he said. Indeed, perhaps the key weight on the dollar this year has been the reversal in the flow of capital into the country, as foreign investors, who have showed a remarkable appetite for U.S. stocks and bonds in recent years, begin to shift their funds elsewhere.

Black Blade: Nearly all the action in the currency markets has been due to numerous official interventions. This is truly amazing as the US, Japan, and Europe is now all involved in a three-way currency war. This is not a currency war to maintain the stronger currency � but amazingly it is a currency war to achieve the weakest currency. Bizarre as that may seem, it is necessary for each region to have the weakest currency. The reason is obvious. First the US dollar is already extremely overvalued and in a weak economy a weak currency is the only way to stimulate US exports. Second, Japan is nothing more than a factory on a couple of island with no raw materials. They must import raw materials and manufacture trinkets for export in order to survive economically. The Japanese economy appears to be in for a rough ride and their only possible hope is a weaker yen to float their economy with exports. Europe has just realized that their economy is not as strong as they had thought. In fact there are concerns about rising inflation. They too are now hoping for an increase in the export of goods to other regions. In short � everyone is fighting for that piece of the shrinking global economic pie. It is quite odd that everywhere the world economy is retracting and there may simply be very little if any global economic pie to go around. Life in this world is just about to get very "interesting".

Black Blade

(07/06/2002; 01:23:10 MDT - Msg ID: 79975)

Best gold & silver stocks for the half-year

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256BED0051D81E?OpenDocument
Snippit:

NEW YORK -- Gold producers with reserves sold forward have paid a heavy penalty as stock prices idled relative to the supercharged performance of companies offering full exposure to the gold price. Whereas hedged producers have bested the gold price by 35%, unhedged producers were a 100% better at the half-way mark, with a 129% gap over the imperilled S&P500 index.

Black Blade: Hedgers (mainly Mega-Hedgers) have been part of the problem in the low gold price environment experienced over the last 6 years. The question I have is why would anyone invest in a hedged gold company? Isn't the whole point to have full exposure to the rising price of the underlying product? It therefore does not surprise me that non-hedgers have so dramatically outperformed the hedgers.

BTW, I am not pushing any particular stock, however, as hedgers have contributed to the lower POG they should be exposed as under performers. As disclosure I only hold highly profitable non-hedgers as well as a nice stash of physical for portfolio insurance.

Henri

(07/06/2002; 02:30:38 MDT - Msg ID: 79976)

Test

Ignore

Henri

(07/06/2002; 02:42:42 MDT - Msg ID: 79977)

Golden Word

I hereby declare that my privately held corporation retains 500% of the par value of all its stock in pm's (gold silver and platinum)as the sole indication of its strength. Books smooks, anyone who runs a business knows that the amount of money in the checking account doesn't mean smotz unless it is balanced against current and future liabilities.

The pm reserve will be distributed to real and beneficial holders of corporate stock upon dissolution.

In addition, the corporation will acquire and hold an another 100% of the par value of its stock as assurance for each client. This pm is profered in lieu of liability insurance which my corporation will not purchase. This additional pm reserve stands along with my solemn word that I will deliver my services in good faith and meet contractual obligations. If my word and the full company's worth in pm is not good enough for a client, then i do not need their business.

Go small business!

Take that you wall street geeks!

Henri

(07/06/2002; 02:46:24 MDT - Msg ID: 79978)

Hi Black Blade

yes, I am up early. Off to Scout camp with my troop for a week. No phones no lights no TV, No internet (aaarrrggghhhh!!!!!)

5 am departure

Adios mi amigos
vaya con Dios

Black Blade

(07/06/2002; 03:02:38 MDT - Msg ID: 79979)

Wall Street Still Over Its Head in Overhead

http://www.thestreet.com/_yahoo/markets/matthewgoldstein/10030231.html
Snippit:

Die-hard tech investors aren't the only ones crossing their fingers for a screaming stock market rally, it seems. Wall Street's big investment firms are talking up the prospect of a big second-half pickup, too. That would pass for standard-issue optimism if it weren't for the fact that Wall Street desperately needs business to bounce back if it is to avoid a wave of new layoffs, observers say.

Black Blade: It appears that more confidence men will be fired from Wall Street's boiler rooms. There is the same old boiler room line of "growing profits" in the next quarter or half or year, etc. A lot of analysts are screaming for investors to jump into the markets since today's "dead cat bounce". It should be quite "entertaining" on Monday whatever direction the market takes. Presumably we have a "State of the Union" address coming up next week and I suspect that the Pied Pipers will play it up.

Black Blade

(07/06/2002; 03:19:13 MDT - Msg ID: 79980)

Foreign Direct Investment Slid 56% to $565 Billion in 2001

http://biz.yahoo.com/djus/020705/200207050028000015_2.html

Foreign direct investment flows to developed countries tumbled by 56% last year to $565 billion from more than $1 trillion, Friday's Wall Street Journal reported. And it looks like they're going to fall again this year, according to the Organization for Economic Cooperation and Development, a Paris group representing 30 industrialized nations.

Leading the decline was the U.S., which saw direct investment tumble more than 57% to $131 billion in 2001, down $177 billion from $308 billion in 2000, and the lowest level since 1997. Germany, Japan, Ireland, Sweden and the United Kingdom also saw big declines....

Black Blade: The lower interest rates won't attract much foreign cash to US bond markets either. Notice how desperately the Pied Pipers are announcing the "economic recovery" today. It is doubtful that they can slow the stampede for the exits. The foreign investor has been helping to prop up US equities markets (and the dollar). Once that foreign cash goes home it will get very "interesting".

Black Blade

(07/06/2002; 04:28:44 MDT - Msg ID: 79981)

Breaking News - Afghan Vice President Assasinated

The Afghan Vice President Haji Abdul Qadir was just assasinated. The assassin got away although 10 of the VP's guards have been arrested. Looks like the Afghan governmnet is crippled and could collapse as there are too many clans fightening each other. That is what helped collapse the governmnet previous to the Taliba. I am not surprised though. "Interesting Times"

- Black Blade

Waverider

(07/06/2002; 06:15:12 MDT - Msg ID: 79982)

Currency War

BB - you mentioned the 3 way currency war between Japan, US and Europe...maybe Switzerland makes it 4? The Swiss are quite concerned about the strength of the CHF, it has gained around 4% on the Euro and has appreciated faster than the Ca dollar against the US. For the 1st time in approximately 21/2 years, the CHF is stronger than the Ca dollar. Funny, isn`t it that there`d be a war for the `weakest`currency. Cheers,
Waverider

Pan

(07/06/2002; 06:17:26 MDT - Msg ID: 79983)

News From Asia ! Gold Certificates, backed with real Gold !

http://straitstimes.asia1.com.sg/money/story/0,1870,129875,00.htmlThe Straits Time - Singapore

5. July 2002 FRI

Gold rush - sure thing or passing fad?

With currencies volatile and stock markets heading south, some investors are once again investing in gold - one of the few assets that have seen a steady price rise since last year. In My Money, OH BOON PING finds out how you can participate in the current gold rush, as well as how long the rally will last

IF YOU still haven't heard, gold prices are on the rise.

It is a dramatic reversal of fortunes for the precious metal that had been shunned for much of the 1980s and 1990s.

As governments and central banks around the world converted their reserves from gold to currencies such as the US dollar and the yen, the price of gold fell from highs of US$660 per ounce in the 1980s to a low of US$252 per ounce last year.

But since the Sept 11 terrorist attacks last year, gold has been back in vogue.

The price of the precious metal surged to a five-year high of US$328 per ounce last month - a return of 21 per cent in less than one year.

Gold-related stocks and funds have put up even more impressive performances.

For instance, the United Gold and General Fund saw its net asset value rising by 83 per cent in the comparative period.

And stocks of companies that deal in gold have also doubled or even tripled their value.

The result: Whether it is the Philadelphia XAU, Toronto Gold or FT Gold Mine index, gold indexes have far outperformed their floundering equity market counterparts.

Still, to most Singaporeans today, the concept of investing in gold is both quaint and alien.

Indeed, many associate it with the ubiquitous Credit Suisse gold wafers worn around their necks or ankles when they were little children, or with old ladies exchanging hard-earned savings for necklaces or bracelets at the neighbourhood jewellery store.

Thankfully, banks in Singapore offer a number of other options.

INVESTMENT OPTIONS

United Overseas Bank (UOB) says it offers a wide variety of assets, ranging from gold bars to gold certificates, that will provide investors with sufficient exposure.

If you are after something to have and to hold, then you may want to consider gold bars or gold bullion coins.

These are sold according to the prevailing Singapore gold kilobar price, plus 3 per cent Goods and Services Tax (GST).

However, the inconvenience lies in the storage of gold bars and coins, which is not provided for.

There is therefore an additional cost associated with buying gold bars or coins - the rental of safe deposit boxes at the bank.

Alternatively, you can choose not to buy physical gold and instead opt for:

Gold certificates; or

Gold savings accounts.

Gold certificates give their owners a legal claim to physical gold.

They are also sold in multiples of one kilobar, subject to a maximum of 30 kilobars per certificate.

With no expiry date, these certificates can be exchanged for physical gold whenever the need arises.

But this is typically more expensive than buying physical gold, notes UOB.

That is because the investor is charged an additional flat fee of $5 per certificate and a storage fee of $30 per kilobar per annum.

A gold savings account, on the other hand, is for investors who expect to trade in gold more frequently.

Any cash deposited into the account is converted into grams of gold at the prevailing gold prices.

The balance held is strictly not convertible into physical gold. This means that to withdraw from the account, the customer has to sell part or all of his balance back to the bank at the prevailing Singapore gold price.

However, UOB says that if the client insists on converting the account balance into physical gold, it is willing to make an exception.

But upon delivery of the gold, GST will be levied and no storage services will be provided.

Gold account holders can make transactions at any time during banking hours in units of one gram of gold, subject to a minimum of five grams per transaction.

An administrative fee - in grams of gold - of 0.25 per cent per annum on the highest balance per month or 0.12 gram per month, whichever is higher, is charged.

RALLY - BUT FOR HOW LONG?

All right, so there are options. But what is the likely performance of the market over the next 12 months and will the rally persist?

Mr Alfred Wong, portfolio manager for UOB's United Gold and General Fund, is bullish.

Historically, gold has had a strong negative correlation with the US dollar and the continued weakening of the greenback implies that the price of gold will appreciate further.

Also, gold has anecdotally always done well in an environment with low short-term interest rates.

This is because a government attempting to pump-prime the lacklustre economy using low rates runs the risk of raising inflationary pressures inadvertently.

Thus, gold, which is seen as a traditional hedge against inflation, will emerge as a favourite store of value.

Moreover, there is still the strong investment demand for gold, especially from Japan, says Mr Wong.

'In the first quarter of 2002, gold demand in Japan was 45 tonnes, double that of the fourth quarter of 2001 and triple the volume in the same quarter of the previous year,' he notes.

A large part of this demand from Japan came about as a result of the new insurance limits on term deposit introduced by the Japanese government on April 1.

Because their deposits are no longer insured fully by the banks, Japanese savers have been channelling part of their wealth into gold.

Come April 1 next year, this insurance limit will be extended to include current accounts as well.

And should the Japanese banking system and the Japanese or global economy take a turn for the worse, one can logically expect more funds to flow into gold, which is seen as a traditional asset of last resort and has a safe haven status, he added.

Is there enough supply in world markets to meet this added demand?

According to analysts The Straits Times spoke to, years of structural decline and low gold prices have created a scenario where exploration has been slashed and producers now face the serious problem of replenishing their reserves.

Hence, supply may not be readily available.

Given rising gold prices, major holders of gold - including the world's central banks - are unlikely to sell their gold reserves.

Economics 101 teaches us that when demand rises faster than supply, prices are likely to rise.

Is gold, therefore, a sure bet?

Well, when prices have surged to new highs, the risk of the rally having run its course is always present.

Said Mr V. Anantha Nageswaran, regional head of investment consulting at Credit Suisse Private Banking Singapore: 'The risk of all this optimism about gold is that markets somehow judge that US stocks have been oversold and they suddenly start to rally.

'The other risk is that, as the US dollar weakens, central banks in Asia and Europe decide that the greenback's weakness is a bigger evil than its strength and begin to resist it by verbally talking the greenback up or through intervening in the market.'

Investors will do well to heed such early warning signs of a reversal in the upward trend in gold prices.

But until then, gold is an asset that is shining for now.

misetich

(07/06/2002; 07:26:46 MDT - Msg ID: 79984)

Reliant takes billions off books - SCANDAL OF THE DAY

http://www.chron.com/cs/CDA/story.hts/business/1484621Snip:

July 6, 2002, 1:01AM

Reliant takes billions off books
Phony trades inflated revenues
By MICHAEL DAVIS
Copyright 2002 Houston Chronicle
Reliant Energy has reduced its reported revenue for the years 1999-2001 by $7.8 billion to exclude the sham energy trades the company admitted to earlier this year, according to a filing Friday with federal regulators.

Reliant Resources, the unregulated subsidiary of Reliant Energy, also restated its revenues for the same three years, trimming off $8 billion in reported revenues. Reliant Resources is under investigation by the Securities and Exchange Commission for the phony trades used to inflate its revenues and trading volumes.

Round-trip trades involve a company buying and selling the same amount of a commodity.

Other companies have admitted conducting such trades but did not record them on their books. Reliant Resources is the only one that has conceded it booked the trades as revenue in its reports to the SEC.

............

Reliant Energy previously reported $15.2 billion in revenues in 1999, $29.3 billion in 2000 and $46.2 billion in 2001. On Friday, the company restated its revenues to $13.79 billion in 1999, $28.26 billion in 2000 and $40.81 billion in 2001.

It also restated its expenses for the same three-year period, decreasing its expenses from $13.9 billion to $12.5 billion in 1999, $27.5 billion to $26.4 billion in 2000 and $44.2 billion to $38.3 billion in 2001.

Reliant Resources reduced 2001 revenue by 15 percent to $31.1 billion from $36.5 billion. It adjusted 2000 revenue by 5.4 percent to $18.7 billion from $19.8 billion, and 1999 revenue by 18 percent to $6.5 billion from $8 billion, according to filings.

Misetich

Corporate America is following the principle of "what is is"

Got gold?

misetich

(07/06/2002; 07:42:48 MDT - Msg ID: 79985)

Searching for signs of "US economic recovery" - NOT in Securities industry

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∣dle=ad_frame2_topfin&s=APSXTXhQoTWVycmlsSnip:
Merrill Eliminates More Jobs as Markets Decline

``There are still far too many people in investment banking,'' said Olgerd Eichler, who manages about $480 million in U.S. equities at Union Investment GmbH, including Merrill Lynch shares. ``Merrill will probably cut even more jobs.''

Misetich

It sounds like the "second half US economic recovery" is being post-poned, yet again - to 2003

Wait till next year, is the battle cry ( the Bear is licking its chops, waiting..)

Got gold?

barnaclebob

(07/06/2002; 08:20:45 MDT - Msg ID: 79986)

MOUSSAOUI CLAIMS THE U.S. ALLOWED SEPT 11 ATTACKS

http://news.findlaw.com/legalnews/us/terrorism/cases/index.html#moussaouiScroll down the page to "HIJACKERS" to review the motions.

MOUSSAOUI CLAIMS U.S. GOVERNMENT ALLOWED SEPTEMBER 11
ATTACKS TO TAKE PLACE. Zacarias Moussaoui, who is on trial in federal court in Alexandria, Va., for conspiracy charges in connection with the Sept. 11 attacks, has filed motions asking to talk to Congress and to a federal grand jury about the "FBI cover-up" of Sept. 11.

One of his handwritten motions is captioned "Motion to
appear in front of Congress hearing on FBI knowledge and
responsibility on the Sept. 11 attack," and in it, Moussaoui says that "I have relevant information and proof relating to conduct of the FBI regarding the Sept. 11."

In another motion, he said he wants to testify before the
federal grand jury investigating 9/11 because "I have extensive and relevant information on how did this operation happen." He says that "I will stipulate to chains, handcuffs, leg cuffs, stun belt, 20 or 30 marshalls as long as I can say what I know about Sept. 11 attack."

In another "Motion to compel the government to withdraw the
charge against me because the FBI were conducting an undercover surveillance operation," Moussaoui says that he was arrested and held in secret to prevent newspapers headlines saying that "the FBI had arrested a Muslim Arab at Pan Am [Flight Academy] the same school where [suspected hijacker Hani] Hanjour the believe hijacker train a few weeks before." Moussaoui seems to be saying that his testimony will allow Americans to know "how their
government cynically allow Sept. 11 in order to destroy
Afghanistan."

In another place, Moussaoui says that the government's
theory that the Sept. 11 attacks were carried out by Osama bin Laden is a hypothesis which is "unproven."

barnaclebob

(07/06/2002; 08:24:26 MDT - Msg ID: 79987)

Moussaoui: Judge to Stage 'Incident'

http://news.findlaw.com/ap_stories/other/1110/7-3-2002/20020703153009_137.htmlALEXANDRIA, Va. (AP) - The only man charged as a Sept. 11 conspirator has repeatedly accused the judge in his case of trying to kill him. In a motion released Wednesday, Zacarias Moussaoui predicted how it would happen.

The guy wants to talk on the record to Congress about the alleged FBI cover-up and now he's scared sheepless!

Woodie

(07/06/2002; 11:59:09 MDT - Msg ID: 79988)

Got me some, ... now what?

First time poster. Let me first say thank you to all of the great and informative posts that I have been reading for the past several months. I hope to continue to learn, and become a more contributing member of this society.

I recently cashed in some positions in PM stocks, and converted it to physical. Now I can't help but wonder what to DO with it. The logical part of my brain knows that I am not supposed to do anything with it except store it in a secure place, and let it give me peace of mind as any other type of "insurance" does. But that other half of my brain is trained to think in terms of making a "profit" on my investments. Is this a common affliction of the new physical owner?

Thanks, Woodie.

Gandalf the White

(07/06/2002; 12:21:09 MDT - Msg ID: 79989)

WELCOME Sir Woodie -- You have taken the BIG STEP !

Woodie (7/6/02; 11:59:09MT - usagold.com msg#: 79988)
Got me some, ... now what?
First time poster.
===
IF you have any hesitations on the feelings of not getting "interest", just take out some of the PHYSICAL and hold it in your hand and look at it and think about it for a minute. The smile that you get on your face will be far better than the lost "interest" !! Remember, this is wealth (PORTFOLIO) insurance. Ask anyone in Argentina if they would trade you some of those BONDS for a little of that PHYSICAL ?
<;-)

Black Blade

(07/06/2002; 13:06:51 MDT - Msg ID: 79990)

A tear for Argentina's pension funds

http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR20020704670.2_4598004e5fbaaeb4
Snippit:

A quarter of the Argentine population is unemployed. Over half the population is now officially below the poverty line. Rioters loot supermarkets. A people, once proud of eating the best beef in the world, now fight over carcasses of cows when cattle-trucks overturn. The exchange rate has gone from one peso to one US dollar - fixed for over a decade under the convertibility law - to over three pesos to the dollar: Argentines' savings have been cut by two-thirds in five months. The government has defaulted on its $150-billion debt. Bank deposits have been frozen since December and the government now proposes to give depositors long-term peso-denominated government bonds in lieu of their US dollar deposits. Cash has disappeared since only limited withdrawals are allowed. The stories of interest on radio stations are those that involve ATMs that still have cash. Barter is rampant in private transactions. The entire banking system, shut down several times in the past four months, is now bankrupt.

Black Blade: The reports out of Argentina get worse all the time. It has been reported that many Argentines are scrounging for food in landfills and garbage cans. Some are eating stray pets and toads. Crime is rampant. Now Argentines not only have lost their savings, but now they have lost their retirement funds. More hopes and dreams are dashed. How far behind are the other dominoes in South America? And how long until the U.S and other western nations follow? In a word � "Grim".

barnaclebob

(07/06/2002; 13:13:04 MDT - Msg ID: 79991)

@Woodie: Markets to fall further 50 per cent

http://investor.ft.com/custom/ftmarkets-com/news/story.asp?guid=%7B2835FD6E-9D6E-4F56-8C5F-60E21F334C6D%7DWith most economic predictions suggesting major economic declines thirties style, you own and possess the greatest assett available, it's compact, fungible, and the value does not rely on any underlying assett. Is there any better "storehouse of value and wealth" than Gold in times like these? If there is, I have not found it!

LONDON (FT Investor) - Hugh Hendry, Europe's best-performing fund manager, believes equity markets will fall a further 50 per cent before bottoming.

Despite this year's rise, Mr Hendry is running scared of equities since detecting a significant shift in the markets in mid June.

"Up until the second week in June I was up about 22 per cent, now it's 15 per cent. The last three weeks have been quite difficult."

Rather than flowing into the equity markets, as has historically been the norm, this liquidity has flooded into assets such gold, property and commodities.

"I have been consistently 100 per cent invested for the last three years, but I am now selling stocks," he says.

Mr Hendry admits he is not certain what will happen next, but he is raising the possibility that we may be heading for a 1930s-style depression, rendering it impossible to make money from the markets.

"One has to give serious consideration to that now the bear market has encroached into my golden 5 per cent [of stocks]. And no equity strategy succeeds with that outcome: value growth, good management, strong balance sheets, nothing works."

As an example, Mr Hendry says global markets bottomed in November 1929 at an average price-to-earnings ratio of around 10. Caterpillar, the tractor manufacturer, would have looked good value on a p/e of eight, but investors who thought so would have lost 95 per cent of their money in the following three years.

The 1929 example also supports his thesis that bear markets typically bottom at p/es of around 10-11, with 12 in 1962 the highest on record.

So where will it all end? Mr Hendry argues that the last five years of gains from a bull market are typically wiped out in the following bear market.

As markets peaked in March 2000, we need to fall back to March 1995 levels before reaching the bottom, he believes.

Black Blade

(07/06/2002; 13:36:21 MDT - Msg ID: 79992)

Re: Woodie,...All � PM Insurance

Your position is not unique. Most everyone wants to be in "the game". I would suggest that everyone take care of his or her most basic needs first. That is to secure food and shelter of course. I would also suggest that everyone get out of debt as soon as possible. Once that is done you can sleep a lot easier as that sword is no longer hanging over your head. Also start a storage program of several months of nonperishable food and basic necessary items. You just never know when some financial or natural disaster will strike. With the growing numbers of layoffs it is good to be secure with no (or very little debt) and to have enough food for yourself and your family. Then it is best to take care of other needs such as stashing enough cash for expense that you are likely to encounter for several months should you find yourself unemployed either through layoff, illness, or injury. Then as Alan Greenspan said, have gold as the "ultimate" form of money to insure your investment portfolio. I tend to add physical in proportion to my stock investments (yep, I like to play "the game" too). In the current economic environment I see more danger than in the recent past so I had added to my precious metal position while adjusting my stock portfolio to sound defensive investments (mostly profitable and some good yielding energy, utility, and non-hedged gold shares, with a dash of biotechs and (gulp) mortgage bankers). Still I keep a portion of my investment portfolio in physical precious metals, as it is the "ultimate" form of money. I have been in many countries around the world and most everywhere gold is revered above all currencies. In many areas of SE Asia when I show people a U.S. dollar bill, they just don't get it. When I show them a couple of specks of gold in a rock sample, their eyes light up because they do understand gold. Now if only the Argentines had set aside a portion of their cash in precious metals they would have been much better off today. I did not acquire any gold Argentinos when offered at USAGOLD, though I did get some Gold pesos from Uruguay. Both Argentina and Uruguay are deeply mired in a worsening economic disaster. This has already begun to spread throughout the region to Brazil, Colombia, and Venezuela. Chile is also feeling the heat as is Mexico far to the north. When LatAm crumbles the bankers and politicians in the U.S. will be under intense pressure for yet another bailout. It look to get very ugly. We in the US are not immune from similar problems. Look at the near disaster triggered by LTCM. The derivatives mess on Wall Street and in the major world banks dwarfs any concern once held by the LTCM and Russian bond defaults. As I said, be glad that you have taken steps to acquire some measure of insurance in this uncertain world. When the collapse comes it could be rapid and it will be difficult to get out of the way as everyone runs for the exits all at once.

Cheers!

- Black Blade

Off to the gym!

Siochain

(07/06/2002; 13:56:43 MDT - Msg ID: 79993)

ChapX

Would you be so kind as to list reference for the Executive Orders....Thanks

misetich

(07/06/2002; 15:14:38 MDT - Msg ID: 79994)

Ominous portents from the NextBank meltdown - Doug Noland

http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=13186Snip:

July 1, Bloomberg: "A failure by WorldCom Inc. to pay interest on its bonds would roil the market for collateralized debt obligations, affecting one out of eight of the securities. Of the 800 such securities in the $350 billion market, at least 100 have WorldCom debt pooled with that of other companies, said Stephen Anderberg, an analyst at Standard & Poor's in New York. Collateralized debt obligations are bonds backed by other kinds of debt, and are held mainly by pension funds and insurers... Sellers of collateralized debt repackage corporate bonds and credit-default swaps into new securities. They profit from the gap between the interest they pay on the debt and the higher rates they get from the pool. They promise investors who buy the safest part of the fund triple-A ratings and a very low risk of default. They can do this because they put all the security's risk into a small portion of low-rated bonds and unrated equity that absorb losses first. Fund managers complain the cushions aren't enough and say defaults in the investment pool put the principal at risk. �Some of the synthetic investment-grade collateralized debt

obligations are just too leveraged to deal with one-off-shocks like this,� said John O�Grady Walshe, who helps manage $3 billion of asset-backed debt for Zais Group Investment Advisors in Dublin."

...............
Expecting a "post-Bubble" barrage of major defaults, it's been our fear that some of these types of structures would soon be in serious jeopardy. We suspect that we have now reached this point, although there is little if any transparency.

If these synthetic CDOs are today at risk of "blowing up," then the value of the insurance they have written now comes into question. This would mark the commencement of what we expect will be major counterparty derivative issues.
...........

The fragile underpinnings of contemporary consumer lending were brought to light this week, as the American Banker reported on the escalating cost of the failure of pioneer Internet credit card lender NextBank. It is now estimated that this failure will cost the bank insurance fund between $300 million and $400 million, rather shocking news (although I don't believe it was covered in the Wall Street Journal). When the Office of the Comptroller of the Currency closed this bank on February 7th, it's assets totaled only about $700 million and insured deposits were $554 million. Just a few months ago (April 17th), a spokesperson from the FDIC stated that losses were expected to be about $25 million. This proved an especially poor estimate. The ugly fact is that this bank was closed down only 30 months after NextCard acquired it. At the time, it had only $3 million of assets. NextCard proceeded to aggressively market insured jumbo CDs that enabled it to easily raise more than one-half billion of deposits. We live in an exceedingly dangerous financial environment.

The NextCard fiasco is pertinent today on many levels.

Misetich

A must read!

Got gold?

Boilermaker

(07/06/2002; 15:27:42 MDT - Msg ID: 79995)

Asian Currency

http://biz.yahoo.com/rf/020706/economy_asem_kobe_1.htmlsnippet:
COPENHAGEN, July 6 (Reuters) - Five years after the Asian crisis, the countours of a future regional currency regime is starting to emerge with a study that calls for the creation of a currency basket system and ultimately a single Asia currency.

The proposal, which foresees a single Asian currency, an Asian central bank and a monetary union after 2030, is part of the Kobe Research Project, an initiative launched by Asian and European finance ministers (ASEM) in 2001.

On Saturday Japanese Finance Minister Masajuro Shiokawa presented the study to his counterparts, who were attending the fourth ASEM meeting here.

Japan has been very active in helping create a web of central bank swap agreements to avoid a repeat of the region-wide crisis which began with the Thai baht's plunge in 1997.

comment; No mention of gold as part of reserves. Looks like paper on paper. What's the point? Looks like an attempt to get in on the US$ scam.

misetich

(07/06/2002; 15:37:08 MDT - Msg ID: 79996)

Japan in denial - Japan Battles Bond Rating

http://www.nytimes.com/2002/07/06/business/worldbusiness/06DEBT.htmlSnip:

Japan's total debt to G.D.P. is expected to hit 157 percent at the end of this year, according to the International Monetary Fund � almost triple the level of a decade ago, and triple the American level. That is the highest any major industrialized country has faced in about 50 years.

Japan's stock of government bonds has risen 15 to 20 percent a year lately, to the equivalent of $4,000 for each Japanese citizen last year. Although few people doubt the willingness of Japan to pay its debt, many say the burden is only worsening Japan's economic problems.

Although Japan's government plans to increase bond issuance by only 1.5 percent this year, to about $1.1 trillion, this figure may come under pressure if tax receipts continue to fall. On Thursday, the Finance Ministry reported that because of an economic contraction, Japan's tax revenues last year were 5.5 percent below projections.

Over the last decade, the economy has stagnated. After shrinking by 1.3 percent last year, Japan's economy is expected to tread water this year. At the same time, the average age has crept up to 41, the highest in the world.

Japan's foreign reserves and overseas assets look small when compared with its $5 trillion in primary government debt, $3.7 trillion of which is bonds.

The reserves "are just a drop in a bucket against its outstanding debt, equivalent to $4.6 trillion, unless the government is contemplating paying off investors with U.S. Treasury bills at 9 cents on the dollar or foresees the day when the U.S. dollar is trading at 1,463 yen," Marshall Gittler, currency strategist here for the Bank of America, wrote recently.

Even $11 trillion in private savings looks less impressive in light of Japan's mountain of debt, which stands at $9.3 trillion if government loan guarantees and unfunded pension liabilities are included, said Takashi Asia, author of a financial newsletter.

............

Misetich:
"unless the government is contemplating paying off investors with U.S. Treasury bills" - With the US $ ready to fall off the cliff - Japan needs to diversify - Hashitomo where are you? Sell US $ and buy gold!

NY Times requires registration

misetich

(07/06/2002; 15:46:19 MDT - Msg ID: 79997)

Everyone Is Outraged - Are they genuine?

http://www.nytimes.com/2002/07/02/opinion/02KRUG.htmlSnip:

Arthur Levitt, Bill Clinton's choice to head the Securities and Exchange Commission, crusaded for better policing of corporate accounting � though he was often stymied by the power of lobbyists. George W. Bush replaced him with Harvey Pitt, who promised a "kinder and gentler" S.E.C. Even after Enron, the Bush administration steadfastly opposed any significant accounting reforms. For example, it rejected calls from the likes of Warren Buffett to require deduction of the cost of executive stock options from reported profits.

But Mr. Bush and Mr. Pitt say they are outraged about WorldCom.

Representative Michael Oxley, the Republican chairman of the House Financial Services Committee, played a key role in passing a 1995 law (over Mr. Clinton's veto) that, by blocking investor lawsuits, may have opened the door for a wave of corporate crime. More recently, when Merrill Lynch admitted having pushed stocks that its analysts privately considered worthless, Mr. Oxley was furious � not because the company had misled investors, but because it had agreed to pay a fine, possibly setting a precedent. But he also says he is outraged about WorldCom.

Might this sudden outbreak of moral clarity have something to do with polls showing mounting public dismay over crooked corporations?

Still, even a poll-induced epiphany is welcome. But it probably isn't genuine. As the Web site dailyenron.com put it, last week "the foxes assured Americans that they are hot on the trail of those missing chickens."
.............
Now to the story of Harken Energy, as reported in The Wall Street Journal on March 4. In 1989 Mr. Bush was on the board of directors and audit committee of Harken. He acquired that position, along with a lot of company stock, when Harken paid $2 million for Spectrum 7, a tiny, money-losing energy company with large debts of which Mr. Bush was C.E.O. Explaining what it was buying, Harken's founder said, "His name was George Bush."

Unfortunately, Harken was also losing money hand over fist. But in 1989 the company managed to hide most of those losses with the profits it reported from selling a subsidiary, Aloha Petroleum, at a high price. Who bought Aloha? A group of Harken insiders, who got most of the money for the purchase by borrowing from Harken itself. Eventually the Securities and Exchange Commission ruled that this was a phony transaction, and forced the company to restate its 1989 earnings.

But long before that ruling � though only a few weeks before bad news that could not be concealed caused Harken's shares to tumble � Mr. Bush sold off two-thirds of his stake, for $848,000. Just for the record, that's about four times bigger than the sale that has Martha Stewart in hot water. Oddly, though the law requires prompt disclosure of insider sales, he neglected to inform the S.E.C. about this transaction until 34 weeks had passed. An internal S.E.C. memorandum concluded that he had broken the law, but no charges were filed. This, everyone insists, had nothing to do with the fact that his father was president.

Given this history � and an equally interesting history involving Dick Cheney's tenure as C.E.O. of Halliburton � you could say that this administration is uniquely well qualified to chase after corporate evildoers. After all, Mr. Bush and Mr. Cheney have firsthand experience of the subject.

And if some cynic should suggest that Mr. Bush's new anger over corporate fraud is less than sincere, I know how his spokesmen will react. They'll be outraged.

By PAUL KRUGMAN - NY Times (registration req'd)

Misetich

Don't know whether or not Krugman is a democrat or a republican- but he makes his point - can't trust politicians
- you got to love that line -

"the foxes assured Americans that they are hot on the trail of those missing chickens."

Got gold?

sector

(07/06/2002; 16:05:47 MDT - Msg ID: 79998)

C'Mon Woodie

Physical is PhysicalDon't imagine that you should trade it as if it were some dot-bomb paper.

One must always think of gold as prime undeveloped real estate the one smart players do with real estate is to WAIT.

Wait for the US financial house of cards to ...well...fall down.

The above link to Doug Nolan's latest ought to be enough to convince anyone of the prudence of holding gold...in a sock drawer if necessary...or in plain sight.

Visitor probably have never seen the stuff before.

Clint H

(07/06/2002; 16:21:33 MDT - Msg ID: 79999)

misetich (msg#: 79997)

misetich
<Don't know whether or not Krugman is a democrat or a republican- but he makes his point - can't trust politicians>>

Krugman makes HIS point. Not necessarily fair or balanced. This deserves a counter point but this forum is not the place.

misetich

(07/06/2002; 16:43:48 MDT - Msg ID: 80000)

Clint H

Krugman editorial was posted not for its political message (if any) - but more importantly as it relates to Corporate accounting frauds and the alleged "outraged" Bush - and SEC's Harvey Pitt and his predecessor Arthur Levitt inaction
which has/is causing financial distress within the US borders and worldwide.

Here's an excerpt of ANOTHER column by Krugman (NY Times, June 28, 2002)

Finally, there's the WorldCom strategy. Here you don't create imaginary sales; you make real costs disappear, by pretending that operating expenses � cream, sugar, chocolate syrup � are part of the purchase price of a new refrigerator. So your unprofitable business seems, on paper, to be a highly profitable business that borrows money only to finance its purchases of new equipment. And you can sell shares at inflated prices.

Oh, I almost forgot: How do you enrich yourself personally? The easiest way is to give yourself lots of stock options, so that you benefit from those inflated prices. But you can also use Enron-style special-purpose entities, Adelphia-style personal loans and so on to add to the windfall. It's good to be C.E.O.

There are a couple of ominous things about this menu of mischief. First is that each of the major business scandals to emerge so far involved a different scam. So there's no comfort in saying that few other companies could have employed the same tricks used by Enron or WorldCom � surely other companies found other tricks. Second, the scams shouldn't have been all that hard to spot. For example, WorldCom now says that 40 percent of its investment last year was bogus, that it was really operating expenses. How could the people who should have been alert to the possibility of corporate fraud � auditors, banks and government regulators � miss something that big? The answer, of course, is that they either didn't want to see it or were prevented from doing something about it.

I'm not saying that all U.S. corporations are corrupt. But it's clear that executives who want to be corrupt have faced few obstacles. Auditors weren't interested in giving a hard time to companies that gave them lots of consulting income; bank executives weren't interested in giving a hard time to companies that, as we've learned in the Enron case, let them in on some of those lucrative side deals. And elected officials, kept compliant by campaign contributions and other inducements, kept the regulators from doing their job � starving their agencies for funds, creating regulatory "black holes" in which shady practices could flourish.

(Even while loudly denouncing WorldCom, George W. Bush is trying to appoint the man who drafted the infamous "Enron exemption" � a law custom-designed to protect the company from scrutiny � to a top position with a key regulatory agency. And some congressmen seem more interested in clamping down on New York's attorney general, Eliot Spitzer, than in doing something about the corruption he has been investigating.)

Meanwhile the revelations keep coming. Six months ago, in a widely denounced column, I suggested that in the end the Enron scandal would mark a bigger turning point for America's perception of itself than Sept. 11 did. Does that sound so implausible today?

Misetich

As revelations and frauds are exposed, .....

Got gold?

Chris Powell

(07/06/2002; 16:47:21 MDT - Msg ID: 80001)

An exchange about the commodities exchange, and the "sport of kings"

http://groups.yahoo.com/group/gata/message/1172An exchange about the commodities exchange
and the "sport of kings."

http://groups.yahoo.com/group/gata/message/1172

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

misetich

(07/06/2002; 16:56:53 MDT - Msg ID: 80002)

Say A Prayer, He Won't Be The Pretender

http://www.pimco.com/bonds_commentary_fed_focus_0702.htmSnip

That essay remains the favorite thing I've ever written, and its conclusion remains as true today as it was eighteen months ago:

"Both Wall Street and Main Street are currently exploding bubbles, and the explosion will self-feed, not self-correct, until (1) the Fed eases massively, and/or (2) the federal government proactively reduces the budget surplus.

Debt deflation is the beast of burden that capitalism cannot bear alone. It ain't rich enough, it ain't tough enough. Capitalism's prosperity is hostage to the hope that policy makers are not simply too blind to see."
...............

Deflation is indeed the beast of burden that private enterprise cannot bear alone, because the private sector does not own a press that prints money. Only "we the people" can address deflation risk, by demanding that our government lever its balance sheet to support nominal aggregate demand, underwritten by liberal use of the Fed's power to print money. Yes, that's the essence of Keynesian macroeconomics: attack private sector deflation with public sector reflation. And policy makers owe nobody any apology for doing so, as it is capitalism's own excesses and hubris that create deflation risk. When capitalism's stuff is hitting the oscillator, it is democracy's duty to unplug it.2

Mr. Greenspan is trying with a 13/4% Fed funds rate, and fiscal authorities are trying with budget deficits of some 2% of nominal GDP. Will it be enough? A few months ago, I thought so, and said so.3 But I'm also mindful of Keynes' dictum that when a man gets new information, he should be willing to change his mind. And recent months have revealed new information: many, far too many, balance sheets in Corporate America are not just infected with illiquidity, but are reeking with the gangrene of default risk.

The evolving "crisis" in Corporate America is not just about a few crooks in the executive suite, but rather too much debt relative to a "balance of risks" tilted towards deflation (the FOMC may say that the "balance of risks" is balanced between deflation and inflation risks, but from a policy perspective, that is poppycock, per the Volcker Doctrine; and Greenspan knows it).
................

Minsky passed away in 1996, as corporate financing patterns of the New Age Economy were following precisely his script, moving progressively toward Ponzi Finance Units. And at the end of the decade, the Fed did indeed declare the economy to be in an inflationary state (even if it wasn't) and sought to exorcise the (irrelevantly low) inflation with monetary constraint (I like how Minksy called it "constraint," rather than "restraint"�a more fulsome word!).

And sure enough, Ponzi Finance Units have been evaporating ever since, with ever more putative Speculative Finance Units being exposed as Ponzi Finance Units in drag. These developments are, as Minsky declared, a prescription for an "unstable system" - to wit, a system in which the purging of capitalist excesses is not a self-correcting therapeutic process, but a self-feeding contagion: debt deflation. Eighteen months ago, I dubbed the outlook to be a Minksy Moment.

It still is. I don't, however, think we've reached a "tipping point" into a Minsky Meltdown in the United States. But we're far closer to the point than I thought we would get eighteen months ago, or even three months ago. What frightens me most is the herd notion "in play" right now that all Speculative Finance Units must strive to rehabilitate themselves into Hedge Finance Units; to wit, that the only truly "money good" credit is a borrower that can both service and amortize its debt with cash flow from its operations. This is the emerging, and frightening paradox of our times: for a company to prove that it is a going concern, it must prove that it could liquidate itself.
.............
Bottom Line
It is time for Mr. Greenspan to order banks to expand their "liquidity" lending, and cease contracting it: good loans are made in bad times, and the time has come to make them! And as part of the "deal," it is time for Mr. Greenspan to commit actively to pursue higher inflation, by declaring the "doctrine" of pre-emptive tightening to be dead: short rates will not be raised to prevent rising inflation, but only raised once inflation is rising.

Capitalism's beast of burden won't go away until the Fed is willing to slay it. It's time for Mr. Greenspan to use all his armaments. Unless he does, he will ride into the sunset himself as the Pretender, who started out so young and strong against inflation, only to surrender to debt deflation.

Misetich:
Debt deflation - we live in "interesting times"

Got gold?

Black Blade

(07/06/2002; 19:12:59 MDT - Msg ID: 80003)

Gas drillers tap coal beds

http://www.usatoday.com/money/energy/2002-07-05-methane.htm
Snippit:

The thousands of wells that now dot the basin produce about 1.5% of all U.S. natural gas, and if ambitious plans of Williams and other energy companies go through, coal-bed methane in the Powder River Basin could supply almost 10% of U.S. production, a potentially crucial boost for a nation that uses more and more of the clean-burning fuel but is finding less and less from conventional wells.

A report by the federal Energy Information Administration on the potential for gas production here and elsewhere in the Rocky Mountain region refers to the area as a possible "Persian Gulf for natural gas," noting its resources "are more than adequate to meet the expected increase in (U.S.) demand." Companies had produced coal-bed methane from gas-rich coal seams in Alabama and Colorado for years before production caught on here. As late as the mid-1990s, most production companies thought the Powder River Basin held little promise for coal-bed gas production, noting that the gas content of the water here was not as rich as other areas and guessing the little gas that bubbled up from coal de-watering wells was a localized phenomenon.

But the coalfields here are immense. From a small plane a few thousand feet up, the open-pit mines between Casper and Gillette are stunning for their sheer size, studded with enormous mechanical shovels and mammoth dump trucks, and attended by busy coal-hauling trains that seem to stretch forever across the high plains. As producers drilled more and more successful wells to tap coal-bed methane, they realized they'd stumbled on a rare "elephant" � a gas field of the size rarely found anymore outside the Gulf of Mexico or Alaska's North Slope. "It took enough people pumping long enough to convince themselves it wasn't just a local play around the gas mines," Zavadil says. The land boom that ensued saw companies snap up 95% of the available land in mineral leases.

Black Blade: The Powder River Basin is a potential energy target of nearly 24 Trillion cubic feet of methane. It is the largest potential source of methane energy in the lower 48 states. Its development is absolutely necessary if the US economy is to have a prayer of survival. Without energy the US economy is toast and this source of energy is a rare untapped resource. Regardless, the world is fast approaching peak energy development couple with rising economic development and growing population and will soon enter a period of permanent energy crisis. We live in "Interesting Times".

Black Blade

(07/06/2002; 20:11:00 MDT - Msg ID: 80004)

Crash Test

http://www.msnbc.com/news/776029.asp
As markets dip to their lowest level in years, some wonder whether the crisis in corporate confidence could trigger a far more serious downturn

Snippit:

THIS WEEK, on Tuesday, the Dow broke through the psychologically significant 9,000 mark during the session. And the Standard & Poor 500 index (which contains financially troubled Tyco International) followed in step, falling to a four-year low. "What we're seeing is individuals throwing up their hands and saying, it's just one thing after another." global investment strategist for J.P. Morgan Fleming Asset Management "It's all about confidence and faith in corporate profits," says Stuart A. Schweitzer, global investment strategist for J.P. Morgan Fleming Asset Management. "What we're seeing is individuals throwing up their hands and saying, it's just one thing after another." Could the growing crisis of confidence trigger another market crash?

Black Blade: A somewhat overly optimistic article in my opinion, however, at least the author admits that investors are fed up with corporate malfeasance and corrupt/inept boards of directors who act in concert with criminal auditors like Arthur Andersen. With a "Scandal a Day", it's a tough call for anyone calling an end to this "Bear Market".

R Powell

(07/06/2002; 20:36:52 MDT - Msg ID: 80005)

Lease default

The New York branch of Deutsche Bank stated that Asarco has defaulted on a lease of 1.5 million ounces of silver. The lease was extended at least once (last Dec.) and due recently but payment was not made.
I don't know if repayment in metal form was demanded or not. The monetary value is $6.3 million and the silver was used for hedging.
Did the company hedge more than it could mine? This seems unlikely given that the lease was extended once giving the company more time to mine. Did the company sell leased metal thinking it could buy back at a lower price and get burned with a higher POS? It would not appear so as $6.3 divided by 1.5 = $4.20/ounce. This could have been bought back at that price and even lower during this year. The lease extention was granted last December. Did the company lease and sell silver to raise working capital which is now gone with not enough monetary mining profit or metal to repay the loan? Would you move your family out of your home if you couldn't pay the monthly mortgage or would you pay the mortgage with a credit card? Perhaps a low interest (for six months) loan. Perhaps this company prolonged its life, hoping for better times (higher prices for its product) which never materialized?
Perhaps Mr. Blade, who is very knowledgeable about the mining industry, will comment. Anyone else? Is this the first of many metal leases defaults?
Rich

Black Blade

(07/06/2002; 20:45:40 MDT - Msg ID: 80006)

Trading on former glories

http://www.timesonline.co.uk/article/0,,630-347963,00.html
London's declining role in world trade

Snippit:

SINCE the days of the coffee houses of old, London has played a pivotal role in setting the price of world commodities. The traditions live on, influencing events thousands of miles away, from goldmines in New Guinea to bulk carriers rounding the Cape of Good Hope.
Famously, the London gold fixings take place twice daily, at 10.30am and 3pm, at the offices of NM Rothschild on St Swithin's Lane. The ceremony, which involves five men lowering tiny Union Jacks, has been enacted here since September 1919 when it began as a way of marketing South African gold.

Each fixing takes about ten minutes. The chairman suggests an opening price, which is relayed by the others to dealing rooms by telephone. He then asks who wants to buy � or sell � 400-ounce gold bars. The gold price increases or declines accordingly. When the business is done, the flags are lowered and the price is fixed.

Black Blade: Increasingly London is becoming irrelevant. Trade will likely go online 24/7.

Black Blade

(07/06/2002; 20:55:18 MDT - Msg ID: 80007)

Re: R. Powell

A couple of years ago Dakota Mining went tits up and left the Bank of NY on the hook for a few $million of forwards. Pegasus Gold also went tits up and the financiers took over the company in bankruptcy. The company changed its name to Apollo Gold and recovered their investment (though I am unsure if this necessarily involved forwards). The bankers recovered their investment by operating the mine no less. We nearly saw similar events with Ashanti, Cambior, and Emperor Mines. They are still around (though perhaps on borrowed time). Cambior is just a shell of their former selves after divesting themselves of some mining operations and Ashanti just threatened nationalization unless given acceptable terms. They are all buried deep under crushing debt and still may not survive (especially if the POG continues to rise).

- Black Blade

steady

(07/06/2002; 21:02:51 MDT - Msg ID: 80008)

how the fed reserve uses sdrs. and are more on the way?

http://www.gold-eagle.com/editorials_01/walker110901.htmlSDR Allocations and the Gold Price
After writing Bombshell from the IMF, I decided to take an in-depth look at the introduction of the Special Drawing Right (SDR) and see if there was an effect on the gold price.

First, an SDR is a reserve asset that is issued by the International Monetary Fund (IMF). Gold is also a reserve asset that is found on the balance sheet of a central bank.

My theory was that if there is X amount of gold on the balance sheet and a new asset is created that is designed to be a reserve asset, then the SDR would be filling a slot that would normally be held by gold.

Using that basis of thought, one would expect a decline in the gold price as the SDR was introduced. To date there have been two allocations of SDR's. The first period shows a link to a gold price decline, the second does not. The current period of the third allocation indeed does show a relationship with the decline in the gold price.

It is important to note that the third SDR allocation is not formally approved and awaits the vote of the United States to approve the Fourth Amendment to the IMF's Articles of Agreement.

Black Blade

(07/06/2002; 21:15:02 MDT - Msg ID: 80009)

Re: R. Powell

BTW, wasn't Asarco acquired in October 1999 by Grupo Mexico SA? I don't think that Asarco exists as a company anymore. Grupo Mexico is the world's third largest copper producer, fourth largest silver producer and fifth largest producer of zinc and molybdenum. Grupo Mexico is the leading by-product producer, with a total output of approximately 700t each year, mainly from its Santa Barbara and San Francisco del Oro lead zinc operations in Chihuahua and Charcas in San Luis Potosi. Other major producers were Grupo Frisco, that produces 200t each year from its Real de Angeles lead zinc mine. The Real de Angeles mine is to supposedly cease operation. Still, it is quite strange that such a large producer cannot meet its obligation on such a small debt. Cheers!

- Black Blade

Black Blade

(07/06/2002; 21:38:39 MDT - Msg ID: 80010)

Mexico � The World's Largest Silver Producer

Mexico is the largest silver producer in the world. Production comes from several primary silver mines, with silver also being produced as a by-product of base metal and gold operations. Silver production totaled 89 Moz in 2000. Mexico contributes approximately 17% of the world's total annual output. Four states were responsible for 74% of the country's silver output, listed in decreasing order of output: Zacatecas, Chihuahua, Durango, and Guanajuato. The largest producing company, Industrias Pe--oles, that contributes approximately 40% of the Mexican total. More than half of the company's output is derived from the Proa--o operation near Fresnillo in the Zacatecas State. Penoles' other major mines include the Las Torres mine in Guanajuato and the Naica lead zinc mine in Chihuahua.

- Black Blade

Max Rabbitz

(07/06/2002; 21:40:52 MDT - Msg ID: 80011)

Sector's Real Estate

http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=13186Yes Sector, Someone at this site turned me on to Doug Noland 48 weeks ago. What an education. You can't buy this at any University I know of. It's like seeing a train wreck in slow motion before reading about it in some dusty old history book modified for political correctness.

Also, Gold is the best kind of real estate. You don't have to pay taxes while waiting and it's transportable. What a deal for times like these.

R Powell

(07/06/2002; 21:56:13 MDT - Msg ID: 80012)

Black Blade

Yes, Asarco is part of the Grupo Mexico company. I would think but don't know for sure that, as such, Grupo Mexico would have no problem paying off $6.3 million or, at least, renegotiating the loan.
I've wondered for a long time about metal loans and whether they are normally simply rolled over when due. Maybe the interest rate changes a little but rolled over just the same. Wasn't the original sales pitch made to central banks to induce lending - interest on metal that otherwise wasn't producing any profit- so why not, from the bankster's point of view, roll over the loan for continued interest. This assumes that they aren't worried about eventually getting physical back. Bankers think interest, not default on capital. They are unaware or don't believe anything that would make them think otherwise concerning repayment. They're probably happy to collect interest on leased metal until kingdom come and a few years beyond if they could without ever recapturing the "principle". They won't let me pay off my mortgage without constantly telling me that the house should be mortgaged!
I've heard that interest on metal loans must be paid in metal. I've never seen this confirmed and, last year, asked David Morgan about this. He said he had never seen any lease forms for metals and thus did not know.
I do believe that silver supply will get tight soon and even 1.5 million ounces will be a significant amount. In 1000 bars, I could create some nice landscaping designs- walls and walkways and small outbuildings with 1.5 million ounces. I guess I'd have to hire a guard. No, I'd watch it myself while selling tickets to visitors!
Any more lease info?
Rich

sector

(07/06/2002; 21:56:16 MDT - Msg ID: 80013)

And...Max...The Best Part is "They" Don't Know you have it

Nor can "They" ever tax your "Capital Gains"I prefer to to think of profitable physical gold sales as local currency losses so one ought to be able to book the metallic "Gain" AND write off the currency "Loss".

R Powell

(07/06/2002; 22:17:04 MDT - Msg ID: 80014)

Max Rabbitz

http://csf.colorado.edu/longwaves/ Max, if you like Doug's Noland, you might like some of the stuff at longwaves.
Chapman has some thoughts on debt economy collapse too. Basically, can the Fed make money fast enough and convince banks to lend and borrowers to borrow to keep the system going? The Greenman has to keep this train running at full throttle. It will derail at any slower speed.
I hope the link works!
Rich

R Powell

(07/06/2002; 22:29:08 MDT - Msg ID: 80015)

Correction

I think the 1,000 ounce silver bars will do nicely for the walls and outbuildings but I'll use the 100 ounce bars for the walkways. They'll be easier to work with and will look better too.
"I say I don't know but I've been told.
The streets in heaven are paved with gold."
But the sidewalks are made from silver bars, just a little smaller than a regular sized brick.
I guess I'd better get some sleep.
Goodnight good people.
Rich

Max Rabbitz

(07/06/2002; 22:43:19 MDT - Msg ID: 80016)

Rich

Thanks, I'll take a look. I appreciate Noland so much because he took the time to clearly explain things like collaterized debt obligations and structured finance. It seems to me like modern finance is a very creative attempt to hide risk with paper creations. Currently I tend towards the belief that the Fed will end up monitizing all the bad loans. We shall have the hyper inflation?

Tomorrow I attempt to install a hardwood kitchen floor. Pray for me.

Black Blade

(07/07/2002; 00:54:57 MDT - Msg ID: 80017)

Gold rush - sure thing or passing fad?

http://straitstimes.asia1.com.sg/money/story/0,1870,129875,00.html

Snippit:

With currencies volatile and stock markets heading south, some investors are once again investing in gold - one of the few assets that have seen a steady price rise since last year. The price of the precious metal surged to a five-year high of US$328 per ounce last month - a return of 21 per cent in less than one year.

If you are after something to have and to hold, then you may want to consider gold bars or gold bullion coins. Historically, gold has had a strong negative correlation with the US dollar and the continued weakening of the greenback implies that the price of gold will appreciate further. Also, gold has anecdotally always done well in an environment with low short-term interest rates. This is because a government attempting to pump-prime the lacklustre economy using low rates runs the risk of raising inflationary pressures inadvertently. Thus, gold, which is seen as a traditional hedge against inflation, will emerge as a favourite store of value.

'In the first quarter of 2002, gold demand in Japan was 45 tonnes, double that of the fourth quarter of 2001 and triple the volume in the same quarter of the previous year,' he notes. A large part of this demand from Japan came about as a result of the new insurance limits on term deposit introduced by the Japanese government on April 1. Because their deposits are no longer insured fully by the banks, Japanese savers have been channelling part of their wealth into gold. Come April 1 next year, this insurance limit will be extended to include current accounts as well. And should the Japanese banking system and the Japanese or global economy take a turn for the worse, one can logically expect more funds to flow into gold, which is seen as a traditional asset of last resort and has a safe haven status, he added.

According to analysts The Straits Times spoke to, years of structural decline and low gold prices have created a scenario where exploration has been slashed and producers now face the serious problem of replenishing their reserves. Hence, supply may not be readily available. Given rising gold prices, major holders of gold - including the world's central banks - are unlikely to sell their gold reserves. Economics 101 teaches us that when demand rises faster than supply, prices are likely to rise.

Black Blade: An interesting article from Singapore. The topic of declining gold reserves at existing mines is addressed in the latest Daily Gold Market Report. Asia is the next major gold consumer. Current Japanese bank deposits will longer be fully insured come next April 1st. Yes, another "April Fools Day Surprise" awaits the hapless Japanese citizen as they are about to be taken advantage of again by their banks and government. They will seek other means to preserve wealth (unlike the Argentines who lost it all). Much of the Japanese savings will likely be withdrawn from the insolvent Japanese banks before the "April Fools Day Surprise" and some will be transformed into Gold, Platinum, and Silver. Note that this month the Chinese will begin another phase of a 5 step program to liberalize the Gold market (beginning in Shanghai). Soon over 1 billion Chinese will be able to trade in the Gold markets and the convenience of Gold ownership will expand throughout China. That is one huge market in a country where Gold and Silver have traditionally been seen as a safe haven store of wealth. Currently most Hong Kong Gold dealers say that the bulk of their business is from Mainland Chinese coming into the islands. When the convenience of purchases can be made throughout China we shall see Gold demand skyrocket. In a recent article, many citizens of Vietnam have been buying Gold. According to Gold trends � listed by the WGC � Vietnam Gold purchases have reached record levels. Asia is a region on the verge of a Gold buying binge.

Chap X

(07/07/2002; 01:01:40 MDT - Msg ID: 80018)

Siochain - Re: link

Here is the link to the post, which contains a link to the actual declaration.

http://groups.yahoo.com/group/yugoslaviainfo/message/3935

Chap X

(07/07/2002; 01:03:53 MDT - Msg ID: 80019)

Gold Standard - What a great idea!

Allgemeine Zeitung - DEPRESSION OR GOLD STANDARD
6 July 2002.
[Source: FAZ 5.7.02]

July 5 -- STOCK MARKETS WILL CONTINUE GOING DOWN FOR THE NEXT 5 TO 10 YEARS, states London-based hedge fund manager Hugh Hendry in an extended interview with Frankfurter Allgemeine Zeitung.

Stocks will have to crash another 35%, states Hendry, and thereby the "stock market culture will be eradicated."

The top central bankers, and in particular the Federal Reserve, have to be blamed for the disaster taking place on world stock markets. They have pumped the liquidity into the markets. And now, as investors have lost all confidence into corporations and their stocks, this liquidity in ending up in physical assets like gold, raw materials, and real estate.

It all started in 1971, states Hendry, when the dollar was decoupled from gold. Since then, central banks again and again created money to rescue the stock markets. In addition, semi-public agencies like Fannie Mae and Freddie Mac were used to create huge amounts of cheap credit for consumers.

The last stock market bubble, centered around the Nasdaq, was triggered by none other than Alan Greenspan, "who played James Bond, rescuing the world."

Therefore, he wouldn't be surprised at all if the Federal Reserve were to intervene directly as a buyer at stock markets. Greenspan is very worried about the huge liquidity, which he himself created, and which is no longer tied to stock markets.

For the US economy, with all the implications for the rest of the world, there are only two possible scenarios, states Hendry.

First, a long and worldwide recession, triggered by the US, which could take the dimension of a 1930s-style depression.

Alternatively, states Hendry, central banks could create even more liquidity trying to rescue the stock markets. In this case, there will be a huge inflationary push, and in the end investors will loose confidence in any paper values. We would then see the return to a gold standard.

Black Blade

(07/07/2002; 01:23:14 MDT - Msg ID: 80020)

Enron Board Knew of Accounting Shams

http://biz.yahoo.com/rb/020707/enron_congress_2.html
Snippit:

WASHINGTON (Reuters) - A U.S. Senate subcommittee concluded the board of directors of Enron Corp. "knowingly allowed Enron to engage in high-risk accounting," Time magazine said on its web site Sunday. In a report, the subcommittee also said the board was aware of matters that included off-ledger deals, conflicts of interest and excessive compensation for top officers but did little or nothing about it. The magazine said it obtained a copy of the report.

Black Blade: This is not uncommon. The board of directors are usually friends of the executive leadership. It's a matter of "you scratch my back and I'll scratch yours". Although the board is supposed to look after the interests of the shareholder, they rarely do. It's unfortunate but those are the facts of life in corporate America.

steady

(07/07/2002; 03:58:04 MDT - Msg ID: 80021)

imf/sdr vote

the last annual meeting of the IMF was canceled due to 911 so perhaps thay will hold one this year and possibly approve the SDR allocation.

Paper Avalanche

(07/07/2002; 07:53:01 MDT - Msg ID: 80022)

Silver market reaching critical mass

http://www.gold-eagle.com/gold_digest_02/chapman070802.htmlChapman summarizes the current sitaution in silver very well in his latest report. One might surmize that we are but weeks, or at most months, away from seeing the spot price for silver go vertical.

Paper Avalanche

USAGOLD

(07/07/2002; 10:11:52 MDT - Msg ID: 80024)

Sunday Thoughts. . . .

Haven't done this in a while, so here goes:

- - - - - - - - - - - - -

A headline in the Denver Post Sunday edition reads:

RECENT SCANDALS CALL REGULATORS INTO QUESTION

Anyone who reads my analysis on an on-going basis knows that I've consistently called to question the "hear-no-evil, see-no-evil, speak-no-evil" role of regulatory authorities in the U.S. markets. Not only have I called it to
question, my concerns were surfaced and published here long before they became the concerns of the media and society at large ( and only after high profile corruption and failure in corporate America became daily fare).

To go to the heart of it, I believe that the regulatory authorities' abandonment of their congressionally-mandated mission to provide free and fair markets is the root cause of the problems prominently featured in the media at the
moment, both in the gold and stock markets. This corruption and and these failures -- overlooked and even nurtured by political considerations in BOTH political parties -- goes to the heart of what's wrong with Wall Street,
and points demonstratively to the role of gold ownership as an antitoxin for what ails the American investment portfolio.

If you believe that the Enrons and World Coms of the world are isolated (some think even "culminating") events, then you've missed the point of my analysis and will probably hold onto your stocks until the bitter end -- or
your personal financial collapse -- whichever comes first. These are not isolated or singular events, my friends, they are systemic in nature and the concluding chapters to a long novel thematically based on the all-encompassing
and pervasive breakdown of the post World War II economic order. In other words, we are not talking about the collapse of individual companies here, but the potential collapse of the entire system. If you are not affected
now, you will be in the future. If you think its the other guy's portfolio on fire. Think again. If there's no fire in yours there's probably smoke.

For those who can't let go of the stock market and all its problems -- who think that we've finally reached the end of this sordid chapter in financial history, I will refer you to Gretchen Morgenstern's column in this morning's
New York Times. Morgenstern profiles the analysis of Sean Egan (Egan-Jones Ratings Company) who has a penchant for sniffing out corporate smoke and warned his subscribers in November, 2000 of the upcoming
WorldCom fiasco. He now says US Airways, United Airlines, Continental Airlines, Ford Motor Company and Xerox will all face "significant" problems along the same lines -- all having with debt, or more precisely, debts
they may not be able to pay. And lest you still miss my point let me say that, even with those inclusions, you are still only seeing the tip of the iceberg seated firmly in the path of the Wall Street Titanic.

Denial lies at the heart of the reason why this problem is not going to be rectified easily (and where denial has been subdued, outright corruption might well have taken its place), and denial is at the heart of why most investors
are going to take their hit and slog insistently on with the rest of their lives.

With reference to institutional denial: In that same Denver Post article referenced earlier, former Securities and Exchange chief accountant, Lynn Turner, states "The SEC is not funded, nor is it staffed, nor does it have the
statutory mandate to catch �crooks.�" My question to Mr. Turner would be "Then what is the purpose of the SEC -- to put in the run-ways so the �crooks� have a place to land?" I think not. The SEC has failed in the regulation
of corrupt practices -- in its oversight duties -- and the CFTC has failed in the regulation of corrupt practices -- most notably in the gold market (the problems in which they have been warned consistently and repeatedly.) In the
SEC's case, the apologists now say that it is not their duty to prevent financial crime but to gather "information." So. . . "information to what end?" To fill government file drawers? This is a familiar pattern -- accountants,
board members, management, regulators -- a circle of monkeys, arms akimbo, with fingers pointed in either direction. The American public is forced to witness this frustrating spectacle and shake their heads in collective
disillusionment -- fun reading, but not the sort of thing which generates market confidence -- and even more threatening, confidence in the society as a whole.

With reference to personal denial: Also in this morning's New York Times, the front section features an article by Alessandra Stanley titled:

PORTFOLIOS DEPRESSED, TRADERS SEEK THERAPY

The point of the article is that psychotherapy, as you might have guessed, has become all the rage with major stock players, traders, investment advisers and the like. One of the primary disorders being treated is a special kind
of anxiety having to do with selling one's holdings -- the psychologists have dubbed it "divestiture anxiety." One patient told his analyst: "I can't seem to let go." When asked if that sounded familiar, the patient said that it
reminded him of "trouble letting go of his mother when it was time to go to school." Of course, it goes deeper than that and the article avoids the problems of not being able to get out if you happen to manage one of the larger
mutual funds, or if your stock halves in the course of two or three trading days, or if its stuck in a corporate or government retirement plan where the chief investment officer is similarly afflicted. One bold hedge fund manager
claimed that taking drugs like Prozac diminished one's anxiety about the end of the world scenario which means "you are not as anxious as you should be about an obvious downside."

So get out the prozac and let it ride. "I'm losing everything!!! Whoooooooooopeeeeeeeee!!"

- - - - - - - - - - - - - -

Fortunately, most gold investors are no so easily drugged into market submission, nor do they believe everything the government tells them, nor do they believe that Alan Greenspan can pull all the levers, all the time, come hell
or high-water. They used to laugh at us. Who's doing the laughing now?

We will be open for business Monday selling our own version of therapy:

Gold in the portfolio.

Mr Gresham

(07/07/2002; 10:12:38 MDT - Msg ID: 80025)

The Silence of FOA

Haven't caught up on this weekend's posts, but looks from a glance like some good stuff from Max and RPowell. Have links up to read on "Debt" collapse, etc. Topical to the Max, indeed!

(My FOA thought is that the guy likes to be out ahead of the curve, not just hang around saying "I told you so." So, he's either totally gone -- I hope he misses us enough to come by and say HOWDY! -- or he's just letting us watch events and match them up with his Trail writings. And -- if he's on to something new, that would be nice to hear about, too.)

How does gold do in deflationary debt collapse, the kinds we see after accounting scandals reveal empty balance sheets? FOA's take is that Greenspan will liquefy the bad debts with new e-cash, leading to hyperinflation.

I'm guessing that the money won't be put out there to rescue your jumbo house, but just the creditor who lent you the jumbo mortgage. You'll still have to work out your debt with the Fed's designated receiver, and your house price won't be inflating you out of your debt, either.

The key is "WHERE is the now-paid-off creditor going to put HIS money?" after Greenie buys his debt paper? Lend it out again in an imploding asset scene? No. It's going to get parked in highly liquid, currency-collapse-insulated vehicles, waiting to buy up the assets at the bottom. And, it's going to seek momentum.

This is where all of the currents funnel the remaining (and any newly "manufactured") cash into the few available real, physical, and unleveraged assets available. Everything else gets starved for liquidity. Bingo!

USAGOLD / Centennial Precious Metals, Inc.

(07/07/2002; 11:18:38 MDT - Msg ID: 80026)

How to Protect Your Wealth through Private Gold Ownership -- An Education at Your Doorstep

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

"Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

TownCrier

(07/07/2002; 11:31:49 MDT - Msg ID: 80027)

Whether they do or not, be aware of what governments CAN do in a tight spot

http://biz.yahoo.com/rf/020706/economy_argentina_3.htmlExxcerpts:

BUENOS AIRES, Argentina, July 6 (Reuters) - Despite pressure to stop Argentina's financial system from collapsing, President Eduardo Duhalde crushed on Saturday market hopes he would forcibly transform billions of dollars of frozen bank deposits into bonds.

Instead, his economy ministry announced details of some new incentives that encourage Argentines to swap their savings for bonds...

"There will not be mandatory bonds," Duhalde told a news conference. He added that the government would look for other ways to save from collapse banks which lost billions of dollars after a bank freeze and a currency devaluation.

This week there was widespread market optimism the government would forcibly switch deposits into public bonds, a move that many analysts say is the only way of stopping banks from going bankrupt.

-----------

Bottom line: Such is the problem when you borrow short-term and lend long-term, coupled with a market that is perhaps too shallow for effective Central Bank open-market and Lombard operations without running a great risk of hyperinflation as a consequence.

Don't let yourself and the liquidity of your own portfolio be caught standing in the rain. Preparation, by definition, is something you do while the sky is still blue.

R.

Mr Gresham

(07/07/2002; 11:35:12 MDT - Msg ID: 80028)

Pimco

http://www.pimco.com/bonds_commentary_fed_focus_0702.htmThanks, misetich!

With the great insights from McCulley & Bill Gross, you wonder if at some point they will admit they shouldn't be running a bond fund ("Sure, we'll continue to do the best we can for you who want to stay in bonds, but...") and jump the divide over into something that really will preserve capital.

Hey -- if monetary "management" really WERE done responsibly, as the Fed would like all textbooks to assert it is, would we even be here talking about gold?

The sooner they shake it all out, the sooner we all could begin to talk about something else, something that will promote the _productive_ use of assets, and not just be a holding operation to survive the downslide. Meanwhile, they just want us all to mistake monetary THEORY for actual behavior.

Come over here, Charlie Brown, and kick this football...

Mr Gresham

(07/07/2002; 11:59:33 MDT - Msg ID: 80029)

Woodie

"what to DO with it?"

Nothing. Absolutely nothing.

(It's a very Zen thing we're into here ;-) Oh, yeah.)

misetich

(07/07/2002; 12:12:39 MDT - Msg ID: 80030)

The Trouble with Debt by Sean Corrigan

http://www.mises.org/fullstory.asp?control=994&titlenum=&FS=&title=&MonthSnip:

Thus, another tenet of the Greenspan Model proves to be invalid. Not only were profits often fraudulently overstated--as well as being falsely, if legally, enhanced by stock-options accounting--but "growth," too, was slower than reported in the boom years.

Do you know what was real, though? Incontrovertibly, unimpeachably, and rigorously recorded? Debt--even if the ultimate title to much of it has been obscured by Wall Street's skills in financial engineering. Debt. Liabilities. Owing money. Claims on yet-to-be-earned income. A lien on the future. A mortgage on Tomorrow. Debt. The real, four-letter legacy of Alan Greenspan and his former accomplice, Bob Rubin.

............

FitchIBCA painted a somewhat bleaker picture, posting a 13.4-percent default rate on its high-yield universe, with any improvement in overall ratings a mere statistical artefact resulting from the fact that even as so many CCC and lower-grade bonds had defaulted--fully $34 billion out of $120 billion late last year--several "fallen angels" had been newly included, as they in turn dropped out of the investment grade rankings.

S&P was perhaps the most sombre, noting that "the second half of 2002 continues to be challenging." Standard & Poor's also pointed out that, while 60 percent of U.S. ratings outlooks were currently stable, negatives, at 35 percent, outpaced positives 7:1.

Moreover, the firm was at pains to point out that pressure was not restricted to tech, telecom, and energy, but that the malaise was much more widespread.

Autos were characterized thus: "financial performance deteriorated precipitously." In capital goods: "the extent of the weakness cannot be overstated." Banks? "The majority of the 25 percent subject to change have a negative outlook." Energy: "Dismal."

Chemicals, forestry & mining, auto supply, consumer goods, media & entertainment, airlines--all had more companies with negative outlooks than with positive. Only health had parity between the ups and the downs (thank you, socialized medicine!).

As for those banks, while earnings were a record $21.7 billion in the first quarter--largely due to the Fed's largesse and the corresponding aid to net interest income--the FDIC warns of two major risks; that high loan-to-value consumer loans are not performing as well as their grantors� models predicted (Capital Insight Rule I: The Model is NOT the Market) and that there are heavy exposures to commercial property in some of the districts worst affected by the bust.

For thrifts, there are other worries. For the first time in four years, loan-loss provisions do not fully cover noncurrent loans, and there has been a sharp jump in problem thrift assets to a $15 billion level not seen since 1994.

...........

Dr. Debt may well find it will not just be equity investors and overseas dollar holders who come to curse him. Overburdened homeowners and even those who count these debts and their derivatives among their own savings may well come to do likewise before the crisis passes.

Misetich

"Do you know what was real, though? Incontrovertibly, unimpeachably, and rigorously recorded? Debt--even if the ultimate title to much of it has been obscured by Wall Street's skills in financial engineering. Debt. Liabilities. Owing money. Claims on yet-to-be-earned income. A lien on the future. A mortgage on Tomorrow. Debt. The real, four-letter legacy of Alan Greenspan and his former accomplice, Bob Rubin."

Greenspan, Rubin (now O'Neil), and the rest, the architects of Debt - Debt Engineers - and rest assured that they have the cure - More debt

Got gold?

misetich

(07/07/2002; 12:24:34 MDT - Msg ID: 80031)

Fannie Mae Distorts Markets

http://www.mises.org/fullstory.asp?control=986Snip:

An Affordable Housing Bubble
Fannie gives banks the ability to lend potential home buyers funds that they could not otherwise qualify for, with which they may purchase a home that they could not otherwise afford. For example, the Wall Street Journal reports that home loan mortgage payments as a percentage of disposable income are at record levels due to "changes in mortgage underwriting standards," and that the average down payment has declined over the last decade from 10 percent to 3 percent, with zero down payments not uncommon.[8] Fannie claims that it is using its regulatory privilege to decrease the cost of the credit to home buyers.

But does this make housing more affordable? The housing market will respond to an increase in demand by some combination of increasing supply and/or increasing prices. Research by Bert Ely, author of a study on the GSEs for the American Enterprise Institute, has suggested that subsidizing mortgage loans does not do much, if anything, to make housing more affordable because most of the subsidy goes into price increases rather than supply increases. His research shows that only a small increase in home prices is necessary to fully capitalize the interest rate subsidy.[9]

Ely's research also indicates that a portion of the demand subsidy goes toward an increase in the size of homes.[10] Ironically, it is this increase in home size that Raines cites as another factor driving demand for its lending activities.

The GSEs have linked home prices to the market for risk-free debt securities. Domestic and foreign buyers purchase these securities. In fact, they are a significant fraction of the capital accounts surplus funding U.S. the trade deficit. Fannie's continued ability to find buyers for riskless debt securities allows it to create what appears to be an increasing demand for housing by magnifying the amount of systemic risk.

Most home owners are completely unaware of this process, believing instead that their home prices are driven by the factors similar to those Raines cites, and that home prices move in only the upward direction. This process is not unlike the way small investors approached the stock market during the stock market bubble.

The fallacy of Raines's demand-side case for subsidized mortgage credit is that when a demand subsidy exists, home prices are partially a byproduct of the demand subsidy. Raines's claim that Fannie is simply stepping in the gap to supply much-needed credit is disingenuous. Increasing home prices are partially a consequence of Fannie's credit subsidy. Of Raines's list of so-called drivers of credit demand, most are side effects of the leverage and declining credit quality that Fannie has created.

If Fannie's policies enable some buyers to obtain loans credit that they could not otherwise afford, then for them, the cost of buying a home will be lower--"more affordable." As Raines has claimed in one of his speeches, "The suggestion that too much capital is going into housing is not new. We heard it a lot in the beginning of the 1990s. Fortunately for the 10 million families who became homeowners during this decade, the theory did not get much traction."[11]

It is not surprising that the recipients of a subsidy were pleased with the result: demand for a free good always exceeds supply. The borrowers, the banks, and Fannie's shareholders are quite happy with this arrangement. Taxpayers will probably remain unaware of their obligation until the bill becomes due. Were interest rates to rise, housing prices to turn down, or the ratio of mortgage loan defaults to increase beyond Fannie's reserves, a taxpayer bailout reminiscent of the S&L bailout would probably be called for by holders of GSE debt.

.............

As chronicled by numerous observers of the current financial scene,[14] Fannie funding is increasingly used for "cash-out" refinancing and home equity loans, the proceeds of which are spent to pay down credit card debt, or to fund more consumption items. The long-term result of increasing consumption at the expense of savings investment is that capital is consumed without being replaced. An economy with less capital can produce fewer consumption goods. Overall wealth is diminished.

Conclusion
An economy grows, i.e., increases its ability to produce consumption goods, when people save enough to fund the accumulation of more capital. Thus, wealth creation depends on savings. This is the only real way to make most things more affordable for the bulk of the population. Only the accumulation of more capital goods will enable business firms to produce more consumption goods.

Raines may be in a dream business, but the net result of Fannie Mae's actions in the credit markets is a nightmare of resource misallocation and massive systemic risk.

Misetich

Murphy's Law Mr. Raines, Murphy's Law

Got gold?

misetich

(07/07/2002; 12:40:17 MDT - Msg ID: 80032)

Richard Russell on Gold

http://216.46.231.211/boards/user/non-frames/message.asp?forumid=4&messageid=131125&threadid=131125Snip:

The money supply figure for the latest week shows the broad M-3 money supply up a mind-blowing $39.7 billion. M-3 is now growing at the annualized rate of $2 trillion a year. I've been saying that when the bear market hits, the Fed will fight the trend "tooth and nail." I was wrong, the Fed is fighting the bear "tooth and nail and fists and feet and elbows and knees." The classic definition of inflation is an unusual growth in the money supply. If so, then boys and girls, the US is inflating -- big time.

I was almost shocked to see that the latest Confidence Index (CI) figure out of Barron's was 80.0, a huge drop from last week's figures of 83.3. The CI is Barron's High-Grade bond index divided by Barron's Medium-Grade bond index. The steady decline in the CI indicates that the bond market is increasingly worried about the credit-worthiness of the nation's corporations. The old rule was that the CI (sophisticated bond investors) moves two to four months before the stock market moves. If so, watch out.
.........

A lot of subscribers are asking me for significant support levels for gold and the gold shares. I don't want to talk about such levels, because all such supposed "levels" will do is knock gold holders out of their positions, assuming they sell if such levels are violated. If this is a bull market in gold, which I believe it is, then you should take your position in gold items and hold them until the bull market fully expresses itself. This means that you should not assume a position that will worry you if gold and gold shares decline.

Remember, just as the bear wants to go down while taking the greatest number of stockholders with it, the bull wants to advance while taking the fewest investors with it. Therefore, this gold bull will try to shake as many gold investors off its back as possible as it rises. The best way to do that is to violate so-called support levels. Advice -- take a gold position that you can sleep with and forget about trading gold.

With the Fed pumping up the money supply at the rate of $2 trillion a year, even if gold never goes anywhere, holding gold items (real money) is logical and makes sense. Also, bull markets start in areas where most people are not. Who do you know who owns any physical gold or gold shares? Not many people. If fact, I'm flooded with people who ask me where to buy gold coins. They really have no idea.

Misetich

Lifted from PrudentBear' Post - Thanks to Jessel

Got gold?

misetich

(07/07/2002; 13:01:24 MDT - Msg ID: 80033)

Leftists could dominate Brazil presidential vote

http://ad.doubleclick.net/adi/N815.forbes/B997259.5;sz=336x280;ord=2002.07.07.18.43.20?Snip:

BRASILIA, Brazil, July 7 (Reuters) - Brazil on Sunday faced the possibility of two leftist opposition candidates squaring off in the October presidential election after two polls showed the center-right government's candidate sharing second place.

Such a scenario, which could further unnerve financial markets fretting about a turn to the left in Latin America's biggest country, has never taken place in Brazil's democracy.

Misetich

Keep on eye on this possible financial explosive trouble spot- largest SA economy - US bank interests are heavy as are imports from US

Got gold?

Boilermaker

(07/07/2002; 14:01:03 MDT - Msg ID: 80034)

Woodie's Dilemma

http://www.americanroyalarts.com/ViewSub.cfm?Section=Disney⋐Section=Scrooge%20McDuckScrooge McDuck is a marvelous model for a gold bug's "what to do with it".

kludge

(07/07/2002; 14:23:51 MDT - Msg ID: 80035)

Thar's gold in dem dare archives

As luck would have it, I began early last week to reconsider the sector weightings of some investments. Friday's market action provided the impetus get out of some losers while the getting was good (or at least better), so consequently I spent a fair amount of the weekend reading, studying, and debating with myself where the new home for this cash should be.

After some more or less random browsing of newer analysis, commentary, and charts - I ultimately found myself in the USAGOLD forum archives. With as many browser windows open as my poor, tired PC would allow: I went day-to-day thru the earliest archives (got to 12/99) while constantly referring back to historical price charts, news archive sites, and the linked commentaries/predictions of the then current day. All with the benefit of 20/20 hindsight. The results were impressive, and I thank the posters then (some gone, many still here, one or two due back soon?) for their courage to "make the call".

While it'd be no surprise to those that read here where a significant chunk of the cash will be going, just wanted to thank CPM for providing this forum, and invite others to make use of this valuable repository and draw their own conclusions.

Thanks!

Ten Bears

(07/07/2002; 17:02:35 MDT - Msg ID: 80036)

Scattershooting while wondering what happened to ORO and PANDAGOLD

The Poker Game-another analogy
How would you like to play poker where one player (the banker) had the power to create an infinite number of chips, loan them to other players, and collect interest on the loans as well as taxing a portion from the winner of each pot? Soon the banker would own not only all of the players' chips, but would also own the players he had loaned money to---not an easy game to win---unless you are the banker. Oh! Also, if you leave the game solvent, a portion of your chips is confiscated as a 'game leaving tax'. Your kin, who take your seat at the game, will be further disadvantaged with each successive generation.

David Ricardo's "Iron Law of Wages" in modern times= "trade, the race to the bottom". Remove all restrictions on importation of goods, and capital will move to the lowest labor and environmental cost regions, driving down worldwide wages to subsistence levels= "Socialism for financial corporations; aid as needed in exchange for control of industrial corporations; and cutthroat competition for natural (non-corporate) individuals." (Based on an article from The Royal Danish Ministry for Foreign Affairs)

Robert M. Hutchins's speech to a 20th century university graduating class: "The greatest, the most insidious, danger you will face is that you will be corrupted. Your friends will corrupt you, your business associates will corrupt you, and the system will corrupt you. It is this corruption that you must avoid." Recent news headlines indicate that his advice was not well received.

Cherokee neighbor says ... "the only people who can make corrupt corporate chiefs look good are politicians...they sell their services to the corporations. What does that make them?"

Alexander Del Mar noted in "History of Money Systems", published in 1895..."Coinage is the surest mark of sovereignty." Coinage in a more modern sense can be construed to mean the creation of money. That power (and sovereignty) resides with the Central Banks. This was pointed out recently by a post on this very board. Del Mar also observed that when a new order was in process of being established, new coins were struck with different names to note the change. Will we get new money and new names as FRN's depreciate at unprecedented rates?

Del Mar's research is extensive and his book is a good read...there is a chapter on the "Sacred Character of Gold". Also see "The Science of Money" published in 1896 from the same author.
__ Ten Bears

sector

(07/07/2002; 17:17:16 MDT - Msg ID: 80037)

LA Shooter was an Egyptian Jihad Islami Agent

Met with Osama Bin Laden's top deputy in 1998From DEBKAfile's Exclusive counter-terror sources
7 July: Hesham Mohamed Hadayat was no stranger toEl Al's Los Angeles airport office.

According to DEBKAfile's counter-terror sources, the man who murdered two Israelis on the El Al ticket line at Los Angeles airport on July 4th worked for the American Mercury ground service company from 1993 (one year after he arrived in the US) until 1998, when he left to set up his own limousine service for air passengers.

Exactly what he did at Mercury is vague, but during his five years in their employ, this former bank clerk from Cairo was free to move around Los Angeles international airport. Our sources reveal that during that time, he aroused the suspicions of El Al security personnel who warned airport security. When no action was taken, they put him under surveillance. El Al asked Mercury to rearrange Hadayat's shifts for periods when none of its planes were scheduled, which Mercury agreed to do

After the 4th of July attack, in order not to clash directly with the US authorities which refused to identify it as a terrorist assault, El Al and Israeli security spokesmen said that even if the Egyptian gunman was not a proven member of a terrorist group, his crime ranked as an act of terror.

However, Sunday, July 7 the influential Arabic London-based Al Hayat followed the original DEBKAfile disclosure of July 5 - that Hadayat was a member of the Egyptian Jihad Islami - and took it a step further. According to the Arabic paper, the Egyptian gunman met Dr. Ayman Zuwahri, the Jihad Islami chief who is Osama bin Laden's deputy, twice in California � once in 1995 and again in 1998.
According to DEBKAfile's sources, it was at that second encounter that Hadayat was told to leave his job with Mercury and given capital to set up his small limousine firm, so as to take advantage of his access to airport facilities and airline personnel contacts, while at the same time shaking off any watchers.

The Al Hayat report places Dr. Zuwahri in California unobserved less than three years before the 9/11 hijacking attacks in America and a year and a half before the Egyptair disaster (see first DEBKAfile story).

The Hadayat family lives in Cairo. His father, a retired Egyptian army general, and his uncle, a former minister of science, admit that Hesham was a fervent Muslim who did what he could to encourage everyone to read the Koran. They say he was happy in Irvine, California. His neighbors in that Los Angeles suburb tell a different story, that he hated Israelis and Jews and asked one of them to take down the American and US Marine flags put up after 9/11.

From all the foregoing, our counter-terror experts cite Hesham Hadayat as a classical a Qaeda plant. He was positioned at Los Angeles airport in the early 1990s to bide his time for the right moment to carry out a terrorist attack against an El Al flight. When Hayat's handlers saw he was under observation, they made him lower profile. His assignment was revised to fit his role as a limousine driver familiar to the Tom Bradley terminal staff and free to move around - namely to shoot down a line of passengers waiting to board an El Al flight.

Although from 1994 or 1995 at the latest, Hadayat was brought to the notice of American security, was under the eye of El Al security, and the Egyptian authorities must have known about him, he was never investigated - even after 9/11. The FBI has admitted he figured on no watch list for terrorists. This left him perfectly free to carry out his mission on behalf of the extremist Islamic organization � all of which raises some hard questions about the way in which the war against terror is carried out in the United States.
+++++++++++++++++++++++++++++++++++++++
Another black eye for the FBI and CIA�This shooter was a deep underground operative. No wonder the Feds can't admit that fact.

Black Blade

(07/07/2002; 17:59:28 MDT - Msg ID: 80038)

Top fund manager sees stock markets halving

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1025793330387&p=1012571727143
Snippit:

Hugh Hendry, Europe's best-performing fund manager, believes equity markets will fall a further 50 per cent before bottoming. In the last three weeks Mr Hendry says has sold off a third of his equity portfolio to seek the sanctuary of government bonds. Until recently Mr Hendry relied on the fact that a 'golden' 5 per cent of shares will rise even in a bear market. He identified these by following the flow of liquidity that central banks have been pumping into the economy by aggressively cutting interest rates. Rather than flowing into the equity markets, as has historically been the norm, this liquidity has flooded into assets such gold, property and commodities.

Mr Hendry played this trend by buying equities that were proxies for these assets, such as housebuilders, property companies, food manufacturers and tobacco companies. However, in recent weeks the market has turned against even these stocks. "I have been consistently 100 per cent invested for the last three years, but I am now selling stocks," he says. Mr Hendry admits he is not certain what will happen next, but he is raising the possibility that we may be heading for a 1930s-style depression, rendering it impossible to make money from the markets.

Black Blade: only a 50% decline in the equities markets? Quite the optimist. I agree that we are likely headed into a new Great Depression. There is absolutely nothing holding up the markets � certainly not growing profits.

Black Blade

(07/07/2002; 18:13:23 MDT - Msg ID: 80039)

In Mutual Fund Reports, a Midsummer's Nightmare

http://www.washingtonpost.com/wp-dyn/articles/A33670-2002Jul6.html
Snippit:

Before you peruse your second-quarter mutual fund statements, you may want to pour yourself a drink. A stiff one. Chances are the news is not going to be good. In fact, from value to growth, small-cap to large-cap, the news about mutual fund performance over the last three months is pretty much across-the-board awful. Even fund styles that did fairly well in the first quarter, such as large-cap value, suffered in the second, unable to overcome the deluge of scandal that swamped the stock market, sent investors scurrying for cover and pulled down shares of just about any firm with a complicated balance sheet.

In the global arena, gold dominated with the 11.11 percent return, while Japanese funds provided the only other gain, a slim 3.83 percent advance driven by signs of recovery in that nation's long-battered economy. Latin American funds fared worst, plunging 19.37, a drop analysts blamed on reduced export potential for Mexico, as its biggest trading partner, the United States, continues to struggle.

Black Blade: It appears that the banks are at it again tonight in OZ. Some fund/bank is working hard to push Gold prices down during somewhat illiquid trading conditions. It could get more "interesting" when a real market opens in Europe or the US. It should be interesting to watch the equities markets as Friday's run up during extremely thin trading could reverse sharply unless "official" or suspicious "institutional" trading suddenly appears. Of course the end of quarter trading is also done for now � so "normal" institutional trading should be subdued.

mikal

(07/07/2002; 18:36:44 MDT - Msg ID: 80040)

@BlackBlade, All

As you know, some of Friday's US equities rally has been attributed to relief and release of pressure built up over July 4th terrorism worries. Since Friday was a shortened trading session, has all this pressure been released? And will many traders remain on the sidelines waiting for Bush's, Tuesday State of the Union speech? How will they react to it? TIA!

misetich

(07/07/2002; 18:37:55 MDT - Msg ID: 80041)

Rich lost $2.6trillion in financial markets in '01

http://channels.netscape.com/ns/news/ns/story.jsp?floc=FF-PLS-PLS&id=403781107&dt=20020707190200&w=RTR&coview=Snip:

LONDON, July 8 (Reuters) - Rich investors on both sides of the Atlantic lost $2.6 trillion -- or six percent of their wealth -- in 2001's plunging markets, according to a survey.

The mountain of assets wiped off in just one year is roughly the size of the entire private banking industry in Switzerland, where wealthy client assets managed by banks are estimated at between $2 trillion and $3 trillion.

"Few investors or regions were untouched by the destruction," said the benchmark industry survey published by global management consultants Boston Consulting Group (BCG).

...........
The BCG, which surveyed more than 60 leading private banking firms representing total assets of $3 trillion, said 2.3 million households around the world slipped below a wealth threshold of $250,000 in net assets last year.

The rich are alarmed by the wealth destruction and are becoming risk averse, shifting to cash and money market funds, it said.

...............
"Many competitors are still assuming unrealistic levels of growth...Institutions must actively manage their costs instead of focusing too narrowly on revenue and asset growth," it said.

It said 2001 industry revenues fell an average 11 percent, commission income 21 percent and asset fee income eight percent while compensation costs climbed one percent, marketing expenditure five percent and operational costs two percent.

As many banks managing money for the rich scale back ambitious expansion plans, bankers expect more job cuts.

Barclays Plc , Britain's fourth largest bank, has said it is mulling cuts to private bank staff costs due to tough market conditions which banking sources say could affect up to 15 percent of jobs in the international business in London.

Coutts & Co, private bankers to the Britain's Queen Elizabeth, says it is restructuring its London business to focus on profitable domestic clients.

In May, Britain's loss-making Schroders Plc shed top private banking executives and axed 19 jobs just a year after creating a private bank.

Citigroup Inc , the world's largest financial services firm, has recently announced cuts in European private banking jobs. Germany's largest Deutsche Bank has also taken the knife to its loss-making London private banking unit.

The survey said many banks were pursuing unprofitable low-balance accounts. On average, half of client accounts at most firms held balances below stated minimums, it added.

Misetich

New Paradigm, New Economy - what a scam!

Got gold?

misetich

(07/07/2002; 18:41:52 MDT - Msg ID: 80042)

Bush under pressure on corporate fraudsters

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1025793371794&p=1012571727304Snip:

US senator Tom Daschle (pictured left), the Democratic leader, on Sunday called for the release of the case file of a 1991 insider trading investigation of George W. Bush, saying discrepancies in the president's account have raised new questions.

Mr Daschle's comments raised the pressure on the administration before a speech by Mr Bush on Tuesday, in which he is expected to announce tougher criminal penalties for executives who commit fraud. They also come as the Senate prepares this week to vote on tough accounting reform legislation, a bill the White House opposes.

The Democrats further turned up the heat with the publication of a 60-page report by the Senate sub-committee on investigations, chaired by Senator Carl Levin, in which the Enron board is charged with contributing to the energy trader's collapse by ignoring repeated warning signs that wrongdoing was under way among executives.
...........
"The president would do well to ask the SEC to release the file . . . let everybody see just what is there," Mr Daschle said on the CBS News programme Face the Nation.

The administration has made a concerted effort in recent weeks to appear tougher on corporate wrongdoing, with Mr Bush speaking forcefully against the $3.8bn (�2.5bn) accounting restatement at WorldCom, and Harvey Pitt, SEC chairman, quickly filing a fraud suit against the telecommunications conglomerate.

But Mr Daschle said the misleading statements about the insider trading inquiry - and the acknowledged failure of Harken to report properly Mr Bush's sale of company stock - highlighted the administration's lack of responsiveness in the wake of recent corporate scandals.

Documents obtained by the Centre for Public Integrity, a watchdog, said the SEC found in 1991 that Mr Bush had insufficient knowledge of Harken's losses to have traded improperly on the information when he sold his stock.

Misetich

Lets see...November elections around the corner - it will get "interesting" as they turn the knives on each other -

Got gold?

goldfool

(07/07/2002; 18:49:08 MDT - Msg ID: 80043)

Gold and the precious metals - investment of last resort

Hope springs eternal for the sheeple until employment and real estate values start eroding then look for a major shift into the PMs. Now that the Fed has lured many people into refinancing their mortgages with low interest rates and sucking the equity out their homes to keep the economy propped up, what's next on their agenda? Can they keep the stock market buoyed up long enough to allow corporate America to climb out of debt and start reexpanding? I doubt it. Consumer spending is showing signs of fatigue as accounts dwindle and the stock market wealth effect turns into the poverty effect ( Wait until the next quarterly 401K statements are sent out, do you think the little rally on Friday was to soothe the nerves of a few frazzled investors? ) . Insiders, the pros, and foreigner investors have seen the writing on the wall and are bailing out of the SM in droves as corporate scandals run amok. The only thing that is probably providing any comfort or solace for the sheeple is overinflated real estate values. People keep pouring money into upgrades ( pools, remodels, etc. ) and new purchases just as they poured money into the tech stocks at the top during the late nineties thinking home values will only keep appreciating. The consequence I'm afraid is going to be the same. Pretty soon unemployment is going to take it's toll and consumer spending is really going to snowball downward. When it does new construction and real estate values will plummet with demand and with no jobs many will default on their mortgages, credit cards, and car loans. Bankruptcies will skyrocket. The Fed has so far been able to control the exodus out of the SM by manipulation of key economic numbers, indexes, currencies, and commodities however pretty soon the dike is going to burst and a lot of capital is going to be desperately looking for a new home and that could be the PMs, the investment of last resort. The central bank selling of reserves in my opinion is nothing but a big bluff as up to 35% ( according to some estimates ) has already been loaned out. The cabal with their paper games will be overwhelmed and be forced to cover. Hopefully the government will take no extreme measures ( such as confiscation ) and let the markets find a natural equilibrium. What to do until then? Just lean back and consider the undulations and machinations of the markets as entertainment.

misetich

(07/07/2002; 18:54:35 MDT - Msg ID: 80044)

Rhetoric raised in JP Morgan's Mahonia trial

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1025793323067&p=1012571727304Snip:

Alleged fraud at WorldCom may be preoccupying markets. But a fierce legal battle is developing around another big US corporate scandal - the collapse of Enron - which could have important ramifications for both Wall Street and the insurance industry.

At issue is whether 11 insurers must pay nearly $1bn to JP Morgan Chase, Enron's adviser and one of its principal creditors, on surety bonds used to guarantee commodity deals between the US bank and the energy trader.

The trial of the case is not due to begin until December 2 - coincidentally under the same New York judge, Jed Rakoff, who will hear the Securities and Exchange Commission's fraud suit against WorldCom next year.

.............

Chubb, whose Federal Insurance subsidiary is one of the 11 being sued by JP Morgan, raised the temperature two weeks ago by filing a direct claim against JP Morgan, alleging that the bank "surreptitiously lent money to Enron, by way of Mahonia, and expected to be repaid . . . by Enron, with interest" directly or via other offshore vehicles.

Such allegations have set regulators, Congress and prosecutors including Robert Morgenthau, the Manhattan district attorney, on the trail of JP Morgan, in search of evidence that the bank misled investors.

...........
In making its case, however, JP Morgan has had to detail the nature of its own pre-paid forward commodity deals with Enron. The bank insists that the underlying sales of oil and gas were real transactions, but it says everybody, including the insurers, "knew that the [Mahonia] deals were part of a structured financing transaction for Enron's general corporate benefit".

What interests regulators is whether these were in reality loans that the bank did not declare. But to describe such deals in that way, JP Morgan suggests, is to over simplify what was a complex, but legal, structured financing technique.

............

Chubb declines to comment on the JP Morgan counter-claim. But the insurers are also probing sensitive territory for the bank, which was slow to detail its exposure to the surety bonds last December. Part of Chubb's complaint is that JP Morgan propped up Enron because, without the additional financial support, the bank risked losing its other outstanding loans.

.............
The insurers have only recently won access to more than 400,000 e-mails and 350 warehoused boxes of documents related to the case, and JP Morgan is seeking further evidence of other surety bond contracts written by the insurers.

Misetich

Will stay on the JP Morgan TRAIL...without deviating too far from FOA "wink, wink"

Got gold

slingshot

(07/07/2002; 19:00:37 MDT - Msg ID: 80045)

Feeling Good Tonight.

*******************************Welcome all new posters. Looking forward to reading your point of veiw on what is happening with Gold. Yepper, they are at it again trying to push the POG down again tonight. Can you blame them? They're in deep Kim Che. As for Another, FOA and all the rest, I have the feeling they are lurking. Waiting for the right time to come back, center stage.

Yea, I await the day.
Good fortune comes our way.
And we'll ride down the Kings Highway.
Tom Petty, "Kings Highway"

Thinking Positive.
Slingshot----------------------------<>

misetich

(07/07/2002; 19:09:36 MDT - Msg ID: 80046)

Dollar Falls as Japan's Shiokawa Says Currency Likely to Weaken

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&T=markets_bfgcgi_content99.ht∣dle=ad_frame2_all&s=APSjdGxaSRG9sbGFySnip:

Japan's Finance Minister Masajuro Shiokawa said Saturday that many of his counterparts in other countries have a view that the dollar is weakening, and ``may fall to about 115,'' he told reporters after the Asia-Europe Finance Minister's meeting in Copenhagen.

``Shiokawa's comments led to the dollar's decline as they hint Japan may have changed its stance to tolerate a stronger yen before selling it,'' said Yasuo Kayamoto, vice president for foreign exchange at UFJ Bank Ltd. In the past months, ``Japan's yen sales were the only supporter of the dollar.''

Misetich
Maybe they are getting wiser, maybe they're not telling the truth - maybe they know they can't fight the market-

Time will tell

Got gold?

Mr Gresham

(07/07/2002; 19:10:45 MDT - Msg ID: 80047)

goldfool

That was a fine summary -- if I had to give someone my overview of the economic picture in ~200 words, I would borrow yours. Each sentence segues to another facet of what is around us, and points to what lies ahead of us in that department. Thank you.

I just saw a friend's $35,000 paint job on his house last night. He borrowed into equity to do it. He thinks he's a house millionaire. He already knows I think he should sell it and convert his remaining equity to "other forms", so I don't nag him about it anymore. Someday that 35k will be grocery money he doesn't have.

Sheesh! What a Doomer I am! Somebody stop me.

But when you think that 95% of all national economic policy since 1940 has been to AVOID a return to the 1930s, you just gotta put in a vote for the "Return of the Repressed" theory and say that what they've done overall is a PERFECT set-up for making it happen again.

misetich

(07/07/2002; 19:21:35 MDT - Msg ID: 80048)

Euro will gain parity with dollar, says Prodi

http://www.gulf-daily-news.com/Articles.asp?Article=27115&Sn=BUSISnip:

"I think that the euro will have in the future similar rate, similar dignity, similar weight as the dollar," he told a forum of government officials, diplomats, academics and businessmen here after delivering a lecture on Asia-Europe ties.

"Europe, when we shall arrive at 500 million people, we shall represent by far the biggest economic entity in the world," he said, referring to the moves to expand the European Union to around 25 members.

Prodi was replying to a question on the possibility of the single European currency increasing its share as part of the foreign reserves of countries worldwide currently dominated by the US dollar.

"We have given birth to a baby and it will grow big," Prodi said at the forum.

Misetich:

CB's holding vast amount of US $ reserves and little else must be getting a bit "worried" as they see their "just good as gold theory, sold to them in the last 20 years" being flushed down the proverbial toilet

Gold has no substitute

Got gold?

misetich

(07/07/2002; 19:28:53 MDT - Msg ID: 80049)

Brazil's Dollar Denominated Debt Doomsday Machine: David DeRosa

http://quote.bloomberg.com/fgcgi.cgi?ptitle=David%20DeRosa&touch=1&s1=derosa&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APSJ3DxZ4QnJhemlsSnip:

New Canaan, Connecticut, July 3 (Bloomberg) -- Brazil's Arminio Fraga, the former hedge fund manger turned central banker, could easily say he has hunted with the hounds and run with the hare.

You will remember that before Fraga took over his country's central bank in 1999, he worked for the Soros hedge fund. Soros, for many, has long been the lead dog in the hedge fund hunting pack.

Fraga's problem is that Brazil is now the number one rabbit in the field. One of the hunters has become one of the hunted and Fraga -- now Brazil's central banker - is having a hard time outrunning the hounds.

The source of Fraga's problems and Brazil's tribulations is presidential hopeful Luiz Inacio Lula da Silva. Lula is well poised to win the Oct. 6 election.

What worries investors is that as president, Lula will order Brazil to default on its debt. Or he might demand re-negotiations between Brazil and its creditors, which amounts to the same thing.

The odds that Lula will get elected and become Brazil's next president have caused the Brazilian currency to fall 19 percent since March.

..........
If you really want to understand the explosive nature of Brazil's financial situation, consider that it owes $132 billion in debt denominated in dollars.

Doomsday Machine

This is the doomsday machine I referred to in the headline. For as the real sinks, Brazil's indebtedness, measured in terms of its own currency, climbs higher. Since March, the value of Brazil's debts in local currency has increased by 19 percent, or the equivalent of $25 billion dollars.

Where have we seen this before? Lots of places, mostly emerging markets nations. My favorite was Mexico, a country that before abandoning its fixed exchange rate for the peso in December 1994, converted substantial portions of its government debt to dollar-linked bonds.

When the peso exploded, the government went bust. Bust meaning it had to call on the U.S. and other nations as well as the International Monetary Fund for emergency funding.

Dollar-denominated debt is popular with emerging market nations because whereas capital markets are shallow in their own currencies, the dollar-based market is as deep as deep can get.

An Extraneous Factor

Yet fears about Lula are driving Brazil toward bankruptcy. The potential access to money is greater when Brazil taps the dollar debt market, but the country took on an unhedged -- I would argue speculative -- position when it borrowed in dollars. In effect, Brazil is short dollars and long on the local currency when it comes to dollar-denominated debt.

At this point, I would normally expound on the danger of having external dollar-denominated debt in conjunction with a fixed exchange rate regime. That is a witch's brew that took down most of Southeast Asia in 1997, not to mention Russia in 1998 and Argentina last year.

But Brazil already abandoned its peg for the real in 1999. Since then the real has been floating.

Instead, what we have here is a case of a floating exchange rate that is plagued by a crisis of political trust.

And the sad truth is that Fraga probably can't do much about it. Fear of Lula may literally drive Brazil bankrupt.

Misetich

JP Morgan, Corporate Accounting Fraud, Fanny Mae, Life Insurance, Pension Funds, Mutual funds, Distressed bankers, Telecom Debt, Consumer Debt, Corporate Debt, overvalued Stock Markets - so many TRIBUTARIES to our TRAIL - waiting for the gold coil to snap

Got gold?

Black Blade

(07/07/2002; 19:32:59 MDT - Msg ID: 80050)

Insider-trading creeps into limelight

http://cbs.marketwatch.com/news/story.asp?print=1&guid={DF2EDCFC-DD7F-450B-B544-3C37A3C2D66A}&siteid=mktw
Regulators vow tougher stance, but can they handle it?

Snippit:

Even as the bad old days of Michael Milken and Ivan Boesky fade further from memory, insider trading is making a comeback in America. But those who dare to make ill-gotten earnings may be on a collision course with an SEC that's vowing to take a harder-line stance in the post-Enron era. "Insider trading is creeping back, and the agency wants to crack down on it like a ton of bricks," said Brian Lane, a Washington-based securities lawyer with the firm of Gibson, Dunn & Crutcher.

Black Blade: Insider trading will never end � not anymore than phoney bookkeeping or corporate corruption.

Boxman

(07/07/2002; 19:55:11 MDT - Msg ID: 80051)

Countries going under, are U.S. states next?

http://www.larouchepub.com/other/2002/2926calif_budgt.htmlThe well to do are going to take it in the shorts (like they don't pay exceedingly more than their fair share now)with calls for increased taxes on them. If I were well heeled, and lived in California, I would high tail it to a friendlier state.

Joe six pack will also pay more, as sin taxes face extreme increases in the coming months.

The elderly, living on fixed incomes will be put in dire straits, as the cost of health care will increase, and state and federal help will be decreased.

If energy costs escalate due to hot weather (speaking primarily of CA), things will indeed become unbearable for far to many.

I believe that this decrease in revenues to the states is going to become a huge problem that only now seems to be gaining attention in the press.

Keep a low profile, and most importantly, follow Black Blades advice.

goldfool

(07/07/2002; 20:37:29 MDT - Msg ID: 80052)

Mr. Gresham - Boomers vs. Doomers

No need to feel apologetic about having a bad feelings about an economy built up on and perpetuated by lies, greed, and corruption. Believe me there are more than enough "cheerleaders" around to help try and keep the spirits of team America fully invested in the stock market. What the country needs now are more critical and independent thinkers like you who see beyond the facade that the bureaucrats, economic analysts, and mainstream media have created to cover up the cold and bleak economic realities and eventualities that exist underneath. Basically we have a good economic foundation but in order to fix a sagging house you've got to tear the siding off to expose the rot underneath.

A Canadian

(07/07/2002; 20:55:22 MDT - Msg ID: 80053)

REAL T.V.

The U.S. dollar index daily drama providing a great episode tonight. ( Japs finally realising folly of bailing with a puny scoop). Tomorrow's episode should be an eye-popper. Stay tuned.

Black Blade

(07/07/2002; 21:20:39 MDT - Msg ID: 80054)

EU has own list of financial scandals

http://www.busrep.co.za/html/busrep/br_frame_decider.php?click_id=345&art_id=ct20020706191055796S56074&set_id=60
Snippit:

Paris - Europe has its own list of financial scandals, from a Belgian software maker that fabricated income to a millionaire Briton who plundered his company's pension fund and then drowned. While none is as large as WorldCom's $3.9 billion in mischaracterised expenses, there is no guarantee against something similar happening in Europe, accountants and investors say. "It could definitely happen here," says Markus Straub, a spokesperson for German shareholder activist group SdK. "The reason you don't see cases on the same scale as in the US is that there is a time lag. Our regulators aren't as stringent." "Auditors are the last link in the chain," says Stella Fearnley, a lecturer in accounting at Portsmouth Business School, who in April testified to a UK parliamentary committee on financial regulation. "We are not exercising the right sort of controls." US regulators are better positioned to pick up on company wrongdoing than their European counterparts, experts say.

Black Blade: Not very reassuring.

Gandalf the White

(07/07/2002; 21:25:27 MDT - Msg ID: 80055)

OK SPOT !!! Enough of that JUMPING Down and Up !!

http://informer2.comdirect.de/de/detail/_pages/charts/main.html?sSymbol=GLD.FX1&sTimeframe=iD&useSettings=0&showSettings=&sid=&hiddenTimeFrame=&sOrdType=price&sScale=linear&sMarket=GLD.FX1&iType=1&sAv1=38&sAvfree1=&sAv2=200&sAv2free2=&sAv2count=1&iInd0=na&sBench1=na&sBenchcount=1&sBench2=&sBench2count=1&showBenchmarkSearch=&iInd1=na&iInd2=na&iIndcount=1&sSettings=naJust JUMP UP !!!
<;-)

sector

(07/07/2002; 21:31:20 MDT - Msg ID: 80056)

Levitating Stock Market

The Fed Issued $39 Billion in "Repos" Last WeekDoes it really take rocket science to connect the manipulation dots?

These Fed repos go straight to the stocks, bonds and swaps of the finance and brokerage industry. Indeed the annualized growth of the money supply is at a $2 Trillion run rate.

That spells inflation and voila right on cue, the Economic Cycles Research Institute [ECRI] has just released the USFIG or future inflation gauge data. Jeeze it went UP by 5.5% and is in a kind of moon shot trajectory. For the last year the FIG has risen well over 15% from its low.

The Fed watches this parameter and no doubt is feeling the heat a bit these days. But not to worry, the Master of the Universe is IN CONTROL. He will print and print and print...damn the FIG!

Gandalf the White

(07/07/2002; 21:48:26 MDT - Msg ID: 80057)

WOWSERS there Sir 'A Canadian' !!!

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=iA Canadian (07/07/02; 20:55:22MT - usagold.com msg#: 80053)
===
Looks like a bottomless PIT !
HOLD ON to your PM's.
This is getting SEROIUS !
<;-(

Black Blade

(07/07/2002; 22:00:16 MDT - Msg ID: 80058)

Mixed Indicators

http://www.mrci.com/qpnight.asp
The USD is falling flat tonight (so far). Gold is static, petroleum is lower as the deepening recession decreases demand for energy, and the market index futures indicate a lower opening at these levels. Looks like fun.

- Black Blade

(07/07/2002; 22:49:53 MDT - Msg ID: 80059)

MERCK EARNINGS NEWS

There is something coming from CNBC Europe about Merck's
Earnings in Monday's Wall Street Journal. Does anyone
have more detailed information on this?

(07/07/2002; 23:04:49 MDT - Msg ID: 80060)

MERCK ADJUSTMENT IN REVENUE

http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20020708/bs_dowjones/merck_booked__12_4_billion_in_revenue_it_never_collected
The above link gives a detailed article on the Merck revenue

adjustment described in Monday's Wall Street Journal. This

may be having an impact on the USD now, and may also impact

stock trading in the U.S. on Monday.

Black Blade

(07/08/2002; 00:13:17 MDT - Msg ID: 80061)

Japan may bail out banks with public funds after all

http://business-times.asia1.com.sg/news/story/0,2276,50528,00.html?
Govt panel proposes indirect use of taxpayers' money to avoid backlash

Snippit:

JAPAN has begun to think what has up to now been the unthinkable - a full-scale bail-out of its bad debt-laden banks using public funds. If the plan goes ahead in the form proposed by a high-level government panel, it will be carried out by the Resolution and Collection Corporation (RCC). The government will not buy the banks' non-performing loans directly, so as to make the exercise palatable to taxpayers. Some analysts believe that the Bank of Japan will be forced to finance the operation indirectly by buying more government bonds, at a time when BOJ governor Masaru Hayami is said to be already very concerned about the high amount of government debt the central bank holds.

Shoichi Royama, head of the advisory panel which Mr Yanagisawa set up to come up with a 'vision for the future Japanese financial system', has suggested that the problem of NPLs must be solved partly through the use of public funds. Whichever route is chosen, it threatens an increase in liabilities for a government whose outstanding debt (at some 660 trillion yen) has already reached a record level equal to 140 per cent of GDP.

Black Blade: I think we know why the Yen is tanking in spite of the MOF and BOJ intervention. The Japanese taxpayer already has been paying the cost of currency intervention and for government adventures in propping up the Nikkei. Also, the name and purpose of the department - Resolution and Collection Corporation (RCC) � sounds eerily like the "Resolution Trust Corporation" created by the US government to bail out the Savings and Loans a few years ago. Hmmm�

"Interesting Times"

Black Blade

(07/08/2002; 00:29:30 MDT - Msg ID: 80062)

Bust is here - and it's not going away - (UK)

http://www.guardian.co.uk/business/story/0,3604,750337,00.html
The final part of a Guardian investigation looks at the cyclical nature of markets and suggests the bear market will not change in the short term: 200 years of bulls and bears

Snippit:

The chancellor of the exchequer has used the phrase "no more return to boom and bust" 89 times in speeches and interviews since Labour took power in 1997. Or at least it feels that way. The office for national statistics does not keep a record. Neither does IG Index, the spread betting firm, which declined to make a price on the matter yesterday. But for Gordon Brown the claim is proving something of an embarrassment. It is difficult to fathom why an otherwise shrewd politician would continue to repeat it when even the most cursory glance at the financial history books illustrates how unlikely it would be.

Black Blade: First off, Gordie Brown is not an especially bright fellow. In fact I would refer to him as a dim bulb. His plan to give away the peoples Gold at the lowest price possible for BoE reserves in what are now fast depreciating currencies was at best a "poor" decision. I think he fancy's himself an economist � though he will go down in history as the opposite of King Midas. Everything he touched did not turn to Gold, rather turned to s***.

Black Blade

(07/08/2002; 00:37:18 MDT - Msg ID: 80063)

"Scandal of the Day" - Merck Booked $12.4 Billion in Revenue It Never Collected

http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20020708/bs_dowjones/merck_booked__12_4_billion_in_revenue_it_never_collected
Snippit:

Drug giant Merck & Co. recorded $12.4 billion in revenue from the company's pharmacy-benefits unit over the past three years that the subsidiary never actually collected, according to a filing with the Securities and Exchange Commission. Monday's Wall Street Journal reported.

Black Blade: One does not have to look far to find a "Scandal of the Day" anymore. Sometimes there are two or three to chose from.

TownCrier

(07/08/2002; 01:15:10 MDT - Msg ID: 80064)

The U.S. dollar as one of the IMF's basketcases?

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Stories%20World&tp=ad_uknews&T=news_storypage99.ht&ad=worldtop&s=APSj.RRaSRG9sbGFy&ao=3348311Fortunately, longtime readers of USAGOLD have been adequately warned of this inevitable downturn, even as the rest of the world was frenetically buying into Wall Street's hype of a new investment paradigm based on a "new economy".

The party raged on, and if there was any lingering doubt about whether the band was merely taking a break or if they had, in fact, left the building, the reality check has now been served this year with the dollar itself finally joining in the well-established downtrend of the equities markets. Adding again to previous years� losses, so far this year the Nasdaq Composite is down 26 percent, the S&P 500 Index is down 14 percent, and the dollar has fallen 10 percent against the yen and the euro.

When there's somethin� strange in your neighborhood, and looking at your quarterly portfolio statement gives you the creeps and the jitters, who ya gonna call... Ghostbusters? Try again. The IMF??? Don't laugh. The idea has been floated.

In the article linked above, Bloomberg reports that "IMF Managing Director Horst Koehler told the Financial Times in an interview last week the Fund may seek joint efforts to prevent the dollar from tumbling."

Did you ever think the U.S. would become one of the IMF's basketcases? In truth, unless my read on the unfolding situation has suddenly turned astray, they just might have to close the casket on this one.

Perhaps the Japanese government and central bank have grown weary of their singular enterprise to hold the dollar back from the brink of the abyss. They surely know, along with their counterparts, that despite the best efforts of central banks, however coordinated, the ultimate fate of a currency is authored by the hand of the market. And the writing is all over the wall on this one. Is it any wonder that Japan might someday look into that abyss and change its stance to "tolerate a stronger yen" in the tactful parlance of officialdom?

Here are some other pertinent excerpts from the article for your consideration:
---
Tokyo, July 8 (Bloomberg) -- The dollar had its biggest slide versus the euro in more than seven weeks and dropped against the yen after Japan's financial chief indicated the U.S. currency may extend its five-month decline.

The dollar dropped to 98.16 U.S. cents per euro from 97.27, the steepest fall since May 17. It weakened 1.1 percent to 119.22 yen from 120.43 in late trading Friday.

The loss reversed all of last week's 0.8 percent rally and is the biggest since June 26.

The dollar has weakened more than 10 percent this year against those currencies, prompting the Japanese government to sell yen on seven occasions in as many weeks to protect exporter earnings.

Masajuro Shiokawa told reporters Saturday after a meeting of European Union and Asian finance ministers in Copenhagen that many of his counterparts in other countries share the view the dollar is weakening, and ``may fall to about 115.''

``Shiokawa's comments led to the dollar's decline as they hint Japan may have changed its stance to tolerate a stronger yen,'' said Yasuo Kayamoto, vice president for foreign exchange at UFJ Bank Ltd. In the past months, ``Japan's yen sales were the only supporter of the dollar.''

----(See URL for more)----

R.

Black Blade

(07/08/2002; 01:31:42 MDT - Msg ID: 80065)

Spot Jumps!

http://www.mrci.com/qpnight.asp
Spot is getting a bit frisky tonight. London trading just opened and Spot is ready to play. He appears to have had enough of "playing dead" and "roll over". He wants to jump and leap.

Meanwhile, European markets are solidly in the red from the start. The USD is sinking back to its lows and the US market indices are off sharply. Looks like it will get very "entertaining" on Wall Street today. The new "Scandal of the Day" must be playing on every investors mind this morning. Investor confidence is crashing to new lows. I still believe that we are running headlong into the "New Great Depression". Watching Richard Quest on CNNfn this morning is also quite "entertaining" - can't wait to watch the grumbling on CNBC's "Wake Up Call".

- Black Blade

Black Blade

(07/08/2002; 02:30:56 MDT - Msg ID: 80066)

Newcrest CFO Pays Price For Hedging

[Dow Jones] Resignation of Newcrest CFO Gary Scanlan isn't a surprise, Scanlan likely partly paying price for Newcrest's loss-making hedging strategy. "There has been a high level of dissatisfaction with Newcrest's hedging strategy over the recent past and the CFO has to take some of the blame for that," UBS Warburg's Shaun Giacomo says. Departure likely a slight negative for stock given uncertainty it causes. Giacomo has neutral rating on Newcrest. Shares last down 2.9% at A$6.94.

Black Blade: We will see many more such stories as the Mega-Hedgers look for scape goats. I recall that Stillwater Mining did the same thing a few years ago when their CFO locked in PGM prices at the lowest possible prices. Shareholders will be calling for heads to roll. We could see the same thing in coming months as mining CFOs start dropping like flies. They will be resigning with excuses like "he left to pursue other interests", or "wanted to spend more time with the family". Its going to be very "entertaining".

Black Blade

(07/08/2002; 02:55:10 MDT - Msg ID: 80067)

"Barbarous Relic Files" - Five kilograms of counterfeit gold seized at Tehran airport

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=31097248&ID=cnniw≻ategory=Metals+%26+Minerals%3APrecious&
Snippit:

Five kilograms of counterfeit gold have been uncovered and seized at Mehrabad airport's customs. Customs officials have advised people to be careful about counterfeit gold.

Black Blade: A lot of effort over a "barbarous relic".

Black Blade

(07/08/2002; 03:23:11 MDT - Msg ID: 80068)

Europe Awash In Red

http://quote.yahoo.com/m2?u
Euro markets start off in negative territory on news of Merck fraud. Corruption reigns at yet another major company. I heard some amazing statements such as "it isn't as bad as WorldCom". Well it's bad enough as the health and biotech sector could get hit hard as well and the loss of investor confidence has just risen a notch or two. Elan and Cardinal Health are two more helth/biotech companies caught up in questionable bookkeeping.

Meanwhile, CNBC has gold up +$2.00. It could get very "interesting" as we enter "earnings season". There is a lot of hope centered on Dubya's State of the Union address tomorrow night. It will have to be one hell of a speech to "put lipstick on this pig".

- Black Blade

Black Blade

(07/08/2002; 03:56:29 MDT - Msg ID: 80069)

Japanese Meltdown

The previous article on the insolvency problems surrounding the Japanese banking sector got me thinking. Japanese rushed into the gold markets to buy kilo bars when the April Fools Day Surprise approached. The next April Fools Day Surprise is on the horizon. I expect to see many more Japanese going for the gold this next time around as the insurance coverage for all deposits will be drastically slashed.

Japanese banks are drowning in debt. They have avoided writing off bad loans, as they do not wish their exposure to affect the markets. It appears that it is way too late for that. The only thing left aside from stealing from the Japanese people is to sell the nearly $500 billion worth of U.S. stocks and bonds they hold. That will send a tsunami over the world markets, especially the U.S. markets.

Over the last decade Japanese investors and citizens have watched their life savings vaporize. Much of that wealth disappeared when the Real Estate bubble popped. Unemployment is rising in a country where it was expected that workers would have jobs for life. The news get worse as the Nikkei 225 has hit levels not seen since before 1984. Bankruptcies are climbing along with the suicide rate.

It is only a matter of time before the whole banking sector crashes. These banks are buried under over $1 trillion in bad debt. That debt load is growing daily as more companies go into bankruptcy taking with them ever more Yen that will never be collected. Recently Japanese banks were able to legally hide their stock market losses from the public. Not anymore. New laws require that they report the value of their stock holding � and these holdings have been big losers.

Is it any wonder then that the Japanese prime minister fired the former Finance Minister, Kiichi Miyazawa when she said that Japan's "economy is very close to collapse". The country is over $5.6 trillion in debt and rapidly climbing. The Japanese economy will crash and the ripple effects will be felt around the globe. Rest assured that this is too big for the IMF and it is a sure bet that the U.S. government will step in to lend support with U.S. tax dollars. This is just way too big to stay on the Japanese islands. The smart Japanese will be holding precious metals as a store of wealth because the Yen will be essentially worthless. I expect to see Japanese buying pick up substantially as the next April Fools Day Surprise approaches.

- Black Blade

Black Blade

(07/08/2002; 04:07:23 MDT - Msg ID: 80070)

Gold Higher and Dollar Lower

http://www.mrci.com/qpnight.asp
The USD is sinking back toward recent lows as the Yen, Pound and Euro surge higher. Gold is up about $2 higher. It is about that time where institutional and official players (President's Working Group on Financial Markets?) tend to step in to cushion any possible drop at the open.

Worldcom hearings begin at 1 pm (EST) today. We will see former CEO Bernie Ebbers, CFO Scott Sullivan, CEO Sidgmore, and Salomon Smith Barney scumbag Jack Grubman get grilled. Expect to see more "under the advice of counsel I respectfully decline to answer as provided under the fifth amendment". Even if these guys get convicted - don't expect any prison time (at least not in a rfeal prison). It should be "entertaining" though.

- Black Blade

Black Blade

(07/08/2002; 04:20:18 MDT - Msg ID: 80071)

DRD closes out hedge book

http://www.news24.com/News24/Finance/Companies/0,4186,2-8-24_1210522,00.html
Snippit:

Johannesburg - Durban Roodepoort Deep (DRD) said on Monday it had closed out its full revenue hedge book. "The outstanding fixed loss on the close out was US$17m, which will be repaid within the current financial year," DRD said in a statement. The company said it would now receive the full spot price from its gold sales.

Black Blade: Another one breaks from the pack. More and more we shall see miners drop the insidious practice of shorting their product and helping to cap the POG. We shall see more producers continue to unwind their hedge books. It is good to see AngloGold and Newmont beginning to break away from the pack by unwinding these onerous leg irons. This will help the POG a bit more.

Black Blade

(07/08/2002; 04:34:54 MDT - Msg ID: 80072)

Dollar Slides, Asian Stocks Sag on U.S. Worries

http://biz.yahoo.com/rb/020708/markets_asia_1.html

Snippit:

SINGAPORE (Reuters) - The dollar slumped and Asian stocks abandoned an early rally on Monday as the threat of new accounting scandals and talk that financial authorities accepted a weaker dollar tore attention from Friday's surge on Wall Street.

Black Blade: Another article on the effects of the weakening US dollar and Scandals in world markets.

Canuck

(07/08/2002; 05:16:14 MDT - Msg ID: 80073)

Question to the money followers......

http://www.martincapital.com/chart-pgs/CH_crb.HTMWe see vast sums of money being created over the last several years and apparently inflation lies dormant. The money is invented, churned and lost in this deflationary spiral.

The gold gold advocates await the commodity spark it seems. Checking the above link, a 10-year snapshot of the CRB, we see it peaking in 1996 at 340. Was the economy roaring at that time? There was a mini-peak just a couple years ago to a level about 230 and when the 'recession' of 2001 hit the CRB fell off again. Now we see it rising once again.

What will cause the 'commodity bull' that many of us await?

My brother-in-law and I had a lengthy chat this week-end, apparently he has a hole burning in his pocket. He asked my opinion. Without saying the dreaded 'gold' word I introduced him to a 'natural resource fund'. He had a blank look about him. What might I say to reinforce the 'commodity' pitch?

TIA.

Canuck

(07/08/2002; 05:22:42 MDT - Msg ID: 80074)

Question to the currency followers...

As Japanese woes continues, we see the contagion building in slow motion in South America. By next April, BB's 'April Fool's Surprise' we may see full blown currency problems around the world.

Important question: If a few currencies begin to pop, does that in itself lead to strength in the USD?

TIA.

misetich

(07/08/2002; 06:42:10 MDT - Msg ID: 80075)

BIS - Economy Report - US $ OVERVALUED

http://www.forbes.com/newswire/2002/07/08/rtr654250.htmlSnip:

BASEL, Switzerland, July 8 (Reuters) - The Bank for International Settlements on Monday sounded a cautious note on the potential damage to economies from higher interest rates, given high debt levels, and also said the dollar appeared overvalued according to some measures.

In its annual report, the BIS -- a bank and forum for the world's central banks -- noted that "household and corporate debt levels in a number of the English-speaking countries seem very high" measured against disposable income and cash flow.

It said there had been a sharp rise in mortgage debt and an even sharper rise in mortgage refinancing in several countries, partly a reaction to lower interest rates.

The cash raised through such means had helped to support consumption through the economic slowdown.

While debt service burdens still looked manageable, and the ratio of debt to assets was relatively low, "both these more positive indicators would deteriorate were interest rates to rise back to more usual levels," it said.

"In contemplating when and how quickly to raise interest rates, assuming the current recovery continues, the possible fragility of balance sheets may need to be taken into account," it said.

There may be less urgency for tightening if higher wages in Europe don't prove to be inflationary. Global competitive conditions were "more likely to reduce employment and growth potential than to raise prices," the BIS said.

It was less optimistic for Japan, saying that private sector debt levels remained quite high. Rising unemployment and falling confidence could dampen spending further there.

Regarding the dollar it said that by two different measures -- purchasing power parity and fundamental long-term equilibrium exchange rates -- the dollar lies above, and the euro below, long-term equilibrium values.

But it was hard to say by how much this is the case, with estimates of deviations vaying "substantially across empirical studies, ranging from five to 40 percent," it said.

While the BIS said financial markets had shown "remarkable resilience" to the global slowdown and string of prominent U.S. corporate failures, it noted in its annual report that equity valuations remained "exceptionally high".

It hoped the worst was over for equity markets but added that compared with conventional values stocks "particularly in the United States" still looked rather expensive.

Here the dollar could also have an impact. Given the fact many investment portfolios were weighted heavily towards dollars, there could be scope for rebalancing "should the period for dollar strength seem definitely over," it said.

It also cautioned about the potential risks tied to increased activity in credit derivatives among insurers and reinsurers saying "at this stage, it is difficult to assess the extent to which this trend may have exposed them to new risks".

Copyright 2002, Reuters News Service

Misetich

"substantially across empirical studies, ranging from five to 40 percent," it said.

There must be a lot of nervous US $ holders - lets follow the TRAIL and see where this FEAR money goes- shall we

Got gold?

Canuck

(07/08/2002; 10:38:25 MDT - Msg ID: 80076)

Excellent WGC info. at G-E at 10:51..............

Cheryl Martin is a cool woman.

sector

(07/08/2002; 11:06:36 MDT - Msg ID: 80077)

@Black Blade---About those Long Term US Treasury Securities

There has been a vast amount purchased by JapanAs you point out, $500 Billion in US stocks and bonds.

The US Treasury website reveals that Japan has accumulated $338 Billion in Long-Term US treasuries too. They really haven't begun to sell them back [Repatriarte them]...yet. This indicates that the Japanese and US day of reckoning is in the future.

Moreover, totaling the "Net Purchases" from ALL foreign purchases of Long-Term US Treasuries, one also sees that there has been an accumulation of $821,650 Billion overseas since January 1988.

If only 10% of this figure repatriates then its $82 Billion...quite a hit...even for the Fed's "Repo Machine". With the rising tide of corruption and all the circus media attention "Interesting times" await.

Wagering on future US financial disaster is close to a sure thing.

sector

(07/08/2002; 11:20:27 MDT - Msg ID: 80078)

Systemic Risk--Stephen Roach of Morgan Stanley

http://www.morganstanley.com/GEFdata/digests/20020708-mon.html#anchor0[...]
Over the past several years, "bifurcation" has become a hallmark in the lexicon of market analysis. On the way up it was "new economy" versus "old economy." Then it became Nasdaq versus the broader equity market. On the way down, the dot-com implosion led the way, initially leaving the rest of the market largely unscathed. That was followed by similar downturns in information technology and, more recently, telecom. At each of these episodic milestones, however, the wider and more lethal strain of contagion associated with systemic risk largely absent.

There are signs that this is now beginning to change. Courtesy of the WorldCom debacle -- the most disruptive credit event since late 1998 -- credit spreads have widened back toward levels last seen in the aftermath of the September 11 terrorist attacks. For US investment-grade borrowers, spreads have increased by more than 30 bp since early June. While Steve Zamsky, our US corporate bond strategist, continues to stress that capital market access for good companies remains very much intact, he does concede that an increasing number of innocent victims have been affected. Steve Galbraith sees a similar tendency in US equity markets, noting that Aa and Aaa borrowers have significantly underperformed the broader market recently. Risk aversion is obviously spreading to the highest end of the quality spectrum -- a clear sign, in my view, that investors are beginning to anticipate a transition from discriminatory to systemic risk.
[...]
++++++++++++++++++++++++++++++
LTCM times ten may be upon us this Summer.

USAGOLD / Centennial Precious Metals, Inc.

(07/08/2002; 11:41:40 MDT - Msg ID: 80079)

Put a Foundation Under Your Portfolio -- Don't be Fooled by Inflatable Substitutes

http://www.usagold.com/ProductsPage.html

Gold Today!

Because you never know what tomorrow will bring.

In this global marketplace, a single event on the far side of the world can suddenly and adversely affect the performance-credibility value of the commercial positions within your investment portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

admin

(07/08/2002; 11:45:29 MDT - Msg ID: 80080)

The Daily Specials Board: Available for Immediate Delivery. . . .

http://www.usagold.com/ProductsPage.htmlWhat's the catch?

You can only find out which coins they are (and the prices) by picking up the phone. You'll want to speak with any one of these friendly folks:

Marie Ballard (ext.106)
Jonathan Kosares (ext.110)
George Cooper (ext.102)

First Come, First Served. Limited daily quantities of each item for immediate delivery. Items will come off the SPECIAL board as they are sold out...

Call us toll free (800) 869-5115

sector

(07/08/2002; 12:00:34 MDT - Msg ID: 80081)

Fleckenstein on World Com's Aftermath...An Ultimate Loss in Confidence by Christmas

http://moneycentral.msn.com/content/P25856.asp?special=msn
Greenspan: Man of the shammy cloth

To summarize my outlook, stocks are not cheap. They've been propped up by confidence in the Fed, and up until now, Wall Street and Corporate America. But the eroding of confidence has already begun. As it gathers momentum and ultimately cracks later this year -- when people finally figure out what a sham the Fed is, and that we're headed on the path for three down years in a row -- I believe they will re-evaluate their positions, and that will result in people selling stocks. In short, I believe this process of realigning stock prices with the underlying fundamentals will accelerate in the second half of this year.
+++++++++++++++++++++++++++++++++++++++

Lots of coal in Wall Street's Stockings

YGM

(07/08/2002; 12:49:44 MDT - Msg ID: 80082)

Bush Vows Jail Time For Fraudulant CEO's

http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020708/ts_nm/bush_financial_dc_10≺inter=1Excerpt:

White House officials were tight-lipped about the specifics of Bush's speech, but Bush has vowed that "executives who commit fraud will face financial penalties, and, when they are guilty of criminal wrongdoing, they will face jail time." (end)

** This action by the US Pres. may spur alot of "Pot Calling The Kettle Black" & "Fox in the Henhouse" commentaries....."BUT" there is no denying the fact that this tough stance "WILL" be making a lot of Co executives VERY NERVOUS which will in turn hasten and increase further disclosures and thus add more quickly and substantialy to the bonepile and further decline of Markets and investor confidence....GW is caught between a rock and a hard place it seems...Damned if he does and damned if he doesn't...When the final shoe drops what will he do to pull the economy and financial system out of the coming collapse?...Will history repeat?....How many will have the ultimate financial insurance?....Physical Gold and Silver!....The War machine always comes into play during times like this and if defaults become the order of the day in the world of paper then whether it's a Depression Era or a time of Wars, or 'BOTH' one can only view physical PM's as the best scenario for a portable, indestructable lifeline IMHO....YGM

"GO GATA" "GO PHYSICAL" and be part of the 'Solution & End' to Paper Manipulation of AU/AG prices.....

Black Blade

(07/08/2002; 13:07:06 MDT - Msg ID: 80083)

Contempt Proceedings For Bernie Ebbers and Scott Sullivan?

I am watching the House Hearing on WorldCom Scandal. There are now calls for "contempt" proceedings against former CEO Bernie Ebbers and former CFO Scott Sullivan for "selective" use of the fifth admendment. This is getting to be rather "entertaining".

- Black Blade

YGM

(07/08/2002; 13:21:22 MDT - Msg ID: 80084)

British Fund Manager Hendry on Gold Standard....

FAZ..Archives 5/7/02[Source: FAZ 5.7.02]

July 5 -- STOCK MARKETS WILL CONTINUE GOING DOWN
FOR THE NEXT 5 TO 10 YEARS,
states London-based hedge fund manager Hugh Hendry
in an extended interview with Frankfurter Allgemeine Zeitung.

Stocks will have to crash another 35%, states Hendry,
and thereby the "stock market culture will be eradicated."

The
top central bankers, and in particular the Federal Reserve, have
to be blamed for the disaster taking place on world stock
markets. They have pumped the liquidity into the markets. And
now, as investors have lost all confidence into corporations and
their stocks, this liquidity in ending up in physical assets like
gold, raw materials, and real estate.

It all started in 1971,
states Hendry, when the dollar was decoupled from gold. Since
then, central banks again and again created money to rescue the
stock markets. In addition, semi-public agencies like Fannie Mae
and Freddie Mac were used to create huge amounts of cheap credit
for consumers.

The last stock market bubble, centered around the Nasdaq,
was triggered by none other than Alan Greenspan, "who played
James Bond, rescuing the world."

Therefore, he wouldn't be
surprised at all if the Federal Reserve were to intervene
directly as a buyer at stock markets. Greenspan is very worried
about the huge liquidity, which he himself created, and which is
no longer tied to stock markets.

For the US economy, with all the
implications for the rest of the world, there are only two
possible scenarios, states Hendry.

First, a long and worldwide
recession, triggered by the US, which could take the dimension of
a 1930s-style depression.

Alternatively, states Hendry, central
banks could create even more liquidity trying to rescue the stock
markets. In this case, there will be a huge inflationary push,
and in the end investors will loose confidence in any paper
values. We would then see the return to a gold standard.

**FWIW...IMO, you'll be hearing ALOT more comments like the above in the future....YGM

Sierra Madre

(07/08/2002; 14:31:06 MDT - Msg ID: 80085)

Head 'em off at the pass!!!

There is no doubt in my mind, that the PPT is intervening not only in the Stock Market but also in currencies and of course, the No.1 currency is GOLD - always has been.

So, what these gentlemen or hoodlums are doing, is preempting any possibility that the human herd - not so different from a cattle herd - may stampede into gold.

Sucha sxtampede would be fatal. So, that's why we see dold drop whenever there is bad news. Can't let the herd get the idea that gold might be a good place to head for.

Sierra

TownCrier

(07/08/2002; 15:34:14 MDT - Msg ID: 80086)

Click for related chart

http://www.usagold.com/wgc.htmlWhen you see the small magnitude of the price break on this chart, you will be amazed that it could foster such a an upswing in physical offtake.

As you'll surmise for yourself, at the risk of liquidity in the global physical market there is very little room for successful gold price suppression to continue when piggy-backed on top of a weakening U.S. dollar.

Pertinent excerpt from this week's WGC report by Rhona O'Connell:

"Indian traders are reporting that the recent fall in gold prices has rejuvenated the local market, with daily imports of ten tola bars, the favoured investment product, rising to 12,000-15,000 in the past few days. In early June imports had fallen to between 1,000 and 2,000 bars per day with demand being fed by locally recycled supply. The average in June and July 2001 was approximately 16,000 bars per day."

Click URL for more, plus chart.

R.

TownCrier

(07/08/2002; 16:09:42 MDT - Msg ID: 80087)

Argentine reprise -- the Market and Government: toe-to-toe, or hand-in-hand...?

http://biz.yahoo.com/rc/020708/markets_argentina_2.htmlBUENOS AIRES, Argentina, July 8 (Reuters) - Argentine stocks soared on Monday on continued talk of a new government plan to save the financial system from collapse, while heavy Central Bank intervention sent the peso slightly higher.

...Continuing a trend from last week, banking shares led the charge as investors continued to bet the government would force a switch of bank deposits into public bonds. Analysts say the unpopular move is necessary with banks short on cash amid a chaotic four-year recession.

Central Bank president Aldo Pignanelli on Monday ruled out an obligatory deposits conversion ... but traders said they believed the government would eventually be forced to face reality and make the switch.

"The deposit switch is a reality the government can not avoid," a stocks trader said.

----(click URL for full text)----

Now check out the article's concluding remarks. The recent performance of the dollar (not to mention the banking controls that were implemented) justifies our remarks offered long ago that this would become a case of "Out of the frying pan, into the fire".

-------Traders said the Central Bank had sold an above-average $49 million in dollars into the electronic wholesale market to prop up the peso. ... But the local currency is still about 70 percent weaker since January's traumatic currency devaluation, which sent investors scrambling to buy dollars to protect their savings.-------

We can only hope that everyone else learns from Argentina's mistakes.

R.

Chap X

(07/08/2002; 16:24:37 MDT - Msg ID: 80088)

Michael Parness challenges the media whores

He's certainly right when he says "you only want lies"

CHALLENGE TO CNBC/CNN FN/FOX NEWS

WAXIE (Michael Parness) will go on air and BEAT ANY analyst, ANY guest you have on air in ANY contest, market predictions, or anything you want.

I'll put up $1,000,000 if they want to stage a real contest.

I'll beat them in Tennis, too, damn it! (though I won't put up $1 for that, hehe!)

LET THE PEOPLE HAVE A VOICE!!!

EVERY prediction I've ever made on air has come TRUE 100%. Go look at the tapes, they are unedited and in your OWN archives.

That is a FACT. I know you read my alerts, and I know you are SCARED to let me on your airways because I tell the TRUTH and you only want LIES.

Well, the time is now and the people are ANGRY and they want the TRUTH.

They will get it, one way or another, so do the right thing and tell the liars of the world that the TRUTH
is comin' to get them!!!

And, in the end - THE TRUTH can NOT be denied!!!

I am 100% on my on air calls. It's public record.

To my clients, please send emails to ALL these places by the TONS and FORCE them to have THE TRUTH on air!!!

Thank you, and God bless,

WAXIE
Michael Parness

TownCrier

(07/08/2002; 16:27:39 MDT - Msg ID: 80089)

"Who Wants to be a Millionaire?"

http://biz.yahoo.com/rf/020708/markets_turkey_lira_1.htmlJust stick a dollar in your pocket and fly to Turkey on holiday....

Excerpt:

ISTANBUL, July 8 (Reuters) - Turkey's lira currency hit an all-time low at 1,680,000 to the dollar on Monday after deputy prime minister Devlet Bahceli on Sunday called for early elections in the crisis-hit country.

-------

The revaluation/repricing for which gold is due should entail more than mere adjustment compensation for a weakening dollar. It should reflect a concentration of value of much illusory gold paper supply into the relatively small quantity of physical property.

For value "leverage", therefore, you want to buy and own the physical product. To be sure, today the sky is still blue, and "you ain't seen nothin' yet", Argentina being just a wisp of cloud, relatively speaking.

R.

Carl H

(07/08/2002; 16:33:47 MDT - Msg ID: 80090)

WASHINGTON (Reuters) Bush to Attack Corporate Abuses Caused by a 'Few'

A 'few'? Yeah, right.

Got gold?

YGM

(07/08/2002; 17:09:04 MDT - Msg ID: 80091)

India "FAILS MISERABLY" in 'Effort' to trade paper Gold for Physical...5.6 T... not expected 100T

Gold bond scheme fails to dig up hoards

The gold bond scheme launched by the Indian government has failed woefully in its aim of retrieving some of the estimated 10,000 tonnes of gold held in private hands.

India's largest bank, the State Bank of India (SBI) had launched the scheme on November 19, 1999, as part of the government's policy of bringing private gold hoards into the economy and reducing the country's dependence on imports.

"We have mobilised 5.6 tonnes of gold as of December 31. This is well below expectations," an SBI official told AFP on Monday.

The SBI had hoped to mobilise about 100 tonnes of gold in the first year.

"People are unwilling to part with gold. This mentality has to change," the official said.

Under the scheme, the SBI accepts a minimum of 200 grammes (seven ounces) of gold, hallmarks it and issues a certificate to the depositor.

The gold must be kept with the SBI for a minimum one year, and a maximum seven years, with annual interest of between three and four percent.

At the end of the specified period, depositors can either retrieve the gold or its value in money.

Analyst Ashwin Arya, at gold trading house eMecklai, attributed the scheme's failure to the minimum deposit requirement and fear of prosecution.

"The average gold holding with a family is between 150 and 200 gms. So the minimum limit should be brought down," Arya said.

"Most of the large private gold hoards have been bought with black money, so people fear tax raids and investigations. If there was an amnesty attached to the scheme, much more gold would have come out," he added.

Analysts said one other reason for the poor response was the lack of quality control by jewellers.

"When a family takes gold jewellery to the bank to be deposited under the scheme, they think they are taking 24 carat gold, but after quality control tests by the bank, they find they are holding only 18 or 22 carat gold," said an analyst in SBI.

"This means they have been cheated by the jeweller and this is a great disappointment for them and they decide to keep the jewellery."

India is the world's largest market for gold but mines a negligible quantity of the metal, making it heavily reliant on imports.

Private gold stockpiles in India are estimated to total between 10,000 and 12,000 tonnes.

***No matter what Nation of the World you are in "Bankers Hate Physical Gold Ownership"....got to have burnable, defaultable, controlable, tracable, devaluable, PAPER, PAPER, PAPER....150 to 200 grms p/family, that's laughable....We Bankers must have that Gold....FOR YOU SIMPLE CHILDREN ARE NOT ALL KNOWING ENOUGH TO UNDERSTAND FINANCIAL FREEDOM.... Yeah right!....

I've often wondered if there ever was another attempt at Gold Confiscation, if that the new veil under which it might be attempted, would involve the forced use of E-Gold accounts....
Once again the NWO Bankster/Gangster crowd still get control of the physical, you'd get a passbook....No black market allowed under laws dreamed up by the NWO slime....They give you more worthless Fiat in exchange and say "Trust Us" we know best....
Lord is it even possible to think like a Bankster/Gangster Globalist in order to be one step ahead, or do you just own and hide all the Gold you can afford now and say to hell with all the rest!!!!..........YGM.

neer-do-well

(07/08/2002; 17:17:29 MDT - Msg ID: 80092)

YGM

What will GWB do when the shoes drop? He told us today in his speech, he will blame Congress. They fail to enact his agenda. SO.....executive order # ???. To hell with Congress.

Where we go from there uh..I really can't guess.

misetich

(07/08/2002; 17:25:57 MDT - Msg ID: 80093)

Accenture to Fire 1,000 as Technology Spending Slows

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∣dle=ad_frame2_topfin&s=APSn1VhUYQWNjZW50Snip:

New York, July 8 (Bloomberg) -- Accenture Ltd. will fire 1,000 workers by the end of August as customers of the world's largest computer consultant spend less.

Misetich

No recovery in computer consultant industry. More downward earning revisions on the horizon. More scandals on the horizon as crooked bookkeeping will be exposed, as the "cooks" are unable to hide previous frauds in this type of climate

Got gold?

R Powell

(07/08/2002; 17:28:16 MDT - Msg ID: 80094)

Silver flatline

http://www.kitco.com/charts/livesilver.html Does anyone know what's up with silver? The Kitco chart shows that the price of $4.93 hasn't traded up or down since 9:00 AM. Another Kitco price reporting snaffo or was trading halted for some reason?
TIA
Rich

Carl H

(07/08/2002; 17:36:13 MDT - Msg ID: 80095)

The Ant and the Grasshopper

This was sent to me today and I thought it was quite applicable to GOLD BUGS, but probably even more so to NATURAL GAS BUGS and SILVER BUGS.

ORIGINAL VERSION:

The ant works hard in the withering heat all summer long, building his
house and laying in supplies for the winter. The grasshopper thinks he's a
fool and laughs and dances and plays the summer away. Come winter, the ant
is warm and well fed. The grasshopper has no food or shelter, so he dies
out in the cold.

MODERN VERSION:

The ant works hard in the withering heat all summer long, building his
house and laying in supplies for the winter. The grasshopper thinks he's a
fool and laughs and dances and plays the summer away. Come winter, the
shivering grasshopper calls a press conference and demands to know why the
ant should be allowed to be warm and well-fed while others are cold and
starving.

CBS, NBC and ABC show up to provide pictures of the shivering grasshopper
next to a video of the ant in his comfortable home with a table filled with
food. America is stunned by the sharp contrast. How can this be, that in a
country of such wealth, this poor grasshopper is allowed to suffer so?
Kermit the Frog appears on Oprah with the grasshopper, and everybody cries
when they sing, "It's Not Easy Being Green." Jesse Jackson stages a
demonstration in front of the ant's house, where the news stations film the
group singing, "We shall overcome." Jesse then has the group kneel down to
pray to God for the grasshopper's sake. Al Gore exclaims in an interview
with Peter Jennings that the ant has gotten rich off the back of the
grasshopper, and calls for an immediate tax hike on the ant to make him pay
his "fair share."

Finally, the EEOC drafts the "Economic Equity and Anti-Grasshopper Act,"
retroactive to the beginning of the summer. The ant is fined for failing to
hire a proportionate number of green bugs and, having nothing left to pay
his retroactive taxes, his home is confiscated by the government. Hillary
gets her old law firm to represent the grasshopper in a defamation suit
against the ant, and the case is tried before a panel of Federal judges
that Bill had appointed from a list of single parent welfare recipients.
The ant loses the case.

The story ends as we see the grasshopper finishing up the last bits of the
ant's food while the government house he is in, which just happens to be
the ant's old house, crumbles around him because he doesn't maintain it.
The ant has disappeared in the snow. The grasshopper is found dead in a
drug-related incident and the house, now abandoned, is taken over by a gang
of spiders who terrorize the once peaceful neighborhood.

God Bless America

misetich

(07/08/2002; 17:37:49 MDT - Msg ID: 80096)

KPNQwest had much wider 2001 loss than reported

http://www.forbes.com/newswire/2002/07/08/rtr655106.htmlSnip:

AMSTERDAM, July 8 (Reuters) - Dutch telecoms group KPNQwest suffered a 2001 net loss that was much wider than the one it indicated earlier this year, a court-appointed trustee for the recently declared bankrupt company said on Monday.

KPNQwest officials never released the company's annual report showing that the company would have posted a net loss of some 375 million euros ($370 million) as the company spiraled into bankruptcy in May, Dutch trustee Jan van Apeldoorn said.

That higher loss figure amounts to a figure some 40 percent larger than the 266 million euros figure the company originally reported in February.
.........

Legal questions, exacerbated by fears over its bookkeeping, as well as a large trail of unpaid bills and a complicated ownership structure, has already scared off U.S. telecoms giant AT&T Corp. (nyse: T - news - people), which was once a leading contender for most of KPNQwest's backbone network.
..........
The bankrupt firm's lender banks -- led by Citigroup (nyse: C - news - people), Deutsche Bank and Dutch ABN AMRO -- have lost hope that they would recover an amount anywhere near the remaining 220 million euros they are owed. Bondholders and shareholders appear unlikely to recover anything.

The banks have already said they would ask the administrators to appoint an investigator to look into KPNQwest's accounts, especially its once cozy relationship with founders KPN and Qwest, who had accounted for over 40 percent of total venture sales and who were the company's biggest shareholders, with Qwest owning 47 percent of the company and and KPN 40 percent.

A flurry of lawsuits from the banks, investors and even employees are expected to haunt the firm's management and possibly reach its parent companies in the coming months.

Misetich

ANOTHER day ANOTHER scandal - When/how will this end?

Got gold?

YGM

(07/08/2002; 17:53:04 MDT - Msg ID: 80097)

Excellent Paper.......Well worth the time and bandwidth......

http://www.google.ca/search?q=cache:sWpU8RGdcLgC:www.m-cam.com/features/20011002_bluffton.pdf+Gold+Knowledge&hl=en&ie=UTF-8The Knowledge Economy and a Cross of Gold
2001 Bluffton College

Presidential Leadership Lecture Dr. David E. Martin, CEO M�CAM

October 2, 2001
"I come to speak to you in defense of a cause as holy as the cause of liberty � the cause of humanity." - William Jennings Bryan, 9 July 1896inds of change fanned flames of controversy the year Central Mennonite College (the name first used for the present Bluffton College) was founded. Across the country, upheaval caused by geopolitical and economic power realignment left Americans searching for a standard, a basis upon which they could denominate their existence. With the industrial machine drowning out the sound of the plow and scythe, a revolution was brewing � one that would change the landscape of the globe for a century. Productivity, industrial might, and cash now measured wealth, once denominated by property ownership. The idle holders of idle capital vilified by William Jennings Bryan at the Democratic National Convention in 1896 were the educated industrialist elites who, according to him, turned a deaf ear to the working masses. While all acknowledged the need to establish a currency standard, fierce battle lines were drawn on the 11thmeridian of the Periodic Table of Elements with impressive skirmishes in the "A" section. In the face of this tumultuous time, another debate was growing equally rancorous. As the 20th century dawned a movement was afoot to establish the infrastructure to consolidate the movement of wealth throughout the nascent continental country. Financial panic, alleged by many to have been instigated by proponents of a central bank, provided a stimulus to create the Federal Reserve Bank by 1913, the same year Noah Byers promoted the consolidation of Mennonite educational efforts under the banner of United Mennonites to then president Samuel Mosiman. The centralization of the mode of wealth and knowledge transfer, be it tangible or intangible, has long been known to be the path to dominance. After watching the Duke of Wellington defeat Napoleon at Waterloo, Baron Nathan Rothschild was quoted as saying, "I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain's money supply controls the British Empire, and I control the British money supply." While observing that, "whoever controls the volume of money in any country is the absolute master of all industry and commerce," President Garfield provided the inspiration for today's presentation in his words spoken in 1880. "I am an advocate for paper money, but that paper money must represent what it professes on its face. I do not wish to hold in my hands the printed lies of the government." One might reasonably ask, at this moment, "How do Bryan, Hirschy, Mosiman, Garfield, Rothschild, and Morgan find themselves visiting Bluffton on this 2nd day of October?" After all, isn't today the day most of us mourn the 1780 hanging of British Intelligence Officer Major John Andre and celebrate the President Johnson's swearing in of Supreme Court Justice Thurgood Marshall? An appropriate question may be the most eloquent uttering of the 1992 Vice Presidential Candidate Vice Admiral James Stockdale, "Why am I here?" Today, we will explore the realities of a crisis of humanity more polarizing than the debate of gold or banking. We will probe the enigma of the knowledge economy that has no standard � a wealth without denomination. We will address the challenge presented by President Garfield 120 years ago and resolve to valiantly seek to address the problems we encounter. What is knowledge, how is it's quality assessed, and who controls its distribution? Informed by the debates of yesterday, we will seek solutions for the challenges we face today. Let me begin by making the following observations. At the turn of this century, the International Leadership Forum estimated that the adult global literacy rate was 73%. That means that the written word was meaningless to over 1.3 billion adults. With many countries boasting rates of 95%, many had rates under 50%. An UNESCO report estimates that approximately 250 million children between the ages of 5 and 14 are working and going to school. Fifty percent of this group works full-time. When one considers the numbers of people trained beyond nominal literacy, the numbers are more poignant. Less than 40% of the world's population, over the course of their lifetime, can enter tertiary educational institutions.1Sixty three percent of the world's literate population lives in economically "developed" countries with African, Central and Southeast Asian countries disproportionately illiterate. These statistics should, in themselves, hold considerable weight.2However, this is not a lecture on education of the masses. No, today, I'm concerned with a far more complex topic that, while impacted by the numbers above, is far more unnerving. We find ourselves at a point in history where considerable acclaim is cast upon those who have achieved greatness in the pursuit of corporate goals. Forbesand Fortuneherald one after the other multi-millionaire whose fame is built on success in entrepreneurial imperialism of one sort or another. During the last four years of the past decade, more millionaires and billionaires (in economic adjusted terms) were created than in the cumulative running of all of human history. Are we really that much smarter and that much more productive than all civilizations that preceded us? Are our institutions of higher learning producing genius with every diploma? Do we live in Garrison Keillor's mythical town where, "every student is above average?" Or is it possible that we have built a tower of Babel? Let us examine three elements of the knowledge economy. First let us ask the question posed by Mr. Bryan. In the knowledge economy, we must ask ourselves the unsettling question of basis. In antiquity, wealth was denominated by raw materials. Those who had the most land, the most gold � in short, the most tangible property � were the wealthiest. In the evolution of economies, these basic elements were replaced by the metrics of the industrial age. In industrial economies, productivity, distribution, and market share served as the more abstract surrogates for the wealth of ages gone by. Now, in the knowledge economy, we find ourselves confronted by an economic reality without basis. Prior to the dot bomb, we were told that value was measured in "eye-balls" and "stickiness". Billions of dollars flowed into the creation of a virtual presence that conveyed virtual information virtually anywhere. Pause; let us consider what virtual means. Our faithful Webster tells us that virtual refers to a hypothetical particle whose existence is inferred; being in essence though not formally recognized. In other words � NOT. When value is ascribed to virtual reality, how is it denominated? More importantly, how is one to know whether it is real or imagined? As the educator and the educated, how can we learn to discern reality from that which is not? Revisiting President Garfield's conundrum � we need to know that face value is based on value or it's a lie. Is "knowledge" the presence or absence of literacy, the letters of degree conferred on an individual, the prestige of institution or commercial affiliation, nationality, race, creed? Or, is knowledge something more than these? I would suggest the sine qua nonof knowledge economy is the need for a gold standard. Copyright law of the United States established that facts have neither owner nor value. The organization and presentation of facts in various expressions have value. Our society is filled with data; our challenge is to transform that into usable information leading to wise deployment creating value. Yes, here's where I appeal to the student populous movement � educational assessment should not be based on the recitation of facts established by U.S. law as valueless � now here comes the part where I shamelessly pander to the faculty � but in the useful synthesis and application of the same. Knowledge built on rout memorization is valueless, knowledge built on application and problem solving has value.
Second, we explore the problem of ownership. There was a time when ownership was rather unambiguous. Possession was 9/10ths of the law. Land, buildings, shipping lines and trade names were clearly defined by title. In the knowledge economy, we are confronted with the timeless problem of counterfeit. When he realized that conventional warfare was not swinging in his favor, Hitler, in an effort to decimate the United States and Great Britain economies began the process of printing counterfeit dollars and pounds. The French tried the same technique in Vietnam and the U.S. introduced 20 Peso notes in Cuba for the infamous Bay of Pigs invasion. Why is it that from Duke Sforz of Venice in 1470, to Napoleon, to Hitler, to Kennedy counterfeiting has been an integral part of war? Because savvy tacticians know that economic chaos is one of the world's most effective weapons. Introducing counterfeit undermines all economic systems as confidence is lost in the representation of legal tender. So too, in the knowledge economy, counterfeits are an untold tactical weapon. In a recent study made of United States patents, our company found that over 35% of all current patents are intellectual forgeries. This means that the patent claims rights already secured by another party or already existent in the public domain. One cannot help being overwhelmed in Malaysia with copies of Microsoft Office being sold for $2 in the shopping malls of Jabor Bahru. Passing off as proprietary that which is not is an unmitigated disaster looming over our current economic system. For the knowledge economy to have any viability, forgery detection must be implemented. Last Spring, the University of Virginia gained national attention when one of its faculty implemented a computer system to determine whether term papers submitted by students were plagiarized or authentic. In certain sections, as many as 25% of the papers were copied, in part or in whole from other sources � often the papers of classmates. Is it any wonder that we go on in life to copy the works of others in business, education, and other walks of life when, in high school and college, we get away with intellectual theft? I think not. However, I believe that educators and students alike must realize that these patterned behaviors establish foundations that lead to ruin. Finally, let us consider trade. When Central Mennonite College was founded a century ago, Noah Hirschy advanced the premise that education needed to be relevant to the society and times in which students found themselves. Established to provide exceptional higher education in the context of the church as opposed to establishing an overtly sectarian curricular propagator, this college embraced social and political dialogue deemed heretical to many in the establishment. Knowledge, according to Bluffton's founders, was for the benefit of society � a mission without boundaries.
Many have proposed that with the ubiquitous nature of the internet, we are becoming a boundary-less world. Traditional geopolitical barriers are eroding. People are interacting with one another irrespective of time zone, language, tradition, or status. In real time, I collaborate with business partners overlooking Tiananmen Square, Big Ben and Tierra del Fuego. However, in these times of heady multinationalism, we must consider the often-overlooked dependency that is being created in this unrestricted World Wide Web. Knowledge must be transferred and shared for it to achieve its greatest impact. However, as we see the expansion of telecommunications-facilitated trade, we see an equally expanding malignancy of inadvertent isolationism. Geiger & Diller closes its doors while we shop on-line. Balmer's purchases are now made at Talbots.com. All the while, we lose the priceless, informal interactions with our neighbors telling us of places, people and events that once were intrinsic to the broadening of our minds and perspectives. We miss the touch of the hand, the warmth of a smile and the sharing of a friend's tear � in our wealth, we gain poverty of soul and mind. In the midst of this efficiency, what has the knowledge economy lost? Is the local ISP the Rothschild of the knowledge economy? We have sacrificed human interaction. In our global economic conquests we have lost the innovative impact of observation. Rather than go to places, we visit them virtually (remember, that means we DON'T). I would like to suggest that one of the greatest threats of the knowledge economy is that we will actually see a reduction in global understanding. We will see, hear and trade with only those who are wired into the web. Rather than learning from the wisdom of the cultures that have passed before us, we will see only that which the content providers deem appropriate and, in so doing, we will see a contraction, not an expansion of knowledge. In short, we will choke the inventory of innovation and inquiry in the morass of irrelevancy. We must resist the centralization of information and knowledge. Efforts must be made to learn from the richness of indigenous knowledge that may never find its way to a web browser. We must develop multiple venues and vehicles for the exchange of knowledge so that the trade routes are not the monopolistic empire of the few. So today, we must heed the warnings of history and listen to the voices of the past so that we build a legacy of renaissance, not repression. We need to encourage one another to add value, not volume, to the knowledge of the ages. We must commit ourselves to respect and value the uniqueness of the intellectual property of each member of the human race and decry piracy of the same. And finally, we must vigorously resist the temptation of sloth and in its place actively participate with the global community. We must resolve to move forward the democratization of knowledge and be relentless in our efforts to bear the standard of substance in the face of maelstrom of virtual value. Let now ring true the statement made by Mr. Bryan on that hot July day in 1896,.........

"The humblest citizen in all the land, when clad in the armor of a righteous cause, is stronger than all the hosts of error."

misetich

(07/08/2002; 18:00:54 MDT - Msg ID: 80098)

Brazil's Fraga to meet O'Neill and Greenspan

http://www.forbes.com/newswire/2002/07/08/rtr655032.htmlSnip:

BRASILIA, Brazil, July 8 (Reuters) - Brazilian Central Bank President Arminio Fraga will meet with U.S. Treasury Secretary Paul O'Neill and Federal Reserve Chairman Alan Greenspan when he visits Washington this week, a bank spokesman said on Monday.

Fraga is also scheduled to meet with International Monetary Fund Managing Director Horst Koehler, the spokesman said.

Fraga is traveling to the United States, where he is also due to meet with private banks, amid speculation that Brazil may seek an extension of its current IMF loan, which expires at year-end, to help it overcome a loss of investor confidence ahead of October elections.

Government officials have denied they are sounding out the IMF on such a loan, although local newspaper Valor reported the government has already proposed the idea to the IMF.

The loan would depend on the leading presidential candidates committing themselves to low inflation, independence for the Central Bank and fiscal austerity, according to daily Valor

Misetich

Lets see IMF's Kohler hinted at co-ordinated currency intervention supporting the US $ -
IMF needed in Argentina, now Brazil
Greenspan & Co need to bail out US banks exposure in Brazil-look for the IMF extension to bail US interest and then?

Got gold?

Mr Gresham

(07/08/2002; 18:01:45 MDT - Msg ID: 80099)

"I've fallen..."

http://quotes.ino.com/chart/?s=NYBOT_DXY0Bad day for Uncle Buck.

misetich

(07/08/2002; 18:28:12 MDT - Msg ID: 80100)

Turkish disarray threatens IMF rescue plan

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1025793397255&p=1012571727088Snip:

Growing conflicts within Turkey's ruling coalition on Monday prompted further speculation that the government might collapse and undermine an economic rescue programme backed by the International Monetary Fund
...........
The latest developments in Ankara jolted financial markets, which have been gripped for the past two months by fears that the poor health of Mr Ecevit, 77, could derail an economic rescue programme backed by a $16.3bn (�16.7bn) loan from the IMF.

Misetich

There goes ANOTHER IMF rescue -

Got gold?

misetich

(07/08/2002; 18:37:03 MDT - Msg ID: 80101)

K�hler warns against 'wrong signals' amid market volatility

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1025793320441&p=1012571727088Snip:

The biggest risk in today's uncertain financial markets is to "give the wrong signals and exaggerate problems so that they become a self- fulfilling prophecy," says Horst K�hler, managing director of the International Monetary Fund.

In an interview with the FT in London, Mr K�hler says he is careful not to underestimate the risks from the current period of extraordinary volatility. A nightmare scenario - the convergence of further and deeper market weakness in the developed markets with debt defaults in emerging markets such as Turkey and Brazil - cannot be ruled out. Indeed, Mr K�hler estimates there is a one in five chance of it occurring.

............
Mr K�hler says that capitalism is the best system but it depends on an ethical framework and that it is up to the "private sector to demonstrate that it is aware of this. I'm challenging business leaders to act more responsibly."

Misetich

Mr K�hler says "A nightmare scenario - the convergence of further and deeper market weakness in the developed markets with debt defaults in emerging markets such as Turkey and Brazil - cannot be ruled out. Indeed, Mr K�hler estimates there is a one in five chance of it occurring. "

One in five? Odds will be even better as the "scandals" undermine investors confidence

Got gold?

misetich

(07/08/2002; 18:41:05 MDT - Msg ID: 80102)

Moody's warns of severe downgrade at Vivendi

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1025793380775&p=1012571727108Snip:

Vivendi Universal faces a "severe" downgrade of its debt ratings unless it acts quickly to arrange additional funding and stave off a looming liquidity crisis, according to Moody's the debt rating agency
..........
Moody's said on Monday that Vivendi was "facing a worsening liquidity situation which could result in further severe downward migration of the ratings".

"The longer it takes for Vivendi Universal to arrange additional committed funding, the more strained its financial condition is likely to become," Moody's said
...........
With just E2.4bn in cash and unused credit lines, the first task of Jean-Ren� Fourtou, the new chief executive, is to secure enough cash to stave off default. The board has asked Goldman Sachs to monitor the worsening liquidity position.

Misetich
More debt required to solve Vivendi worsening liquidity situation . Ponzi would be so proud.

Got gold?

misetich

(07/08/2002; 19:06:16 MDT - Msg ID: 80103)

Bush - Pitt - SEC- then and now

Snip:

Now

Mon Jul 8, 5:54 PM ET
WASHINGTON (Reuters) - President Bush ( news - web sites) said on Monday he would seek additional funding for the Securities and Exchange Commission ( news - web sites), allowing it to hire more investigators to combat corporate fraud.

http://story.news.yahoo.com/news?tmpl=story&ncid=580&e=3&cid=580&u=/nm/20020708/bs_nm/bush_financial_dc_18

Then

A series of interviews USA TODAY conducted with top SEC officials shows that is no easy task. The agency is chronically understaffed and beset with high turnover. The investigative arm of Congress found that the SEC is "increasingly strained," yet Pitt has requested 20% less for the SEC's budget next year than his predecessor asked for in 2001. The head of the SEC's corporate finance division admits that Pitt probably hasn't asked for all the funding that the agency needs. And the head of the SEC's enforcement division concedes that he also feels stretched.

..........
Clearly, Levitt has a point. Problems facing the SEC include:

High turnover. Some 17% of SEC lawyers and almost 14% of its accountants left in 2000 � nearly twice the rate of other government agencies. The average tenure of SEC examiners was just 1.9 years in 1999 and 2000, an all-time low. And at the SEC's enforcement division, 12 of 28 branch chiefs have been on the job less than a year.
Empty leadership positions. The five-seat commission has two vacancies. Meanwhile, two Bush administration nominees, Texas entrepreneur Roel Campos and Columbia University law professor Harvey Goldschmid, have yet to be officially confirmed.
Increasing workloads. There were 112 accounting fraud cases in all of 2001. There have been 64 so far this year. In a March report, the General Accounting Office (GAO) found that the SEC's workload has grown four times as much as staffing over the past decade.
The SEC reviewed just 16% of 14,000 annual reports filed by companies in 2001. Its goal is to review 33%. At a Senate Governmental Affairs subcommittee hearing last month, former and current agency officials said that problems at Enron may have been uncovered sooner if the SEC wasn't so understaffed. The GAO says the SEC is "increasingly strained" against increased corporate filings, complaints and investigations.

But despite all that, so far Pitt has asked for just $467 million for the agency's budget next year � $120 million less than what Levitt requested in 2001. Only 100 new people will be hired, increasing the SEC's head count by less than 1%.

http://www.usatoday.com/money/covers/2002-05-09-sec-workload.htm

Misetich

Can anyone explain why Pitt asked for a reduced budget? in lieu of the know SEC constraints?

Got gold?

YGM

(07/08/2002; 19:51:36 MDT - Msg ID: 80104)

Michael Rupperts FTW Global Financial Collapse Alert.......

http://www.rense.com/general26/ftw.htmExcerpt....

CONCLUSION

The Great Depression was not an event that wiped out U.S. capitalists. It was an event that made the rich even richer by transferring the wealth of the people into the hands of the wealthy. Legendary is Bank of America s rise to affluence through real estate foreclosures from 1929-37. Don t believe for a minute that the richest of the rich will be hurt by the coming collapse. The only ones hurt will be you and me.

George Soros is a member of the Bilderberger Group, a collection of the wealthiest individuals on the planet. It includes, from the U.S., both Democrats and Republicans, and from Europe and Asia the richest old money that can be found. U.S. participants in this year s conference included David Rockefeller, Henry Kissinger, former Treasury Secretary Larry Summer, former CIA Director John Deutch and George Soros. It was just after this year s meeting which ended in early June, that all of the revelations about corporate fraud started to really hit the news. One wonders if it had been on the agenda.

I also note sadly a recent financial report from the Denver area stating that mortgage foreclosures were going through the roof. This, at the same time that Reuters (July 2, 2002) reported that corporate layoff announcements had risen by 12% in one month. In this context Bush s tax cuts seem worse than bad judgment. As former Ass t Secretary of Housing Catherine Fitts pointed out to me in a last minute e-mail, By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52 per cent of the total tax cuts will go to the richest one per cent & Put another way, of the estimated $234 billion in tax cuts scheduled for the year 2010, $121 billion will go to just 1.4 million taxpayers.

Unless you can convince me that gravity might suddenly reverse direction, this collapse is inevitable and imminent. It will be unspeakably brutal. How long do we have? Maybe weeks. Maybe months. Maybe only days. But the house of cards is already starting to collapse all around us. A major terrorist attack, the folly of an invasion of Iraq or a nuclear exchange between India and Pakistan would only be a momentary diversion from a much greater tragedy.

Complete article @ Link...YGM

Pizz

(07/08/2002; 20:01:02 MDT - Msg ID: 80105)

On the Brink

Anyone else notice any similarity to Bush going to Wall Street to boost investor confidence and Ken Lay's speech to Enron Employees right before the collapse?

Even though "401K" may turn into a four letter word for investors, at least most are somewhat employee directed. Now company pension plans are another thing. If the big three (Ford, GM, Chrysler) plus other large corporations with pension funds aren't able to fund their pensions due to the markets' inability to continue to go straight up, the administration has got to be sweating bullets.

Notice the recent lack of mainstream coverage of India-Pakistan, the Middle East, or anything else that might make gold go up? Did these problems all of sudden over the last 4 weeks heal themselves? The gag orders are in place, can't have a dervitives blow up can we?

You'd think that with the dollar in a vertual free fall, that gold would be rising, but gold, gold stocks, etc. are just hanging in there. Do you think a few highly placed phone calls have been made to the big money players? You're naive if you don't. They may not be buying, but nobody smart is selling out.

Notice how Bush has refrained from going after the previous administration for the economic problems? Got to be driving the GOP nuts coming into congressional off-year elections. But how can he? He'd have to admit we have major structural problems (bubbles) over and above some bad accounting and that just might send the sheeple over the edge.

Bottom line, when the number one has to turn "cheerleader", update your resume, cause the end is closer than you think. I've seen it too often in business - the PTB are running scared, and there are no more short term fixes.

Kind of like stepping into an empty elevator shaft when all you're doing is trying to is go up one floor.

Pizz

Black Blade

(07/08/2002; 20:15:07 MDT - Msg ID: 80106)

Numbers game and blame

http://www.denverpost.com/Stories/0,1413,36%257E33%257E715620%257E,00.html
Flurry of restatements expected

Snippit:

Sunday, July 07, 2002 - Multibillion-dollar lapses at Enron, Xerox and WorldCom may be just the beginning. "We are going to see an avalanche of (financial) restatements between now and the end of the year," said Allan Koltin, whose Chicago-based Practice Development Institute Inc. is one of the nation's leading consultants to the accounting industry.

More than 2,000 public companies are changing auditors following the conviction of Arthur Andersen on obstruction-of-justice charges. And many are changing management after years of shaky performance. Experts say the new auditors and managers will distance themselves from the financial sins of their predecessors, and the adjustments they may make to past financial statements will continue to haunt the stock market and erode the public's trust.

Black Blade: I somehow don't think that Wall Street is ready for this. The Pied Pipers are on CNBC, Bloomberg, and CNNfn screaming that all will be well as the economy has recovered. Aside from the absurdity of the economic recovery statement, they tend to ignore the avalanche of corporate restatements. IBM is one such stock that could hit Wall Street very hard in coming weeks. It is a DOW component and there are questions about the balance sheet. It has also been suggested that the stock is greatly overvalued. There are many other companies that will hammer the markets in coming weeks. Add to this the wave after wave of accounting scandals and corporate malfeasance. It is going to get very ugly. It is definitely in everyones best interest to sock away a small percentage of their portfolio in Gold and Silver as insurance against the continual assaults on the markets shake the foundations of the American economy, and the Global economy for that matter.

BTW, I watched the WorldCon hearings today. I was not impressed. This is just the current state of American business I suppose. Standards have slipped over the years � and that is putting it mildly. If you insist in "playing the game" in the stock markets � be extremely careful and learn "everything" you possibly can about the company. Just be aware that there are a lot of cockroaches out there.

Black Blade

(07/08/2002; 20:23:47 MDT - Msg ID: 80107)

The Drumbeat of Systemic Risk by Stephen Roach (New York)

http://www.morganstanley.com/GEFdata/digests/20020708-mon.html#anchor0
Snippit:

Notwithstanding the angst of June, financial markets have attempted to remain discriminating in assessing risk. Problems have largely been isolated before they have contaminated entire asset classes. That works fine as long as economic recovery stays on track. But as a double dipper, I fear that such discriminatory risk could well morph into systemic risk -- a wider and more lethal strain of financial market contagion that is reflective of the inherent flaws in markets and economies that exist under normal operating conditions. There are mounting signs that such a transition could well be close at hand.

I take the recent weakening of the dollar as yet another warning sign of the perils of systemic risk. America's excessive dependence on the rest of the world to fund its external deficit was always a delicate balancing act. But in the aftermath of a serious corporate governance shock, together with the growing realization that a return to an era of single-digit returns on dollar-denominated assets could well be hand, capital inflows are suddenly much tougher to come by. While the capital flow data lag, the figures for the first four months of this year underscore a stunning slowdown of foreign demand for US securities -- portfolio inflows were off about 35% from the comparable period a year earlier. As Joe Quinlan notes, this downshift mainly reflects the diminished appetite of European investors; in the first four months of 2002, portfolio inflows from Euroland amounted to just $7.5 billion, fully 70% short of the pace a year earlier. In my view, external imbalances are a classic set-up for systemic risk. America's outsized external imbalance highlights those risks all the more. The recent weakening of the dollar, in conjunction with the sharp recent reduction in foreign demand for US securities, suggests that the currency dimension of systemic risk may now be coming into play.

Black Blade: WOW!!! Too much too cover in a few comments, however, Stephen Roach nails it in the scathing review of "Systemic Risk". He makes a very good case for getting your house in order and going defensive.

Black Blade

(07/08/2002; 20:34:13 MDT - Msg ID: 80108)

Recent scandals call regulators into question

http://www.denverpost.com/Stories/0,1413,36%257E33%257E713523%257E,00.html

Snippit:

"There's clearly a growing concern among investors about who's looking over the shoulder of these people who are using (questionable) accounting techniques," said U.S. Rep. Diana DeGette, a Denver Democrat and member of the House Energy and Commerce Committee. "There's concern that the SEC, under the leadership of Chairman (Harvey L.) Pitt, has not taken an aggressive enough oversight role."

Black Blade: Consider that a young man robs a bank at the point of a gun for a couple thousand dollars and is caught � he likely will go to prison for several years. Consider that a CEO (or CFO, or auditor, or�.) robs thousands of investors with the point of a pen for millions of dollars and is caught � he will likely get a fine that to him is pocket change and just maybe get probation and be denied serving in such a position again. Don't count on any of these clowns ever serving a day in jail, let alone prison (and a real prison at that). Is the corporate crook any better than the poor stupid kid who robs a bank? Hmmm...

Black Blade

(07/08/2002; 20:46:42 MDT - Msg ID: 80109)

How Many WorldComs Does It Take?

http://moneycentral.msn.com/content/P25856.asp?special=msnSnippit:

The worst isn't over until everyone fears the worst is yet to come. Even with the scandal du jour in the headlines and more waiting in the wings, we're not there yet.

Black Blade: Bill Fleckenstein exposes a few more warts on Wall Street. I agree with his IBM analysis. We will see much more damage to the markets. Investor confidence is nonexistent now. Foreign cash is leaving US shores. The US dollar will fall further. Definitely get prepared while you can. As always, get out of debt (and stay out of debt) if at all possible, stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. Prepare for the worst and hope for the best. No one will look out for you or yours expect of course � you. Always look out for number one.

Gauntlet-Runner2("GR2")

(07/08/2002; 21:04:21 MDT - Msg ID: 80110)

Gold shorting pigs are starting to squeal

http://messages.yahoo.com/bbs?.mm=FN∾tion=m&board=1601028319&tid=drooy&sid=1601028319∣=40682POG looks like it has a double bottom with an upslope, short term bullish. Rooy is in a snake coil and should gap pup. With a small bark. Does the metal precede the XAU? Maybe the short covering panic spills over from one to the other. We sometimes see "natural accumulation" of the goldstocks which shows a tighter supply of the metal in correlation, possibly. Other times the POG spikes on news and the goldstocks sit there like they missed the bus, until the next day.

Black Blade

(07/08/2002; 21:13:31 MDT - Msg ID: 80111)

Bush to seek jail for CEOs

http://money.cnn.com/2002/07/08/news/bush/index.htm

Speech seen as effort to distance president from critics and restore investor confidence.

Snippit:

NEW YORK (CNN/Money) - President Bush could tell Wall Street Tuesday that he will seek prison time for corporate executives who mislead investors -- even after he again answered questions about his own business activities. Bush's speech comes amid a crescendo of worry about the reliability of corporate accounting and presumed malfeasance by top executives, worry that has sunk U.S. stock markets and could hamper the country's nascent economic recovery.

Black Blade: It's a start I guess. A bit late, but a start nonetheless.

Gauntlet-Runner2("GR2")

(07/08/2002; 21:36:18 MDT - Msg ID: 80112)

DOW-----GOLD Ratio Chart

http://www.sharelynx.net/Charts/Dow-Gold-Ratio.gifTo comprehend what this means...........and the truth is always a bit scary.

Traveler345

(07/08/2002; 22:00:00 MDT - Msg ID: 80113)

At LAST - GR2

GR2

Welcome back!!!!!!

I have missed reading your posts. Please keep it up!!!

The Traveler345

kludge

(07/08/2002; 22:07:41 MDT - Msg ID: 80114)

(No Subject)

I know many of my posts haven't really been welcomed here as I've tried to reconcile what I know of gold's history and my personal beliefs and experiences with it, with - for my lack of a better term - "the truth(s) about gold today" that are presented here. From reading the posts and studying the archives, I've concluded that most here do not seem the type that would be prone to paranoia or conspiracy theories (anyone else here listen to shortwave radio programs solely for the entertainment value? :) And there is wisdom here or I wouldn't have wasted my time posting. But there is the one general underlying premise that I have the most difficult time understanding, and I hope you'll indulge me as I try to state it in as few words as possible.

Sierra Madre's post struck a chord and started me pondering, again, the various market manipulators that are generally identified here as the cabal or the PTB. More specifically, I've read from various posts that these (could) include the FED, BIS, IMF, ECB, LBMA, BBs, the big four, the oil state(s), among others.

It seems highly unlikely to me that there is any single unifying vision that is powerful enough to hold all these together with a single-mindedness that transcends borders, political goals/affiliations, and above all, their individual members desire for wealth and power. What keeps splinter groups from forming within the ranks? What keeps the lowly minions and minor players silent? What keeps powerful outsiders from learning the truth and spilling the beans?

I mean, or I think I mean, the interaction required to simultaneously attempt to control and/or manipulate the gold (and likely silver, if not all commodities?) price, the currencies, and the stock markets would have to be an immense worldwide operation to oversee and conduct on a daily basis. A collusion of this magnitude, thats goal is the control of the ONE real money of the world, couldn't be kept hidden from other powerful politicians, rulers, multi-national corporations, and the multi-{m|b}illionaires of the world easily. We're talking about REAL money here, and for the ones that win, ultimate power, right?

If something this big was afoot, with all the powerful players necessarily to pull it off, then they must be taking their marching orders from someone - or some overseeing group, right? Certainly if there was a power stuggle of this size between two or more groups it couldn't go unnoticed - the tug of war would be obvious. So who has the power to dictate course adjustments when necessary, unify the factions, ward off the challengers, silence the informers and media, and recruit the new Presidents, Princes, and Prime Ministers (along with the Congresses, Cabinets, and high-level bureaucrats) that happen into the scene every few years?

Too many questions, I know. But considering the scope, why hasn't GATA found a stool-pigeon with a briefcase of Evidence and a functioning moral compass yet? Why hasn't one insider come forward seeking asylum, or whistleblower protection, with The Proof? Why wasn't ANOTHER and FOA found and silenced for their years of betrayal to this group's plans? They masterminded a global conspiracy, but were helpless to plug a 5-year leak of information?

Surely the old-timers and the wiser newcomers here have pondered these questions and reached a logical conclusion as to how this may have come into being, and still continue to exist and function a couple decades later. If so, can you share your thoughts on this?

Thank you, and I apologize in advance if my questions have offended any.

PH in LA

(07/08/2002; 22:42:09 MDT - Msg ID: 80115)

Conspiracy

Kludge:

Conspiracy is not really the right word, since it implies a degree of collusion, as you rightly point out, that would be easily punctured.

Rather, it is a process that is carried out publicly, right out in the open, under everyone's noses, with no apologies to anyone. It is simply the way things are done. Period. We keep the POG under control because the system works better that way!

It's a bit like Dubya's "high crimes & misdemeanors" that came under scrutiny today. The poor guy must be scratching his head at all the interest stirred up over something that happened 10 years ago. "But that's the way things were done" he must be saying to himself. "And we did the obligatory whitewash "investigation" by the SEC a long time ago... Of course, nothing was found then, so why does the press insist on beating that dead horse?"

It's just the way things are done. And so when one of our leaders finds out that a stock he owns is in for a beating, he sells it as fast as he can. Why did he buy it in the first place, if he didn't have some good information that it was going up? I mean, we don't actually expect him to lose his own money do we? We all know that's the way it works. This tempest in a teapot that the press is stirring up is just window dressing, isn't it? They knew it all along, too!

It's all been going on like this for years. Right out in the open, under everyone's noses. And nobody said a word!

cyberbat

(07/08/2002; 22:59:11 MDT - Msg ID: 80116)

@kludge

Sir,
Your memory may be failing you just a bit. I can help.There onced was and still is a huge hedge fund called capital one. Their derivities in gold and stocks had turned South on them all of a sudden. Greenspan stepped in and said "This hedge fund with it massive losses is just too big to fail; it would take world banks and large industries down with it if it all caved in. Therefore, I will use your U.S. tax dollars to bail them out." There was no conspirousy here, it was just a simple fact that the big boys could move in to the market place and move mountains. Now, they have a license to do so with Greenspit's blessing.
Go sometime to KITCO 24 HOUR GOLD and watch how it begins each morning as the gold trading reaches New York. You can watch the hedge boys at work as they attempt to bring the price of gold down so they can unwind their shorts.
One guess now and one only; what is the prime competitor of paper money. If you know the answer, don't you think that the paper money boys know too. I don't see any behind the scenes activity; it's all going on out in the open just like when the japs are buying dollars or the us is buying yen to shore each other up and at the same time debasing the currency so that it is worth less so as to have a step up on each other on their trade deficits.
While they call gold a barbous relic, they are constantly putting it on dollies and rolling it around from cage to cage in New York in their basements of the federal reserve. If they are not scared of the relic, why are they not auctioning all of it off? Why indeed!!
Cyberbat

Camel

(07/08/2002; 23:27:53 MDT - Msg ID: 80117)

Conspiracy

PH in LA seems to have a good handle on one side of the coin, but to me ANOTHER and his friends are more the"conspirators" in the true sense of the word in that they are actively plotting to overturn the existing order of the way "things are done." The "Giants" to which ANOTHER refers are people like DeGaulle and the Rothchildes and the intellectual anf financial elite of Europe who started the euro, and they are attempting to convince the Arabs and the Chinese to go with the Euro, and overturn the dollar. I remember one of ANOTHER'S posts in which he was so elated that the Chinese were going to come on board because he feared he had only a "one tooth cat".

I think what happened was that Saddam Hussein got wind of ANOTHER'S plans and jumped out in front of it and tried to portray himself as the leader of the switch to the EURO, an unintended consequence, and that took the wind out of ANOTHER'S sails because he did not to want his ideas to be supportive of someone like Hussein.

Carl H

(07/09/2002; 00:17:31 MDT - Msg ID: 80118)

@kludge Cabal Participants

First, thank you for recognizing that we are not all conspiracy nuts. 2.5 years ago I thought GATA was nuts -- then I started looking at GATA's evidence and was simply floored by it.

Second, I think that the view of an organized consipracy is not quite the right model to use here. Here is the way I think of it:

At the center is the President's Working Group on Financial Markets (PPT). Among this group are the Treasury and FED. They got the gold manipulation theory from Summers, the implementation wherewithal from Rubin and Fisher, and the OK from Clinton.

The treasury supplied the US gold reserve.

The FED supplied rampant dollar creation to take advantage of the "Strong Dollar" by printing a lot of them.

We know for a fact that ~1700 tons of the US gold is encumbered. I suspect that the only reason that was encumbered is that the other ~6500 tons of deliverable gold were already sold. (Why bother to involve someone else by encumbering the coin melt gold if you have deliverable gold available?) So I think it is _probable_ that substantially all of the US gold reserve has been disposed of.

From the work of Frank Veneroso, it is fairly clear that 8200 tons is not enough to account for the suppression. Some of the rest of the gold came from making deals for various things with various countries. Examples: Kuwait gave up their 80 tons in probably in exchange for a sweet deal on some fighteres. Russia probably got an adjunct NATO membership for some of theirs. And Bangladesh probably got generous flood aid for their 3 tons. What I have had trouble with is what the Euopeans are getting for theirs. My best guess is that they get they weill get a Strong Euro policy after the rot and corruption kill the Strong Dollar policy.

Now, what about the bullion banks -- I think that they got a sweet deal in that they could use the gold carry trade to make a very nice return. I suspect that there are unwritten assurances from ESF that the gold loans will be converted to gold sales if things turn against them.

Regarding the gold mining companies, for many the choice was between hedging and shutting down. Most managers would probably choose to hedge rather than shut down. Hedging is an effective way for the ESF to covertly subsidize the high cost miners.

This addresses many of the participants you suggested. Others included:
BIS - This perhaps makes sense if the strong Euro is intended as the replacement for the strong dollar.
IMF - Definitely complicit because of their instructions to the central banks about accounting for gold loans.
ECB - This perhaps makes sense if the strong Euro is intended as the replacement for the strong dollar.
LBMA - If memory serves me, the BB's are significant members of this.
the big four - I doubt that they were really aware. To Morgan - Chase, the gold stuff is somewhere in the decimal point -- until gold explodes.
the oil state(s) - Probably paid off like Kuwait with the deal on the fighters.

Thoughts anyone?

Aristotle

(07/09/2002; 00:18:50 MDT - Msg ID: 80119)

Right-O, kludge-man

First of all, I think you worry overmuch about offending people with your fair thoughts.

Second of all, for what it's worth, I'm one among a group here ((A majority? I don't know...most are silent.)) that rejects the notion of a "cabal" for many of the same reasons you've expressed in your post. I find there's no need to be apologetic about it. If the truth won't set a guy free, at the very least its the shortest route to enlightenment and prudent independence of action. So it's a key to freedom soon if not immediately, I guess. Nothing wrong with that.

So if it's not the coordinated act of a "cabal, "what are we seeing here, with Gold reduced to these recent neighborhoods of 22-year lows?

It's the aggregate effect of commercial and political interests acting within the parameters and under the influence of modern banking practices treating Gold as though it were Money (instead of the much-preferred condition -- in my studied opinion -- where Gold should be respected as Private Property.)

Modern banking is notorious for artificial inflation of the supply of its Monetary Unit. And to the extent that Gold is wrapped up in the sordid affair, its apparent Supply (existing in the form of equivalent credits and Gold Receivables) is expanded accordingly, and it's price-value suffers accordingly.

A tweaked monetary (banking) system that allows for a market in "Free Gold" to return to dominance should be the prize that all Physical Gold Advocates have their eye upon. Free Gold is physical Gold owned outright, free of encumbrances, warrants, attachments, liens, or claims of any kind other than that of it being Private Property belonging to its one sole owner who has paid for it outright and in full.

You will discover that Gold, when respected under that condition, is SCARCE! This is precisely what Sir Belgian has been driving at lately.

As we all grind our way through this global economic slump, I'd suggest that any government looking to rejuvenate the economy based on a "wealth effect" need look no further than to make haste with policy implementations for a *new* "Gold standard" of Free Gold. A standard of Private Property, not of socialized sharing (and hence inflation) via the Unallocated banking system and use of derivatives. By the very nature of its modern usage, Money -- however humble or solid its beginnings -- is elevated to (reduced to(??)) a Notion. An ignominy that no kingly ounce of Gold should ever have to endure! That is, now that a new structure (Eurosystem) is gaining footing thus allowing/empowering Free Gold to to throw off the legacy dollar-yoke and run afield. Why would they do such a thing? The fair-minded French spirits of Messrs. de Gualle and Rueff live on in others, wanting if nothing more advantages than a leveling of the playing field through termination of Bretton Woods enduring "exorbitant privilege" for the U.S.

I note, however, that it remains a sad fact many traditional Gold-Stardardites simply shoot from the hip in this regard, having an incomplete grasp on the very core of the banking and monetary system, thus failing to recognize the enduring incompatibility that Gold is very Real while Money is merely Notional. Humans being human, it can be no other way, and any honest look and interpretation of history confirms that. That, I guess, is the bad news. For them. Now for the good news.

Free Gold can be yours today if you want it. It's as easy as a bank run with no Lender of Last Resort.

Of course, to those who ask why the Biggies don't just step up to the window to single-handedly bring down the roof, as FOA said with such simple wisdom, (approximately) "Why rush to break up a game that's delivering in your favor?"

So, my friend, keep on earning those bucks, and without fuss keep on converting them into Gold while it remains inconveniently heavy for the price. You'll be richly rewarded in due course.

Free Gold. Get you some. --- Aristotle

Horatio

(07/09/2002; 00:33:20 MDT - Msg ID: 80120)

Hearings

Any CEO that doesen't take the Fifth is a Moron.
You can see from the attitude of the Politicians ,they are in need of a Scrapegoat ,lest the public turn on them.Why don't they call before thier panel of demogoges the regulators that were paid using public money,public payroll to watch these crooks.Give us thier names....and which politician was not paid with campaign funds to look the other way? What did they think that money was for?Altruistic benevelance ?
These hearings are a joke,the problem starts and ends with how we elect our politicians.Somebody is going to take the fall
and any ceo that opens his mouth will be it.Will the regulators go to jail?Thats where the buck stops,and with who hired them.

Aristotle

(07/09/2002; 00:39:37 MDT - Msg ID: 80121)

Timbervision

Thanks for thinking of me in soliciting a response to that Tlaga piece on July 4th.

The longer and more convoluted things get, the less they lend themselves to written discussion. And this is definitely one case where what has been proferred weighs heavily upon the "steaming load" factor. (To be fair, there is much about it that remains good... but to consider eating a pie when half the apples in it are bad??)

In no more than two beers on either side of a table you and I could be through it and crystal clear walking away. As is, however, I won't touch it. Too messy all over the map. Hopefully, my prior post to kludge will show largely where I stand apart from Tlaga's monstrosity. Respectfully, --- Ari

Belgian

(07/09/2002; 01:07:25 MDT - Msg ID: 80122)

@ Timbervision # 79917 : Sorry for late answer on the Tlaga article.

Yes, my intuition (1 year ago) also suspected the euro/dollar-block, "parity" (including yen). It's all in the exchange rates, isn't it ? This euro/dollar-block "temporary" mutual interest, in GOLD management, is suggested in the "Washington" aspect of the Washington Agreement ! Euroland CBs, pro forma sales of Goldreserves and the US, redefining Goldreserves, twice. Both currency blocks ($/�) in a joint effort to hide THE REAL DEGREE OF PERMANENT CURRENCY DEPRECIATION, with an agreed OFFICIAL degree of PCD. An enormous difference between these two !
Official PCD since 1971 with a factor between 8 and 10 and Real�PCD with a factor between 15 and 20.

Wouldn't it be nice if both currency blocks, "converge" (parity) to the perception of "stability and growth" as to start, together, from, there on (parity), adjust in lockstep (tandem) for past real depreciation ? Nice, isn't it ? Maybe Kludge can find an answer for the "who" is conspiring/managing, with what kind of force ?

But this joint venture between dollar and euro-blocks is NOT going to last !? Both are extremely ambitious and want dominance as soon as "total collapse" is percepted as impossible. And Gold will play its leverage (fulcrum) role into this power-play.

$/� (and yen) blocks, as 50% of "contracting" global GDP, has to face the other 50% in full expansion ! A friend just back from China/Hong Kong, witnessed with reliable objectivity, the action going on in the Gold shops. Massive accumulation of the Physical stuff by ordinarry (far eastern) folks. And...
Hugh Hendrey (Odey Asset Management), did it again (was allowed to) on CNBC-Euroland : A very strong Gold statement:
1/ The JPM/C, dangerous derivative situation,
2/ ALL CURRENCIES ARE INTRINSICALLY WORTHLESS !!! (said it literally)
Wow ! The financial media, seem to go for cover and organize the : We told you so !

Sorry for being so brief on this. Hollidays without the www-gear. Greetings Timbervision.

Yellow Metal

(07/09/2002; 01:10:26 MDT - Msg ID: 80123)

Carl H (7/8/02; 17:36:13MT - usagold.com msg#: 80095)

The Ant and the GrasshopperSo what's your point Carl ?

Yellow Metal

(07/09/2002; 01:16:19 MDT - Msg ID: 80124)

Apologies for brevity of previous post

Upon reviewing my question to you I found it unnecessarily blunt and indeed rude.
Sorry.
But in all sincerity I do ask the question.
I just don't get it.

Gandalf the White

(07/09/2002; 01:22:04 MDT - Msg ID: 80125)

Don't look now, BUT SPOThas awoken and is about to ----

JUMP, SPOT !! JUMP !!!!!
<;-)

steady

(07/09/2002; 03:34:55 MDT - Msg ID: 80126)

yellow metal re not getting the ant and the grasshopper

http://www.pacificnet.net/~johnr/cgi/aesop1.cgi?sel&TheAntandtheGrasshopper&&antgrass.ramThe objective of this lesson is to help you to understand that all living creatures have needs. It is
important to know what you need to do in order to survive. Click on the Website in the resource area to the pathway of knowledge.

Aesop's Fables: The Ant and the Grasshopper. In this fable, the Ant is trying to teach the Grasshopper the need to save for an emergency. .
substitue gold for corn and financial meltdown for winter

however in our society there are many who would want to penalize u , ridicule you and possibly even take away the fruits you have labored hard for, and give to those who do nothing and expect everything. I think that was the point there!
got gold, give it a silver lining!

Humble Pie

(07/09/2002; 03:45:15 MDT - Msg ID: 80127)

Aristotle post #80119

I wish I had said that,a masterpiece

Black Blade

(07/09/2002; 04:01:11 MDT - Msg ID: 80128)

Interesting Night With A Couple Of Gold Bugs

I am just getting in from a night having a few cold ones with a couple of Latvian and Russian visitors. They have some interesting comments about oil and gold in the former Soviet Union. However, I will probably discuss this later on as I am a bit unable to focus right now. Can those boys drink! Of course I held up the flag in face of nearly impossible odds. But for now I need some recovery time. It's been a while since I had consumed that much. Cheers!

- Black Blade

Mr Gresham

(07/09/2002; 04:07:32 MDT - Msg ID: 80129)

Away

Away from computer-land for a couple weeks.

As Bill (Murphy?) and Ted (Butler?) would say:

"Be EXCELLENT to one another!"

Mr Gresham

(07/09/2002; 04:44:35 MDT - Msg ID: 80130)

Sirs kludge, cyberbat, Camel, Carl H, Aristotle

Excellent questions! Excellent answers!

A mystery to me, too. I imagine that the first thing the insiders (and those who wannabe) can agree upon is that the Public (the Cow for the milking) is the Outsider, and no need to rile it.

Nothing to be gained by exposing the game. They (the public) wouldn't get it, and you could only lose _your_ chance at the brass ring. (Rise above the Pubic one notch, and you -- we -- ARE already an Insider, relatively -- now we're just talking your percentage.)

No percentage in being the Spoiler, and perhaps a significant downside as some notable accidents may have served to remind, whether intended that way or not.

Mr Gresham

(07/09/2002; 05:05:47 MDT - Msg ID: 80131)

Pizz

Mixing metaphors here: You keep peeking under the hood, and hitting 'em out of the park.

GR2 -- great to see you around.

misetich

(07/09/2002; 05:45:08 MDT - Msg ID: 80132)

ANOTHER SCANDAL - Elan CEO Geaney Quits After Drugmaker's Shares Tumble

misetich

(07/09/2002; 05:53:04 MDT - Msg ID: 80133)

China Gains on Dollar Loss as Yuan Peg Lifts Exports

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∣dle=ad_frame2_topfin&s=APSqGjBVaQ2hpbmEgSnip:

Euro-Asia Agricultural Holdings Co., which gets almost two- thirds of its revenue from Japan and the Netherlands, is benefiting from China's weak currency. The yuan's peg to the U.S. dollar means the two are falling in tandem against the euro, the yen and other currencies.
..............

Chinese exporters stand to get a windfall from the drop in the dollar, which has tumbled 10.2 percent against the yen and 12.2 percent against the euro in the past three months. A falling currency lets them sell more cheaply than competitors in countries such as Korea and Thailand, whose goods become more expensive overseas as their own currencies follow the yen higher.

Misetich

Can we expect ANOTHER round of currency devaluations in SE Asia?
ANOTHER blow to Japan?
Round and round we go, the domino effect of globalization is staggering - "Somebody" is underestimating China!

Got gold?

Hipplebeck

(07/09/2002; 05:55:39 MDT - Msg ID: 80134)

pog

I believe things are just as they should be.
The price of gold is balanced between the central banks desire to hold the price steady, doubt about the global recovery and fear of war.
I have said many times that the price will not skyrocket until the general public perceives inflation.
The effects of the dollar fall have not been felt yet by most. But when it is felt, we are going to see the price move.
Gold will not take it's rightful place until people see inflation as real. Right now, all you hear is that there is no inflation, and most people have been conditioned to think that gold only moves when there is inflation. Most people know about how gold was selling for $800 twenty years ago, and they all know it was because of inflation.
Be patient if you want the price to rise so that you can make money off of gold.
Me, I hold gold because I treasure it. I hope to be able to give it to the next generation rather than sell it.

misetich

(07/09/2002; 06:11:32 MDT - Msg ID: 80135)

Hedge funds attack bondholders

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∣dle=ad_frame2_topfin&s=APSqbwBT4UGltY28nSnip:

Gross said his observations of the market lead him to conclude hedge funds may be shorting bonds of debt-laden companies, sometimes anticipating downgrades by credit-rating companies, which want to counter the perception they were too slow to warn of problems at Enron Corp. and other companies.

``Just as lions cull the weakest and slowest from the zebra herd, hedge fund managers prey on disabled or temporarily injured companies by shorting their bonds,'' Gross said. Shorting means selling borrowed securities in hopes of buying them back at a lower price and profiting from the difference.

Forced to Sell

Hedge funds may be taking advantage of rules that force many managers to sell any bond demoted to junk status, wrote Gross. Bonds of WorldCom, Gap Inc., and Enron traded as if they were junk- rated in the days preceding actual downgrades.

``The game results in billions of dollars of profits'' for hedge funds and threatens companies' survival by hurting their ability to access capital, wrote Gross.

He said corporate bond prices and yield spreads also are being affected by the withdrawal of banks from short-term lending, which underpinned the commercial paper market for decades. Companies were able to borrow at relatively low interest rates because banks offered such credit lines at nominal cost, keeping the spread between corporate and government yields ``artificially low'' since the late 1990s, he said.

``Yield spreads will not return to the narrow levels of yesteryear no matter how strong an economic recovery we have,'' he said.

Misetich

The Stock Market is small relative to the bondmarket. Distress is being caused as the value of bonds held by pension plans, insurance companies decline. These same institutions have leveraged their declining bondholdings in other assets...

How will this end?

Got gold?

Paper Avalanche

(07/09/2002; 06:41:37 MDT - Msg ID: 80136)

The E in P/E

Imagine what the real, GAAP earnings will be for the major indices once CEO's truly fear for their personal freedom, a la threats of jail time for cooking the books. I believe that the notional value of major market indices will be cut in half in six months and still the P/E of the major averages may be higher than they are today once the truth is known.

Thanks Kludge, Aristotle and Belgian for your insight and thoughts. This board never ceases to amaze me in the concentration of intellectual thought and exchange of ideas.

Paper Avalanche

Carl H

(07/09/2002; 07:16:35 MDT - Msg ID: 80137)

@Yellow Metal - The Ant and the Grasshopper.

My point is people don't like to see a few make money when most are loosing their shirts. So before this is over, expect gold and silver holders to be made to look like villians in the press and expect attempts to either confiscate the metal(s) (for the national good, of course) or heavily tax the profits from it.

Paper Avalanche

(07/09/2002; 09:04:56 MDT - Msg ID: 80138)

Silver chart on Kitco - trading halted?

http://www.kitco.com/charts/livesilver.htmlDoes anyone know why the Kitco chart for silver show it flat-lined at 4.98? It would appear that all trading has been halted. Am I mistaken in this interpretation? Rich, have you heard anything? Any word from Ted Butler or David Morgan with respect to defaults on the exchnage suspending trading?

Or is this simply a glitch on Kitco's systems (they have happened before). Please note that silver flat-lined yesterday as well a few minutes into trading.

Hmmmmm.

Paper Avalanche

miner49er

(07/09/2002; 09:11:41 MDT - Msg ID: 80139)

timbervision @ 79917

Greetings, timbervision -- Sorry for the late response re: Tlaga article; been away... Will just try to briefly address your question. The discussion of whether the money powers want to keep gold from ever re-valuing (upward) is in part a matter of one's perspective of how the whole thing is played by these powers. And since our view of the activity is remote, and left to much guesswork, it is really only possible to evaluate at all in very large chunks.

First, if the global banking system were indeed content to continue within the current dollar-centric framework, then it is not unreasonable to conclude that the current game-playing could go on in all its hideous excess for a long time to come. In it gold, as a de facto currency, must be subjected to all the exchange games to which every currency is exposed. So, IF all these monetary forces do continue to subscribe to a dollar-dominated world, then it IS in their best interests to keep the dollar looking good by keeping the gold price down in terms of dollars.

This, however, is a very big IF. If this paradigm is challenged with a viable alternative, one that does treat gold differently, one that conceives of gold positively, then the real possibility exists for the gold price to rise drastically (as the real-physical stuff IS very scarce). There are chiefly two currency blocs in viable competition for global reserve/settlement status: the dollar and the euro. One suppresses the gold price as a constant (officially), and at an artificially low price (unofficially, in the paper markets as transacted in dollars). The other revalues it to the spot price quarterly.

The gold-price suppressing currency must remain strong in its users' eyes relative to gold, since it is declaring itself to be stable in terms of gold. Human nature will, however, inflate it recklessly as long as it can get away with maintaining this stability fiction. In order to create and maintain this illusion, the system must (among other things) make the gold supply seem more than enough for all who want it. Hence its supply is also (artificially) inflated with paper gold. Eventually, unless ALL the players keep agreeing to pretend and play along, this is one giant train-wreck in the making.

The currency that revalues to the market price of gold, on the other hand, benefits by a rising gold-price, as this increases the value of its gold reserves. It is not in competition with gold as a currency, is not threatened by it, and is opposed by design to its price suppression (and artificial supply inflation).

If nothing else, this alone should refute the notion that ALL the players are in cohoots to keep the current dollar gold-price suppression paradigm intact. Here you have the no-turning-back committment of the financial structure and economies of hundreds of millions of people to a new currency that demands a positive view of gold, and ultimately its true value to be recognized. Why on God's green earth would they subscribe to furthering the current price suppressing framework? Why would they have spent several decades making a new currency with this in mind, if they did not intend to see a revaluation of this component of their reserve base?

Certainly, as the euro faction is just as prone to the failings of our human nature, they will themselves find a way to wreck their system eventually, too. But that is for worrying about another day. In this phase, a transition to the euro as the dominant currency of trade will necessitate the eventual rupture of the dollar paper gold markets, and likely the dollar itself. It will also bring about a very major upward revaluation in the price of gold. This will not be BECAUSE of the masses moving the market -- although their participation is essential. It will be because of the design and dynamcis of the monetary forces in place, and how they relate to the natural human tendency to consider gold as something of lasting, real value. One has fought against this current of human nature for ages by controlling its price, and is at exhaustion; the other has postured itself to ride this flow to its advantage by liberating its price, and not only ride it, but even be energized by it for some time to come.

So, like Ari mentioned to you, this could probably be ironed out quite handily over a beer or two, but there are so many rabbit trails to this whole issue that written discussion becomes next to impossible. I encourage you to read through the various archives at this site, especially the FOA/Another archives to get a fuller treatment of all this. This is probably better than rewriting what's been written a hundred times, anyway...

Best regards,
miner

Pizz

(07/09/2002; 09:11:59 MDT - Msg ID: 80140)

Paper Avalanche

http://quotes.ino.com/exchanges/?c=metalsTry this for silver quotes

Pizz

YGM

(07/09/2002; 09:29:10 MDT - Msg ID: 80141)

USA GOLD BANNER @ GOLD-EAGLE.........What a Great Sight!

http://www.gold-eagle.com/cgi-bin/gn/get/forum.htmlKinda makes ya feel like saluting.....Anyways it is nice to see when you open the GE Forum page.....I hope this leads to more mutual contact between the two "BEST" Gold Forums on the Web.....United we stand, good neighbours all with the greatest common interest.....YGM...(a relic from both worlds)

tedw

(07/09/2002; 09:38:56 MDT - Msg ID: 80142)

Advertisements

Noticed the last few days more ads for precious metals. Cable tv ads are promotng gold as an alternative investment
due to declining dollar and stock market.

Ive noticed it in some print media too (worldnetdaily).

Investor demand has been the missing item in the Gold market, and the above are anecdotal evidence of the return of the investor.

Since most people are hypnotized already,Im sure fixating on a tv that tells you to buy gold is not going to hurt investor demand one bit.

After reading the above, concentrate on this dot . for a while. Wordlessly, it is saying "buy gold"

YGM

(07/09/2002; 09:58:37 MDT - Msg ID: 80143)

Strange to see the Yellow jump with GW pep talk on Wall St.

http://quotes.ino.com/chart/?s=FOREX_XAUUSDOThis is not what I expected....YGM

RobotGuy

(07/09/2002; 10:08:32 MDT - Msg ID: 80144)

Nice to see old yeller back to her old tricks

Mini-spike at high noon eastern. They'd better hurry back from lunch to smack 'er down.

Cheers!

RobotGuy

sector

(07/09/2002; 10:15:22 MDT - Msg ID: 80145)

Tlaga's Tripod -- 1$=100Y=1euro

The Slipper is Too TightTlaga has offered on July 4th that there may be a tacit agreement between authorities so as to assure that 1 $USD=100Y=1Euro.

There are at least three fatal problems with this idea.

First, Japan's industrial export base is already strapped badly at Y=120. Expecting them to take another 20% discount hit to their anemic bottom lines is unreasonable given the terminal state of their banks and life insurance companies. Recall that life insurance dividends to elderly Japanese are severely threatened in their worsening recession and debt crunch...which further threatens savings deposits which are losing as of April 2003, ALL deposit insurance. The gold market would have received a steroid boost if the yen had fallen under 140, as it was threatening earlier this year. The Japanese are caught between the gold monster if they devalue and failing industry if they don't.

Second, Tlaga's formula ignores the deteriorating credit integrity in both the US and Japan [Not that Europe is much better]. The credit shell game got even more stressed by all the emerging corporate scandals. Inflation as a way of life is a dream afflicting only a few at the Fed and ECB. Countervailing forces exist in Moody's and the S&P...not to mention the listing bond market.

Finally, seeking a magic fulcrum number to balance Western currencies also passes by the gold manipulation problem...it can't be manipulated forever because it requires physical tonnage as a derivative consumable. Perhaps Tlaga imagines that gold will be somehow released at the $1=Y100=E1 fulcrum point since Western currencies will equally divide the gold losses? I don't think so.

More likely is a replay of the 1971 dollar deval when rebel Dredsner Bank finally broke ranks and became a buyer of precious metal. Russia, China, The ME money centers and others standing to gain from a gold price rise, have the power at any moment to upset the gold cartel's delicate shell-game equilibrium.

It is a nice try, but at the end of the day the theory ascribes unreasonable cooperation among theives.

jayzee

(07/09/2002; 10:22:22 MDT - Msg ID: 80146)

Bush speech

Bush says that we should double the prison time for corporate officers that are guilty of fraud. The problem is that these big money people usually get off with a relatively small fine if they are caught, and they do not serve any prison time. So, 2 times zero still equals zero, so doubling the time in prison amounts to NOTHING!!

sector

(07/09/2002; 10:46:44 MDT - Msg ID: 80147)

Fed "Studies" Japan--The Fed KNOW'S It's in Trouble

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=APSpf.xZvRmVkIFJl07/09 00:01
Fed Research Is Window Into Greenspan's Thinking: Caroline Baum
By Caroline Baum

West Tisbury, Massachusetts, July 9 (Bloomberg) -- Accounting scandals must be becoming pass�. How else to explain the buzz about a Federal Reserve working paper, even as congressional hearings on WorldCom were getting underway?

``Preventing Deflation: Lessons from Japan's Experience in the 1990s,'' by Alan Ahearne, Joseph Gagnon, Jane Haltmaier, Steve Kamin and a gaggle of other economists from the Fed's Division of International Finance, explores Japan's experience in the 1990s and the lessons learned about the policy response when inflation and interest rates are close to zero.
[�]
Often it seems as if Greenspan starts with the conclusion and works backward from there, dangling the challenge of ``who can get me the answer I want?'' in front of the staff, says Paul Kasriel, director of economic research at the Northern Trust Corp. in Chicago.
++++++++++++++++++++++++++++++++++++++++
Economic "Scientists" who START with conclusions are wrapping themselves in the cloth of failure.

YGM

(07/09/2002; 11:05:00 MDT - Msg ID: 80148)

Finacial Swat Team?....OK!>>> :>}}

http://channels.netscape.com/ns/news/ns/story.jsp?floc=FF-PLS-PLS&id=403832783&dt=20020709115300&w=PA&coview=Bush announces 'financial crimes SWAT team'

President George W Bush has called for stiff new penalties for corporate criminals and a crackdown on boardroom scandals.

He made the call in a speech on Wall Street.

President Bush announced a new task force for the pursuit and prosecution of corporate criminal activity.

He said, "We will use the full weight of the law to expose and root out corruption."

The president called on the US Sentencing Commission to recommend longer prison terms for corporate executives guilty of fraud.

The task force will be headed by Deputy Attorney General Larry Thompson and include investigators from the Department of Justice and other agencies.

Bush likened it to a "financial crimes SWAT team, overseeing the investigation of corporate abusers and bringing them to account."

***This new team is going to get an email/fax barrage from the GATA Army...IMHO....YGM

YGM

(07/09/2002; 11:30:46 MDT - Msg ID: 80149)

A Repost from a Friend and his own valued comments.....

Bang on Commentary........"DERIVATIVES"Poster's Note: Anyone reading this article can not help come away without realizing why the Central Banks are very scared about higher gold prices. Barrick in conjunction with some bullion banks have created a monster than can destroy the banking system and also ultimately Barrick Gold (ABX). I would not own ABX under any circumstances. Nor will I own any of the shares of the bullion banks.

It appears to me gold prices will have to go much higher some day in the future for reasons that are obvious to any gold bug. The only question in my mind is when. The central banks and the bullion banks do not have enough physical gold metal to keep up this charade forever. When the day comes when these people can not longer play their dangerous game, ALL HELL WILL BREAK LOOSE.
............................................................
Gold Derivatives

By Ian Williams
Tue 9 Jul 2002(11151)

LONDON (ShareCast) - There may be trouble brewing in the gold market. But for a change, this trouble will be good for gold bugs as an unusual confluence of events pushes gold, currently trading around $310 an ounce, to $400 and above. And it will prove very bad for any big-name banks caught on the wrong side of this price move.

The phenomenon revolves around a highly unusual form of gold derivatives, a market in which Citibank, Goldman Sachs and JP Morgan are the major players. The particular form of derivative is a type of hedging pioneered by Barrick, one of the world's largest gold producers and a leader in innovative hedges.

Ordinarily, a hedge protects a producer or investor from the downside, but, other things being equal, it does so by limiting their upside. Barrick, however, has managed to construct a hedge that allows it considerable upside if gold rises. And one big bank could be caught very short.

Barrick has been a very good hedger, making use of all sorts of instruments and investment strategies. In fact, at the end of 2001, its hedge book had assets of $5.5bn, which was more than the gold-mining part of the company.

It appears that part of this success comes from what is known as a spot deferred forward sale contract, which it started using in 1990.

Barrick makes a forward contract with a bank to deliver (unmined) gold at a certain price at a certain date. But - and this is what makes these contracts different and, indeed, dangerous for counter-parties - Barrick also had the right to defer the delivery of the gold for periods ranging from five to 10 years. Recently Barrick has entered into contracts that allow it to defer delivery for 15 years.

While deferring or rolling over a contract is not unusual in the financial world, it can usually be done for only a short period and both parties have to agree. But Barrick appears to have pulled off a coup by writing extended-length contracts that allow it to take the decision unilaterally.

This can be very lucrative for Barrick. Say gold is trading at $300 an ounce and Barrick agrees to sell Bank X 1m oz of gold at $320 an ounce in 12 months. If gold then trades at $310 an ounce one year later, Barrick will sell the gold to the bank and receive a better price than it would get elsewhere. But if gold has shot up to $350, Barrick can choose to defer the sale to the bank, and sell its gold in the market. This gives it the best of both worlds - little risk and the highest price available.

If you are Bank X holding the obligation to buy the 1m oz at $320 per ounce, then you need to hedge this position in the market. Standard gold futures contracts have no deferral clauses, so you sell forward the gold that you don't have, which means you are now relying on Barrick to deliver the gold so you can fulfil your end of the bargain.

If Barrick decides to defer the sale, though, there could be trouble - which is what we hear could happen.

Apparently, one sizeable bank active in this market has a gold derivatives book of $41bn, a significant part of which is attributable to its dealings with Barrick. Barrick's contract apparently has the option to defer any sale. If the gold price starts to accelerate, Barrick could choose to defer and the bank will have to find some other way to get the gold it needs to fulfil its own obligations.

How will it do that? It will have to buy the gold - potentially hundreds of millions of dollars worth - in the market. A forced buyer of that size would send gold rocketing to $400 or even $450 an ounce, prices not seen since the early 1980s.

You may have a question: How could a bank do something so risky? Eight words give a clue to that: Enron, Savings & Loans, Long-Term Capital Management.

Ian Williams is head of fixed-income and commodity research at Durlacher.

Financial broadcaster Ian Williams is head of Durlacher's fixed-interest team

Pizz

(07/09/2002; 11:33:57 MDT - Msg ID: 80150)

YGM

I've got about the same amount of faith in the new swat team as I have had in "the war on drugs". You can't legislate morality, and who's going to decide if it's criminal or requires a hand slap? All it's going to do is be the enforcement arm of the upcoming "do they get a governmemnt bailout or not?"

Right now the PTB are discussing what to do next. Gee, the speech didn't work and gold's goin' up. What? Nobody believes our reformed attitude? Why should they? All they've managed to do is put every CFO in the country on alert, and even the ones with just aggressive accounting are going to be telling the CEO's and Boards what to do with their agressive ways. Earnings rebound? Not likely.

Default and deflation? No way, look for Japanese devaluation and massive stimulus via bailouts, and massive war time spending, further decreases in interest rates, and bailouts in the US (and any other country that needs it and toes the line).

Gold and silver should start discounting the coming inflation.

Pizz

goldfool

(07/09/2002; 11:41:55 MDT - Msg ID: 80151)

YGM/RobotGuy - Old Yeller back to its old tricks

Every once in awhile the cabal finds it prudent to allow these mini-spikes to occur to run the buy stops (a house cleaning of sorts) then turn around and hammer the price down again so as not to spark any major interest and provide any momentum to the upside. Quite effective in teasing and demoralizing the longs and picking up profits. They talk about Wall Street being a sewer, well the COMEX is the resevoir outside a sewage treatment plant. The other scam they run is writing out of the money call or put options to unsuspecting investors. These investors are lured into the trap by the price gyrations as described above, good gold fundamentals, and by precious metal "con artist" bank analysts who set overly optimistic price targets. The banks or funds they represent will even participate in the buying to drive the price up then at strategic points turn around and sell heavily to get momentum going in the other direction by running stop losses and then pocket the big profits. Upon option expiration the price is fine tuned so that it falls in between big blocks of out of the money strike prices and they collect almost all the premiums. You can do this easily with the resources they have. This happens not only with gold futures and futures options but gold stocks as well. Small investors with even with good money management skills have almost no chance of making any money from this rigged casino which serves two purposes: it's an easy money maker for the large investment banks who in actuality carry out the dirty work for the central banks who want to keep the price of gold down in order to maintain confidence in their fiat currencies. The government of course officially denies any participation and looks upon this these activities as a necessary evil.

The Hoople

(07/09/2002; 11:56:32 MDT - Msg ID: 80152)

James Grant's excellent WSJ article

As usual James Grant offers wisdom where buffoons like Bush and his cronies offer chicanery and hypocrisy.

Snippit: "if U.S. stocks were absolutely and unequivocally cheap, today's alleged crisis would be self-correcting. Having fled an overvalued market, people would be creeping back into an undervalued one...(the stock market) is a proverbial $20 hamburger, or $25 hamburger, a bargain only in comparison with the %100 sandwich".

Well said, Jimmy. The gold market appeared to treat the Bush drivel like the soldier on the fort in the Monty Python movie "The Holy Grail". "I fart in your general direction".

YGM

(07/09/2002; 12:02:39 MDT - Msg ID: 80153)

FWIW....Gold Spike Today....

One Big Buyer Today?So far today I have read "Two" different Brokerage in house memo's referring to an (undisclosed)Investment Bank going long Gold...Expecting a near term retest of $330.00+ level....All fundamentals remain bullish for Golds move both reports say.....What two trading houses think/know, many others will also....FWIW....YGM.

YGM

(07/09/2002; 12:09:42 MDT - Msg ID: 80154)

Pizz (7/9/02; 11:33:57MT - usagold.com msg#: 80150)

No faith here either.....Just a hope that this so called 'team' may put a little fear in the Paper Whores.....Plus the GATA email/fax machine Army has another venue to drive crazy and gain a little more exposure possibly?....YGM

USAGOLD / Centennial Precious Metals, Inc.

(07/09/2002; 12:26:33 MDT - Msg ID: 80155)

Common sense investing for uncommon times...

http://www.usagold.com/ProductsPage.html

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call Centennial for Arrangements
1-800-869-5115

admin

(07/09/2002; 12:30:53 MDT - Msg ID: 80156)

The Daily Specials Board: For Immediate Delivery. . . .

http://www.usagold.com/ProductsPage.htmlWe have begun a new program for selling gold. We are offering certain products available for immediate delivery and at reduced prices.

The catch?

You can only find out what they are and the prices by calling our offices and talking either to
Marie Ballard (ext.106),
Jonathan Kosares (ext.110), or
George Cooper (ext.102).

First Come, First Served. Limited quantities each day of items available for immediate delivery. Items will come off the SPECIAL board as they are sold out daily.

Call toll free (800) 869-5115

Belgian

(07/09/2002; 12:32:26 MDT - Msg ID: 80157)

Decoding Rhona (WGC) CNBC-Europ, this morning ?

The WGC wants to create easier acces to Gold-Holdings by means of gold-certificates (say : paper) !? Reason : Gold is to heavy for its price...whoehaa (You like this Sir Ari ?). But, more seriously is the fact that the WGC was on CNBC and talked about Gold... most probably becoming scarcer and scarcer. Let us suggest to WGC that our host has no problem with shipping the PHYSICAL, only a call away.
Let us suggest to WGC, that more and more accumulation of Physical, inevitably leads to much higher prices and declining shipping costs. Etc...etc...

1971 >>> present :

POG : 41$ >>> 320$ (x 8)
Oil : 2,5$ >>> 25$ (x 10)
US debt : 600 Million >>> 6 Trillion (x 10)
Bonds : capitalization (x 8)
Dow Jones : 1.000 >>> 11.000 (x 11)
Newspaper, haircut, bread and other regulated (controlled) items, are within this same 8x/10x Currency Depreciation ratio : The Official one ! The managed one !

Detecting the REAL degree of currency depreciation is a very difficult job. There are not that much real goods and services that are not price-influenced by the above mentioned items or imported cost elements from the colonized workers on the globe. But even with the managed (falsified) depreciation factor od 8x/10x, the more "free" priced goods/services are within the 15x/20x range.
Once oil/gold/interest rates, are adjusting to the real depreciation...HYPERINFLATION will surface much more clearly. And will be much higher than factor 20x from 1971 till now.

It is in this coming period of inevitable "hyperinflation" that GOLD will set itself FREE. Trainloads of fiat will be needed (provided) to keep the bulk of our western economy afloat and sailing. This whilst more than 2 billion non western people, expand, economically, at the speed of light.
800 million (m not t) will soon have much reasons for panicking, with or without confidence restoration speeches or acts. It is too little, too late. Western Economic expansion (compromise) and WAT (Sassam ousting) don't go (will never), hand in hand (Bush speech)! War AND prosperity is nonsense.

Under normal, officialy managed, circumstances... POG should, presently, be floating into the 600$ to 800$ zone.
(41$ x 20 = 800$) Taking well into consideration that the 1971 POG=41$ was already a strongly manipulated price. A ridicule low POG is reason for an as ridicule low POO and a surviving economy. The West (numeric minority) succeeded in having the "purchasing power" on its side. Not much is needed to crash this purchasing power. When the scarcing Physical Gold, becomes un-available...the whole charade implodes. And it is not because POG increased by as little as 20% (253$ >>> 315$) that the media start to bring some serious Gold talk on the show ! They knew already what is the achillus heel of the Gold Management : PERMANENT (sustained) PHYSICAL ACCUMULATION ! Denial >>> Acceptance >>> Capitulation and panic. In that order...again and again.
A POG of 600$/800$ would bring a POO = 40$/50$. This price zone has already been tested, twice. Do you remember how much pain it caused ??? And all this with a succesfull price-raid on oil in 1999 = 10$ per barril ! POO strenght, today, is VERY significant for what the future will look like !

Disclaimer : Belgian is holding his "heavy" coins !

Pizz

(07/09/2002; 12:43:41 MDT - Msg ID: 80158)

YGM & your paper ladies of night

My take would be systematic covering of short PM positions in indirect ways. I don't think the paper gold markets can handle the direct offset, so if the fundamentals and a few big money players (taking long positions in gold) push up the price, the bullion banks might have to "offset" gold losses with profits from other areas. Not their first choice, but better to lose a manageable chunk rather than go belly up chasing gold to the moon.

The kicker here is the bond markets. Most think Greenspan will have to raise rates to support the dollar. I don't think so, in fact, my guess would be the opposite. a couple of 1/2 point cuts, very timely, sending the bond market skyward (and a relief rally in the SM) (my guess is there are quite a few big players short right now, and Greenspan hates the arbitragers, could give the JPM's of the world an indirect windfall to offset the gold derivitives losses now brewing(or a big chunk of it). Besides, if Japan devalues like I think they will, the rate cuts would keep the dollar in play in the currency race to the bottom.

Everyone says were're in a housing/real estate bubble. I disagree. They have to hyper inflate, and with freddie and fannie making it easier for loans, I'd say they're going to try to get all who can into housing before the inflation.

Think about it, the NASdaq was a bubble, but we're no where near a real estate bubble like Japan got into. Lots of room there, and it will stave off armageddon for a few years.

Kind of rambling, but they're backed into a corner. Defalt and deflation will send us into the abyss. When you're really scared, the instinct is to run as hard as you can in the opposite direction. We'll see.

Pizz

YGM

(07/09/2002; 12:54:37 MDT - Msg ID: 80159)

AOL Bonds Nearing Junk Status...

http://www.nypost.com/business/52028.htmExcerpt:

The company has roughly $23.7 billion in outstanding bonds and its 10-year notes are trading as though the company were rated four steps below its BBB+ grade.

AOL's coupon notes rated at 6 7/8 percent and maturing in 2012 were quoted at $885 per $1,000 of face value, with a yield of 8.63 percent.

That figure is 3.8 percentage points more than comparable U.S. Treasuries.

Junk bonds are generally defined as those that trade more than 3.5 percentage points above Treasuries.

"In this market, there's no tolerance for an opaque credit, and that's what these guys are," said Eli Lapp, a fixed-income analyst at BNP Paribas in New York, referring to AOL.

Cont'd....

**Imagine the fallout if AOL is also discovered at having done some "CREATIVE" Accounting in this great purge....YGM.

TownCrier

(07/09/2002; 12:57:50 MDT - Msg ID: 80160)

Through this, can you see why the U.S. Treasury quit selling 30-year bonds?

http://biz.yahoo.com/rf/020709/financial_argentina_auction_1.htmlBUENOS AIRES, Argentina, July 9 (Reuters) - In a regular debt sale aimed at soaking up liquidity to prop up the peso, Argentina's Central Bank said late on Monday it had sold 247.9 million pesos ($68.9 million) in 14-day debt at an annual interest rate of 129.7 percent, higher than recent auctions.

-----(see URL for more)-----

You can see from the Argentina experience, the market price gives away the game, revealing the state of affairs. It's more prudent not to try selling them (30-yr) and let the price get somewhat propped up from the dwindling supply.

R.

TownCrier

(07/09/2002; 13:01:09 MDT - Msg ID: 80161)

Post Script to previous...

With an annual rate of 129.7 percent on 14-day loans, can you imagine what interest the market would require if Argentina tried to float 30-year debt?

R.

Belgian

(07/09/2002; 13:01:12 MDT - Msg ID: 80162)

@ YGM / @ Goldfool

Nice description and, most probably, a correct vieuw on how the derivative gordian nod is entangled. I'm pretty convinced that the final outcome of this paper-circus will be heavely reduced in importance, once the Gold community (what's left of it) sees that continious, under-the-skin- accumulation of the Physical is a factual given. Once, Physical Holding will be experienced as a *happy* feeling in the midst of other paper vaporization. POG momentum-phases, are increasing in frequency and soon in magnitude.
The paper is heating up. The entropy within the Gold molecule is increasing ...and so on. Thanks for the derivative mechanism, explained, better and better.

Black Blade

(07/09/2002; 13:05:27 MDT - Msg ID: 80163)

FBI sweeps jewellers for 'terror link'

http://news.bbc.co.uk/hi/english/world/americas/newsid_2118000/2118256.stm
Dozens of stores were raided by FBI agents

Snippit:

US investigators have raided dozens of jewellery stores across America suspected of laundering money for Osama bin Laden's al-Qaeda network, US officials have said.
About 75 jewellery kiosks, mainly owned by Pakistanis, were reportedly targeted by FBI and immigration officials over the past two weeks. The stores came under suspicion after an employee was detained after spending hours photographing the World Trade Center days before it was destroyed.

The owner of Intrigue Jewelers in Pittsburgh, Tariq Hussain, said FBI agents questioned him for several hours and wanted to know about any links he had with bin Laden of al-Qaeda. "They took everything, my paperwork, bills, my computer, my cheques," he said. Civil liberty and Muslim groups have reacted angrily to the raids. "These people are being confronted - and in some cases terrorised - based on no evidence," said Ibrahim Hooper, from the Council on American-Islamic Relations. "Even when the FBI says there is evidence, it is never anything anyone else is allowed to see," he said.

Black Blade: It could be worse. We no longer have concentration camps like we had for Americans of Japanese decent.

goldfool

(07/09/2002; 13:18:34 MDT - Msg ID: 80164)

Pizz @ I don't think there's a housing bubble

Excerpt:
The U.S. financial system is now dependent to an unprecedented degree upon one prop: the greatest housing-real estate bubble in human history. A hyperinflationary spiral has sent home prices shooting up by 10-40% annually in recent years�depending on the region of the country�and artificially pushed the price of millions of homes into the $400,000 to $1 million range or above. Already in 2001, one out of every ten homes for sale in the United States was priced at $1,000,000 or more. Since then, prices, assessments, real estate taxes, and mortgage credit volume have continued to spiral upwards, even as the productive economy staggered downhill. Many homes today are simultaneously glorified shacks�with plastic exteriors and gold-plated faucets in the bathroom�and yet unaffordable to most American families.
http://www.larouchepub.com/other/2002/2924fannie_mae.html

goldfool

(07/09/2002; 13:21:42 MDT - Msg ID: 80165)

Pizz @ I don't think there's a housing bubble

http://www.larouchepub.com/other/2002/2924fannie_mae.htmlSorry, first timer.

YGM

(07/09/2002; 13:58:47 MDT - Msg ID: 80166)

GATA news @ Rense.com

http://www.rense.com/general26/golcacc.htmWidely read site that helps....YGM

goldfool

(07/09/2002; 14:01:54 MDT - Msg ID: 80167)

Pizz - One more thought about the housing bubble

Isn't it ironic (or is it?) that the current inflationary trend in home prices started about the same time as the manipulation of the gold price in '95-96 as evidenced by Gibson's paradox? (The divergence between the price of gold and real interest rates).

Gandalf the White

(07/09/2002; 14:03:06 MDT - Msg ID: 80168)

Thanks "newbie" Sir Goldfool !! AND, a belated WELCOME !!

You are doing well after you "Jumped-in" !!
Now you have MASTERED the "LINK" !!
The Hobbits are all re-reading you posts and wish to advise you that they think that you were trying to "fool" them with the use of that "handle" !!
<;-)

Pizz

(07/09/2002; 14:05:52 MDT - Msg ID: 80169)

@goldfool

You may be right, but keep in mind, Greenspan thought we had irrational exuberance a few years too early also. Housing may not be real affordable now, but people are still buying what ever way they can.

A bubble is when prices are so high people just walk around shaking their heads saying "impossible", and then the prices go higher.

I'm wrong about 45% of the time, but I still throw my thinking out for others to comment on.

thanks for the feedback.

Pizz

Gandalf the White

(07/09/2002; 14:17:02 MDT - Msg ID: 80170)

"Oh, What a difference a DAY makes!!!!"

The Hobbits are singing and smiling again ! Look at the BEST Sector on the Markets today. How are you feeling now Sir Jimbo ?

Chap X

(07/09/2002; 14:23:18 MDT - Msg ID: 80171)

(No Subject)

IT'S ABOUT TIME!!!!!!!

YGM

(07/09/2002; 14:25:14 MDT - Msg ID: 80172)

Pizz....

Housing Bubble?Whether or not one views it as a bubble probably depends on which side of the spectrum you're viewing the picture from....A Bubble to those who can ill afford the sector and for those that can afford it remains a viable market with expected upside potential....Trouble is which view is reality based and also how long will RE sector continue to draw investment from the Trillions of sidelined Market dollars...I see it as both a Bubble and a yet one with lots of possible upside before correction....Even after 1929 and thru the 30's RE skyrocketed in some geological areas and bottomed out in others....Good insights are hard to mold and you're helping mine....Thnx for the discussion....YGM.

Aristotle

(07/09/2002; 14:35:51 MDT - Msg ID: 80173)

A couple handshakes

miner (usagold.com msg#: 80139),
You, my friend, are a Saint.

Belgian (usagold.com msg#: 80157),
"Trainloads of fiat will be needed (provided) to keep the bulk of our western economy afloat and sailing. This whilst more than 2 billion non western people, expand, economically, at the speed of light. ......Western Economic expansion (compromise) and WAT (Sassam ousting) don't go (will never), hand in hand (Bush speech)! War AND prosperity is nonsense."

Belg, ol' man, on that first item you point clearly to a key element that many would overlook to their everlasting financial misfortune (missed opportunity.) The current bullion banking Gold market structure (shell games with Paper Gold) simply can't weather the coming "Storm" that prosperity will bring with it. Doom arrives on the wings of doves!

I've actually made the same claim myself that Gold would benefit most in good times rather than bad. Seeing this same point made by the most estimable YOU, Sir Belg, gives me great comfort to know I've not actually beome witless wandering lost and alone in the wilderness.

--- Ari

misetich

(07/09/2002; 14:47:45 MDT - Msg ID: 80174)

ANOTHER Scandal? Vivendi's Financial Information Probed by Regulator

Black Blade

(07/09/2002; 14:48:36 MDT - Msg ID: 80175)

CLEAN UP YOUR ACT OR THE BULL GETS IT By JOHN CRUDELE

http://www.nypost.com/business/52005.htm

Snippit:

July 9, 2002 -- A ransom note from the little guys to the business bigwigs who blew our life savings.

TO: Wall Street, corporate and Washington fat cats.
From: Angry investors.

If you want your bull back alive, here are a dozen demands.

Black Blade: An interesting article that lays it on the line. The bull is dead and now investors threaten to bury the carcass.

R Powell

(07/09/2002; 14:55:20 MDT - Msg ID: 80176)

Pizz // housing bubble// today's POG and POS

Like most of us over half a century old, I think today's housing prices are outrageous. However, the houses selling at $200,000 will be priced about right when the dollar devalues POG up to about $650/ounce. I found the driveway covered with change once. My daugther had cleaned out her car! Money in the driveway. "But dad, it's only change!" You bet your life dear old dad picked it up. I cheek the driveway, now, every morning. What will they do after Belgian's hyperinflation (after Bigfloat's return?) starts and POG flies into four figures? Will the kids throw away anything less than a sawbuck?
I've heard the government is now printing paper of a different color. When the time comes, how many of the old green ones will it take to buy a shiny new "blueback"? How many of the blues after that will be needed to buy the next color?
Belgian, I enjoyed your list of 1971 versus todays prices and number of times inflated. If we included silver in the list, I think we'd see something even more undervalued than gold.
*****
Pizz, you caught my attention with your, "Gold and silver should start discounting the coming inflation."

Perhaps prophetic prediction previously (80150)
proclaimed, properly precipitating prescient positions, perchance predicating preserved purchasing power.
It appeals to my financial instincts that POG and POS will move up more before the everyday Jills and Joes start complaining about even higher prices of goods and services. I'm doing my part, I raised the price of my labor (work) this year. It's become almost an annual family business tradition, to acknowledge all the good printing of the Fed. I even see it as a patriotic gesture to insure good use of the Fed.'s work. Everyone should carry many pounds of paper money all the time.
YGM, thanks for the word of large players entering on the long side. Can you reveal any more?
Beware, this Friday is expiration day for August precious metals' options. What, now, is the dollar price that requires the least amount of payout from the option writers?? Actually, some studies have found that there is no advantage (profitwise) in granting options over purchasing them. This, I believe, assumes a "free" market.
Any other news as to today's delightful price results???
Rich

misetich

(07/09/2002; 15:03:33 MDT - Msg ID: 80177)

White House's Lindsey-only a few CEOs broke the law

http://www.forbes.com/newswire/2002/07/09/rtr656229.htmlSnip:

WASHINGTON, July 9 (Reuters) - White House economic adviser Lawrence Lindsey said on Tuesday that relatively few top executives were involved in corporate misbehavior but promised that any offenders will be hunted down.

"The crooks are being investigated and the crooks will go to jail," Lindsey said on CNBC television.
............
"The number of people who've actually committed crimes is relatively small, it may be a matter of dozens or whatever, but it's a relatively small number."

Misetich

Dozen or whatever? Over 7.5 trillions of market value has disappeared (transfer of wealth to investment bankers, CEO's, auditors, corporate insiders) and Lindsey has the audacity to claim only a dozen - hundreds if not thousands of dot.coms scams have taken place - probably over 25% of the S&P 500 have cooked their books in a variety of ways, pro-forma etc- investors are not going to be soothed by this type of nonsense - they want their money back -

Go ahead Lindsey, underestimate and perpetuate the problem -they say if it isn't broken don't fix it - its broken Lawrence!

It is this type of leadership that lets me say

Got gold?

Black Blade

(07/09/2002; 15:06:56 MDT - Msg ID: 80178)

Falling dollar's far-reaching effect

http://www.csmonitor.com/2002/0708/p01s02-usec.html
Tourists and investors feel the pinch � and home-buyers might soon

Snippit:

For foreign investors, a falling dollar also reduces the value of their stock holdings � at a time when the US markets are falling. This could make it more expensive to finance the federal budget if foreigners decide to move their money elsewhere. That could ultimately make it more expensive to buy a house or car, since Treasury bills are the base against which most interest rates are set.

There are already signs that some of the world's central bankers are getting queasy about the weakening dollar. Last week, for example, the Bank of Japan and the European Central Bank intervened in the currency markets to try to stabilize prices. Both are concerned about competitiveness.

Black Blade: This could lead to some serious readjustments to the long overvalued US dollar and push precious metals much higher. Amazingly the three major regional currencies (the US dollar, Euro, and Yen) are struggling to have the weaker currency. For the Japanese it is a matter of nothing less than survival. For the US and Europe it is a matter of fighting to emerge from the deepening recession � in spite of the ludicrous claims of a "recovered economy". There are so many parallels to what happened in the last Great Depression it is too hard to ignore any longer. As always, get out of debt (and stay out of debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic goods storage program. Prepare for the worst and hope for the best.

Off to the gym!

YGM

(07/09/2002; 15:15:44 MDT - Msg ID: 80179)

Rich.....

Traders Info....Reveal more? no I wish I could but it would be detrimental to my sources & then me:>}...actualy there was little more than what's available mainstream sentiment. I'm sure they're just guaging the temp & flow like the rest of us...
I just thought it relevant both (separate Bourse) memos had almost the same comments and both were anti-dollar, market declines, Gold shines attitudes. Both felt a strong retest of $330. was in the cards..Not pro bear type hype we have to live on usually.... I wouldn't doubt Bill (Cafe) will have the scoop on the big buyer/s in his Midas tonite. ..YGM.

"Go Silver, Go Gold, Go GATA"

misetich

(07/09/2002; 15:23:33 MDT - Msg ID: 80180)

O'Neill says US stock market laying foundation for 'another leap forward'

http://www.afxpress.com/afxpress2/afx/bn194056.xml.htmlSnip:

"Technical people would tell you what we're now going through is testing the lows that we hit after September the 11th," O'Neill said in answering reporters' questions aboard Air Force One en route to President George Bush's speech earlier.

"And that's a basis for creating a foundation for another leap forward, above the highs that we've ever achieved," O'Neill said.
..........
Separately, he likened the task of Justice Department's newly proposed Corporate Fraud Task Force to the federal government's 1930s campaign against mafia alcohol-running.

"In my mind, it's the equivalent of the Elliot Ness attack on organised crime," O'Neill said.

Misetich

Lets hope O'Neil is right - would like to see an "Elliot Ness" type investigate the ESF and Treasury alleged manipulation of gold

It is this type of nonsense -resorting to"technical analysis" from the US Treasury - concealing the obvious - the bubble has burst - and since the bubble was created by a combination of debt creation ad infinitum, fraudlent bookkeeping, gold suppression schemes

Mr. O'Neil is not going to convince too many investors with his "technical analysis" - and I wouldn't be too surprised if the market gives O'Neil, Lindsay, Greenspan, Bush a vote of no confidence - This is not time (2 1/2 trillions of Stock Market wealth has evaporated in the last few weeks - bondholders such as pension plans, insurance companies are being decimated) for O'Neil to show how naive he is

Got gold?

sector

(07/09/2002; 15:25:28 MDT - Msg ID: 80181)

GSEs Creating Inflation?

It seems so..."They [FNM/FRE] have to hyper inflate, and with freddie and fannie making it easier for loans, I'd say they're going to try to get all who can into housing before the inflation."
+++++++++++++++++++++++++++++++++++

Sir Pizz, with the utmost respect�the "Money" used by FNM and FRE �IS� the inflation. It's reflected in M3.

Just as John Law attempted to monetize real estate in France's fiat disaster, so too has Alan Greenspan. These GSEs have received and created mortgages for over $1.2 Trillion since 1997. By channeling inflated money directionally into mortgages the idiots at the Fed imagine that they have corralled it, prevented it from leaking out into the general markets where it would lead to higher prices.

The key that Doug Nolan keeps pounding at is this debt is a non-producing obligation. The income necessary to service this debt has withered away as America's true GDP has disappeared behind a tapestry of Fed economist's hedonic chicanery. Look at steel, refinery capicity, oil production. The fraction of personal income needed to pay the freight on these mortgages is at an all-time high even with Moms working.

The end-game in real estate has begun. Foreclosures in Denver are the lead tendril of flame in the lead wave of fire that will consume the housing market. The mania in housing, like the gold manipulation scheme, is unsustainable because their required economic foundation has already crumbled to dust.

But the Fed is surrounded with lots of fire on all sides. Gold supply needed to run their increasingly visible scam, Balance of trade payments deficit, angry US industry at the moronic [To them] "Strong Dollar" policy, breath-taking inflation in health care, the Japanese all-around financial debacle, World currency instability boiling uo from Latin America AND a competing euro that seems to be getting a life.

The high-density entertainment value to all this Fed squirming is priceless.
It's all the more enjoyable with your piggy filled with many "Coins of the Realm".

Pizz

(07/09/2002; 15:34:57 MDT - Msg ID: 80182)

@Misetich

"probably 25% of the S&P 500'?

That is probably closer to the percentage that are legally agressive.

For 20 years the name of the game has been "increase shareholders' value" and you do that by capital gains, not dividends. You can't get a CFO's job in public corporations without the ability to affect the bottom line.

The signs have been with us for years. When was the last time a merger came about without a "restructuring charge". During the up market, companies pumped their books to get bought out at lofty premiums, and the restructuring charges were a nice way of writing off the BS (after the sale).

Remember a company not so long ago that had a 6 billion dollar inventory writeoff one quarter? As if it happened in a 3 month period - right.

Over the next six months or so, it's going to be interesting to watch the gross margins of companies drop rather presipitously. The companies that have been just aggressive will use the slowing (crashing?) economy to write off the book pumping as a cost of sales. The more aggressive will do some conslidations, etc. that will require rather substantial "restructuring charges", and the really guilty who have the billions of worthless goodwill, will try to inflate that even more with the rest of their pumped up balance sheets.

The PTB will let any of them that still have the ability to survive get away with it. They'll prosecute the ones that they deem both "we can live without this company" and "they won't survive anyway". It's the way the game is played, and don't expect it to change much.

And finally, we have to have a good reason for all the econoanalysts to be able to retract their lofty second have earnings projections. "Well, we didn't realize the books were cooked that much!!!".

Pizz

misetich

(07/09/2002; 15:44:43 MDT - Msg ID: 80183)

Japanese companies lose trillions of yen

http://www.nzherald.co.nz/storydisplay.cfm?storyID=2051159&thesection=business&thesubsection=worldSnip:

10.07.2002

TOKYO - Japanese listed firms, excluding financial concerns, posted combined group net losses of 616.86 billion ($10.63 billion) last financial year, largely due to restructuring costs. The previous year they made a 6.67 trillion profit.

The combined net loss totalled a stunning 3 trillion including those reported by financial concerns - banks, brokerages and others - in the year ended in March, according to the survey of 1507 listed companies by the Tokyo Stock Exchange.

Banks alone, in the middle of a battle to eliminate massive bad loans, scored a combined group net loss of 2.36 trillion.

One hundred and seventy electronics manufacturers lost 2.27 trillion, after profits of 1.5 trillion the previous year.

- REUTERS
Misetich
No earning recovery in Japan - It is no wonder Japanese gold buying - reportedly 45 tons in 1st quarter is rocketing

Got gold?

Pizz

(07/09/2002; 16:00:15 MDT - Msg ID: 80184)

@Sector

No argument, and I think we're both looking at the same issue but from different ends of the rope.

The government/fred/fran/ or whomever have to get the inflation started and they have, IMHO only two ways to do it. BUBBLE housing/real estate even more with even easier credit/subsidies which will draw a very big chunk of the hot cash (and keep it from sending gold to the moon too quick)and/or direct injection. Direct injection bypasses the banks, and they're not writing them off yet. The housing forclosures you see now are just the overextended casualties of 911, and don't represent the 90%+ of homeowners that still have the ability to trade up and keep pushing the market along with the 5% or so that have the cash. If you have an extra 20% equity in your home and a job, trust me, you can find a bank that will finance another piece of dirt. Gold/Silver just aren't on the radar screen YET, but a few quick turns on some prime real estate is well within the boomers mentality. (I know some who are doing it with what's left of their stock protfolios.)

Pizz

R Powell

(07/09/2002; 16:01:23 MDT - Msg ID: 80185)

misetich

There was a crash in stock prices in 1907. O'Neill, while stating his views on technical analysis, didn't happen to mention testing those lows did he? How about some of the lows from the 1970s or 1980s? It's amazing what can be assumed by increasing or decreasing the time of cycles or by changing the scales on charts and graphs.
It's reassuring to know that Mr. O'Neill has this all figured out. I've been waiting for someone in authority to clarify it for me. Thanks
Buy the dips!
Rich

sector

(07/09/2002; 16:19:04 MDT - Msg ID: 80186)

Asians [Ex Japan] in Control

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=APSpKoRUlQW4gQW1l07/08 22:29
An American Crisis That Dwarfs Asia's? Hmmm: William Pesek Jr.
By William Pesek Jr.

Jakarta, July 9 (Bloomberg) -- Of all the headlines leaping out from the Jakarta Post last week, one was particularly striking: ``Asian Stocks Favored as Investors Flee U.S.''

The headline's timing was ironic. It ran two days after the fifth anniversary of the start of the Asian financial crisis. And it underscored the reversal of fortune between the world's largest economy and Asian ones knocked on their backs in 1997. These days, it's the U.S. that seems to be falling over.
+++++++++++++++++++++++++++++++++

The Asians can undercut their Western competitors any day they choose. All they need to do is buy the COMEX dry and channel their $USD long-term Treasury assets into gold. Upon doing this, they own the world.

++++++++++++++++

Sir Pizz: Right-O on the coming inflation to "Support" the dollar since the Fed can't raise interest rates due to the minefield of interest rate derivatives. They have with the best on intentions constructed a complex paper house that is now on fire.

I'm particularly enchanted with the coming derivatives neutron bomb. All the thirty-something, inside the beltway, econo-rocket science PhDs will end up flipping hamburgers under tents.

Fire burning on all sides for the Fed. Even Larry Lindsay is in the fray with tidbits of his "Wisdom"..."Only a few CEOs violated the law" ...give 'em a break. And how 'bout that O'Neill fella? Doing his A-1, Don Knotts "Nothing Wrong HERE"... "Only a stock market pull-back" imitation.

These bozos will be crushed by gold.

misetich

(07/09/2002; 16:33:53 MDT - Msg ID: 80187)

Schroeder Says US Corporate Scandals 'Iceberg Tip'

http://abcnews.go.com/wire/World/reuters20020709_483.htmlSnip:

July 9
� By Steven Silber

LUDWIGSHAFEN, Germany (Reuters) - German Chancellor Gerhard Schroeder blamed U.S. corporate culture for recent accounting scandals and lauded Europe's model on Tuesday as President Bush launched new penalties for such abuses.

Faced with a raft of accounting abuses, including at energy firm Enron and telecoms giant WorldCom, Bush unveiled a number of proposals on Tuesday aimed at fighting fraud and rebuilding confidence in corporate America's finances.

A senior European Union official also blasted U.S. corporate practice saying American accounting rules had been used to raise share prices rather than reflect fair company values.
.............

"Now it has been revealed that egotism practiced at the top under the catchphrase 'shareholder value' is worth less in macroeconomic terms, but also as far as the companies themselves are concerned, than a system based on a fair balance between the interests of workers and employers," he said.

Schroeder, who has often rejected calls to adopt what he calls U.S. "hire and fire" practices to help create more jobs in Germany, said the scandals at Enron and WorldCom showed that the American economic model should not always be emulated in Europe.

"That is presumably just the tip of the iceberg and it has to do with a corporate culture which is different from here. There the individual employee is not valued and shareholder value is everything," he said.

"Egoism at the top does not suffice to have lasting economic success," he said. "It must perhaps lie in the structure and not just individual lapses."

EU ALREADY TAKING ACTION

Asked to respond to Bush's speech to Wall Street leaders, European Union Commission spokesman for internal markets Jonathan Todd said the EU's executive body had been active on the corporate governance front for many years.

"Ever since the 1970s, it has been a requirement under EU law to ensure that accounts give a fair view of what is the true value of a company," he said.

"One has the impression that accounting rules in the U.S. have been used as a tool to push up share prices rather than to reflect the fair value of a company."

Todd said an EU action plan on financial services reform was geared to boosting investors confidence by concrete means such as the planned introduction of international accounting standards and rules on independent auditors.

In France, Michel Prada, head of the COB stock market watchdog, said he doubted there were similar cases of financial fraud in France.

He told France 2 television he could not say that French firms had been under more pressure in recent years from shareholders to produce strong results.

"That's not the impression I have," he said. "I think we have to be very careful not to compare an American situation in which some companies had cases of real fraud with the situation on the French markets.

"We have good reasons to think that the transparency and pertinence of information provided by French companies are well controlled. So I would like to warn against the temptation to think that what happens four or five thousand kilometers from here would be happening in France."

Prada said the COB conducts about 90 investigations of company finances per year, with about 10 to 15 resulting in charges against the firms in question.

"This is not more than we used to have," he said.

Misetich

"That is presumably just the tip of the iceberg and it has to do with a corporate culture which is different from here. There the individual employee is not valued and shareholder value is everything," he said.

Interesting comments from Chancellor Gerhard Schroeder- Did they forsee this when they implemented the 1999 Gold Washington agreement?

Salvos have been fired !

Got gold?

Boilermaker

(07/09/2002; 16:44:54 MDT - Msg ID: 80188)

Housing Sector Bubble

I have always thought that the mortgage interest deduction for income taxe purposes was eventually going to create a massive imbalance between productive and non productive investment in the US. It has come to pass. Americans live in the most colossal homes in the world. They use more energy to keep them warm/cool than anywhere else. Many service industries are devoted to their care and feeding. This is sapping the capital and energy from the productive sector.

A big house and mortgage is viewed as a sensible investment from a tax and capital gains standpoint. Noone is concerned that a $1,000,000 house only provides the same comfort and shelter as a $100,000 home. Prestige is what you get for the $900,000 difference along with a taxpayer subsidy.

The housing and related sectors will be devastated by the coming depression.

Disclaimer; I live in a barn built in 1901. No mortgage.

misetich

(07/09/2002; 16:44:56 MDT - Msg ID: 80189)

Goldman Says Fed Will Wait Until 2003 to Raise Rates

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∣dle=ad_frame2_topfin&s=APSrpWhRqR29sZG1hSnip:

A slowing in consumer spending and stock market declines have ``neutralized'' the Fed's efforts to jumpstart the economy through rate reductions last year, prompting policy makers to leave the benchmark rate at a 40-year low of 1.75 percent for longer, the economists said. They lowered their economic growth forecasts for the first two quarters of next year to 2.8 percent and 3 percent.

``People are a little too optimistic about the prospects of a recovery in the U.S.,'' said William Dudley, chief U.S. economist. ``It will take a while for the stock market to recover.''

Misetich
William Dudley has been right on the money in the last couple of years - he also says US $ could crash 30-40% -
The Feds will do what they do best - pump more fiat ad nauseum -
Where is the "hot" money going to go in a climate of negative interest rate returns? Stocks? Bonds?

Got gold?

misetich

(07/09/2002; 16:55:58 MDT - Msg ID: 80190)

Pension losses will hurt many firms' bottom lines

http://seattletimes.nwsource.com/html/businesstechnology/134490143_pension09.htmlSnip:

Already reeling from accounting suspicions and a prolonged stock-market decline, many of the nation's biggest and oldest companies are facing another threat to their stability.
Corporate pension funds at companies such as Safeco, Alaska Airlines, Airborne and Paccar are running short of money. Rather than earning income on their investments, these large pools of wealth that pay out benefits to retirees are suffering losses along with the stock market.
..............
But the pain will begin to hit corporate bottom lines this year and next as hundreds of companies start recognizing the losses on their earnings reports � and start putting in more money to shore up underfunded plans.

The bad news could ripple into the stock market. Earnings are one of the key drivers of stock prices, and a recovery in earnings is supposed to help power the market higher. If the market decline deepens, some foresee a vicious cycle in which lower earnings push down stock prices, further depressing pension assets, which in turn reduce earnings.

"You have these humongous losses," says John Ehrhardt, a principal at Milliman USA, a Seattle-based actuarial firm. "Some of these are going to start showing up in second-quarter results."

Of the 14 biggest funds at Northwest companies examined by The Seattle Times, all but three are under-funded. The plans expected to earn nearly a billion dollars last year but lost a half-billion instead.

That $1.5 billion gap, up from $400 million in 2000, could rise to $3 billion this year and remain at that level in 2003, according to some experts. That's a sizable chunk of the $9.2 billion in pension obligations the companies are pledged to pay out under the plans.

The situation provides another stark illustration of the sharp and enduring reversal of the 1990s stock-market boom. Until a few years ago, pension funds outperformed expectations and the excess was used to pad corporate earnings. By one estimate, as much as 30 percent of earnings reported for Standard & Poor's 500 companies was due to pension-fund gains.

.............
Pension funds at four Northwest companies � Albertson's, Alaska Airlines, Precision Castparts and Washington Mutual � swung to a loss last year after being in the black in 2000. The rest � Airborne, Safeco, Paccar, Boise Cascade, Louisiana-Pacific, Avista and Consolidated Freightways � are experiencing their second or third consecutive year of worsening decline.

Northwest companies aren't alone. The market's drop left a $90 billion hole in the pensions of the nation's 50 biggest companies last year, according to Milliman.

General Motors, home to the country's largest corporate pension fund, said last month it may pour in as much as $2 billion to help fill a $9 billion hole caused by stock losses. The cost could cut pretax-earnings by $1.37 a share this year.

A number of companies have avoided the problem by not having the traditional defined-benefit pension plans. Instead, they use so-called defined-contribution plans, where employee and employer contribute to an investment fund held by the employee. With these plans, such as the popular 401(k), employers avoid the risk of a down market. That risk shifts to the employee.

Underfunded pensions also pose a threat to corporate balance sheets, reducing the assets the companies can claim. In some cases, steep declines could trigger problems with creditors, whose lending agreements often stipulate minimum levels of capital and assets.

"That's the thing that's scaring the hell out of some (companies) right now," says Michael Hall, a consultant at Frank Russell in Tacoma. "Their balance sheet looks a whole lot less strong than it did before because the bottom line is $100 million in assets has just flown out the window."

Misetich

ANOTHER shoe ready to drop - Earnings recession continues. Stock Market losses to accelerate- How will this end?

How can investors protect themselves?

Got gold?

misetich

(07/09/2002; 17:01:48 MDT - Msg ID: 80191)

U.S. says to back Brazil through economic problems

http://www.forbes.com/newswire/2002/07/09/rtr656446.htmlSnip:

BRASILIA, Brazil, July 9 (Reuters) - The United States "would do whatever is necessary," to help Brazil out of economic troubles that are roiling the country, a senior U.S. official said on Tuesday amid talk the country is seeking IMF cash.

"I wouldn't want to speculate about what needs Brazil would have in the future," Otto Reich, U.S. assistant secretary of state for Western Hemisphere affairs, told reporters during a press conference at the U.S. embassy. "But we would do whatever is necessary to help Brazil, certainly out of a problem not of its own doing
...........
Misetich

No surprises there. US bailing out US banks with taxpayers(IMF) money - and then Brazilians will get stuck with ANOTHER autsterity program!!! Currency traders will have a field day!

Got gold?

R Powell

(07/09/2002; 17:02:35 MDT - Msg ID: 80192)

Tranporter

I just came from next door by way of direct transport. Just clicked on the Usagold logo and here I am. Sort of like Star Trek. Cool!

misetich

(07/09/2002; 17:08:30 MDT - Msg ID: 80193)

Standard & Poor's takes foreign firms out of S&P 500

http://www.forbes.com/newswire/2002/07/09/rtr656420.htmlSnip:

NEW YORK, July 9 (Reuters) - Standard & Poor's yanked the seven overseas firms from its benchmark S&P 500 index on Tuesday, replacing them with U.S. firms, saying the change would make the index a better guide to the performance of large-cap U.S. stocks.
.............
The companies removed from the index are: Royal Dutch Petroleum (nyse: RD - news - people), Unilever (nyse: RD - news - people), Nortel Networks (nyse: RD - news - people), Alcan (nyse: RD - news - people), Barrick Gold (nyse: RD - news - people), Placer Dome (nyse: RD - news - people) and Inco (nyse: RD - news - people).

Misetich

Barrick Gold? Placer Dome? Alcan ? Nortel? Inco? I guess the US got upset as Canada beat their butts in both Man's and Women's hockey this year-

Who got the gold?

Pizz

(07/09/2002; 17:11:02 MDT - Msg ID: 80194)

Can anyone guess who was missing in the markets today?

Probably the first day that I can remember in a long while where I really felt that there was NO intervention.

Europe & US Markets all down about the same percentage. PM's in nice, unfettered up trends.

PM stocks in uptrends with orderly trading swings.

Makes me really start thinking that even the government may be starting to think that the jig is up with market manipulation. Course 1 day a trend do not make, but free markets?? What a novel idea, and glad you thought of it Mr. Bush (smile).

You other tape watchers out there, did you feel the same thing. Honestly, the PPT or whomever were not in the markets today.

Pizz

USAGOLD

(07/09/2002; 17:11:16 MDT - Msg ID: 80195)

Ladies and Gentlemen. . .

Faith is the glue that holds this system together. Faith has been subracted from Wall Street. If someone wanted to engineer a foolproof scheme to completely and inalterably undermine Faith in Wall Street, they could not have done a better job of it than Wall Street has done itself. The investment business has only itself to blame for this one, but unfortunately they are going to take a bunch of innocent people with them. The same one's who keep telling you that the "market is going to come back. . . ."

Chap X

(07/09/2002; 17:16:55 MDT - Msg ID: 80196)

Martin Weiss Comments.....

http://www.safemoneyreport.com/home/daily.asp
Corporate Forecast: Fraud with a Chance of Obstruction
-- July 9, 2002

More corporate scandals are about to rain down. And the
umbrella President Bush is offering is the size of a thimble!

That's why investors have continued to dump their stocks and
run for cover.

Investors know that Wall Street needs more than just a stern
"talking to" before it will change its ways and before confidence will be restored. Unfortunately, President Bush's proposal, even if it is implemented fully, won't reform Wall Street. And it certainly won't wash away all of the rampant fraud that exists right now.

Plus, corporate fraud aside, the underlying economy is still
running into a ditch ... stocks are still wildly overvalued ... and earnings are getting worse by the week, making stocks even more overvalued. That's not a forecast for recovery -- it's a forecast for disaster!

misetich

(07/09/2002; 17:21:24 MDT - Msg ID: 80197)

Support grows for expensing options

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/07/09/BU100558.DTL&type=businessSnip:

So far, only two companies in the Standard & Poor's 500 index -- Boeing and Winn-Dixie -- expense options. AMB is not in the S&P 500, although its market value, at $2.5 billion, is bigger than Winn-Dixie's.

Most public companies disclose the estimated value of employee stock options granted each year in a footnote to financial statements but do not deduct an option expense. As a result, the earnings they report to shareholders are higher than they would be if they deducted options.

However, companies get a tax deduction when their employees exercise nonqualified stock options, the most popular kind.

This favorable accounting treatment, along with a booming stock market, made stock options the compensation of choice at many companies in the late 1990s. Some say the craze went too far and encouraged executives to do whatever it took to keep their stock prices up, even if it meant cooking the books.

A growing chorus of financial luminaries -- including Federal Reserve Chairman Alan Greenspan, billionaire Warren Buffett and former Securities and Exchange Commission Chairman Arthur Levitt -- would like to see mandatory expensing of stock options.

Misetich

Bush said -

"With strict enforcement and higher ethical standards, we must usher in a new era of integrity in corporate America," he said.

http://story.news.yahoo.com/news?tmpl=story&ncid=578&e=2&cid=578&u=/nm/20020709/ts_nm/bush_financial_dc_41

Notice the absent luminaries "missing" such as Bush, O'Neil, Lindsay- Pitt

No wonder the market gave Bush a thumbs down!

Market is questioning US financial leadership

Got gold?

misetich

(07/09/2002; 17:36:14 MDT - Msg ID: 80198)

Recovery underway but fragile, says bank- BIS

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2002/07/09/cnheal09.xml&sSheet=/money/2002/07/09/ixcity.html&secureRefresh=true&_requestid=400907Snip:

However BIS warned that share prices still look high compared with historical levels, particularly in the US, and further falls could endanger economic recovery.

On a day when Wall Street was hit by a fresh accounting controversy, BIS president and chairman of the board of directors Nout Wellink cautioned that poor-quality financial information also threatened to put the skids under any recovery, while the full repercussions from the crisis in Argentina had still to be felt.

...............

The report singled out Japan among the leading industrial nations as likely to be heading for economic decline, predicting a 1pc fall in real GDP this year.

................
"Further legacy charges against profits might still materialise given the long period during which profits appear to have been heavily managed and pension funds might have to be topped up," it said.

Misetich

" given the long period during which profits appear to have been heavily managed and pension funds might have to be topped up," it said."

If earnings have been "heavily manged" (no doubt), and say they have been exaggerated by 15% add pension topping off and expense stock options- we are left with no earnings growth or negligible earnings growth - Current Stock Market P/E ratio to the moon! and so will GOLD!

Got gold?

LimitUp

(07/09/2002; 17:51:18 MDT - Msg ID: 80199)

Report from the bottom of the food chain

I ordered 300 silver Maples from my local dealer one month ago - still waiting for delivery. I have never had to wait more than a week in the past! Supply shortage?

A Canadian

(07/09/2002; 17:53:02 MDT - Msg ID: 80200)

@ PIZZ

Indeed, things seemed unmuddled for a change (kinda creepy!). However, I never view manipulation or regulation as anything unusual. Cheating is a regular component of all contests (human imperfection) and must always be discounted. Play well, outsmart the crooks, build fort Knox for your loved ones. If you believe that the universe is in perfect equilibrium (as I do) then take comfort in the knowledge that all cheats are eventually left to twist in the wind.

P.S. enjoy your posts immensely.

Jimbo

(07/09/2002; 18:08:53 MDT - Msg ID: 80201)

@Gandalf the White

It's been a wonderful two-day run, Sir Gandalf the White, and I'm feeling much better, thank you! Those of us who hold paper gold are still smarting from the effects of six weeks of cabal and government intervention. Best I can figure, my gold stocks are still down about 10 percent (but they've come up an equal amount recently). This is encouraging, of course, but I'm waiting for the other shoe to fall and the cabal to start intervening again tomorrow. Someone posted earlier that there was no intervention today. Anyone guess how long that will last?

A Canadian

(07/09/2002; 18:12:16 MDT - Msg ID: 80202)

@ BLACK BLADE

Hope you have been re-hydrating yourself and can provide me with my morning fix.(I'm an appreciative parasite). I seriously think you would be an excellent trade liason to the former soviet block since you can actually keep up.(My only attempt resulted in hospitalisation). Perhaps your pain and spikes gain are correlational? Please conduct appropriate research. :)

Carl H

(07/09/2002; 18:23:30 MDT - Msg ID: 80203)

@Limit up: Maple Leafs

We just ordered 1K Silver Maple Leafs and a couple ingots they arrived in good time, especially considering the holiday. The sales person commented that they were doing a brisk business in silver. And, as usual, he thought I was nuts for taking delivery.

Boxman

(07/09/2002; 18:38:22 MDT - Msg ID: 80204)

Stage 1 alert in California

http://www.caiso.com/awe/systemstatus.htmlLooks like it's going to be a long, hot, and expensive summer for Californias residents. Good thing they have the very best and brightest in their state government to steer them through all of this (some say I have a strange sense of humor, I prefer to think of it a having a wry sense of humor).

Black Blade, it looks like your work load just increased. Good to know that you will be up to the task. Thanks for all that you do for us.

Black Blade

(07/09/2002; 19:26:59 MDT - Msg ID: 80205)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Snippit:

No, dear reader, the theme is still decidedly bullish. Most publications don't even acknowledge that a bear market exists, much less talk about bear market strategies. Try to find regular coverage of gold or silver stocks or gold mutual funds. Maybe a few say that having as little 5% in gold isn't such a bad idea. But do they really think having 5% in gold is going to protect a stock portfolio that is heavily-weighted towards stocks at 70%? Or if they recommend a heavy portion of a portfolio to be invested in bonds, they forget the last time we had a dollar crisis back in 1985-87 when we had rising interest rates that led to a stock market crash.

Black Blade: Jim Puplava's message today is quite appropriate. I have been saying for some time now to go "defensive". The market collapse isn't anywhere close to being over. I would see what could easily be another 50% clipping for today's unsuspecting investors. The problem is that stocks are grossly overvalued by any common and reasonable measure. I occasionally gag when I hear Pied Pipers on CNBC or CNNfn say something absurd such as "the economy has recovered", "stocks are a bargain right now", or "the sell-off is overdone". Who are these guys kidding? Obviously not as many these days, because trading volumes have been relatively light except when investors are "running for the exits" when yet another corporate or accounting scandal surfaces. It's going to get very ugly in the markets. I continue to tell people time and again, get "defensive" with your portfolios. Get Gold and Silver insurance, get outta debt, stash some cash and survival goods such as nonperishable food and basic necessities. I'm not saying to get into a bunker with loaded firearms surrounded by MRE's and sit atop a pile of Gold. I am just saying get prepared for rough financial times. What if you are out of work for �. oh say a year. Can you make it? What about 6 months? What about 3 months? I have been living off some of my supplies quite well and occasionally rotating with fresh supplies. Heck, I might even make some more home brew! My point is you will at the very least sleep a lot easier if you are prepared.

PH in LA

(07/09/2002; 19:37:49 MDT - Msg ID: 80206)

Sale of US Gold Reserves?

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=17706310Is there anything to this?

USAGOLD

(07/09/2002; 19:43:40 MDT - Msg ID: 80207)

YGM. . . .

Thanks for noticing. Vronsky runs a first-class web site and discussion group. Proud to be associated with him and Gold Eagle -- like all of us here, at the vanguard of bringing the public into the gold market.

While I'm handing out the kudos, I want to thank Randy again for his extraordinary long term contribution to our web site (as our sitemaster) -- this site runs like a fine Swiss Watch due to his efforts. I'd also like to congratulate Black Blade (aka Jon Warner) for his Daily Reports -- read far and wide and providing much-needed balance in the gold reporting field.

And last but not least, I lift my bubbly glass to Sir Gandalf the White. . . .our Contest Master and Keeper of the Gate. It wouldn't be the same without you, my wizardrous friend.

If you want to know what's going on in the gold market, you eventually find your way to USAGOLD and Gold Eagle. . .stay awhile, you actually find yourself a considerably wiser investor and individual . . . . .

The one comment that keeps coming back to us in almost daily conversation at the office is a note of thanks for the helping hand in avoiding disaster over the past several months. . . . . .We are happy to extend that helping hand . . . . In the end thought, it's gold that's doing it for you. We just happen to broker it. . . . . .MK

Black Blade

(07/09/2002; 19:45:11 MDT - Msg ID: 80208)

Re: Boxman, Canadian, and R. Powell

Boxman � Hope you are enjoying retirement. I know that California has experienced a couple of alerts so far this summer. They just might squeak by. However, we still have 2 or 3 months of summer heat to get through. The NatGas situation for this coming winter is still up in the air. One question is how much of a difference in the data collection can be attributed to the switch over from the American Gas Association (AGA) to the Energy Information Agency (EIA). Still drilling activity has increased during the traditional drilling season and storage injection rates are moderate at best. We could see some possible energy crunches develop this winter and early spring.

Canadian � I somehow managed to face the Russian Bear last night and survive (not too badly gashed and bruised). Some of the conversation can be found in the Daily Gold Market Report (comments). I think I will try to avoid such adventures for the time being. I did manage to get to the gym and finish my routine without too much suffering. I guess "moderation" is in order for a while.

R. Powell � I noticed your post where you mentioned the crash of 1907. It should be noted that a complete disaster was narrowly averted when Wall Street bankers approached John Pierpont Morgan for help. He offered several million dollars and told them to go to the exchange and start buying shares. They did this and the market took notice. The market turned around and the eventual crash occurred a few years later. I guess that this could be referred to as the early version of the "President's Working Group on Financial Markets".

Cheers!

- Black Blade

Black Blade

(07/09/2002; 19:59:25 MDT - Msg ID: 80209)

U.S. Economy: Consumer Debt Rose $9.5 Billion in May

Black Blade

(07/09/2002; 20:12:58 MDT - Msg ID: 80210)

This bear is betting on Nasdaq 500

http://moneycentral.msn.com/content/P26076.asp

Snippit:

The Prudent Bear Fund is up a whopping 109% in the last 27 months. Its manager, David Tice, thinks he has plenty of room to run yet and sees the Nasdaq falling deeper into the hole. "Unfortunately, markets overshoot their fair value," says Tice, whose Dallas-based fund is approaching a five-year high. "We will correct excesses and imbalances, and we have an imbalance -- a maladjusted U.S. economy where there's too much debt in the system." He thinks the Nasdaq "could easily fall to 500," as the Dow Jones Industrial Average ($INDU) tumbles another 67% to below 3,000. Tice is betting the carnage will continue. The 18-year bull market that ended in 2000 was preceded by 17 years of bear market. "We have gone from record low participation by individual investors to a record high, and what happens in secular bear markets is you wash all of that out," he says. The process has, he thinks, about 15 years to go.

Black Blade: I am more inclined to agree with Tice, though the author of the article disagrees. There is a lot of room to fall back to historical valuations. That includes an S&P 500 of about 425. It looks ugly and toss in scandals that wear on investor confidence it could easily overshoot to the downside.

Pizz

(07/09/2002; 20:22:47 MDT - Msg ID: 80211)

@ A Canadian

Agree 100% with your manipulation & regulation comments. And yes, sooner or later they all twist in the wind.

Speeking of wind, those of us in the trenches who have played the dark gray line for most of our careers and are still survivors, (white being holy than Thou, and black being the Ken Lay's of the world) always have a very good sense of which way the wind is blowing, and an uncanny sense of knowing when it's changing. It's changing.

Be prepared for a decent run of basic accounting from corporations and government, and a little more straight shooting from the hedge funds, bullion banks, and especially the central banks. May sound strange, but nobody, and I repeat nobody, wants to be at or near the top of anything that blows up over the next couple years. The first few that go to jail will make the history books, and these guys are not your run of the mill street crooks - they do care if their asses are literally on the line.

And even though I tend to bash Bush a little bit, do not underestimate him or his administration. They have some of the best minds out there, all the resources our money can buy, and most of all, thanks to Bush Sr. and his experience, Jr. knows what doesn't work, and that improves his odds immensly.

Gold/Silver? Right now we have probably have the first fair shot at a fair market in over 20 years. I don't think the administration will want to take GATA in this environment. The best way to make GATA go away is to free gold, and my gut says today may have been the start of what we've been looking for.

Just my humble opinion, subject to change (as usual) as events unfold.

Pizz

Black Blade

(07/09/2002; 20:38:06 MDT - Msg ID: 80212)

Electricity Prices in California Soar for 3rd Day in Heat Wave

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Energy%20News&s1=blk&tp=ad_topright_energy&refer=topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_all&bt=ad_position1_energy&tag=energy∣dle=ad_frame2_energy&s=APSr80BXlRWxlY3Ry
Snippit:

Sacramento, California, July 9 (Bloomberg) -- Electricity prices in California rose for a third session, to an 11-month high, on expectations that sustained heat will boost demand for power to run air conditioners and agricultural water pumps. California's grid operator ordered power-plant owners in the state to defer maintenance so generators will continue running in this afternoon's heat, with demand approaching record levels. Temperatures in Sacramento will climb to 105 degrees Fahrenheit (41 Celsius) today and 107 tomorrow, the Weather Channel said.

Prices have more than doubled in the three trading sessions since July 3. Temperatures in the 100s today were expected to increase demand to 40,402 megawatts, the highest level so far this year, according to the California Independent System Operator, which controls most of the state's transmission network. Demand tomorrow is expected to peak at 40,287 megawatts. ``This is going to be a challenging week for us,'' said Lorie O'Donley, a spokeswoman for the grid operator. Edison International's Southern California Edison Co. and PG&E Corp.'s Pacific Gas & Electric Co. utility asked customers to raise thermostats and reduce lighting where possible to reduce demand during peak periods and help avert blackouts.

Black Blade: There may be some problems as there are many bottlenecks in the energy grid. A long heat wave or a sustained series of heat waves could mean trouble. The higher energy costs are not what the California economy needs right now � especially energy devouring Silicon Valley.

Black Blade

(07/09/2002; 20:49:15 MDT - Msg ID: 80213)

Dubai launches global gold centre

http://www.bday.co.za/bday/content/direct/1,3523,1071489-49567233-0,00.html

Snippit:

DUBAI - Dubai, the self-styled "city of gold", has launched a metal and commodities centre for trading gold, diamonds and key commodities with an initial goal of securing half of the global gold trade. The centre will offer physical trading facilities, storage, hallmarking, package and delivery facilities; a training centre and a gems lab; and "transparency, flexibility and a regulatory environment of international standard", said Kazim. "The physical location of Dubai is a huge asset in this project as the city is close to many of the key markets. We also have the opportunity to build on the established infrastructure that we have in place, particularly in the gold trade. "Investment is going to be significant," Kazim said, without giving details or a timetable for the centre's construction.

Black Blade: Interesting if it gains acceptance. There are in an excellent location for several markets.

Yukon

(07/09/2002; 22:14:44 MDT - Msg ID: 80214)

H.R4846, "The Silver Eagle Coin Continuation Act of 2002"...

Greetings all. Well the first step in getting more silver for the U.S. Mint's Silver Eagle program (as well as providing the silver needed for the silver proof sets and commemorative programs) has been completed. June 25, 2002 the House of Representatives passed H.R. 4846 by a vote of 417-1.

This legislation primarily authorizes the Treasury Dept. to buy silver for the above named programs from sources other than the strategic stockpile which is rapidly nearing depletion.

So its on to the Senate Banking, Housing and Urban Affairs Committee. What shall become of it here? We shall see. But also, it will be very interesting to see the effects on the silver market as the U.S. Mint uses a hell-of-a-lotta silver! (Proof Silver Eagles are still on backorder direct from the Mint...I hope the Senate acts quickly lest the Treasury miss out on some easy profits).

Viva Liberty!

Yukon

Kagamusha

(07/09/2002; 22:19:33 MDT - Msg ID: 80215)

lack of intervention today

With respect to the several comments that there did not appear to be any intervention today, I agree. It seems to me that with all the new talk recently of a deflationary collapse (especially from PIMCO and credible others) it may be in the best interest of the Fed to let gold signal an inflationary bias to the 325 to 330 level and cap it there. They seem to think reality matters little and perception is all. What better way to turn on the inflation signal without the problems associated with showing it in the CPI with all the implications that has - Soc Sec etc. Just a thought!

The CoinGuy

(07/09/2002; 22:31:05 MDT - Msg ID: 80216)

Bush's New Era of Corporate Integrity Starts off with a Real Bang

http://www.judicialwatch.org/2088.shtmlComment: Excellent article on Dubai BB, Naz 500 sounds about right.

The CoinGuy

timbervision

(07/09/2002; 22:37:33 MDT - Msg ID: 80217)

Aristotle, Belgian, miner49'er, and Sector

Thank you all for your reply to my Tlaga question. Aristotle, your "Tlaga's monstrosity" reveals a lot. From Sector, "unreasonable cooperation among theives", Miner, "why on god's green earth would they subscribe to furthering the current price suppressing framework?" and Belgian, "this joint venture between dollar and euro-blocks is NOT going to last !?"

Your posts are all like oases in an media desert. I'll file Tlaga under "mirage."

Miner, you are more than right to re-direct me back to the Gold Trail. I first dug into it months ago but have known for some time that I must return to it for a careful and thorough study.

Thanks again to all of you for the time and effort you applied to my question. Your scholarship and desire to educate continues to impress.

Best regards,
timbervision

Carl H

(07/09/2002; 23:03:56 MDT - Msg ID: 80218)

Silver at 5.11?

According to K, silver is at 5.11. Is this real or a K glitch?

Gandalf the White

(07/09/2002; 23:32:01 MDT - Msg ID: 80219)

Sir Carl H's Question !

Sorry, Sir Carl H, but I can not answer that Question with a proven fact, as all the other Quote Boards (like "thebulliondesk") are not yet past 12 Midnight NY time. BUT, looking at the chart, it appears to be another normal K Chart "FOULUP" !!! Note the axis skip.
BUT, the Hobbits are wishing that you are CORRECT !
<;-)

Gandalf the White

(07/09/2002; 23:38:03 MDT - Msg ID: 80220)

There is the ANSWER !

http://www.thebulliondesk.com/default.asp?load=trueJust updated at BD and PROVES that the K Chart is indeed INCORRECT AGAIN !! Tis as $5.04 though.
<;-(

Gandalf the White

(07/09/2002; 23:41:46 MDT - Msg ID: 80221)

ROFL !!!!

There is your answer, Sir Carl H.
Check it out now !
And then don't waste your time there unless you like heart attacks !
<;-)

tedw

(07/09/2002; 23:47:34 MDT - Msg ID: 80222)

Accounting Scandals

|The aggressive accounting (lying) is coming to the attention of everyone. I noticed President Bush has created a task force to solve the problem. More Bureaucracy. There are some things that Government just cant solve. I propose the following solution:

1)Ministers across America start telling their flocks:

"What profit a man if he gain the whole world and lose his soul"

2) And they start telling their congregations that if they abandon their principles for personal ambition and gain that they are going to HELL for cheating innocent people.

3) They stop telling their congregations that God loves them just the way they are, and start telling them that God cant stand their sight and stench and that they need to repent.

And thats just for starters.

YGM

(07/09/2002; 23:48:34 MDT - Msg ID: 80223)

WorldCom 3 wks to decide Bankruptcy or not....

http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020709/ap_on_bi_ge/worldcom_reorganization_1≺inter=1WorldCom Considering Reorganization
Tue Jul 9, 7:14 PM ET
By JOHN PORRETTO, AP Business Writer

JACKSON, Miss. (AP) - WorldCom Inc. says it will know within three weeks whether it will pursue what would be the largest corporate bankruptcy filing in U.S. history.

Photos

AP Photo

The Clinton-based long-distance and data services company is on the verge of bankruptcy after disclosing it disguised $3.9 billion of expenses as capital expenditures in a bid to appear more profitable.

WorldCom executives clashed with former auditors Arthur Andersen LLP Monday during Congressional hearings over who's to blame for the improprieties, which prompted President Bush ( news - web sites) to propose tougher penalties for company officials who lie on financial statements.

As the WorldCom case unfolds, the company continues to negotiate with lenders for $5 billion in critical funding � as it was doing before news of the accounting scandal broke June 25.

The company said Tuesday it also was awaiting word from banks on interim financing that could avert a bankruptcy filing � at least for now.

Another option is a debt-for-equity swap with bondholders as part of a prepackaged Chapter 11 filing. A company spokeswoman said chief executive John Sidgmore has been contacted by certain bondholders, but no formal discussions have started.

"We're fighting for our life," Sidgmore testified Monday before a House panel investigating the debacle, which is under investigation by the Securities and Exchange Commission ( news - web sites) and the Justice Department ( news - web sites).

WorldCom has laid off 17,000 of its 80,000 workers, and Sidgmore has said additional layoffs are possible. The company, which has $30 billion in debt, also is looking to sell parts of the business to raise cash.

Telecom analyst Pat Comack of Guzman & Co. in Miami said WorldCom's next move � bankruptcy or not � places bondholders and lenders in a tenuous situation.

Comack said any new bank loans almost certainly would be secured with collateral, placing those lenders at the top of the creditor's list should a bankruptcy filing eventually occur.

On the other hand, he said, a debt-for-equity arrangement would give bondholders � who hold $26 billion in bonds � greater leverage and a better chance of recovering their investment.

Without debt, Comack said, a leaner WorldCom could emerge from bankruptcy and possibly survive on its own or become a takeover target.

With more than $100 billion in assets reported at the end of March, a WorldCom bankruptcy would be twice as large as Enron's slide into Chapter 11 last fall and four times as big as Global Crossing's in January.

The company's shares have plunged from more than $64 in June 1999 to 21 cents Monday.

Belgian

(07/10/2002; 00:17:53 MDT - Msg ID: 80224)

Lost and alone, wandering in the wilderness.....(Ari)

No Sir, we are NOT alone at all ! Have a look at the GE-neighbours...pictures of juveniled Aden sisters.
Stare at that magnificent POG picture and its 8 years bottom to bottom cycles. What a beautifull, WAVING, flag pattern ! 1971 > 1980 stick (x 25) and enormous waving flag 1980 > 2001 ! What will happen with such a flag-pattern when fundamental "storm-winds" (gails), come thundering in ? The flag-pattern, you see today, has the shape of a triangle (pennon). It is a "deformed" pattern. It already should have been a rectangle flag-pattern (POG=800$ plus).
This is technical interpretation of a price-pattern, linked to fundamentals (20x depreciation adjustments).
But it is exactly this *anomaly* that will cause the reshaping of that 30 years old pattern, too perfect to be true. Now let your creative imagination and intuition, run free...and ask yourself how such a nice pattern should be altered/shaped, into another, recognizable, one ? What happens with a "flag" when gail-winds are tearing it from its mast and sweeping it up ? Right...it (the flag) goes much higher than the mast (x 25) it was pending on !

Gold into the thousands is NOT going to sink the world. Gold into the thousands is not going to provoke massive dishoarding (Don Stott has it wrong)!!! When POG rocketed to 850$...it changed some hands, but is still there, where it originally found shelter, care and admiration. Rare and valuable tangibles, whatever their nature, remain scarce and increase proportionally in scarcity. And therefore, always keep rising in price to reflect their VALUE !
GOLD IS AN INVESTMENT ! A Rubens painting is an investment, also changing hands. Paper comes...and paper goes...all paper !

And will the above story, happen in our lifetime, dearest Ari ? Yes Sir, it definitely will ! Why Belgian ?
Because, flags...either fly away or grow too long and desintegrate around their mast (POG sub 200$).

Look at the fundamentals, behind the 30 year old Gold pattern...and you will see ! There is nothing more "factual" than a price PATTERN for interpreting how the hidden fundamentals will evolve. Ask yourself why the 253$ bottom has been created within this pattern and POG could not be maneuvered to sub 200$ as to destroy the visible pattern ? Thanks to the WA !
Do the same for POO and the 10$ (1999) low.

Back to the pleasures of Holidays. Regards to you Ari.

RobotGuy

(07/10/2002; 00:47:30 MDT - Msg ID: 80225)

Too da moon!

Let's go Alice'.. I love those after hours spikes!!

RobotGuy

(07/10/2002; 00:49:11 MDT - Msg ID: 80226)

Where are ya B.B.??

Black Bird should be singing tonight!!(Blade)

RobotGuy

(07/10/2002; 00:52:09 MDT - Msg ID: 80227)

Tonight may not be the night,.. but the loonie shall fly!!

Cheers to my fellow Canucks, for the time is ripe!

Black Blade

(07/10/2002; 00:52:19 MDT - Msg ID: 80228)

Re: RobotGuy

Hi there. I'm just catching up on some reading. I'm "locked and loaded". Well locked anyway. Cheers!

- Black Blade

RobotGuy

(07/10/2002; 00:55:13 MDT - Msg ID: 80229)

Like you my friend,.. I sometimes suffer from the whole insomniac dilemna...

RobotGuy

(07/10/2002; 01:00:35 MDT - Msg ID: 80230)

Sell your gold,.. fools!,.. For there are plenty wise who are ready to afford it.

Black Blade

(07/10/2002; 01:20:18 MDT - Msg ID: 80231)

Asia Awash In Red and Europe Starts Off Ugly

http://quote.yahoo.com/m2?u
The Nikkei 225 got hammered and the rest of the world's markets look rather sickly this morning. There is no positive news and with the threat of more terrorism and a new scandal ready to emerge at any minute, the markets look to be under a lot of pressure.

- Black Blade

RobotGuy

(07/10/2002; 01:24:34 MDT - Msg ID: 80232)

I am Canadian!

My father said to me,.. and I quote "I don't trust that Bush Fellow!" unquote. I don't know what it is exactly, but he strikes me as a very guided simplistic leader,.. don't get me wrong, our Canadian leader (Cretien) is the executor of every American desire,.. but something still isn't right here in N.A.. From the understanding I've arrived at (thank-you to the members of this wondrous forum) we're in for a couple of real eye opening changes. I just hope my survival skills are as dependable as I might think. Look out crown land,.. here I come!

RobotGuy.

Black Blade

(07/10/2002; 01:28:23 MDT - Msg ID: 80233)

Mixed Indicators

http://www.mrci.com/qpnight.asp
The US market futures are slightly lower this morning. The USD is weakening again as the Japanese appear to have run out of ammo for now. The Japanese are trying a new strategy of "jaw-boning" the currency markets. So far not much reaction as the yen strengthened to where the dollar is now equal to 117.75 yen. Gold is standing firm and silver had spiked 9 cents higher at one point. Oil and NatGas have jumped higher (I haven't checked today's inventory data), however, OPEC is likely to announce increased production - that's another story altogether. The ME and Russian producers really don't have a lot of extra capacity, however, we are fortunate to have a deepening recession with declining demand so supply should be fairly adequate for now. It appears that trading on Wall Street could be "entertaining" again.

- Black Blade

Black Blade

(07/10/2002; 01:47:17 MDT - Msg ID: 80234)

THE GREAT CRASH OF 2002

http://www.321gold.com/editorials/maund/maund070902.html
Every cloud has a GOLD lining!

Snippit:

Clive Maund is an English technical analyst, holding a diploma from the Society of Technical Analysts, Cambridge and living in southern Bavaria, Germany where he trades US markets. There has been a lot of talk over the past year or two about "the bear market," how long it's run and the damage it's caused etc. Well, if you think what we've seen to date is a bear market, I've got news for you:- it's BEARly begun - you ain't seen nothin' yet!

I state now, without exaggeration, that I firmly believe that we are now about to witness, within the next few months, possibly within the next few weeks, the MOST DRAMATIC STOCK MARKET CRASH IN HISTORY, which will make the crash of '29 look like a Sunday School outing. THE WRITING IS ON THE WALL - it's as clear as that NASDAQ board in Times Square (and what a warning that was!). A clear break of the neckline of the Head-and-Shoulders formation on the S&P500 will probably, as often happens, be followed by a brief but deceptive pullback towards the neckline. After that a vertical all-out crash to the 560 area is to be expected. This will be a straight down vertical plunge - the market will go down like an elevator with its wire cut.

Black Blade: I have no allusions as to how is will occur or the precise time frame. I follow fundamental analysis and look at the big picture. However, the author (Clive Maund) presents pretty much the same scenario as I see it. So far the crash looks like a slow-mo "slow burn" with occasional upticks. Unless some Herculean effort by some unseen forces can "successfully" intervene, then it is going to get very ugly on Wall Street. "Interesting Times" lie ahead.

Black Blade

(07/10/2002; 02:09:18 MDT - Msg ID: 80235)

Gold hedging here to stay, says expert

http://www.miningweekly.co.za/?show=24049
Snippit:

A leading commodities risk-management expert has come out in defence of gold-price hedging, suggesting that it will continue to play a role in the gold market well into the future despite current negativity. Speaking in South Africa last week, ScotiaMocatta MD Steven Lowe, who is based in London, argued that companies with well-structured hedges could protect revenues while maintaining critical exposure to any gold-price upside, and that, in many cases, would outperform non-hedged producers.

Black Blade: Of course the non-hedgers have greatly outperformed the mega-hedgers by a huge margin. So my question is why in the world would anyone invest in a company that shorts its own product in a belief that their company is not viable otherwise. I would run like the blazes and seek out another investment. It simply makes no sense. As we know the Gold community is split into two camps where the Gold Bulls seek bullion and non-hedgers, whereas tepid Gold Bears seek out mega-hedgers that could suffer with a stronger Gold price. So far the non-hedgers have been the clear winners. It is interesting to note that Gold bullion has outperformed many of the mega-hedgers. As the non-hedgers front run the Gold price, it appears that physical Gold is set to charge hard and fast.

Belgian

(07/10/2002; 03:50:38 MDT - Msg ID: 80236)

SP_500

Non American companies (Unilever, Royal Dutch...etc) removed from SP-500 !? Waww...Free Trade ? Goodbye dollar.

SteveH

(07/10/2002; 04:09:58 MDT - Msg ID: 80237)

Placer and Barrick too

Belgian,

The subject companies were also removed from S&P 500.

Goldman Sachs, UPS, and Ebay amongst a few others were put in their place.

Black Blade

(07/10/2002; 04:24:21 MDT - Msg ID: 80238)

Global Platinum Shortage Sees Production Surge and Palladium Sidelined

http://biz.yahoo.com/bw/020710/102014_1.html
Snippit:

HOUSTON--(BUSINESS WIRE)--July 10, 2002--Researched by Industrialinfo.com (Industrial Information Resources Inc.; Houston). After peaking at $1094 an ounce and then falling to around $400 an ounce in the last 12 months, platinum seems now to be on an upward trend moving up to and near the $550 mark. Angloplat (Anglo American Platinum) (JSE) (Johannesburg), along with other producers, plans to boost production by 1.5 million ounces by 2006 bringing the company's total output to 3.5 million ounces by 2006. This is in response from surging demand from automakers.

Black Blade: Not much of a concern is Russia as they sold off their stockpiles of PGMs years ago in the frantic search for "hard currency" during the "Russian Bond Default" in 1998. Nearly all PGM supply out of Russia is current production from Norilsk Nickel. Announced deliveries often fail to materialize for months at a time. The last major crunch came when PGM prices skyrocketed. Now the deepening recession has reduced demand � at least until the zero financing for autos craze.

JCTex

(07/10/2002; 06:06:23 MDT - Msg ID: 80239)

RobotGuy (7/10/02; 01:24:34MT - usagold.com msg#: 80232)

Gosh, golly, geewiz! I guess we would be better off with AlGore or Hillary.

Black Blade

(07/10/2002; 06:21:12 MDT - Msg ID: 80240)

Dollar's rapid fall must be checked: Shiokawa

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20020710a3.htm
Snippit:

Finance Minister Masajuro Shiokawa said Tuesday that the rapid decline of the dollar must be checked before it reaches the 115 yen level. "Since there is a (pessimistic dollar) tendency, we must prevent the dollar from reaching that level by all means," Shiokawa told a regular news conference. Shiokawa made a similar remark on exchange rates last week, inviting speculation that the Japanese government would tolerate the dollar falling to the 115 yen level.

Economy, Trade and Industry Minister Takeo Hiranuma said the dollar weakening could hurt the export-led pickup in the Japanese economy. "As an export-oriented nation, it is not desirable that the strengthening of the yen advances too much," he said. Japan has intervened on behalf of the dollar seven times since late May in an effort to keep the nation's exports affordable abroad and keep exporters' profit margins from narrowing.

Black Blade: "By all means" � and what a stellar success the Japanese intervention has been so far. Hmmm� Japan's economy is toast.

Black Blade

(07/10/2002; 06:27:09 MDT - Msg ID: 80241)

Property market takes a beating

http://www.msnbc.com/news/778331.asp?cp1=1

Corporate scandals mean problems for landlords

Snippit:

July 10 � The corporate scandals racking the business world are giving office landlords skyscraper-sized headaches.

Black Blade: A lot of rental space opening up.

Black Blade

(07/10/2002; 06:34:12 MDT - Msg ID: 80242)

US Bank Failure - Feds Seize Credit Cards

http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020710/ap_on_hi_te/nextcard_accounts_4
Banks to Close NextCard Accounts

Snippit:

Some of NexCard Inc.'s 800,000 customers may be surprised when they try to swipe their Visa cards Wednesday � federal regulators are closing all accounts as a result of the online credit card issuer's financial failure. The Federal Deposit Insurance Corp., the government agency that has been overseeing the business since regulators seized the accounts Feb. 7, waited until Tuesday to tell NextCard customers their credit cards would become worthless Wednesday. Regulators closed NextCard's banking subsidiary because of heavy loan losses.

Black Blade: Just the tip o� the iceberg. FDIC steps in and freezes credit card accounts. A lot of ticked off people today. Yep fill up the gas tank and the card is no good. Hmmm�

Black Blade

(07/10/2002; 06:42:14 MDT - Msg ID: 80243)

The hidden costs of stock options

http://www.globeinvestor.com/servlet/ArticleNews/story/RTGAM/20020710/wxopti
Snippit:

Cognos Inc. reported a profit of $19.4-million (U.S.) in fiscal 2002, based on U.S. accounting standards. The company's chief executive officer said Cognos had a "great" fourth quarter, and its earnings handily beat analysts' expectations. There was a catch, but one only sophisticated analysts and investors could appreciate. It was the cost of the technology company's employee stock options.

Black Blade: perhaps this will evolve into the next scandal on Wall Street when investors wake up.

The Hoople

(07/10/2002; 07:35:22 MDT - Msg ID: 80244)

BB: Shiokawa sailing in a ship of fools

Shiokawa basically gives a full confession to fraud. How asinine to declare to his populace their worth, in yen, must decline. Little wonder they are taking a liking to the shiny stuff. All CB's that talk about strength or weakness of currencies are obfuscating the core issue: they are purveyors of dishonesty and thieves of wealth. No stretch
understanding why so much business becomes dishonest when pitted in a race against a depreciating asset. CB's should be on trial before a REAL American congress that represents the people. The evidence is overwhelming. Even "Law and Order" could slam dunk this one.

Tommy P

(07/10/2002; 07:44:47 MDT - Msg ID: 80245)

Junk bond Mania!!!!!!!!!!!!!!!!

http://www.nationalpost.com/financialpost/story.html?id={4E5B55FE-046B-4232-B871-F306D1467341}Oops there she blows!

YGM

(07/10/2002; 08:24:26 MDT - Msg ID: 80246)

CBS MarketWatch "Bulletin"..............Ouch! -30%, -26%, -34%

http://cbs.marketwatch.com/news/story.asp?guid=%7B6B391D37%2DE657%2D4103%2D8BAD%2DD3C1F53D64C4%7D&siteid=mktw&Decliners

ADC Telecommunications (ADCT: news, chart, profile) fell more than 7 percent after the company said that fiscal third quarter earnings and revenue would fall short of forecasts due to reductions in capital spending in the telecommunications industry. The broadband services provider added that it would attempt to lower its breakeven point to $250 million in quarterly sales from $300 million by consolidating facilities, reducing its workforce, increasing outsourcing, divesting low revenue product lines and cutting operating expenses.

Chiron (CHIR: news, chart, profile) dropped more than 2 percent after the company said Wednesday it granted a non-exclusive license to genetic data on the hepatitis C virus to Abbott Laboratories (ABT: news, chart, profile). Financial terms weren't disclosed. Abbott will use the information to develop potential treatments for hepatitis.

Gymboree (GYMB: news, chart, profile) slipped more than 4 percent after the company reaffirmed its outlook for earnings of 60 to 66 cents a share in fiscal 2002. The Burlingame, Calif., children's apparel and accessories retailer is also disclosing that same-store sales rose 3 percent in June. Total sales for the five weeks ended July 6 rose to $38.8 million from $37.3 million in the same period a year earlier. Gymboree projects same-store sales will increase in the positive mid-single digits in July.

Ligand Pharmaceuticals (LGND: news, chart, profile) plunged more than 30 percent after the company said that second quarter sales were negatively affected by $6 million to $8 million due to the decision by several wholesalers not to buy, or to buy reduced quantities of, its marketed products. Ligand added that delays in completion and data publication of ongoing clinical trials have led to lower-than-expected demand growth. Meanwhile, the company reiterated its full-year product sales forecast. Separately, Ligand said it has begun a full, national launch of Avinza, a treatment for chronic, moderate-to-severe pain.

Merck (MRK: news, chart, profile) sank more than 1 percent after the company pulled back its $1 billion spin-off of MedcoHealth Solutions for a third time late Tuesday, even as it defended its accounting for revenue in the pharmacy benefits subsidiary. Merck pointed to market conditions and attempted to diffuse heat for reporting some $12.4 billion in MedcoHealth revenue it never collected from co-payments on medicine from consumers to pharmacies.

Novadigm (NVDM: news, chart, profile) fell more than 26 percent after the software and content management company said preliminary results for its fiscal first quarter were "disappointing" government license revenue was below-plan due to delays in end-of-quarter closings and the adverse affects of a sluggish information technology spending environment of commercial license revenue. Meanwhile, license revenue in Europe witnessed "robust" growth. The company now expects to report revenue of $10.5 million to $11 million for the quarter ending June, and a pro forma net loss of 21 to 24 cents a share.

Qwest Communications International (Q: news, chart, profile) plummeted more than 34 percent after the U.S. Attorney's office in Denver began a criminal investigation of the telecom giant. The U.S. Attorney's office did not disclose the subject matter of the investigation, Qwest said. Qwest plans to fully cooperate with the probe.

The Wet Seal (WTSLA: news, chart, profile) tripped more than 7 percent after the company said net sales for the five-week period ending July 6 totaled $55.3 million, up 11 percent from the comparable period a year ago. Same-store sales for the period rose 5.6 percent.

Michael Baron is a reporter for CBS.MarketWatch.com based in New York.

YGM

(07/10/2002; 08:49:15 MDT - Msg ID: 80247)

The 40 Billion $ EMU Question..."They want Gold Higher"

http://www.thebulliondesk.com/reports/barcap/40B.pdfDon't think the EMU want Gold to drop in value, exactly the opposite it seems to me...YGM

RobotGuy

(07/10/2002; 08:49:56 MDT - Msg ID: 80248)

JCTex - - - Is there anyone we can really trust?

Actually, I think Hillary would have been a little better, but anyone who plays in those circles has a little sheister in 'em.

No offense intended Tex, I could be just as wrong as the next public office hater. I get this way from being a Canadian/Nature lover who has seen enough ignoring to last a thousand plus years. We all contribute to the destruction of this planet, but our leaders show us how.

I know you're a Bush lover, perhaps he is better than the other available options, but at an economic time like this do you think it's wise to be spending billions of dollars bombing Afghanistan churches?

Sorry,, back to gold :)

RobotGuy.

Boxman

(07/10/2002; 08:58:35 MDT - Msg ID: 80249)

Latest from Stehpen Roach

http://www.morganstanley.com/GEFdata/digests/20020710-wed.htmlI do believe that he is becoming more concerned. How does this guy keep his job?

YGM

(07/10/2002; 08:59:05 MDT - Msg ID: 80250)

CIBC (Major Canadian Bank) reveals new Gold Stock Valuation Model

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256BF1006DC6D9?OpenDocumentOK!

RobotGuy

(07/10/2002; 09:00:59 MDT - Msg ID: 80251)

Black Blade (7/10/02; 01:47:17MT - usagold.com msg#: 80234)

"will make the crash of '29 look like a Sunday School outing"

Okay,.. that made me laugh!! :)

Cheers B.B.!

YGM

(07/10/2002; 09:44:11 MDT - Msg ID: 80252)

Thom Calandra see's Market Meltdown....

http://cbs.marketwatch.com/news/story.asp?column=Thom+Calandra's+StockWatch&dist=nwtwatch&siteid=mktwGold gain points to market meltdown
Stock turmoil, dollar's slide highlight trend

By Thom Calandra, CBS.MarketWatch.com
Last Update: 10:38 AM ET July 10, 2002

SAN FRANCISCO (CBS.MW) -- When gold stocks rise sharply as a group on extremely heavy volume, it's almost always a sign of trouble ahead for the overall stock market.

Analysts say the 7.5 percent advance for U.S.-traded gold shares earlier this week -- the sector's largest increase since May 2000 -- points to renewed interest in the metal. It's also a sign investors accept the possibility that the stock market, and those few industries still holding onto gains this year, could come crashing down in coming days or weeks.

Gold's price, subdued until this week, is up almost 20 percent from 12 months ago. The spot price on Wednesday morning in New York was $315 an ounce, down $1.40 after a gain of almost $4 the previous day. Trading activity in top gold mining companies like Newmont Mining (NEM: news, chart, profile), Gold Fields Ltd. (GFI: news, chart, profile) and Barrick Gold (ABX: news, chart, profile) is regularly exceeding the stocks' three-month volume averages.

Analysts and newsletter writers say the metal and corresponding shares have been winners at a time when the stock market and the U.S. dollar are losers. What is new is the growing belief that the metal's gains, and those of gold mining companies, are telltale signs of an impending stock-market meltdown.

"What the market seems to be saying is that we've seen the end of Wall Street's oversold relief rally, and the resumption of gold's bull trend," said Bob Bishop, the longtime editor of Gold Mining Stock Report. "I'm guessing that (the July 5) lows in many gold stocks are likely to be the lows for some time, principally because of the amount of bad news that appears to be baked in the cake of the broader market and the U.S. dollar. That's good for gold, and bad for U.S. stocks and the dollar."

Gold shares Wednesday morning were down a little more than 2 percent, as measured by the XAU (XAU: news, chart, profile) index of major miners.

Barry Cooper, gold mining analyst at CIBC World Markets in Toronto, is convinced gold's gains will proceed lockstep with the fall of the dollar against other major currencies, such as the euro. The euro is flirting with the $1 level for the first time since January 2000.

The rise of gold mining shares "suggests the broader markets are not that healthy, but most people could have surmised that," says Cooper. "The equities have been leaders to bullion for the past while so I would expect we will see some further strength coming." One of Cooper's top gold stocks, Canada's Goldcorp. (GG: news, chart, profile), staged a 9 percent gain in a single day this week.

Joseph Duarte, a Dallas fund manager and author of "Successful Energy Sector Investing," says the mining companies' stellar stock-market gains this year bode poorly for other industries. "Gold is the refuge du jour, because there isn't any place else to run. Hospitals, HMOs, drugs, banks, oil -- everything that is 'safe' is getting clobbered," Duarte said Wednesday.

Homebuilder stocks were one of the few industries holding onto substantial gains this year. No more. Adds Duarte: "Look at the charts of the home builders, especially Toll Bros. (TOL: news, chart, profile) and Ryland Group (RYL: news, chart, profile). These stocks are clearly under heavy selling pressure, suggesting that even these invincible stocks are being abandoned. That may well be the sign that indeed capitulation is either here or just around the corner, as when people are truly getting scared."

Not everyone expects a surge for gold this summer, traditionally a weak season for jewelry sales. James Turk, founder of payment system GoldMoney.com and a longtime precious metals newsletter editor, sees a trading range of $300 to $320 an ounce for gold "in the next 2-3 months, then gold makes another attempt to hurdle $325 in September or October."

Mike Darda, an economist at Polyconomics Inc. in Parsippany, N.J., sees a "slight upward bias" for dollar-gold prices, "but not a bias that will cause the price to rise by leaps and bounds. We'd need an attack on Iraq for that -- and we still think that prospect remains remote." Polyconomics sees gold prices moved most by the supply and demand for currency and bank reserves, which are influenced in turn by tax policy expectations and geopolitical developments.

"For gold to fall hard, we would need to see a turn in U.S. fiscal policy (i.e. a cut in the capital-gains tax) or another big downshift in global political risk," Darda says.

John C. Doody, editor of Gold Stock Analyst, expects that gold mining shares will continue to reflect gains in the metal. The "rule of thumb is a 1 percent change in gold price yields a 3 percent change in stock price," says Doody. "This is because the price increase adds directly to the bottom line, or takes from it if the price falls. Witness the recent $15-an-ounce slide, or 5 percent, that saw most stocks off 15 percent to 20 percent."

Higher gold prices provide gold miners with more cash flow from their annual production. Investors in turn are more willing to pay a higher price for a miner's reserves, generally 10 times annual production for the best companies. "The price increase," he says, "makes all the reserves more profitable and may make marginal ounces profitable now, which weren't economic at a lower price."

Thom Calandra's StockWatch appears each trading day.

Gandalf the White

(07/10/2002; 10:18:24 MDT - Msg ID: 80253)

SPOT !!! --- DID you hear the NY Noon Bell ? --- TIME to ----

JUMP SPOT !!! JUMP !!!
<;-)

sector

(07/10/2002; 10:20:21 MDT - Msg ID: 80254)

Dollar's rapid fall must be checked: Shiokawa

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20020710a3.htmFinance Minister Masajuro Shiokawa said Tuesday that the rapid decline of the dollar must be checked before it reaches the 115 yen level.

"Since there is a (pessimistic dollar) tendency, we must prevent the dollar from reaching that level by all means," Shiokawa told a regular news conference.

Shiokawa made a similar remark on exchange rates last week, inviting speculation that the Japanese government would tolerate the dollar falling to the 115 yen level.

While saying that there are various ways to interpret his remark, Shiokawa disavowed the speculation.

"I meant that, if (the dollar) falls rapidly, it would be troublesome. I did not mean to approve" of the dollar reaching that level, Shiokawa said.

He told a Diet committee later in the day that Japanese monetary authorities are following the pace of the yen's appreciation against the dollar, and repeated that they remain prepared to intervene in the markets if necessary.

"The authorities are interested in the speed" of the dollar's drop, Shiokawa said. "If it is too rapid, we must think of ways to deal with that."
++++++++++++++++
What he is saying is Japan's industry can't tolerate a rising yen/dollar scenario because their export bottom lines, life insurance balances and cash flow rates will be adversely effected.

Since Japan's entire financial structure is hanging by a thread, the falling dollar poses a real threat of an immediate accident.

Gandalf the White

(07/10/2002; 11:06:23 MDT - Msg ID: 80255)

LOOK OUT SPOT --- Paper Avalanche in late NY trading !!!!!!

<;-(

YGM

(07/10/2002; 11:22:31 MDT - Msg ID: 80256)

More Gold-Dumping Hyperbole from Banksters.....(stopped todays advance)

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Currency%20Europe&tp=ad_uknews&T=news_storypage99.ht&ad=euro_currency&s=APSvbixadV2VsdGVrCurrency Europe
07/10 08:00
Welteke Says Bundesbank Wants the Option to Sell Gold Reserves
By Christian Baumgaertel

Frankfurt, July 10 (Bloomberg) -- Germany's Bundesbank, the world's second largest holder of gold, wants the option to sell some of its bullion after a central bank accord to limit sales expires, said the central bank's president, Ernst Welteke.

Germany would ``want to keep the option open to possibly be able to sell gold,'' Welteke told reporters at an event organized by the Frankfurt Club of International Business Journalists. ``It must be an amount that's worth bringing to the market.''

A 15-nation accord signed in 1999 limits central bank gold sales to 400 tons per year, and the agreement is due for review in 2004. Germany lags only the U.S. in gold holdings and has 3,500 tons, equal to about 16 months of the total supply from mines worldwide. The banker said the agreement should be renewed.

Welteke in an interview in February said the bank wants to swap some of its gold reserves into better-returning assets such as stocks and bonds. Its gold reserves don't ``yield any profit,'' he said.

Gold prices in London rose as much as $1.10 to $317.35 an ounce. Gold has gained 14 percent so far this year.

***Sick of this never ending "Phoney" Banker, Gold Disinterest Bulls--t and sicker still of those who believe it......Keeps the boys in the Vault mighty busy moving the name tags around on the Bullion Dollies that never leave the premises...What a sham, so transparent it borders on ridiculous....YGM

Carl H

(07/10/2002; 11:33:24 MDT - Msg ID: 80257)

Reuters: US Treasury's Fisher to testify on mortgage agencies

WASHINGTON, July 10 (Reuters) - U.S. Treasury Undersecretary for Domestic Finance Peter Fisher is scheduled to testify before Congress next week on administration policy regarding government-sponsored mortgage finance giants Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News), the House Financial Services Committee announced on Wednesday.

Fisher's testimony, scheduled for July 16, represents the first time the Bush administration has broadly discussed publicly its views of the mortgage finance firms, who operate under congressional charters even though they are shareholder-owned.

"Undersecretary Fisher is expected to testify on a number of wide-ranging issues including restructuring GSE regulation and improving disclosure and market discipline," Committee Chairman Michael Oxley, an Ohio Republican, said in a statement.

Fisher is the only witness at the hearing.

The director of the federal agency that oversees the soundness of the companies' finances is expected to testify later this month.

Fannie Mae and Freddie Mac, known as government-sponsored enterprises because Congress chartered them to provide a deep and even flow of funds to the mortgage markets, buy mortgages from lenders and repackage them as bonds or hold them in their own portfolios.

Some members of Congress, led by Louisiana Republican Rep. Richard Baker, believe the GSEs have grown large and dominant enough to pose risks to taxpayers. Baker, who asked Fisher to testify, wants tougher government oversight of the two companies.

Members of Congress have also recently introduced legislation that would make mandatory some of the financial reporting the two companies currently do on a voluntary basis.

CarlH: I am sure that Mr. Fisher will heap praise on these upstanding institutions. Got Gold?

Traveler345

(07/10/2002; 12:18:53 MDT - Msg ID: 80258)

Silver on the move...

Calling R. Powell, calling R Powell

Watching the silver chart over at Kitco.com - extremely fascinating. What in you're erudite opinion is going on?

The Traveler345

R Powell

(07/10/2002; 12:45:06 MDT - Msg ID: 80259)

POG versus XAU

YGM posted (80252) today's offering from Thom Calandra in which Calandra quoted from various sources. One of these analysts was a John Doody of Gold Stock Analyst who gave his "rule of thumb" concerning the POG and stock prices. He believes that a 1% POG gain should cause a 3% increase in stock prices. I mention this as it reminded me of the final consensus of opinion at GE of a 1 to 4 ratio. Of course, we never know which is the leading indicator and which is due to catch up although both have recently retracted and have hopefully bottomed. Perhaps they'll start to move together. Upside targets appear to be $330 for POG and 90 for the XAU. I'll bet there are buy orders just above these levels!
Message for George W. He does lurk here doesn't he?
Both houses of Congress have passed the bill authorizing the buying of silver for the Philly Mint's ongoing coin production. Come on, Mr. Pres., sign the bill!

It's my opinion that the silver market does not know much of silver's fundamental situation (or I don't!) and is trading more on technical trend following programs than the continuing supply/demand deficit. Unless there is an unknown supply available (black silver?), the severity of the drawdown should be raising the price more. Perhaps it will take the publicity of Bush's signing this bill to wake up the market to the paucity of the remaining supply. Depending upon which source one reads, the US government held between 4.2 and 5.8 billion ounces just after the end of WW2. That's Billions but now they're gone.
YGM, thanks for posting Calandra's article.
Rich

sourdough

(07/10/2002; 12:49:07 MDT - Msg ID: 80260)

Barrick , Placer Dome sell off

Who is getting screwed today?
How about the joe 6 packs who hold index mutual funds?
One wonders? An article suggests that Barrick has outwitted the bullion banks with their hedging policy.
They get kicked out of the index so funds have to divest freeing up millions of shares at lower prices.
Who would benefit? How about the very same bullion bank who buys up the Barrick stock. If Barrick does do okay on their hedging policy as suggested, the very same bullion banks can sure use the gains to help offset their hedge loses.
In fact they better buy control so they can control when Barrick delivers.
Hey , thatsa good business for you. Sorry AMERICAN JOE, BUT BUSINESS IS BUSINESS IN AMERICA

RobotGuy

(07/10/2002; 12:56:00 MDT - Msg ID: 80261)

I think it's obvious that not everyone is dumping U.S. dollars

Today's currency chart's compared to the DJIA are a little different than the previous months. It would appear to me that even though the U.S. industrial market is failing, the EURO isn't giving up all hope in N.A. Now mind you, I have a limited understanding of these things, all I do is compare charts and graphs. In the previous few months when the DOW went DOWn, the Euro would rise, but today it's just sitting on a fairly level playing field.

Input please,..anyone

RobotGuy

Jon

(07/10/2002; 13:17:25 MDT - Msg ID: 80262)

PPT

Mkt now down 230 points. If there is a PPT where are they? Dow is now 8850!

sector

(07/10/2002; 13:18:18 MDT - Msg ID: 80263)

About Mr. Weltke's Bundesbank "Gold Sale"

Watch to see if it is issued as an "Auction"......If so, the "Sale" is nothing more than a "Delivery" of previously sold gold.

Just as the BOE "Auctions" were. It is a sign of great stress that the Bundesbank feels compelled to deliver gold it has already sold to customers who must be pressing for possession of the metal.

A falling euro/gold price is the main justification. However, there may be problems for Mr. Weltke if even a few other banks decide to stop their euro/gold losses and actually start buying the metal.

Honor among thieves is a losing bet. Someone will crack under pressure.

The Victorian

(07/10/2002; 13:20:40 MDT - Msg ID: 80264)

Gold is moving up on "access" trading

Gold just took a spike up on "access." This is becoming a frequent occurance in the last couple months. I really do not understand why it did not happen often before as it seems like a relatively new phenomenon.

R Powell

(07/10/2002; 13:26:26 MDT - Msg ID: 80265)

Traveler 345

Another silver bug? Excellent!
My opinions are only that but I believe that after POS severly retested the 475-480 level, which it took so many tries and so long to final clear on the upside, we may see POS clear up a chart gap around 510 and then hopefully higher. I expect buy orders to be hit at that point, just above that gap. Upside? Who knows!

I rely much more on fundamentals than technical chart reading but without much info lately and in keeping with my belief that the supply/demand situation is being overlooked by the market, it's about all I can offer. For technical purposes, I've always prefered reading the entrails of a plump Rhode Island Red chicken, slaughtered under a new moon
but, for now, chart reading will have to do.
I was surprised recently during a POS downturn that both the commercial and large speculative players did not sell, only the small specs were sellers. Usually, the position changes of large specs and commercials (as defined by the COT) counterbalance each other. They are the Zing and Zang with small specs just a baby zingzang. I saw this as unusual and a good omen. It lead me to believe the 475-480 level would hold.
For fundamentals, the Central Fund of Canada is presently purchasing a reported 5 million ounces and, if Georgie signs the bill, silver will be purchased for coinage. Publicity from this (if we get some!) will spark prices. I still contend that industrial silver is purchased off exchanges, more than 75% of mine production is by-product and very few analysts have taken the time to really study the situation. These conditions allow the undervaluation of silver to continue. As Butler says, it's hard to get any attention as most people simply decide that the long term near flatlining price tells the whole story. They look at a long term chart and loose interest. This is similar to not bending over to pick up a hundred dollar bill off the sidewalk of a very busy street, reasoning that it can't really be $100 because, if it were, someone would have already picked it up, no?
What do you think??

BTW, I have bought Silver Eagles, brokered through our host, and they are beautiful. Michael's service is always excellent. And yes, I still think the price will reach unbelievable levels but patience is needed and, for paper trading purposes, careful positioning until the eruption.
Disclaimer, I hold both paper and physical silver. Lots of each and still want more. Greed!, that which every single baby is born with plenty of.
Thoughts or news!!
Rich

Carl H

(07/10/2002; 13:33:11 MDT - Msg ID: 80266)

Silver for Mint Question

Does Bush have to sign it? Looks to me like a veto would be meaningless because of the very wide margins in congress.

Carl H

(07/10/2002; 13:49:06 MDT - Msg ID: 80267)

Reuters: US Treasury's O'Neill furious at corporate 'crooks'

O'neil Quote Snip:

"It never occurred to me that I needed a law or a regulation to do the right thing but it's apparently true that not everyone's wired that way, so we have to re-wire them," he said.

End Snip.

Carl H: I can't even find the words for this one. Got Gold?

Black Blade

(07/10/2002; 14:08:24 MDT - Msg ID: 80268)

An Ugly Picture

http://finance.yahoo.com/q?s=@^dji
A very ugly picture of the stock markets (see link). It isn't likely to get much better, though there will be some minor "bounce back rallies", the overall trend is down.

BTW, the DGMR is updated.

- Black Blade

R Powell

(07/10/2002; 14:13:16 MDT - Msg ID: 80269)

Access market

Perhaps as The Victorian mentioned, we'll be seeing more action in the electronic after normal Comex hours market. The shorts hammered POG in the last few minutes of the last day of trading on Comex in the recently ended 2nd quarter. Perhaps this was to help the monetary derivative positions that have to be marked-to-market for quarterly statements?
Then the shorts ambushed POG in the afterhour's market but maybe this just highlighted this thinly traded opportunity to the would be longs. ?? If you had really big bucks and wanted to initiate a large long position in metals, how would you do it without sparking the price higher before you had bought enough? I still think it is amazing that Buffett was able to buy 89 million ounces of silver in the summer and fall of 1997 before a lawsuit filed against Philbro brokerage forced him to disclose his position. Apparently, until Philbro asked him to explain himself, the market and all its analysts were totally unaware of his presence. 89 million ounces bought and no one knew he was there! Maybe a diehard silver enthusiast will win a huge lottery or someone of means will take an interest. "What do you mean, now that you've won the lottery, you're going to the New York Comex and not Disneyland!"
Do you think that those wishing for lower POG and POS are finding this more and more difficult to achieve and are now resorting to sneak attacks like huge last minute orders and electronic trading? Good omens?
Rich

sector

(07/10/2002; 14:18:46 MDT - Msg ID: 80270)

More on Japan's Woes and the Liklyhood of US Treasury Repatriation

There's Less Demand for Japanese Exports Combined with a rising YenA double whammy. A twofer. Very bad for industry.

Americans are not buying as many Lexus due to job loss, a general loss in confidence and worries about their bloated housing expenses.

The competitiveness of Japanese industry has come to depend upon a falling yen, now it must also deal with a loss in US and World auto demand.

This unbearable pressure will lead them to take steps they would never have considered in the past...selling US Treasuries...some $338 Billion worth.

I think today's $USD volatility was due in part to Japanese dollar dumping. The BOJ can't play along with Greenspan indefinitely.

Honor among thieves has limits.

Gold gains strength as the markets melt and authorities blow more hot air and currencies roil.

R Powell

(07/10/2002; 14:26:10 MDT - Msg ID: 80271)

Post 9-11 lows

Goodby post 9/11 market lows. Bye, bye.
Have we fallen below them on all indexes? How many years back (decades?) do the chartists have to look to find the next level of "support"?? Wow, can anyone see a bottom down there?

R Powell

(07/10/2002; 14:34:49 MDT - Msg ID: 80272)

sector

http://www.thespiritof76.com/bigfloat.html Your post brought this to mind. I believe Randy also has a copy of this here. If this happens, will there be any doubt as to whether deflation or inflation is the order of the day?
Thanks
Rich

R Powell

(07/10/2002; 14:36:38 MDT - Msg ID: 80273)

Carl H

I've been waiting for someone to answer your question. I don't know. Can anyone help?
Rich

The Hoople

(07/10/2002; 14:47:25 MDT - Msg ID: 80274)

R Powell

Ironic it would be if the market found support at the lows of the 1991 Iraq invasion while making the second Iraq invasion. December- January seems possible. Same Prez last name, same month, same stock market numbers- now there's a groundhog day for you.

USAGOLD / Centennial Precious Metals, Inc.

(07/10/2002; 14:52:08 MDT - Msg ID: 80275)

Put a Foundation Under Your Portfolio... Don't be fooled by inflatable paper substitutes

http://www.usagold.com/ProductsPage.html

Gold Today!

Because you never know what tomorrow will bring.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

sector

(07/10/2002; 15:10:57 MDT - Msg ID: 80276)

@RPowell The "D" Thingy or the "I" Thingy

Deflation is now... Inflation is just around the corner..When "Big Float Phones Home"Falling utilities are the tell-tale. Real estate Bubs popping. They both drop with rising interest rates.

Although the Fed Funds rate is steady, all the other "Spreads" are worsening.

Stagflation, then inflation of historic proportions.

It seems to be happening sooner rather than later.

The master of the Universe is losing a bit of traction these days.

Then there's the SECTREAS O'Neill dude doing his best Don Knotts..."We'll rewire the them [The BAD CEOs]". What should have happened was an announcement of arrests by John Ashcroft followed by incarceration at a "Base" in the Caribbean�but then the Enron boys would have ratted on their gold carry trade with the Fed.

alanka

(07/10/2002; 15:13:08 MDT - Msg ID: 80277)

(No Subject)

Gold Conspiracy
A group of Central, supranational and bullion banks have been manipulating the gold market since the mid-1990s, according the Bill Murphy, President of GATA (the Gold Anti-Trust Action Committee). GATA's accusations of illegal collusion to control the price and supply of gold also received a great deal of attention at the recent AMA meeting. The gold price is going up, not because of a weak dollar or low interest rate etc. but because the, " ... rigging of the gold market is becoming unglued," said Murphy, an impassioned speaker who's organisation ballots politicians, the press and gold producers on its theories relating to the suppression of the gold price.
Their prognosis centres around the fact that gold reserve figures and the amount of lending/sales has been artificially understated, particularly in the US. Moreover, this action is "un-constitutional, " say GATA.

GATA contend that between 14,000-15,000 tonnes of gold has been loaned/swapped out by Central Banks. How much of the 32,000 tonnes of Central Bank reserves is actually in the vaults (or returning to them)? This "Gold derivative neutron bomb," as Murphy describes, it is about to explode. "We believe the shorts are trapped," he told the conference, "The gold scandal will break and the funny games exposed," he said, with the result that, "the gold market will melt-up much like Enron melted-down." Gold will therefore "stun" people on the upside, with GATA suggesting a range of $800 - 1,000/oz � "Murphy's law will hit them," he told delegates.

Nonetheless, GATA have a lot of work to do assembling concrete evidence and convincing the market that they have a case, particularly given their failure to gain mainstream attention and the recent dismissal by the Boston Federal Court of Reg Howe's (another GATA protagonist) highly credible legal case, citing him as an "inappropriate plaintiff".

The GATA "army" continues its claims, mainly via the Internet, in pursuit of justice, (see: www.gata.org).

Conclusion
Just over a year ago a gold price fall through $250/oz seemed imminent. Now for some, $350/oz seems a distinct possibility, although, on the surface, the rally could be conceived to be the result of frenzied buying by panic-stricken Japanese housewives.

Gold's price rise is leading some analysts to predict that the metal will have to fall, particularly as speculators hold large long positions on futures markets, making it increasingly vulnerable to a short-term correction. Large speculators have recently been trimming their net long exposure to gold futures as evidenced by the latest (May) Commitment of Traders Report from the CFTC.

Gold bulls have waited a long time to flex their muscles, and with sideways stock markets, political unrest and banking crises in the offing, are now increasingly calling the market significantly higher � even from these levels.

Calls for gold to reach the heady heights of the early 1980s seem tsunamic. Conversely, gold could go the way of silver as Central Bank sales escalate, gold is de-monetised, and if so, "... goes to $68/oz," � a favourite scenario cited my Smith. Either way, and perversely as ever, we should all hope that gold will stabilise in months to come.

--------------------------------------------------------------------------------

Silver Markets Look Brighter?
"Silver fabrication should recover fairly strongly in 2002," according to The Silver Institute in a May 2002 release. This prognosis supposes that the world economy will "pick up steam," says the World Silver Survey 2002, although they do acknowledge that over the rest of the year, the health of the electronics industry in particular, will be an important factor2.

Fabrication demand fell 4.9% in 2001, principally due to the downturn in global GDP, the "anaemic" performance of the electronics industry and the bursting of the 'tech bubble', said the Survey . Electronics was the key factor behind the decline.

Supply and demand for silver last year was roughly in balance at 880 million oz � with fabrication demand totalling 863 million oz. Industrial use of silver is the single largest component of fabrication demand � with electrical and electronics applications accounting for its largest use � 133 million troy ounces in 2001 (with brazing alloys and solders � other important industrial uses � taking up 36 million oz).
Jewellery and silverware fabrication demand escalated a solid 2.2% in 2001 with Asian demand accounting for most gains, (India up 22% and Thailand 8%). Photographic demand fell 4%, although radiography demand remained fairly steady at 73 million oz.

Output of silver coins and medals was off 9% in 2001 � a result of lower demand in the US and Germany (two of the largest silver coin manufacturing countries) as against gains posted by Mexico, Spain and China.

Silver supply fell 6% last year, despite a small increase in mine production � such as Peru and Chile where silver is a by-product of base metals operations. Mexico again mined the most silver in 2001.

"As for 2002, the weak outlook for base metals prices generally, coupled with the implementation of numerous production cutbacks at zinc and copper operations, and reduced silver by-product from gold mines in 2001, suggests lower silver output from these sources in 2002," according to the survey.

For the third year in a row, the silver markets have had to withstand and absorb a high level of government stock sales. Official sector sales were up nearly 10% year-on-year, although lower than levels recorded in 1999. "Of note, for the first time in over a decade, there were virtually no net sales out of private sector stocks," said the report, suggesting that this was the first time in over 10 years that there was an increase in investment.

Silver prices averaged $4.38 per troy oz in 2001 against the average COMEX closing spot price of $4.51 in 2002 (to May 17th). Most commentators expect little upside for silver prices this year given the huge supply potential overhanging the market and the dominance of gold in the current move to 'pure exotica'. Silver fabrication could rise by up to 3.7% this year to 860 million oz while total supply could see a 1.0% decline to 790 million oz, according to the newly released CPM Group Silver Survey 2002.

YGM

(07/10/2002; 15:40:55 MDT - Msg ID: 80278)

alanka (07/10/02; 15:13:08MT - usagold.com msg#: 80277)

WelcomeI haven't seen your handle here before, so welcome...now can you tell us what your post was all about? It seems like it was maybe lost in transit for mo's???...Left me scratchin my head anyways....Don't think the Gold and Silver scenario you paint seem quite right at present as per your post....The GATA news is old hat now also....YGM

Clint H

(07/10/2002; 15:42:09 MDT - Msg ID: 80279)

alanka (msg#: 80277)

alanka, is your name Smith?

sector

(07/10/2002; 15:43:05 MDT - Msg ID: 80280)

Moody's expects pressure on CDOs [Due to Wold Com]

Collateralized Debt Obligations --An "Exotic" By Any Other Name...Moody's expects pressure on CDOs
By Rebecca Bream
Published: July 10 2002 5:00 | Last Updated: July 10 2002 5:00

The booming collateralised debt obligation market may come under ratings pressure as a result of the fraud at WorldCom, according to the latest research by Moody's Investors Service.

Moody's report says WorldCom's $30bn of debt is widely held by CDOs, which are managed funds that invest in various debt markets and finance themselves through structured bond issues.

The leveraged nature of the funds means one large default can have a serious effect on returns, especially for synthetic CDOs that take positions through the credit derivatives market.

The exposure to the collapsed US telecoms company will be felt in both Europe and the US, and is likely to hit both investment-grade and junk CDOs.

WorldCom's fall down the credit ratings scale was so rapid that many high-grade funds were still holding the company's junk bonds when the extent of the fraud was revealed two weeks ago.

Moody's found a total of 58 synthetic CDOs that have large amounts of WorldCom exposure through credit derivatives, about $1bn, with 30 per cent of these contracts denominated in euros. In the case of one fund, WorldCom made up 4.6 per cent of its portfolio.

If the fund managers cannot salvage the situation, Moody's says many CDOs could be downgraded.

"Several investment-grade CDO deals are already very close to triggering early amortisation tests," says Gus Harris of Moody's structured finance group and author of the report.
++++++++++++++++++++++++++++
Other World Coms lurke just out of sight and the "Tsunamic" effects from their failures and frauds will trigger lethal, domino-like waves throughout US finance.

YGM

(07/10/2002; 15:51:51 MDT - Msg ID: 80281)

alanka (07/10/02; 15:13:08MT - usagold.com msg#: 80277)

Panic Stricken Japanese House wives??Gold to $68.00?
Markets going sideways?
Perversely hope Gold should stabilize?
Gov't Siver stock sales?
Huge Silver supply overhang?

Partner I don't know what's up with your info meter, but last time I looked the Markets were dumping on everyone in them, Gold was in a Bull market, Silver's goin up, the Gov is buying AG, not selling! What market overhang? And frenzied panic stricken housewives got naught to do w/ anything I know of....YGM.

misetich

(07/10/2002; 15:58:17 MDT - Msg ID: 80282)

Up Up and Away - US Current Account Deficit 4.3% in 1st Qtr 2002 - Seen climbing over 5%

http://www.ntrs.com/library/econ_research/daily/us/020709.htmlSnip:

Would You Keep Investing In An Enterprise That Was Just Throwing Parties With Your Funds?
July 09, 2002

Paul Kasriel
Director of Economic Research

In the 1990s, the US was the recipient of a huge amount of the rest of the world's savings. As shown in the chart below, the US current account, a proxy for capital inflows, went from a surplus of almost 1% of GDP in early 1991 to a deficit of over 4% of GDP at the end of 2000. And what were we doing with the savings of the rest of the world? The other line in the chart shows that we were spending a good portion of the resources on loan to us on nonresidential fixed investment -- i.e., computers, servers, routers, drill presses, office buildings, and warehouses. Presumably, by investing the savings of the rest of the world, we would become more productive. If so, we would then be able to pay the interest and dividends owed to foreign investors and have enough output left over to still provide us with a rising standard of living. This is why global investors were so willing to place funds with us - because we appeared to be employing those funds in way which increased the probability that they could be paid back without undue hardship on Americans. Global investors didn't care about the hardship on Americans, per se. Rather they felt that if debt and equity servicing required hardship on Americans, we would try to repay global investors with "cheaper" US dollars.

The US current account as a percent of GDP peaked out at 4.4% in the fourth quarter of 2000. But starting in the fourth quarter of 2001, the current account deficit relative to GDP started moving up again. It had risen back to 4.3% by the first quarter of this year. So, global investors have stepped up again their placement of funds with us. But what are we using the savings of others for now? A form of partying, I would argue. Now, we are using the resources of the rest of the world to erect houses here, buy Lincoln Navigators, and build cruise missiles. Nonresidential fixed investment as a percent of GDP peaked out at 13.2% back in the second quarter of 2000. By the first quarter of this year, this percentage had slipped to 11.1%. So, we are borrowing more resources from the rest of the world, but not employing these resources in ways that are likely to boost our productivity in the coming years. Do you think that global investors will want to keep throwing good money after bad? Judging by our weak stock market and weak dollar, the answer is "no."

Misetich

The "productivity miracle" is over. US $ is in trouble. Foreign investors are taking it on the chin - falling investment values and foreign exchange losses

Got gold?

YGM

(07/10/2002; 16:03:30 MDT - Msg ID: 80283)

sector....

question?"Tsunamic" effects from their failures and frauds will trigger lethal, domino-like waves throughout US finance.....

*so ineffect future Bond issues are going to be tougher to market and highly scrutinized I presume??? I obviously know nothing of the Bond Market but it seems to me this area will be hardest hit by these cascading failures and create further dominoe effects??....YGM

misetich

(07/10/2002; 16:05:38 MDT - Msg ID: 80284)

US wants INFLATION not Deflation

http://www.ntrs.com/library/econ_research/daily/us/020708.htmlSnip:

But, because we are the biggest net-debtor nation in the world, deflation could beget more deflation as it would make it more difficult for us to service our debt. So, as net debtors, we Americans want inflation, not deflation. And Greenspan aims to please us now, just as he did when he created the credit to inflate the stock market.
..............
I said that we are the world's largest net-debtor nation. Chart 2 shows that the rest of the world now owns almost 12% of our total outstanding debt - up from less than 2% thirty years ago. When foreign creditors - and domestic ones, too -- get wind of Greenspan's intent to lower US inflation-adjusted interest rates, which today are only 0.55% in terms of the fed funds rate -- by stepping up US inflation, how do you think they will react? My bet is that they will run to the currency that will give them a positive inflation-adjusted return on their short-term money. And if all central banks join in with the Fed in pushing inflation-adjusted interest rates into negative territory, then there always is gold.

Misetich

Greenspan stepping US inflation -

On behalf of gold investors everywhere Allan, for giving us the opportunity to acquire gold at these cheap prices in recent years - Thanks

Got gold?

Canuck

(07/10/2002; 16:10:23 MDT - Msg ID: 80285)

What a thrashing

Markets got murdered again.

Checked the non-hedgers, G, AGE, MNG, and PAA on the TSE. All had strong finishes in the final hour/half-hour, a couple closing on their highs.

This puppy may pop REAL soon.

NT bounced off 2 bucks (even) several times, (closed at 2.07 CDN) if it breaks that all hell will break loose here in Canuckland.

Time to SERIOUSLY consider the short term future, long-term is secure with the REAL McCOY!!!!!!!!

Get you the REAL McCOY.

misetich

(07/10/2002; 16:12:02 MDT - Msg ID: 80286)

U.S. accounting rules seriously weak-ECB official

http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-l10501823&feed=reu&date=20020710&cat=USMARKETSnip:

Wednesday July 10, 11:41 AM EDT

By Lisa Jucca

BRUSSELS, July 10 (Reuters) - European regulators took aim at U.S. accountancy rules on Wednesday, saying the Enron scandal showed they were seriously flawed and that EU-backed standards were superior.

But a day after President George W. Bush declared war on corporate fraud, officials conceded that EU member states needed to make sure they were enforcing their rules properly.

The European Union has long promoted the superiority of International Accounting Standards (IAS), to be adopted across the EU in 2005, over the Generally Accepted Accounting Principles (GAAP), the standard accepted in the United States.

"The Enron case raises many issues. It is complacent to think that such issues are simply about a violation of the rules," European Central Bank board member Padoa-Schioppa told a European Parliament committee.

"The rules themselves have shown very serious weaknesses... Even when complying with the rules, things that should not happen are allowed to happen."

Bush's fight against corporate abuses is aimed at restoring confidence in stock markets after the accounting scandals emerged at energy trader Enron (ENRNQ) and telecoms giant WorldCom (WCOME).

In February, European Internal Market Commissioner Frits Bolkestein publicly slammed U.S. accounting rules by partly blaming the Enron scandal on their approach of having hundreds of detailed rules.

Misetich

Its always good to see 'good friends' give wise advice when needed -

Got gold?

misetich

(07/10/2002; 16:18:23 MDT - Msg ID: 80287)

Cleveland Federal Reserve Bank president retiring

http://digitalmass.boston.com/news/wire_story.html?uri=/dailynews/191/economy/Cleveland_Federal_Reserve_Bank:.shtmlSnip:

CLEVELAND (AP) Jerry Jordan, president of the Federal Reserve Bank of Cleveland for the last 10 years, plans to retire in January. In the post, Jordan helped set the nation's monetary policy.

Jordan, 60, said he plans to spend more time with friends and family.

Misetich

ANOTHER Fed "retires" to spend more time with friends - How many Fed retirees in the last year or so?

The Financial Titanic captain is being deserted!

Got gold?

misetich

(07/10/2002; 16:26:49 MDT - Msg ID: 80288)

Seaching for US "economic recovery" GM, Ford Shares Fall on Cost Worries

http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=202&feed=bus§ion=news≠ws_id=bus-n10366280&date=20020710&alias=/alias/money/cm/nwSnip:

DETROIT (Reuters) - Shares of Ford Motor Co. (F) closed at a seven-year low on Wednesday, and General Motors Corp. (GM) shares also dropped after an analyst downgraded the automakers, saying they would be forced to follow DaimlerChrysler AG's (DCX) (DCXGn) offer of a longer powertrain warranty.

Banc of America analyst Ron Tadross and other Wall Street industry experts were also raising questions about how GM and Ford would cover growing liabilities for pensions and health-care costs.

..............
Tadross and other analysts have also raised questions in the past few weeks about the billions of dollars in pension and health-care liabilities facing the Big Three, especially GM. All three rely on investments to fund retirement benefits, but analysts say weak stock markets have put automakers' assumptions of investment returns in doubt.

Misetich

There goes that "pension" thing again - The markets have fallen for the last 3 years and analysts have put "investment returns in doubt".

On the run with no place to hide.

Got gold?

Horatio

(07/10/2002; 16:43:41 MDT - Msg ID: 80289)

Barrick

UPDATE 2-Barrick doubles gold estimate at Alto Chicama

(Recasts lead, adds company and analyst quotes, updates stock price. Figures in U.S. dollars unless noted)

By Scott Anderson

TORONTO, July 10 (Reuters) - Barrick Gold Corp. doubled the estimated reserves at its Alto Chicama gold find on Wednesday, but some analysts said the revision might only be the beginning of even brighter forecasts for the property in north-central Peru.

The company, which first announced the find in April, now estimates the property could contain as much 7.3 million ounces of gold, twice the 3.5 million ounces it originally estimated.

"Obviously it's great news to see any company in this environment expanding reserves, and what appears to be low-cost ounces," said David Christensen, a director at CS First Boston, in Toronto.

"There's no surprise they doubled and there would be no surprise if this reserve continues to grow. It's awfully early in the development program to say that's the end."

Barrick also said it was increasing its 2002 exploration spending for Alto Chicama by $15 million to $35 million, the second major increase in the exploration budget this year.

That is more than one-third of the estimated $92 million Barrick has earmarked for exploration and development in 2002.

Company executives said the increase sends the message that Barrick, the world's second largest gold producer, will use its financial strength to increase its clout in a rapidly consolidating industry. "What we want to do is build a company that is firing on every cylinder... Now what we've shown is that we have got another cylinder that we can fire on and that's grassroots exploration," Randall Oliphant, president and chief executive told reporters.

With indications of significant amounts of gold at Alto Chicama, the company said it has begun a mine development plan for the rest of the year, including metallurgical testing, and a mine and process feasibility study, to be completed in 2003.

It will also start the process of gaining permits for the Lagunas Norte section of the property, where most of the intensive test drilling has taken place.

Barrick said it does not expect many hurdles in having the permits in place by next year.

The Alto Chicama discovery, which the company has dubbed "one of the most significant gold finds in the past decade," is about 175 km (105 miles) from Pierina, a low-cost producer with average annual production of 500,000 ounces of gold at total cash cost of $90 an ounce.

Barrick has been exploring the Alto Chicama property since early 2001, after it was the only bidder in a tender by Centromin, the Peruvian state mining company.

The only financial commitment Barrick had to make was to spend $6 million over three-years and prepare a feasibility study for mine development. It has already spent $3 million.

It must pay an additional $2 million and give Centromin a net smelter royalty of 2.5 percent over the life of the mine.

"In an industry where supply is expected to fall off in the next couple of years due to the reduced emphasis on exploration and lack of significant new projects, a grassroots discovery like this is significant, especially given the fact that Barrick has more than doubled the resource number in...a couple of months," said John Bridges, a mining analyst at J.P. Morgan.

Barrick stock slipped 85 Canadian cents to C$28.65 on a volume of 4.1 million shares on the Toronto Stock Exchange on Wednesday afternoon, but that was largely due to news it was one of five Canadian firms being dropped from the U.S. Standard and Poor's 500 index this month.

Fellow gold miner Placer Dome , also being dropped from the S&P 500, was down 68 Canadian cents at C$16.58.

Barrick stock has risen 11.7 percent so far this year, outperforming rival Placer which has slipped 4.7 percent in the same period.

(

misetich

(07/10/2002; 16:44:42 MDT - Msg ID: 80290)

O'Neill Warns Senate on Accounting Oversight Board

http://www.washingtonpost.com/wp-dyn/articles/A50546-2002Jul10.htmlSnip:

Treasury Secretary Paul H. O'Neill warned the Senate today against establishing a new, independent oversight board with power to enforce accounting standards, saying the entity would compete with existing regulators and allow scofflaws to slip through the cracks.

...............
On corporate wrongdoers

"In their greed and their gluttony, these crooks sacrificed the retirement years of teachers, truck drivers, nurses and farmers to enrich themselves," he said, telling the business audience, "Face it, the '90s are over. Now's the time for sober virtues."

................

Misetich

Tough talk from Mr. O'Neil

Is he related to this Paul O'Neil?
http://www.odwyerpr.com/archived_stories_2001/october/1001seitel_commentary.htm

In April, O'Neill agreed to sell $100 million in Alcoa stock. Three months later, he still owned stock in his former company, had profited from its increase since the new Administration took over, and suddenly refused to reveal how much stock he had left.

O'Neill's seeming reluctance to divest, while Alcoa shares skyrocketed, didn't exactly assist an Administration seeking to distance itself from its predecessors in terms of candor.

"One of the sad truths of Washington is you can't take people at their word anymore on anything," said the executive director of the Center for Public Integrity, adding that the Treasury Secretary "made money by holding onto [the Alcoa shares] while the Administration's policies have driven up the price of his stock."

..............

Yep - one and the same -

Got gold?

Paper Avalanche

(07/10/2002; 16:59:11 MDT - Msg ID: 80291)

alanka

Where are Jimbo and JJ tonight?

Horatio

(07/10/2002; 17:10:30 MDT - Msg ID: 80292)

Agnico-Eagle

Yesterday there was an order inbalance for about half an hour
the spread between bid and asked was $2.00,favor asked!They woulden't open the stock until the got the spread down.!
Don't sell a single share!They are snapped up as fast as offered.I'll bet if all of us offered shares at $3.00 above the market we could start a "RUN"on the price.Same holds true for most gold and Silver stocks.The order inbalance is on the favor
of "asked".We could start a "RUN" simply by raiseing the offered prices far above the markets...I have no doubts it would work !....On 5/31 I sold some Barrick at 22.25 and it was snapped up so fast I was very surprised.(I used the money to buy Apex Sil.)I won't be selling any metals except to switch for some balance in portfolio.

R Powell

(07/10/2002; 17:22:27 MDT - Msg ID: 80293)

alanka

Thanks for the silver information which I recognize as coming from GFMS's 2002 Silver Survey. May I suggest that sources of info get included so that all will know who said what and then include your response as such.
Black Blade is a master of this method, giving not only the source but a link to it, then a sample of what the link offers and then his own personal thoughts clearly marked as such.
This may also help deflect the negative responses of those who disagree with what you are quoting.
******
Concerning the silver numbers for the year 2001, you mentioned supply and demand being in balance at 880 million ounces. It also should be mentioned that total supply from primary mining, by-product supply and recycled sources fell approximately 89 million ounces short of demand. Thus the year 2001 was the 12th continuous year of a supply vs usage (demand) deficit. The shortfall had to be, as always, made up by a drawdown of existing stores. Total yearly numbers of supply versus demand rarely balance. The question is, after the tally, are there now more soybeans, cotton, silver or whatever commodity, listed as "carryover" or leftover to be added to next year's production to give next year's total supply OR is there less "carryover" for the future?
For 12 years in a row, the demand has exceeded production with the shortfall lowering the carryover to the point where the average monthly deficit of 10 million ounces will consume all leftover within the forseeable future. This 10 million per month is approximately the 12 year average while 2001's deficit was only about 7-8 million per month. Economic slowdown with increased Mexican production? Still, the deficit continues with no price rationing of the 300-500 million ounce estimate of remaining supply. My point, supply and demand were roughly in balance but ONLY after adding 89 million ounces of drawdown from the ever shrinking "carryover". These numbers are from memory from that 2002 Silver Survey.
*****
Two questions
How much is really left, in weak hands?
How close to actually running out will silver come before serious price rationing ($25/ounce at least) begins?
Thoughts?
Rich

YGM

(07/10/2002; 17:31:55 MDT - Msg ID: 80294)

alanka....

Not trying to scare you off..I 'did' mean the Welcome!You just got me, and looks like others totally confused with your post...Take RPowell's good advice when posting so we can separate your thoughts from your copied info and do give a link in the optional box please...Now please join in here...If I seemed rude in 2nd post I apologize. We all needed some time to get used to this posting stuff...YGM.

goldfool

(07/10/2002; 17:38:17 MDT - Msg ID: 80295)

Real Estate Replacing Gold as Safe Haven

http://www.forbes.com/technology/newswire/2002/07/10/rtr657917.htmlCourtesy of Fannie Mae and Freddie Mac.

YGM

(07/10/2002; 17:43:51 MDT - Msg ID: 80296)

Hmmmmm!

DT Letter....Yep, words out. R Russell says today he bought a batch of Kruggerands. Says Gold is the only money with no debt attached...Tells us watch out the Mutual Funds are idle but the selling hasn't begun yet and when it does...Kaboom.

Maybe Richard lurks here...Sure be nice if he was posting his intelligent outlook and Market savvy......YGM.

Canuck

(07/10/2002; 18:14:06 MDT - Msg ID: 80297)

@ misetich

Love your coverage of the gory details, please continue.

Just wait until Greenspan announces his retirement!!

Canuck

(07/10/2002; 18:18:28 MDT - Msg ID: 80298)

Vice President being sued..............

apparently over fraudulent accounting at Haliburton.

Can it get more grim?

Canuck

(07/10/2002; 18:22:25 MDT - Msg ID: 80299)

S&P closes at 920..........

breaches 911 intra-day low of 944.

The Titanic has struck.

(Forget about Nasdaq, last week's news)

goldfool

(07/10/2002; 18:25:43 MDT - Msg ID: 80300)

Real Estate Replacing Gold as a Safe Haven

http://www.milken-inst.org/gold/Gold90s.pdfHere's the full report from the Milken Institute (a name you can trust) in pdf. It's kind of difficult to read though because it's full of holes.

R Powell

(07/10/2002; 18:32:09 MDT - Msg ID: 80301)

YGM

Hummmmm Your mention of Richard Russell's thoughts led me to think of how much that we've talked about here and elsewhere along with how much we've read of various predictions that have now happened. Also, what is now unfolding has been discussed, hashed over and rehashed here along with other good internet sites (like Puplava's, for example) but it's still amazing to watch it now occur.
So much financial history (manias, bubbles, post bubble economies, etc.), so many thoughts of people like Adam Hamilton etc. and the investment community's typical response to this bear market seems to be unfolding as if on schedule. If this continues according to script, it may get seriously frightening soon, certainly before year's end.
I think either I'm getting paronoid or It's time to double up efforts to follow Mr. Blade's advice with the squirreling away of food, money, howitzers, etc. As more and more transpires as predicted, I become more and more convinced.
Scary!
Rich

R Powell

(07/10/2002; 18:37:34 MDT - Msg ID: 80302)

Ponzi

Remember Shifty's daily Ponzi number?
Today's Ponzi is 5079. I wonder how far back in time we have to go to find a lower number?

misetich

(07/10/2002; 18:47:01 MDT - Msg ID: 80303)

Uruguay Debt Rating Cut by Moody's on Neighbors' Woes

http://quote.bloomberg.com/fgcgi.cgi?touch=1&btitle=Top%20News&T=sa_content.ht&s=APSy.jBXJVXJ1Z3VhSnip:

Buenos Aires, July 10 (Bloomberg) -- Uruguay's credit rating was lowered by Moody's Investors Service for a second time this year on concern financial problems in neighboring Brazil and Argentina have reduced the country's ability to pay foreign debt.

............
``The foreign currency earning capacity of Uruguay has been weakened by the contracting local and regional economy, and instability of financial markets throughout much of South America,'' Moody's said in a statement.

Uruguay, which sends more than half its $2.3 billion exports to Brazil and Argentina and is on track for a fourth year of recession, has been the country most hurt by a fallout from Argentina's December debt default and January devaluation. The downgrade signals that Uruguay, which obtained a $3 billion loan last month led by the International Monetary Fund to slow a run on banks, may have trouble getting access to fresh loans as concerns grow that Brazil will be the next to default.

``Fiscal deterioration, if it occurs, may jeopardize the continuance of much-needed financial support from the international financial institutions,'' Moody's said.

Misetich

Latin America is not an economic healthy place - What will make the situation improve? The "Rest of the World" except Europe is US consumer dependent. Economic recovery in the US is expected to be under 3% for the rest of the year - unless loss of confidence and corresponding consumer spending declines - a double dip recession cannot be dismissed for the US and US dependent countries

Got gold?

Got gold?

Black Blade

(07/10/2002; 19:07:41 MDT - Msg ID: 80304)

Real estate replacing gold as safe haven-study

http://www.forbes.com/technology/newswire/2002/07/10/rtr657917.html
Snippit:

WASHINGTON, July 10 (Reuters) - Real estate -- it's the new gold for wary U.S. investors seeking security in a bear stock market that won't quit, a study released on Wednesday says. "Much like gold in the 1970s, Americans now appear to be treating the purchase of residential real estate as the investment of choice in times of economic uncertainty," said a study by the Milken Institute, the California think tank funded by the foundation of former junk bond trader Michael Milken.

Gold was historically the investor's shield of choice against inflation and uncertainty, the study said. But the precious metal's status as a safe haven has been in decline since the 1970s, due to the rise of the importance of oil as a commodity and because central banks have been willing to manipulate the supply of gold, the study's authors wrote.

Black Blade: Aside from this report coming from a convicted felon, it does not address that we are in a real estate bubble. What are we to do? Rent from each other? I had discussed this before, and the report is partially right though. People are looking for hard assets as a safe haven and that is why real estate (as well as Gold) has done fairly well. Of course it depends on where in the country you are looking. In the intermountain west I see a lot of real estate for sale that has been on the market for several months. Could the bubble be ready to pop? Also, there are several reports of commercial property going begging for renters. Hmmm�

USAGOLD

(07/10/2002; 19:13:49 MDT - Msg ID: 80305)

Welteke/Murphy. . .

You know. . .I have to agree with Bill Murphy on this. Either Welteke is involved in some kind of political chicanery that not one of us can understand or interpret, or the guy's a complete moron. Myself. . .I think it's the latter. This guy has come out of the ozone ever since the first time I ran into his name. And the Germans are dumping on us about our accounting scandals??

Think again.

YGM

(07/10/2002; 19:18:48 MDT - Msg ID: 80306)

Rich P

Long Ahead of the Curve......yes the posters and followers here and Gold-Eagle, Kitco the Ranch and all the other Pro Gold/Silver forums have been a long time ahead of the sheeple as we've always called the masses....I guess it's small consolation if we get down to needing all those Y2K type supplies....Like the man says prepare for the worst and hope for the best (I still will enjoy the perversion of watching all that airy nothing dissapear tho)...Down here at my much reduced level of $$$$ & PMs nowadays isn't so bad but even 'Miner' misery likes company...Wall St can use the flushing out and the Banks can use the Vacant Mansions to store all the Porches & Jags they will own....I got a little more Ag today. Like the US ones better tho. They still seem more valuable or real than the Canadian ones regardless of purity......YGM

Black Blade

(07/10/2002; 19:23:24 MDT - Msg ID: 80307)

Bear market one of most painful yet

http://www.msnbc.com/news/778600.asp

Many analysts say there's no way to predict when stocks will recover

Snippit:

The latest slide in stock prices has turned a painful bear market into one of historic proportions - the worst in more than 50 years by one measure. And many analysts say there is no way to predict confidently that the pain will end anytime soon. "It's bad by just about any kind of standard you use," said Hugh Johnson, chief investment officer of First Albany Cos. "Just based on chronology and severity, this is historic. This one is very long and very severe."

Black Blade: This isn't the small downward spike that bounces back � this is the real deal. I expect to see a lot of pain yet. The markets roared high during the go-go nineties when the speculative mania lured investors to invest in companies that did not have a prayer. Remember those companies that had no game plan and only existed in the faint hope that they would be acquired because they fit the "new paradigm" � were part of the "new economy". We sent over $6.7 Trillion of wealth to "money heaven" in this bear market (so far). That's money gone for ever � never to be seen again � gone to "money heaven". Amazingly the Pied Pipers like Abby Jo are trotted out to say how wonder everything is and how much better is will be. Excuse me! But didn't these very same people entirely miss this bear market purging of the markets? Hmmm�

Go defensive! Get outta debt as soon as possible (and stay outta debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic goods storage program. At the very least you will sleep a lot easier.

YGM

(07/10/2002; 19:27:31 MDT - Msg ID: 80308)

USA Gold.......................

Maybe both.....Chicanery and a Moron....Spew the chicanery for the string pullers and a moron if he thinks it won't affect his future reputation....And not only Germany dumping on the USA, but the British as well...Short memory on what the BOE cost the people there!
Little do they know the Gold wars will affect them all!
No form of trade barriers or isolationism can protect the world today from a financial collapse, if one goes we all go right?.....YGM

Black Blade

(07/10/2002; 19:32:51 MDT - Msg ID: 80309)

Stocks Careen to 1997 Lows � And "Scandal Of The Day"

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1187615
Snippit:

NEW YORK (Reuters) - Major U.S. stock gauges slammed to lows unseen since 1997 on Wednesday after Qwest Communications International Inc. Q.N inflamed worries over corporate accounting and Standard & Poor's booted a handful of companies from its prestigious index. "There are no buyers and that's a proxy for a major lack of confidence in U.S. companies," said Gary Wedbush, head of trading at Wedbush Morgan Securities. Qwest lost almost one-third of its value after federal prosecutors launched an unspecified criminal probe into the No. 4 U.S. local phone company. The latest in a string of high-profile investigations into Corporate America dealt another stinging blow to investor confidence.

Black Blade: Qwest could qualify for our "Scandal of the Day". They admit that they are now officially under investigation. Though this was not unexpected.

Black Blade

(07/10/2002; 19:44:36 MDT - Msg ID: 80310)

Workers' 401(k)s Lost $1.1 Billion

http://www.washingtonpost.com/wp-dyn/articles/A46743-2002Jul9.html

Snippit:

Employees of WorldCom Inc. who own shares in the telecommunications company in their retirement plans collectively have lost at least $1.1 billion during the past three years.

Former WorldCom employee Lisa Brown, 35, says she heeded the encouragement of former chief executive Bernard J. Ebbers and invested all of her retirement contributions in company stock. She said the value of her 401(k) account fell from $45,000 to $210. "I lost 10 years of investments, and so financially I am 10 years behind where I should have been," said Brown, who now works for a nonprofit agency near Wichita, Kan. "I might have to work to supplement my income after I retire."

Black Blade: Money is gone � "to money heaven".

Go defensive!

goldfool

(07/10/2002; 19:46:48 MDT - Msg ID: 80311)

Welteke - USA Gold/YGM

Maybe Welteke realizes gold is going to be $1,000/OZ in two years (Near a top) and stocks will be near a bottom - a good time to buy. HAH!

Black Blade

(07/10/2002; 20:10:35 MDT - Msg ID: 80312)

Asia Starts Off Ugly

http://quote.yahoo.com/m2?u
The "entertainment" should be market action in Asia and early Europe as markets struggle as "monkey see - monkey do" following the US "slo-mo" market crash. I expect to see continued intervention in the currency markets by the MOF and BOJ. Success has been elusive so far. Should be fun.

- Black Blade

sector

(07/10/2002; 20:33:06 MDT - Msg ID: 80313)

@USAGold Welke as Bundesbank Moron...or more dangerous...

...a bureacratAs a good little bureaucrat, he simply mimics the wishes of his puppet-masters...the thirty-somethings, "New Guard" at the Bundesbank. It's the old guys there who oppose the sale of German gold and constantly undermine Welke. It was they who assembled the Washington Agreement cadre.

One can make a case for them giving Welke just enough rope so as to effect a self-hanging event.

Perhaps the most important item this week so far is the gold bullish turn of UBS Warburg and their savvy lead analyst, John Reade. I continue to place more than a modicum of weight on a single ambitious bank as the breaker of the gold cabal. UBS could be the one. Winning big is but a matter of choosing to move first.

Surely at some point, cabal members will realize through some form of trading-floor osmotic process, that more and more buyers have arrived to partake of the gold feast and that they will be doomed.

The smell of defeat is in the air...another run at $330 is all but assured. Will it hold? Time waits, and gold is prepares for it's vengeance.

Entertainment like this is priceless.

YGM

(07/10/2002; 21:08:27 MDT - Msg ID: 80315)

If Central Banks have no Interest in Gold "Then Why does the BIS" The Banker to THE Banks Value it's Assets in Gold Francs?

http://www.bis.org/press/p020708a.htmFrom B.I.S. 72nd Annual Report issued July 8th /02 Excerpt:

Quote:
The Bank reported an audited Balance Sheet totalling 87,714.4 million gold francs at 31 March 2002, and a net profit of 225.7 million gold francs after deduction of costs of administration (1 gold franc = 0.29032258... grams of fine gold, or US$ 1.94149..., converted at US$ 208 per ounce of fine gold) end Quote:

*complete News Release and links to Annual Report at above link........YGM

Next press release:
Basel Committee reaches agreement on New Capital Accord issues (10 Jul)

USAGOLD

(07/10/2002; 21:27:10 MDT - Msg ID: 80316)

Sector. . . .

Sector. . .
You know something? That's a great post. . .Hope others read it and internalize its meaning. Nothing is etched in stone. All is in the process of becoming something else. . . .even with respect to our Mr. Welteke. . .

steady

(07/10/2002; 21:55:33 MDT - Msg ID: 80317)

how the fed hides its gold movements out of the u.s.a.

you see the basement vault of the NY Fed has special status, it is considered a foreign country. That is how they get away with gold leaving the vault and not having it show up on the export numbers. When it leaves the vault they file an import document and when it leaves the country they file an export document. That makes it a wash so it is as though no gold moved at all.
could this really be true can someone find out. im assuming it is.
got gold? give it a silver lining.
also that million ounces off the comex, could that be the balance of cefs silver delivery?

Black Blade

(07/10/2002; 23:02:51 MDT - Msg ID: 80318)

Capital Report on CNBC

Well, I just watched a show on CNBC called "Capital Report". The guests were Sec. of the Treasury Paul O'Neil and Comerce Sec. Donald Evans. O'Neill was ... well, O'Neill. However, when Tyler Matheson asked Sec. Evans how come there were no arrests over this series of scandals on Wall Street, Evans replied "Don't worry, we're just getting started". It sounds like a lot more scandals and corporate executives headed to criminal court in the coming months. He was also asked what can be done because the investor is essentially saying "I won't be fooled again". Evans said that we just have to have trust. Hmmm...

Looks like the markets are going to crash some more.

- Black Blade

YGM

(07/10/2002; 23:46:49 MDT - Msg ID: 80319)

Fed Res Gold Vaults.......(Tours)

http://www.ny.frb.org/nycinfo.htmlThe Federal Reserve Bank of New York is located in the heart of the financial district in at 33 Liberty Street. Visitors will learn about the central banking functions that the Federal Reserve System performs and they will see the Bank's vault of international monetary gold on the bedrock of Manhattan Island, five stories below street level.

YGM

(07/10/2002; 23:53:08 MDT - Msg ID: 80320)

steady....

Do you remember?A discussion or inquiry some time back (2 yrs?)in GATA's early days about the NY Port Authority not having the exports of Fed Gold in their records? If I remember rightly they were supposed to be reported and were not?...BTW, the Port Auth main offices I believe were in the W Trade Towers...another small coincidence? Records gone maybe? Someone else might have further knowledge in this area.....YGM

steady

(07/10/2002; 23:58:10 MDT - Msg ID: 80321)

im just a hobbit .a burowing one at that

ygm nope i missed that by about 6-8 months im just a lil ole hobbit who likes to burrow and find the truth. thats why i found gold and then this wonderful form.
got gold give it a silver lining .

YGM

(07/11/2002; 00:18:27 MDT - Msg ID: 80322)

steady.....found this on Google search of "NY Port Authority & Gold"

http://www.cam.net.uk/home/nimmann/peace/explosions.htmExcerpt:

But it was on these floors that the entire accumulation of evidence and investigation briefs on two highly important cases were being stored:

the case against Mobil Oil and James Giffen on illegal oil swaps between Iran and Kazakhstan (at that time before a New York grand jury as described in great detail by Seymore Hersh in the July 9 New Yorker magazine);
and even more important, the evidence in the investigation of GOLD PRICE FIXING stemming from charges brought against Alan Greenspan, Morgan & Company, Goldman Sachs.
(see below [truth.htm] for full reconstruction of this crime -- that is now all but confirmed by this revelation of a bomb devastating the FBI floors of the North Tower before the tower collapsed.)

YGM

(07/11/2002; 00:28:06 MDT - Msg ID: 80323)

WTC & 12 Tons of Gold.....

More WTC & GOLD Intrigue....One last thing to keep track of: why have we heard nothing in the press except one Reuters/AP article regarding the 12 tons of gold in the basement of the WTC? Gold story here:

http://us.news2.yimg.com/

**This article has now been pulled...YGM

YGM

(07/11/2002; 00:42:35 MDT - Msg ID: 80324)

Enough Surfin for one night...Last look in the Fed Vault...only 5%? OK !

http://www.google.ca/search?q=cache:VPAJdFD7TNwC:home.imf.au.dk/moef/tekster/newyorkref.ps+NY+Port+Authority+%26+Gold&hl=en&ie=UTF-8Excerpt:

After a short introduction we were seated in a room where we were told about the Fed'smain duties. Mainly the Fed controls the monetary policy in the US and is also responsible for the disposal of damaged notes. After this we watched a video on how the Fed receives money from the banks, checksthem for forgery and packs them so as they are ready to go back out to the banks. All this happens automaticly to ensure optimal security. We then walked on to the 9th floor and listened to a speach on how monetary policyworks. The Fed has three main monetary policy tools. These are open market operations, discount window lending and reserve requirements. The Fed stores gold bars for 60 different governments and international agencies whichadds up to 700,000 bars equivalent to 9,000 tons. 5% of the gold belongs to America. Each bar contains approximately 99.5% pure gold. There are two reasons for the 60 go-vernments to store their gold in the Federal Reserve Bank of New York. Firstly it is stored there free of charge and also it makes it easy to trade gold in between the countries. We were transported by lift down to an unknown floor nearly 80 feet under the ground, wherewe were able to see the gold.

We do thank you for a very interesting and most educational visit.

Black Blade

(07/11/2002; 01:13:49 MDT - Msg ID: 80325)

Global Market Meltdown

http://quote.yahoo.com/m2?u
Asia is solid red (unless you invest in Sri Lanka) and Europe is starting off very UGLY! Looks like the hammer is coming down.

- Black Blade

Usul

(07/11/2002; 01:48:54 MDT - Msg ID: 80326)

S&P 500 index buys American

http://www.iht.com/articles/64111.html"The changes will decimate the representation of gold stocks in the S&P 500, reduce the representation of oil stocks and raise that of financial companies.

The changes will take out some of the index's better performers. So far this year, an index of the stocks coming out would have been up 3 percent, while an index of the stocks being added would have been down 6.2 percent..."

Upside-down logic... what is the most likely explanation?

(1) This will strengthen the SP500 performance going forward
(2) Down with global free trade, up with isolationism
(3) We know something is in the works that won't allow us to keep the non-US members.
(4) Any chance to put gold down
(5) Oil's getting cheaper because the dollar will soon get even stronger
(6) Financials will need all the help they can get (any connections here?)
(7) None of the above

Black Blade

(07/11/2002; 01:50:16 MDT - Msg ID: 80327)

No neat pattern can explain the fortunes of gold

http://search.ft.com/search/article.html?id=020711001063&query=gold&vsc_appId=totalSearch&state=Form
Snippit:

There have been six gold price cycles since the price of the precious metal hit an all time high of $850 per ounce in January 1980. That peak came after the US abandoned the gold standard in August 1971 - when the dollar was pegged at $35 an ounce - and mainly reflected mounting investors' concerns during the 1970s about inflation. Somewhat surprisingly, however, research undertaken by Straszheim Global Advisors, the Santa Monica, California-based investment advisory firm run by Donald Straszheim, Merrill Lynch's former chief economist, suggests there is no common denominator to subsequent gold price spikes.

The Straszheim research is significant because it suggests that it is almost impossible for investors to anticipate a gold price rise such as the recent rally, which has seen the price of gold rise by 28 per cent from a low of $255 in April last year to $327 early last month. "Gold prices have not followed normal business cycles, either here or abroad," says the report. "Sometimes gold's attraction is its 'safe haven' quality. At other times, it is an inflation hedge.

The investment advisory firm argues that the current gold price rise has been driven mainly by geopolitical concerns - particularly the threat of terrorism - the potential for significant wealth destruction in equity and real assets, heightened economic uncertainty and the growing distrust of corporate behaviour reflected in equity market prices. Essentially this gold cycle is a "safe haven" effect.

Black Blade: Sounds like a glowing review for staying invested in Gold through thick and thin. It is always good to have insurance.

misetich

(07/11/2002; 05:01:56 MDT - Msg ID: 80328)

Tough Talk on Corporate Ethics, but Where's the Regulatory Bite?

http://www.nytimes.com/2002/07/11/business/11SCEN.htmlSnip:

But something more systemic than a few clever swindlers is staining America. It is hard to believe that Mr. Bush's economic advisers don't know that. The Enron deceptions alone involved some of the nation's most prestigious accountants, lawyers, Wall Street brokers and commercial bankers, along with some of Enron's own highly respected directors. About 1,000 corporations have had to restate earnings the last five years.

A good economist's first instinct would be to determine whether there are incentives built into the financial system that encourage deception and fraud. A president who wanted to make business trustworthy again and renew the nation's confidence would address these incentives directly.

NY Times (Registration Req'd)
Misetich

Bush, O'Neil, Lindsay - have been slammed by the markets - for the attempted CONfidence jawboning. Most investors are still being ill advised and are "holding for the long run" - captives and prey to the Big Bad Bear -
The smarter investor is adding some insurance to their portfolio - GOLD

Got gold?

misetich

(07/11/2002; 05:19:22 MDT - Msg ID: 80329)

No Cheer in Japan over America's Woes - FEAR has taken over

http://www.businessweek.com/bwdaily/dnflash/jul2002/nf20020711_5452.htmSnip:
Tokyo is too busy sweating about what'll happen to it if U.S. corporate scandals keep weighing down the greenback
................
TERRORISM WILDCARD. It may well be that the great corporate crime wave of 2002 will prove short-lived. Sure, a tsunami of earnings restatements will likely occur in the months ahead as everyone catches on to the idea that the days of creative earnings management are over. Eventually, confidence will be restored, and the U.S. will recover its image as a global financial center governed by financial probity, the ultimate haven. Let's hope so.

Yet even under the most bullish scenario, the terrorism wildcard remains. A guy I know at the BOJ wondered over lunch what the world would be like if there were no havens, or at least if the U.S. could no longer play such a role. Instead of corporate scandals dragging down investor confidence, the fear is that America is heading into a turbulent period of civilian killings and bombings, something on the scale of September 11 or perhaps worse.

Japan is the world's biggest net creditor, meaning it has huge claims on the rest of the world, particularly the U.S. This includes a huge amount of dollar claims -- stocks, Treasury bonds, truck plants in Indiana, and resort complexes on Maui -- all sorts of stuff. If terrorists were able to regularly deliver multibillion-dollar shocks to American cities and infrastructure, the greenback would get pounded, and so would a lot of Japanese wealth.

INEXTRICABLY LINKED. During much of the 1990s, a robust U.S. economy, the importer of last resort, bailed out Japan and exporting economies all over Asia. But now the outlook is uncertain. America's monster current-account deficit and swelling budget deficit mean it's heavily reliant on foreign capital. A lot of things -- corporate scandals or terrorism -- could be the tipping point for a dollar crash.

That scenario would be a double blow for Japan. Its big institutional investors, such as life insurers with big U.S. bond portfolios, would endure huge losses, and the export sector now carrying the economy would also take a beating. Such are the financial and trade ties that bind the world's two biggest economies.

Misetich

Fear of a US $ CRASH - must be making Japanese housewives nervous - Lineup for gold coins and bars are going to get longer in JAPAN as the domino effect rambles on

Got gold?

misetich

(07/11/2002; 05:41:43 MDT - Msg ID: 80330)

DEFLATION

http://www.dailyreckoning.com/body_index.cfmSnip:

DEFLATION
by Bill Bonner

There is no greater genius than the man who bounces our own ideas right back at us.

That was our first thought upon reading a subscriber's letter to Richard Russell, on his website.

The subject was the fate of the dollar...and the economy. Like Barron's and now Forbes, the writer had come to the same conclusion we had: both are headed down.

We take it for granted that stocks are in a bear market.

What goes up, goes down. That stocks are on the downside of the cycle seems almost too obvious. Of course, it if were any more obvious, the yahoos and patsies would have seen it already and already forsaken stocks. They have not yet; so the bear market must continue.

But what of the rest of the story? Whither the dollar? What will happen as the Fed desperately tries to revive the economy and the stock market? Will inflation suddenly erupt, like a pimple on a 14-year-old...and spoil the picture?

Most economists will tell you that the economic system is controlled by mood changes at the Fed. When the Fed governors feel the need for a little more bustling about in the nation's shops and factories, they administer a little "coup de whiskey", as Fed chief Norman Strong once put it. When they are in the mood for calm, by contrast, they take away the whiskey bottle and the party soon dies down.

Since WWII, the Fed's mood swings do seem to correspond with the ups and downs in the economy. But sometimes things happen even if America's central bankers are not particularly in the mood for them.

"Despite a flood of money and credit creation, and despite widespread predictions of recovery, the markets refuse to cooperate," writes Dr. Kurt Richebacher in his July letter. "Why? In short, because we are not experiencing a cyclical recession, and therefore a cyclical recovery is not on the way. Instead, the U.S. economy is sick to the bone."

The sickness doesn't seem to yield to a shot or two of whiskey. "For the first time in the postwar period, monetary easing - even the most aggressive easing in the Fed's history - is proving a flop in kindling a stock market rebound," Richebacher explains.

But all this extra money in the system is bound to have some effect, right? Won't it show up as inflation - if not in equities, at least in consumer prices?

Ah...maybe not.

"China is exporting deflation at a very rapid rate," explains Mr. Russell's correspondent. Almost no matter what Americans or Germans can make - the Chinese can make it cheaper.

Plus, "Russia is now moving towards becoming the world's largest supplier of most industrial commodities (including oil) and they too will use their competitive advantage and sell their goods cheaper than anyone else," he continues.

But as we mentioned above, nothing ruins a good economy faster than too much easy money. Thanks to Alan Greenspan and the Fed, "the U.S. private sector debt alone is over 280% of GDP," Russell's reader explains, "and is the largest debt pile in world economic history. The U.S. telecom sector alone has more debt than the entire Japanese property sector did or has." "In the first quarter of 2002, consumers borrowed at an annual rate of $695 billion - breaking all previous records," Dr. Richebacher elaborates. "Their incomes, on the other hand, rose at an annual rate of only $110 billion. And for the 12 months ending in April of this year, $5.9 dollars of debt was added for every $1 of growth in GDP."

Adding debt to the system is inflationary: there is the illusion of greater purchasing power, which boosts up whatever market is hot at the time. Stocks went up in the '80s and '90s; now real estate is having its turn.

If only it could continue forever! Alas, that is not the way of the world. For each additional dollar of debt produces less and less economic progress...and is therefore a heavier burden than the dollar that preceded it.

At some point, people realize that they cannot afford to continue borrowing - their debt-service payments have become too much of a burden. Instead, they have to cut expenses and pay down debt. Then, prices fall...sales go down...jobs are lost...and the economy sinks into a deflationary recession.

This, of course, has been the economic history of Japan for the last 10 years.

More to come...

Bill Bonner

p.s. There is another little detail to the Japan story which the letter writer noticed: "It amazes me that most people miss the appalling demographics in the Western World," he continues. "This is the thing that keeps me awake at night. By the time a 31-year-old retires at 60, almost 50% of the population of the Western world and Japan will have retired before him..." (Hmmmn...)

Misetich

Got gold?

tedw

(07/11/2002; 06:43:48 MDT - Msg ID: 80331)

The last great mania

Doug Casey of the International Speculator has struck at
world net daily on gold.

"And when they do move in (to gold stocks) its going to be like trying to Siphon the contents of Hoover Dam thru a garden hose.And thats not even to mention the institutions"

see article at

www.worldnetdaily.com

Max Rabbitz

(07/11/2002; 07:10:03 MDT - Msg ID: 80332)

YGM & WTC

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=26920The cambridge site is likely KGB disinformation. Tying the GATA gold evidence to the WTC towers does not make sense. The FBI was holding this evidence? I think rather Reg Howe was and is. Besides all they needed was a compliant judge to slip out of the tight spot. I believe Russian KGB/communists/mafia have not given up dreams of revenge and a new empire. They use Islamic terror as part of their grand stategy. Destroy both Islamic (oil) and US power by pitting them against each other. It is in their interest to deflect and confuse their enemy with disinformation. This fits in with the reports of Putins female economics advisor and KGB/mafia associate (Tatiana something) warning of financial attacks on the US last year and more currently�..and urging the Russian people to buy gold. She needs to remove KGB/mafia fingerprints from the crime scene and will use gold intrigue or anything else to do it.

From the above article reprinted from Stratfor Global Intelligence, March 21, 2002.

"Tenet delivered a blunt message to Putin: The United States believes that WMD proliferation is official Russian policy. The government in Moscow must either immediately halt this policy or face the consequences."

Waverider

(07/11/2002; 08:14:33 MDT - Msg ID: 80333)

Thanks All

Thanks all for the posts, news and DMR - I`ve little opportunity at the moment to contribute but greatly appreciate being able to stop in quickly to see what`s happening. Cheers.
Waverider

sourdough

(07/11/2002; 09:21:17 MDT - Msg ID: 80334)

Usul (07/11/02; 01:48:54MT - usagold.com msg#: 80326)

"NONE OF THE ABOVE"
I suggest removing placer and barrick from the S AND P, provide the opportunity for bullion banks to pick up shares of these companies which could eventually lead to a control position. This may provide 'book" in ground reserves to satisfy their own gold creditors (central banks?)
How many shares issued on Barrick? I see 538 million.
How much money required to buy company? $10 billion?
How many shares required to have control over Barrick hedging program? Half would be 250 million or 5 billion.
They could then force Barrick to deliver at any time required. Hell, with the power these guys have they could take the company private with enough financial assistance.
Share are being dumped by index funds (forced).
Trizec hahn has convertible bonds backed by 30 million Barrick shares. If convertible holders wish to take barrick stock, Trizec must pay the market price to keep their Barrick shares. The fact is, it is not Monks company anymore, the power of the 30 million shares he exerts on Barrick is somebody elses power.
p.s. Yesterday the changes in the S AND P were announced.
It raised my eyebrow to see who rang the bell at the NYSE.
I know who it was because Pisani gave him a plug complete with company chart and company discussion after market.
Guess who. THE PRESIDENT OF TRIZECHAHN, the same Trizechahn who has the lean on 30 million barrick.
Can the bullion banks save themselves by acquiring control (or all)of placer and barrick? I don`t know. They will have a lot of "deep storage gold" if they pull it off. After all American dollars (to purchase) are getting cheap.
The smart think to do is force the sale of barrick and placer and pick it up to get control. If they are clever they will eventually get both companies "private"! What the heck is a few billion these days.

YGM

(07/11/2002; 09:30:23 MDT - Msg ID: 80335)

MUST READ!...Barrick Rumered to Defer Hedge Contracts, Subsequent Bank Losses and Gold Rockets..

http://www.thebulliondesk.com/reports/ross/durl.pdfIf only this "What we hear" rumor came to pass....It would be known as "Barricks Revenge"......YGM

"GO GATA"

The Hoople

(07/11/2002; 09:37:34 MDT - Msg ID: 80336)

Speaking of Placer and Barrick...

Snippit from latest Guarino/WSU:

You know what a gold mine is? A gold mine is a hole in the ground with a liar on top. Gold mines have committed the unthinkable sin. They are trading derivatives. They have sold their production forward at lower prices. Yeah, you got it right: The mines have committed to sell millions of ounces of gold $30 under the present price. As the gold market goes up, it does not help them because they have committed to sell gold for years in the future at below market prices. If you want to buy gold, buy gold. If you want to lose money, buy stocks. If you want to lose a lot of money, buy gold mine stocks. Pretty simple.

YGM

(07/11/2002; 09:48:36 MDT - Msg ID: 80337)

I TAKE BACK EVERY NASTY THING I EVER SAID ABOUT BARRICK! (that's alot of retractions)

GO BARRICK!....... DEFER, DEFER, DEFER.........Show em you can't be kicked off the S&P w/o revenge....
It would be totally "Ironic" if the Miner most despised by Goldbugs was the one to kick off the "Greatest Gold Rush in History"......If this Rumor of Mr. Ian Williams comes to pass, it will be the single best piece of Gold news ever read in recent times......YGM.

"Go GATA & Go Barrick" :>}

sector

(07/11/2002; 10:03:50 MDT - Msg ID: 80338)

Jim [The Street.Com] Cramer's "Redemption"...Say Halleluliah Brother

Now a born again, sandwich man for the truthJeeze! Who'da thought that Jim Cramer of all people would be lamenting the absence of transparency in the Mutual Fund redemption business. "You just can't find the numbers".

In today's YAHOO news [Registration required], he rants about how the biggie funds "Hide" their redemption numbers from the unsuspecting public.

He now says the redemptions are coming fast and furious and this is the reason for the DOW's crumble of late.

Actually he has company. Lance "Crash" Lewis, formerly of the Prudent Bear Fund, also alluded [In his pay site newsletter] to the smell of redemptions in yesterday's micro-melt.

So ...IF this is the case, we can expect today to be a replay of yesterday as the big funds in Boston continue to lighten up in order to meet rising redemption demands.

Four hours to go!

YGM

(07/11/2002; 10:04:03 MDT - Msg ID: 80339)

Look at Spot Spike....

http://www.kitco.com/charts/livegold.htmlNow is it Barrick or 'Fear' of Barrick :>}}}}}}}}}

Gandalf where are you, your dogs jumping on an unexpected day....YGM

"Go GATA, Go Barrick's Revenge"

USAGOLD

(07/11/2002; 10:11:23 MDT - Msg ID: 80340)

Of Mice and Men. . . . .

I can remember a small incident in my personal life from a few years back that tells volumes about what kind of stock market we've been through and what kind of stock market we are going to have in the future. I mentioned this incident here back then, but I thought it worthwhile to repeat it.

I was standing in line at the local Mexican grill. In front of me were two young gentlemen dressed casually. They were talking. It was apparent that one of the two was a 'veteran' day trader at the day trading office a couple blocks from our offices. The other someone new to the 'job.'

- - - - -

First Day Trader: "This day trading is fun. I think you're going to like it."

Second Day Trader: "I don't know. I'm a little worried about doing this. Took out the second mortgage. Money's ready to go but I just can't seem to pull the trigger."

First Day Trader: "I was the same way but once you figure out how you want to do it, they make it easy for you."

Second Day Trader: " Oh yea?"

First Day Trader: "You just need to know where to put the money. I get up every morning early. CNBC runs its picks of the day and I just buy those. They always hit. I just keep making money."

Second Day Trader: "That's it? Do you do any other research?"

First Day Trader: "Nah. That's all you need to do."

- - - - - - - - -

Their turn came in line and that was all of the conversation I was privvy too. To be honest, I was put off by the discussion thinking if it's that easy then why would anyone work for a living. Above and beyond that, the thought also ran through my mind that if you didn't have to know anything about the stocks you were buying, why would anyone need a stock broker or financial research. (At the time, I hadn't completely figured out that financial research wasn't worth the paper it was printed on anyway.) But that was then and this is now. One wonders if the first fellow is still brimming with confidence and whether the second has lost his house. I doubt it. Both are probably looking for jobs in a nearly impossible job market. Meanwhile, I'm at home today watching CNBC and the steady stock promotional efforts continue on as if nothing has changed in the equities markets. If there are still sheep out there to be fleeced, you can bet the CNBC crowd is going to woo them into putting distance between them and their money. Maybe a little Qwest stock is in order. . . . .

As Bill Bonner reported in his e-mail report yesterday:

"This week should be interesting..." Dan Denning wrote
me yesterday, "because second quarter 401(k) and mutual
statements should arrive all across America. Imagine how
most people feel opening them right now. The sense of
dread they feel looking at a number that keeps getting
smaller, even as they keep pumping more money in each
month. Maybe proof in black and white of just how bad
the market is will cause them to sell."

End quote.

---------

Interesting indeed:

Monday: DJIA down about 100.

Tuesday: DJIA down about 200.

Wednesday: DJIA down about 200.

Thursday: DJIA down about 100 as this is written.

On the questions about the PPT and whether or not they have been present in the stock market the past several sessions: Keep in mind that these are powerful forces, but they are not omnipotent. Standing in front of this market might very well be like standing in front of a gully wash -- no place to go and no way to stop it. The socialist crowd would like to think it can play God with the markets but they're finding out they can't.

Just as the downside may have become unstoppable in the stock market, so the upside in the gold market might become unstoppable at some point in the future as well. What you don't want to do is wait for the most-underpriced primary asset in the world to become the object of the investment public's fancy before you've secured your position. I think you will find the wild scramble to get physical a bit unpleasant. CPM / USAGOLD clients can be assured that if supplies are rationed, those who can call themselves clients will get preferential treatment. We hope it doesn't come down to that, but if it does, that's what we'll do.

- - - - - - - -

Gold ownership should be pursued from a position of confidence and understanding. The best time to make a purchase is when

A. the gold market appears quiet

B. when the metal is greatly undervalued as it is now

The old dictum about a quality suit valued at an ounce of gold carries great weight at times like these. It is no secret to most that the rate of inflation has risen dramatically in recent years despite the phony statistics issued by the Labor Department -- so much so that a quality new suit runs roughly $700 -- not one ounce of gold but two and one-third ounces of gold. This thumbnail illustrates makes gold greatly undervalued vis a vis goods and services. Buying know and holding until the dam breaks is the equivalent of buying gold in the late 1960s, early 1970s at $35 per ounce -- a purchase in investment lore that equates to findiing the Holy Grail. What we are experiencing now in my mind is not only an environment which requires the an allocation for portfolio insurance, we may be sitting on one of the best investment opportunities in the past decade.

I happen to know a fellow who bought his first ounce of gold at $35. He's in his 80s now and he's buying gold now -- and lots of it. His most memorable statement to me: "We both know, Mike, it's not a question of 'if' but 'when.' I'll buy it and stick it away. If my grandchildren become the beneficiary, that's OK with me. I know what gold can do, and nobody's going to talk me out of it."

As I go to post this, CNBC talks of

foreign markets collapsing at the end of session

possible problems at Janus

Raymond James president telling CNBC anchor "people are screaming "get me out." Anchor says "Isn't that telling us were at the bottom?"

etc

etc

etc

The Hoople

(07/11/2002; 10:14:32 MDT - Msg ID: 80341)

Dips R' Us

The only dips worth buying the last 6 months has been gold and silver. Is the epiphany moment here finally for the hoards? Feels like it. Barriks's revenge might replace Montezuma's revenge in the anals (pun intended) of history.

Gandalf the White

(07/11/2002; 10:40:17 MDT - Msg ID: 80342)

YGMer's Question

YGM (07/11/02; 10:04:03MT - usagold.com msg#: 80339)
Look at Spot Spike....
http://www.kitco.com/charts/livegold.html
Gandalf where are you, your dogs jumping on an unexpected day....YGM
---
SPOT and SPIKE are doing well !!
Saving their energy for the PAPER AVALANCHE that can happen at a moments notice !
They are ready to BITE the paper pushers in the rear-end THIS TIME !
SILVER is shinning too ! HELLO Rich ! Where are you ?
<;-)

Carl H

(07/11/2002; 10:54:05 MDT - Msg ID: 80343)

Dollar

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=sThe dollar is not looking healthy today.

Got Gold?

sector

(07/11/2002; 11:22:19 MDT - Msg ID: 80344)

Doug Nolen's July 5th Run at NEXTCARD's Demise and the FDIC's Losses.

http://64.29.208.119/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=13186
[...]
Let there be no doubt, when borrowers are informed that they will not be able to use their NextCard visas for new purchases, defaults will skyrocket (with rising servicing costs) and the value of card receivables (and related securitizations) will plummet. It is no mystery why there is little interest in acquiring NextBank trust assets. The NextCard experience (with loss estimates as high as 70% of deposits) does not bode well for the FDIC's exposure to other troubled lenders. Metris ended the first quarter with deposit liabilities of $1.725 billion and managed card receivables of $11.78 billion. Providian ended the quarter with deposits of $14.4 billion and a "managed consumer loan portfolio" of $22.1 billion.

How could it have ever made any sense to allow subprime lenders to finance reckless lending with insured deposits?

It is also worth mentioning that Internet mortgage king Countrywide Credit ended March with over $2.2 billion of deposit liabilities.

It is interesting to observe the timeline of the NextCard fiasco. From the company's website: "NextCard was so-founded on June 6, 1996 by Jeremy and Molly Lent�The first NextCard Visa was issued on December 23, 1997. Although many applied, only the best consumers passed the strict credit quality guidelines we established� The NextCard team is "not afraid to take chances." The company's founder (Jeremy Lent), CEO and president all learned their trade at Providian.
[�]
February 7, 2002: NextBank closed down by the Office of the Comptroller of the Currency. "NextBank's unsafe and unsound practices were likely to deplete all or substantially all of the bank's capital, and there was no reasonable prospect for the bank to become adequately capitalized without federal assistance."

February 11, 2002: FDIC mails $525 million of checks to NextBank's depositors.

April 17, 2002: FDIC spokesman estimates loss to insurance fund at $25 million.

July 3, 2002: American Banker runs story stating FDIC now expects NextBank-related losses to the insurance fund of between $300 million and $400 million.
[...]
+++++++++++++++++++++++++++

With Billions of card defaults looming at NextCard and other aggressive subprime card lenders, how does the FDIC calculate a loss of only $400 million? Does the FDIC imagine IT will collect the amounts due?

The answer is the real FDIC loss is far larger and they are covering it up.

USAGOLD / Centennial Precious Metals, Inc.

(07/11/2002; 11:27:52 MDT - Msg ID: 80345)

You don't have to stand idly by as the market or government policy plunders your wealth

http://www.usagold.com/ProductsPage.html

Empires rise and fall, as do economic freedoms,
and common fortunes fade away
like memories of common events.

Why should YOU buy gold Sovereigns today?

Because no one else will do it for you.

Centennial is here to help.
1-800-869-5115

Husky

(07/11/2002; 11:53:48 MDT - Msg ID: 80346)

RE: Barrick, this isn't the first time.

http://www.derivativesstrategy.com/magazine/archive/1995-1996/0396shrt.aspSnippits from a March 1996 article:

Gold Hedging Loses a Fan

Late in January, however, Barrick announced it was readjusting its hedging policy: it would hedge forward sales only two years in advance, instead of the three-year policy it now has in place. Several market sources believe that Barrick is responding to pressures from shareholders who think that the five-year high hit by spot gold is a harbinger of things to come, and want Barrick to ride the coming surge.

The strangest aspect of the story is why Barrick went to such great pains to trumpet the announcement in the financial press. It made some observers wonder if this was not a forewarning that it would soon scrap all hedging. "The curious thing is why they bothered to make an announce a change in their cost of funds methodology," says Douglas Newby of Moyes Newby, a corporate finance boutique that specializes in the mining industry. "It would normally be an internal matter. They are clearly signaling to the market that the perception of Barrick as a classic hedger is wrong."

---

So did anything change in 1996 as a result of this or not or not ?

Black Blade

(07/11/2002; 12:19:21 MDT - Msg ID: 80347)

"Scandal Of The Day" - SEC opens Bristol-Myers investigation

http://news.ft.com/servlet/ContentServer?pagename=Synd/StoryFT/FTFull&artid=1026311895209
Snippit:

US regulators are investigating whether Bristol-Myers Squibb, one of the world's largest pharmaceuticals companies, inflated its revenues by $1bn last year. Company officials have met the Securities and Exchange Commission to discuss the circumstances behind sales to drug wholesalers that boosted inventories to unsustainable levels. Regulators are asking whether the company gave inappropriate incentives to wholesalers to help meet 2001 earnings expectations.

Black Blade: Yep, another corporate scandal.

YGM

(07/11/2002; 12:23:22 MDT - Msg ID: 80348)

Husky

Barrick in 95/96They never did reduce their Hedges that I know of, in fact they increased them I believe. (they've been 4 yrs out for many yrs now)..The deferal and subsequent upward pressure on POG by Barrick buying physical and the grief caused the BB's seems much different to me than that news release of 96. No matter whether the rumor of Mr Williams holds true or not, if Gold does move high enough the Hedgers will be buying physical and the lenders will be biting the bullet from those who cannot afford to buy at rising values....Just my much shared opinion tho...Thx...YGM

R Powell

(07/11/2002; 12:41:19 MDT - Msg ID: 80349)

Gandalf the White

"Silver is shinning too. Hello Rich. Where are you?"

Why does a wizard need to ask that which a wizard knows? As with yourself and orc control, I've duties to perform but mine pertain to emptying concrete mixers. Otherwise I'm rarely far away. Thanks for thinking of me.
*****
I'd dearly love to see POS convincingly take out this $5.10 barrier to avoid a possible 480 - 510 trading range. She may be encouraged if big brother Gold moves up to attack his $330 resistence. Close your eyes and click your heels three times....
Rich

barnaclebob

(07/11/2002; 12:46:22 MDT - Msg ID: 80350)

Are Gold Bugs todays modern Noahs?

It is written that long ago on the orbiting orb we call earth that rain had never occurred in the history of the world. One day a visionary prophet named Noah recieved a vision from the Creator that a terrible rain and flooding would cover the earth.

The sheeple of the day discounted Noahs prediction as it had never rained on Earth before. Noah, knowing that the flood waters would consume the earth began building a giant wooden ship. The sheeple taunted and laughed and laughed at Noah and his family because Noah was constructing such a Ark, stockpiling food and readying themselves for the future disaster that was coming.

One day shortly after Noah had completed and stocked his great wooden Ark as prescribed by the Creator, a few rain drops began to fall on the dry parched earth. The sheeple at first thought rain was a novelty as they had never before experienced the fresh smell and feel of rain drops.

The rain began at first fallimg from the sky very lightly, the sheeple began prancing and dancing about the land as the new precipitation spawned new growth of flora and fauna never seen before. The rain however continued unabated until the new flora and fauna was covered by the now heavily falling rain. The sheeple began to realize that the land was now covered with six inches of water, they remained confident that the rain would soon stop and their lives would return to normal. The water levels continued to rise to 3 feet and the entire crops were lost. The sheeple were now beginning to become concerned.

The tribal elders were called upon to provide council. The elders explained that the rains would soon subside and the flood waters would soon recede. The minor flood condition was but a mere minor inconvienience. The sheeple filled with confidence returned to their protective lairs from the rains and flood waters. The tribal elders knew the rain was increasing ever more and more with each passing day but they did not dare tell the sheeple. When the flood waters rose to five feet, the sheeple began to panic.

No longer did the sheeple think Noah and his family were lunatics from the fringe as the flood waters began to lift the great giant wooden Ark and its very precious cargo. The sheeple had been warned by Noah and they had the time and opportunity to prepare for the great disaster.

Today, Forum Posters, Gold Bugs, PM Investors and GATA have been warning the sheeple of the imminent disasterous economic tsunami of red ink about to flood the global economies and financial markets.

This very diverse group of individuals from all walks of life have warned our families, friends, co-workers, employees, strangers, and even government officials of impending disaster. Our warnings have been recieved much like Noahs, we have been ridiculed, mocked, taunted and laughed at.

The flood waters are rapidly rising, the sheeple have again spoken to elders, the elders again know there is no stopping the flood of red ink. The sheeple are beginning to panic. The Gold Bug early warning does not appear so cynicle or laughable now.

Prepare and protect yourself like Noah did from the rising flood of red ink, get physical Gold!

BB

Horatio

(07/11/2002; 12:55:24 MDT - Msg ID: 80351)

Barrick Vs GoldmanSucks & Morgan

I was all alone in pointing out this part of Barricks contracts 6 months ago,and got a lot of ridicule from Black Blade,now someone else has pointed out the same observations.
If Barrick can defer delivery for 15 years,and not have margin calls,Goldman Sachs and Morgan have been snookered.
My heart goes out to Goldman Sucks.Now Barrick may become the vehicle by which the GOLD bugs get thier revenge!!
The Lord works in mysterious ways.

Quoted from Calandra article
"Hathaway estimates each $10 rise in the gold price "means the collective bullion dealers have extended another $1.4 billion to the gold mining industry, based on a 4,000-ton position."

Hathaway warns, "A $50 move, which is certainly in the cards, would be $7 billion. What does this mean? It means a serious squeeze on the bullion dealers, not the mining companies for the most part. Central bankers who have lent the gold to JP Morgan, Morgan Stanley (MWD: news, chart, profile), Goldman Sachs (GS: news, chart, profile) and others would not be happy with this situation."

What can the bullion dealers do about it? "Not a whole lot, other than buying gold to cover their short, which is what they are starting to do," says Hathaway from his Tocqueville (TGLDX: news, chart, profile ) offices in New York City. "Most mining companies, especially the big ones, have margin-free trading agreements with their various dealers. This means they do not have to advance cash when the gold price rises. It is too late for the bullion dealers to go back to the mining companies to change the deal, so they have no choice."

Hathaway sees Wall Street clean-up crews at work, frantic in their efforts to erase the gold derivatives. "There are all kinds of crazy, exotic deals made in the past that will come to light -- exploding puts, knock-in calls, etc., which had high fees originally but are now viewed as toxic waste by the dealers who sold them."

The fund manager points out that actual gold supplies do not move around as freely as those who need to cover their hedging strategies would like. "Physical gold is illiquid relative to short covering demand. This will take gold a lot higher, unless the central banks step in, which I expect them to do when the gold market gets really disorderly, like gapping $10-$20 a day or more.""

We'll hear more on the hedging debate, gold industry mergers and what Mitsui Precious Metals analyst Andy Smith calls "the new error of gold" early next week, when the London Bullion Market Association and the Washington-based Gold and Silver institutes stage a San Francisco conference.

admin

(07/11/2002; 12:57:04 MDT - Msg ID: 80352)

Special Offers For Immediate Delivery. . . . .

We've begun a new program for selling gold -- in addition to our traditional metals brokering services. We are offering certain products available for immediate delivery and at reduced prices.

The catch?

You can only find out what they are and the prices by calling our offices and talking either to
Marie Ballard (ext.106),
Jonathan Kosares (ext.110), or
George Cooper (ext.102).

There are several different items now on SPECIAL. . . . . .

First Come, First Served. Limited quantities of each item for immediate delivery. Items will come off the SPECIAL board as they are sold out.

Call toll free (800) 869-5115

YGM

(07/11/2002; 13:19:45 MDT - Msg ID: 80353)

Horatio...

The Lord works in mysterious ways.Amen to that....YGM.

TownCrier

(07/11/2002; 13:23:19 MDT - Msg ID: 80354)

Currency turmoil around the world evident at USAGOLD Newswire

http://www.usagold.com/DailyQuotes.htmlSome of the current headlines you can visit...

Here you see rouble spreading beyond Argentina in South America:

Brazil financial turmoil takes toll on real economy (12:36 Forbes)

Uruguay's peso falls 8.5 pct on economic uncertainty (12:19 Forbes)

Chilean peso tracks Brazilian real to end firmer (12:11 Forbes)

Here you see Japan's plight, yet U.S. dollar remains weak even against the yen:

Japanese government warns economic recovery shaky in global uncertainty (12:02 CBC Canada)

Dollar Losses Against Yen Grow (11:20 Reuters)

Dollar Drops to Nine-Month Low Against Yen (09:59 Bloomberg)

Here you see the ever-beleaguered lira, where citizens have well-learned to store their savings in gold:

Turk central bank props up lira as govt. crisis deepens (10:09 Forbes)

And here you see the euro playing strongman, challenging the dollar as the new currency of business and finance:

EU presidency satisfied with euro's rise (11:50 Ananova)

ECB stands sentinel against any wavering in euro deficit pledge (10:57 EU Business)

Bottom line: In a world of competing currencies, some of them in a race to the bottom, gold is wise man's choice for savings. Anywhere, anytime. It's that simple. Give Centennail a call.

R.

Aquarian

(07/11/2002; 13:29:35 MDT - Msg ID: 80355)

i'm a new guy

I feel must first introduce myself to the group. i am 24 yrs old and work as a lobbyist in Minnesota. i'm not an economist nor do i have any real understanding of what is actually happening in the markets.

i have three questions:

1) in the event of a crash, are investment dollars lost to other investors (those who bet on a crash) or do they simply evaporate? if a currency were to collapse, wouldn't the debt also collapse? if i borrow money from you, and money becomes worthless, do i not owe you nothing? Pardon my ignorance--i'm sure this is an easy one for you guys.

2) are there any markets for souls? i'm sure if i sold mine now i could end up in decent shape by the time i want to retire.

3) isn't it all just semantics? aren't we all pretty much just serfs (of varying degrees and classes) living in a fuedal (futile) society?

siamo tutti naufragati in questo mare. salute.

TownCrier

(07/11/2002; 13:37:02 MDT - Msg ID: 80356)

A mine is no substitute for gold -- it's a completely different investment class including corporate risk

http://allafrica.com/stories/200207110522.htmlHEADLINE: SABI Gold Mine Ceases Operations

The Herald (Harare)
July 11, 2002

SABI Gold, wholly owned by the Zimbabwe Mining Development Corporation, has ceased operations and requested to be placed under care and maintenance following a debt in excess of $1 billion.

A spokesperson in the Ministry of Mines and Energy said the board of directors had asked the ministry to put the mine under care and maintenance after realising the mine was technically insolvent and was no longer capable of producing cash to sustain operations.

"The current status of the business is that it is technically insolvent, because it has for a long time now been unable to generate cash flows to sustain its operations," the spokesperson.

The largest creditor, Trust Bank Corporation is owed over $900 million and has already begun fore closure proceedings.

...Problems at the mine started surfacing when the mining company increased its daily mined ore tonnage from 250 tonnes to 1 000 tonnes a day. ...This led the company to finance its expansion through a bank loan...

...A handful of gold mines have scaled down or ceased operations as they find it difficult to survive under these adverse macro-economic conditions.

...To ensure the sustainability of the industry, the central bank last year introduced the Gold Support Scheme, under which producers are fetching US$434 per ounce, which has ameliorated the situation.

----(click URL for full text)------

Know where your money is going. Are you merely speculating in management and operations, or are you indeed converting your inflatable national scrip into the timeless tangible wealth of gold?

R.

Black Blade

(07/11/2002; 14:01:15 MDT - Msg ID: 80357)

Barrick Hedges

http://www.thebulliondesk.com/reports/ross/durl.pdf

I find it curious that Ian Williams is privy to the inner workings and fine print of Barrick's forward sales contracts when no one else is. Does he work for Barrick and have intimate knowledge of Barrick's legal affairs and corporate contracts? Does anyone really think that Barrick has fooled the masters of the game? Ian has just parroted the Barrick company line, however, he has not presented any evidence except a nice pet theory. I await even an example such as one measly contract (in whole with fine print and footnotes) that would support his contention that Barrick has absolutely no risk and all the benefits in these hedge agreements. It would be a first in the annals of investment banking. I remain unconvinced unless of course JP Morgan Chase, Citibank, and Goldman Sachs suffer on the bottom line as a result. Could this be the reason that Morgan's Dinsa Mehta was "allowed" to "spend more time with his family"? Apparently the market is unconvinced about Barrick's worth s it has grossly under performed the market whereas profitable non-hedgers have skyrocketed. Forward sales have contributed to the pain and suffering of the gold market over the last several years by giving a false impression of endless gold supply that depressed gold prices. However, that said, I await any evidence that Ian is willing to impart. I remain unimpressed.

Gandalf the White

(07/11/2002; 14:02:49 MDT - Msg ID: 80358)

WELCOME Sir Aquarian !!!

Aquarian (7/11/02; 13:29:35MT - usagold.com msg#: 80355)
i'm a new guy---
====
Learning at a younger age is advantageous.
Stick around this TABLEROUND and you will "WIN" !!
<;-)

Gandalf the White

(07/11/2002; 14:11:24 MDT - Msg ID: 80359)

PS to Sir Aquarian !

You ended with --- loosely translated by BRUNO the Gate Guard ---- "We are all as shipwrecked in this sea, health to you."
---
BUT if the ballast is GOLD and SILVER, all is not lost !!
<;-)

CoBra(too)

(07/11/2002; 15:14:22 MDT - Msg ID: 80360)

Confidence - A Game?

It may seem obscene ... - Though nothing can be as obscene as the slow motion managed and manhandled crash of the trash of the "irrational exhuberance" - and make no mistake - that was 1996 and the Dow was 6.000! and the Duck a bit higher than today!
Way, irrationally and exhuberantly too high said the Fed's Mr. Greenman! - and the answer was to grease the bubble machine to the extreme. May the Greenman also succeed in putting the brakes to the slide of financial assets - the suspects of the economic malaise are dead ahead.

And as confidence in all walks of life takes a backseat and is in retreat - politics take up the slack and tell you - at best - to re-regulate your markets to make them really free! - Recall, the founding of the SEC, FTCT, antitrust and several other venerable institutions to ENFORCE a level "playing" - no, market place - right after 1929 - see FDR!

Or'Well - some-one said WAT abroad and SWAT back home will take care of the GWB syndrome. ... Maybe not before the IOU - becomes redeemable again - against a common commodity called labor and/or productivity - measured against the eternal scales of gold's value!

... And we may be far from any confidence in politics, fiat money and economics.

- As hopefully not misquoting the WSJ in a recent article GWB's career at Harken Energy was close to stock manipulation. 'But now that Mr. Bush has moved from the board room to the Oval Office, the man may pretend that he never held an honest job in his entire life. And maybe he didn't. - ... and being lectured by the Bush White House on ethics - is likely to raise more sneers than cheers, says Sean Corrigan. -

- The managed slow motion or stealth crash, aside from conj-(ass)-uring the sheeple offers more opportunity to prudently acquire reality - or as Ari says way or even weigh too heavy physical for the paper price tag - rag.

cb2 -

... and am sorry for GWB - to have squandered the potential to blame the eco and fiscal mess to the originators - instead - being accessories - at best.

Boilermaker

(07/11/2002; 15:24:06 MDT - Msg ID: 80361)

Recent POG

I noticed that the gold stocks were down rather sharply this PM in spite of strong POG action. Recent history suggests that gold will get hammered tomorrow. Could it be that certain "investors" are given the word on the next day's POG sell off? POG $317 seems to be a current lid for the folks who are holding the lines. I'd like to hear from Pizz or others who read these charts and watch the market.

YGM

(07/11/2002; 15:33:36 MDT - Msg ID: 80362)

Black Blade...Barrick & Ability to Deferr Contracts up to 15 Years...

http://www.homestake.com/3_Financials/3_05_03_Q_and_A.asp#qa10The information Mr. Ian Williams and others are using for this 15 yr deferral assumption is valid and also very public knowledge....Mr Williams is very astute in his views IMHO and "IF" his scenario should come to pass (that's a BIG IF, I agree) then the writers of those contracts would be the ones underwater....This would then be "BIG" for the POG. I'm not advocating owning Barrick shs myself but the facts remain what they are. I also believe Mr. Williams is a very astute/well documented analyst and one could consider he'd be very sure of his facts before making such statements.....YGM

Pizz

(07/11/2002; 15:49:26 MDT - Msg ID: 80363)

Dow support

http://www.dogsofthedow.com/dow1900log.htmScalped the chart off another forum with the comment of long term DOW support. Thought I might expand a bit on it.

As we listen to the talking heads and analysts discuss where DOW support is and where/when we resume an uptrend, this long term 100 year DOW chart gives a pretty good indication where long term support is.

Since we seem to be forming a real nice four year head and shoulders top now, makes you really stop and think about a right shoulder on the above chart over a 60 to 70 year time frame.

Hmmm, 20 year bear in gold while the dow climbs to the top.
Now, a 20 year bull in gold while we drop to long term support? Makes sense to me, but Wall Street might have a hard time swallowing it. Kind of hard to play derivitives with a 675 - 1050 DOW, an SPX of 60 to 100, and an OEX of 25 to 50. Assuming of course derivitives are still in existance by then, which I doubt seriously.

Heard one analyst this morning saying 400 to 500 gold MIGHT BE POSSIBLE, but 10,000 could never happen. I'm old enough to remember people saying the same thing about the DOW.

___________________

Was having a few (too many) cocktails last night with a few people in my industry and the conversation drifted to stocks and investments. Sat back and listened to the horror stories of all the tech and telecom losses. Finally one of the more drunk and boisterous members made a comment that I looked a bit too smug and asked me how I was doing with my investments and I told him. When he replied "impossible", I said "not with gold and silver". And that pretty much ended the conversation.

Maybe it's just programming, but I still find it almost impossible to get people to invest in the metals, even when they are going up. That's OK, cause it just gives us more time to buy lower so that when we finally sell some, it'll be to these idiots at much, much higher prices.

The Bull in PM's is just about as far along as the Bear is in the above long term DOW chart. It's just starting.

Pizz

R Powell

(07/11/2002; 15:51:56 MDT - Msg ID: 80364)

Aquarian

Hello,
There are many here much more qualified to answer your questions than I but I'll start with some of what I believe to be true. Others may correct me so stay tuned.

As to investment money being lost in a market downturn, I find it helpful to think of the Dow, Nasdaq and other exchanges as simply that- exchanges. One sells and another buys with the profit or loss tallied only after each one's transaction or position has been closed. As an example, if I buy a stock at $10 and the price rises to $100 but then falls back to $10 and I then sell at $10, what's my gain or loss? The exchange gained fees, the brokers collected commissions and, assuming that $10 still has the same purchasing power as when I first bought the stock, I'm even. Damn, I wish I'd sold that puppy at $100!
*****
As to debt repayment, if the value or purchasing power of the dollar declines, then it would seem that old debts could be repaid with less value or weaker dollars if the dollar declines. I find this is a tempting notion but, usually, during those economic times when the dollar is losing appreciable value, it may be difficult to earn even deflated dollars. Perhaps it's better to try to reduce debt. As much as I love the long side of silver, I'm not ready to bet the farm on it. As I'm sure many will mention, an ounce of gold will still be an ounce of gold no matter what value or color our paper money becomes. It's dollar valuation is the variable. The metal is constant.
******
One last thought as to profiting in a decline equities market. It can be done but is difficult. Shorting the index numbers comes to mind. This can be done with futures or options in futures. The futures markets are zero sum markets where one profits at the expense of another, that is, profit from one position comes in an equal amount, out of the pocket of someone else.
Again brokers collect commissions, the exchange collects its $0.09 per transaction fee and the players place their bets against one another. It is more common or usual to see bets on the short side in commodities than it is in the stock market. Margins are the same for short positions as they are for longs. Short selling in equities is not common among the average investors. I hope this helps somewhat. I'm sure there will be other responses and probably differences of opinion. That's what makes any market, different opinions!
Rich

R Powell

(07/11/2002; 16:08:25 MDT - Msg ID: 80365)

Good to see you

It's been too long- since CoBra(too) has spoken to- me and you. Hopefully the absence wasn't due to any sort of flu but I haven't a clue as to what or who- keep you.
Less time please, between appearances.
Rich

misetich

(07/11/2002; 16:20:39 MDT - Msg ID: 80366)

Expect credit blowups even as economy improves - BofA

http://www.forbes.com/newswire/2002/07/11/rtr659225.htmlSnip:

NEW YORK, July 11 (Reuters) - Corporate bond investors can look forward to a brighter economic and profit picture for the rest of the year, but they should still tread cautiously over the next few months, Banc of America Securities strategists said.
...............
"The number of potential credit implosion candidates has not materially declined over the past six months," he said.
................
Telecom bonds, the market's worst performers so far this year, could continue to struggle with regulatory probes, concerns about liquidity, ratings downgrades and intense competition, Bartlett said. Banc of America recommends a market weight in the sector, meaning a weight matching corporate bond indexes.

The bank also cut its recommendation on the auto sector to market weight from overweight. Though sales were strong this year, they were achieved mostly through incentives that may have robbed future sales growth, said Tim Patrick, head of global high-grade research.

Negative business trends also could pressure ratings, though rating agencies will likely hold off this year while they monitor business trends, he said.

Misetich

No recovery in sight for auto and telecom industry - Feds have one more tool at their disposal, since they have used up "interest rates", taxes decreases, higher budget deficits, higher government spending
The remaining tool is a lower US $

Got gold?

AllanC

(07/11/2002; 16:35:52 MDT - Msg ID: 80367)

This week's stock action

As I watch the SM debacle continue on a global scale
with persistent selloffs accompanied by violent rallies
followed by further selloffs etc, I am reminded of a
loooong grinding bear market never seen before. The "death by a thousand cuts" as one commentator stated.

Before it is over, existing notions that "stocks will always
bounce back higher", "buy the dips" and "don't panic, hold for long term" will be put to rest once and for all. People like Joe B and Abby C will get theirs. I wish I was a fly on the wall listening to their private conversations with the suckers they led into this mess.

For those of us still interested in making a profit from
stocks, I will remind you of these immortal words:

"Do ya feel lucky, punk?"

followed by the coup de grace:

"Your stock order has been filled, sir"

And gold has based and it's "paper price" is grinding higher in opposite fashion. Once big paper gold buyers decide to "test" the system and take physical delivery, then as ANOTHER poster reminded us, keep your physical close at hand, and watch the games begin...

misetich

(07/11/2002; 16:51:41 MDT - Msg ID: 80368)

Debt Clock Revived as Deficits Soar

http://www.nytimes.com/reuters/business/business-economy-debtclock.htmlSnip:

NEW YORK (Reuters) - The U.S. government has returned to its old ways of bursting budgets and so New York's landmark national debt clock lit up again on Thursday after a two-year hiatus, whizzing higher by $30 a second.

A spatter of puzzled pedestrians stared up in the morning sun's glare near the bustling corner of Sixth Avenue and 42nd Street near Times Square as workers switched on a massive 11-by-26-foot digital clock that had lay dormant for nearly two years.

After taking a few seconds for the 13-digit figure to sharpen, the sign read $6.1 trillion, or $66,791 per U.S. household, and immediately began ticking higher.

``It's frightening -- really frightening,'' said Ruth Davis, 48, a native New Yorker, who paused from reading her newspaper at a table in Bryant Park, located across the busy intersection, and cast a glance up at the sign.

...........
But officials said late on Wednesday the Bush administration will release new budget projections next week showing higher budget deficits in part because of the recent stock market slide.

Many Wall Street analysts think this year's shortfall could top $200 billion.

Misetich

A few $ here a few $ there
How long will foreigners keep on lending? Where to US $

Got gold?

misetich

(07/11/2002; 16:56:03 MDT - Msg ID: 80369)

Acknowledging 2 whose foresight was accurate

http://www.suntimes.com/output/savage/cst-fin-terry112.htmlSnip:

But about five years ago, Allmon told his subscribers that the market had become "overvalued" based on what he called "real earnings," not the "pro forma" earnings that companies were reporting. It was an accounting distinction that went unnoticed by most stock market investors. As Allmon explained repeatedly: "Companies have been 'fudging' the numbers by not deducting expenses properly, especially when it comes to stock options."

As the decade ended, Allmon's list of recommended stocks contracted: only a real estate investment trust and a large gold- mining company, along with a few old-line companies. But most of his model portfolio was in short- to medium-term government securities. Subscribers defected. They wanted the hot technology stocks. Still, in every issue Allmon warned that not only tech stocks but other major companies would see huge losses in market valuation when people woke up the accounting legerdemain.

In mid-1999 Allmon forecast that the S&P 500, the Wilshire 5000 and the Dow Jones industrial average could fall 40 percent to 60 percent by 2001. The former two indices hit his forecast mark; the Dow, so far, is down 27 percent from its highs. And in February of 2000, Allmon forecast the NASDAQ (which he then noted he rarely follows) could drop 60 percent to 80 percent--another forecast that was right on the money.

Today, Allmon isn't gloating. He says that at his age, 82, he just "takes it as it comes." And what does he think is coming next? "More of the same," he responds promptly, adding, "There's something big out there we haven't seen in 70 years, and I'm talking about trust. It's gonna take a long time to get people to regain their trust in corporate America."

...............

Do today's market headlines hold any surprises for Tice?

"No. It's coming out the way we had envisioned. Corporate accounting shouldn't shock people. We created an environment of speculation and recklessness, where the most aggressive professionals were promoted--accountants, money managers, analysts and stock brokers. The incentives were to 'go for it and get rich, baby.' And as long as executives met their targets, investors continued to buy without caring how the numbers were produced. So this blowup is no surprise."

What should investors do now?

"We're only in the third inning of this bear market, and the most important thing to do is protect principal ... We were wrong being bearish early. But I'm confident that we're still in the early stages of the biggest secular bear market in this century--because the excesses were so great. So I can't in good conscience advise people to put their money stocks today."

Misetich
"There's something big out there we haven't seen in 70 years, and I'm talking about trust. It's gonna take a long time to get people to regain their trust in corporate America."

What does Mr. Allman forsee?

Got gold?

mikal

(07/11/2002; 16:58:09 MDT - Msg ID: 80370)

@Boilermaker

"Recent history suggests gold will get hammered tomorrow." Maybe a large fund or bank or two will sell again, metal that is. Stocks too, but I don't hold any. But notice how miniscule the POG affects are. Clearly the volatility, characteristic of this market, is missing. Manipulation down, butts against buying pressure EVERY DAY except thin & after-hours trading. "Control" appears to be in place, but it's temporary stabilization only. There are easier ways to perceive POG market closes rather than "hammered", "dumped", "bopped", "clobbered", "faded", "sold off", "retreated" aren't there? We'll use psychological warfare against the Cabal and our personal doubts. Let's see, "corrected", no that's too repentent/pacifist. Whaddya think? "Adjusted", "Regrouped", "Paused"(White lies are ok in war), or "Retraced"?

misetich

(07/11/2002; 17:02:11 MDT - Msg ID: 80371)

Gold In Early Stages of Bull Market

By: Tom Locke, Of DOW JONES NEWSWIRESSnip:

On the demand side, Lassonde stressed that a reversal of hedging trends will work in favor of a rising price. Gold producers have borrowed 4,000 metric tons of gold from central banks over the last 10 years, he said. Now those producers are paying back more than they're borrowing.

Forward selling of production is not as attractive as it once was because of low interest rates. In a typical situation, a broker will borrow gold bullion from a central bank at, say, a 1% lease rate, sell the gold on the market, and park the proceeds in an interest-bearing account at 4% to 5%. That spread between the gold lease rate and interest rate enables the broker to pay a higher price to a producer of gold for future delivery than the current spot price. When it comes time to pay back the central bank, the broker receives delivery of the gold from the producer and pays back the central bank.

With a lower difference between the gold lease rate and the interest rate, central bank borrowing is less appealing and hedging of future production is less pronounced.

In 2002, Lassonde said, the net payback (after borrowings are subtracted) to central banks will be 350 metric tons. He figures that the price elasticity of gold is $5 an ounce per 100 metric tons of gold per year, so the net payback of 350 metric tons from production should translate to an increase in the gold price of $17.50 an ounce.

In 2001, the net payback to central banks was a negative 75 metric tons, he said. In 1999, hedging resulted in the dumping of 500 metric tons of central bank borrowings on the market, he said, and that can be directly correlated with the $25 drop in the gold price at the time, from $275 an ounce to $250 an ounce.

Lassonde also foresees a weaker dollar helping the dollar-denominated gold price. For example, he said, a stronger dollar hurt the gold price between 1980 and 1985, during which the gold price dropped from $800 an ounce to $300 an ounce. But when the dollar weakened by 33% versus a basket of currencies between 1985 and 1987, the price of gold partially rebounded, to $500 from $300, he said.

If the dollar falls 20% versus other currencies, then odds are that gold's going to go up 20%, he said. And because of trade deficits and other reasons, he thinks the dollar is on the brink of weakening.
.............

think we're in the early stages of a bull market that will last many years. I don't think this is a flash in the pan whatsoever, Lassonde said.

On the supply side, the low gold prices of the last five years have curtailed exploration and development of new projects, said Lassonde. For that reason, he expects 2% to 4% less gold to be produced per year for the next five years. Currently, about 80 million ounces a year is produced worldwide.

Misetich

A worthwhile repost of Mr. Lassonde's presentation at a Merrill Lynch conference in Boston not to long ago

Got gold?

mikal

(07/11/2002; 17:05:24 MDT - Msg ID: 80372)

@Boilermaker

Tomorrow, August precious metals options expire. So, per your "recent history", gold'll get it again, if they're lucky, a two or three buck or so, "pause".

misetich

(07/11/2002; 17:12:55 MDT - Msg ID: 80373)

O'Neill defends plan for Social Security

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/07/11/BU188377.DTL&type=businessSnip:

Washington -- Despite a sagging market and corporate scandals, Treasury Secretary Paul O'Neill on Wednesday defended the Bush administration's plan to allow workers to invest a portion of their Social Security taxes in stocks and bonds.

.............
"Social Security was a monumental idea, but it is not sustainable in its present form," he said.

As the Baby Boom generation begins to retire, the system will not have enough workers to pay the benefits of retirees. The government projects that beginning in 2016, the system will not collect enough in payroll taxes to cover all the benefits it has to pay out.

To cover the gap, it must begin redeeming an expected $4.9 trillion worth of Treasury bonds that Social Security will have accumulated from surpluses it has been running since the mid-1980s.

As the bonds are redeemed, Congress will have to cover the costs by raising taxes, cutting spending or borrowing money. By 2038, according to government estimates, the bonds will be exhausted. If nothing were done, benefits would have to be cut 27 percent from promised levels to keep the system afloat.

Misetich

Is Mr. O'Neil on drugs?

Got gold?

Pizz

(07/11/2002; 17:17:16 MDT - Msg ID: 80374)

Boilermaker/Rich

Boilermaker - These markets are way to volitile with 1% swings in minutes and would be near impossible to trade, even for the pros. One of my gold stocks had the specialist swallow about 50,000 shares right at the end of the day, problem is when they make a market inbetween the bid and ask, you can't tell if they are buy orders they're taking or sell orders. Lot's of cross currents.

I'm still bullish on PM's short term from a technical standpoint. Nearly everything I watch is at the lower end of up channels and they're holding. We should move to the upper end of the ranges over next 2 to three months. If we get a war or terrorist action, it'll be a lot quicker.

Rich - If you'd have sold at 100, you'd still be even, cause you'd have to pay-off all the extra stuff you bought when you were richer (is that a pun?) (smile).

Pizz

Carl H

(07/11/2002; 17:17:58 MDT - Msg ID: 80375)

Trying to put 2 and 2 together today.

Today was it was interesting the way all the mining stocks got hit hard this afternoon. I have been trying to make sense of this and I thought I would share a couple thoughts.

1. It is possible that there is going to be another attack on gold and silver before option expiration on gold and silver this week. (Is op ex this week?) So someone may be trying to profit from expected decline.

2. Another possibility is that the cabal is running low on ammo and is hoping to get some arbitragers to go long the mining stocks and short the metal. Again, this could be due to option expiration.

3. Looks like a buying opportunity in any event.

Pizz

(07/11/2002; 17:22:15 MDT - Msg ID: 80376)

Misetich

Re: Social Security

Bet you a maple they're dead serious, and you'll be able to invest you funds ONLY IN THE NEW AND REVISED S&P 500. Which are now sans gold stocks and foreign stocks - Bet me please!!!!

Pizz

goldfool

(07/11/2002; 17:40:46 MDT - Msg ID: 80377)

Something just doesn't smell right about megahedgers Barrick and Placer Dome getting booted from the S & P.

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256BF2005B15B6?OpenDocumentI smell a skunk no, make that a herd of skunks. After the FT/Crudele article earlier this year describing the extreme measures the Fed was comtemplating in order to save the stock market (including the Fed buying gold mines) I think there's more to this story than appears on the surface. Unfortunately I don't know enough about international corporate law to put it together but something about this heretofore unholy alliance stinks. What does Barrick do? Turns around and doubles the resources at their Alto Chicama property or should I say deep storage gold. Then it might just qualify as a reserve asset, eh? HAH!

Carl H

(07/11/2002; 17:48:29 MDT - Msg ID: 80378)

@goldfool Placer, Barrick and the SPX

I think that the answer is that the cabal is trying everything they can think of to make gold, silver and mining stocks look bad. By kicking those two out of the SPX, index funds will have to sell them, and buy whatever toxic waste S&P adds to the index. I suspect that this is a large enough amount of stock to make a dent.

misetich

(07/11/2002; 17:57:47 MDT - Msg ID: 80379)

Pizz

Pizz
You'll do anything (wink) to add to your collection! I won't bite -
Something is up - and we will find out soon enough.
This "All-American S&P 500" stuff doesn't add up

Pizz

(07/11/2002; 18:09:22 MDT - Msg ID: 80380)

Misetich

By letting us invest (long term til we retire) some of our SS funds into the market is nothing more than direct government subsidy of the markets, cause they are spending the funds anyway. And these funds will have to come from either increased taxes, or spending cuts, or more borrowing.
All it is is either now or later. (Unless there is really a PPT and they're trying to clean up their act without someone finding out - verrry possible????)

Much more thought required on this, but now it's time for a toddy and 9 holes of golf, or 9 holes of golf and a few toddy's.

PIZZ

R Powell

(07/11/2002; 18:31:22 MDT - Msg ID: 80381)

Pizz

Did you mention volatile markets? I have friends who have no knowledge or interest in anything financial but, to be polite, often ask me how my stocks are doing. I used to correct them by stating I own no stocks buy trade commodities. That always ended that conversation cold. Now I gasp and say, "Stocks! They're much to volatile. I can't take the risk so I trade those stable commodities."
Now about selling that Nasdog stock when it was at $100, how many did buy low but not only didn't sell high but still haven't sold at all? What they did gain was a sense of wealth which was never collected but was utilized as justification to live beyond their means so maybe the exchange exchanged their initial buying price into debt which now exceeds whatever monetary value the stock still has. Now that that's done, maybe we can run up the appraised value of houses to finance more consumer spending. After that bubble bursts we'll think of something else to continue deficit spending. After all, if all else fails, we'll just set the date for exchanging greenbacks for the newly printed blue colored fiat. Does 20 green for one blue sound about right? This will discount all existing unpayable debt by 95%. Then we can really start pumping out the bluebacks! Hey, this is easy, John Law just didn't know when to change colors.
****
Thanks for the technical thoughts. I happen to agree completely so I've not much to add other than that imho all this will take much longer than most foresee. For the physical holders, strategy is easy beans, simply buy, buy, buy and hold. For those of us who also trade a bit, same thing but with some paper buying and selling within those channels you mentioned. Now then, is POS going solidly through the 510 level or does she have to back off again to get a running start?
Any thoughts, anyone?
Rich

misetich

(07/11/2002; 18:34:47 MDT - Msg ID: 80382)

Consumer-driven commercial real estate strong, corporate-driven weak

http://www.moodys.com/moodys/cust/displaySummary.asp?busLineId=100000000038∨iginal=1&document_id=1501500000003850Snip:

The real estate segments that are more dependent on the consumer side of the economy - multifamily and retail - are currently more stable. However, office and industrial properties, which are more driven by the corporate side of the economy, are presently fragile-to-grim. The health of these commercial real estate sectors affects the collateral that underlie commercial mortgage backed securities
...............
The office segment has no green markets, and the national score of 40 is the lowest of any property type in the last two+ years that we have been reporting quarterly property market scores. Vacancy is still rising and at 16.1% is at the highest level since 1993. However, assuming that the macro-economy continues its nascent recovery, the office sector could at least stabilize within this calendar year and reverse its slide by some time next year.

The industrial score declined slightly, to 52 from 56 last quarter, still within yellow territory. The biggest culprit was rising vacancy rates. Nationally, vacancy increased to 10.2% in the first quarter of 2002, up from 9.7% last quarter and 7.2% a year ago and well above the long-term average for the product of approximately 8%. The trend of deteriorating vacancy was broadly based, as only three markets out of 51 saw vacancy improve year-over-year.

Misetich

Vacancy still rising in the office real estate-
Vacancy rate rising in the industrial sector
Office and Industrial Real estate fragile-to-grim

No US Economic recovery in commercial real estate

The whole US and Global economy is fragile - it wouldn't take much to send it on a tailspin- and paper currencies will burn

How are you prepared?

Got gold?

misetich

(07/11/2002; 19:05:44 MDT - Msg ID: 80383)

Trade deficit remains a ticking time bomb

http://www1.firstcall.com/commentary/market/commentary2.html?commentart|market|full reportSnip:

3Q02 Earnings Outlook

Ominously, the estimates for 3Q02 appear to be moving into a free fall mode. From 1 April to 1 July, the expected earnings growth for 3Q02 over 3Q01 dropped from a 22.1% gain to a 17.0% gain, a decline of 5.1 percentage points. That is far more than the normal trimming for the three months before the start of a quarter. Worse yet, most of the drop came in the last few weeks of the period.
.........

Adding to the deterioration in 3Q02 expectations is that another 0.5 percentage points was lopped off in the shortened first week of July. That included a drop of eight percentage points last week in expected tech sector earnings growth, but leaving tech sector earnings growth at a pie-in-the-sky 110%.
............

Four factors overhang the market and will continue to do so for some time.

1. High profile negative earnings pre-announcements in the tech sector giving further indications that 2H02 earnings are likely to be much less than analysts are currently anticipating.

2. Another escalation in the Israel/Palestinian conflict

3. Higher than expected trade deficit, sending the dollar to a 2-year

low.

4. More congressional hearings on executive malfeasance, this time adding insider trading to the list. Also, announcement that Utah attorney general would be investigating analyst conflicts at Goldman Sachs (a la, the way NY AG did Merrill Lynch) and that other states would be assigned additional brokers.

Even though all the business scandals have pushed the trade deficit issue off center stage, it remains a ticking time bomb with the dollar likely to continue to weaken.

Misetich

Trade deficit remains a ticking time bomb....

Got gold?

Black Blade

(07/11/2002; 19:08:54 MDT - Msg ID: 80384)

Jobless claims rise

http://money.cnn.com/2002/07/11/news/economy/economy/index.htm
New claims for unemployment benefits again above benchmark 400,000 level; PPI gains.

Snippit:

NEW YORK (CNN/Money) - New jobless claims rose in the United States last week, the government said Thursday, as the labor market continued to show signs of a sluggish recovery. The Labor Department said the number of Americans filing new claims for unemployment benefits rose to 403,000 in the week ended July 6 from a revised 387,000 the prior week. It was the first week in six weeks that new claims were above 400,000, a level that points to a sluggish job market. Economists, on average, expected 390,000 new claims, according to Briefing.com.

Black Blade: The "Bone Pile" grows again in spite of data massage at the BLS. Not a sign of a "recovering economy" as the financial media pundits would have us believe. Are you prepared if there were no work starting tomorrow? As always, get outta debt (and stay outta debt), stash cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities program. At least you'll sleep a lot easier as the "Bone Pile" grows.

Boilermaker

(07/11/2002; 19:18:14 MDT - Msg ID: 80385)

Barrick Hedges

Here's a snippet of what Antal Fekete e-mailed to Ferdie Lips 11/3/2000 about Barrick's hedges and shows up in pages 162-167 of "Gold Wars".

"Barrick simply assumes that what goes up must come down. If the gold price goes up, say, $200 per ounce, then it is duty bound to come down at least that much in due course. Those with financial staying power, such as Barrick considers itself to possess in good measure, will be able to ride out any storm caused by temporary spikes in the gold price. They can roll over all futures contracts showing a loss, several times if necessary, until the gold price comes down again. Barrick and others will, therefore, always be able to close out their deals at a profit.

The truth remains, however, that all Barrick has accomplished is to have swept margin calls on its gold-borrowings under the rug, thereby concealing the potential liability from its shareholders and creditors. Therin lies the fraud, which SEC and other watchdog agencies of the US government should uncover and expose. Instead, they adopt the 'hear no evil, see no evil' attitude.

Barrick wasn't around in 1968. But suppose, for the sake of argument, that it was. Assume further that Barrick had sold borrowed gold at $38 per ounce (which may have appeared as an incredibly smart thing to do that year to the gold producers of the day). In that case Barrick would still be rolling over its gold loans in the forlorn hope that the price of gold will be good enough to drop below $38 per ounce, in order to enable Barrick to unwind its losing position with a profit. But in fact, after 1968, the year the US Treasury defaulted on its obligation to pay its creditors (foreign central banks with short-term dollar holdings) in gold at $35 per ounce as contracted, the price of gold took off never to come back again. Barrick could still be holding the bag of losses, and keep reporting huge profits, because the conspirator banks allow it to roll over its short position in gold at $38 per ounce. It may be pointed out that today the position of the US Treasury vis-a-vis its foreign central bank creditors is far inferior to its position in 1968.

It has happened any number of times in history that the gold price took off; never to come down to the level it has started from. For this reason, any accounting assumption that a commitment to deliver gold at a future date can be closed out profitably in the future (if only one is willing to wait long enough) is simply fraudulent. It should never be allowed in a society with self-respecting legislators making meaningful contract laws. And the fraud should be exposed by self-respecting accountants and other watchdogs of fair play"

Comment; Antal nails it. Barrick, its shareholders and creditors, are dead men walking.

Black Blade

(07/11/2002; 19:39:52 MDT - Msg ID: 80386)

Ouch! Investors Lost $2.4 Trillion in '02

http://www.reuters.com/news_article.jhtml;jsessionid=YGGH2SM5JVMHACRBAE0CFFAKEEATGIWD?type=businessnews&StoryID=1191131

Snippit:

NEW YORK (Reuters) - A stock rout this year has erased $2.4 trillion in market value, representing almost one-quarter of the U.S. gross domestic product, as waves of accounting problems, executive skullduggery and profit warnings have pounded Wall Street's confidence.

Black Blade: Gone to "money heaven".

Black Blade

(07/11/2002; 19:55:15 MDT - Msg ID: 80387)

Re: Boilermaker

Exactly!!! The point is the "masters of the game" don't take on the risk, they pass it along to the "other guy". That is the nature of their business. Either Barrick will pay up with risk margin should gold prices rise, or some foolish insurer (or reinsurer) will bear the brunt of losses. I never ever heard of such an arrangement as some suggest between Barrick and their counter-parties where the borrower assumes literally "no risk".

- Black Blade

Trapper

(07/11/2002; 19:58:26 MDT - Msg ID: 80388)

Sir Hoople

I must take some exception as to mining stocks. As for me personally I'm up 40% to 150%> I have bought many coins with the proceeds from those mines. I also enjoyed coming home from a long trip to find my dividend check from Gold Corp waiting to be cashed. I will call our host and try out their new service they are offering on "specials". History will show that Homestake did very well in 1930's. I would say most of here hold at least some stocks. It makes a good mix with some hard Ag, Au, and Pt. To each his own, or until America becomes Amerkia. Live small.
RJ

Black Blade

(07/11/2002; 20:10:49 MDT - Msg ID: 80389)

WORLD BONDS-Outlook grim for bonds nearing junk status

http://www.reuters.com/news_article.jhtml?type=search&StoryID=1186011

Snippit:

NEW YORK, July 10 (Reuters) - Warning: the line between junk and high-grade bonds is blurring, and if some economists are right, the trend could dampen the speed of the U.S. economy's current recovery. "Most economists are still kind of optimistic about the economy, but it throws a real fly in the ointment that investors are much more wary of anything Wall Street is telling them," said Peter Kretzmer, senior economist for Banc of America Securities. "This seems to be the headwind that is now facing the economy -- rather than a banking crisis or a savings and loan crisis like we had in the early '90s -- now it's this corporate-credibility issue."

Black Blade: Seriously, is anyone really surprised? Now that bond funds are willing to accept lower grade bonds as a matter of course, investors should beware that the safety nets are being removed. It looks worse day by day.

BTW, the national debt clock in New York has been turned back on. In my opinion it should never have been turned off because the national debt continued to grow in spite of absurd claims of a "surplus". Considering that now we are suffering in a period of corporate malfeasance and barraged by accounting scandals that permeate Wall Street, I am a bit squeamish when politicians claim to be on our side and that they will clean up the corruption on Wall Street when they themselves use even worse accounting standards and phoney baloney bookkeeping.

Gee, and I didn't even comment on international government loan defaults that are about to be coming to light. Hmmm...

Black Blade

(07/11/2002; 20:29:16 MDT - Msg ID: 80390)

Bracing for an earnings hit

http://money.cnn.com/2002/07/11/news/options/index.htm

Expense options and disallow pension income and guess what earnings are? A lot lower.

Snippit:

NEW YORK (CNN/Money) - The earnings investors base their valuations on could be wildly overstated. As stocks have crumbled, a growing cadre of market watchers have begun to argue that shares have gotten downright cheap. "Look out above," was the title of the note Lehman Brothers strategist Jeff Applegate sent out Thursday morning. Later, Morgan Stanley global strategist Barton Biggs got on the squawk box saying it was time to buy. But while the benchmark S&P 500 might look cheap on, say, a price-to-earnings basis, the earnings part of that equation is dicey. Company results aren't nearly what they seem.

It's not just all the high-profile scandals. The way companies account for options will pad results by 10 percent this year according to one recent report while another suggests that the way companies run pension funds will inflate earnings by another 4.5 percent.

Black Blade: Amazingly, Barton Biggs came out and exclaimed that he is wildly bullish today. Shortly afterward the markets turned around from triple digit losses to end the session almost flat. I'm not impressed. We are entering "earnings season", and almost to each announcement is the tagline � "based on pro forma results". HUH!!! Here we go again, phoney baloney earnings and squirrelly accounting along with beating vastly lowered analysts "earning estimates". Funny how those "estimates" drop lower each quarter.

The markets are grossly overvalued - Go defensive!!!

Black Blade

(07/11/2002; 21:50:52 MDT - Msg ID: 80391)

Uncertain times boost top gold retailer's sales 3.17-fold

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20020712a4.htm
Snippit:

Tanaka Kikinzoku Kogyo attributed the sharp increase to high levels of "cashability" during the period, meaning that gold was easily exchanged for cash, allied to the international marketability of gold ingots. "Gold ingots provide both high levels of cashability and international marketability at a time when the stock market is in the doldrums and interest rates are at ultra-low levels," an official of the firm explained. Purchasers stepped forward from across the social spectrum, with young people of both sexes joining their elderly counterparts to buy gold, the official said.

Black Blade: The smart Japanese will accumulate gold as the next "April Fools Day Surprise" approaches.

Pizz

(07/12/2002; 00:04:23 MDT - Msg ID: 80392)

R Powell

Rich, about the 5.10 silver barrier. I think we're going to go thru it. Next day or two probably down into the high 4's as they run a few stop losses and then a push to 5.25 or higher mid to late next week.

I think we'll have a two or three day dead kitten bounce in the SM's to fight thru first. Tomorrow will be interesting. It appears a bunch of people will be going into the weekend long stocks, and with the world still a basket case, it's not the brightest move. Monday's could be real hell if the terrorists get frisky over a weekend.

P.S.

My PM investments are long term, and I don't trade them based upon my thoughts and feelings, but I do have fun mentally playing the short term. If nothing else, when I'm right (about 55% of the time) it does make my day go a bit better. (smile)

Have a good one.

Pizz

YGM

(07/12/2002; 00:37:58 MDT - Msg ID: 80393)

Here's a great analyst I used to make money on long ago FWIW (HE'S STILL ONE OF THE BEST)

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=28245The last great mania

--------------------------------------------------------------------------------
Posted: July 11, 2002
1:00 a.m. Eastern

DOUG CASEY.........
� 2002 WorldNetDaily.com

Last week, I said the general public, innocent of any fundamental knowledge, will buy gold stocks the way they bought the Internet stocks, ultimately driving share prices to insane levels.

One reason I say that is because scores of millions of people were involved in the late mania in the stock market, and they still don't believe it's over. They're anxious to get into the next sector that looks hot. And they will move into mining; and the fact they have no understanding of economics, and even less of mining, won't put them off.

All they need to know is that the story tells well, and the sector is hot. And when they do move in, it's going to be like trying to siphon the contents of Hoover Dam through a garden hose. And that's not to even mention the institutions. They'll find it nearly impossible to buy the positions they'll have to. Stocks like Newmont, Harmony, Goldfields and Durban will tack on 10 percent and 20 percent a day. Their prices will cut through one new high after another, like a thermite torch through tissue paper.

In my view, many longtime gold bulls, who actually know the mining industry, are going to be left behind. The very fact they know all the things that can go wrong will work against them. They'll say (quite correctly) "A double is good. Make the money, take the money." Then they'll see the stock they sell � double, and redouble, and redouble again. They won't buy it back or get into others like it because they think in terms of value.

Cont'd....

Black Blade

(07/12/2002; 01:36:54 MDT - Msg ID: 80394)

Dead Cat Bounce

http://quote.yahoo.com/m2?u
Sharp rise in global markets (Asia and Europe). Hard to believe that this is due to Barton Biggs being "bullish" (per CNBC anchors Maria Bartiromo and Bob Pissani). Hmmm...

- Black Blade

Black Blade

(07/12/2002; 01:55:02 MDT - Msg ID: 80395)

Mixed Indicators

http://www.mrci.com/qpnight.asp
Gold is off $1.20, USD is higher, Oil is higher, and market indices are higher. There is no positive markets news so this could still get quite "entertaining" when Wall Street opens for trading.

- Black Blade

steady

(07/12/2002; 02:42:00 MDT - Msg ID: 80396)

world startegy

http://story.news.yahoo.com/news?tmpl=story&cid=578&u=/nm/20020712/ts_nm/afghan_usa_dc_1 is tomorrow option experation day on comex? doesnt gold usually get hammered down on those days.
need a way to make the manipulation more blatent right out there for everyone who is suspecting it ? how about this then!

U.S. Special Forces Base Attacked in Afghanistan
Fri Jul 12, 3:18 AM ET

BAGRAM AIR BASE, Afghanistan, July 12 (Reuters) - A compound being used by U.S. special forces in central Afghanistan ( news - web sites) was attacked with small arms, U.S. officials said on Friday.

Black Blade

(07/12/2002; 02:49:51 MDT - Msg ID: 80397)

Forget Enron - Congress is even worse

http://www.nandotimes.com/opinions/story/461836p-3695752c.html
Snippit:

As members of Congress make political hay with corporate America's accounting scandals, their own financial mismanagement continues to dwarf those companies they excoriate. While securities regulation and criminal justice bring corporate culprits to justice (raising the question of whether more laws are really necessary), Congress violates its own management rules and standards on a daily basis. While states prohibit private sector firms from siphoning off pension trust funds for non-pension spending, there is no such restriction at the federal level. In fiscal 2000 and 2001, the federal government increased total debt to another record high while claiming a surplus. They took Social Security and other trust fund money worth $189 billion in 1998 and $228 billion in 1999 to cover general government operational deficit spending. For 2000 and 2001, they stole another $463 billion from the various trust funds, of which $272 billion came from Social Security.

Black Blade: Ditto that! The article has quite a litany of government malfeasance. The cockroaches aren't all in the boardrooms across America, they are in the halls of Congress too.

misetich

(07/12/2002; 04:13:02 MDT - Msg ID: 80398)

Homes, Gold Attract Investors as Alternative to Stock

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∣dle=ad_frame2_topfin&s=APS6OOhZtSG9tZXMsSnip:

Washington, July 12 (Bloomberg) -- Falling stock prices, investigations of corporate deceit, and money-market funds that yield little more than inflation have pushed investors to real estate and precious metals as a shelter for their cash.

U.S. homebuyers are increasing down payments as a share of property values, and consumers are becoming reacquainted with gold pieces such as American Eagles and Krugerrands. Bullion has won converts among younger Japanese investors, even as the government is trying to entice them into bonds with ads by a movie star.

..............
More Americans are seeking the comfort of precious metals as well. This week, a banker bought 1,524 one-ounce American Gold Eagle coins, worth about $500,000, says Michael Kramer, head trader at Manfra Tordella & Brookes Inc., a metals dealer in New York.

First Profit in Years

``One guy is buying 200 to 300 ounces of gold a week,'' Kramer says. Many people started picking up bullion at below $300 per ounce earlier this year, he says, so ``it is the first time in years that somebody has been able to have a profit.''

At FH Coins & Collectibles, a dusty, standing-room-only shop crammed with old porcelain and crystal as well as coins on New York's Upper East Side, owner David Heller says people are calling up or walking in off the street three out of five days a week and asking how to buy gold. Usually, he sells them American Eagle, Canada Maple Leaf, or South African Krugerrand coins.

``A year ago, you couldn't give it away,'' he says. Gold, which doesn't pay dividends, was trading below $300 an ounce and ``you couldn't interest anybody in buying.''

Demand at his shop now is almost as strong as it was in 1999, when investors hoarded gold on fears that the arrival of Jan. 1, 2000 would cause computers to malfunction and throw business into chaos. ``With everything going on in the economy, people want something substantial,'' he says.

Gold Highest Since 1997

Gold for August delivery rose June 4 to $328.80 an ounce, the highest closing price for the metal since October 1997. Back then, stocks had tumbled in reaction to a slump in Asian economies. Last month, investors were concerned that India and Pakistan were going to war. A year ago, gold fetched $266.

Few analysts expect gold, trading at more than $310 since mid- May, to exceed $400 an ounce this year. In London, gold recently traded at $316.85. Sales of jewelry, the largest consumer, have declined. And central banks, which hold about one-fourth of above- ground reserves, continue to sell.

The gold market, ``has an 800-pound gorilla in it and that is the world central banks,'' says Joseph Haubrich, an economist at the Fed Bank of Cleveland. Holdings have declined from an estimated 45.8 percent of total government reserves in 1985 to an estimated 12.2 percent in 2001.

.......................
``People just don't have any place to put their money,'' says Hitoshi Kosai, general manager at the precious metals division of Tanaka Kikinzoku Kogyo, the country's largest bullion dealer. Japanese started buying bullion after Sept. 11, and haven't stopped, Kosai said.

``This is the longest streak for a gold boom in Japan,'' he says. ``Usually, they end after a month.''

Japanese investments in gold bullion and coins rose to 47.5 tons, or about $487 million, in the first quarter, almost a fourfold increase from a year earlier, says the World Gold Council, a Geneva-based trade group.

In the U.S., homes continue to trump gold and other precious metals as the investment of choice for those diversifying into tangible assets.

............
Typically, homes and precious metals are snapped up in inflationary times because they hold their value. Indeed, gold reached a high of $834 an ounce in January 1980 after a year in which U.S. consumer prices rose 13.3 percent. By comparison, U.S. consumer prices were up 1.2 percent in May from a year earlier. Low inflation is also a reason why U.S. Treasury securities remain a popular haven for cash.

Gold-stock funds in the U.S. received $760 million in new cash in the first five months of the year, representing a 39.4 percent rise over year-end asset levels for those funds, according to Lipper Inc., a mutual fund analysis firm.

Demand for gold bullion and coins in the U.S. was 2.8 tons, or approximately $28.7 million, in the first quarter, according to the World Gold Council, a rise of 13 percent over the first quarter of 2001.

Misetich

Japan had a stock bubble followed by a housing bubble - followed by debt deflation
The US is following the same pattern. The 800 lb Gorilla, was a featherweight when gold prices rocketed from $35 an oz to over $850
CB's are considerably WEAKER now - though - they have substituted Real Physical with a Paper Derivative Avalanche -
Paper burns - It is a question of when not IF

Got gold?

misetich

(07/12/2002; 04:30:00 MDT - Msg ID: 80399)

Morgan Stanley research probed by NY Attorney Gen.

http://www.forbes.com/newswire/2002/07/12/rtr659537.htmlSnip:

NEW YORK, July 12 (Reuters) - Morgan Stanley (nyse: MWD - news - people) has received requests from the New York attorney general's office for documents and information relating to its analyst research reports, according to a filing with the Securities and Exchange Commission on Thursday.

Morgan Stanley, in filing its financial report for the quarter ended May, said that it "has continued to receive and respond to requests for documents and information from the New York state attorney general in connection with his investigation of the company's research analyst practices."

The securities firm added it had also "received and is responding to subpoenas and requests for documents and information in parallel industrywide investigations being conducted by other governmental and regulatory agencies," including the Securities and Exchange Commission, the regulatory unit of the National Association of Securities Dealers, the New York Stock Exchange and the U.S. attorney's office for Manhattan.

Misetich

ANOTHER slap on the wrist coming up - though investor confidence will suffer - but who cares - they're already billionaires - as the STING is over

Got gold?

misetich

(07/12/2002; 05:50:05 MDT - Msg ID: 80400)

Senate Rejects Listing Of Stock Options as A Corporate Expense

http://www.washingtonpost.com/wp-dyn/articles/A58272-2002Jul11.htmlSnip:

By Helen Dewar and David S. Hilzenrath
Washington Post Staff Writers
Friday, July 12, 2002; Page A01

Senate Democrats yesterday blocked a proposal that would have changed the way companies account for stock options, an initiative vehemently opposed by high-tech companies that have used such grants to award billions of dollars in compensation to their executives and employees.

Sen. John McCain (R-Ariz.) tried unsuccessfully to attach to a broader corporate accountability bill a requirement that companies subtract the cost of stock option grants from their reported profits. But the Democratic leadership prevented McCain's amendment from reaching a vote.

"The fix is in," said McCain, vowing to try to force a vote on the measure in the future. McCain's proposal faced bipartisan resistance in the Senate.

Majority Leader Thomas A. Daschle (D-S.D.) said he had misgivings about a "one-size-fits-all" formula for dealing with stock options, suggesting instead that the bill require the Securities and Exchange Commission and a proposed accounting oversight board to come up with regulations on the issue.

,,,,,,,,,

Misetich

What a farce! Interesting choice of words from McCain "The Fix is in!"

Got gold?

misetich

(07/12/2002; 06:03:14 MDT - Msg ID: 80401)

Critics Call For Chavez To Give Up Presidency

http://www.washingtonpost.com/wp-dyn/articles/A58095-2002Jul11.htmlSnip:
The march took place two days after former president Jimmy Carter failed to bring together Chavez and opposition leaders for talks aimed at achieving a measure of political reconciliation. Despite urging from U.S. diplomats, who signaled beforehand that Carter represented perhaps the last hope to avert another coup, the opposition refused his invitation to meet with Chavez and begin a "national dialogue" to open up his leftist government to a wider range of views.

Misetich

Oil - Oil - Oil
The Washington Post has four stories (Associated Press) "covering" the Venezuela situation

Chavez is a thorn on somebody's side

Got gold?

USAGOLD / Centennial Precious Metals, Inc.

(07/12/2002; 06:11:59 MDT - Msg ID: 80402)

Put a Foundation Under Your Portfolio

http://www.usagold.com/ProductsPage.html

Gold Today!

Because you never know what tomorrow will bring.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

The Hoople

(07/12/2002; 08:06:25 MDT - Msg ID: 80403)

Blinker light red day

Notice HD at $29 , DUK at $25 ? Awful stuff is getting priced into these companies. Housing and utilities next on the hit list of scandal and fraud? Surely not. Sitting here in my office with Marketalk, aka George Cooper. These guys will fly 1,300 miles to personally take your pm order! MK: can I deduct the speeding ticket I got going to the airport to get him from my next order?

barnaclebob

(07/12/2002; 08:10:08 MDT - Msg ID: 80404)

"ULTERIOR MOTIVES" IS CORPORATE CHAOS A TOOL OF GOVERNMENT?

http://www.etherzone.com/2002/henr071802.shtml
When the stock market declines, it's traditional for investors to turn to gold and the bond market, particularly federal Treasury securities in all their many flavors. Some may go for "munies" or real estate, but by far it's the U.S. Treasury's securities that gain the most.

What's more, there are other reasons the government might want to take investor dollars away from the stock market. These reasons have to do with the way that the government sells its securities.

Just consider it as a possible reason for clamping down on private companies that don't begin to commit the kind of fraud and deception our government commits. Run the competition in the ground and you've got the investor market almost to yourself.

I don't put anything beyond the Beltway Bandits.

What a gas, the possibility of the Government and Wall Street fighting over capital flows. Intentionally Crash the markets forcing investors to flee into Treasuries. Maybe the Fall Street crooks have been bested by the bureaucrats (LOL).

This could prove interesting if true!

Carl H

(07/12/2002; 08:48:17 MDT - Msg ID: 80405)

Juniors by cash cost?

Has anyone seen a list of juniors by cash cost?

Alternatively, does anyone know of a junior with cash cost between $325-$350?

Thanks!

luckypierre

(07/12/2002; 09:34:31 MDT - Msg ID: 80406)

Our Founders sacrifices debunked?

Last week, someone posted a message stating that the article on the sacrifices the signers of the Declaration of Independence had been debunked. Could whoever posted that message please provide a pointer to the counter information? I would like to send it to some friends. Thanks.

LuckyPierre

Pizz

(07/12/2002; 09:44:51 MDT - Msg ID: 80407)

Carl H

Junior with cash costs around 350?

I only know of 1, BENGB, it's a Phillipine company that is not mining right now because of low gold prices. Read a report few years back that said their costs were somewhere around 350. They have lots of properties, but the company has had a bit of trouble over the years. Corrupt government, secondaries with questionable claims to ownership, and they're losing money right now trying to be a natural resource company. The only positives are that they've been around 100+ years and their stock is cheap.

Due your own due dilligence, this one is speculative as heck. I also own a little bit of it, but I don't think anyone could say the above represents any kind of recomendation.

Pizz

R Powell

(07/12/2002; 10:07:12 MDT - Msg ID: 80408)

Pizz

Thanks for the thoughts (80392). My metal investments are likewise long term but a part of them are options which, as time wasting assets, need periodic rolling over.
Basically, I'm taking a little profit when possible and reinvesting on the dips. If I catch it right, I can both increase my position and buy more time. If not, well...
This is not a great investment and profit is not necessary to pay any bills but money on the table certainly helps to focus my attention. I do love watching this great game, commodities, SM, the politics of Wall Street, etc.
One huge global puzzle. Thanks
Rich

Ulysses

(07/12/2002; 10:08:17 MDT - Msg ID: 80409)

Carl H

Check out US Gold-USGL. They have a recent story out.

Pizz

(07/12/2002; 10:25:48 MDT - Msg ID: 80410)

R Powell

Rich, reading your posts is almost looking in a mirror.

My nemisis over the years has been Index options. Still fighting the emotions - especially during options expiration week when I'm playing the in the money's and they're fluctuating 10 points every 30 minutes. Also, at my age it tends to make me feel a bit alive. Pushin numbers for a bunch of questionable businessmen can be a bit of a drag on the mind, gotta have some fun in life cause my golf game sucks.

I don't consider myself a trader, but I do dabble every once in a while. Like my wife says, at least with my hobby I have a chance to make a buck or two, rather than a bunch of depreciating toys (cars, bikes, boats, etc.) Probably go to my grave still thinking I can nip a few bucks off the big boys, but if I don't, at least I tried, and no one gets hurt cept me.

Pizz

Rock

(07/12/2002; 10:39:32 MDT - Msg ID: 80411)

Congress worst than Enron? How can that be?

Welcome to the round table discussions where the unlearned
become the learned.

Great insight Blackblade pointing out the various places those cock roaches lurk including the halls of Congress.
All I can say is it almost makes me sick to see all this white collar robbery going on, brings me to the question, who can you trust?

At least gold in hand is something no one can minipulate or steal and no matter how many big corporate scandles may be happening at least those individuals with physical gold in their possession know how financially secure they feel because the big CEO's can't rob them. Thats one of the reasons I love ownership of PM's.

Have a great day all, thanks for the data, I
read here daily but once in a while I do have to respond out of kindness or respect or maybe both for all the things I have been taught here deserves some sort of recongition.

Rock

sector

(07/12/2002; 10:57:34 MDT - Msg ID: 80412)

Deficit Estimate Goes Up Again

http://www.washingtonpost.com/wp-dyn/articles/A58181-2002Jul11.htmlWhite House Maintains It Will Shrink Next Year

By Jonathan Weisman
Washington Post Staff Writer
Friday, July 12, 2002; Page E01

The White House plans to release new budget deficit projections today that will show the federal government to be as much as $150 billion in the red this fiscal year, according to congressional budget experts.

But the Office of Management and Budget also is expected to predict a smaller budget deficit for the next fiscal year, in sharp contrast to private forecasters and even Republicans on Capitol Hill, the experts said.

Moreover, House Republicans are pushing the Joint Committee on Taxation to adopt new economic models that would offset the cost of tax cuts by assuming that they would stimulate economic growth. Such "dynamic scoring" could free up billions of dollars for tax cuts or spending increases simply by changing forecasting methods.

Critics have said the same creative approach to accounting that has roiled the financial markets is creeping into federal budgeting.

"It's like what happened in the corporate community is now infecting the government," said Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee. "Maybe these guys are cross-fertilizing.
++++++++++++++++++++++++++++++++++++++++
It's called Wall Street/Washington incest.

The REAL budget deficit is well over $515 Billion GAAP dollars [From the Treasuries website letter by SECTREAS O'Neill]�but in Washington, who's counting THESE days?

Yesterday the Fed pumped out $15 Billion is "Discount" window operations.
+++++++++++++++++++++++
July is still young...

Pledge of Alliegence declared unconstitutional [Never mind the child subject in the case and her mother [A sunday school teacher] are NOT atheists], WCOM's record fraud and pending CH11, 400.000 illegal "Immigrants" since 9/11 [58, 000 of which are Middle Eastern men], Stock Markets break 9/11 lows and now this:

Sesame Street plans an HIV positive muppet...just what America's three-year-olds needed.

Old Yeller

(07/12/2002; 10:59:04 MDT - Msg ID: 80413)

Shred 'em,Danno

http://www.indiantrust.com/releases.cfm?press_id=15
Gosh,the Federal Reserve is shredding documents as the walls close in on the Indian Trust accounting debacle.

What an unusual turn of events,better get a task force going on this one,Bush.I see one Robert Rubin is also along
for the shredfest,that name sounds familiar.

Pizz

(07/12/2002; 11:22:10 MDT - Msg ID: 80414)

Sector

yah, but who's getting _______?

Elections this year ought to be real entertaining. For one, I think we ought to have a Goldgate. What do you think would happen if a couple bullion banks were forced to go to the trough for a bailout. Think there aren't a few snakes and skeletons in their closets?

O'neils comments on Social Secuity and investments really have me peeved. Let's put some more (?) public money into a bloated market to help bail out Wall Street and the Banks.

I have a better idea for Social Security. Why don't they mark to market the public's 8,000+ tons of gold and replace the non'marketable gov IOU's the fund is holding, and if they's any extra, leave it there as permanent funding? Then every month or so they could use our payroll deductions to buy more gold to keep the fund above water, and as they have to pay out, sell a little bit or whatever.

Makes a lot more sense to me, but I'm sure our elected officials, banks, etc. would scream a bit. WHAT?? THE PUBLIC IS MORE COMFORTABLE WITH GOLD THAN A BUNCH OF BLOATED PAPER THAT MAY NOT BE WORTH ANYMORE MORE THAN INK, PAPER, ETC. REPRESENTING NONEXISTANT EARNINGS (THAT ARE PAID IN MORE WORTHLESS PAPER!!)

Enough of a rant. These guys are going to find out shortly that the public may not be quite as educated as they are, but when the BS gets as deep as it is now, most will be after blood - literally.

Pizz

sector

(07/12/2002; 11:54:35 MDT - Msg ID: 80415)

Bracing for an earnings hit...and BTW the US already loaned away its gold...ALL of it.

http://money.cnn.com/2002/07/11/news/options/index.htmExpense options [Then] disallow pension income and guess what earnings are? A lot lower.

July 11, 2002: 6:51 PM EDT
By Justin Lahart, CNN/Money Staff Writer

NEW YORK (CNN/Money) - The earnings investors base their valuations on could be wildly overstated.

As stocks have crumbled, a growing cadre of market watchers have begun to argue that shares have gotten downright cheap. "Look out above," was the title of the note Lehman Brothers strategist Jeff Applegate sent out Thursday morning. Later, Morgan Stanley global strategist Barton Biggs got on the squawk box saying it was time to buy.

But while the benchmark S&P 500 might look cheap on, say, a price-to-earnings basis, the earnings part of that equation is dicey. Company results aren't nearly what they seem.

"The quality of reported earnings went down pretty badly during the bull market," said Jeff Matthews, who runs Conn.-based hedge fund Ram Partners.

It's not just all the high-profile scandals. The way companies account for options will pad results by 10 percent this year according to one recent report while another suggests that the way companies run pension funds will inflate earnings by another 4.5 percent.
+++++++++++++++++++++++++++++++++

From California to the New York Island...corporate America is a latrine of lies and a casino of corruption. The more that Washington tries to squirm out...the deeper they sink.

The GAAP US Consol. Fin. Statement shows a book entry debit for $20 billion in the "Gold and Foreign currency" category...that matches 1,700 tonnes of West Point "Custodial" bullion. That was a "Deliverable" item. The treasury gold loans are something else.

That the Fed has lied about gold swaps is telling [Mattingly, the Fed's Chief "Lawyer"]. That they ascribe to the IMF vetted practice of double-counting gold loans fits perfectly with the Fed's tradition of double-talking and triple-dealing when it comes to hedonic GDP "Statistics".

Will they care in Peoria? They have already started to withdraw or "Redeem" [What an appropriate word!] their mutual fund holdings from the crooks many of whom may not have the cash balances to continue for long. NBC this week showed a couple cashing in to buy goats and gold...thier goats will multiply and their gold will get more valuable.

The housing BUB is popping as folks realize that the true price-earning value for their house is the market rent divided into the appraisal...nearly ALL of today's houses are way above that real-world figure.

Washington senses a sea change in politics...the have caught the whiff of fear. For once Congress may identify with Joe Six Pack...only it's fat-cat senators and congressmen from BOTH parties who will go down in November. Bush can forget about a second term...even IF the Europeans allow him go after Saddam.

Note that the US capitulated on the "World Court" military immunty issue. Perhaps the euro guys applied a little "Go along with us or we will stop selling gold" pressure?

Pizz

(07/12/2002; 12:06:57 MDT - Msg ID: 80416)

(No Subject)

Definition of GAAP:

It's the gaaaaaaaaap between reality and fantasy land!

Black Blade

(07/12/2002; 12:29:26 MDT - Msg ID: 80417)

Gold Producer Hedging To Return, But In Lesser Amounts

http://www.zawya.com/Story.cfm?id=193r6062&Section=Markets&page=Commodities&channel=Precious%20Metals%20News&objectid=C9D5E773-8F38-11D4-867000D0B74A0D7C

Snippit:

Gold producer hedging is likely to return to the market if prices emerge and hold above the $325-per-ounce level, but the volume of hedging is expected to be much more modest than what prevailed during the 1990's, according to market observers. When global interest rates dropped in 2001 as the economy slowed down, the yield on gold sales diminished somewhat, making it less rewarding for miners to conduct such practices. Then, when gold prices began to show strength late last year, some producers lifted those hedges by purchasing equivalent amounts of gold in the hope of benefiting from the rising prices, boosting gold demand. This was deemed to be a major supportive factor in the gold price rally of the past several months, by both reducing supply and increasing demand at the same time. Howard Patten, precious metals analyst at Barclays Capital in London, estimates that additional "unhedging" in 2002 will add an extra 350 tons to demand.

In the current era of economic uncertainty under the specter of corporate accounting malfeasance, what are perceived to be exotic revenue-enhancing tools - options and derivatives used in many hedge contracts - often incite distrust among potential investors. In addition, some hedgebooks have been known in the past to work against mining companies during a gold price rally by pre-defining upside sale prices. As a result, many investors are currently favoring non-hedged miners as destinations for their money, which is expected to dissuade some miners from reinstating large hedges in the near future. Further, during the recent years of historically low gold prices, expenditure on expansion and exploration dried up, leaving few new deposits readied for development. Many existing deposits are either nearing the end of their life cycle or are expected to become uneconomical to mine unless prices average much higher levels than currently prevail because of the depletion of high-grade ore. So, with mine supplies widely expected to dwindle and shareholders on the lookout for untethered upside gold price exposure, the levels of forward sales are likely to be well below those seen in the past.

Black Blade: It is very important for investors to vote with their feet if any precious metals miner sells forward production. Investors must become activists in order to prevent deceptive and dishonest practices such as hedging. The best gold companies are those who can survive in the free market by adjusting output with slack demand and increasing output with high demand. To artificially inflate gold production with forward sales only hurts the industry and inflicts more pain on the shareholder and artificially caps the price of physical metal. It appears that many follow this philosophy as well. It should be noted that nonhedgers have outperformed hedgers by a very wide margin.

sector

(07/12/2002; 12:30:19 MDT - Msg ID: 80418)

@pizzman You 'DA MAN when it comes to Social Security...

...and SECTREAS O'Neill's buffooneryHe has turned into the James Watt of the Bush admin.

Every time he opens his mouth, lightening strikes him. The privatizing SS issue is as dead as it can be, thus blocking [As you well noted] the bailout of big US banks AND a spend thrift Congress.

O'Neill the $100 million dollar ALCOA man...O'Neill the indian-giving Bono Africa , "I Feel Your Pain" tour-man...O'Neill the clueless. There is no doubt that it will be O'Nell that goes down in American history as the SECTREAS on watch when GoldGate blasted the US empire out of the water. Surely he can see that continued resistance to the rising gold tide is futile and that HE will get the blame along with the Master of the Universe...Abbot and Costello.

If I didn't know better, I would guess he's being allowed to gain just enough rope as needed to effect a self-hanging. Now... who will be his replacement when he wants to "Spend more time with his family"?

Black Blade

(07/12/2002; 14:11:17 MDT - Msg ID: 80419)

Breaking Records--For Bankruptcies

http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=208698

Snippit:

"It's been growing since October two years ago," says Ray Warner, a professor at the University of Missouri at Kansas City Law School. "You're now seeing some very large examples, which is different than in the past. What we're really seeing is bankruptcies that are being caused by accounting issues. The real trigger for these companies is the loss of financial confidence." If you're guessing that bankruptcies are going through the roof--or falling through the floor--right now, you're dead right.

The action on the personal side is even faster and more furious. Be it under Chapter 7 (liquidation), Chapter 11 (reorganization), Chapter 12 (family farms), or Chapter 13 (low-income insolvencies), Americans are raising the white flag as never before. In the first three months of 2002, bankruptcy trade group ABI reports, total bankruptcy filings climbed to 379,012, the highest first-quarter tally ever. The overwhelming majority, 369,237, were personal bankruptcies. In other words, 97% of the bankruptcies in this country are personal. That's up from 81% 20 years ago.

Black Blade: It's going to get much worse. Get prepared while you can. As always, get outta debt, stash cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. You will sleep a lot easier. I know I do.

misetich

(07/12/2002; 15:38:10 MDT - Msg ID: 80420)

IMF says euro area economic outlook weakened

http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-wat026797&feed=reu&date=20020712&cat=USMARKETSnip:

WASHINGTON, July 12 (Reuters) - The International Monetary Fund said on Friday that economic growth prospects for the euro area had weakened somewhat and that uncertainty and downside risks in the region have increased.

But in a report prepared as part of its annual review of the 12-nation bloc, the lender did not say how much it was downgrading its earlier forecasts for economic growth of 1.4 percent this year and 2.9 percent next year.

Misetich

US economists, Feds, are forecasting a rebound in the US. They should like outside their "window" once in awhile and look whats happening around them. Japan is in a mess, Europe is slowing, Latin America is full of economic problems and slowing - it is difficult to imagine - unless you're a wishful thinker- how US exports are going to pick up.
As it is the US is enjoying a jobless recovery - with debt deflation accelarating - We are living in "interesting times" as BB cites.

Got gold?

misetich

(07/12/2002; 15:54:18 MDT - Msg ID: 80421)

Off-Balance-Sheet Accounting and Disclosure: Homer's Odyssey Revisited

http://www1.standardandpoors.com/Forum/RatingsCommentaries/CorporateFinance/Articles/070802_experts.htmlSnip:

Off-Balance-Sheet Accounting and Disclosure: Homer's Odyssey Revisited
In introducing the panelists discussing off-balance-sheet accounting and disclosure issues, Scott Sprinzen, Managing Director in Standard & Poor's Corporate Ratings, said, "The off-balance-sheet realm constitutes the uncharted waters of financial reporting, in which monsters have been lurking in recent years. Zeal to maximize earnings has been accompanied by a lust for leverage, coupled with companies' intense effort to hide the extent of leverage. We've seen companies like Enron employing trusts in which assets are sold to off-balance-sheet special-purpose entities for which transaction-funding the seller retains the economic risk associated with the assets. We've also seen companies like Adelphia extend undisclosed guarantees on third-party borrowings. Synthetic leases are also being used, which, for S&P's analytic purposes, are not so different from operating leases. The insidious aspect is that, in many instances, they are not just off-balance-sheet, but also off-footnote--leading to understating the true extent of the economic liability and disguising the loans as forward contracts."

Misetich

Pensions (earnings)'stock-options, off-balance sheet items - all major issues and tools to used to deceive investors - and hide losses and debts -

Are current valuations reflective of reality?

Got gold?

Belgian

(07/12/2002; 16:39:23 MDT - Msg ID: 80422)

@ Sector

My guess about Welteke and Bundesbank Gold :
The Deutsche Telekom disaster (decimation) and incredible debt position, is a political sword for Shroder. Millions of German families own DT-shares and see no future ! German state is still owner of 40% in DT. Thousands of jobs need to be cut to regain profitability. After having shedded already thousands of jobs at Deutsche Post...this could be political suicide. Suggesting an impossible (prejudice) Gold-sale could be a nice excuse and face-saver for the soicialists ? Your thoughts on this,please ?

POG > 317$ : Previous support = present resistance ?
World's Investment Funds in concerted (buy) action to build (construct) 9/11 double bottom support ? Coming announcements of declining profits (bottomlines) will cause the bottom blasting and...panic ?

30.000 tonnes of official Goldreserves, priced at 300 billion dollars. US's National Debt is 6 TRILLION dollars !
Debt at 60%-plus of US's GDP of 10 Trillion (what's in a figure ? ). Real Gold Value priced at a 6.000/300 (billions) = 1/20 tht. These very, very conservative proportions of dollar-debt/world's goldreserves and gold-pricing...reflect that currency depreciation factor of x20 again !? And 1971 > 1981 was also a x20 for POG (41$ > 850$). Private individual debt(s) also rising from 35% to 45% (and more). And serviced with very, very low interest rates...for the time being !
If stocks (Globe's Funds) prices (not values) AND house-prices (overvalued throught SM wealth effects), should decline much further...what's left as collateral ? Do you feel the HYPERINFLATION tsunami coming ? One CANNOT deflate such a situation anymore. Deflation is slow down on currency-depreciation, within the present rising debt proportions : IM_POS_SI_BLE !
Chinese are making their products less and less durable to clip the prices further ! A gigantic squeeze.

30 years of oil/Gold relation (A.Hamilton) : Low x10 and high x25 : POG = 25$ (POO) x 10 = 250$ and high is 25$ x 25 = 625$, wich reflects the very, very conservative depreciation of 20 times from 1971. Is it surprising that A.Fekete, suggests, FREE GOLD as the final and inevitable, outcome for this evolution for all to see and detect, factually ? Zeolotes postal x20 factor (and M3) is adding evidence to the systemic, incontournable, permanent depreciation with fatal end. I found much more confirmation (other representative items) of this conservative x20 here in Euroland. And am using "conservative", because the past systemic management on the real depreciation was almost perfect. Read K. Richebacher on some more frightening proportions and realities. 5,9 US$ DEBT for 1 US$ GDP. And this with un-critical acceptation of the suggested 8 to 10 Trillion GDP (of lousy quality).

All this could ONLY happen with the almost perfect elimination of CB's greatest enemy : GOLD ! And watch for the breaking point, when the more than 20 years of interest rates declines, stop and reverse, dramatically. The present and future losses on South America are hanging in the air as another sword of Damocles. There are NO positives left anymore. Buy the higher dips in the Gold Bull and sell the lower tops in all paper Bears. NIA !!!

R Powell

(07/12/2002; 16:54:34 MDT - Msg ID: 80423)

Perplexing Ponzi Prediction Proudly Presented

I have been in contact, recently, with the world's foremost Ponzi Number experts, none other than the Ponzi originators. They were gracious enough to reveal to me that the alltime low figure was 4829.50 which occured on September 21, 2001.

It is my belief that exceeding this low will open the floodgates for the final descent into the abyss. This will be the final undisputable proof that "the economy will recover in the next quarter." There will probably be more of the huge one day upside breakouts which Adam Hamilton has documented as even bigger percentagewise than the largest advances of the Bull market 1990s but the trend will remain down.

Although only after long laborious technical research was completed did Ponzi expert Ross L convey to me that there may be some support at the 3250 level but even this is in doubt as to its ultimate strength. Mr. L was quite evasive when asked how sure he felt that 3250 was "the bottom". Sensing his uncertainty and pain, I did not persue the point. I fear the effort to ascertain these results have exhausted the great sage.

Most unfortunately, this information did not arrive until today. Unfortunate, in that this month's new moon has past (7/10/02) so an entrail reading of a Rhode Island Red will have to be postponed until the next new moon on 8/8/02. The reading will be necessary to confirm the Ponzi low. Hopefully, the signs will be definitive enough to assess a degree of probability that Ponzi 3250 is indeed the target low! The utmost care in the coming preparations will assure us a greater degree of accuracy.

Finally, I've also requested that noted astrologer Ms. Lokhi Litepoints help us by employing her knowledge to focus on any celestial significance that the final Ponzi low of 3250 may infer. Her help in timing the actual arrival may be of the utmost importance to the success of our coming endeavors.

If anyone can further this research, please do contribute. My deepest gratitude, once more, to Mr. Ross L and Mr. Shifty for their continuing efforts.
Happy weekend !
Rich

R Powell

(07/12/2002; 18:28:43 MDT - Msg ID: 80424)

Weekend reading

http://www.financialsense.com/editorials/morgan071202.htm Titled "The Significance & Sanity of Silver as Money" by David Morgan. Puplava's site is always worth the visit. His ongoing Storm Watch series is imho worthy of printing in book form. Mr. Morgan has been a frequent guest at financialsense.
It prints out at six pages.
Happy midsummer weekend!
Rich

USAGOLD

(07/12/2002; 19:55:43 MDT - Msg ID: 80425)

Hoople. . .On GC and Marketalk. . .

At what price, good conversation? The sacrifices we gold advocates / owners make to see one another. I think you should have explained to the officer that you were on the way to meet a fellow USAGOLD poster. He would have then understood!
We count the men in blue, the military and firemen among our best customers -- and still receiving the traditional service dicount, a policy that has stood the test of time. . .nearly 30 years!! Many of the "protectors" read here.

As for yourself, thank you for posting here, for your long business relationship with this firm, and for your friendship and counsel over many years.

The road to personal financial freedom is paved with gold. . . . . .

Thanks, Hoople, and always keep a one-tenth ounce gold coin in your wallet in case your stopped. . . .

Just kidding. . . . .Juuuuuust kidding, my friends. . . . .

USAGOLD

(07/12/2002; 20:19:51 MDT - Msg ID: 80426)

Belgian. . .Case you missedit . . . . a secular as opposed to cyclical decline. . .Article worth noting. . .

http://sg.biz.yahoo.com/020712/15/30hhg.html(Dow Jones). . ."Between them, the central banks of Japan, China, Taiwan, Hong Kong and South Korea hold just over $1 trillion in reserves, with the bulk still held in the U.S. dollar. Since the launch of the euro in January 1999, those banks have indicated that there would come a time when they may need to rebalance their assets, but with the dollar remaining strong over the past few years, there's been little incentive to do so. Now, that picture is changing dramatically, with evidence mounting that the dollar's decline might this time be more than a cyclical - and therefore temporary - downturn. There are also key signals that the euro has emerged as a viable alternative major global reserve currency.

"If you're a central bank managing reserves and you think the dollar is on a cyclical decline, you wouldn't do any adjustment, but if you think it's a secular decline, you want to think about it," said David Mozina, director of foreign exchange and fixed income research at Banc of America Securities in New York."

-------

Please note: The article headline doesn't necessarily reflect content.

sector

(07/12/2002; 21:57:14 MDT - Msg ID: 80427)

@Belgian I Think Germans are Like People Everwhere...

They are now wary of stocks...even their own Deustche TelecomSo the Welke sabre rattling about selling gold is a political "Trial balloon" to keep testing the waters.

He will find, I believe, that the temperature remains cold regarding the sale of gold in order to buy stocks. After all who in America would want World Com even IF it WERE artificially supported by the government?

YGM

(07/12/2002; 22:15:01 MDT - Msg ID: 80428)

New Article re: BIS & GOLD.......

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=28259Title: "He who owns the gold, makes the rules"

Posted: July 12, 2002
1:00 a.m. Eastern

By Joan Veon
� 2002 WorldNetDaily.com

The rusty colored building that houses the Bank for International Settlements in Basle, Switzerland, looks like any other round office building, yet a small sign by the steps leading to its specially designed glass doorways tells you it is private property.

When the BIS holds its annual meeting, those who control the world's monetary system � the central bank ministers of the world, who look like ordinary businessmen � walk over from the nearby hotels. Once a month, the Group of Ten Central Bank governors meet to determine currency values, international banking rules and regulations, which country is going to grow and which country might even need sanctions. What really sets this bank apart from all the other central banks is that it lends to other central banks and does business only in gold. According to their annual report, they have assets of 192 tons of gold.

This new world economic order has been evolving since 1930 when an American, Owen Young, became the designated creator of the "central bank's bank." In his book, "Tragedy and Hope," Dr. Carroll Quigley, Bill Clinton's mentor at Georgetown University, said this,

[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.

This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements, a private bank owned and controlled by the world's central banks which were themselves private corporations.

Interestingly enough, we now live in a world in which there are no financial boundaries. Working through the Group of Seven and beginning in 1980, it was the BIS which helped to tear down these borders, thus creating a stateless flow of $1.9 trillion which runs around the world on a daily basis looking for the highest return or quickest play. In turn, the need to manage this global game of financial roulette has allowed the BIS to develop rules and regulations to bring all of the world monetary systems into compliance with them.

In 1995, the BIS began to orchestrate the beginnings of the final takeover of the world monetary system. All one has to do is read their documents. While most of this has not been explained to we the people, all of the major newspapers, financial publications and television reports have touted it as being "good for the banking system and the stock market." As I have followed its progress, three key points should be made.

First, in 1913, Congress voted to transfer their control of our financial system to this private corporation. The Federal Reserve joined the Sveriges Riksbank (Sweden) founded in 1688, the Bank of England in 1694, the Bank of France in 1803, the German Bundesbank in 1870, the Bank of Japan in 1882 and the Bank of Italy in 1893 in transferring monetary control to a private corporation. Their goal is to lend money to their respective governments so that they will pay them interest forever! If you doubt this arrangement, your dollar is a "Federal Reserve Note." This is why "we the people" cannot forgive ourselves the interest on our debt. We don't owe it to the Treasury!

Second, when the financial barriers between countries came down, it created the need for more central-bank oversight. As a result, the mandate of the BIS to create new rules, regulations and supervision � in areas that it heretofore had no control � increased. Hence, when the G7 called for "strengthening the International Financial Architecture," it allowed them an official mandate to seize control of new areas. The Basle II accord, to be implemented by 2006, will govern how much capital banks must set aside to cover risks of default on loans. This will affect how much money banks have to lend and which bank has enough capital to stay in business.

Third, Congress this week is discussing and looking to pass S.2673 which transfers the oversight for corporate accounting to an international foundation that is developing international accounting rules. Its chairman of the Board of Trustees is former Federal Reserve Chairman Paul Volcker. Trustees include BIS Managing Director Andrew Crockett, the next governor of the Bank of England. In short, the wolves (international bankers) are now chasing the foxes (all those who already have access) to the chicken coop which is the investments and savings of you and me.

In closing, at their July 8 annual meeting, the BIS declared that the global financial system had held up well in light of unexpected shocks to the system. When asked about the fact that while low interest rates helped create a robust housing market if it might just be the next "NASDAQ" because of the increased amount of personal debt, the response was muted.

While the old adage says, "He who owns the gold makes the rules," it is interesting that in the same city which the BIS is located, these words from 1601 are found on the walls of the old town hall: "Freedom is greater than silver and gold"!

--------------------------------------------------------------------------------

Joan Veon is a Certified Financial Planner and is President of Veon Financial Services, Inc., an investment advisory firm.

*I Posted entire article cause it's very quiet on this Fri nite....YGM

Old Yeller

(07/12/2002; 22:26:08 MDT - Msg ID: 80429)

Tripwires in the corporate financing world

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=13442
Excellent overview of the big picture and all of it's complexity.Lends credence to FOA's thoughts on how it will inevitably be settled.

Black Blade

(07/13/2002; 00:09:26 MDT - Msg ID: 80430)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm

Snippit:

One problem the funds are fretting over is what happens when the small fund investor looses confidence? So far, most mutual fund investors have held on to their stock funds. Many investors have little choice but to invest in equities or in bonds in their 401(k) programs. If confidence starts to evaporate, and the public begins to sense the market isn't coming back, then the markets could see an investor stampede to the exit gates. Then the markets would be in real trouble. The insiders have already bailed or have substantially reduced their holdings in the companies they own or run. The small investor has held on because we have been sold on the concept of long-term investing. The mutual fund industry did its job well. The investor has been programmed to hold on with soothing words. The media reinforces the message by constantly discussing which stocks to buy or what sector is doing well. The talk is never about a protracted long-term bear market. The words "bear" market or "recession" are seldom mentioned. In their place is talk about a second half recovery designed to keep hope alive.

What About Precious Metals?

The words "gold," "silver," "precious metals," or "raw materials" are seldom heard. They may mention the word gold, but then quickly disparage it. But what do you tell investors when the XAU is up 40% this year and the HUI is up 109%, compared to double-digit losses for the major averages for the third consecutive year in a row? You can, like Vanguard, close off your gold fund so you won't have to compete against yourself. You can change the S&P 500 Index and remove gold stocks, raw material companies and oil, and hope the money that replaces these companies will be spread out over the remaining 493 companies and generate some buying power. When that doesn't work, what will be tried next?

Black Blade: Looks like it will get much worse. Next week "earnings season" picks up and it could get very "interesting" indeed. It is quite amazing to listen to the Pied Pipers and Trolls on CNBC deny the realties of the Economic Crash. They persist in claiming that all is well and the economy is recovering. That is a tough sell when insiders have cut and run, institutional investors have bailed, and now the little guy is ready to throw in the towell.

Black Blade

(07/13/2002; 00:52:39 MDT - Msg ID: 80431)

Bush Expects 56 Pct Surge in '02 Deficit

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1196695
Snippit:

WASHINGTON (Reuters) - The Bush administration said on Friday it expected the federal government to post a deficit of $165 billion this fiscal year, a 56 percent increase over earlier projections reflecting a dramatic drop in tax revenues as the stock market has slumped. Conceding it was caught off guard by the steepest decline in receipts since 1955, the administration said it may develop new budgetary models aimed at projecting the impact of stock movements on capital gains and other tax revenues. "We have no model at this time, and it will be very difficult, I know, to produce one, but we need to try to understand this phenomenon better," White House budget director Mitch Daniels said.

Black Blade: It shouldn't be too difficult to phoney up a model, the BLS has been doing it for years.

YGM

(07/13/2002; 00:56:58 MDT - Msg ID: 80432)

Old Yeller....Post #80429

Thnx...for that post.One paragrarph in particular I found to be a very piercing and action guiding statement.....

Quote: We live in a world that can now be declared, for all intents and purposes, both upside down and inside out. It is only by being willing to entertain the unthinkable that we have had even half a chance of staying one step ahead of the maddening crowd. And how the crowd has maddened.(end)

One must be firm in the belief that if ever there was a time to think "Outside the Box" it is now.....YGM

Black Blade

(07/13/2002; 00:58:31 MDT - Msg ID: 80433)

Consumer sentiment sinks

http://money.cnn.com/2002/07/12/news/economy/economy/index.htm

Michigan sentiment index lower than expected, though June retail spending rebounds from weak May.

Snippit:

NEW YORK (CNN/Money) - A closely watched measure of U.S. consumer confidence shrank dramatically in July, according to published reports Friday, as non-stop news about corporate malfeasance, falling stock prices and a weak labor market put pressure on a pillar of economic strength.

Black Blade: Just the tip of the iceberg.

Black Blade

(07/13/2002; 01:08:17 MDT - Msg ID: 80434)

Bearish chart pattern suggests 600 point drop on S&P 500

http://investor.ft.com/custom/ftmarkets-com/news/story.asp?guid=%7B0FC3A311%2D6AEE%2D48EE%2D85DD%2D8168924B0138%7DHead-and-shoulders completed

Snippit:

LONDON (FT Investor) - The S&P 500 slumped 3.4 per cent on Wednesday July 10, sweeping aside key technical support to complete a major bearish chart formation, which has an eventual price target some 600 points below current levels. Even after a volatile session on Thursday, which saw the S&P reverse early losses to close higher, the bearish chart signal remains intact.

Black Blade: S&P 500 at 320? That's not far off. From a simple historical valuation and using the somewhat debatable listed p/e ratio, the S&P would probably be fairly valued at between 322 to 345. Hmmm� As I said, it is going to get very ugly.

Black Blade

(07/13/2002; 03:29:58 MDT - Msg ID: 80435)

Gold's historical extremes

http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_1263016,00.html

� Nov. 30, 1987: Gold hits $492.50 an ounce, just weeks after the Oct. 19, 1987, stock market crash.

� Feb. 29, 1996: Gold tops out at $418.40 an ounce as the stock market floundered.

� Aug. 31, 1999: Gold sinks to $251.95 an ounce, only days after the Dow Jones industrial average soared to 11,326 points.

Black Blade: As the stock markets crash, I would say that history is on our side. We can look back even further to see that gold has always outperformed during times of economic distress.

Black Blade

(07/13/2002; 03:42:34 MDT - Msg ID: 80436)

Rush to Gold

http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_1263025,00.html

Snippit:

"Gold is essentially the refuge of last resort now," said Joe Duarte, a Dallas fund manager and author of Successful Energy Sector Investing. "The negative of that is that market history shows that a frantic rise in gold stocks precedes a major decline in the stock market."

Gold stocks are "extremely speculative," Duarte said, "so when people rush to gold it's for one of two reasons: They are truly scared, or they think things are so good they'll invest in gold because it's the last dog to rally. My indicators are telling me that people are getting very scared."

Local gold expert Douglas Silver, president of Denver Tech Center-based Balfour Holdings Inc., was even more blunt in his assessment: "If the world is going to hell in a handbasket, people flock to gold."

"For gold, it's the toughest of all sectors to predict where it will go," Duarte said. "But rallies in gold stocks often precede something dramatic happening - like the market crashing."

Black Blade: Of course we already knew this, but it is good to see in print.

Belgian

(07/13/2002; 03:44:33 MDT - Msg ID: 80437)

@ USAGOLD # 80426

" Foreign Central Banks unlikely to pull trigger on dollar "

Global trade AND capital holdings do have to make *choices* at decisive crossroads. In my opinion, both have made their choice, already : Shifting global trade from dollarblock to Euroland and shifting capital holdings from dollar to euro.
It doesn't matter how this process evolves as long as we have certainty that the "choice" has been made.

Is it an academic question if the CBs *induced* this change or just adjust to this choice ? Have the US$ trade and capital fields been plundered and exploited enough or is there another rising dominant force (China) that decided to bet on another currency and trading partner ? Academic isn't it ?

With euro/dollar parity...the US$ is definitely in the "defensive" mode. Time to give both warriors ($/�) some consolidation time. As a matter of exhausting the dollar's defense tools (IRs and manipulative management).

Orderly, Secular decline of the dollar PLUS market stability is rather utopian, isn't it ? Have a look at the POO-chart and the dangerous approach of price resistance, willing to break it. Why should oil hesitate, when there are key signals that the euro has emerged as a viable alternative major global reserve currency...if not *THE* future single reserve currency ? See how the USTB-30 yrs, desperately tries to decline (5,30%) as to give false evidence of dollar strenght.

The half-harted support for the US$ will break suddenly, regardless of the compensatory tradeflows are already in place or not. And it is at this breaking point that GOLD will storm in. Gold as a valve as to not overdue euro appreciation. Gold as a refuge for the speeding dollar depreciation (hyperinflationarry effects of it). I even do suspect a possible strong revival of the Nikkei, propped up by repatriated fiat ?

Trading with and holding the US$ DEBT CURRENCY has its limits ! Whilst the interventionist noise goes on, the blood is sucked out of the aging US$, already in defense mode since 1990/1995.
Gold's role will be highlighted at the crux of the dollar drama (global hyperinflation). POG is in its early stages of anticipation.

Currencies can fight a relative balanced war, for quite some time...but finally a winner and a loser must be appointed. Up until now the dollar succeeded in having the upper hand with its intrinsic weakness hidden behind the "no alternative" (euro) psychosis. Nothing new but necessary to repeat as to understand "why" things are happening as they do.

Next target for euro/dollar exchange rate is 1,10 after some needed consolidation time. This suggest another 10% rise in POG (?) : reaching the 354$ danger (gapping) zone !
Not "if" but "when" ?

Not monetary management anymore, but rightout monetary WAR not yet ugly because only in the warming up phase !
Nice weekend and Thanks.

Boilermaker

(07/13/2002; 04:50:15 MDT - Msg ID: 80438)

Wall Street Week for losers

This AM's AOL wake up message;

snippet;

(July 12) - After a decade of investing in stocks, Philip Little is about ready to get out.

A 50 percent decline in his portfolio has the 37-year-old Los Angeles publicist looking at alternatives, like suspending contributions to his retirement plan and using the cash to buy real estate instead.

His gut feeling: ''There's more fallout to come.''

''It seems like there's a corporate scandal a day. And I don't want to put my money into a company until I'm sure that the books are clean. Right now, I'm not sure,'' Little said.

He is not alone. Months of corporate accounting scandals and quarter upon quarter of dismal earnings reports have pulled the major indexes down to near or below their post-terrorist attack lows. Investors fear that the bear market that has engulfed trading for the last two years is simply going to get worse..........................

The Wilshire Associates Equity Index, which represents the combined market value of all New York Stock Exchange, American Stock Exchange and Nasdaq issues, ended the week at $8.711 trillion, off $601.80 billion from the previous week. A year ago, the index was $11.271 trillion.

Comment; Money heaven getting rich. Real estate getting earthly leftovers. Gold not quite on the sheeples radar (yet).

Belgian

(07/13/2002; 04:55:02 MDT - Msg ID: 80439)

FIBONACCI ON SP-500

SP-500 ATH = 1.527 on 03/24/2000.
The SHS pattern is in place and the neckline, known.
Some very simple and basic Fibonacci math on the 1980 > 2000 SP-500 hyperbole with the ATH known and in :

Hyperboles do break and have specific down targets calculated with the two main Fib. figures : 0,382 and 0,618 or a 38,2% / 61,8% decline
1.527 x 0,618 (38,2%) = 944 > recent low = 920 (consolidation point or possible support to become resistance when pierced)
1.527 x 0,382 (61,8%) = 583 (or final bottom-target)

Now this is confirmed by the SHS-Top pattern (BB-posting FT). The head (H) being 1.527 and neckline at 948 (connect both shoulders-S).
Head to neckline (shoulders) distance = 1.527 - 948 = 579
Fibonacci 1,618 times 579 = 937 decline for final (next)bottom : 1.527 - 937 = 590 already calculated with the 61,8% decline from ATH.

Possible conclusion(s) : The SP-500 has reached its first target and choices have to be made :
- Further decline with retracement (technical rebound-short covering) to 944 and resumed decline to next target 583 ?
- Or, straight down (zigzag) to 583 ?

SP-500 = 583, being the '94/'95 zone where Greenie talked about (ir)rational (hum) exhuberance.
Decimation (1.527 : 10 = 153) of SP-500, brings us back to exactly 1980, where the other inflation (GOLD) indicator stopped !!!

Quite mechanical, isn't it ? Thanks Fibonacci.

Boilermaker

(07/13/2002; 06:00:13 MDT - Msg ID: 80440)

Natural Gas Prices

http://tonto.eia.doe.gov/oog/info/ngs/ngs.htmlOver the past two months the price of NG has dropped more than $1 per MCF to about $2.80. Presumably this reflects the higher levels of storage this summer compared to recent years (see link). Reading the EIA statistics and notes I get an uneasy feeling that they have been "revising" the data in favor of consumers. Perhaps Black Blade can help me understand this rather sharp reversal. Is gas production rising and/or is gas consumption falling more than expected?

I'm more than curious because I recently bought into two wells, the first of which is looking good and will start producing this month (the second has not been spudded). The initial production known as the "flush" will decline rapidly over the first two years and I was hoping that gas prices would remain strong.

misetich

(07/13/2002; 06:15:05 MDT - Msg ID: 80441)

Breaking Records--For Bankruptcies

http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=208698Snip:

It's terrible. Unless, of course, you happen to be Wilbur Ross, CEO of W.L. Ross & Co., who is a dean of distressed investing. "The numbers are really big, and there's no end in sight," Ross says. "We keep track of companies with $100 million or more of liabilities when they file. Last year was the all- time world's record. Companies worth $230 billion filed for bankruptcy. That's up 80% from 2000, and up 11.5 times from the last peak, in 1990." Last year some 172 large companies filed for bankruptcy, says Ross. That's one every two days!

And the beat goes on. "If we don't break the record this year, we'll be within spitting distance of it," says Ross. "If you add up the two years cumulatively, there will be some $500 billion of liabilities in bankruptcies by the end of the year. That's 5% of GDP."

And that's just corporate bankruptcies. The action on the personal side is even faster and more furious. Be it under Chapter 7 (liquidation), Chapter 11 (reorganization), Chapter 12 (family farms), or Chapter 13 (low-income insolvencies), Americans are raising the white flag as never before. In the first three months of 2002, bankruptcy trade group ABI reports, total bankruptcy filings climbed to 379,012, the highest first-quarter tally ever. The overwhelming majority, 369,237, were personal bankruptcies. In other words, 97% of the bankruptcies in this country are personal. That's up from 81% 20 years ago.

Misetich

With all accumulated debt in the last 10 years - it is not surprising -

Got gold?

misetich

(07/13/2002; 06:27:16 MDT - Msg ID: 80442)

White House Says It Expects Deficit to Hit $165 Billion

http://www.nytimes.com/2002/07/13/politics/13DEFI.htmlSnip:

The recent dropoff in tax receipts and the ensuing surge in the federal deficit is due "almost entirely to what I will call stock market related income � capital gains, and to a lesser extent income from mutual fund distributions, options, perhaps bonuses tied to stock performance," said Mitchell E. Daniels Jr., director of the White House's Office of Management and Budget. "This is a new and I think important phenomenon we are all going to have to understand much better."
...........

Mr. Conrad said the $5.6 trillion, 10-year surplus projection the White House relied on last year in pressing for the tax cut proved to be a mirage. While last year's recession and the costs of the war on terrorism played a role, he said, the bulk of the deteriorating fiscal outlook over the long run was attributable to the administration's emphasis on tax cuts.

"The markets are voting every day on the credibility of this economic team, and they're giving a thumbs-down to this economic plan," Mr. Conrad said.

Misetich

Whitehouse NONSENSE- deficit is due "almost entirely to what I will call stock market related income � capital gains..."

The deficit will be much higher - and don't forget off-budget items and interest payments on top-

Terrorism tax (homeland security etc)coupled with higher unemployment, tax cut is the main reason for the higher deficit -

How long will foreigners keep on lending?

Got gold?

Boilermaker

(07/13/2002; 06:46:31 MDT - Msg ID: 80443)

Natural Gas

http://biz.yahoo.com/tsp/020712/10031478_1.htmlFriday July 12, 3:52 pm Eastern Time
Under the Radar: Traders Aghast at Gas Data Errors
By Christopher Edmonds
Special to TheStreet.com

When it comes to natural gas data, whom can you trust?

Energy trading floors and analysts rely on the weekly natural gas storage numbers from the Energy Department to make investment decisions, only to find -- as often as not -- that the data are flawed.

Since the Energy Information Administration, or EIA, took over collecting and reporting weekly natural gas storage data from the American Gas Association 10 weeks ago, it has had to revise its report five times.

comment,
I thought the AGA data were suspect. EIA is mastering the data manipulation game very nicely.

misetich

(07/13/2002; 06:55:31 MDT - Msg ID: 80444)

Senator Urges Change in How Stock Options Are Handled

http://www.nytimes.com/2002/07/13/business/13SENA.htmlSnip:

WASHINGTON, July 12 � Senator Carl Levin said today that he would try to force accounting rule makers to revisit the issue of how corporations account for stock options.
.................

Stock options are "one of the driving forces behind the corporate abuses that we've seen," Mr. Levin said today. F.A.S.B. officials "were thwarted, they were beaten down" when they tried to change the option accounting rules in 1994.

Misetich

US Treasury O'Neil is opposed on the suggeste change - Wonder why?

Don't expect any action on this issue anytime soon - as McCain said, "The Fix is in"

This issue, accounting treatment of stock options - represents the corporate fraud perpetrated to investors - that everybody knows, what the problems are - and does little about it - perpetuating false and misleading financial reporting

Got gold?

Carl H

(07/13/2002; 08:44:36 MDT - Msg ID: 80445)

@Boilermaker: Nat Gas

I did some analysis of the EIA's Nat Gas numbers back in March. (The numbers have since changed.) I would be happy to share the spreadsheet with you so you can see just how phoney the numbers are. You can ask MK for my e-mail address.

In short, I suspect that you will conclude that you don't want to sell a single m^3 until the dollar cracks.

Incidentally, I am also a Boilermaker.

Max Rabbitz

(07/13/2002; 08:56:48 MDT - Msg ID: 80446)

YGM

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=28259Your find from last night deserves a repost.

"Freedom is greater than silver and gold"

sector

(07/13/2002; 09:01:14 MDT - Msg ID: 80447)

@misetich The GAAP Deficit is $515 Billion

This per an O'Neill letter posted at the Treasury website......which pretty much sums up the media bias since they know about the true number but don't say.

It's a financial "Don't Ask...Don't Tell" policy...on steroids.

USAGOLD

(07/13/2002; 09:35:24 MDT - Msg ID: 80448)

Belgian. . .

Agreed: Hopes for a "orderly" secular decline in the dollar fall in the utopian category.

The euro though will continue to have usage problems internationally as long as gold and oil are denominated in dollars. Break the currency monopoly on those two items and watch the euro fly. Gold will anchor both currencies (no matter what the authorities say or do) and remain "the" reference point ( (no matter what the authorities say or do). Europe recognizes this due to Mundell's influence as well as that of the prevailing cooler heads working in the background. I will skip over the reasons for gold's function in this regard knowing you understand them full well. The United States denies this tie which opens the door to the euro taking on a more prominent (though probably not dominant) role in international store of value reserve positions. The question is whether Europe will parlay the advantage into a wider role for the euro. That depends on Europe. The move of late to push the leftist parties aside helps, but the financial world would probably like to see something more than just rhetoric. Is the euro gains of late due to US acquisescence or European assertiveness?? This seems to be the right question for this discussion.

- - - - - - -

Thumbnail Sketch and Analysis: Note, the United States admitting a $165 billion budget deficit. If they admit that, it's probably more like $250 billion and once again the US is verging on chaos in government finance. The Bush administration is telling the world it's time to trash the dollar! But any gain in the euro stature may be illusory, if they use a de facto dollar devaluation as cover to print more currency of their own. As water is added to the lake, all boats rise, but none become bigger, better and more efficient. In other words, though there's more water in the lake, the most efficient operators will still dominate the fish catch.

This stubborness about gold in the United States (against all practical understanding) makes the dollar problem not just American but international under the current economic system. However, I continue to believe that "all" currencies in this beggar thy neighbor environment will depreciate against good and services making gold attractive to the knowledgeable worldwide -- Japan and China being good current examples with others to follow. I am reminded of FOA's argument that private gold ownership will become a bulwark of savings in all the nations of the world encouraged by the various national governments. Better to have the gold as an instrument of national security than another country's paper promise. If you live in Brazil, Mexico, Japan, China and the United States, a gold acquisition program remains the most viable option. Using Argentina as an example of what happens to those who put faith in the political process over a simple gold diversification, individual savers must to grips that even though their governments will put on whatever face appropriate for the times, they may be helpless -- victims of their own policies, it would seem. (the impotent Bush administration reaction to the American financial scandals being one good example).

- - - - - -

Conclusion: All together. All falling. . . As the poet says: You don't need a weatherman to know which way the wind blows. And you are certainly correct: The dollar to most eyes will be leading the way. . . . .and to as orderly as the authorities are likely to try to make it, the greater probability is that it will get away from them -- like it did in the 1930s and the 1970s. And, neatly, we come back to Connolly's Dark Vision. . . .

Thanks, Belgian, for stimulating cobweb territory on a soon to be hot Saturday morning here at the foot of the Rocky Mountains.

Anyone else wanting to take a stab at this is welcome to the discussion. . . .

Best to all.

USAGOLD

(07/13/2002; 09:50:27 MDT - Msg ID: 80449)

Belgian. . .One more point. . .

I agree that the euro could very well over time become the world's dominant currency due to a default on the dollar. Hopefully, though Europe is serious enough about its gold policies to use the yellow metal as a lever to a more stable international monetary system. I, for one, wonder if the use of any currency over gold in settlements is the most advatageous and fair policy. To me, better to use the one reserve asset detached from any nation state as the final arbiter.

Agree or disagree??

TheJuniorMiner

(07/13/2002; 10:06:26 MDT - Msg ID: 80450)

Silver, Gold and inflation

Having many thought this rainy Saturday morning. Thought I'd post an essay for a little more moderate view of things.

Love your Stuff BlackBlade
Read all your posts Gandalf, sector, YGM
You guys are great.

I'm more hopeful of an inflation scenario that a complete collapse of our world economic system. We can only hope it really works out this way.

During the early 70's, major inflation was felt. Inflation was highest in goods, and especially Gold and Oil. Later in the 70� it was felt in real estate. During the mid 80's through the late 90's (At least this is a personal view I've had for many years) it was in the global, but especially US, stock markets. Paper money has always found a place to go.

Now where can it go? Most global currencies want to be weaker than the other. Big shot economist, seen on Wall Street week last week said something to the effect that global currencies want to depreciate but they don't have anything to deprecate against. Really, I'm not kidding. My feeling is real estate and commodities. Oil analyst on Wall Street Week (one of my favorite shows) several weeks ago suggested that non-OPEC world oil production will peak in 2006-7. Perhaps a slightly longer term view of where the prices (in US fiat) for Gold and Silver will ultimately peak will settle some of these daily jitters.

Silver, or oil could be the catalyst and gold may just follow. If non OPEC production cannot keep up with increasing global demand, prices will rise. I can recall working at a Shell station in the late 70's when gas prices doubled in 1 year. Went from 56cents to $1.29. Prices are pretty much the same today. Gas prices haven't changed in 23 years. Yet everything else has! Oil is a finite resource and the spigot will slow down. It's just a matter of time.

Silver is a major industrial metal and is used in our everyday life. The world consumes approx 100 million more ounces than is mined and scrapped. Photography by the way is about 160 million of this and the digital camera doesn't seem to be making big inroads yet. (Probably happen when silver prices rise significantly). A little bit of silver is used for a lot of things. As in gold, the demand in excess of mining and scrap is coming from somewhere. Hard to pin down all the sources but it is clear that 1.5 billion ounces of silver have been consumed from this source over the last 15 years. How big are the sources. Got to end sometime. May end way sooner for silver than gold.

My point being that paper always seems to flow somewhere. It sure seems like the time for it to flow into commodities in now. This can be a little slower process than some on this site seem to view but it as hopeful as I can be sitting here on a gray Saturday morning in Central Florida.

Silver, Oil and Gold could be the big sponges for the next round of inflation.

Boilermaker

(07/13/2002; 10:28:50 MDT - Msg ID: 80451)

Carl H

Greetings fellow Boilermaker. Thanks for the offer of your EIA data analysis, I would like to see it. I hereby request our esteemed host to provide our email addresses to each other. Is that the way it's done?

Pizz

(07/13/2002; 12:45:36 MDT - Msg ID: 80452)

USA Gold

Euro & the dollar. I'd have to think it's more US aquiensince and a possible end run to throw a monkey wrench in the Euro.

I may be off base here, but I think the Euro is going to have one major hurdle to overcome in the next couple years.

Just as the US has exported inflation for the last 10 years thru a strong dollar policy, I tend to believe that with the defacto weak US policy that seems to be in place, that the opposite is about to happen to the Euro, that is we will be exporting the deflation most doomsayers say we are about to have due to the debt implosion.

I also think this is the main reason why the European stock markets are having a rougher time than the US, albeit both are bad, and discounting a depression.

If the US is successful in exporting deflation (inflate our way out of debt for a short term fix), and we are are the biggest boys on the block, we have a real good chance. This could be the longest, coldest winter in more ways than one, and when the US population really starts suffering, direct government dollar infusion and massive bailouts will be very well accepted by the people.

Now, until then, with a strong Euro and their stance on little or no inflation, they may be able surplant the dollar a little in regards to investment and maybe even oil,
but the deflation is going to have a real negative effect on both their banks and exports.

If my thinking is on track, this may be what transpires to (attempt??) keep Britain from jumping into the Euro, and a real political/sociological battle next year as far as Euro survival. Going to be darn tough if the US (and others fighting for the bottom) is able to light off inflation (I still believe we have no choice and they will find more than enough ways to do it - deflation is NOT an option, believe me) for Europe to sit back with the most sound currency on the face of the planet with the corresponding economic convulsions.

Kind of rambling and throwing off thoughts, but the current and coming currency wars are going to have a lot of twists and repercussions.

Belgian, your thoughts would also be appreciated, and if by chance you've covered this before, my apologies and point me in the right direction.

Pizz

R Powell

(07/13/2002; 12:50:20 MDT - Msg ID: 80453)

JuniorMiner

Agree. The Fed. and the Greenman can inflate the amount of money anytime (and all the time!) they want but they can not control where that money goes. Real Estate may well be the current target. The dollar has depreciated by a factor of three since our house was purchased in 1984 and prices are still rising.

The POS may rise even more and faster if the wildest bull predictions come to pass and even Abbey Joe's predictions prove to be too low. Fat chance, I think, but POG and especially POS should both appreciate no matter what the government or the economy does or does not do. It's reassuring to know that neither depend upon the actions of the inept. This assumes, of course, that mankind does not total self destruct the whole planet. Another baseball strike may be an omen of such a disaster.

Ted Butler has a new thought concerning silver and the recent downdraw of Comex stores. He likens the 100 or so million ounces in Comex as the source (lender) of last resort. He believes the CFC has resorted to this source for its announced silver purchase. Has anyone heard if George W. has signed the government silver purchase bill to supply the mint's coin program!!!!!!!
Happy weekend
Rich

sector

(07/13/2002; 13:06:06 MDT - Msg ID: 80454)

@The JrMiner Inflation During and Especially After Deflation...Take It To The "Bank"

"Bank" Being One's Own GSA--Gold Storage AreaGreenspan has flooded the market with repos, M3 and GSE based mortgage paper...this last category accounting for $1Trillion in the last three years alone.

The value of this FNM and FRE vast real estate empire [We will hear more next week on Fannie and Freddie from Peter "The Gold Bagman" Fischer, is not what owners and credit issuers suspect. It is far less as one must rate housing valuations against their potential rental income. Can Joe Six Pack get $2,000 per month for his $230,000 new house to cover mhis mortgage? Certainly not in a recession and never in a depression which is exactly where we are headed.

The hot money created by the Fed will find speculative value like water finds low points. As you suggest, commodities are in the batters box with gold and silver "On deck". The cabal cannot win the manipulation game as a host of very BIG funds not to mention sovereigns are moving in for the $330 kill. If not this time then next.

The price of gold in dollars has broken (Since April) a fifteen year pattern of trailing the DOLLAR INDEX price of gold. This means that gold is retaining its value as the $USD falls [Data source FED's h.10 compilation]. This inspite of the cabal's efforts.

You heard it first right here at USAGOLD.

This trend is very important and is in my view the result of widening knowledge of inappropriate gold market rigging coupled with vast US corporate fraud.

Let's enjoy the squirming of the President and especially Lawrence Lindsay as they sink deeper into the quicksand of corporate malpractice all the while drawing attention to US Government fiscal misdeeds.

Black Blade

(07/13/2002; 13:33:02 MDT - Msg ID: 80455)

Re: Boilermaker and Carl H - EIA and NatGas Supply

I have always been critical of the AGA data collection and methodology in the past. They too had huge weekly revisions at times. It appears that the EIA has not been much better (perhaps worse). I don't know what the answer would be as far as designing new data collection and statistical methodology. Obviously a more efficient method is needed. Also, the severe deep recession has had a large effect on a build up of supply in recent weeks. This is actually very fortunate for America in that we have an economic depression in the works, otherwise our energy supply could have been in jeopardy. The aluminum and fertilizer industries have recently left US shores for the Carribean and South America and therefore reducing demand.

Still, the hot summer is likely to have some effect energy supply. It should also be noted that several new NG storage facilities have been built over the last few years as well as several NG-fired power plants. We have a new El Ni--o system affecting weather patterns now that could increase NatGas demand. Summer temperatures have increased in the western half of the US and El Ni--o winters tend to be much colder. However, we may be lucky should demand for energy be low due to reduced industrial demand.

Drill rig rates (especially onshore) have been very low even though decline rates for NatGas production have been increasing. This is worrisome as future production may not be sufficient to keep a build up of supply through the winter months. However, if the new EIA data is correct due to these new "mystery revisions" of supply data, then we just might be able to avert a serious energy crunch this year and early next year. That is why producers, traders and marketers are somewhat distressed over these revisions. The producers are especially worried because how do you set strategy to ensure a secure energy supply if the data is confusing and constantly changing with huge supply data revisions?

It will be interesting to see how this plays out. If the EIA data turns out to be correct then we may have nothing to worry about and drilling and exploration can be sharply curtailed and probably even eliminated in several regions, however, if the EIA is wrong � requiring large revisions in data to the downside, then we have plenty to worry about. They had better find out where their data collection problem is soon or many exploration projects will be closed, drilling companies out of business, and future energy supply in danger.

As far as some nefarious conspiracy is concerned, I would normally say that "I doubt it". Then there was Enron. Hmmm�

- Black Blade

MarkeTalk

(07/13/2002; 13:35:57 MDT - Msg ID: 80456)

Of Amish and Gold

After visiting with The Hoople for the last couple of days, I find myself further up north in Amish country, visiting "English" (non-Amish friends). Today I met some authentic Amish with beards, straw hats and bonnets. I was offered to ride in one of the horse-drawn carriages which was built in 1912. I was even offered to hold the reigns of the horse as we drove along the back roads of rural Indiana. (By the way, the corn and soybeans crops look dismal. The fields are as dry as a bone.)

Of course, the question came up: What do you do in Denver? I explained I was in the gold and silver business. Faces lighted up and eyes got big. We carried on a conversation and I could tell that these simple people understood what true wealth was. So we city folk might try to dismiss them as backward anachronisms with no understanding of high finace, but the truth is they are more aware of gold and silver than most Americans--not to mention the sophisticates on Wall Street who, along with most Americans, are now losing their collective ass(ets).

I will be back in the office on Monday, Lord willing.

GC

sourdough

(07/13/2002; 13:39:11 MDT - Msg ID: 80457)

The Evil doers aka Economic Terrorism

Thoughts from a Canadian but not necessarily Canadian thoughts.
I think all here agree we don`t know how the world economic story is going to play out for certain but certainly for a while anyway, it is going to play out badly.
Canada as an economy sends (I believe) about 80% of our exports to the U.S.
On the reverse, we are Americas largest trading partner.
Regardless of the "spin" Canadian economists tried in the past to say we no longer are, essentially we are still hewers of wood and diggers of minerals. Basic commodities are still the game in Canada and will remain so.
Minerals,forest products, oil, gas, electricity, precious metals/diamonds and water. Agricultural products are a valuable export, but not necessarily related to America.
It is plain to see that all of these export products are a necessity to the American economy. Every once in a while'someone decides it is in "their" best interest to "delete", one or more of these imports, not for the sake of the people as a whole (homebuyer) but for the interest of individuals or small groups.
The latest example being the lumber tariff.
In the interest of politicians and the groups that contribute to keep them in power, (the minority), the majority pays up. (Perhaps it also has something to do with helping to keep the real estate market inflating by raising the cost/value of new housing?)
It is very simple to see what we send to the U.S., "NECESSITIES".
NECESSITIES TO MAINTAIN AMERICAS DOMINANT PLACE IN THE WORLD. (In fact, some have suggested that if we didn`t provide what they need, they would find a way to take it. Plenty of historical examples to justify those thoughts.

ON THE OTHER HAND: What is it we import from the U.S., that we "NEED", that could not be obtained from somewhere else?

Fruit/vegetables? no. Central and South America/Cuba,etc. can supply our agricultural needs. No problem there. The Canadian export dollars to those countries, would come right back to us in our "necessity" exports to them.

Textiles/clothing? No. Same thing. We import from other nations, they buy our "necessities" to continue to produce. Maybe the odd beef steak, some housing materials also, as we cut out the "middleman".

Canadians can produce their own meat/bread,dairy,with plenty to export to balance trade with 3rd word suppliers of the basic necessities we require.

Transportation? Well fuel is no problem, we "mine and refine", with plenty extra to export. Vehicles, well, we got the materials, we know how to make em, and plenty of people in Korea, Japan, and soon, likely China, are happy to provide us with cheap imports. Of course they need the "necessities" to make them. Maybe they would also like some LUMBER beef,pork,poultry,dairy products from us as they get a little more wealthy.
I can be fed,dressed, well housed, warm and transported without AMERICA. Can Americans say the same, without Canada?
WHAT IS IT WE REALLY NEED FROM THE U.S.?
Seems to me all we import is junk. As the mountain men of days gone by would say: FOOFORAH. TRINKETS.
(It may be, well past time, to remind the men,women and children of Canada, the difference between trinkets and necessities, the opportunity to do this may well be on it`s way, like it or not.)
There is one "necessity" that the U.S does provide. TECHNOLOGY . What is technology? "SMART People" and Money. Smart people go where the money is. Money is GOLD.
Canada has room for an unlimited amount of "smart people". Canada has lots of gold(for it`s population/debt,etc.) and the best expertise in the world for finding and mining it.
The fact is, Canada "is" the greatest place in the world, with the greatest potential in the new century.
It is ours for the having.Things may be tough for a time, but with the correct thinking, Canada will be better off for it, when all is said and done.
When we finally take our rightful place in the world, one can confidently hope we will do a better job than our neighbour to the south.
The Cost of being "cock of the walk" destroyed Britain in 1914-17 and 39-41, while America got the chance it needed to take over the henhouse by the profits of war. Now history repeats.
CANADIANS, it is our century, let`s learn from others mistakes. Stand up and do it right, WHILE DOING RIGHT TO THE REST OF THE WORLD.
God HELP US FIND A GOOD LEADER. God help him/her know and convince our people that Gold in the future, as in the past is part of the formula.
God help that Canadian leader understand and help all the peoples of the world understand that "LOVE" itself is God.
Nothing more, nothing less.
When I see the coinage of Canada, inscribed with the words: "IN LOVE WE TRUST", "WORSHIP LOVE", I will know Canada has become the "world leader"it is destined to be.
"MANIFEST DESTINY,CANADIAN STYLE!"

Black Blade

(07/13/2002; 14:05:43 MDT - Msg ID: 80458)

The Risk of a US Liquidity Trap

http://www.smithers.co.uk/newsdyn.php?pgtype=news&pgnm=article&pgmime=&pgndx=12
Snippit:

When the US stock market bubble burst, in March 2000, it came almost exactly a decade after the peak in the prices of Japanese shares. At first, few seemed to worry about the economic impact of Wall Street's problems, but of late there has been a growing concern that the way in which the New York market has imitated Tokyo may be followed by a similar case of imitation in the broad economy. Even if the US does not suffer a decade of stagnation, there are fears that its economy may not readily recover from the current recession. The key question is whether the US will now follow Japan into a liquidity trap.

Black Blade: Interesting article.

Black Blade

(07/13/2002; 14:17:31 MDT - Msg ID: 80459)

Market fuels fears of 'double-dip' recession

http://www.washtimes.com/business/20020713-4268236.htm

Snippit:

Some soft spots have emerged in the economic recovery in recent weeks, most notably a steep decline of consumer confidence, reflecting in part the stock market's drubbing amid numerous corporate scandals and a still-bleak job outlook. Consumer spending has pulled back from the solid pace that appeared to be leading the economy out of recession earlier this year.

Black Blade: I am one of those who see a sharp downturn yet to come. What we have seen is just the tip of the iceberg. We are now in "earnings season" and the Pied Pipers have been saying that this is the make or break season. Of course they have said that every quarter was going to be better over the last couple of years. The earnings estimates are continuously lowered so that companies can meet or beat the "consensus estimate". What an absurd joke this has become. Earnings have been lower quarter over quarter with no end in sight. Then there is the "pro forma" and "operating earnings" put forth as if these were real earnings. Looks like we will have this debate all over again which is surprising in the age of Enron, WorldCom, Qwest, Tyco, Global Crossing, etc. I expect to see a parade of Pied Pipers and Trolls trotted out on CNBC, Bloomberg and CNNfn to tell us about bargains in the stock market, to get in while these stocks are "en fuego", that the economy is recovering, and all manner of "putting lipstick on these pigs".

Cavan Man

(07/13/2002; 14:18:12 MDT - Msg ID: 80460)

Indiana Corn Crop report

Last week I drove from Dayton to Muncie; from Muncie to Gas City and from Gas City to Terre Haute. The fields were lush and the corn, in a word, beautiful. The beans looked good also. Ditto for Illinois I70 corridor from Terre Haute west.

R Powell

(07/13/2002; 14:50:50 MDT - Msg ID: 80461)

Corn and beans

Conflicting reports with MarkeTalk mentioning dry, sad looking fields and Cavan Man describing the corn as beautiful and the beans looking good too. Both you guys were talking about Indiana but one of you was traveling at horse drawn speed and the other was powered by many horsepower.

Both corn and soybeans prices like precious metals will be determined in part by the strength or weakness of the dollar. A great part of the market for grains comes from exports so they are currency exchange sensitive. Have the recent gains in crop prices really been weather driven? Or has the declining dollar simply adjusted export expectations thus raising prices? The CRB index gains have been mostly based on price rises in exportable commodities like corn, soybeans, wheat and cotton, not those that we do not import like coffee and sugar. What's this to do with gold? Perhaps a continuation of the increase in commodity prices as seen through the CRB will predict or confirm the ongoing precious metals bull market.
When all the Fed's newly created liguidity desperately looks for a safe place to hid, tangibles will appear as the spot whether gold or grains, silver or soybeans. If I had the nerve and the money, I'd play the whole scenario long with the CRB index! Many view the CRB as inverse to the equities indexes. Lord knows, it hasn't been just the price of silver and gold that have fallen below production levels during the Great 90s Stock Mania. Many analysts see this trend reversal as a long term event just now in its infancy. "Buy and hold" may still be sage advice, just be careful what you buy!
Thoughts?
Rich

R Powell

(07/13/2002; 14:53:38 MDT - Msg ID: 80462)

Correction (sorry)

not those that we do not Export....(not import)

Around The Corner

(07/13/2002; 15:08:13 MDT - Msg ID: 80463)

RE: Boilermaker, BB, all...

"Since the Energy Information Administration, or EIA, took over collecting and reporting weekly natural gas storage data from the American Gas Association 10 weeks ago, it has had to revise its report five times.

comment,
I thought the AGA data were suspect. EIA is mastering the data manipulation game very nicely."
____________________________________________

Consider the revelation of late: Enron (and others) were conducting sham/empty NG trades to artifically pump up the volume of NG business they were doing.

These sham NG trades by Enron (and others) were recorded as REAL trades? by the AMA which resulted in artifically inflating the NG usage/demand data of the California energy market.

Throw in the re-routing/storing/hiding of available/unincumbered NG at critical times of high energy demand to make it appear (falsely) that there was an energy/NG shortage in California...and the scam to demand sky rocketing NG prices was complete.

IMO, if this is indeed what Enron (and others) did, then the guilty parties should be tried for murder. Yes, murder...because as a direct result of their scam, blackouts occured in California which directly resulted in the deaths of a number of people.

ATC

Aragorn III

(07/13/2002; 15:59:49 MDT - Msg ID: 80464)

Answer a question with a question

Sir sector, yesterday you were correct to say "Belgian I Think Germans are Like People Everwhere..."

Does that not give you a measure of understanding, leading to comfort, when Bundesbank President Welteke "jingles the bags" of German gold?

You offered "He will find, I believe, that the temperature remains cold regarding the sale of gold in order to buy stocks."

Then you asked, "After all who in America would want World Com even IF it WERE artificially supported by the government?"

Let us not so easily dismiss our opening premise of the similarity of people everywhere.

In response to your question where you imply the answer is negative, this question is offered for your fullest consideration on the behaviour of similar peoples:

"After all, who in America would want gold even IF it WERE artificially price-supressed by the government (or other non-sustainable factors)?"

Recent history has been instructive in this human behaviour, has it not? Children to be led around by the hand.... "common delusions and madness of crowds."

What to do to choose your path? Keep an eye on sustainability. (ANOTHER's Gold Trail in the wilderland grows only the firmer and the wider with much use, in time to be a highway gathering many feet and wheels.)

got gold?

cyberbat

(07/13/2002; 16:08:05 MDT - Msg ID: 80465)

Canadian Precious Metals Mutual Fund

@ anyone
Someone on this site made mention of a canadian retirement fund that was comprised of the metals and gold mining stocks. Does anyone know about this and can americans also buy in to this fund. It is said to have the government's blessing which means that Canada probably won't outlaw gold when every other country starts to after gold reaches epic proportions in price.
Help me out !!
Cyberbat

Boilermaker

(07/13/2002; 16:12:09 MDT - Msg ID: 80466)

Re; Carl H and Black Blade

http://www.eia.doe.gov/oiaf/servicerpt/natgas/pdf/sroiaf(2001)06.pdfOn page 52 of the link above there is a table labeled "Balancing Items in EIA'S Natural Gas Data Series" that discusses the history of the annual "Balancing Item" (fudge factor) that is needed each year to balance the gas books. This factor seems to be getting much more erratic the past two years and suggests that the production and consumption data are getting more unreliable. I suspect that this could be due to Enron type transactions that screw up the totals. Any other ideas?

Boilermaker

(07/13/2002; 16:19:03 MDT - Msg ID: 80467)

Re; Around The Corner

I posted my last message before reading yours. We are thinking in parallel.

Gandalf the White

(07/13/2002; 17:25:47 MDT - Msg ID: 80468)

Great to see KING Aragorn III posting again !

The Hobbits missed you while you were on the "ROAD" !!
<;-)

R Powell

(07/13/2002; 17:40:07 MDT - Msg ID: 80469)

cyberbat

Now that the 2nd quarter reports are in, we see that 13 of the 14 leading mutual funds are of the precious metals/mining variety. IBD lists 197 different sectors every day. Mining/precious metals has been No 1 (ranked by YTD gain) for some time now. Many of the bear funds are also doing very nicely this year and they're doing spectacularly well in comparison to the majority of mutuals which are down for the year. The new scam from phone soliciters is to give gains over the last three years. When they call ask about YTD numbers.
The Central Fund of Canada may be the one you refer to. It trades on the Toronto Stock Ex. and buys and holds precious metals. It is presently purchasing 5 million ounces of silver along with gold. When its market cap exceeds 500 million it will become an eligible target of some very large funds. At that time it may be able to buy more metal. Some silverbugs believe that it is the CFC buying that has drawndown the Comex silver reserves. Is there not enough silver available elsewhere to fill their order??
This info is from memory so due diligence as always is needed. This may be a good choice for money that HAS to go into the long side of stocks like 401K investments or such but, if precious metals look like the place to be, why not buy and hold yourself? I prefer silver since I get more weight for my dollars but silver does tarnish, gold does not.
Rich

Black Blade

(07/13/2002; 18:07:29 MDT - Msg ID: 80470)

Re: Boilermaker, aroundthecorner,etc.

I had considered the Enron, Dynegy, Duke, Aquila, El Paso, etc. trades as a possibility for some of the skewed data. Some of these companies also have storage fields and processing facilities. If the data is dependent on the voluntary release of information from these producers/traders/marketers we could perhaps not have access to the actual data. This could open a whole new can of worms - especially if the storage levels are much lower and there is more "phantom" NatGas recorded. On the other hand, if there is much more NG in storage the question is where did this NG come from when drill rates dropped, decline rate increased, and on top of all that recorded overall increase with flat out production last year and the year before only brought on a 2% increase (as per previous data). I smell a rat. Something is definitely suspect here. Another question is whether the AGA was complicit in some fraud and if so, they too could be a target for the lawsuit happy Californians. A lot of interesting possibilities.

Anyway, got to step out to a party with some of my Mexican-American friends (Negra Modelo, canciones, fiesta y baile). Cheers!

- Black Blade

cyberbat

(07/13/2002; 19:03:56 MDT - Msg ID: 80471)

@ R POWELL

Appreciate that info. I am presently in Vanguard precious metals and Fidelity's. I am going to check you lead out and do some due diligence. I'm trying to shift at least 50% of my metal and mining funds into physicals as a dropping stock market may "ground all ships" and I am not prepared to take that chance with my IRA's and 401K.
I'm also considering Kitco's gold pool. Sounds like that program may have some merit since you are not paying fabrication or shipping charges.
Thanks again for that info.
Cyberbat

goldquest

(07/13/2002; 19:16:43 MDT - Msg ID: 80472)

NG Debate

The records of the pipeline carriers should not be overlooked. Companies such as Williams, Chevron, etc., have hundreds of miles of NG lines running througout the U S. Each pumping station keeps records of their volume and distribution. Of course these records could be doctored or destroyed also, but my guess is that they would be fairly accurate. I don't know how the pipeline companies are compensated, but I assume it is by volume transported.

Carl H

(07/13/2002; 19:32:23 MDT - Msg ID: 80473)

@Black Blade: EIA Data

Black Blade -- my critisism of the EIA data is harsher. I can conclusively demonstrate that a significant part of the drilling set of data that I downloaded in March is FAKE from 1/2001 to 3/2002.

YGM

(07/13/2002; 19:37:37 MDT - Msg ID: 80474)

'MAN' "O" 'MAN'....What a Day of Amazing Insightful Posts....

...not that all days here aren't good! ...... BUT!...What a great day to sit over here in the corner and lurk, todays posts read like the wisdom of our own sorely missed "A" & "FOA"....Aragorn yahoo & howdoo!

""""sourdough""""
your Canada post was most appreciated and well read by this Canuck...Yes all we lack is leadership...We have everything but tropical fruit right here at home...No our defense minister don't count for fruit(s)...Thanks for the reminder of what we should not take so lightly while complaining about our Prime M-oron and current Gov...I love the USA and it's people are second to none but there's no place like home.......YGM

"GO GATA" "GO GOLD & GO PHYSICAL"
Think Big & Live Small (we know where that last line comes from :>}...and welcome to the new posters of late...
Just keeps gettin better around here!!!!

YGM

(07/13/2002; 20:07:45 MDT - Msg ID: 80475)

TheJuniorMiner & Max Rabbitz

JM...Thanks for the compliment by comparison but I fear my visions are not nearly as insightful as those of the company I keep...I read and post what I find of which I think others may find interest...An economists mind I have not, but here I learn...YGM

MAX...Freeeedom yeeeesss! Stand for somthing or fall for anything is a great adage! It's one that seems to have common fellowsip here....YGM.

YGM

(07/13/2002; 20:17:06 MDT - Msg ID: 80476)

(Off Topic) The Land Where the Gold Would be Shared for the Good of 'ALL'... "Shambhala"

http://www.newdawnmagazine.com.au/articles/mystery_of_shambhala_part_one.htmlA good day-dream for any quiet evening.....YGM

sector

(07/13/2002; 20:38:29 MDT - Msg ID: 80477)

@King Aragorn III Ahhhh!...WCOM "Supported" vs. Gold Suppressed...

...A True Hobson's Choice, if we were talking about apples and apples......Alas, we have here embroidered WCOM equity paper [Deutsche Telecom for Mr. ], replete with stockholder perks like Bernie Ebber's Mississippi Crawdad Stew and beer keg parties vs. the most fungible substance on Earth. As much as I like the crawdads and beer, I think most Germans and folks anywhere will take the gold and run given the thrashing paper has suffered and will continue to endure.

Some in the Fatherland would of course say... But the jobs!...Sell the gold and buy German telcos to save the jobs! I'm afraid that would play directly into hands of the gold-bug, "Fringe" element in Germany who already is demanding an audit of Bundesbank vaults with Mr. Weltke steadfast against such...any attention is bad attention for the gold cartel.

The puppet Weltke will keep trying without results to please his BIS Puppet masters.

darkhorse

(07/13/2002; 20:55:49 MDT - Msg ID: 80478)

what a week...

Hi everybody...I just got back from a week at Myrtle Beach. I didn't take my laptop and after I turned on CNBC Thursday (I purposely stayed away from "everyday things", but I got curious late in the week) I'm almost sorry I left it behind. I've got a week to catch up on, so if you'll excuse me, I'll be over here in the corner for a while. BTW, I saw a couple posts earlier today re: Indiana crops. I grew up in Indiana, and when I was up there Memorial Day weekend, most fields were weed-ridden (nothing had been planted because the spring had been so wet the farmers couldn't get into the fields). A few had just been turned over ready for planting, and even fewer were being planted as I drove along. Over more than four decades, I don't remember seeing conditions anything like what I saw that weekend.

HOOSIER GOLDBUG

(07/13/2002; 21:43:05 MDT - Msg ID: 80479)

Crops!

Shorted one contract of corn (MARCH) at CBOT and already making money! Will short more come Monday and keep shorting into rallies up! Estimated 9.0 - 9.5 Million Bushel Crop on its way! Shorting 2 contracts of beans (MARCH) on CBOT on Monday! Crops are looking good here in Indiana! The importance of INDIANA GRAIN CROPS is subordinate/secondary to the crops in Iowa, Nebraska, Illinois, and Ohio! Historically 8 out of 10 times ALWAYS MAKE Money Shorting Corn and Soybeans on my wife's birthday, July 10, and buying Wheat. Usually December Corn and Novemeber Beans, but this year shorting THE MARCH and MARCH Contract Months, because of the late planting. Long 8 contracts of Wheat, and up about $6,000.00 already, with crunch time/demand usually starting Novemeber 1. Poor quality and low quantity! GREAT GAME TO CREATE FIAT FOR TRANSFER INTO TANGIBLE GOLD!
(NOT INVESTMENT ADVISE)

Carl H

(07/13/2002; 22:35:12 MDT - Msg ID: 80480)

@TheJuniorMiner: Oil production.

In a previous message you wrote:

"Oil analyst on Wall Street Week (one of my favorite shows) several weeks ago suggested that non-OPEC world oil production will peak in 2006-7."

Two good books on this topic are Hubbert's Peak by Kenneth S. Deffeyes and The Coming Oil Crisis by C. J. Campbell.

From Hubbert's peak, the World peak in oil production will, with high probability, occur between 2004 and 2008. NON-OPEC production has peaked and is in decline. If memory serves me, OPEC Production will peak around 2010.

Consider how much the funny little green bits of paper we use as money will be worth if the US can't get it's full daily fix of oil.

Got Gold?

Cometose

(07/13/2002; 22:47:31 MDT - Msg ID: 80481)

Conquer the Crash by Robert Prechter

This is an excerpt from Chapter 10 re: What is a Dollar?

" Originally a dollar was defined as a certain amount of gold. Dollar bills and notes were promises to pay lawful money, which was gold. Anyone could present dollars to a bank and receive gold in exchange, and banks could get gold from the U. S. Treasury for dollar bills.
In 1933, President Roosevelt and COngress outlawed U. S. gold ownership and nulllified and prohibited all domestic contracts denoted in gold, making Federal Reserve notes the legal tender of the land. In 1971, President Nixon halted gold payments from the U. S. Treasury fo foreigners in exchange for dollars. Today, the Treasuruy will not give anyone anything tangible in exchange fot a dollar. Even though Federal Reserve notes are defined as "obligations of the United States", they are not obligations to do anything. Although a dollar is labeled a 'note', which means a debt contract, it is not a note for anything.
Congress claims that the dollar is "legally' 1/42.22 of an ounce of gold. Caa you buy gold for $42.22 an ounce. No. this definition is bogys, and everyone knows it. If you bring a dollar to the U. S. Treasury , you will not collect any tangible good, much less 1/42.22 of an ounce of gold. You will be sent home.

Some authorities were quietly amazed that when the government progressively removed the tangible backing for the dollar , the currency continued to function. If you bring a dollar to the marketplace, you can still buy goods with it because the government says (by "fiat") that it is money and because it's long history of use has lulled people into accepting it as such. The volume of goods you can buy with it fluctuates according to the total volume of dollars - in both cash and credit --and their holders 'level of confidence that those values will remain intact.
Exactly what a dollar is and what backs it are difficult questions to answer because no official entity will provide a satisfying answer. It has no simultaneous actuality and definition. It may be defined as 1/42.22 of an ounce of gold, but it is not actually that. Whatever it actually is (if anything ) may not be definable. To the extent that its physical backing , if any, may be officially definable in actuality , no one is talking.
Let's attempt to define what gives the dollar objective value. As we will see in the next section, the dollar is "backed" primarily by government bonds, which are promises to pay dollars. So today, the dollar is a promise backed by a promise to pay an identical promise. What is the nature of each promise? If the Treasury will not give you anything tangible for your dollar then the dollar is a promise to pay nothing. The Treasury should have no trouble keeping this promise." --Robert Prechter /Conquer the Crash

after reading this passage , i got the eerie feeling about his commentary,,,that the rest of the world already realizes and espouses these truths about the dollar ....
What the dollar is without tangible backing is only what the beholder percieves is to be....what changes perceptions without tangible gold to back the paper may be a snowball that starts an avalanche. Americans perceptions are very much isolated by information they recieve from the mainstream press in AMERICA.

THis is a good read and thorough analysis of economic fundamentals relating to our economy . It also outilnes specific advice on things one might do to protect ones self. There are some very sobering chapters on the Fed and the games the FED has been playing for the 89 years of its existence...He states that there are four tools the Fed can use to do its job Two of its tools , are used up ...(it created a huge credit bubble which is weighing heavily on the economy) and the implications about the limitations of the FED,,, its priorities,,, and the consequences....leave one with the feeling of waking abandoned on a sinking ship... where the people who were supposed to be looking out for your best intersts deserted their posts...

All the pieces put together in this wave analysis make the crashing of this economy look staged.....Radical political changes occur at times of these Financial/ economic consequence

I am thankful to God in heaven and here on earth for good information..which I 've observed is brought to us through others (gifts)..although the truth of what is being revealed about the masses getting screwed ( under the guise of it being an accident ) is giving me rage...or perhaps righteous indignation.

This type fall isn't an accident .... it is engineered and allowed to occur and then the uninformed are left wondering ???? what just happened???? Then CNN is going to come up with some nice scripts to explain and the media and the regulators are going to have their scapegoats....
but they are not going to explain how the fed juiced everything at the right times expanding the money supply and in collaboration with the Mutual Fund Industry took charge of the oversight of the wealth of American families; and in conjunction with the banking system sent americans on a debt binge spree and used a sector of growth /internet technology sector of the market indexes to blow up 4-5 trillion dallars of investor wealth /money supply contraction/ to send the stock market and the economy over the edge of a very steep and deep cliff.....of which they were aware existed....

this week , I mused to myself that the markets after penetrating key SHS supports were now in the hands of the technical analysts .....
who work for someone(s) who get extremely short in scenarions like this and in quiet mode help change investor perception by taking the markets down until we get capitulation which greatly en riches those for whom the technical analysts work........banksters.....Use the media to give the sheeple bad and inaccurate info which ruins and destroys their lives......

THe Easy Rider movie featured a soundtrack that had a song on
it : one of the lyrics was" Damn the PUSHER MAN!!!"....about the drug dealers...

Someone is going to write a new song giving the Banksters credit for what they are doing and what they have done...

In situations like this , I always think conspiracy and want to be able to lay the blame for the whole thing on one person who is responsible.or a group ....i am afraid that only the devil could have orchestrated all this through the Love of Money in its fact of being the root of all evil..

Shermag

(07/13/2002; 22:48:50 MDT - Msg ID: 80482)

Bob Prechters take on the real estate bubble

Today I listened to a financial radio show, based in Vancouver, on which Bob Prechter was a guest. Noteworthy was his statement that historically, over many stock market bubbles he has studied, real estate follows with its own bubble that peaks about two years after the stock market. In his words, that puts us due right about now for some significant downside of real estate.

If nothing else, Prechters work is replete with detailed analysis of multiple financial relationships, and I take his prognosis of this market with a great deal of interest.

Prechter's take seems to mesh with other signals I have observed, such as a downturn in lumber futures, a break in house building stocks, and some anecdotes of downturns in high end home prices in some select markets. Perhaps the last thread holding the North American economy up is finally starting to unravel.

YGM

(07/13/2002; 22:49:03 MDT - Msg ID: 80483)

JAPAN'S POST-WORLD WAR II DEFENSIVE ECONOMIC WARFARE PLAN: THE GREATEST TRANSFER OF WEALTH IN HISTORY

http://www.slonet.org/~ied/frthuz.html***Not to be missed economic site....Many, many articles and papers here at this repository.....YGM

Excerpt:

Japan's collapsed land and stock markets (down 70 percent and 75 percent respectively) are not the total failures they are loudly touted to be. The preceding bubble economy was specifically designed to create finance capital with which to build more industry. Earlier we described how Japan first industrialized in the nineteenth century through selling government-built industry to Japanese industrialists at 15 to 30 percent of construction costs. After World War II, the same rapid industrialization was accomplished through charging Japanese consumers three times the price for consumer products as the rest of the world. Those high prices were only a hidden tax that, along with other dictated policies and creative accounting, gave Japanese industry the same free finance capital as it received a hundred years earlier.

Understanding the economic multiplier factor, Japanese industry could actually sell to the world at what would be a loss for a free enterprise corporation and still keep running. Now that Japan has built the world's most modern industry and captured markets around the world, so long as the trade surpluses are maintained, losses can be absorbed, up to a point, by those high domestic prices taxing back a part of the economic multiplier gains.

Even as its industry is running at only 65 percent of capacity and its real estate and stock markets have collapsed, Japan's trade surpluses have been consistently in excess of $50 billion a year with the United States alone, and it is not about to release any markets it has captured to anyone. All stops will be pulled out to prevent others from selling on its home market, and--with the exception that this accumulated wealth was invested in the world's most modern industry and Western financial instruments instead of gold, silver and jewels--that is pure mercantilism by anyone's definition.4

Even though it has the added features of planned industrial financing and good pay for Japanese labor so the economic multiplier will develop a strong economy, mercantilist scholars will easily recognize Japan's wealth-siphoning formula: Buy resources for industry cheaply, build and maintain the most efficient industry in the world, educate their citizens, pay Japanese labor well, charge Japanese citizens above that for the same exported product, price exports just under the products of other nations, and sell enough on the world markets to pay for it all with a substantial cushion to spare.

Japan invested its accumulated surplus values (half the industrialized world's savings), above that needed for building industry, in U.S. treasury notes and other financial and real properties in the United States. This has locked both Japan and America into a debt/equity embrace that neither knows how to get out of.

Japan has only to drop those treasuries and other properties on the market and the U.S. dollar crashes. (Japan's continued purchase of those treasuries was an unwritten agreement between the two countries to maintain the health of both economies.)

The United States has the choice of doing what the entire industrialized world did when OPEC raised the price of oil: just print the money to cancel the debt. America's gain would be Japan's loss but there could be much worldwide distress from such an inflationary binge even if America won that financial warfare battle.

Americans would initially have all those TV sets, computers, recorders, and automobiles for the cost of printing the money. When Japan spent those devalued dollars Americans would have to work only a fraction of the time Japanese labor worked to produce the now inflation-valued products and services.

Essentially each had the other right by the throat and neither dares squeeze any harder and neither dares turn loose. Until the Soviet Union collapsed, each had to protect the other or Japan's economy would have collapsed and America's ability to finance the Cold War would have been severely weakened.

Cont'd @ Link.....

Black Blade

(07/13/2002; 22:50:27 MDT - Msg ID: 80484)

Bear For The Very First Time

http://www.guardian.co.uk/business/story/0,3604,754442,00.html
It's been so long since brokers had to contend with a falling market that many younger players are regarded as 'virgins'

Snippit:

The excesses evident at the peak of this decade-long bull market owe something to the diminishing experience of different conditions. The financial industry sucked in hundreds of thousands of new recruits as it built on the opportunities afforded by rising share valuations. And, as the previous two bear markets receded towards the memory's horizon, naysayers became increasingly marginalised.

Anyway, each bear market is different. Just look at how brokers spend their time in them. The tale of 1973-74 that sticks in my mind most is of endless games of cards filling days of market torpor. Prices slid gradually lower, a slow lingering financial death almost ignored by brokers who had long since given up hope of finding any buyer for any share at any price.

Now, it is different once more. We're two years into this bear market and the only brokers playing cards are those thrown out of work. Trading volumes are not what they were, but the market is still liquid. There is no shortage of investors and traders prepared to throw themselves repeatedly into the fray in an attempt to outsmart the gods.

Black Blade: It just goes to show that there is a lot of room to fall yet. As pointed out last night, the S&P 500 could fall at least another 600 points before the index approaches fair value and the DOW could easily fall below 5,000. "Those who do not remember the past are doomed to repeat it" � George Santayana.

Gauntlet-Runner2("GR2")

(07/13/2002; 23:08:35 MDT - Msg ID: 80485)

Monday's Lineup

We have bullish MA crossovers on the XAU with the histogram moving into positive territory. That is on the 10 day hourly candle chart. Coming off a retracement handle after the shorts were squeezed early last week. The "Big W" pattern is forming for many goldstocks which shows this sideways consolidation is coming to its end. MA crossovers were a "fake out" before due to the manipulation. Cabal Cronies were selling Barrrick's and Placer's "new at 325" hedges and we see the future writing on the wall as they were among the 7 companies just kicked off the S&P 500. Scuttle the leaky boats.........What a trashing of a corporation. They can't cover the shorts they already have out, then they go and sell more forward to "cap" gold at sub 325. So the DOW drops like 7% and the POG goes flat.................the dollar drops and the POG goes flat...............Is this from a Ray Bradbury novel? The price is in compression and we're going into sheer real fast with more fractured patterns to the upside. Some of the goldstocks are in their own small world. The microgold SLGLF, donut chase this stick. Yes it will go up but there is better and safer out there. Anything that goes from 20 to 54 cents in one week is ripe to kill every last buyer with a 30-40% retracement. Butch Cassidy and the Sundance kid at the end of the show, the selloff will be deafening.
It is really tough to do tech analysis when we see massive selling on the London exchange to auger the price down so the shorts can buy to cover in NY. Then the price started to run and so they sold more. FACT: They have to save ammo to cap the price at the next level , say 350. They cannot hold it down if it requires selling massive amounts of paper contracts. The management of those corporations are going to freak out if they expand their hedge program too much in a rising market. The other side of the coin is the BOJ and how much yen do they want to sell to buy dollars? The limit probably isn't set and the Japanese move like a big school of fish. A few big families say "Enough" and then we have to get China to buy dollars. They all have no choice because they want their currency cheap so they can export more. No doubt alot of money is going to get sucked back into the Nazdow sponge that was just wrung out. So be it, is the bottom really in? No one can answer that, so smart money will sit on the sidelines until the patterns show a clear bottom in the DOW and Nasdaq. Without a confirmation, they will not commit to serious block share buying. They all thought a bottom was in before as they tend to eventually believe the lies they propose. The smart money will run into gold and gold related but at this time the crowd of traders just doesn't know. Open interest in the Comex gold futures is over 90,000 contracts, a massive amount. So we can expect alot of volatility and shorts don't want to cover too early while longs are affraid to enter, I suppose. Interesting how we saw the gold first get hammered in NY earlier in the week then it shifted to be rising at noon in NY. Whether we get a third wave down is anyone's guess. I'm asking WHY? The Nasdow goes down so far and they sell gold so hard to force money to go into the money markets instead of gold. They lost control at 275 and at 300. It just takes awhile for reality to set in. At best they can try to get the DOW and Naz to trend sideways to fake a bottom. I think the POG has upward bias unless intervention selling is ocurring. Eventually that selling will abate and the upward trend will resume. I'm not saying a big breakout will occur next week just it is bullish for Monday because of the XAU.

USAGOLD

(07/13/2002; 23:50:29 MDT - Msg ID: 80486)

Is it just me. . .

or has anyone else noted the total abscence of Alan Greenspan from the national stage? Is he laying low? Or is this a calculated retreat? One would think that he would be saying things to calm the markets -- soothe the financial soul. With a full blown crisis in capitalism in full tilt, one would think that CNN and CNBC would be showing video of him fully engaged in the crisis, sleeves rolled up, computer screens flashing, financial people being flown in and out for top level meetings, etc. Instead America's most highly respected man of money is nowhere to be found. Odd.

There have been some news reports about Greenspan but a dearth of statements with the exception of his stance voiced about a week ago that options should be expensed, but I haven't been able to determine if that was a live interview, or a Fed statement. The most recent photo published at Yahoo was June 17. He's supposed to appear before Congress July 17, so I guess we'll find out what's on his mind then. . . . .

Black Blade

(07/14/2002; 00:10:45 MDT - Msg ID: 80487)

One More Loose End - The Real Estate Bubble

The last several years of wealth was built on credit. The level of debt is staggering. It was massive consumer and corporate debt that financed the economic boom of the 1990's. Now these loans are about to be called due and the economic pain will be enormous. Japan has been dealing with this same problem for nearly 20 years. Now it's our turn. You could simply call this a "credit bubble". The printing presses have been running flat out 24/7. But this loose monetary policy has run its course and is no longer having an effect of the economy. The equities markets just keep tumbling, although some think it is due to accounting scandals, corporate malfeasance, or loss of confidence, the point is consumers are nearly tapped out. Its time to pay the piper. Despite all the spin out of Washington and Wall Street, the markets continue to slide in a slo-mo crash, or as I have called in the past � "the slow burn". The pile of debt keeps growing � government debt, corporate debt, and consumer debt. Everyone was spending like a drunken sailor and very few have been taking precautions. One good example is Argentina and another is Japan. Except the excesses are so great that this time it will be especially painful for the western nations.

Today (actually over the last year or so) there has been a lot of discussion about the "real estate" bubble. The reason real estate appears to have performed so well is that now much of the remaining cash is seeking an alternative investment. Real estate is one such investment. When the cash dries up and fewer people are buying third and fourth homes, then we will see the real estate bubble pop. While some view this bubble as an extension of the "wealth effect" it is actually fear. The markets are crashing and people are looking for somewhere to park their cash. Pity the poor investor who has his retirement tied up in a 401K or IRA with limited choices or solely in company stock. He will suffer greatly. Where to run? Where to hide? Consider that those who put it into real estate at inflated prices (just like in the dot.com craze) are buying at the top. Add to this scenario those who have mortgaged their homes for cash for whatever reason. When the real estate market crashes, then what? If these people owe much more than the property is worth, will they simply turn in the keys and walk away? Will they continue as long as they can and make payments on grossly overvalued properties? Then we will see the real fear set in � America "Argentina style". The fun has yet to begin. We do live in "Interesting Times".

- Black Blade

Black Blade

(07/14/2002; 00:27:56 MDT - Msg ID: 80488)

Greenspan on the sidelines

http://cbs.marketwatch.com/news/story.asp?guid=%7B2833EA69%2DF8E7%2D4C43%2DACFB%2DF39BC762A048%7D&siteid=mktw
Chairman in unfamiliar spot as financial crisis builds

Snippit:

WASHINGTON (CBS.MW) -- For the first time in his 15-year tenure at the helm of the Federal Reserve, Alan Greenspan finds himself on the sidelines as a financial crisis brews. Unlike the crash of 1987, or the Asian and Russian crisis of 1998, or the post-Sept. 11 confusion, this time no one expects Greenspan to say or do anything to fix the mess on Wall Street. Today's problems with corporate credibility can't be solved by some reassuring words from the Fed chairman or another cut in interest rates. "In truth, there is little the Fed chairman can say to restore investor confidence in corporate governance," said James Glassman, economist at JP Morgan Securities.

Greenspan is scheduled to deliver the Federal Open Market Committee's semiannual testimony on the state of the economy to Congress on Tuesday and Wednesday. Typically, markets move dramatically one way or the other when Greenspan gives the testimony formerly known as Humphrey-Hawkins. But this summer's appearance could be an exception. "He is likely to keep a low profile," said Bill Dudley, chief economist at Goldman Sachs. "The chairman will not want to suggest that he is overly concerned about the weakness of the U.S. equity market or that the level of stock prices is a primary focus of monetary policy." "Chairman Greenspan faces a delicate task, as markets are vulnerable to the slightest miscommunication," said DiClemente, economist at Salomon Smith Barney. Too much pessimism could be self-fulfilling. "A stampede now would risk serious harm to the economy," DiClemente said.

Black Blade: That's about it. If AG looks concerned enough to make comments about the economy it could spook the markets. On the other hand if he keeps mum, then that could be a sign that he is at a loss what to do about it, again this too could spook the markets. He doesn't have any ammo left so he is caught between a rock and a hard place on this one.

Black Blade

(07/14/2002; 00:48:12 MDT - Msg ID: 80489)

Slump May Extend Into Earnings Season: U.S. Stocks Outlook

Black Blade

(07/14/2002; 01:24:11 MDT - Msg ID: 80490)

California on brink of plunging into darkness

http://news.independent.co.uk/business/news/story.jsp?story=314752
Snippit:

A searing heatwave, the collapse of Enron and months of acrimonious political battles have left the state of California facing a long hot summer of electricity chaos. The power crisis that has dogged the Sunshine State for more than 18 months has now returned with a vengeance, and is threatening to produce a series of blackouts and electricity shortages in coming weeks. The cost to businesses of a month of disrupted supplies runs into the hundreds of millions of dollars.

Last week, California's electric-grid operator issued emergency orders to some of the state's largest power users, forcing them to close their offices in an attempt to stave off system-wide blackouts. It was the first time the operator had moved to a "Stage 2" alert for more than a year. Electricity traders and power company insiders are now "almost certain" that this summer will see the state moving to "Stage 1" status � called when supplies drop to below 7 per cent of total grid demand. Californian summers represent the absolute peak of demand, as homes and businesses switch their air conditioners to maximum.

California's dire situation has come about because of a combination of problems. As well as the weather, which meteorologists say could hold for some time, the politics of power supply have been messy. For years, Californian power stations were neglected, and attempts to drum up investment by de-regulating the market failed horribly. That, combined with heavy regulation of what utility companies could charge, stripped away incentives to build more capacity.

Black Blade: It looks like a long hot summer. Negligence has caught up with the Grasshoppers. The high energy costs and potential loss of production during rolling blackouts and voluntary energy curtailment will sap any perceived economic recovery for the state. In a word � "Grim".

jinx44

(07/14/2002; 02:40:08 MDT - Msg ID: 80491)

BB--your postings

Your postings are always appreciated here. Tonight, your 'One Loose End...' was especially prescient, IMO. I hope the readers will pay special attention to it.

Thank you Sir.

Black Blade

(07/14/2002; 02:50:54 MDT - Msg ID: 80492)

News From Japan � Interesting Comments

http://atimes.com/atimes/Business_in_Brief.html#H1
Snippit:

Yen may face upward pressure against dollar

TOKYO - Bank of Japan Governor Masaru Hayami hinted at the possibility of the yen appreciating further against the US dollar over the medium- to long-term, in comments made at a meeting of the upper house fiscal and monetary policy committee on Thursday. "The possibility of a worldwide move to dump the greenback is fairly high," the central bank chief said.

Black Blade: The US dollar is grossly overvalued and has hurt US exporters. One point that I was thinking about while at the gym yesterday � Oil is priced in dollars. The world market price is set in Rotterdam where the euro is in use. The ME producers sell the majority of oil to Europe and Asian markets. Why would they want to have oil monetized in dollars? The US dollar is becoming more insignificant these days. In short it is quite possible that the dollar's days are numbered as the premier reserve currency.

Deposit protection caps coming in Japan

TOKYO - Insisting that another postponement would run counter to the spirit of structural reform, Financial Services Minister Hakuo Yanagisawa said the government must not delay the full reintroduction of deposit protection caps, slated for next April. The topic of the caps came up for discussion among government and ruling party officials in the day's meeting preceding the release of the Cabinet Office's monthly economic report.

Black Blade: As the April Fools Day Surprise approaches we will see the pace of Gold purchases accelerate.

Black Blade

(07/14/2002; 03:27:33 MDT - Msg ID: 80493)

PREZ WILL TRY TO RALLY INVESTORS

http://www.nypost.com/news/nationalnews/19016.htm
Snippit:

July 13, 2002 -- WASHINGTON - President Bush is planning a major economic speech on Monday to restore investor confidence, while his chief corporate crime fighter vowed yesterday to be aggressive in going after crooked execs. Bush is hoping that by spelling out his economic plan and taking a tough stance on corporate crooks, individual investors will begin to feel secure enough to wade back into the stock market.

Black Blade: Want to bet that the speech backfires?

Black Blade

(07/14/2002; 03:34:50 MDT - Msg ID: 80494)

Re: jinx44

Thanks - we edge closer toward the abyss with each passing day.

- Black Blade

Around The Corner

(07/14/2002; 04:20:32 MDT - Msg ID: 80495)

Newspaper: Duke Energy price-gouged California

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2002/07/13/state2235EDT0141.DTL
(snip) Duke Energy Corp. sought to charge California a whopping $1,170 per megawatt hour for power during blackouts last year after it had asked only $200 weeks earlier, The Charlotte Observer reported after deciphering the secretly coded bids.

Normally the identities of the companies making power bids to the state remain secret. But The Observer unraveled the code using bid reports on Duke's Web site and matching them with power-plant data and federal reports.
.
.
.
Duke says it marked prices up as much as 80 percent because California became a credit risk. (MY NOTE: I think that should be 800 percent, according to the figures above.)

When deregulation froze consumer rates, utilities couldn't recoup their costs from customers and hence couldn't pay the ISO, which in turn couldn't pay Duke -- a trickle effect that Duke claims necessitated the higher prices demanded of the state.

Several bidders offered the state power at prices far exceeding Duke's, including one unidentified bidder which wanted $9,999 per megawatt hour.(end snip)
__________________________________________________

Looks like Duke is busted for price gouging during a crisis.

From my Y2K research I learned that most all electric utilities have agreements with their largest industrial customers that, should demand reach stage 1 or 2 alerts, the heavy usage industries will temporarily shut down in order to prevent blackouts to the general public. In return for signing onto this agreement, the electric utility sells electricity to their largest industrial customers at a discount rate.

This makes perfectly good sense because the alternative would be to over build and thus have "emergency" generating capacity sitting idle 99.9% of the time. Not a very cost effective use of resources.

It's my understanding that the whole "grid" system is, among other things, designed to allow the flow of electricity from areas with power generating capacity that's not being utilized, into areas in need of extra power, like California during extreme heat waves. One would think a power generator like Duke would be pleased to sell their "extra power" to California. Instead, they refused to sell their excess power to California unless California agreed to pay upwards of 800% of their recent price.

So why don't they eagerly sell their excess power at reasonable rates?

Back when all electricity rates were regulated by the government, a power producer with excess generating capacity was more than glad to sell their extra power to anyone who wanted to buy it because the CEO did not receive "bonuses" for increased sales. But now, after deregulation, those same CEOs running those same generating plants have an incentive to force up the price of electricity because they are now allowed to be "compensated" for increased sales.

I'm sure somewhere, there is a success story of government deregulation. However, don't look for it on Wall Street or Main Street, USA...unless you are a CEO of a major corporation.

Buy gold and silver, and be quick about it.

ATC

slingshot

(07/14/2002; 07:46:41 MDT - Msg ID: 80496)

Black Blade Msg# 80493

Investor ConfidenceThe President will solve it all with an Executive Order here
and a Task Force there. Phooey! How about some Tar and Feathers and a ride on a rail. Yepper , we do them up in front of the Exchange and ride them down to Times Square putting their picture on the Nasdaq Screen for all to see. Then having some angry investor look into the camera and yell to Corporate America.

" What have you got in your files"
Oh, Sorry. Cruel and Unusual Punishment.
Slingshot----------------<>

misetich

(07/14/2002; 08:16:23 MDT - Msg ID: 80497)

New Reasons to Wonder if the Worst Is Over

http://www.nytimes.com/2002/07/14/business/yourmoney/14VIEW.htmlSnip:

For some insight into just how bad things could still turn out on Wall Street, it is worth paying attention to Robert D. Arnott, managing partner at First Quadrant, a money management firm in Pasadena, Calif., and co-author of a provocative recent article in the Financial Analysts Journal. It has the seemingly innocuous title, "What Risk Premium is `Normal'?"

"The market has come down quite a bit from the unprecedented levels it reached a couple of years ago," Mr. Arnott says. "It has now reached the same valuation level as at the market top in 1929."

That's right, the market top: before the crash that heralded the start of the Depression, not afterward.

Mr. Arnott, whose view of market history extends a bit further than that of most people on Wall Street (his research examines the performance of stocks back to 1802) doesn't really expect the kind of stock market collapse that occurred from 1929 to 1933. And he certainly doesn't expect the economy to fall apart; indeed, he is counting on economic growth to average the same rate of the last three decades.

But his study is a powerful reminder of just how over the top the stock market became in the 1990's and how much more downward adjustment may still be needed before prices reflect a fair valuation of the earnings and dividends that support them.

To reach that point, Mr. Arnott predicts, Wall Street may have to endure a long spell � a decade or longer � in which the stock market, while providing plenty of ups and downs, repeatedly disappoints investors. "I would be very surprised," Mr. Arnott said, "if bonds don't outperform stocks over the next decade or so." Meanwhile, he added, "The economy is probably going to be fine; it will just take a decade or two to catch up with what the market had anticipated."

.............

The problem, to vastly simplify Mr. Arnott's complex analysis, stems from the fact that investors in recent years failed to resolve a fundamental contradiction.

On one hand, they seemingly forgot that stocks are inherently riskier than bonds and began bidding up prices in the market accordingly. That drove down the so-called risk premium for holding stocks until it essentially vanished. Yet at the same time, investors came to believe that stocks � because they are supposed to reward investors for taking extra risk � would continue to outperform bonds and inflation.

YOU can't have it both ways indefinitely. When stocks were priced at, say, 12 times earnings and offered dividend yields of 4 to 5 percent, it was very easy to beat the return from government bonds and inflation by 5 to 8 percentage points a year. But when the market, at its top in 2000, was selling at about 35 times earnings and dividends were yielding barely more than 1 percent, investors could no longer expect to maintain such premium returns.

.............

For the bull market to return, Mr. Arnott reasons, either the stock market must fall even more or earnings and dividends must soar. But his research found, contrary to the conventional wisdom on Wall Street, that the growth in earnings and dividends over the longer run cannot even keep up with real economic growth per person, largely because new enterprises rather than established companies account for a significant share of the gains.

"Earnings growth will not keep pace with G.D.P. growth � that's a really important insight," said David Levine, a former chief economist at Sanford C. Bernstein.

Misetich

Most stock market investors (bulls) have disagreed with Mr.
Arnott in the last couple of years with disastrous portfolio consequences - Chances are they will hold on (long term investor) -

Thus far earnings growth have kept up pace with GDP growth (see 1st Qtr 2002, and 2nd Qtr 2002)- Stock Market bulls portfolios are being decimated by the Bear Market - smarter investors have/are buying portfolio insurance - GOLD

Got gold?

misetich

(07/14/2002; 08:33:37 MDT - Msg ID: 80498)

Is True Reform Possible Here?

http://www.nytimes.com/2002/07/14/business/yourmoney/14ROUN.htmlSnip:

In late June, with the fresh indictments of two chief executives only the latest in a seemingly endless string of business scandals, President Bush invited the 140 corporate leaders who make up the Business Roundtable to a briefing in the Old Executive Office Building. The group meets with the president most summers, but this time there was something new at the top of his agenda: corporate accountability.

"I expect you, as corporate leaders, to do everything within your power to bring back trust in corporate America," Mr. Bush told the assembled elite.

Soon thereafter, the Business Roundtable � the only business group named by the president in his speech on Tuesday � issued a statement saying that its members were "appalled, angered and, finally, alarmed" about the year's run of outrageous business news. They praised President Bush for taking a stand, acknowledged that their previous position on corporate ethics was "not enough" and sketched out some ideas for improvement.

"We must and will be at the forefront of supporting these reforms," the statement said.

.............
"Now, it is more focused on the process of governing the businesses themselves," said one Roundtable member, Robert S. Miller Jr., who is chairman and chief executive of Bethlehem Steel. "It is a sea change."

But is it? Institutional investors, academics, consumer watchdogs and others who monitor the goings-on in America's executive suites have their doubts. What reforms can emerge from a process in which the top executives themselves all play an instrumental role, they ask? True, the Business Roundtable is making all the right noises about broad principles of corporate governance, they say. But at the level where the specifics are sorted out � in conference committees and accounting boards where the public never goes, for example � the Roundtable in the past has used its considerable powers to block some of the very proposals now getting a second look in Washington.

"They preserve the kind of business-statesman attitude that was more typical of corporate America in the last generation," said Damon A. Silvers, associate general counsel for the A.F.L.-C.I.O. and someone who has tangled often with the Roundtable. "It comes across as: `We are not cowboys. We are not gamblers. We run large institutions and we are responsible stewards of those institutions.' That means that they can be a far more resourceful opponent of real reform than some of the cruder folks."

Even today, despite the rhetoric, the Roundtable opposes any changes in the accounting treatment of stock options, the seemingly obscure issue that many governance experts say is behind exorbitant executive pay and has fueled the worst abuses of many of the current scandals.

At a time of intense debate about how to bring errant corporate chieftains into line, perhaps no group has as strong a self-interest in shaping the final package of reforms � or the power to get the reforms it wants � as the Business Roundtable. Founded by a handful of power brokers bent on building a pipeline between the nation's corporate leaders and its top government decision makers, its members today include Jeffrey R. Immelt of General Electric, Scott G. McNealy of Sun Microsystems, Sanford I. Weill of Citigroup, Kenneth I. Chenault of American Express, Carleton S. Fiorina of Hewlett-Packard, Philip M. Condit of Boeing and other chief executives chosen for their wattage and corporate heft. Together, their companies boast $3.5 trillion in revenue a year and employ about 10 million people.

As a lobbying group, the Roundtable itself regularly comes in second only to the Chamber of Commerce in spending by business groups � but even that standing understates its influence. Individually, these corporations are among the biggest check writers to both political parties and to individual members of Congress. Those donations, along with the stature that members have in their headquarters cities, gives them open-door access at the highest levels of government and adds considerable weight to their viewpoints.

And what members do as part of the Roundtable overlaps and blurs with what they do as separate companies. Employees on their corporate payrolls, for example, are often detailed to do work for the organization.

"It's more than a little disingenuous to announce that they're terribly concerned," said Charles Lewis, executive director of the Center for Public Integrity, a nonprofit research group in Washington that monitors money in politics. "They were out there lobbying against any reforms throughout the 1990's."

And earlier. More than two decades ago, the Business Roundtable published "Corporate Governance and American Competitiveness," which pronounced the status quo "excellent," with "proven self-correction mechanisms." During the spate of hostile takeovers in the 1980's, it promoted an ambitious program of "control over the processes of corporate governance" that institutional investors pooh-poohed as a mere effort to entrench embattled executives in their corner offices.

In 1988, the Roundtable tried to have a federal court strike down a new Securities and Exchange Commission rule enshrining the one-share, one-vote concept in law. Two years later, it went to war with the California Public Employees' Retirement System, the huge pension institution known as Calpers.

Calpers had tried to poll the 4,500 corporate directors whose companies make up the Standard & Poor's 500 index on their views about executive power. The chairman of the Roundtable's corporate governance task force, H. Bruce Atwater, chief executive of General Mills, said he was "very concerned" about just what Calpers was really up to, and wrote to all the Roundtable chief executives, urging them to tell their directors not to respond. Calpers withdrew the questionnaire.

But the most heated battle was fought over an accounting rule � the important rule laying out how corporations should treat stock-option grants in their yearly financial statements.

Since 1985, specialists at the Financial Accounting Standards Board, a private organization that makes accounting rules, have wanted to improve the way companies report option grants; they proposed in 1993 that companies deduct the value of the options on their income statements, just as any other compensation expense is treated.

Timothy S. Lucas, who recently retired as the board's research director, said he had never seen anything like what followed. In other cases, the rule makers had tried in vain to have chief executives involved in their work, he said. But this time, John S. Reed, then chief executive of Citicorp and chairman of the Roundtable's accounting principles task force, summoned him and the board's voting members to a private meeting. John F. Welch Jr., then chief of General Electric, and Mr. Weill, then the head of Travelers Group, were also present, he recalled.

This all-star lineup praised stock options as an excellent employee-motivational tool and an engine of economic dynamism; the board's complicated rule would spoil everything by making companies unwilling to issue them, they said. Mr. Lucas had heard it all before and found it as unpersuasive as ever.

But the Roundtable luminaries made clear the stakes as no one else could, he said. He left the encounter with the understanding that even if the board went ahead with its rule, the S.E.C. would never enforce it anyway. The business opposition was just too strong.

In the end, the board backed off and required only that companies disclose the value of their option grants in footnotes. That move, critics say, allows companies to overstate their earnings.

And it helps executives pad their pay. A Citicorp proxy statement shows that, in addition to his 1993 cash-and-stock compensation of $6.2 million, Mr. Reed received options that would be worth $21 million in 10 years, assuming appreciation of 10 percent a year, for example. In keeping with the accounting board's requirements, Citicorp's income statement � like those of most companies � did not say how much it cost to issue those or subsequent options awarded to employees. Options have since soared in popularity.

Executives say it would be unfair to judge the Business Roundtable's commitment to reform today by actions it took in earlier years.

Misetich

Can investors believe that - this powerful lobby group - who has looked after themselves quite well in the last 10 years - is going to change anything? How can investors confidence be restored if the much needed accounting reforms are continuously being blocked - Mr. O'Neil has gone on record in the last few weeks - that stock market options - are STILL to be disclosed as a FOOTNOTE in financial statements - (Mr. Greenspan on the other hand feels that stock market options should be expensed)

Got gold?

misetich

(07/14/2002; 09:53:47 MDT - Msg ID: 80499)

The Insider Game

http://www.nytimes.com/2002/07/12/opinion/12KRUG.htmlSnip:

By PAUL KRUGMAN

The current crisis in American capitalism isn't just about the specific details � about tricky accounting, stock options, loans to executives, and so on. It's about the way the game has been rigged on behalf of insiders.

And the Bush administration is full of such insiders. That's why President Bush cannot get away with merely rhetorical opposition to executive wrongdoers. To give the most extreme example (so far), how can we take his moralizing seriously when Thomas White � whose division of Enron generated $500 million in phony profits, and who sold $12 million in stock just before the company collapsed � is still secretary of the Army?

Yet everything Mr. Bush has said and done lately shows that he doesn't get it. Asked about the Aloha Petroleum deal at his former company Harken Energy � in which big profits were recorded on a sale that was paid for by the company itself, a transaction that obviously had no meaning except as a way to inflate reported earnings � he responded, "There was an honest difference of opinion. . . . sometimes things aren't exactly black-and-white when it comes to accounting procedures."

And he still opposes both reforms that would reduce the incentives for corporate scams, such as requiring companies to count executive stock options against profits, and reforms that would make it harder to carry out such scams, such as not allowing accountants to take consulting fees from the same firms they audit.

The closest thing to a substantive proposal in Mr. Bush's tough-talking, nearly content-free speech on Tuesday was his call for extra punishment for executives convicted of fraud. But that's an empty threat. In reality, top executives rarely get charged with crimes; not a single indictment has yet been brought in the Enron affair, and even "Chainsaw Al" Dunlap, a serial book-cooker, faces only a civil suit. And they almost never get convicted. Accounting issues are technical enough to confuse many juries; expensive lawyers make the most of that confusion; and if all else fails, big-name executives have friends in high places who protect them.

................

An aside: Some pundits have tried to dismiss questions about Mr. Bush's business career as unfair � it was long ago, and hence irrelevant. Yet many of these same pundits thought it was perfectly appropriate to spend seven years and $70 million investigating a failed land deal that was even further in Bill Clinton's past. And if they want something more recent, how about reporting on the story of Mr. Bush's extraordinarily lucrative investment in the Texas Rangers, which became so profitable because of a highly incestuous web of public policy and private deals? As in the case of Harken, no hard work is necessary; Joe Conason laid it all out in Harper's almost two years ago.

But the Harken story still has more to teach us, because the S.E.C. investigation into Mr. Bush's stock sale is a perfect illustration of why his tough talk won't scare well-connected malefactors.

Mr. Bush claims that he was "vetted" by the S.E.C. In fact, the agency's investigation was peculiarly perfunctory. It somehow decided that Mr. Bush's perfectly timed stock sale did not reflect inside information without interviewing him, or any other members of Harken's board. Maybe top officials at the S.E.C. felt they already knew enough about Mr. Bush: his father, the president, had appointed a good friend as S.E.C. chairman. And the general counsel, who would normally make decisions about legal action, had previously been George W. Bush's personal lawyer � he negotiated the purchase of the Texas Rangers. I am not making this up.

Most corporate wrongdoers won't be quite as well connected as the young Mr. Bush; but like him, they will expect, and probably receive, kid-glove treatment. In an interesting parallel, today's S.E.C., which claims to be investigating the highly questionable accounting at Halliburton that turned a loss into a reported profit, has yet to interview the C.E.O. at the time � Dick Cheney.

The bottom line is that in the last week any hopes you might have had that Mr. Bush would make a break from his past and champion desperately needed corporate reform have been dashed. Mr. Bush is not a real reformer; he just plays one on TV.

Misetich

Bush is on TV again tomorrow. Unless the SM moves up - he will be blamed again -
Will Democrats "allow" the PPT to rescue?

Got gold?

WAC (Wide Awake Club)

(07/14/2002; 11:54:44 MDT - Msg ID: 80500)

@MK- Where is Big Al?

http://uk.news.yahoo.com/020714/80/d3cvu.htmlGreenspan looked to for market-soothing words
By Joanne Morrison

WASHINGTON (Reuters) - Alan Greenspan's twice-annual monetary policy speech never fails to draw attention, but with major U.S. stock indices beaten to five-year lows, Wall Street is hoping more than anything else that the Federal Reserve Chairman can halt the slide.

His testimony on Tuesday before the Senate Banking Committee, and then to the House Financial Services Committee on Wednesday, will come a week after President George W. Bush tried to soothe markets cowering under a volley of accounting scandals by pledging a crackdown on corporate wrongdoing.

Truthcaster

(07/14/2002; 12:20:41 MDT - Msg ID: 80501)

Ugly open for stocks monday?? Maybe yes

After one of the most intereasting weeks
in the market I have ever seen from Friday of
last weeks sucker rally to this weeks fall in
stocks. I just wonder what the next week will
bring. Will the PPT boys be back in maybe this
time to keep the Dow above 8,000? Will the speech
Bush give tomorrow be all it takes to send stocks
higher? Or lower? But one thing is for sure that is
the up ward pressure on gold and silver is more and
more with each passing week. I just wonder if it is
possible for on day to get up and see gold gap up
at open 25 to 50 bucks..? I'll be waiting is long
as it takes. I'm still a young pup yet. Truthcaster.

misetich

(07/14/2002; 12:34:18 MDT - Msg ID: 80502)

Belgian central bank faces lawsuit - SELLING OF GOLD

http://www.euromoney.com/public/markets/banking/news/05jul2002-1.htmlSnip:

A group of shareholders in the National Bank of Belgium (BNB) the country's central bank, are threatening to take governor Guy Quaden to court unless he reconsiders his position on ownership of the Bank's reserves.

They claim the bank has been liquidating its gold and foreign exchange reserves and transferring the proceeds to the state in an attempt to reduce Belgium's budget deficit. This raises the question of who a central bank's reserves belong to when it has been partially privatized.

The shareholders argue that the money raised should have been equally divided among all of the bank's owners. "On the basis of the accounts, these assets belong to the bank," says Erik Bomans, partner at Belgian shareholder-rights consultancy Deminor. "The state has taken money out on a systematic basis because it needed cash". Bomans claims that up to Eu6.5 billion was transferred to the government's account in the late nineties in an attempt to reduce the budget deficit.<

But the bank maintains that the assets in question rightfully belong to the state. "The reserves of the BNB should be considered to belong to all Belgian citizens and not only to BNB's shareholders," it says.

But there's more at stake now. Since the European Central Bank took over responsibility for the currency in the Eurozone this year central banks no longer need to hold such large reserves. According to article 46 of BNB's constitution, should the bank lose the right to print money then the reserve fund will be distributed among all of its owners.

A spokeswoman says that BNB has nothing to add on the subject of the shareholder suit.
Headline: Belgian central bank faces lawsuit
Source: euromoney.com
Date: July 05 2002
Author: Jennifer Morris

Misetich

Full Press Release can be obtained here

http://www.euromoney.com/public/markets/banking/images/Persbericht020702Eng.pdf
(Requires registration)

misetich

(07/14/2002; 12:42:58 MDT - Msg ID: 80503)

BRAZIL - Central Bank sells US$1.7bn

http://www.euromoney.com/isi/story.html?id=6095Snip:
The Central Bank has already spent US$1.7 billion intervening in the foreign exchange market in less than a month, but is has not managed to stabilize the local currency, the real. Since June 14, when the intervention began, the bank has sold dollars and has held several auctions to sell dollars with an obligation to buy them back at a predetermined date, but the real has still weakened 5.6%, from 2.71 to 2.88 per dollar. Economists say the Central Bank's interventions are not intended to strengthen the real or define a 'ceiling' for exchange rate, but instead supply dollars for those that need to pay debts abroad.

Brazilian companies are having problems rolling over their foreign debt. A total of US$2.08 billion in foreign corporate debt comes due in July. "The Central Bank is supplying the demand for the financial flows of the market," explained BicBanco economist Luiz Rabi.

Misetich

Lets stay on this tributary TRAIL - shall we-
Got gold?

misetich

(07/14/2002; 12:54:57 MDT - Msg ID: 80504)

US Leadership being questioned -

http://www.bridport.ch/BridPublic/news.htmlSnip:

The days when the "Rest of the World" looked to the USA for leadership in all things political and economic have gone.

Where is the credibility of an Administration that preaches free trade but sets up huge farming subsidies and steel tariffs, and speaks of international collaboration and justice while spurning the international consensus on the environment and on war crimes?�. Guantanamo Bay�.?
How can US accountants and financial regulators be taken seriously after the Andersen scandals and, worse, the resistance of the accounting profession to a principles-based approach over a rules-based system?
What trust can be given to corporate leaders that so obviously put their personal avarice above all else?
What hope can there be for system reforms under a President tainted by issues of insider trading and a Vice President associated with accounting fraud at Halliburton? These stories look set to run.
How fast can the US economy find a new balance when the Administration does not even recognise the imbalances and thinks that low interest rates are all that is needed to turn an ailing economy around?
How much power does the Fed really have over interest rates when so much credit creation is in private hands (banks' securitisation of debt) and semi-private (the mortgage agencies)?

These are indeed serious questions, making the above, extreme views about systemic failure at least understandable. If the world's "natural" leader proves wanting, it is up to others to take on the responsibilities. Digby Jones (Confederation of British Industry) has asked Japan to join the UK in "standing up to a failure of US leadership in the conduct of global business". What a pity he could not have made that plea to other countries in the European Union. For the moment the UK looks clean of accounting scandals. It appears that US companies wanting to reassure investors of their propriety are appointing UK-trained financial directors, just like the new Chairman of the Financial Accounting Standards Board, Robert Herz, who has an accounting degree from Manchester University). Long may the UK's accounting reputation last, for everyone's good!

Everyone talks about the reluctant moves in France and Germany to the "Anglo-American" business approach. The shortcomings of the "American" part are now glaring. Vivendi represented an example of espousing the approach, warts and all. At the other extreme, the reluctance of the German Government to let the market have its ways with Kirch, Holzmann and, now, Babcock, witnesses to the death throes of "Deutschland AG". If only Chirac has the courage he needs in France, and Stoiber is similarly brave when he takes over in Germany, then the European Union could at last pick up America's dropped mantle.

In Europe, the build up in euro cash as the dollar weakens will in the short term reinforce deflation (hence delays in raising interest rates and our lengthening); in the long run that money will seek a more lucrative home.

Systemic weakness is showing up in the bond market, too. Selling certain corporate and emerging-market bonds is proving more and more difficult, with some market makers calling a temporary halt.

Misetich

How will this end?

Got gold?

Black Blade

(07/14/2002; 13:06:51 MDT - Msg ID: 80505)

Stocks' Slide Is Playing Havoc With Older Americans' Dreams

http://story.news.yahoo.com/news?tmpl=story2&cid=68&u=/nyt/20020713/ts_nyt/stocks__slide_is_playing_havoc_with_older_americans__dreams≺inter=1

Snippit:

In January 2000, with the Dow well above 10,000, they were confident they had picked the right time. They took more than $2 million they had made from selling their company and bought stocks. Their broker encouraged them to take a month in Europe; instead they moved to South Carolina, where they began building a dream house on the beach.

The Pringles have since lost about 75 percent of their investment. Far from taking any trips to Europe, they have done what they vowed never to do: mortgaged their house and gone back to work. "I thought I would at least be able to take a break and think about what to do with the second half of my life," Mr. Pringle, 63, said. "But I didn't have a lot of options when the market went south."

People in this age group 55 to 64 have had almost twice as much money invested in stocks over the last few years as the average American. But if that money took them higher during the boom years, raising their expectations for living easy and dying rich, they have since fallen farther.In interviews last week from Hawaii to New England, older investors told stories of losing the entire value of their portfolios, of canceling travel plans and scaling back expectations. They used to stand mesmerized outside storefront stock tickers, or glued to CNBC at home.

Black Blade: Unfortunately many of these people will be practicing to make statements such as "welcome to WalMart", and "would you like fries with that?" It is sad, however, as one who lives in the "feast or famine" world of natural resources, these novices are getting a harsh lesson about life. There are many more examples in the article. Now if only they diversified their portfolios to include Gold. Unfortunately I think many will leave comfortable retirements only to end up living in the street and eating dog food. Hmmm�

USAGOLD

(07/14/2002; 13:08:11 MDT - Msg ID: 80506)

Misetich. . .Belgian Central Bank Story

A major find, Misetich. Thanks.

This could be precedent setting. I don't know to what extent these central bank charters in Europe were boiler-plated, but if they were the Belgian shareholders could be opening the door to similar suits elsewhere. (My bet is that there are consistent legal threads running through all the central banks since all were established for the same reasons.) In keeping with the mood of the times, the central bankers responsible for selling gold without shareholder approval should be held personally accountable. There is little doubt that should this suit get to discovery, the shareholders would demand an audit in order to ascertain to what extent their shareholder rights were violated. Central bankers beware. . . .At the very least, the Deminor suit signals a rift in the shareholder structure (the establishment) of the central banks, and suggests that there is a private ownership aspect to these "semi-private" institutions -- an aspect complete with private shareholder rights. My feeling is that this suit will be heard because of the importance of the parties filing the suit and because they are directly affected by the central bank's actions.

Side note: When you see something like this going on, does it not undermine the largely held conspiratorialist position that those exposing 'the insiders' could be dragged off to the camps should the financial establishment find its survival challenged? What bigger challenge than forcing a central bank to repatriate "the" asset to aggrieved shareholders? Will the Belgian courts allow the suit? It will be interesting to see, but don't forget those filing suit will have their names entered into the logs of the court. Act of courage on the part of the plaintiffs, or a clearer understanding of how the system really works?

Long term this lawsuit is bullish for gold: It states behind the facade of a lawsuit that shareholders consider gold the ultimate asset not to be sold willy-nilly to meet political objectives, and that those who do could find itself confronted not just by aspects of the body politic, but by its own shareholders who hold a different perspective with respect to the national gold reserve. This could lead to shareholders signing off on such activity in the future -- if so, an interesting turn of events.

Please keep posting any information you find on this important matter. It will be interesting to see how it shakes out.

misetich

(07/14/2002; 13:10:35 MDT - Msg ID: 80507)

Oil Prices Rally Further After IEA Report Predicts Firm Demand

http://www.tehrantimes.com/Description.asp?Da=7/14/02&Cat=9Νm=6Snip:

LONDON -- Oil prices were higher on Friday as the market shrugged off continued equity market weakness, aided by a report that predicted a strong pick up in oil demand next year.

Benchmark Brent North Sea crude oil for August delivery edged 12 cents higher to $26.08 per barrel.

In New York, Light Sweet crude August-dated futures climbed 42 cents to $27.25.

While world demand for oil would remain depressed this year it would firm in 2003 as economic activity picked up, the International Energy Agency said in its monthly report on Friday.

After three years of anemic growth, demand for oil should grow by 1.1 million barrels per day in 2003, or by 1.4 percent, driven by a progressive recovery of the world economy, AFP reported.

"The market broke through technical resistance at $26 and now the objective is $27 per barrel," said prudential Bache Broker Christopher Bellew.

Bellew estimates that speculative funds had been behind the latest rally, having seemingly lost confidence in equities.

Misetich

With US $ plunging - how long is the wait for Oil to be priced in Euro's

Got gold?

Black Blade

(07/14/2002; 13:21:20 MDT - Msg ID: 80508)

BAD TIMES GET WORSE

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2002/07/14/MN101518.DTL
Falling stock forces retirees to reassess - No time to recoup

Snippit:

Jeanne Pentecost thought she was all set for a comfortable retirement. But since the stock market's meltdown over the past two years, she finds herself pinching pennies at age 72, and is even considering returning to work. Pentecost, who retired from her accounting job a decade ago, lost $70,000 -- over a third of her assets. She was counting on almost $1,000 a month in interest and dividends; instead, she's getting zero. She's canceled her supplemental health insurance, given up plans to buy a condo instead of the mobile home where she now lives, and abandoned her dreams of traveling.

"For people my age, our investments will never catch up to what (we) have lost in the market in the past two years," she said. All stock investors have been hurt, of course. But the impact is most devastating for those who can't wait for a recovery -- people in or near retirement, who rely on their investments to help with daily expenses. "The cost of living is going up much higher just at the time when no additional income is coming in," said Pentecost, of Urbana, Ill.

Black Blade: Here's another article that says much the same thing. The last sentence here is interesting, gee � don't these people believe the government? According to the US government (through the BLS) there is no inflation. I don't want to call these retirees unpatriotic after all. Hmmm�

Black Blade

(07/14/2002; 13:42:02 MDT - Msg ID: 80509)

BLAME THE FUND MANAGERS, TOO By TERRY KEENAN

http://www.nypost.com/business/52390.htm

Snippit:

EARLY indications from the front lines suggest that small investors were dumping some of their mutual funds this week, fueling the relentless decline on Wall Street. It's too soon to tell whether the selling will continue, but it's a fair bet this bear market won't be over unless it does.

Lost in the debate about why the "little guy" didn't get a fair shake on Wall Street is this simple fact: most Americans paid and paid handsomely for a "big guy" - a professional - to manage their stocks in recent years as the number of Americans owning mutual funds soared from 8 million in 1980 to some 93 million today. The trouble is, while the mutual fund industry has done a great job at marketing, it's done a lousy job standing up for its customers - you and me.

Black Blade: I have read several articles by Terry Keenan. It is no surprise that she was let go from CNBC. I am sure that CNBC's advertisers were not happy with her reporting on the markets. The whole point was to drain all the resources from retirees and the rest of us and with people like Terry Keenan casting light on these cockroaches it was a no-brainer that she had to go. FOX on the other hand appears to not really care as they are not a "financial products infomercial".

- Black Blade

Off to the gym!

misetich

(07/14/2002; 13:49:28 MDT - Msg ID: 80510)

Iran's euro debut receives strong European support

http://www.euroweek.com/news/index.asp?id=47168Snip:

Iran made a strong showing on its debut in the euro denominated bond markets this week with the launch of a well received Eu500m five year issue via its central bank, Bank Markazi Iran.

............
Moreover, even investors who felt that the transaction was too tightly priced, acknowledged that it was positive to see a new issuer from the Middle East and were keen to see follow-on issuance from Iran.

Political controversy has stalked the issue from the start however, especially in the wake of US president George W Bush's accusation in his State of the Union address in January that Iran along with Iraq and North Korea form "an axis of evil".

And under a US trade embargo, put in place in the wake of the 1979 Islamic revolution, US citizens were not allowed to buy the bond and US banks were precluded from participating in the issue.

Furthermore, at the start of June Moody's Investors Service pulled its B2 sovereign debt rating for Iran on the back of concerns that its ratings work was in breach of US sanctions.

Anecdotal evidence suggests that a number of non-US houses with extensive US operations shied away from joining the syndicate for the transaction for fear of falling foul of the authorities in the US.

Misetich

Is any doubts that Oil will be priced in Euros? When? What will be the effect on the US $ -

Got gold?

Cavan Man

(07/14/2002; 14:06:14 MDT - Msg ID: 80511)

misetich

Great and significant find regarding Iran's float in the Euro bond pond. Thanks.

Cavan Man

(07/14/2002; 15:00:03 MDT - Msg ID: 80512)

Scary if true.

US planning to recruit one in 24 Americans as citizen spies
By Ritt Goldstein
July 15 2002

The Bush Administration aims to recruit millions of United States citizens as domestic informants in a program likely to alarm civil liberties groups.

The Terrorism Information and Prevention System, or TIPS, means the US will have a higher percentage of citizen informants than the former East Germany through the infamous Stasi secret police. The program would use a minimum of 4 per cent of Americans to report "suspicious activity".

Civil liberties groups have already warned that, with the passage earlier this year of the Patriot Act, there is potential for abusive, large-scale investigations of US citizens.

As with the Patriot Act, TIPS is being pursued as part of the so-called war against terrorism. It is a Department of Justice project.

Highlighting the scope of the surveillance network, TIPS volunteers are being recruited primarily from among those whose work provides access to homes, businesses or transport systems. Letter carriers, utility employees, truck drivers and train conductors are among those named as targeted recruits.

A pilot program, described on the government Web site www.citizencorps.gov, is scheduled to start next month in 10 cities, with 1 million informants participating in the first stage. Assuming the program is initiated in the 10 largest US cities, that will be 1 million informants for a total population of almost 24 million, or one in 24 people.

Historically, informant systems have been the tools of non-democratic states. According to a 1992 report by Harvard University's Project on Justice, the accuracy of informant reports is problematic, with some informants having embellished the truth, and others suspected of having fabricated their reports.

Present Justice Department procedures mean that informant reports will enter databases for future reference and/or action. The information will then be broadly available within the department, related agencies and local police forces. The targeted individual will remain unaware of the existence of the report and of its contents.

The Patriot Act already provides for a person's home to be searched without that person being informed that a search was ever performed, or of any surveillance devices that were implanted.

At state and local levels the TIPS program will be co-ordinated by the Federal Emergency Management Agency, which

was given sweeping new powers, including internment, as part of the Reagan Administration's national security initiatives. Many key figures of the Reagan era are part of the Bush Administration.

The creation of a US "shadow government", operating in secret, was another Reagan national security initiative.

Ritt Goldstein is an investigative journalist and a former leader in the movement for US law enforcement accountability. He has lived in Sweden since 1997, seeking political asylum there, saying he was the victim of life-threatening assaults in retaliation for his accountability efforts. His application has been supported by the European Parliament, five of Sweden's seven big political parties, clergy, and Amnesty and other rights groups.

This story was found at: http://www.smh.com.au/articles/2002/07/14/1026185141232.html

R Powell

(07/14/2002; 15:51:05 MDT - Msg ID: 80514)

Jimbo

Most everything mentioned is related to the POG. Occasionally, a few things slip through that aren't according to some points of view but are according to other points of view. Thankfully, from my point of view, we haven't had a big brohaha over subject matter for a long time.

Most financial holdings are evaluated over some span of time. As far as POG skyrocketing, the answer is not yet. But when compared to the Dow's 700 point down move of last week which you mentioned, the POG (and POS) did much better, no?
13 of the top 14 mutual funds as seen YTD have metals' holdings. I've also seen a number that gives 19 out of the top 39. These numbers come from a poster at another forum whose numbers I trust but I'm not sure I can give a link in keeping with USAgold regulations. However, as often mentioned, the IBD newspaper lists the leading sectors and YTD gains every day. The 18 year long bull SM gains will not be erased except over many years time. Likewise, the uptrend in gold and silver will seem to take forever with two steps up and then one step back. This will exceed the patience span of even the sturdiest goldbugs. Patience, my friend, patience.

If you are now interested enough to invest on your "own handle" or as a result of your own recommendations, then congratulations. You are imho better off now than so many who have entrusted their money to fund managers who have never seen a great bear market. Many are also limited to only long stock positions when short is imho the place to be. As to metals' investments, Physical in hand is probably the safest means with highly leveraged futures' markets positions the riskiest. Good luck with whatever you decide. I would be out of character if I did not mention that you might also consider silver. Patience...
Rich

misetich

(07/14/2002; 16:48:45 MDT - Msg ID: 80515)

Governors Take Aim at Health Care

http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020714/ap_on_re_us/governors_5Snip:

"Last year was pretty trying for the nation's governors," Michigan Gov. John Engler said as he launched the four-day National Governors Association conference.

"We've had to battle declining tax revenues ... and at the same time there's been an explosion in health care costs. Boy, are they ever back," said Engler, the Republican chairman of the association.

Thirty governors are meeting in Boise under some of the worst economic conditions their states have seen. More than 40 states suffered budget shortfalls of $40 billion to $50 billion in the last fiscal year, leading to deep cuts, depleted emergency funds and some layoffs.

Despite signs of a gradual national recovery, the states' woes are expected to persist well into the current fiscal cycle.

Their biggest problems are the ballooning cost of prescription drugs and Medicaid, the state-federal health insurance program for the poor. Medicaid spending jumped 13 percent in the last fiscal year and makes up 20 percent of state budgets.

.............

The Bush administration said Friday the government will run a $165 billion deficit in the federal fiscal year ending Sept. 30. That's $59 billion worse than the administration estimated in February.

"The same things that are causing those deficits in Washington are precisely what's responsible at the state level for the problems we have, but there's one difference," Engler said. "We've got to balance state budgets."

Misetich

Higher costs (energy, health) declining investment values (bond, stocks)declining tax revenues- how can you have balanced budget - Fed subsidies, cut services - cut pension - cut benefits- reduced spending

Gold shines in and preserves value in distressed times. It appears that we are heading into a distressed economic cycle - Those that have been hoping for a recovery - and a resumption of the bull market - are being treated to a "jobless recovery" -
Second/third phase of the bubble burst occurred in the last several months - and continuing - The Financial Storm (Perfect?!)is gathering momentum - rather than relenting- We wait patiently as events unfold-
As gold investors we say thanks to those that make Gold available at these bargain prices!!!!!!!

Got gold?

Black Blade

(07/14/2002; 17:59:25 MDT - Msg ID: 80516)

So you haven't sold yet

http://money.cnn.com/2002/07/01/pf/investing/q_haventsold/index.htm

Long-term investors are facing tough choices: Sell low or face more punishing losses.

Snippit:

NEW YORK (CNN/Money) - It's sickening. Cisco below $15. AT&T below $10. Sun Micro below $5. Lucent struggling to stay above $1.50. A few years you were counting on those stocks to pay for a few years of the kid's tuition -- now, they'll barely buy the books. Sure, you thought about selling in the past two years, but the price always seemed too low. Then stocks fell more. And more. You watched your money evaporate before your eyes. Now, you're a lot poorer, and wondering if you should give up on the market and throw whatever pocket change you have left into an index fund.

Black Blade: On the bright side you can use $3,000 of losses to offset income for tax purposes (whoopty doo!). Many will ride this market into the ground and always say they are in for the "long term" � the very long term. This can only turn out very badly.

Black Blade

(07/14/2002; 18:27:28 MDT - Msg ID: 80517)

Stocks ready to chill?

http://money.cnn.com/2002/07/12/markets/sun_lookahead/index.htm
Big company earnings dominate this week as strategists see signs of a bottom.

Snippit:

NEW YORK (CNN/Money) - After some tumultuous times, U.S. stock markets could be ready to calm down this week as investors focus on a slew of quarterly earnings reports from major companies. According to market strategists, stock markets are showing signs of stabilizing and establishing a bottom in the short term. There's no doubt that investors will be looking at corporate balance sheets this week, with a calendar full of heavyweights reporting earnings, or lack thereof.

"We start getting into earnings and at least theoretically that's going to drive the market," said Timothy Ghriskey, president of Ghriskey Capital Partners. "There were very few preannouncements, which means [earnings] are going to come in line or better than expected," Ghriskey said. "There a fair chance that the market really stabilizes, and we might even see an up week."

Black Blade: The Pied Pipers are expecting to see earnings meet or beat vastly lowered earning estimates. Maybe they will, but when the estimates are sliced and diced and cut to the bone so much, how much confidence will remain in the markets? Even so, stock valuations are extreme and shares are grossly overvalued. It could get quite "entertaining". The Pied Pipers and Trolls will be out to "put a lot of lipstick on these pigs".

Black Blade

(07/14/2002; 18:41:29 MDT - Msg ID: 80518)

Dollar hits the skids vs. yen

http://cbs.marketwatch.com/news/story.asp?guid=%7B246A9626%2DBB6F%2D45A6%2D8F47%2DF1773C5FD4EC%7D&siteid=mktw

Greenback needs time, not BOJ intervention for recovery

Snippit:

What is the BOJ's objective? The dollar would probably have been at 110 against the yen had it not intervened," noted Jay Bryson, international economist with Wachovia Securities. He said all the BOJ can do is attempt to slow the dollar's descent -- not block it. "The BOJ is trying to smooth out dollar declines. I don't think it's necessarily trying to defend any particular levels," Byson maintained.

Specific currency levels were brought to the fore last weekend when Japan's Finance Minister Masajuro Shiokawa said that he, along with 25 other finance ministers from Europe and Asia, expected the dollar to weaken further to the 115-yen level -- around the area reached just after the Sept. 11 terrorist attacks.

The Japanese financial daily claims that most of the dollars gathered by the Japanese government and the BOJ from currency interventions to buttress the buck have, for the most part, been poured into U.S. Treasury bonds -- filling almost 40 percent of the U.S. quarterly current-account deficit. The interest from Japan in U.S. assets is in stark contrast to countries in the euro-zone, which have been shunning U.S. financial assets.

Black Blade: The currency wars continue. Meanwhile the USD is heading lower tonight and Gold is moving higher. Could get volatile tonight ahead of a desperate speech by George "Dubya" Bush scheduled for Monday concerning plans to prop up the economy and enlarge the SEC prosecution forces.

Black Blade

(07/14/2002; 19:31:07 MDT - Msg ID: 80519)

Coca-Cola to expense stock options

http://cbs.marketwatch.com/news/story.asp?guid=%7BC8B94643%2D6AB7%2D45B4%2D8248%2DCFA096A45D14%7D&siteid=mktw
Dow component will include as cost of doing business

Snippit:

NEW YORK (CBS.MW) - Coca-Cola announced Sunday that it would start treating stock options as a cost of doing business -- a step that should improve disclosure as a wave of accounting scandals threatens to sweep across Corporate America.

Black Blade: So far only Boeing and one other company expense stock options. I am surprised that now another company has decided to be a bit more honest � it just isn't in their nature to be honest.

misetich

(07/14/2002; 19:51:20 MDT - Msg ID: 80520)

Insiders selling remains at high levels

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∣dle=ad_frame2_topfin&s=APTGDghYWVS5TLiBJSnip:

By some measures, insider selling remains at high levels. There were almost four sales for every purchase among stocks in the New York Stock Exchange in the eight weeks ended July 5, compared to a typical ratio of 2.25 to 1, according to Vickers Weekly Insider Report.

.............
Microsoft Corp. officials lead insider sales in the first half, as they have for the past six years. Shares of the largest software company have fallen 22 percent this year.

Founder Bill Gates reported sales of $617.6 million, topping all sellers, according to the Washington Service. Gates has a regular program in which he periodically sells a small fraction of his Microsoft holdings to diversify his investments, said Caroline Boren, a company spokeswoman.

USA Interactive director Paul Allen, who founded Microsoft along with Gates, sold $568.7 million in stock of Barry Diller's electronic-commerce company.

``We've been focusing on our cable investments,'' said spokesman Michael Nank of Allen's Vulcan Ventures. ``Since the sale of USA's cable networks Vivendi, the stake was no longer strategic.''
...........................................................

Misetich

The headline spin on Bloomberg says "U.S. Insider Purchases Almost Triple After Share Prices Plunge"
The real "gems" are found in the body of the article where it states insider selling is high level of 4-1 ratio vs an average of 2.25 to 1

What do insiders know? Why are they selling at these "depressed stock levels" ? and why aren't buyers rushing in to buy these "dips?"

Bush's team has made a FUNDAMENTAL TACTICAL ERROR- they have tied their fortunes to the Stock Market - will the DEMOCRATS help them succeed and lose the November election?

Either the situation is more precaurious nationally and threatening the country at which point they need DEMOCRAT backing to succeed - and save the financial system -

"Somebody" has tied in the economy and stock market politically -

It remains to be seen who emerges as the "winner" - at what cost to investors in the US and worldwide?

In this political/financial scandals environment we can be assured of increased financial and economic stress.

Got gold?

misetich

(07/14/2002; 19:57:56 MDT - Msg ID: 80521)

US gasoline prices flat over July 4 holiday-survey

http://www.forbes.com/newswire/2002/07/14/rtr660763.htmlSnip:

NEW YORK, July 14 (Reuters) - Heavy driving over the July 4 U.S. Independence Day holiday did not push up gasoline prices, according to a nationwide survey released on Sunday.

In fact, U.S. average retail gasoline prices were virtually flat over the last three weeks, as supplies proved ample to satisfy vacationers' demand for fuel over the July 4 holiday, according to the Lundberg survey of 8,000 retail gas stations.
......................................................
Misetich

Not an encouraging anectodal factoid on US economic recovery - Airline industry is also facing difficulty and as must the Travel and Tourism

Got gold?

Chris Powell

(07/14/2002; 20:07:51 MDT - Msg ID: 80522)

GATA appeals to rock star Bono on gold issue

http://groups.yahoo.com/group/gata/message/1177GATA appeals to rock star Bono to raise the
gold price issue to help rescue Africa:

http://groups.yahoo.com/group/gata/message/1177

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

sector

(07/14/2002; 20:36:22 MDT - Msg ID: 80523)

This Week Could see More Bad News for the Cabal and their US Officials

from several unexpected sources.Can't be specific yet, but those who value the truth and wish the inappropriate market manipulation to stop have reason for hope this week.

The heat on the cabal is definitly going UP. The corruptors of free marrkets who live and work by stealth, in addition, are facing light like they never expected.

timbervision

(07/14/2002; 21:14:13 MDT - Msg ID: 80524)

Can insurance companies maintain their reserves as the markets fall.

http://search.ft.com/search/article.html?id=020711001165&query=Munich+Re&vsc_appId=totalSearch&state=FormThe Sunday Business Financial Times reported that Standard and Poor's might cut Munich Re's credit rating.

Snippet:

"COMPANIES & FINANCE EUROPE: Munich Re hit by S&P rating threat
By Tony Major in Frankfurt and Jane Croft in London
Financial Times; Jul 11, 2002

"Standard & Poor's warned yesterday that it might cut Munich Re's triple-A credit ratings, after the world's largest reinsurer said it would inject a further $2bn into American Re, its troubled US subsidiary, and raised its estimate of losses from the September 11 attacks by another $500m.

"The moves, coupled with indications that the reinsurer might not meet its 2002 profit forecast because of weak stock markets, sent Munich Re's shares sharply lower. Other European insurers tumbled in its wake."....

Insurance companies must maintain certain level of reserves to remain solvent. The shares portion of their porfolio are measured against the stock market. If the stock market falls these insurers may need to sell shares to maintain their reserve requirements.

Question: Could these kind of reserve requirements be the trigger that causes a market collapse? - insurers selling into a falling market with no buyers.

Black Blade

(07/14/2002; 21:18:59 MDT - Msg ID: 80525)

As Stock Prices Fall, So Do Investors' Hopes

http://www.washingtonpost.com/wp-dyn/articles/A1512-2002Jul13.html
Snippit:

A less direct statistic could also help illustrate Americans' possible dwindling interest in stocks. According to Nielsen Media Research, an average of 382,000 Americans tuned in to the financial news channel CNBC during prime viewing hours during the boom years of 1997 and 1998. From Sept. 24, 2001, through July 11, that number had dropped to 264,000.

The days when professional day traders and other arm-chair stock-pickers tuned in to get the latest buzz from honey-tongued analysts and chief executives preaching the Gospel of the New Economy appear to be coming to end.

In fact, many of those one-time star analysts -- Merrill Lynch's Henry Blodget, Morgan Stanley's Mary Meeker, Salomon Smith Barney Inc.'s Jack Grubman -- are under investigation over conflicts of interest. Some are out of jobs. And a handful of the formerly sizzling chief executives -- Enron's Kenneth L. Lay, Tyco's L. Dennis Kozlowski, WorldCom's Bernard J. Ebbers, ImClone's Samuel Waksal -- are either under investigation, indictment or have had their theories of synergy, convergent media and endless broadband demand either debunked or deferred.

Black Blade: "Fool me once shame on you, fool me twice shame on me". Fewer are tuning in to CNBC (and Bloomberg and CNNfn) after having listened to the so-called experts who guided these novices into dog.coms and other poor investments, Aside from general disgust with the CNBC anchors (Trolls) and their guests (Pied Pipers), the investor is tapped out having lost his or her hopes and dreams of a better life. I watched with amazement when CNBC trotted out old Abby Jo to tout a rosy recovery in the markets (before the recent plunge of over a 1000 points). It is no wonder that the ratings for the network are falling off so sharply.

mikal

(07/14/2002; 21:36:55 MDT - Msg ID: 80526)

@sector

"Can't be specific yet, but those who value truth and wish the inappropriate market manipulation to stop have reason for hope this week." Thank you for those encouraging words to add to all the others here today. When can we expect to hear more on this?

Black Blade

(07/14/2002; 21:37:04 MDT - Msg ID: 80527)

Asia Starts Off Negative

http://quote.yahoo.com/m2?u
Asia goes negative. Meanwhile the USD sinks and Gold flies. Could get "interesting".

- Black Blade

goldquest

(07/14/2002; 21:37:58 MDT - Msg ID: 80528)

Gabby Abby

Seems to have slithered away also!

Black Blade

(07/14/2002; 23:54:50 MDT - Msg ID: 80529)

Coca growers' champion wins new era for Indians

http://www.sfgate.com/cgi-bin/article.cgi?f=/chronicle/a/2002/07/12/MN127792.DTL
Bolivian upstart in runoff race for presidency

Snippit:

La Paz, Bolivia -- Evo Morales, the charismatic leader of coca farmers who are fiercely opposed to U.S. drug policy, has sent shock waves through this Andean nation's political establishment with a second-place showing in the recent presidential election.

Black Blade: Indians give Dubya and the Drug War "the finger". Interesting changes in SA. Indians also captured large numbers of seats in the National Congress.

Chris Powell

(07/15/2002; 00:08:33 MDT - Msg ID: 80530)

Help GATA put the gold question to Greenspan

http://groups.yahoo.com/group/gata/message/1178GATA urgently requests the help of its U.S.
supporters in persuading members of the
Senate Banking Committee and the House
Financial Services Committee to put a gold
question to Fed Chairman Alan Greenspan
when he testifies to those committees this
week:

http://groups.yahoo.com/group/gata/message/1178

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 Invisible Hand

(07/15/2002; 00:43:00 MDT - Msg ID: 80531)

Greenspan's absence

Sorry I'm late in answering MK's post, but Gary North was boosting in an e-mail from his mailing list with the Daily Reckoning under the title "July 10, 2002: The Yellow Light Finally Flashed On" that he advised in the beginning of 2000 to move out of stocks.
Sorry, Mr. North, your Y2K website advised that since 1997, I think. If I remember well there was a category "stock market" in the "press review" section of his Y2K website.
But Greenspan warned in December 1996, that's more than five years ago, of irrational exuberance. Why did the imbeciles stay in stocks? What did John Galt do?

Black Blade

(07/15/2002; 02:49:56 MDT - Msg ID: 80532)

European Markets Start Off Negative

http://quote.yahoo.com/m2?u
Euro markets are negative - although slightly. The USD is down and Gold is higher. Petroleum is higher on a bullish EIA report for oil demand (next year). Looks like it could be "entertaining" today as the Prez will talk about the economy. When he opens his mouth, the markets tend to go south. Also, a rumor is being floated that Dick Cheney could have some hard questions to answer over monkey business and accounting problems at Halliburton during his watch as CEO. Hmmm...

- Black Blade

Black Blade

(07/15/2002; 03:16:48 MDT - Msg ID: 80533)

The Future Of Gold

http://www.thebulliondesk.com/reports/ross/fut.pdf
Snippit:

"If I buy a gold stock, it's because I expect the gold price to go up. Why then would I buy shares of a company that hedges the gold price?" Such concerns are the subject of frequent e-mails to the Tocqueville web page (www.tocquevillefunds.com) asking what exposure The Tocqueville Gold Fund portfolio (TGLDX) has to hedged producers.

Do investor preferences make any difference to the performance and valuation of gold equities? It has seemed indisputable to me for years that exposure to a rising gold price creates value while hedging detracts. It is clear that the top performing shares of the last two years have been the unhedged producers, while the laggards have generally been lugging a hedge book. Over the past two years, the Amex Gold Bugs Index (HUI) rose 137% versus 49% for the Philadelphia Gold & Silver Index (XAU). The HUI index consists of unhedged gold equities, while the XAU is dominated by Barrick Gold, Placer Dome, and AngloGold, three of the leading hedgers.

Black Blade: An interesting article from GFMS. The article is 56 pages long (pdf file) and discusses various aspects of the Gold markets, including John Hathaway's treatise on the dangers of hedging. I look at those producers who sell forward as the enemies of a free market in Gold and amazingly as enemies of the very product they bring to market.

Black Blade

(07/15/2002; 04:30:05 MDT - Msg ID: 80534)

London gold volumes hit 13 month high in June: LBMA

http://www.platts.com/stories/pr2.html
Snippit:

Volumes of gold traded in London in June hit their highest level since May 2001, the London Bullion Market Association said Friday.

Black Blade: A combination of institutional fears, and unwinding of hedge books with institutional and investor buying perhaps. Wait until the real panic buying begins as the markets really start to crash.

Black Blade

(07/15/2002; 05:10:42 MDT - Msg ID: 80535)

Euro/Dollar Parity!!!

http://www.mrci.com/qpnight.asp

On CNBC ticker the euro just tagged parity (briefly) with the US dollar. Meanwhile Gold bumps higher by +$1.50 an ounce to $317.40 an ounce. The Yen crumbled below 116 to the US dollar. Meanwhile market futures are higher - although below fair value (except the Nasdaq). We still have much further to fall until these markets are fairly valued by historical averages. It looks to get quite "Interesting" and "Entertaining".

- Black Blade

Black Blade

(07/15/2002; 05:18:06 MDT - Msg ID: 80536)

There It Is - Euro/US Dollar Parity

http://quotes.ino.com/chart/?s=FOREX_EURUSD&v=s
Just hit euro/dollar parity, actually the doller fell lower (see linked chart). Looks like a lotta fun in the currency markets.

- Black Blade

Black Blade

(07/15/2002; 05:42:10 MDT - Msg ID: 80537)

USD Falls Hard

http://quotes.ino.com/chart/?s=NYBOT_DXY0
Oh my, it looks like the USD is about to tumble below 105 now. So far no visible sign of MOF intervention. Gold rises slightly to the occasion above $318 an ounce.

- Black Blade

Black Blade

(07/15/2002; 05:57:29 MDT - Msg ID: 80538)

There It Goes!!!

The USD index crashed through 105 (currently 104.89). The foreign investors are picking up their marbles and are running home. I told ya it was going to get "interesting" and "entertaining".

- Black Blade

Boilermaker

(07/15/2002; 06:23:50 MDT - Msg ID: 80539)

Leonard Kaplan "prospector" commentary for 7/15

http://www.thebulliondesk.com/reports/prospector.htmsnippet;
"The World Gold Council continues to complain that investor interest in gold is being hampered by the lack of a "distribution system". They continue to state that investor purchases are thwarted due to their lack of knowledge of how, and where, to buy gold. This is pure foolishness and highlights their general lack of knowledge of the market. If investors want to buy gold, they will. If investors are seeking safety, full regulatory oversight, low transaction costs, and full transparency, they can enter the futures markets for their purchases. Businesses and industries will quickly respond to their needs, whether it is for large or small purchases. Instead of spending money to develop "distribution systems", the World Gold Council would be best served by encouraging investment demand through education about the current system, which is most efficient and already exists."

comment; "Full transparency" caught my eye. Gotta love Leonard's devotion to the paper market. Hope his clients have some real stuff.

Black Blade

(07/15/2002; 06:25:43 MDT - Msg ID: 80540)

The Earnings Season of Discontent

http://www.businessweek.com/bwdaily/dnflash/jul2002/nf20020715_7273.htm

Snippit:

As earnings season arrives again, investors' minds this quarter are quickly turning toward thoughts of scandal, not profits. Where's the next Enron, WorldCom, or Xerox? Are other situations like Merck or Bristol-Myers Squibb ready to crawl out of the woodwork? How bad will it be?

Black Blade: Where there's one or even a dozen cockroaches, it is a sure bet that there are many more. Watch out for accounting scandals, corporate malfeasance, pro forma, operating earnings, restated earnings, synthetic leasing, write offs, one time expenses, etc. When you hear any of those terms mentioned in an earnings release, run! Run like the blazes � go defensive. I expect to see some pump and prime by institutional firms to prop up the markets today (or at the very least minimize the carnage). Also, expect a lotta spin from the Trolls and Pied Pipers.

Black Blade

(07/15/2002; 06:36:29 MDT - Msg ID: 80541)

Dollar Falls Against Yen, Euro as Demand for U.S. Assets Wanes

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APTKbiBUjRG9sbGFy
Snippit:

London, July 15 (Bloomberg) -- The dollar fell to a 10-month low against the yen and dropped against the euro as demand for U.S. assets wanes. The U.S. currency weakened to 116.08 yen, its worst level since Sept. 21, from 116.79 late Friday. It had its biggest weekly loss in four months last week, with a 2.9 percent decline. The dollar slipped to 99.62 cents a euro, from 98.93.

``With accounting problems at companies, investors aren't so keen on holding U.S. assets,'' said Myrvin Anthony, an economist at Old Mutual Asset Managers, which oversees about $8.8 billion. ``People aren't too sure which numbers they can trust and that's hitting the equity market very hard.'' The euro may rise to $1.05 by the end of the year, he said. ``Unless U.S. stocks start performing better, the dollar will keep falling,'' said Jeremy Stretch, a currency strategist at RBC Dominion Securities. The euro will reach $1 ``relatively soon.''

Black Blade: Phooey! The euro may rise to 1.05 by the end of the week! The euro already hit parity and then some.

Inventories have built up - the Pied Pipers are saying this is good, however, it is really bad as it means that goods are not moving out the door. In other words, look for some more growth in the "Bone Pile".

tedw

(07/15/2002; 06:38:04 MDT - Msg ID: 80542)

Gathering clouds

Declining dollar, poor rates of retun on us bonds, bear market in Nasdaq and Dow, corporate accounting scandals, rising oil futures, crises in the mideast,renewed violence in kashmir.

Are these the gathering clouds for a perfect storm?

canamami

(07/15/2002; 06:43:17 MDT - Msg ID: 80543)

How much better...

the world would be today, if the POG had been allowed to rise in 1998, at the time of the Asian crisis, and the markets allowed to crash. With no bailout of LTCM. The correct market signals would have been sent, the rot arrested and most of that rot would have been purged by now, if not all of it. Without manipulation, goldbugs would be happier. The moral hazard of the '98 bailout caused much of this. But for the bailout and POG manipulation, EVERYONE - shareholders, goldbugs, holders of debt - would be happier and better off today.

Troy Boy

(07/15/2002; 08:18:36 MDT - Msg ID: 80544)

Taking Possession

Boilermakers #80539 re: KaplanI am a bit concerned with the simplistic approach to buying physical on the futures mkt.
We tried to take physical delivery of our June 2 purchase on the Chicago exchange of 80toz. They have been telling us that they have not delivered physical in 10 Years! They are not wanting us to sell these buys and go somewhere else to buy our physical. We still do not have the physical we bought and paid for on the futures mkt.

Troy Boy

(07/15/2002; 08:19:18 MDT - Msg ID: 80545)

oops

prior commentI meant 800toz.

Waverider

(07/15/2002; 08:21:49 MDT - Msg ID: 80546)

Interesting morning...

Interesting action today in the markets, and whooaa to the US dollar. What has struck me most from the numerous people I`ve spoken with here in Switzerland is the consistent feeling that it is going to take a long, long time (5 to 10 years) for people to develop confidence again in the markets following the breach of trust with the accounting scandals. More seem to be looking to Gold as an investment option. Thanks for the news. Cheers,
Waverider

RobotGuy

(07/15/2002; 08:23:17 MDT - Msg ID: 80547)

Troy Boy - - - That is disheartening.

I really hope you see your physical from them. Perhaps the greatest fear of many is true. Perhaps there is much less physical than paper.

Best wishes!

RobotGuy.

Carl H

(07/15/2002; 09:02:35 MDT - Msg ID: 80548)

@MK E-mail

Please provide my e-mail address to Boilermaker.

Carl H

(07/15/2002; 09:28:52 MDT - Msg ID: 80549)

@Waverider -- Time needed to restore confidence.

I think you are optomistic. I think it will take a generation.

USAGOLD

(07/15/2002; 09:34:29 MDT - Msg ID: 80550)

Distribution system. . . .

Troy: There's no problem in the distribution system that I know of. If you would have ordered your physical from USAGOLD~Centennial Precious Metals you would have gotten it by now without a hitch. We've had some delays on Maple Leafs because the mint can't seem to keep up with demand, but other than that things are moving along smoothly. By the way, even if delivery were prompt, you would still have added costs and liquidity problems with the either the 100 ounce or 400 ounce bars you might receive. It isn't the "buy" it appears to be on the surface and if there is an advantage to buying on the exchange, it is marginal.

As we say: Please remember it is your purchase of gold from USAGOLD~Centennial Precious Metals that nourishes these pages!

All: I can say this though. Someone is buying up gold coins like there's no tomorrow. I don't know if its the public (could be) or some of the myriad shorts trying to cover (could be). The fact of the matter is that premiums are going higher and we do not expect that trend to abate. We are very busy with both large (Call Marie Ext 105 or myself Ext #102) and smaller orders (Call Jonathan #110). The IRA business is non-stop (call George #102). And this is July -- traditionally the slowest month in the investment business across the boards. I've told several industry friends that if July is good, the rest of the year could be a blockbuster.

Hard assets...Easy access

(07/15/2002; 10:15:31 MDT - Msg ID: 80551)

--Arm Yourself With Information--

http://www.usagold.com/cpm/Hoppe.htmlThe many new crisis-inspired rules in Argentina should suggest this to you -- having financial resources is one thing, KEEPING them and having them accessible in times of need is quite another. And truly, it is the latter condition that matters most. Typically, it's in times of crisis that the nation-state will avail itself of government powers to take resources from the "haves" to ease the pain of the "have nots".

American history (cf. 1933) shows nothing different. That is, "having" gold (to begin with) and "keeping" it (under your terms) can be two separate issues entirely. With the extra bit of information about legal precedents in the United States found here (visit URL given above) you can intelligently stack the deck in your favor and employ your resources accordingly.

Contact USAGOLD / Centennial Precious Metals, Inc.

USAGOLD / Centennial Precious Metals, Inc.

(07/15/2002; 10:19:11 MDT - Msg ID: 80552)

Common sense investing for uncommon times... Put a Foundation Under Your Portfolio

http://www.usagold.com/ProductsPage.html

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call Centennial for Arrangements
1-800-869-5115

TownCrier

(07/15/2002; 11:05:51 MDT - Msg ID: 80553)

Euro climbs to $1.00 for first time since Feb 2000

http://biz.yahoo.com/rf/020715/markets_euro_parity_6.htmlLONDON, July 15 (Reuters) - One euro bought more than one dollar on Monday for the first time since February 2000, rising past the parity milestone in a dramatic turnaround in fortunes for the youthful single currency.

The euro, which had once sunk 30 percent below its January 1999 launch rate [to a low at $0.8225 during October 2000], has risen six percent in just a month as the greenback has been battered by a succession of U.S. corporate accounting scandals.

"The euro's push through parity gives greater credibility to the euro and the European Central Bank," said Russell Jones, head of foreign exchange research at Lehman Brothers.

...But analysts said recrossing parity would not bring round sceptics, for whom the exchange rate was just another stick with which to beat up the common currency project

"People who are sceptical will find a different area to criticise, they'll say growth in the euro area is too slow or the strong euro is destroying jobs."

-------(click URL for more of this good/thorough article)------

There is talk that the rising euro will play a part in a "virtuous circle" helping the ECB to keep domestic price inflation at bay. That being the case, it stands to reason that the falling dollar could have the oposite effect here.

Ever since those "dark and doubtful" (to sceptics) early days of EMU launch, I've continued to counsel that you need gold. And to that conviction I hold. Now, with the euros project uptrend widely seen as actual rather than merely potential, I add simply to my advice: "now more than ever".

Call Centennial today for your diversification needs.

R.

Jon

(07/15/2002; 11:07:02 MDT - Msg ID: 80554)

What's wrong w/ GWB advisors

Just delivered speech left mkt utterly cold. Nothing new was presented. Doesn't this guy realize he'll be one termer just like dad. "It's the economy stupid."

Aragorn III

(07/15/2002; 12:07:43 MDT - Msg ID: 80555)

You must think about your criticism Jon

What would you have this one man say, and to what effect?

"Got gold??"

Driven like a leaf on the wind...

YGM

(07/15/2002; 12:33:56 MDT - Msg ID: 80556)

Not Financial Advice from Here....

But.....I do take my own advice and have advised a couple family members who've kept the faith and done well....As I've said for many, many moons sell US $/Stocks and buy Euros and/or Physical AU/AG and PM 'Unhedged Miners'....Now my advice to myself and Family is sell the Euro's and all Paper whether PM's or not and go for the Physical Gold/Silver before it goes skyward and gets away....I have no faith longterm in any Real Estate or Paper investments...When one talks of Dominoes falling?....Well they will just move from one sector to another as they fall....And from one Country to another....I have no concern for how high Gold will go with this game plan only 'Wealth' preservation with "Great Potential" for further gains....Anybody who thinks Gold will go below $300.00 p/oz "EVER AGAIN" is a (excuse me) FOOL!!!!....The paper that burns in one corner of the globe today, will burn elsewhere tomorrow....FWIW....Arguements expected but that's my take and I'm stickin to it!...Good Luck ALL!....Adios for now....Have a good summer....YGM.

Black Blade

(07/15/2002; 12:40:34 MDT - Msg ID: 80557)

Market Crash

That must have been one heck of a speech this morning. The DOW (>-430 points), Nasdaq (>-56 points), and the S&P 500 (>-42) are all slipping off into oblivion. Unfortunately for many, this is only the beginning. As I said earlier this was going to get both "interesting" and "entertaining". There really was only one ultimate outcome to all this speculative mania extreme gross overvaluation. It has come to the point where the investors said "show me the money" and the money wasn't there. It will get worse - much worse. As I said, go defensive!!!

- Black Blade

Black Blade

(07/15/2002; 12:44:01 MDT - Msg ID: 80558)

One More Point

Expect to see a sharp recovery, although temporary as institutional firms pull together to set positive market direction and improve sentiment. This could happen anytime and probably accelerate toward the end of the trading session. The overall general trend is still lower.

- Black Blade

Jon

(07/15/2002; 12:52:32 MDT - Msg ID: 80559)

Aragon GWB needs to explain how he intends to punish criminals

Pursuit of jail terms, heavy HEAVY fines, etc.

YGM

(07/15/2002; 13:06:38 MDT - Msg ID: 80560)

One Last Thought for Now!....Financial Armegeddon "WILL" bring Wars... as History will attest!

http://www.newsmax.com/archives/articles/2002/7/14/214727.shtml
FEMA Preparing for Mass Destruction Attacks on Cities
John O. Edwards
Monday, July 15, 2002
FEMA, the federal agency charged with disaster preparedness, is engaged in a crash effort to prepare for multiple mass destruction attacks on U.S. cities -- including the creation of sprawling temporary cities to handle millions of displaced persons, NewsMax has learned.
FEMA is readying for nuclear, biological and chemical attacks against U.S. cities, including the possibility of multiple attacks with mass destruction weapons.

The agency has already notified vendors, contractors and consultants that it needs to be prepared to handle the logistics of aiding millions of displaced Americans who will flee from urban areas that may be attacked.

The agency plans to create emergency, makeshift cities that could house hundreds of thousands, if not millions, of Americans who may have to flee their urban homes if their cities are attacked.

Ominously, FEMA has been given a deadline of having the cities ready to go by January 2003 � in about six months.

A source familiar with the deadline believes the effort is related to making the U.S. prepared for counterattacks if the U.S. invades Iraq sometime next year.

FEMA is currently seeking bids from major real estate management firms, and plans to name three firms in the near future to handle the logistics and planning for these temporary cities.

FEMA officials have told these firms they already have tents and trailers ordered. The tents and trailers would provide shelter for displaced populations.

The real estate firms are expected to provide engineers and architects to lay the plans for emergency infrastructure needs, such as sewerage and electricity.

Editor's Note: This story first appeared in NewsMax's Insider Report -- emailed to subscribers to NewsMax's news alert service. To sign up for this free service -- and receive many stories not published on NewsMax.com -- Click Here.

**One does not need an Economics degree to follow the train of history and common sense....get your secure Gold/Silver protection plan in hand before the other shoe falls...YGM.

sector

(07/15/2002; 13:13:03 MDT - Msg ID: 80561)

@Jon --The GWB "Speech Effect" ...Minus 500 in two days

The New "Swat Team Leader" ...words not said..."Hi... I'm the new Bush Financial Swat Team Leader.

I will have failed in my new duties if there are, in the next six months, not less than 100 CEOs inprisoned at Guantanamo Bay".

What he said:

"I will try to be "Fair". LOL

++++++++++++++++++

With each monthly mutual fund mailing, there will be a rising cry of bloody murder from the widows, orphans and soon-to-retire-but-still-voters. Each month between now and November anger will rise along with redemptions. Anger at anyone associated with Wall Street or its acolytes.

Then the blame game running up to the election.

If I were an incumbent politician from either party OR an "analyst" OR a CNBC talking head, I would do as Senator and Mrs Phil Gramm did...got out of Dodge while they still had their hides intact.

The repartiation of dollars is moving into full swing as the "Control" exerted by the PPT seems a bit tepid. Bad guys still capping gold ...for today at least.

"Fine entertainment"

Cavan Man

(07/15/2002; 13:32:33 MDT - Msg ID: 80562)

Goin' to work eh?

Welcome PPT. Trouble is, it's too obvious for most of the global crowd.

Troy Boy

(07/15/2002; 13:34:29 MDT - Msg ID: 80563)

Physical delivery

Per usa todayI placed a call to MK several weeks ago regarding the possible working with your group there.
There was a not so friendly response to this. In fact I was told he was not interested at all in working with our firm which only he can identify through an email to me. I mentioned I have been a lurker here for years now monitoring the writings of another and all of the other minds.
Maybe another shot is in order now.

The message sent from the exchange to us was that there was no way in the world that we could take physical delivery for the price we bought in the futures market which was $301 at the time. The price would need to be several dollars over spot. Even though when we opened our account we specifically stated we would be taking physical delivery. We agreed but the deal was still stopped.

We are not interested in nation denominated coins. We mint our own. We are interested in bullion. We are out 1600 toz at this point from the exchange. Our broker there is a bumbling idiot and these exchanges are trading paper not physical.

The threat of having to allow gold to be removed from the exchange does not bode well with them. This seems to mess up their derivative accounting. In fact they would have to release a report to the powers to be as gold is money and this transaction falls under the new laws being inacted in the US. So in order to facilitate a delivery of gold out of the exchange vaults is just like receiving a large chunk of money. Even though gold is a barbaric relic listed as a commodity....

So while we tread lightly awaiting our return of our "money", not gold, we can not disclose much more than this.

I would be interested in working with Centennial on our project. Please have someone preferrably MK email me.

Jon

(07/15/2002; 13:35:05 MDT - Msg ID: 80564)

Black Blade re: your "one more point"

You are SO right - mkt now down "only"96 points! May even be positive in next half hour! Why, with dollar off, mkt turbulence, are gold stocks down? Cash being raised to participate in hugh rally of Dow & Nasdak tomorrow???

RobotGuy

(07/15/2002; 13:38:24 MDT - Msg ID: 80565)

WOW!!! What an amazing market turnaround!!!

Looks like all's well that ends well! :)

Cheers!

RobotGuy.

Aragorn III

(07/15/2002; 13:42:46 MDT - Msg ID: 80566)

Jon ... terms of punishment

When this day arrives that a President finds he must speak publically about concerns of this nature, you do not walk away with an image of corporate state-of-affairs to inspire investment confidence.

Airing ones dirty laundry , one expects no cheer among the neighbours. The call goes out for a bath to follow, the Federal Reserve pumping water!

got gold?

Troy Boy

(07/15/2002; 13:44:11 MDT - Msg ID: 80567)

FEMA

YGMAlready there are over 35 states who are providing themselves the power to quarantine, vaccinate, takeover food, weapons, communication, land, homes and any other belongings in response to a supposed attack.
This seems to me to be the method to apply the full court press police state to the US citizens.

What better way to do this? Already most Americans would give up liberties for a false sense of security.

Not only should we all be buying physical, we should all be buying stainless steel and ammo. I prefer the attempt to defend myself even from enemies within.

Troy Boy

(07/15/2002; 13:53:03 MDT - Msg ID: 80568)

Market Manipulation

Talk about corruption.

DJIA down over 400 then at 12:29 the pump starts pumping by 3:50 the PPT has it back to double digits.

Did I miss something? Did someone find the peachy answer to all of the worlds problems and I missed it?

What a scam the whole US has become.
I even heard a talking head the other day speak of many frauds not to invest in when the question was how does an investor hedge his wealth. Not one mention of pm's.

In the future when a individual uses a thesaurus and is looking for a better word than Politician, the thesaurus will provide Corruption as a replacement.

jayzee

(07/15/2002; 13:56:56 MDT - Msg ID: 80569)

Manipulation

I suspect the the PPT sends messages to their friendly and cooperative funds and other large customers that the PPT will make a large purchase in the index funds at 2:45PM Eastern Time. The funds then buy, which helps stop the DOW decline, then sell at a higher price after the intervention.

I wish that this could be investigated, but the PTB will not allow this to happen.

Cavan Man

(07/15/2002; 14:00:16 MDT - Msg ID: 80570)

Jon

Even those bereft of a poor sense of sight and smell are increasingly aware of this "dirty laundry". Expect the game to pick up a head of steam now.

Aragorn III

(07/15/2002; 14:07:11 MDT - Msg ID: 80571)

Troy Boy ... were he here Midas himself could not turn this world's futures papers into gold

Mr. Boy, you say for years you have monitored ANOTHER, and yet there you are, calling up to us on the jungle floor from this pit you are in. You strayed from the trail... if indeed you had once known it.

Young one, if you will not learn from others, then alas, it is as this, you learn the hard way. Your option for method and effort. Happily, you do learn with either choice. You learn, or you wither with no tomorrow.

There is still time, I have no fear you will find your way out and be better for the experience.

got hard knocks?

Black Blade

(07/15/2002; 14:12:10 MDT - Msg ID: 80572)

Wild Ride Today � Subdued Tomorrow?

Now that was both "interesting" and "entertaining". Tomorrow could be difficult to gauge right now as Alan Greenspan will be giving his semiannual "Humphrey-Hawkins" testimony before the senate. Unless he has some "brilliant" insight that he wishes to impart to the rest of us, we might have a resumption of market declines. As the US dollar continues to weaken and should another scandal beak out overnight, we could see more downside to the equities markets this week. Gold prices have dropped slightly after hours due to "fund selling" according to one analyst, however, it appears to have recovered some. Looks like a lot of fun on Wall Street lately.

- Black Blade

Cavan Man

(07/15/2002; 14:13:42 MDT - Msg ID: 80573)

On days like today Jon.....

What becomes increasingly obvious to even the most pedestrian of observers is that, not only are "they" cooking the books but, "their government" is interfering in the stock market. Well then; damned if you do and if you don't. What's a central banker to do?

Cavan Man

(07/15/2002; 14:16:37 MDT - Msg ID: 80574)

Another mess....

J.B. Hunt Transport Falls After Analyst Cites Accounting Issues
By Rip Watson

Lowell, Arkansas, July 15 (Bloomberg) -- J.B. Hunt Transport Services Inc. fell as much as 20 percent after an analyst said the shares may be hurt until the No. 4 U.S. trucker resolves questions about a 1999 lease transaction and a tax shelter for its chairman.

J.B. Hunt fell $5.09 to $23.01 in midafternoon trading of 5 million shares, nine times the recent average. Trading was halted later as the trucker said second-quarter profit rose 80 percent to $15.5 million, or 40 cents a share, from $8.6 million, or 24 cents, in a statement that didn't address the analyst report.

``We have identified a number of accounting-related issues that could put downward pressure on JBHT's stock until they are resolved,'' Morgan Stanley analyst James Valentine said in his report. ``We are not attempting to suggest that JBHT or its senior management are attempting to mislead investors.''

The Internal Revenue Service last week identified 100 clients of KPMG LLP, including Chairman Wayne Garrison, who may have used a tax shelter set up improperly by the accounting firm; the IRS didn't accuse Garrison or the others of wrongdoing. In May, the trucker said it voluntarily gave the IRS details about a 1999 sale and lease-back of containers valued at $175 million because the agency had recently questioned those types of transactions.

Pizz

(07/15/2002; 14:23:06 MDT - Msg ID: 80575)

Troy Boy

Today's market action for the reversal was nothing more than a short covering rally off a double bottom in the Dow going back to 911. 8234 vs. today's low of 8244.

What the news media are trying to make you forget is that nearly all other major averages have already broken the 911 lows pretty significantly and TECHNICALLY they will bounce back to around these downside breakouts. I will be very surprised if the S&P 500 can break back up over 950-975, but we will probably test it within the week. If this resistance area holds, the Dow shouyld break 8000 on the downside and that IMO will be the straw that really breaks the back of the market.

Gold was held under 320, but IMHO silver is the market to watch. Silver Stocks gapped up this morning and fell back and are closing the gaps on lighter volume. The specialist in HL Friday was accumulating @4.50 and appeared to be accumulating at 475 - 4.85 today. This is long term bullish. It may be a run in silver that will pull gold up thru 330, but technically gold is set to move back up to the top end of the upchannel around 350 -355.

The biggest concern I saw today was that as the markets were falling, there was no flight to quality to either the dollar or US bonds. Keep in mind that foreign markets are fairing worse that the US right now. They're discounting something real big 6 to 9 months out, and I sure hope to heck it's not what YGM dug out regarding tent cities. The Pacific NW is NO PLACE TO WINTER OUT in a tent. The problem is we're better off than the midwest or northest (who would probably get the trailers), but it would be flippin misery to say the least.

We shall see. Next batch of gold I buy is going to be 1/10 oz. coins, and that's about as pessimistic as I hope to get.

Pizz

goldquest

(07/15/2002; 14:29:11 MDT - Msg ID: 80576)

With The Prez

giving his pep talk on how good the economy is and will be, they just could not allow the Dow to close at -400! Might make him look bad!

Black Blade

(07/15/2002; 14:31:15 MDT - Msg ID: 80577)

Interesting Statement On CNBC

Moments ago, the CNBC reporter for the NASDAQ stated that around 2:30 pm several institutional firms began buying large blocks of shares in unison. That stimulated buying by a number of funds. However, the investor is still sitting this one out.

- Black Blade

Off to the gym!

Troy Boy

(07/15/2002; 14:33:15 MDT - Msg ID: 80578)

Aragorn III

response to article #80571Perhaps you misunderstood me. We bought for physical delivery on the futures market. We never were buying paper, just the future price for physical delivery.

In regards to being down under looking up, we attempted to use this forums operation to facilitate our needs. We were told the gold would stay at the comex vault. This was in November of last year.
Not acceptible to us as we want the physical in hand.
It would do nothing but make me very happy to use Centennial for our needs. But some needs seem to be unable to be met.
This is quite OK. We realize you can not buy gucci purses from Wal Mart either. That is just a scenario.
Every company has its strong points that they sell into. This is what used to make America so valuable. The market could choose whom served their needs the best.

Black Blade

(07/15/2002; 14:36:38 MDT - Msg ID: 80579)

Short Covering On S&P 500 Futures Buying

BTW, I should also add that the institutional firms were said to be large blocks of S&P 500 futures that triggered short covering in the market. This was not a widespread capitulation as the pundits are now claiming. It appears to have been staged by a simultaneous buying of futures.

- Black Blade

Troy Boy

(07/15/2002; 14:37:07 MDT - Msg ID: 80580)

Pizz #80571

Thanks for the input.

One wonders how long a juggling act of the proportions we are witnessing around the world can last.

cyberbat

(07/15/2002; 14:43:11 MDT - Msg ID: 80581)

What's going on ???

Hope someone, anyone can help me out here. I just glanced at a 24 hour gold chart, long before it reaches the Sydney exchange and see this preciptous 2.00 drop in gold with no exchanges open for trading!!!
Will someone in this august body tell me what's going on ??
Cyberbat

Pizz

(07/15/2002; 14:47:43 MDT - Msg ID: 80582)

Troy Boy

Til they run out of balls.

Pizz

cyberbat

(07/15/2002; 14:56:40 MDT - Msg ID: 80583)

@ TROY BOY

Troy Boy. Concerning your latest post, let me remind you of what one of our forefathers said. So strange how Ben Franklin could see over 200 years in to the future when he said - "For those who would trade a little liberty for security, deserve neither liberty or security." Can you say Police State ? Especially when one in twenty four of us are going to be transformed into citizen spies!!
Got Gold? Get ammo!!

R Powell

(07/15/2002; 14:59:03 MDT - Msg ID: 80584)

Troy Boy // What Exchange?

When I first read your complaint of non delivery "to take physical delivery of our June 2 purchase on the Chicago exchange of 800 ounces" I thought you were talking about silver.

800 ounces of gold is a king's ransom indeed!! We're all jealous, I'm sure. I'm also very curious, what gold exchange in Chicago did you deal with? I'm sure there are legal recourses available, especially with such a huge order. What exchange??
*****
Stock market today! Wow, what a ride. I've a hunch we'll see this kind of volatility in gold and silver before too long. In the last great silver bull market of 1979-1980, silver saw lots of dollar per day gains- and lots of dollar per day loses too!
The cheerleaders on the peoples' stock picking television channel are questioning if today was the final "capitulation" of the current bear market. If they can put enough lipstick on this idea, maybe we'll see one more day of irrational exuberance out of this dying bull yet! Got any remaining dot coms or techies that need selling?
Metals look strong. I wish both gold and silver had NOT left chart gaps behind themselves. I'm always afraid they'll decide to go back once more to fill them. Maybe they'll not get filled until after a currency collapse is "corrected" by redefining the value of the dollar. Just a thought.
Rich

R Powell

(07/15/2002; 15:02:37 MDT - Msg ID: 80585)

cyberbat

Be careful what you say. I've already been conscripted!

cyberbat

(07/15/2002; 15:07:41 MDT - Msg ID: 80586)

All Hands on Deck!!

Stand by everyone and take you hats off for a moment of silence. We are 39/1000's of a cent away from parity with the dying dollar vs. the Euro!!

misetich

(07/15/2002; 15:19:36 MDT - Msg ID: 80587)

Global: Asymmetrical Risks- S Roach

http://www.morganstanley.com/GEFdata/digests/20020715-mon.html#anchor0Snip:

Courtesy of yet another wrenching downdraft in US equity markets, America's wealth-dependent culture is facing a stern challenge. The virtuous circle of the 1990s is on the brink of morphing into a vicious circle. This is the twilight zone of asymmetrical risks, when the system's response to the fear of bad outcomes starts to take on a life of its own.

It all started with the bubble, of course -- the transforming macro event of our generation.
................
Now, fully 28 months after Nasdaq crested at 5000, those are the very repercussions that threaten to reshape much of what we have come to take for granted about the US economy.

The American consumer remains at the top of my worry list in this post- bubble era. The reason -- the perils of what I have called the "asymmetrical wealth effect." This rests on the basic precepts of behavioral finance set forth over 30 years ago by Amos Tversky, a renowned Stanford University psychologist. Through experimental sampling of investor responses to hypothetical and actual financial market situations, Tversky found that the loss aversion motive of individual investors made them far more sensitive to reductions in wealth than to increases in their portfolios. The caveat came in what Tversky called "prospect theory" -- that investor responses are also influenced by recent performance. Individuals that only lose "house money" are less inclined to alter their fundamental economic behavior. Conversely, once the accumulation of losses taps into original investor principal, it's a different matter altogether.

That, I'm afraid, is where we now stand in this post-bubble climate. All the major equity market indexes -- Nasdaq, the S&P 500, and the broader Wilshire 5000 -- have made round trips back to levels prevailing back in mid-1997. Over that same five-year period, the Consumer Price Index has risen a cumulative total of about 12%. In other words, five years of unchanged nominal equity portfolios translates into a loss of about 12% in real, or inflation-adjusted, terms. Of course, that's even more of a setback when compared with historical real returns on US stocks that have averaged about 7% per annum since 1800. That puts the underperformance of the past five years about 50 percentage points short of the longer-term norm. In the parlance of Tversky's prospect theory, the suffering of individual investors has gone far beyond the paper losses of house money. American households are now hurting big time.

Alas, there's far more to individual investor pain than five years of paper losses. Saving short and overly indebted, the aging American consumer is also closer to retirement, on average, than at any point in the post- World War II era. Moreover, with pension fund regimes having shifted increasingly from defined benefit to defined contribution schemes -- assets in DC plans first exceeded those of DB plans back in 1997 -- the nest egg now looks more precarious than ever. In addition, the equity culture has become more essential than ever to American households in achieving their life-cycle saving objectives. As President Bush indicated in his 9 July speech on corporate responsibility, more than 80 million Americans now own stocks -- either directly, in mutual funds, or through their pension plans. It is in this broader context that I believe that five years of real wealth destruction have the clear potential to trigger the powerful loss aversion responses first envisioned by Amos Tversky. Given the demographic profile of an aging American population, saving imperatives are all the more important. That means American consumers now need to save the old-fashioned way -- out of their paychecks. As I see it, the increased likelihood of a shifting preference toward saving could well be the essence of the coming asymmetrical wealth effect.
...............
An analogous asymmetry seems likely in the policy arena. The post- bubble perils of the debt-deflation cycle are the ultimate nightmare for monetary and fiscal authorities. Just ask Japan -- or, for that matter, the United States in the 1930s.
................
Virtuous and vicious circles both have one thing in common -- a tendency toward asymmetric risks. During the late 1990s, the risks were skewed decidedly toward the bullish side, as financial markets rose to ever- higher highs. In a post-bubble climate, that movie now runs in reverse. The perils of deflation are key in shaping the asymmetrical risks of consumers, policy makers, and the body politic. To the extent we treat this latest sell-off in financial markets as yet another dip-buying opportunity out of the script of the 1990s, we're missing the basic point. In a post-bubble climate, there's a very different set of risks to contend with. In my view, the old rules just don't work any more.

......................................

Misetich

S. Roach sounds more confident on his call- If he's right as he has been in the last 2 years...lookout

Got gold?

misetich

(07/15/2002; 15:27:36 MDT - Msg ID: 80588)

Recent payouts dip into pot of pension cash

http://www.cleveland.com/business/plaindealer/index.ssf?/xml/story.ssf/html_standard.xsl?/base/business/102655285115340.xmlSnip:

07/14/02

Tom Diemer
Plain Dealer Bureau

Washington

- An obscure federal agency that came to the aid of LTV Corp. retirees is taking a harder look at the pension liabilities of other struggling companies. Mounting payouts have cut the agency's once-robust cash pile in half.

The Pension Benefit Guaranty Corp. is "monitoring very closely a number of very high-profile cases in the steel industry, in the telecommunications industry, in the retail industry, in the airline industry," said the agency's executive director. He said it is an attempt to ensure not only the well- being of his agency, but also of the system of pension plans that millions of American workers have relied on.

In August 2000, the pension agency, which insures thousands of retirement plans, had assets of nearly $21 billion and pension obligations of just over $11 billion - a net positive of about $10 billion.

But that surplus had dwindled to $4.8 billion by last month. PBGC head Steven Kandarian told a House Ways and Means subcommittee that his agency was facing its "greatest challenge in a decade." Back in 1993, the agency was forced to keep operating with a $2.8 billion actuarial deficit.
...................
Some recent developments show the stress the agency is under:

LTV Corp.'s bankruptcy put a $1.6 billion bite on the insurer when the company closed its mills and turned over three underfunded pension plans covering 82,000 workers and retirees. It was the agency's largest takeover ever.

Freedom Forge, a Latrobe, Pa., steel maker, is facing bankruptcy with two pension plans underfunded to the tune of $37 million, according to the agency, which has stepped in to take over those plans.

Bethlehem Steel, the nation's third-largest steel maker, has said it may reduce pension benefits as it re-emerges from bankruptcy. The company estimates its current plan is underfunded by $2 billion. As the insurer of last resort, the pension corporation could wind up with another big liability.

Kandarian expects more bad news over the next 12 months, with a number of "large troubled plans" likely to need bailouts.

Misetich

Underfunded pension plans - ANOTHER shoe ready to drop..tic..toc..tic..toc...

Got gold?

R Powell

(07/15/2002; 15:32:30 MDT - Msg ID: 80589)

Different thoughts

Between Comex close and the Sydney open, gold trades on the electronic access market. It's like the globex but for gold, very thin volume so the price can be easily moved. It's a good place for the shorts to ambush POG, sort of like a narrow pass in the old Western movies.
*****
Black Blade. Short covering by big players on the S+P index? Sounds reasonable to me and, apparently enough to turn the stampede. Just turn the leaders and the whole herd follows.
*****
Pizz. About that S+P bounce to test 975? Tempting spot to short, no?
You commented that silver is the market to watch. Amen, brother, amen. So many analysts I read still say that there is no fundamental reason for silver to rise (I don't think names should be mentioned) and that silver just follows gold. Silver has a mind of her own now and she does not look happy under $5.10 but, who knows?, maybe one more time to bounce off $4.80?? I'll buy the dips. That's a trick I learned from the bubbleonians.
Rich

Canuck

(07/15/2002; 15:45:21 MDT - Msg ID: 80590)

@ Pizz

Very good observation with the DOW, breaking the 911 support level would not be 'allowed'.

Quick question, POG up rather smartly and shares down across the board including the 'proxies', this is new.

What do you make of that?

Canuck

Canuck

(07/15/2002; 15:54:12 MDT - Msg ID: 80591)

@ canamami

You are correct; in hindsight it makes you wonder what they were trying to pull. The risk/reward factor of it all is now piling into the risk side, HUGE.

R Powell

(07/15/2002; 16:02:32 MDT - Msg ID: 80592)

misetich

From S. Roach's "prospect theory" that you just posted,

"Tversky found that the loss aversion motive of individual investors made them far more sensitive to reductions in wealth than to increases in their portfolios."

Seems like I've heard that before as "the reaction from being hit with a stick is much more immediate than the enticement of a carrot."
Lets add in the untested fortitude of most of today's fund managers and the final emotion of panic and for good measure some redemptions and margin calls. Dangerous mix!
BTW, thanks for all the good work you do!
Rich

misetich

(07/15/2002; 16:04:49 MDT - Msg ID: 80593)

Bailout 'unlikely' for Japanese banks

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026398401609&p=1012571727201Snip:

Japan's new head of the Financial Services Agency on Friday played down suggestions that the government was preparing to pump money into regional banks, saying institutions should take it upon themselves to write off bad loans.

Shokichi Takagi said he supported government plans to remove a blanket guarantee on bank deposits next April, with the aim of forcing market disciplines on the banking system. Many politicians are opposing the removal of the guarantee, arguing that the financial system is too weak to withstand the disappearance of the state safety net.

......................
Misetich

We are about 9 months away from a reduction in investors deposit insurance in Japan - and Japan banking is in a mess

Will it spark renewed Gold demand? What other "money" is safer than gold? the Yen, Euro or the US $

You decide

Got gold?

misetich

(07/15/2002; 16:08:28 MDT - Msg ID: 80594)

Brazil markets slump on poll speculation, Wall St.

http://www.forbes.com/newswire/2002/07/15/rtr661996.htmlSnip:

SAO PAULO, Brazil, July 15 (Reuters) - Brazil's fragile markets slumped on Monday as bearish speculation about an unreleased election poll and losses on Wall Street spread pessimism about what to expect for the rest of the week.
......................

"The situation is not good and the worst thing is that there is a feeling that it could get worse," said Banval director Celso Senise. "The market is ready to improve, but it depends on what happens abroad...You can't bet on anything."
.......................
The rumors were the latest manifestation of persistent fears of mismanagement of Latin America's biggest economy and its $250 billion debt load after the elections that have hammered Brazilian markets in recent months.

Traders said losses on U.S. markets in the wake of a raft of recent corporate accounting scandals and a weakening U.S. dollar against the euro further soured the mood in Brazil.

The poor sentiment meant data showing Brazil's trade surplus had soared to $712 million in the second week of July was overlooked.

"There's nothing right now that suggests the market can bounce back," said Concordia trader Tomi Taterka.
..........................................................

Misetich

Lets stay on this tributary TRAIL shall we.

Got gold?

CoBra(too)

(07/15/2002; 16:11:49 MDT - Msg ID: 80595)

- Debt Overload?

... Not sure if you've also already have run into the question if the current economy, currency and SM's can be related more to the situation of 1974 or 1929?

I, personally, tend to think that the situation may
- while not unique, as such, as it has happened to any predominant reserve currency in history, unbacked by any hard value -
in all probability be interpreted as the ultimate systemic unravelling of floating "Fiat" currency system.

A system finally failing from debt overload.

And if the Privateer's latest assessment of US Government debt and promises to its own citizens is only partly correct, it would be abysmal enough. Bill Buckler is claiming that the US Gov. Debt of 6.1 Trillion $, which is there for all to see; The UN-funded promises of social security and medicare in the meantime have reached about 29 Trillion $ - that means about 3 years of the total of the US GDP - in good years - and more than the total of one year of global GDP. Not included is the US TSY's external debt of another 4.6 Trillion $ ...
- didn't even start to address the "GSE's" like Fannie, Freddie and other idiocies, chosen to uphold the consuming sprees...

A perspective, which doesn't leave much room for interpretation, as it seems clear these kind of amassed debt can never be paid back in any fair and equitable way.

... Which does mean, as historically it has always meant, the only way out of this mess will be for all to pay -heavily. And as this mess is systemic, I would feel the 30's may have been all cream.

The global imbalances have reached grotesque proportions. The LDC's exploding with population growth, while the smug industrialized world is shrinking, though ever more de- and com-manding a larger share of the globe's resources, products and wealth.

While "The American Way of Life" has to be upheld at all costs, according to the administration - the phrase has become as hollow as the US Constitution. Homeland Security for the Nation of formerly free and the Patriot Act have done more harm to the American's liberty than any W and other Wars.
And as Bill Buckler says: BE AFRAID - BE VERY AFRAID!

... and prepare - with Gold in hand - and hope and pray for an outcome, leaving a world still worth to fight for our descendants.

A moody cb2
- especially after a day when GWB's pep talk in the end was supplemented by the ESF [-Stock?-Exchange Equity (Equalization) Fund(ing)] Rescue operation by the PPT, the president's WAT Team on free markets.

Pizz

(07/15/2002; 16:21:49 MDT - Msg ID: 80596)

R Powell

http://www.financialsense.com/editorials/morgan071202.htmTempting to short S&P @975? The actual line in the sand is at 943, but with the media attention on Dow, I'll wait until we break 8000. That's where I think the real carnage will begin. Calling tops and bottoms is next to impossible, but taking a small chunk out of the middle of a trend is better. Probably won't happen til after july options expiration. Can't have a bunch of speculators in the market with a lot of puts with little or no premium, can we??

Regarding silver, if you haven't already found it, you'll really enjoy the above link. I only hope we get a spike down in silver to 4.80, cause I have some fiat coming in within 3 weeks, and need a little more physical, one more small silver paper position to take, and then some disaster preparedness purchases to make (good quality winter wear, etc.) then I'll be as prepared as I can get with what resources I have. So as far as silver going to 4.80, forget it, probably be up to 5.75 before my swampland sale in Texas finalizes.

Have a good one,

Pizz

misetich

(07/15/2002; 16:23:18 MDT - Msg ID: 80597)

Parity with euro spurs fears of rout for dollar

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026553489921&p=1012571727108Snip:

Symbolism is important in the currency markets and euro parity with the dollar is the biggest symbol of all.

When the euro fell through $1 in February 2000 it was a powerful blow to the prestige of the infant European currency and a sign of the pre-eminence of the US economy.

Monday's move back through parity is no less potent a symbol but this time it is the US economy that has suffered. What is more, economists fear that now the dollar has crossed the threshold of parity, the fall in the dollar could turn from a gentle fall into a rout.

For the US, the fall back through parity is the final sign that markets have lost faith in the magic of the US economy, which has been the motor of the world economy for the past decade.

"This is the final nail in the coffin of the new economy," said David Bloom, currency strategist at HSBC in London. "The US has spent years telling the rest of the world how to run their economies and now markets are finally awakening to the problems of the US economy."

By contrast, European politicians are likely to feel that the much-mocked euro has finally come of age. Most claimed all along that the dismal performance of the euro in its first two years - during which it fell 20 per cent against the dollar - was largely a consequence of over-optimism for the US economy. International investors, until recently sceptical about the prospect of a swift dollar fall, are now starting to sit up and take notice. Many economists think that central banks may now begin to diversify their reserves away from dollars, accelerating the fall in the greenback.

Estimates suggest the Chinese central bank holds just 5 per cent of its reserves in euros, while about 20 per cent of trade is euro related.

"A lot of central banks are hold fewer euros in their reserves than would be justified by the importance of their trade and financial links with the eurozone," said Avinash Persaud, head of research at State Street, the Boston-based investment bank. "There is a sense that many were holding off until the euro had matured."

The dollar is vulnerable to even small changes in sentiment. With the US current account set to top $450bn in 2002, the US needs to attract a net $1.7bn of overseas funds every working day in order to prevent the dollar from falling. Investors and central banks do not need to sell the currency for it to go down: it is enough that they slow their purchases of US assets.

Yet crumbling confidence in the integrity of US corporate governance has been reducing the willingness of international fund managers to increase their holdings of US companies. Even if US profit and loss accounts are to be trusted, the price of US equities still looks expensive.

"Corporate scandals in the US appear to be leading more investors to keep their money at home," says Larry Cantor, head of foreign exchange research at JP Morgan Chase in New York.

Investment banks say that an increasing number of their clients who have large holdings of US assets are seeking to protect themselves against a further fall in the dollar. Since that is done by selling dollars, the fall becomes a self-fulfilling prophesy.

The difficulties of the dollar are exacerbated by the mounting fiscal deficit. The US government has moved swiftly from a budget surplus of approaching $300bn to a deficit of close to $200bn since the end of 2000. While international fund managers are often prepared to finance private investment, they tend to be less willing to bankroll government consumption.

So far, the dollar's gentle fall has been seen by economists as relatively positive, both for the US and other large economies. In the US, it has given much-needed help to struggling exporters without kindling inflationary concerns. In the eurozone, it looks likely to postpone the need for higher interest rates. Some economists argue that by making it harder to export to the US, the dollar's fall could help promote faster structural reform in Japan and the eurozone.

An accelerated sell-off in the dollar, by contrast, would be more disruptive. "If the dollar's fall gathers pace, we are more likely to see an exodus from US markets, ra ther than just a reluctance to buy or a desire to hedge," says Paul Meggyesi, an independent currency strategist.

Not only would a sell-off in the dollar further unsettle US stock markets, it would make it harder for the eurozone and Japan to adjust to a higher exchange rate. Policy makers will be hoping that the dollar's fall will continue to be relatively sedate.

.................

Misetich

Will we see a rout of the US $? How will gold respond to the rout?

Got gold?

Cavan Man

(07/15/2002; 16:28:15 MDT - Msg ID: 80598)

PTB's, PPT's and Capitulation

Hello CB2There has been lots of talk in the media from Wall Street to the effect that if could only have, "capitulation" in the markets. Well, if you are like me and tend to believe the other team is playing in the US equity markets at times to move the averages up then, you must logically conclude that such an entity can move the averages DOWN also. Doing both in the same day though is really a trick eh? I think this "capitulation" is a contrivance plain and simple. If the markets end flat to slightly lower this week look out for a lot more selling. I don't think TA applies anymore to the US equity market. I say again: the US market is a freak show. We've left the model of allocating capital behind long ago. "Let value reign." (Jim Grant)

misetich

(07/15/2002; 16:34:36 MDT - Msg ID: 80599)

US banks see no turn in the credit cycle

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026553488312&p=1012571727108Snip:

FleetBoston Financial, the seventh-biggest US bank, on Monday reported a $386m second-quarter loss, reflecting setbacks in Argentina, telecommunications lending and investment banking.

Fleet's difficulties provided a gloomy start to the reporting season for US commercial banks. Its own shares fell by more than 7 per cent by midday in New York.
................
Mr Hance said the bank, based in Charlotte, North Carolina, was bracing for the possibility of more financial accidents - particularly in sectors such as telecoms and energy.

"I have never seen a cycle like this," he said. "The economy is behaving normally coming out of a recessionary cycle. The markets are not. It leaves us very cautious."

...................................

Misetich

It must be remembered this is the 1st time since 1929 where the markets have gone down southward - following multiple rate cuts by the Feds- post a recession

Got gold?

Pizz

(07/15/2002; 16:48:27 MDT - Msg ID: 80600)

Canuck

Re: Dow's 911 low. It wasn't the fact that they wouldn't let it, they will have to in my opinion, today it was just a technical bounce that was needed and anticipated. Some nimble traders positioning for a dead cat bounce, short covering, and then running in the longer term shorts.

We have nothing fundamental for this market to have a decent rally, and it won't until after what it is now discounting is known so the big players can buy at rock bottom - and this hasn't happened yet, so my feelings are another dead kitten bounce (my wife hates that term) - smaller than a dead cat bounce.

The POG is really baffling when you try to use it as a contrary indicator and also corolate to gold stocks. I have to think the disassociations gold is showing are the results of a bunch of scrambling derivitives players. The survivors are trying to cover, the "dead and know it" are still shorting like mad, and then you have the speculators trying to scalp a buck out of a really psycotic market right now. Makes for real confusion, that's why I'm watching silver real close, it's behaving a bit more normal and is indicating, IMHO, where gold will be going shortly.

Best explanation I can give right now.

Pizz

CoBra(too)

(07/15/2002; 16:51:05 MDT - Msg ID: 80601)

PTB's and PPT's - @CM

Hello My friend, CM -

Didn't, as yet get around to capitulation - only am-(-conf-)used by the totally dis-jointed or is it -connected behavior of the SM's, BM's and CM's - or just capit(o-)al markets... and if that's a freak show, where do the freaks show? - uh-oh, ya know what ya know ...

BTW - tried to buy some 25 US Gold Eagles at Viennese coin dealers - couldn't get one - except one dealer offered a Silver Eagle for 20 $! Lot's o' fun- cb2

slingshot

(07/15/2002; 17:09:49 MDT - Msg ID: 80602)

Coming out of Berkley, California

Coffee TaxNews with Dan Rather.

They Tax my Smokes.
They Tax my Booze.

Now it is Coffee Tax! Better stock up on those Lattes.

Guess they have to make up for the lost tax on Gold Eagles.
What else will come out of California?
Slingshot------------------<>

(07/15/2002; 17:29:23 MDT - Msg ID: 80603)

Gold going no-where

Gold will go down - substantially & take GS with it - before it turns and goes up dramatically. The US economy is doomed and Bush will declare war on the rest of the world if he has to, to divert attention from the coming chaos.

All together now, "Happy days are here again, the sky is blue & clear again...."

Disclaimer: I am not a troll, I just know that 'Markets go up & markets go down. Usually when we least expect it'

TownCrier

(07/15/2002; 17:36:17 MDT - Msg ID: 80604)

"Disclaimer: I am not a troll..."

Spoken like a true troll.

Disclaimer: I am not a troll exterminator.

And therein lies the proof...

R.

goldquest

(07/15/2002; 19:10:23 MDT - Msg ID: 80605)

Hubert Humphrey

is that you?

misetich

(07/15/2002; 19:19:34 MDT - Msg ID: 80606)

Auditors

http://www.lemetropolecafe.com/Snip:

Auditors gave a clean bill of health to 42% of the 228 publicly traded companies that filed for bankruptcy under Chapter 11 since 1/1/01. Most of the audits analyzed were dated 9-12 months before the filings. KPMG has the worst track record, having handled 16 of 28 firms that went under. PricewaterhouseCoopers had the best record, it warned 24 of 38 companies or 63%, but failed to alert 37% of it's clients. The problem lies in the relationship between the client and the auditor. The auditor lets problems slide especially if the company has a plan to remedy the problems. All in all auditors have not done their job of alerting shareholders to impending problems.

THE INTERNATIONAL FORECASTER 13, July, 2002 (#2)(Bob Chapman)

Misetich

Got gold?

goldquest

(07/15/2002; 19:30:54 MDT - Msg ID: 80607)

After Watching

todays market circus, the newly formed financial swat team should start its investigations with the blatant manipulation that occurred today. Of course we know that will never happen. They will go after high profile people like Martha Stuart! After all, she made almost $200,000. How dare she!

Canuck

(07/15/2002; 19:33:32 MDT - Msg ID: 80608)

Pondering out loud

I believe this WHOLE THING has been caused by 2 things, Y2K and the Internet (non)- boom.

I recall the hysteria in 98 & 99. Almost half my salary those years was in overtime installing 'patches' and new hardware etc. for telephone and voicemail systems. Every office was getting a new server, a new LAN, new this new that. What was spent? Just shy of a trillion dollars. So rolling over into 2000 every man, woman and child has a new or at least upgraded EVERYTHING.

I just finished a networking course, the teacher works at a large fibre company and estimates show 10-20% of infrastructure is in use ('lit'). He says if demand continues at this flat pace it might be 5-10 years before more is built. He is concerned about the lastest studies showing email to be 'less productive'. I notice the kids playing less and less on the PC's, is the novelty wearing off? Has saturation hit?

The radio bubble of 1929 re-incarnated?

R Powell

(07/15/2002; 20:09:43 MDT - Msg ID: 80610)

Traveler345

You say that you have come "to exchange ideas" and "I log on this site to learn". I do the same. I come to learn, have some fun and hopefully profit.

JJ's post stated that "Gold will go down". As to why he states that markets go up and markets go down. Of course they do.

I would have been interested in JJ's opinion if he had substantiated it with a little more than that. The sun comes up and the sun goes down too. If perhaps he'd added some reasoning or analysis but to simply jump in with a "Gold will go down" statement delivered with a derogatory in-your-face attitude really accomplishes nothing.

What is his point and how do you percieve your immediate reply of censorship to Towncrier? Express your opinions but please do so with some class and intelligence.
Disruption for no purpose does nothing to promote or preserve the value of free expression here or anywhere. It only endangers that which you profess to preserve.
Rich

Golden Bear

(07/15/2002; 20:15:57 MDT - Msg ID: 80611)

Classic quote!

http://www.dailyreckoning.com/"...In the future, perhaps "a Greenspan" will be a colloquialism for "making a colossal theoretical blunder resulting in complete devastation..."

Excellent article - link at bottom of main page at above link.

R Powell

(07/15/2002; 20:29:53 MDT - Msg ID: 80612)

JJ's predictions

Actually JJ, there is truth, however obvious, in what you say about markets rising and falling or, as you think with gold, falling substantially and then rising dramatically. That they fluxuate is the given but why do you think down now first and then up? Why not up and then down? Also, both your adjectives, substantially and dramatically, imply big if not huge moves. Why?
What has evoked these predictions? Why this order of the events that always occur and why bigtime moves?

I agree about the markets' ability to surprise anyone. That's why I have orders to buy "substantially" below current prices and orders to sell above for a small percentage of my positions. Theory- make some profit but be invested for when the "big" move comes.
What do you base your thoughts on?
Rich

Maiden Fan

(07/15/2002; 20:34:40 MDT - Msg ID: 80613)

Kudlow & Cramer

After watching another episode of CNBC's "Kudlow & Cramer" this evening, I say this show was probably the most shill and desperate one yet. I find myself fascinated by this stuff even though I absolutely despise this show. The tone lately has been one of pleading for investors to stay in the stock market. They say everything is getting better, really, just a few more weeks and this downturn will all be behind us. "Oh sure, there are a few bad apples out there, but just look at all the solid companies that are extremely undervalued now". Those who are invested for the long term are always portrayed as the truly wise and rational ones. Cramer himself just said he bought some stock today (what did he buy a token 10 shares of MO or something just so he could say that he bought stocks today?). They then bring out the CEO of some home building company called CENTEX and fawn all over him as he claims that his company is going to earn something like $8.00/sh this year ($8.00/sh? get real!). Why didn't they bring this guy on the show when his stock price was half what it is today less than a year ago. They always bring these guys on when their stocks are at all time highs. And they're pumping it at the height of the real estate bubble too, Unbelievable gall! Kudlow said that today was definitely the bottom in the market. Funny, these two guys never seem to look the least bit nervous about the market no matter how much it falls, when they finish assuring everyone how great the economy is doing, and then break for a commercial, I always notice a little smirk on their faces. I truly wish there was a way to find out what these guys are really doing with their own money. I'll bet my life savings they aren't invested in the stock market any more, they probably were selling their WCOM back when it was $60/sh. all the while they act outraged that Ebbers and Sullivan were bailing out back then too. I vow to stop watching this show. Although after watching the premiere of Maria Bartaroma's "After Hours" (Yawn) maybe I'll continue watching Kudlow & Cramer, at least it's entertaining in a sick way.

USAGOLD

(07/15/2002; 20:37:57 MDT - Msg ID: 80614)

All: In response to Troy Boy's suggestion that he was given short shrift.

USAGOLD/Centennial Precious Metals brokers thousands of ounces of gold each month. This level of business could not be accomplished if we didn't handle inquiries professionally. At the same time, in an average week, we get invitations to at least ten wild goose chases. You name it, we've heard it, by telphone and e-mail.

To make along story short, this fellow did contact me. However, it wasn't to buy gold. He wanted to solicit my interest in a digital gold marketing program. If you look at his post earlier today he carefully cloaks the purpose of his phone call. Alot of people would like to get me to endorse their program. I cut him short but not because he wanted to buy gold, but because I have little or no interest at the moment in anyone's digital gold program. No follow-up e-mail came explaining his "real" reason for calling -- allegedly to purchase gold -- and no appeal on the basis of his "alleged" problem at CBOT -- a problem by the way I see of his own making. (If CBOT did default on his contract for delivery, it will have been the first time in its history!)

The next contact I have with this fellow is his scathing posts and wild accusations earlier today. All because I pointed out in so many words that he would have his gold by now had he purchased it from us. Remember, this criticism is coming from the same individual who claimed default on CBOT contracts earlier today, then changed his story to being over-charged and then went from there into accusing me of not doing business with him. I don't know how to identify this sort of complex -- maybe one of our forum psychiatrists can guide me in this regard.

Hosting this forum opens our operations up to these kinds of pot shots from any and all comers, including competitors and it would seem, disgruntled solicitors. We've tried to walk the thin line between making this forum work for USAGOLD~Centennial Precious Metals and allowing it to remain open. With the openess though comes a certain amount of vulnerability -- a state of affairs with which we are painfully and acutely aware. We rely on the common sense of our readers to filter out the noise and understand what underlies this kind of posting. Failing that, we do have the power to pull posts immediately as well as posting codes. And, as some have pointed out, we are not shy about accessing the delete protocols.

Canuck

(07/15/2002; 20:46:55 MDT - Msg ID: 80615)

Pondering out loud

Alot of theories on the wicked bounce on the DOW today but not much on the freefall at the open. Way down, way up, why?

Another question; I watch the Canuck index (TSX300) closely and for the lack of a better term, it follows the US indices fairly closely. The TSX300 was down over 2% (142) with energy stocks taking a whooping. No confidence in an improving economy?

Is there any correlation, any meaning/significance to my blabbering?

USAGOLD

(07/15/2002; 20:55:30 MDT - Msg ID: 80616)

No sooner do I post the below than this comes in the e-mail

Mrs.

USAGOLD.

I have great alternatives for investment in Peru for mining explotation...

You can help me? I need contact with availables investors...

Faithfully

Gustavo _________________

* * * * * * * * *

Chuckle.

Canuck

(07/15/2002; 21:01:09 MDT - Msg ID: 80617)

@ Rich

One thing that does have me a little concerned is the multiple cracks at 328/330 without success. The dollar has been falling continuously in the last couple weeks with Euro parity today while gold still waffles in the mid-teens (3XX). I have been playing very conservatively in the range between 312 & 318.

I expect gold to breach 330 soon enough (fall?) and might 'bet' more aggressively then. I sometimes wonder (on off days) if the PTB let gold rise to 325 because it 'was supposed to' and now will fight the fight trying to convince people that this was 'all gold had'.

Is this JJ's theory?

Long term however (a couple years?) I firmly believe gold will be significantly higher. Oil & fanatical wars are on their way. I think anyone believing otherwise is a misguided optimist.

sector

(07/15/2002; 21:09:33 MDT - Msg ID: 80618)

@Sir Esteemed pizz...Repeat After Me...

The Only Force Holding Gold Down is the Sale of US and BIS Central Bank ReservesThere's nothing to it. No correlations. No Elliott waves. No fibonacci - broccoli numbers. No teacup, bent-flagged, dandruff Head & Shoulders patterns. Just JPMorgan/GS/Morgan Stanley/CitiBank and their sleaze-bag, greased-back friends using the COMEX paper brought into existence by a series of "Official" FED and Treasury gold loans.

Thus, the OCC reported $41 Billion in JPM gold derivatives represents Treasury metallic gold loans in a futures/forwards/options format. Moreover, the Fed gets to say they still have 8,000tonnes of US gold on their books and that these derivatives are assets only because they double count them per IMF rules. However the loanees [JPM et,al] and loaners [Fed and Treasury] really DON'T both own the gold so one or the other must report it as a liability...RIGHT?

WrongO. They BOTH report their gold loan as assets�.kinda like Big Bernie Ebbers at WCOM and the round-trippers at Enron, Duke Energy and Williams�.expenses, assets�what's the difference! Stick Dem Puppies on the Bottom Line! �Boy!

That this is true can be found in pieces...like the West Point "Custodial" 1,700 tonnes that the US no longer has as "Gold Bullion Reserve". That amount was required to quell the gold price rise from the Washington Agreement. It went to gold heaven. But it is still an asset of ours�like the money your ex-wife uses to buy a new Mercedes�you BOTH get to say the car is "Yours" �at least at cocktail parties. But the GAAP US Consolidated report says it's a $20 Billion debit, so the gold was really sold and it really IS in gold heaven.

So we have a calibration event with the West Point change in designation episode. It took at least 20% of the US gold stock to stop pog in the 1999 WA price rise.

Surely there has been a steady additional drain of gold losses leading up to and following the stabilization after the WA. So...how much? How about ALL the US gold?

This deduction comes in part from the fact that the cabal lost control of sub-$300 pricing pressure earlier this year. They never would have allowed that to happen IF they had sufficient resources of physical metal. The New York cabal sleaze bags would have simply called up the Master of the Universe and said "Yo �AL! �PETER ! [Fischer]� Paul!�We need some mo JACK up here! Sign doze papers�Boys! But they didn't sign for three months while gold ran up tom $330. Then the Russkis showed up.

You can take to the bank that no one at any FED meeting said ,"Let's all save some gold and just kinda �see what happens� when we "Let" gold go to $330? Knowledgeable heads in the room would have said "So you want to let go of the Tiger's tail? Just to see what will happen? Have you been smoking your own divots again? Bananas in your ears?

Will the Fed's allies at the BIS continue to drain THEIR gold vaults down an increasingly deep, US economic rat hole? Recall, they are already $288 Billion in the red. Would you? In a deepening recession? With your stock markets reeling and an ME war looming?

So be not perplexed Sir pizz. The cabal's hands are on the throat of the COMEX�for now. But it is costing them dearly in metal to continue the financial charade. There're bleeding.

But more and more spec sharks and gold vault loaders have been lured to this fresh, new opportunity�and more are somehow finding out each day�all over the World�in the most unlikely of regions.

mikal

(07/15/2002; 21:20:35 MDT - Msg ID: 80619)

"The appointed hour approaches Igor, are you ready? Yeth Masther!"

http://www.reuters.com/news_article.jhtml?type=topnews&StoryID=1204003Bush to Seek New Powers in Homeland Security Plan
July 15, 2002 10:30 PM ET � By Adam Entous
WASHINGTON (Reuters) - Laying out a comprehensive strategy to protect the nation for the first time since Sept. 11, President Bush will call for new measures to prevent nuclear strikes and for expanded powers to crack down on suspected terrorists.
"We are today a nation at risk to a new and changing threat," Bush will tell "fellow Americans" in a letter outlining his National Strategy for Homeland Security.
The letter warns that "our enemies are working to obtain chemical, biological, radiological, and nuclear weapons for the purpose of wreaking unprecedented damage on America."
Under the plan, which Bush will present to lawmakers at a White House meeting on Tuesday, the administration would in its fiscal 2004 budget provide funding for the deployment of new sensors to prevent attackers from using nuclear weapons.
The White House would also develop new "vaccines, antimicrobials and antidotes" to protect Americans from deadly germ agents, as well as boost the FBI's "analytic capabilities," expand the Coast Guard and improve security at the nation's ports.
.......Bush has already proposed folding all or parts of 22 agencies -- including the Secret Service, Coast Guard and Border Patrol -- into a new Department of Homeland Security to better guard against new attacks.
But several powerful committee chairmen in Congress are pushing for changes to the proposal.
In a speech in Alabama on Monday, Bush appealed to lawmakers to put aside their differences and carry out what he called the most sweeping reorganization since President Harry Truman confronted the Cold War in 1947.....end snippit

Yukon

(07/15/2002; 21:27:15 MDT - Msg ID: 80620)

Maiden Fan......

Sorry to be nosey, but I just have to know. Is your moniker a tribute to your fondness of the ladies? Or, as I suspect, is it a tribute to the Iron ones?

"O God of earth and altar, bow down and hear our cry,
Our earthly rulers falter, our people drift and die,
The walls of gold entomb us, the swords of scorn divide,
Take not thy thunder from us, but take away our pride."

Viva Liberty!

Yukon

White Rose

(07/15/2002; 21:43:41 MDT - Msg ID: 80621)

What is the worst case scenerio?

When we read Time or Newsweek about derivatives, they are described as insurance. Lets say I want to provide secondary mortgages. I am flapping in the wind with 30 years of interest rate risk. A little trip to the neighborhood derivative store, a nice little interest rate swap, and my risk is properly hedged.

We know that the world-wide worth of ALL the gold is about a trillion dollars. There are 110 trillion in derivatives. Lets say about 75 trillion are pure insurance, the balance is some sort of weird high stakes gambling.

I believe that if you picked apart the whole derivative mess, you would find gold derivatives to be the ultimate backstop. After all, gold is the most pure, riskless form of money there is. The physical gold supports the paper gold which supports the gold derivatives, which is the ultimate backstop for dozens of trillions of bets.

If the poop gets around to hitting the ventilating device, someone has to explain to the American people (and to the whole world) where all those trillions went to.

This is why we need to attack Iraq. The government needs to fight an actual war against a credible enemy. If the fat cats are lucky, Iraq will unleash an attack on the US homeland that would be a good smokescreen for the total collapse of all things financial. Of course, Iraq would resemble very burnt toast in that event, so it would be very difficult to pievce together much about how the attack took place.

If Iraq didn't do anything to us, that would be completely out of character, and would ruin the script. I'm sure there is a back-up plan that is quite top-secret.

OK, OK, so this is really just the treatment for a new Bruce Willis film (Infidels Die Hard!) But is really hard to tell reality from movie scripts anymore.

This concept is not copyrighted. If anyone does make the movie, just mail me a DVD to my hidden bunker. Oy vey! It has been quite a day.

Gee. The dollar is down, gold is up. I wonder if the Dow will go down tommorrow?

Maiden Fan

(07/15/2002; 22:12:55 MDT - Msg ID: 80622)

Yukon

I'll sing along...

Just a babe in a black abyss
No reason for a place like this
Walls are cold, Souls cry out in pain
An easy way for the blind to go
A clever path for the fools who know
The secret of the hanged man...
The smile on his lips

( BTW, my favorite!)

Black Blade

(07/15/2002; 23:12:02 MDT - Msg ID: 80623)

Asia Decidedly Negative

http://quote.yahoo.com/m2?u
Asian markets carry through with negative returns. The "miracle" recovery on Wall Street today was nothing more than simultaneous S&P 500 futures buying by several major Wall Street institutions that triggered short covering. The question is if this had any effect on market sentiment. If Asia is any indication the answer is a resounding "no". Perhaps the institutionals will resume buying futures in the premarket tomorrow. Regardless, it is quite "entertaining" to watch these lemmings run to and fro.

- Black Blade

Pizz

(07/15/2002; 23:55:46 MDT - Msg ID: 80624)

@Sector

No argument what so ever, and believe me, I am not confused on the big picture nor do I have any doubts on the end game.

The thrashing in gold vs gold shares vs hedgers vs paper - hell the whole system has already failed, most just don't realize yet. It's the short term that has the crosscurrents that are somnetimes visably trending, but most of the time just confusing enough to keep most from getting on the train (today is a prime example). Not many oportunities left to get a first class ticket for standby prices.

The big boys are between a rock and a hard place, I just like to figure out how hard the rock may be and where it will land.

As far as TA, it's the trail human's psycolocial and emotional perspectives make, and does have merit, on a self fulfillment basis. By the way, there's nothing special about 300 gold other than TA.

When the games in gold start to unravel, gold's going to go thru some major gyrations (MAINLY UP), as in any unwinding, manupulated event(s).

Right now, as we know, gold's not free, and therefore it fails to cycle smoothly. Silver does not have as many big players thrashing around. Simple as that.

Pizz

Black Blade

(07/16/2002; 01:42:40 MDT - Msg ID: 80625)

Intel May Announce Layoffs

http://biz.yahoo.com/rb/020716/tech_intel_report_2.html
Snippit:

NEW YORK (Reuters) - Intel Corp. (INTC), the world's No. 1 chipmaker, may be on the verge of announcing massive layoffs or other cuts amid a slow market for personal computers, the Wall Street Journal reported on Tuesday. Intel's chief executive officer, Craig Barrett is scheduled to speak to employees after stock markets close, and about the same time as the chipmaker discusses its second-quarter results in a conference call with analysts, the paper said.

Black Blade: The rumor is that the layoffs could number as much as 20,000. The announcement will come after the markets close so that any rally will not be spooked and so that Intel stock doesn't get killed. The "Bone Pile" looks to grow quite a bit higher. Companies and consumers are not spending and as a result companies like Intel is suffering.

Knallgold

(07/16/2002; 01:50:56 MDT - Msg ID: 80626)

An outlook on paper

Wall Street crashes,$ loses handsome,Gold does not gain,in fact its shares are still correcting.But physical demand is on record levels.It seems Gold is going down with the Dollar,paper Gold,that is.Is this a surprise for us here?

Black Blade

(07/16/2002; 03:17:30 MDT - Msg ID: 80627)

Market Index Futures Plunging - PPT discussed on CNBC!!!

http://www.mrci.com/qpnight.asp
Some very bizarre movements in the futures. The market index futures have fallen off into oblivion. DOW futures are lower by 202 points and falling, S&P 500 off by 20 points, and the Nasdaq off due to concerns over Intel. The USD is falling against all currencies again.

Most striking is that Europe just flopped hard and on CNBC this morning they mentioned that euro markets do not buy the notion of a market bottom or capitulation - so instead of rising, the euro markets are plummeting. And get this! They specifically talked about european concerns of yesterday's "miracle rally" as the work of the "Plunge Protection Team"! That's right, they mentioned the President's Working Group on Financial Markets (aka PPT) as the reason for the intervention at 2:30 pm (EST). Apparently the Europeans do not buy into the "coincidence" argument. However, the CNBC anchor Carlos Quintinilla and the reporter tried to laugh it off and asked if Alan Greenspan was a part of the PPT. Now I guess today will be "interesting" and "entertaining".

- Black Blade

Black Blade

(07/16/2002; 03:23:42 MDT - Msg ID: 80628)

European and Asian Markets Tank Hard

http://quote.yahoo.com/m2?u
Looks ugly for foriegn markets this morning. The USD is falling again. Also, Gold just punched through $320 an ounce on market worries. It looks like President Hoover's speech yesterday was a dud after all. I just read a report that suggests that the real estate bubble is close to popping too. It's up to the Head Fed to say something "enlightening". It should be quite fun watching the lemmings fret and sweat today.

- Black Blade

Black Blade

(07/16/2002; 03:55:00 MDT - Msg ID: 80629)

USD Sub 104 and Liquidity Problems at Major US Bank

First off - Gold surged past $321 and ounce and climbing. The USD look to plunge below 104 at any moment (currently 104.05 and falling). CNBC just mentioned that an unnamed major US bank is having liquidity problems. Anyone know which one? This is the second mention of it this morning on CNBC. Meanwhile Euro markets are recovering and the US market futures have turned around heading toward positive territory maybe? Looks like another day of "entertainment" as the institutional investors do all the heavy lifting as the individual investors are content to "sit this one out".

- Black Blade

Black Blade

(07/16/2002; 04:00:21 MDT - Msg ID: 80630)

More firings as Hong Kong gets more bad news on unemployment

http://biz.yahoo.com/ap/020716/hong_kong_unemployment_1.html

Snippit:

HONG KONG (AP) -- The unemployment rate surged to a record high 7.7 percent in the April-June quarter, the government announced Tuesday, in a fresh dose of bad news that further dimmed hopes for an economic recovery.

Black Blade: Dem "Bones" are piling up in Hong Kong too.

Black Blade

(07/16/2002; 04:08:00 MDT - Msg ID: 80631)

Dollar Vulnerable, Seeks Greenspan Help

http://biz.yahoo.com/rb/020716/markets_forex_2.html

Snippit:

LONDON (Reuters) - The dollar remained vulnerable on Tuesday after its plunge through parity with the euro as investors waited anxiously for soothing words from Federal Reserve chief Alan Greenspan in a testimony later in the day. A slew of U.S. corporate accounting scandals and subsequent steep losses on Wall Street have frightened investors out of U.S. assets, with a late bounce on Wall Street on Monday failing to calm nerves ahead of a spate of U.S. corporate earnings reports. "The market still has a relatively high level of risk aversion due to worries about corporate earnings. Greenspan will give a relatively upbeat outlook on the economy and highlight some clouds hanging over the market," said Bilal Hafeez, currency strategist at J.P. Morgan. "He could indirectly raise confidence but the main focus is the validity of corporate earnings and a big drop in stock markets. I don't think the market will start buying U.S. asset crazily on his speech."

Black Blade: The euro is now worth slightly more than $1.01. The USD is falling back slightly (MOF intervention?). Hmmm�

Black Blade

(07/16/2002; 04:15:57 MDT - Msg ID: 80632)

Plunge Protection Team on CNBC - Again

The CNBC crowd are discussing the PPT again because that is the word out of Europe for the sudden reversal of fortune. The discussion described what their interpretation of the PPT is. They said that it is rediculous because the US government and brokerages never intervene in the markets. Strangely enough the President's Working Group on Financial Markets is well known in the financial markets and less so among the investing public. Surprising that the CNBC people know nothing about it as several NY reporters have reported on it (such as John Crudele of the Post). More important though is that it is the European investors are the ones making an issue about the "alleged PPT intervention". As the CNBC people will not leave this issue alone, they are only informing more people about it as a result. Investor confidence? Hmmm...

- Black Blade

Knallgold

(07/16/2002; 04:21:50 MDT - Msg ID: 80633)

The Goldspring

If I would like to build in maximum leverage into the Goldexplosion,I would,after the bull has started,engineer a setback together with a $ decline.This lowers the POG in all currencies and adds tremendous pressure on the buy side-compressing the spring to a max..Then release it....

Black Blade

(07/16/2002; 04:38:39 MDT - Msg ID: 80634)

CNBC Acknowledges PPT

The crew on CNBC just meekly acknowledged the existence of the Plunge Protection Team by name and even gave the official name (President's Working Group on Financial Markets) while they stated that the Sec. of Treas. and others may work together to buy S&P futures. They seemed a bit surprised and quickly left the subject after stating that this is more of a concern in Europe. These dim bulb CNBC anchors and reporters are bit uneducated about some of the basics. "Interesting Times" Hmmm...

- Black Blade

Black Blade

(07/16/2002; 04:43:53 MDT - Msg ID: 80635)

USD Goes Sub 104

http://quotes.ino.com/chart/?s=NYBOT_DXY0
There it is - the USD just sank below 104 on the way to 103 and lower. (my target - 72). Looks like fun as the Lemmings run over the cliff. Lotsa retirements have vaporized and many more will follow. The hopes and dreams of millions are up in flames - "gone to money heaven".

- Black Blade

Black Blade

(07/16/2002; 04:52:57 MDT - Msg ID: 80636)

Major US Bank On Verge Of Failure

http://biz.yahoo.com/rc/020716/markets_britain_stocks_4.html
I haven't located the source of the rumor although it is being floated in Europe and on CNBC. However, the rumor says that it is none other than JP Morgan Chase! Measnwhile, I will keep searching.

Snippit (from Yahoo): A slide in U.S. stock index futures on market talk of possible credit problems at a major financial institution in the United States undermined fragile sentiment.

If this rumor pans out, we could see a major move to the downside in the markets as the most active sector in yesterday's "miracle rally" was banking (the other was pharma).

- Black Blade

misetich

(07/16/2002; 05:05:02 MDT - Msg ID: 80637)

U.S. Stocks Decline in Europe, Led by J.P. Morgan

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∣dle=ad_frame2_topfin&s=APTPv7xM.VS5TLiBTSnip:

J.P. Morgan Chase, the second-biggest U.S. bank, dropped $1.73 to $28.35

Misetich

Could this be the US bank having liquidity problems?

Got gold?

misetich

(07/16/2002; 05:13:41 MDT - Msg ID: 80638)

General Motors CEO Wagoner Generates Profit, Anxiety in 2nd Qtr

Snip:

What worries them now is whether the largest automaker can support pension and health-care expenses for almost 650,000 workers and retirees, enough to populate Baltimore.
................

``They're hitting on all cylinders on the car side, but the pension issue is just too big,'' said Roger Hamilton, vice president at John Hancock Advisers Inc., which owned 102,700 shares as of March and added 27,300 in the first quarter.
.........................
Pension Losses

Analyst Rubin downgraded the company's shares to ``hold'' from ``buy'' last week, citing stock-market losses that some analysts project may leave General Motors' pension fund $20 billion short of what it needs to pay future liabilities, up from about $9 billion now.

In April the company contributed $2.2 billion to its pension fund. Wagoner, who declined to be interviewed for this story, told reporters last week that for now he doesn't contemplate changing assumptions that the plan will return an average of 10 percent annually over time.

``The important thing on the pension fund is it's a long-term liability and it's a long-term asset,'' he said. ``As it sits here today we're not contemplating any changes -- but we have to look and get the best experts in and decide if that needs to be reconsidered.''

The $67 billion plan is the largest corporate pension fund in the U.S.
......................................................

Misetich

Here's the "NEW AND IMPROVED CEO" who hides his head in the sand - and doesn't (can't?) face up to GM's pension problems.

We wait patiently as the fraudlent accounting wrecks continues...

Got gold?

Black Blade

(07/16/2002; 05:13:49 MDT - Msg ID: 80639)

Question CNBC on PPT

http://moneycentral.msn.com/Content/CNBCTV/TV_Info/email.asp
Since CNBC brought this issue up, I suggest a good barrage of questions asking about the "plunge Protection Team" aka "The President's Working Group on Financial Markets". Ask them to explain what it is they do and is it really true that they can manipulate the markets by buying S&P futures as mentioned on CNBC's "Wake Up call". If it gets a response on the tube � so much the better. I already sent in my question and asked them to elaborate. Hey, they brought it up.

Emails for CNBC programs:

wakeupcall@CNBC.com
Squawk@CNBC.com
MorningCall@CNBC.com
PowerLunch@CNBC.com
ClosingBell@CNBC.com

Several other email addresses for other CNBC programs at the link. Let's get these guys to explain this. It could be a lot of fun � cheap "entertainment".

- Black Blade

White Rose

(07/16/2002; 05:20:24 MDT - Msg ID: 80640)

Time Magazine cover story

Somewhere in the Y2K era, Time Magazine had a domestic cover story with Greenspan, Rubin, and one other individual in a story called "three men who saved the world". The article openly called them the "Plunge Protection Team".

Can someone find this article and bring it to the attention of CNBC? (at home, my e-mail is not working)

misetich

(07/16/2002; 05:20:49 MDT - Msg ID: 80641)

O'Neill says no change in U.S. strong-dlr policy

http://www.forbes.com/newswire/2002/07/16/rtr662501.htmlSnip:

OSH, Kyrgyzstan, July 16 (Reuters) - U.S. Treasury Secretary Paul O'Neill said on Tuesday the United States remains committed to its policy of supporting a strong dollar.

Speaking to reporters at Osh State University, O'Neill said that despite the dollar's slide in value against the euro, the euro had regained only about half its value since its launch at the start of 1999.
................

"There is no change in policy, this is academic discussion," O'Neill said. "There was no intent to give any indication of anything that is different from what the policy was."

He added: "Nothing. No change. Strong dollar policy. The same old wonderful stuff."

Misetich

"The same wornderful stuff" - Be kind to this fellow when he wakes up from DREAMLAND!

Got gold?

Black Blade

(07/16/2002; 05:25:13 MDT - Msg ID: 80642)

Plunge Protection Team?

http://www.investavenue.com/article.html?ID=5065
Snippit:

The article we referred to was "Plunge Protection Team", which appeared in the Washington Post on February 23, 1997 under the byline of Brett D. Fromson. From this article and other sources, here is what we know as fact. Following the October 1987 market crash, the Federal Government became concerned about the potential disastrous effects of another market unraveling and began to seek ways of averting a financial collapse resulting from a stock market meltdown. As a result President Reagan issued Executive Order 12631, dated March 18, 1988, establishing a Working Group on Financial Markets (Working Group). The group was to consist of the Secretary of the Treasury and the chairmen of the Federal Reserve Board, the Securities & Exchange Commission and the Commodity Futures Trading Commission. The purpose of the group was to prepare options to deal with a serious stock market collapse that could seriously impact major financial institutions and the economy.

Since that time the group has met regularly, and each agency has prepared a plan to deal with a potential crisis. Significantly, the Executive Order specifically stated that the group should consult with "representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible." We also know that Chairman Greenspan has previously stated that the financial authorities would intervene under certain circumstances to prevent a meltdown.

Black Blade: Since Alan Greenspan is giving testimony today (Humphrey-Hawkins), today would be especially appropriate to ask this question of CNBC and CNNfn staffers.

misetich

(07/16/2002; 05:38:47 MDT - Msg ID: 80643)

Is Greenspan manipulating the stock market?

http://www.onlinejournal.com/Editor_sDesk/editor_sdesk.htmlSnip:
At 2:32 Wednesday, New York time, something extraordinary happened at the corner of Wall and Broad streets. The New York Stock Exchange's Dow Jones industrial index�struggling since the opening bell after the World Com fraud revelations�threw off its problems. From an intraday low of 8926.6, the Dow shot skywards to its high of 9160 at 3:29 PM . . . Could it be the work of the much talked about, but never seen, Plunge-Protection Team? There is a belief fast gaining ground that this team represents a powerful and secretive hand that is ready to act at any time the Dow looks ready to tank big- time. It is reputed to consist of Fed chairman Alan Greenspan, the US Treasury Secretary, and select insider Wall Street brokerages, including Goldman Sachs and Merrill Lynch along with bankers like Citigroup. When needed, so the theory goes, funds are pumped into stocks and futures to derail any market panic. Such a group's existence first came to light in The Washington Post five years ago. The paper reported that after the October 1987 crash president Ronald Reagan signed an executive order authorizing a working group on financial markets aimed at coming up with strategies dealing with stock market crises. No one heard much more about it�that is, until January 1997 when Dr. Greenspan made a speech saying the government would directly intervene in the market in "rare circumstances." . . . Last January popular online brokerage The Street wrote: "That may investors believe a so-called 'plunge-protection' team exits may be as important as whether it's fact or myth. Such beliefs may explain why many investors rode the markets down in the past 22 months., and why most continue to have faith in the stock market, and in Greenspan." The New York Post reported in October 2000 that when the Dow dropped 400 points the previous day, Goldman Sachs, Merrill and others saved the market through heavy futures purchases . . . London's Observer newspaper last October reported it had information the plunge team was preparing to spend "billions of dollars" to avert a repeat of 1929 and 1987.

So, if Bromby is on the money (forgive the pun), when Greenspan and his Federal Reserve buddies aren't diddling with interest rates for the benefit of the big boys, Alan and his Wall Street buddies are making sure the big boys' stock portfolios aren't taking too big a hit, if they are taking any hit at all. And the kicker is that this criminality may be legal�no, that is no an oxymoron in this current culture of greed.

Misetich

2.5 trillions have disappeared - the PPT line in the sand keeps on retreating - the PPT is FIGHTING the market! and LOSING

The funny stuff is finding other alternative investments - Gold'silver, oil, commodities, real estate-

Times are changing -

Got gold?

misetich

(07/16/2002; 05:48:06 MDT - Msg ID: 80644)

Comments on US President speech

http://www.888webtoday.com/webopinion72.htmlSnip:

He quotes a Presidential response to the growing financial threat that reads, "America's industrial situation is absolutely sound. Our factories are humming. Business is healthy. The economy is in good condition. There is nothing fundamentally wrong with our underlying business and credit structure. It's a good time to buy stock." The year was 1929. The President was Herbert Hoover.
....................

Stories of the federal plunge protection team are borne out by chart watchers of recent years. The strategy has been two-fold� prop up equities and destroy the price of gold, which has been the historical "safe refuge" for those sensing that all is not right in the world of fiat currency.

Got gold?

misetich

(07/16/2002; 05:58:46 MDT - Msg ID: 80645)

Stocks Look Lower As Dollar Falls Again - Concerns about the stability of US bankiing system

http://www.washingtonpost.com/wp-dyn/articles/A11404-2002Jul16.htmlSnip:

Concerns about the stability of the U.S. banking system in the light of recent losses on Wall Street and as the U.S. second quarter earnings season gets under way added to stock and dollar woes.

Misetich

Got gold?

misetich

(07/16/2002; 06:06:46 MDT - Msg ID: 80646)

Confidence Falls With the Dollar

http://www.washingtonpost.com/wp-dyn/articles/A9957-2002Jul15.htmlSnip:

Dampening enthusiasm overseas for U.S. investments is easily verifiable from U.S. government figures, which show that foreign investors bought $131 billion of U.S. stocks and bonds in the first four months of the year, compared with $187 billion in the same period a year earlier. And in the weeks since, foreign purchases have slacked off even further, according to internal data generated by J.P. Morgan Chase and other currency market participants.

That poses a problem for the U.S. economy because of the trade deficit, which widened to a record $112 billion in the first quarter of 2002, based on the broadest measure. Since Americans buy so much more from abroad than they sell, the U.S. economy depends on foreigners' willingness to continue pouring money into the United States -- in effect, lending Americans the money to buy imports.

The dollar's decline reflects foreigners' increasing reluctance to supply those funds, and it also stems from a growing preference among American investors to move money overseas, even though other big economies including Europe and Japan are expanding less rapidly than the United States.

..................

But private analysts in the United States warn that dangers loom for the U.S. economy as well. "To the degree that the dollar declines as part of a broader decline in financial markets driven by the desire to sell off everything that's American -- stocks, bonds, the dollar -- that's not to be applauded," said Alan Blinder, an economics professor at Princeton and a former Federal Reserve vice chairman.

......................
"The worry is that this could spill over into consumption, because if the American consumer pulls in his and her horns, it's going to derail whatever prospects for growth we have," said David Gilmore, an economist at Foreign Exchange Analytics in Essex, Conn.

.................

Misetich

The "perception" mind conditioners have lost their grip as trillions of financial markets values evaporates - and investors dreams are turned to ashes-

Fear is beginning to mount - Will Greenspan be able to turn sentiment or will he get slammed just as Bush has been by the market response

Got gold?

misetich

(07/16/2002; 06:16:30 MDT - Msg ID: 80647)

Loss of Confidence

http://www.washingtonpost.com/wp-dyn/articles/A10091-2002Jul15.htmlSnip:

"The economy will suffer damage from the sick stock market," said Allen Sinai, president of Decision Economics. "This is not like the crash of 1987. This is the worst market for stocks since the 1930s."

................
Sinai said the continued decline in stock prices is likely to cause stock-holding consumers to pull back on their spending -- not only because the value of their savings has declined but also because they don't have the trading profits that they once used to pay for vacations, new cars and home improvements.

"The risk to consumption spending from the slide in the stock market is considerable," Sinai said.

At the same time, falling stock prices also raise the cost of capital for businesses, forcing already-jittery executives to rethink what modest plans they might have had for adding new employees and buying new equipment.

"With every 100-point drop in the Dow, the recovery is undermined," said Mark Zandi, chief economist at Economy.com. "If businesses start cutting investments and hiring again, as they did last fall, consumers simply can't carry this economy along. It's time to get concerned."

...............

Instead, Blinder said Greenspan is likely to try to administer talk therapy to the depressed investors and business executives, carefully balancing his concerns about financial markets and corporate governance issues with his long-term optimism about the American economy.

"It's premature to panic," Blinder said. "But the storm clouds are gathering, and I think everyone, including Greenspan, understands that."

................

Misetich

"talk therapy" from Greenspan - will do wonders for investors confidence and portfolios - NOT-

The RISKS are getting higher -
Greenspan will have to "caution" the slowdown effects for this years projected growth - but everything will be fine NEXT YEAR

Come to think of it didn't he say that in January 2001, February 2001, March 2001, April 2001- and on..and on...and on...

Got gold?

steady

(07/16/2002; 06:27:32 MDT - Msg ID: 80648)

email cnbc

im in will send an email to each one. anyone else care to join?

misetich

(07/16/2002; 06:29:04 MDT - Msg ID: 80649)

S&P warns US of threat to energy supplies

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026553495581&p=1012571727207Snip:

The US oil and gas supply is being threatened by the Bush administration's failure to counter the effects of plunging domestic supplies and tensions in other producing nations, according to Standard & Poor's.

Tina Vital, oil and gas equity analyst at the ratings agency, noted in an industry survey the depletion of US oil and gas wells, limited access to known low-cost reserves, trade restrictions, environmental regulations and political and economic unrest in the top producing regions of Latin America and the Middle East.

"One has to ask, where are we going to get our oil from?" Ms Vital said in an interview. "It just seems like America has got its head in the sand."

.................

S&P estimates a "war premium" of $4 per barrel is already reflected in global oil prices. Ms Vital said each $10 rise in oil prices would cut real GDP by 0.5 per cent.

So if oil rose to over $30 per barrel, from its price in the mid-$20 range, the impact would be significant, though not enough to cause recession. But if the price rose to $50 per barrel, "the implications for the economy would be much more ominous", she said.

S & P considers the supply risk from foreign sources, on which North America relies for about 40 per cent of its oil, to be significant. Political and economic unrest in Latin America was likely to deter investment in the energy sector, Ms Vital said. Shipments from around the Middle East and the Gulf could be threatened by growing conflict between Israel and the Palestinians or an extension in the war on terrorism.

Misetich

Financial scandals, $ woes, loss of confidence, terrorirism, soaring budget deficits, energy supplies threats..and on..and on..and on

Meanwhile gold remains suppressed - Is it SUSTAINABLE? That's ANOTHER story

Got gold?

Carl H

(07/16/2002; 07:29:01 MDT - Msg ID: 80650)

CNBC e-mail

I just sent them an e-mail. I asked what other markets the PPT manipulates. I suggested that they read the RBC report on GATA's work.

Carl H

(07/16/2002; 08:22:46 MDT - Msg ID: 80651)

Something for the mathmatically inclined.

A number of years ago I read a short article entitled "How to Estimate Anything." Unfortunately I have since lost the article and cannot give credit to the clever author. I will start with a simple example of his technique and the apply it the question of how much manipulation are the powers that be doing the markets.

Example: Supposed we want to estimate how long human civilization will last. To make the numbers easy, let's say that human civilization has been around for 10,000 years so far. If we assume that the present moment is a randomly selected moment in what will be the total course of human history, then we can say that there is an 80% chance that the present moment will be between the 10% and 90% points in what will be the total lenght of human civlization. With a little calculation this can be restated that there is an 80% chance that human civilization will last between another 1,111 years and another 90,000 years. While this may seem like a big range, it does tell you that there is little probability that we will make it another million years.

Now, let's apply the same type of reasoning to what we know of the strong dollar policy. I think we can safely state that we know that it incluces:
Manipulations of government statistics (CPI, EIA, etc.)
Short term interest rate manipulations
Exchange rate manipulations
Food Price Manipulations (Farm Subsidies)
Gold Price Manipulations (I take GATA's work as proof at this point.)
Silver Price Manipulations (I take Butler's work as proof at this point.)
and according to CNBC, Stock Market Manipulations.

Now, applying the same reasoning as above, we can say with 80% probability that there is between 11% and 900% more manipulation that we don't know about.

You might want to ponder for a moment what else might be in that unknown portion.

Carl H

(07/16/2002; 08:28:05 MDT - Msg ID: 80652)

CNBC Response!

WOW! I thought all of the news e-mail address were black holes! Here is their response and my e-mail.

From: "Bolland, Patrick (NBC, CNBC)" | Block Address | Add to Address Book

To: "'Carl H'"

Subject: RE: Plunge Protection Team

Date: Tue, 16 Jul 2002 09:38:20 -0400

Carl,

I did see that Royal Bank report a while back ... your point is a good
one

Thanks for watching

Pat

-----Original Message-----
From: Carl H
Sent: Tuesday, July 16, 2002 9:17 AM
To: Wake Up Call (NBC, CNBC); Squawk@CNBC.COM; MorningCall@cnbc.com;
Power Lunch (NBC, CNBC); Closing Bell
Subject: Plunge Protection Team

Greetings:

The discussion of the President's Working Group on
Financial Markets aka the "Plunge Protection Team"
this morning was most interesting and refreshing. I
have suspected thier hand in the US stock market on
several occasions during the last five years.

I would, however, like to point out that the evidence
of their involvement is strong, but circumstancial.
However, they also intervene in other markets as well.
There proof of their manipulations in the gold
market. The proof has been gathered over the past 3.5
years by a group called the Gold Anti-Trust Action
Committee (GATA). The large amount of evidence is at
www.gata.org. For a nice summary, you can look at a
summary that the Royal Bank of Canada sent to its
customers at:
http://groups.yahoo.com/group/gata/message/1149

Sincerely, Carl H, Ph.D.

sector

(07/16/2002; 08:34:21 MDT - Msg ID: 80653)

Nothing is Confirmed...

...Until It Is Officially DeniedJ.P. Morgan Denies Liquidity Rumors

NEW YORK (Reuters) - J.P. Morgan Chase & Co. Inc. (NYSE:JPM - News) on Tuesday denied rumors in European markets that it was having liquidity problems.
ADVERTISEMENT

"The rumors are untrue and irresponsible," a spokesman for J.P. Morgan, the No. 2 U.S. bank holding company, said in New York.

The bank's stock fell in European trade. Dealers there cited rumors of liquidity problems. J.P. Morgan shares also dropped 4.1 percent, or $1.24 a share, to $28.84 on Tuesday on the New York Stock Exchange.

J.P. Morgan, scheduled to report second-quarter results on Wednesday, is expected to earn 65 cents a share, or nearly double what it earned a year earlier, according to analysts polled by market data firm Thomson First Call.

Corporate loan problems have beset J.P. Morgan in recent quarters. The bank was a leading lender to bankrupt energy trader Enron Corp. (Other OTC:ENRNQ.PK - News) and also to telecommunications company WorldCom Group (NasdaqNM:WCOME - News), which recently disclosed what could be one of the largest accounting frauds ever.

J.P. Morgan, whose year-over-year profits have dropped each quarter since the December 2000 merger of Chase Manhattan and J.P. Morgan, said on June 26 its exposure to WorldCom was very small and it would have no material effect on earnings, although it would not disclose the amount it is owed.

WorldCom also moved on Monday to finalize a funding agreement with lenders including J.P. Morgan that would give the phone company money to operate during a possible bankruptcy reorganization.
++++++++++++++++++++++++++++++
Links to the losses of Enron, WCOM, Global Crossing etc.
Did I mention the $41 Billion gold derivatives with no loss limits? Oh yeah, there's also Dinsa Mehta's [Mr. Gold Derivatives] "Retirement".

sector

(07/16/2002; 09:03:08 MDT - Msg ID: 80654)

JPM Rumors

CALPERS WILL SUE JPM OVER WCOM?It seem that CALPERS has huge losses in WCOM bonds and is looking for deep pockets to sue. JPM fits the bill.

JPM is already being thrashed about in court over their Enron "Offshore excesses". This could start a real trend going...maybe even a ...syndrome.

What shall we call it? Perhaps a contest to name the Fed bank corruption melt-down !

USAGOLD

(07/16/2002; 09:33:33 MDT - Msg ID: 80655)

Media Blitz. . .

If this morning's Denver Post is any indicator the financial-political establishment has pulled out all the stops to save the stock market. Their chief instrumentality will be the media propaganda machine. I wonder how many USAGOLDers can report headlines similar to these in their hometown newspaper?

SENATE OKS LEGAL CURBS FOR BUSINESS
MK Comment: Can we now legislate the human heart?

TWO GROUPS OF INVESTORS KEY TO UPTURN
MK Comment: They cite "individual" and "foreign" investors. Can we add a third: the Working Group on Financial Markets?

BUSH SEES 'BETTER DAY RIGHT AROUND THE CORNER FOR ECONOMY
MK Comment: I hope he's not talking about today. The Dow opened down over 200 points but now recovering. Will the Working Group ever find itself out of work in a bear market?

ANALYSTS: DON'T GIVE UP ON STOCKS
MK Comment: So what's new there? Analysts were bullish at the top, they are bullish now, they'll be bullish at the bottom.

ADVISERS: PANIC, 90s MIND SET HURTING INVESTORS
MK Comment: Which 90s mind-set? The one that said buy stocks disregarding earnings, profits, prospects and whether or not the CEO had a criminal record?

WILLIAM SAFIRE OPINION PIECE SAYING THAT "WE" NOT WALL STREET ARE TO BLAME FOR THE EXCESSES
MK Comment: Uh huh. . .and not to speak of the butterfly in Mongolia that fluttered its wings and started the whole international downtrend.

And finally. . .tucked away on the crease where hopefully no one will see it. . . a small four paragraph article headlined:

ANOTHER FREE FALL ON WALL STREET
MK Comment: Can't accuse the Denver Post of avoiding the real issues gripping Americans. . . . .

----------

All in one morning issue. Quite impressive. A media blitz that would have made the old yellow press barons proud. And all to make sure you hold onto your stocks, nay, not just hold on but BUY MORE!!!

---------

Later, time allowing, I will address ten pointers published on the front page of the Denver Post financial section. "Financial advisers," reports the Post, say the decisions investors make now could shape portfolios for years to come." The upshot? You guessed it "Buy stocks!" Disregarding earnings. Forget profits. Ignore prospects. And overlookd whether or not the CEO has a criminal record. Close your eyes. Hold your nose and BUY. . . for heaven's sake. . .BUY.

All well and good. . .all of this is warm-up for the Allan Greenspan show about to play on a financial page near you. . . .

---------

Just for grins, can we have the goldmeisters from around the United States check in with the name of the newspaper and a sample of the financial headlines. I think it might be an interesting lesson in public relations for all. . . ..

Tommy P

(07/16/2002; 09:36:10 MDT - Msg ID: 80656)

Great strory from "The National Post"

http://www.nationalpost.com/search/site/story.asp?id=0E46BDB5-D75A-4FFC-B0ED-793B13346E7CGood read

Black Blade

(07/16/2002; 10:52:08 MDT - Msg ID: 80657)

Equity Loans, Slow Market Putting bite on Sales � Real Estate Bubble deflating?

http://www.sltrib.com/07152002/monday/monday.htm
Snippit:

"But now, with little or no appreciation, people who bought their home in the last three or four years and who put the bare minimum down probably don't have enough equity to cover their selling costs -- or if they do it's barely enough," said Salt Lake City real estate agent Butch Dailey. "I see a lot of people who just do not have the money to pay a Realtor."

People who put little or no money down on their homes within the last several years are not the only ones finding it tough to cover selling costs, he said. He has seen many people who have whittled away tens of thousands of dollars in equity by drawing on home equity lines, taking out home equity loans or cashing in on equity by refinancing their first mortgages.

Dailey said the lack of sufficient equity to cover selling costs many times is not apparent until homeowners try to sell their homes and discover they cannot make a sale for the appraised value or what they believe their properties are worth. In fact, in some areas, sellers are having to make significant price concessions to sell homes.

Black Blade: Sorry, but I have no sympathy for those who don't prepare and plan ahead (Aesop's "Ant and the Grasshopper"). Never � ever � put your home at risk by drawing on equity! These idiots now must pay the piper for their ignorance. As always, get outta debt as soon as possible and stay outta debt, stash cash for several months expenses, get Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program. Prepare for the bad times and hope that all turns out well. People should learn to live within their means and slowly build up wealth over time. There is no free lunch. It is going to be very ugly when the real estate bubble pops.

The Hoople

(07/16/2002; 11:09:58 MDT - Msg ID: 80658)

John Devine, GM CEO. More fuzzy math

OK, 600,000 pensioners, twice the amount of total GM employees, will be paid based on the assumption of 10% annual stock fund growth forever? They are heading toward the fate of many other shattered pension illusions. When pension fund busts pick up this Wall Street ugliness will possibly be a side show. GE offers up same old accounting slop, 14% profit growth on 4% sales growth. These pigs are needing more and more lipstick. Gold doesn't need lipstick, it is pretty all by itself.

goldfool

(07/16/2002; 11:17:47 MDT - Msg ID: 80659)

The Stock Scandal You Haven't Heard About Yet

THE STOCK SCANDAL YOU HAVEN'T HEARD ABOUT YET
By Porter Stansberry

Yesterday Coca-Cola, one of the most respected companies in the world, announced that it would begin expensing options. Any company that wants to keep its good name will soon follow.

In the long run, that's a good thing for investors.

But, in the short run - as companies are forced to come clean with options expenses - investors will be shocked to realize that most of the fastest growing companies in the market were actually not growing at all.

What today are the most expensive stocks in the market, will suffer enormous devaluations as investors come to understand the shell game that was being played with options and share buybacks.

If you haven't already, check your portfolio for "options printing" companies and make sure that the companies you own have really been making money. You can begin with what I suspect will easily become the "poster child" of such shareholder abuses.

Once the most highly respected - and the most profitable - company in Silicon Valley, this company will soon find itself in the middle of the next national scandal...and the focus of media, investor and political scorn.

Its CEO, once regarded as the best CEO in America, will see his reputation...well, return to the mean. And investors in a company that once posted a 9,000% return to shareholders will see their investment wiped out.

But first, if you'd like to understand the next big scandal to sweep Wall Street - a scandal that will make the others pale by comparison - you have to understand in some detail how the cost of granting stock options is represented to shareholders.

Options accounting is considered arcane and a minor financial detail today. In fact, the SEC only requires companies to report their options expenses as a footnote. But you'll soon see a lot more focus on these numbers...

A stock option granted by an employer is the right for an employee to buy a share of the company's stock at today's price. Normally this right extends out into the future - ten years, for example. In theory, options align the employees' interests with the shareholders. But experience is proving quite the opposite. Employees, including CEOs and other executives, don't have any downside. If the stock crashes, he doesn't lose a penny. If the stock soars, he's a millionaire.

The prevalence of these kinds of plans, not to mention the size of the grants given to senior managers, explain why companies during the bubble were being run in such a risky fashion - the managers had nothing to lose. But here's the real scandal. And what management likes about this kind of compensation...it's free. The cost of granting options doesn't appear on the income statement.

Trouble is, as Warren Buffett said recently, if options aren't compensation, what are they? And if compensation isn't put on the income statement, where do you put it?

Consider: if options grants don't show up as compensation expense, they never appear on the income statement. And if a company uses free cash flow to buy back all of the shares granted via options, there's never any record of the extra costs.

Options allow executives to hide the effect of their enormous compensation packages from the bottomline. For example, the CEO of the company I'm going to warn you about today - where options have gotten out of control - realized over $57 million in compensation from exercising options in 2001. That was more than 25% of his company's net profits for the year.

Meanwhile, on the income statement, only his $300,000 salary counts against earnings. On average, over the last six years, this CEO made $32 million per year. Almost none of that expense showed up on the income statement. Companies would never dream of paying executives so much money, except for the fact that investors don't see the effects of this compensation on earnings.

According to current GAAP accounting standards, this company produced outstanding EPS growth - 168% over five years. Even in 2000, when the market tanked, this company still grew earnings by 21%.

Because of this growth and its status as a leading big cap stock, you can understand perhaps why the stock still trades at outlandish prices: 78 times earnings and over 10 times sales.

But, if you deduct the expense of options grants using the Black-Scholes method to determine the value at the time of issue, you see an entirely different picture.

After you expense the value of the options granted, instead of 168% growth over five years, earnings only grew 39% over five years. Hardly remarkable, especially for a high tech company with great position in the market. After all, there was a high tech boom, remember?

Accurate accounting also shows that, like most companies in the sector, this firm had a sizeable decrease in earnings in 2001. As should be reported to shareholders, earnings after stock compensation fell by 29% in 2001.

You have to wonder how the market would price this "growth stock" if shareholders knew that really, counting all costs to shareholders, the earnings per share didn't grow by 21%, they fell by 29%! My guess is that, if the market realized that this company's earnings were actually decreasing, the shares might not trade at 78 times earnings. Maybe 7 times. Or maybe 8 times. But not 78 times.

Here's what else the market apparently doesn't recognize about this company: options expenses are rising. Employees' options that will vest in the next ten years now equal more than 25% of the entire capital stock of the company. If employees choose to exercise their options, there will be a 25% tax on earnings growth as the number of shares grows.

To keep this outlandish executive compensation off the minds of investors, the company has to prevent dilution - new shares - at all costs.

Who controls dilution? Why...the same executives who make millions on options. In fact, executives now use even more cash than provided by operations to buy back shares of stock - no matter how expensive the stock is! - just to prevent the real cost of options compensation from ever being reported to shareholders.

For example, this company made $223.8 million from operations in the last six months of 2001, according to its most recent filing with the SEC. But, during the same period, it repurchased $354.4 million of its own stock...which was trading at prices that today look, well, slightly expensive: 20+ times book value, 100+ times sales and 140+ times earnings.

Did management truly perceive that its shares were undervalued and the best place to spend $350 million? Or...were the executives engaged in a conspiracy to prevent shareholders from seeing an accurate accounting of its expenses - particularly executive compensation? The answer, at least to me, is obvious. But there's more.

If management thought its shares were attractive enough for the company's money...why are the same shares not attractive enough for management to even hold?

In the last six months, management has sold nearly 1 million shares of stock. And, despite 20 years of large- scale option grants, insiders own less than 1% of the total shares outstanding. Incredibly, the founder and CEO of the company in question currently don't own a single share of stock. Nor, according to SEC filings, do five of the company's Vice Presidents.

If stock options were truly meant to align the interests of management and shareholders, the management would at least hold some of the shares they're granted. But, these managers don't. Instead they cash out of every single share.

What's more, the company I've been describing to you is in the highly competitive analog semiconductor field. It's been the dominant company in this sector for a long time. Rapidly changing technology requires huge capital investment for research and investment. Yet, while the company spent $350 million on its own stock in the last six months of 2001, it only parted with $250 million on research and development - for all of 2001.

If you were looking for stocks to sell short in this market, you'd start by looking for large growth companies - heavily bought by index funds - that aren't growing anymore and are still hugely overvalued.

It's always hard for big companies to maintain large percentage growth gains to profits, simply because their markets become saturated and the numbers get so big. That's why companies over $10 billion typically trade at lower valuations than stocks below $1 billion. Not always though... In the U.S. public equity markets there are only eight companies over $10 billion in market capitalization whose shares still trade in the stratosphere of valuation. By any measure these stocks are incredibly expensive - more than 10 times sales, 50 times earnings and five times book value. The eight stocks are: Ebay, Taiwan Semiconductor (TSM), Serono SA, Paychex, Microsoft, Maxim Integrated Products and Immunex.

Out of these, four have net profit margins less than 20%: TSM, Immunex, Ebay and Maxim. And, out of all of these dominant growth companies only two have negative short-term growth expectations: Immunex and Maxim.

But only one - Maxim Integrated Products - is not yet already a part of my victim's portfolio of recommended short sales. In a happy coincidence, the company I've been describing to you today, the poster child for excessive options compensation, is Maxim Integrated Products.

The stock, in time, will become the prime example of the excesses of the 1990s in Silicon Valley. The executives got rich and today's shareholders are holding the bag. They just don't know it yet.

Good Investing,

Porter Stansberry for The Daily Reckoning

P.S. When the truth about options compensation and share buyback programs finally comes to light, the resulting carnage on Wall Street will be bigger than anything we've seen to date. Bigger than WorldCom, bigger than Tyco and bigger than Enron.

It will hit the most expensive stocks in the market - the firms thought to be robust growth companies. There will be total carnage. Maxim spent $503 million buying back its own stock in the last five years. If it still had that money today, it would have 50% more cash on hand than it does right now. And it might really need that money... sales over the last three quarters are down 41% and net profits are down 46%.

P.P.S. What's more, if you're looking for evidence of corporate arrogance, you'll find no better example than Maxim. CEO John Gifford's employment contract stipulates that he gets to name his own cash bonus each year. He also nominated Eric Karros - a professional baseball player - to the board of directors in 2000 at the peak of the bubble.

Naming your own bonus...nominating professional sports heroes to your board...these are the kind of things that show how much hubris this company's senior management has become imbued with. And it's the kind of thing that the newspapers will eat up once the story breaks.

But what's bad news for other investors can be great news for you. Sell Maxim short.

The Porter Stansberry Investment Advisory

Kodie

(07/16/2002; 12:03:46 MDT - Msg ID: 80660)

Business Headlines - Houston Chronicle

http://www.chron.com/content/chronicle/business/index.html
Todays Headline Stories: Houston Chronicle Business Section.
http://www.chron.com/content/chronicle/business/index.html

The Chronicle 100: Houston's top businesses

Greenspan: Economy on road to full recovery

Burns: Water crisis becomes greater threat than recession

House passes business fraud penalties bill
Following the Senate's lead, the House will pass a bill mandating new criminal penalties for company fraud as lawmakers act to shore up investor confidence, House Majority Whip Tom DeLay said today.

Dynegy taking charge for $125 million error

Legislators dissect WorldCom papers

Cheney made bundle off Halliburton stock

White vows he won't take Fifth on Enron

Senate passes business reform

Halliburton moving headquarters here
Halliburton, one of the largest oil-services companies in the world, is relocating is headquarters from Dallas to downtown Houston, a Halliburton spokeswoman confirmed. Halliburton has leased an entire floor at 5 Houston Center on the eastern side of downtown.

Continental blames loss on security, low fares
Continental Airlines reported a $139 million second-quarter net loss today, faulting new security measures coupled with a weak economy and low fares.
Continental mired in industrywide struggle

Contour seeks shelter of Chapter 11
Contour Energy Co. filed for Chapter 11 bankruptcy protection Monday, offering creditors a prepackaged plan to slash the debts of the struggling oil and gas exploration company.

Median home price hits record
The Houston housing market, viewed by many consumers as a relatively safe haven for their money, attracted a steady stream of buyers in June. Houston's used-home sales totaled 5,726 properties in June, only one less than sales in June 2001, the Houston Association of Realtors said.

Firms add to inventories with eye toward recovery
U.S. companies, keeping a watchful eye on the unfolding economic recovery, added to their stockpiles of unsold goods for the first time in 16 months. The Commerce Department reported Monday that stockpiles of goods on shelves and back lots edged up to a seasonally adjusted $1.1 trillion in May, a 0.2 percent increase from April's level.

Goldman Sachs director hired as Reliant CFO

Documents show WorldCom executive feared inquiry

Microsoft plans multimedia edition Windows XP

Industrial production up for sixth month in a row

Greenspan says recession's effects will wear off

Stocks recover from steep drop
President gives pep talk to investors

California, providers agree to compromise

Euro's value surpasses dollar

Zonagen, Schering-Plough part ways

Coke's decision on options pressures others

Mammoth Pfizer merger may foretell more unions

UPS, union hammer out deal

Pipeline segment to be expanded

Hackers plan to bypass government censorship

RobotGuy

(07/16/2002; 12:17:18 MDT - Msg ID: 80661)

GoldFool, - - - Could you answer a simple question for me?

Thank-you by the way, on your post regarding accounting foibles and stock options, very informative.
My question is this,... If a company issues options, is each option represented as an outstanding share one for one?

Cheers!!

RobotGuy.

USAGOLD / Centennial Precious Metals, Inc.

(07/16/2002; 12:31:04 MDT - Msg ID: 80662)

Don't be fooled by inflatable proxies!

http://www.usagold.com/ProductsPage.html

Gold Today!

Because you never know what tomorrow will bring.

In this global marketplace, a single event on the far side of the world can suddenly and adversely affect the performance and credibility value of the commercial positions within your investment portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

Centennial is here to help.
1-800-869-5115

admin

(07/16/2002; 12:32:28 MDT - Msg ID: 80663)

Special Offers For Immediate Delivery. . . . .

sector

(07/16/2002; 12:44:10 MDT - Msg ID: 80664)

Intel CEO's planned speech fuels talk of massive job cuts

http://www.msnbc.com/news/781036.asp?0si=-&cp1=1Firm may be forced to slash costs amid dismal PC market

By Don Clark
THE WALL STREET JOURNAL

July 16 � An address by Intel Corp.'s chief executive officer to employees Tuesday, combined with a dismal personal-computer market, is prompting speculation the chip maker may announce massive layoffs or other cost-cutting measures along with its second-quarter earnings.

CEO CRAIG BARRETT is scheduled to speak to employees at the Santa Clara, Calif., company after stock markets close, about the same time as the chip maker discusses its second-quarter results in a conference call with analysts.

Intel declined to comment on what Mr. Barrett will discuss, nor on the possibility of any work-force reduction.
Word of Mr. Barrett's planned speech spread rapidly Monday, prompted in part by a research note put out by Jonathan Joseph, an analyst at Salomon Smith Barney. He and other analysts were quick to say they had no direct knowledge of Intel's plans, but said they would not be surprised by a substantial belt-tightening.
++++++++++++++++++++++++++
PC Land is reeling...jobs are rocked...real estate is not exactly rolling.

@Robotguy -- Stock Options

As compensation one receives the option to purchase a specified number of shares at a "Strike price" that is set below current trading levels...a discounted stock purchase.

Rule 144 and Rule 4 require compliance as to excercize dates [The date that one becomes the official owner of the shares AND assumes the tax liability] and a host of other notification and internal corporate By-Law requirements.
If one is an officer there are many more constraints to the sale or purchase of one's own stock.
+++++++++++++++++++

All the attention being paid to options and accounting fraud only sets the stage for more screams when the stock bubble's adverse downside effects shift into high gear.

We have yet to begin the real estate bubble and the general credit bubble downsides. Liquidity traps await.

sector

(07/16/2002; 13:00:11 MDT - Msg ID: 80665)

Brazil Bonds, Stocks, Currency Drop Ahead of New Election Poll

http://quote.bloomberg.com/fgcgi.cgi?touch=1&btitle=Top%20News&T=sa_content.ht&s=APTM8wRXFQnJhemls07/15 17:21
By Charles Penty

Sao Paulo, July 15 (Bloomberg) -- Brazil's bonds, stocks and currency fell as investors expected a new opinion poll to show ruling coalition candidate Jose Serra losing ground to opposition candidates ahead of October's presidential elections.

Diminished hopes for an interest rate cut Wednesday and declines in stock markets around the world also weighed on asset prices. The country's 8 percent bond due 2014 dropped for the first day in six, sliding 0.61 cent on the dollar to 62.69 to yield 18.6 percent. The currency weakened 1.6 percent to 2.8555 reais to the dollar.

``It's still all about the polls,'' said Dominic Downes, who helps about $50 million in emerging market debt at Pictet Asset Management in London. He said Brazilian bonds are not likely to break out of a trading range of between 55 and 64 cents on the dollar. ``People will just take profits on any rally.''
++++++++++++++++++++++++
In Brazil, they sell the rallies.

This action resembles that which occurred in Argentina in the months prior to it's own currency melt-down.

Indeed, all of Latin America seems poised for a not-so-good period.

Perhaps they should obtain some gold...just in case.

TownCrier

(07/16/2002; 13:00:42 MDT - Msg ID: 80666)

ECB: Whatever doesn't kill it (and his won't) will only make it stronger going forward

http://biz.yahoo.com/rc/020716/economy_france_trichet_3.htmlPARIS, July 16 (Reuters) - A French magistrate dealt a major blow to Jean-Claude Trichet's prospects of becoming European Central Bank president with a shock decision on Tuesday to send him to court over his role in a 1990s banking scandal.

Philippe Courroye, the magistrate investigating the Credit Lyonnais bank scandal, decided Trichet, governor of the French Central Bank, should stand trial over his role as the civil servant responsible for keeping tabs on Lyonnais in the early 1990s, .......raising the spectre of a lengthy trial that clouds Trichet's chances of succeeding Dutchman Wim Duisenberg as ECB head in July 2003.

...Courroye wants a trial to determine whether those implicated are guilty of issuing fraudulent accounts in 1992...

...Trichet, under inquiry since May 2000, said two years ago he was surprised and believed he had done all he could to alert the French authorities to problems at Lyonnais, whose rescue ended up costing taxpayers tens of billions of euros.

--------(click URL for more)-------

Mr. Trichet brings good qualities to the table, and a timely trial that acquits him of wrongdoing would clear away any lingering clouds, putting his tenure as ECB chief stronger for it. If a lengthy trial or adverse verdict impedes Trichet's succession of Duisenberg, here's the bottome line (from the article):

"Despite the woes that have come back to haunt Trichet, there were sounds from European capitals on Tuesday that the 1998 deal would be respected and that the top ECB job was for the French."

Everyone intimate with the prevailing **and distinctly** French sentiment on international monetary functions will recognize and understand the significance of a Frenchmen at the helm, regardless of the specific name on the door.

Another step along the gold trail.

R.

Black Blade

(07/16/2002; 13:01:21 MDT - Msg ID: 80667)

Gold Fields files to sell 26 mln shrs in U.S. IPO

http://biz.yahoo.com/rf/020716/minerals_goldfields_ipo_2.html
Snippit:

WASHINGTON, July 16 (Reuters) - Gold Fields Ltd. (GFI), South Africa's second-largest gold producer, filed with the U.S. Securities and Exchange Commission to sell 26 million ordinary shares.

Black Blade: A 26 million share stock dilution? That's good enough for me � adios Gold Fields! Sold and forgotten.

goldfool

(07/16/2002; 13:25:49 MDT - Msg ID: 80668)

RobotGuy - Stock Options

The typical Fortune 500 company grants options equal to 1.25 percent of its outstanding shares each year. Software and Internet companies frequently grant options equal to anywhere from five to eight percent of outstanding shares each year. These agressive grants may produce potential problems as companies grow. TTBOMK these options don't show up as outstanding shares until the options are exercised (1:1) and (per the article) if a company uses free cash flow to buy back all of the shares granted via options, there's never any record of the extra costs.

RobotGuy

(07/16/2002; 13:27:12 MDT - Msg ID: 80669)

@Sector - - - Thank-you for the info,.. but.....

I am still curious to know if a company must list it's distributed options as outstanding shares.
IMO realistically speaking, even if an option hasn't been exercized it should represent an outstanding share one to one, should it not?

RobotGuy.

RobotGuy

(07/16/2002; 13:29:25 MDT - Msg ID: 80670)

Ooops! just a minute too late! - - - Thank-you GoldFool!!

RobotGuy

(07/16/2002; 13:36:33 MDT - Msg ID: 80671)

Another question,.....

What exactly is free cash flow? Why wouldn't it be accounted for as expenditure?

Sorry folks for all these rookie questions.... :)

Black Blade

(07/16/2002; 13:43:33 MDT - Msg ID: 80672)

Markets Take a Dump

There is only 40 minutes left for "intervention". The "Working Group" had better get on the ball here. I bet they turn this around (DOW down -200 points).

- Black Blade

Carl H

(07/16/2002; 14:02:04 MDT - Msg ID: 80673)

Greenspan and the market...

When was the last time Greenspan gave testamony and the market went down?

Got Gold?

Black Blade

(07/16/2002; 14:04:42 MDT - Msg ID: 80674)

Markets End Lower

The markets sank lower with the DOW off by about -165, Nasdaq off by -7, and the S&P off by about -17. The blame is being put on Intel. It is widely expected that Intel will report crappy numbers as corporations and consumers are not spending. They will also likely contribute a large number of nonessential "Bones" to the growing "Bone Pile". It appears that the "intervention" could only shave off a few ticks today. Ever notice that most of these drops in the equities markets occur late in the session after the gold pits have closed? Hmmm...

- Black Blade

Black Blade

(07/16/2002; 14:19:51 MDT - Msg ID: 80675)

S&P warns US of threat to energy supplies

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026553495581&p=1012571727207

Snippit:

The US oil and gas supply is being threatened by the Bush administration's failure to counter the effects of plunging domestic supplies and tensions in other producing nations, according to Standard & Poor's. Tina Vital, oil and gas equity analyst at the ratings agency, noted in an industry survey the depletion of US oil and gas wells, limited access to known low-cost reserves, trade restrictions, environmental regulations and political and economic unrest in the top producing regions of Latin America and the Middle East. "One has to ask, where are we going to get our oil from?" Ms Vital said in an interview. "It just seems like America has got its head in the sand."

Black Blade: Another threat to the US economy.

Rock

(07/16/2002; 14:35:08 MDT - Msg ID: 80676)

Intel lays off 4000

Just like you said Blackblade, more added to the bone pile. That pile is quite high.

Its all interesting to me.
Cheers,
Rock

goldfool

(07/16/2002; 14:43:30 MDT - Msg ID: 80677)

RobotGuy - Free Cash Flow

In simple terms it is the money generated by an enterprise's business activities, minus the money needed for investment etc. This is money that can be used for repaying loans or developing new operations, etc.

Rock

(07/16/2002; 14:44:25 MDT - Msg ID: 80678)

Does anyone have any idea when the realistate bubble will burst?

I know its going to blow but I don't know when but I'd say within the next two years.

Rock

sector

(07/16/2002; 15:16:09 MDT - Msg ID: 80679)

@RobotGuy Unexcercized Options are Not Included in "Outstanding Share" data

So the unexcercized options do not depress the "EPS" Data as they fairly shouldeom

misetich

(07/16/2002; 15:19:48 MDT - Msg ID: 80680)

Intel 2nd-Qtr Net Income Rises; to Cut 4,000 Workers (Update1)

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∣dle=ad_frame2_topfin&s=APTSDEBQYSW50ZWwgSnip:

Santa Clara, California, July 16 (Bloomberg) -- Intel Corp. said second-quarter net income rose to $446 million, or 7 cents a share. The world's biggest semiconductor maker said it will cut 4,000 jobs to cope with sluggish personal-computer demand.

.......................

Misetich

Contrast the above with Greenspan comments today, "
For example, an upturn in production of semiconductors and computers has been under way now for nearly a year,"

End of quote

Be kind when Dr. Print wakes up

Got gold?

misetich

(07/16/2002; 15:31:56 MDT - Msg ID: 80681)

House passes bill to fight corporate fraud

http://www.nandotimes.com/politics/story/467942p-3741510c.htmlSnip:

WASHINGTON (July 16, 2002 1:36 p.m. EDT) - Jumping on the Senate bandwagon, the House reversed itself Tuesday and speedily approved new criminal penalties for corporate fraud in an attempt to shore up investor confidence and calm uneasy markets.
.....................

Misetich

OK OK OK Great News

Here's a few leads for you Senators - round them up

INTEL Q2 PRO FORMA EARNS 9C; MISSES ESTIMATES BY 2C
EGAIN COMMS SEES Q4 PRO FORMA LOSS OF 12-14 CENTS A SHR
MOTOROLA Q2 PRO FORMA EARNS 2 CENTS VS LOSS 11 CENTS

SENATORS it would be a diservice to our good host USA GOLD to waste so much bandwith on listing all Corporate Fraud Criminals.....

Pro-Forma Earnings is designed to MISLEAD Investors - it is not GAAP - it is fraud, Senators!

No wonder foreigners are pulling their money out of the US markets

Got gold?

R Powell

(07/16/2002; 15:32:15 MDT - Msg ID: 80682)

Usagold

Michael stated yesterday (80614), "We rely on the common sense of our readers to filter out the noise and understand what underlies this kind of posting."

Yup, we can spot them Michael but thanks for the vote of confidence. They quickly become visible when they can't or won't respond to questions asked.
Disruption serves no one however, I'd welcome anyone with opposing views if they'd be willing to explain their point of view. Testing and questioning our opinions, facts and viewpoint is not treason and will never threaten but instead polish the truth (or whatever must avail us as that closest to the truth).
Thanks, USAGOLD, for keeping the lights on.
Rich

sector

(07/16/2002; 15:46:13 MDT - Msg ID: 80683)

India needs to fight its own battle: Advani

South Asia Friction Cured?.....Guess Again TIMES NEWS NETWORK [ TUESDAY, JULY 16, 2002 7:16:50 PM ]

NEW DELHI: Under severe attack from the Opposition for the government's failure to prevent cross-border terrorism, Deputy Prime Minister L K Advani on Tuesday said that India would meet the challenge of Pak-propelled terrorism without counting on US support.

Replying to a six-hour debate in the Lok Sabha on the latest terrorist strike in Jammu, Advani said that there was no question of waiting for intervention by others in dealing with terrorist groups.

"We will wage war against terrorism on the basis of our own strength," he said. He, however, stressed that diplomatic pressure on the world community would be maintained, to expose Pakistan's role behind the successive terrorist attacks on innocent people.

Dissatisfied with the government's response, the Opposition staged a walkout. The House rejected the Opposition-sponsored adjournment motion by a voice vote.

Advani said that by declaring Pakistan as a terrorist state, Washington could have played a major role in containing the terror campaign, being run from Pakistan. But, his reference to the probable US response, appeared to be more in the form of a suggestion. He asserted that "we will not allow terrorists to claim victory."

Initiating the debate, Congress deputy leader Shivraj Patil attacked the government for its "lack of policy, vision and determination to implement any plan of action" in combating terrorism.

"Simply blaming Pakistan was not going to solve the problem," he said. Patil also mocked at the government for rushing to leaders abroad to explain its position.
Intervening in the debate, defence minister George Fernandes said it was not possible to have a dialogue with Pakistan when it continued to aid and abet terrorist organisations.

"It is said that we should talk to Pakistan, but on what terms can we do so when Pakistan continues to fund, arm and send terrorists to India?"

misetich

(07/16/2002; 15:55:06 MDT - Msg ID: 80684)

Calpers Sues WorldCom Bond Underwriters

http://www.thestreet.com/markets/matthewgoldstein/10032051.htmlSnip:

The pension funds allege that the investment banks failed to perform adequate due diligence before underwriting the bonds and if they had, the firms would have detected some of the $4 billion accounting fraud that's alleged to have gone on at the long-distance carrier. The pension funds, led by Calpers, are seeking $318 million in damages to cover their losses on bonds that are now all but worthless.

The main defendants in the lawsuit are Citigroup (C:NYSE - news - commentary - research - analysis) and J.P Morgan Chase (JPM:NYSE - news - commentary - research - analysis), the lead underwriters on the bond issue. Also named are Bank of America (BAC:NYSE - news - commentary - research - analysis) and Deutsche Bank, which participated in the bond issue.

.................

In fact, Milberg Weiss Bershad Hynes & Learch, the law firm representing the pension funds in the WorldCom case, in April filed a class-action suit on behalf of Enron shareholders, claiming Wall Street investment banks were intimately aware of Enron's plan to hide billions of dollars of debt in off balance sheet partnerships.

Misetich

Lets stay on the JP MORGAN Trail shall we!

Got gold?

misetich

(07/16/2002; 16:27:42 MDT - Msg ID: 80685)

TEXT-GREENSPAN Q&A-Part XXV- Manipulation of GAAP rules

http://www.forbes.com/newswire/2002/07/16/rtr663763.htmlSnip:

SARBANES: I want to invite you to think with me for a moment about an issue that I think is out there in the future, but I want to try to anticipate it. And it's been raised in my mind by the question I put to you earlier about the euro now being worth more than the dollar, but it really addresses the European Union and what that possibly represents as a challenge.
.................
Our accountants have always -- it's been our standard, so to speak, that's the prevailing standard. That's in part, I think, because we've been overwhelmingly the largest economy, although the EU now is fast approaching equivalency with the United States in terms of the size of the economy. They also (inaudible) all the countries are going to adopt the same International Accounting Standards in the EU by 2005.

And I think this is going to be, looking down the road, a very serious challenge to the preeminence of the American accounting profession, which it has had up to this point. Which it seems to me is just another very strong argument why we need to put these changes into place, to get it back up to a standard that commands universal respect.

Because it's very clear now that the Europeans looking at it aren't necessarily -- they no longer concede that we have this established lead; that our system is necessarily better than theirs. They're now large enough economically, in a sense, to challenge it. And so I see a sort of a competition developing down the road which, it seems to me, we need to pay attention to.

Do you have a view on this issue?

GREENSPAN: No, I agree with the general comments you're making, Mr. Chairman. We thought at one point that the detailed GAAP rules actually produced clarity. What we regrettably found in too many cases is that various sets of GAAP rules were used as a hurdle for legal cover of various different types of actions.

And the reason I think that, as in your bill and other requirements, that a CEO or CFO certifies the overall accounts, what is in effect occurring is not merely a stipulation that, "We passed, say, 104 GAAP requirements and we met them all and therefore we have disclosed what needs to be disclosed"; what we have learned, regrettably, is that in order to get a really important understanding of what the underlying profitability and the nature of a corporation is you need far more than merely a listing of whether or not you met a certain set of GAAP requirements.

Now, what that says is that you're requiring, over and above having met individual GAAP requirements that the CFO and CEO are certifying, that irrespective of that, the system has basically -- a set of accounts that are being offered does indeed correctly portray as best one can what the nature of the company is.
Now, I'm not denying that having principles rather than specifics has certain advantages, and I think that the competition that we now see between the two different systems is very healthy. What will ultimately emerge out of it, in my judgment, is probably an international system which will combine the best of both systems and be applicable on a worldwide basis.

Misetich

Sarbane has seen the future- and is sounding the alarm bells- Too bad Sarbane didn't ask Greenspan on how the Euro will affect US $ as the world reserve currency.

Got gold?

slingshot

(07/16/2002; 16:32:44 MDT - Msg ID: 80686)

Seige Engine

Gold above $300.00 The thunder boomed and the lighting struck as the storm pitted its full girth against the fortress. It was as if nature herself had come in judgement of those who have done evil. She was relentless as the torrents of rain filled the battlements.
Inside his chambers, the Lord of the Castle, had stopped pacing. The sound that he listened to so intently had been recognized. A sound from his boyhood. The sound of stone against stone and the rushing of water over them, as he piled them up to block a stream to make a summers swimming hole. That rememberance of joy turned to fear for he knew now what nature had come to do.
The Goldbugs watched the storm pronounce it sentence but as the few who witnessed natures splendor a cheer began to rise within the encampment. The cheer became louder as a groupe of riders rode into camp. Men awakened, gathered around the riders and the news spread like wildfire.
It was the Vanguard of Sir Howe's Army. He was now not far away. Hours ago men were dishearten with the destruction of the trebuchet. Now they were filled with Hope.
The Goldbugs gathered at the edge of the forrest to look upon the storm about the castle. To their astonishment the face upon the wall began to distort and the flow of water from its mouth began to enlarge.
Suddenly as the Lord of the Castle was in deep thought,a pounding at his door and a excited voice proclaimed,
Lord, The Tower is Falling!

Gandalf the White

(07/16/2002; 16:39:12 MDT - Msg ID: 80687)

slingshot (07/16/02; 16:32:44MT - usagold.com msg#: 80686)

Seige Engine (Contiued)
===
WOWSERS Sir Slingshot -- The Hobbits can hardly wait for the next episode of the story !
(This is just like the movie SERIALS when the Wiz was "Gray".)
Thanks
<;-)

misetich

(07/16/2002; 16:40:36 MDT - Msg ID: 80688)

Greenspan -MONETARY POLICY REPORT TO THE CONGRESS

http://www.federalreserve.gov/boarddocs/hh/2002/july/FullReport.txtSnip:

Oil prices remained firm in the second
quarter around $26 per barrel amid turmoil in the Middle East, a
one-month suspension of oil exports by Iraq, disruption of supply from
Venezuela, and increasing global demand. The price of gold also has
reacted to heightened geopolitical tensions and moved up more than
13 percent over the first half of 2002.
....................
The Financial Account

The shift in the pattern of U.S. international financial flows
observed in the second half of 2001 continued into the first quarter
of this year. Influenced by increased economic uncertainty, questions
about corporate governance and accounting, and sagging share prices,
foreign demand for U.S. equities remained weak. Foreign net purchases
of U.S. bonds slowed; although purchases of corporate bonds continued
to be robust, demand for agency and Treasury bonds slackened.
Nonetheless, because U.S. net purchases of foreign securities also
fell off, the contribution of net inflows through private securities
transactions to financing the U.S. current account deficit remained at
a high level. Preliminary and incomplete data for the second quarter
of 2002 suggest a continuation of this pattern.

Slower economic activity, both in the United States and abroad, and
reduced merger activity caused direct investment inflows and outflows
to drop sharply late last year. Direct investment inflows, which were
strong through the first half of 2001, plummeted in the second half.
U.S. direct investment abroad stayed at a high level through the third
quarter but then fell sharply. Both inflows and outflows remained
weak in the first quarter of 2002. Available data point to a pickup
of capital inflows from official sources during the first half of
2002, as the recent weakening of the foreign exchange value of the
dollar prompted some official purchases.
.................................................

Misetich
"weakening of the foreign exchange value of the
dollar prompted some official purchases"

Is Japan buying on behalf of the Fed? Did the Fed buy US $,?

Got gold?

Gandalf the White

(07/16/2002; 16:48:26 MDT - Msg ID: 80689)

Thank you Sir Misetich !

misetich (07/16/02; 16:27:42MT - usagold.com msg#: 80685)Greenspan said;
"Now, what that says is that you're requiring, over and above having met individual GAAP requirements that the CFO and CEO are certifying, that irrespective of that, the system has basically -- a set of accounts that are being offered does indeed correctly portray as best one can what the nature of the company is."
===
One wonders where he learned his AMERICAN English ?
Could it be the Clinton School of definitions ?
That depends on the definition of "is" !
<;-(

SWEET 16

(07/16/2002; 17:22:29 MDT - Msg ID: 80690)

(No Subject)

This is my first message - Hi everyone. I am a young girl who is just beginning to learn about business, money and such things.

Because of my dad, I have some silver (kind of heavy)'some mining stocks and an old Firebird.

I will be reading what you all have to say and any suggestions for a young reader would be appreciated.

Sweet 16

slingshot

(07/16/2002; 17:24:37 MDT - Msg ID: 80691)

Gandalf The White Msg#80687

************************Your Welcome.

There is a terrible battle on the horizon.
Slingshot-------------<>

AllanC

(07/16/2002; 17:34:57 MDT - Msg ID: 80692)

Black Blade - Moral Hazard, Greenspan Put & PPT

http://www.warwick.ac.uk/fac/soc/CSGR/glob-fin/greenspan.pdfBB- I don't know if this paper has circulated here before, but here it is. Apparently some economists have theorized on possilble government intervention in the stock market, and it's effect on risk premium. This paper was written in Sep 2001, is very detailed and replete with formulas etc . It has received some attention in academia. It's quite lenghty and too detailed for me, but one of its premises IMO is the existence of a PPT. Do you read it that way?

PS I have included a PDF link to this paper (above) and a summary & link (below)

AllanC

http://ideas.uqam.ca/ideas/data/Articles/ecjeconjlv:112:y:2002:i:478:p:C171-C186.html

Moral Hazard and the US Stock Market: Analysing the "Greenspan Put"

Marcus Miller (University of Warwick and CEPR)
Paul Weller (University of Iowa)
Lei Zhang (University of Warwick)

When the risk premium in the US stock market fell substantially, Shiller (2000) attributed this to a bubble driven by psychological factors. An alternative explanation is that the observed risk premium may be reduced by one-sided intervention policy on the part of the Federal Reserve which leads investors into the erroneous belief that they are insured against downside risk. By allowing for partial credibility and state dependent risk aversion, we show that this "insurance" — referred to as the Greenspan put — is consistent with the observation that implied volatility rises as the market falls. Our bubble is not so much "irrational exuberance" as exaggerated faith in the stabilising power of Mr. Greenspan. Copyright Royal Economic Society 2002.

Gandalf the White

(07/16/2002; 17:36:00 MDT - Msg ID: 80693)

WELCOME Lady "Sweet 16"

http://www.usagold.com/cpmforum/tools/goarchive.htmlYOU ARE SOOOO LUCKY !
KEEP the FIREBIRD "square".
Give your Dad a big KISS,
and then start reading in the ARCHIVES.
(see the above LINK)
<;-)

misetich

(07/16/2002; 17:53:56 MDT - Msg ID: 80694)

J.P. Morgan Faces $91.3 Mln Loss on Loans to Enron Partnership

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Energy%20News&s1=blk&tp=ad_topright_energy&refer=topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_all&bt=ad_position1_energy&tag=energy∣dle=ad_frame2_energy&s=APTSMDhSCSi5QLiBNSnip:

New York, July 16 (Bloomberg) -- J.P. Morgan Chase & Co. said it faces $91.3 million of losses on loans to an Enron Corp. partnership that is under investigation by a U.S. congressman.

The biggest arranger of loans worldwide outlined its potential losses on the partnership for the first time in a second written response to questions from Representative Henry Waxman, a California Democrat. Waxman said last month J.P. Morgan's initial responses were inadequate.
...................

J.P. Morgan, which has already written off $450 million of trading losses and loans to Enron, is one of the banks under investigation by Congress for the role it played in Enron filing for bankruptcy protection last year.

Court filings by J.P. Morgan in its suit to recover $2.1 billion from Enron sparked congressional interest in five partnerships: Sequoia, Choctaw, Cherokee, Zephyrus and Enron Finance Partners.

...........

Misetich

Lets stay on the JP Morgan Trail shall we - who knows (wink, wink) where it may lead

Got gold?

AllanC

(07/16/2002; 18:06:42 MDT - Msg ID: 80695)

PPT- Correction

That should read: The premise is investors belief in the existence of a PPT...

misetich

(07/16/2002; 18:07:48 MDT - Msg ID: 80696)

`Once-in-a-Generation' Greenspan Spanks CEOs: Caroline Baum

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Caroline%20Baum&touch=1&s1=baum&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APTRidhTAYE9uY2UtSnip:

West Tisbury, Massachusetts, July 16 (Bloomberg) -- The Federal Reserve chairman who brought you the once-in-a-lifetime technological boom and the once-in-a-century seizing up of financial markets today attributed the slew of corporate accounting scandals and cases of malfeasance to a ``once-in-a- generation frenzy of speculation that is now over.''

Only Alan Greenspan could pull this off with a straight face.

It wasn't long ago that Greenspan cited five-year earnings estimates of Wall Street equity analysts as proof positive that companies could increase profits at a rate reflected in the inflated price/earnings ratios of the late 1990s.

...............
Three years ago almost to the day, ``Greenspan praised CEOs,'' Carson said, pointing to his July 19, 1999, testimony in which Greenspan bought into continuously rising earnings estimates as ``suggestive of changes in underlying economic forces.''

...........
In October 2000, as the air was coming out of the bubble, Greenspan was still using earnings estimates to justify the money being thrown at technology companies.

``Evidence began to accumulate in the early and mid-1990s that prospective rates of return on capital were rising,'' Greenspan said in a speech at the Cato Institute's 18th Annual Monetary Conference. ``This was implicit both in the marked rise in investments in high-tech equipment and in the updrift in estimates of the growth of long-term earnings by corporate management, which were reflected in the projections of securities analysts.''

.............
Greenspan's upbeat assessment of the economy didn't ring true with Henry Willmore, senior U.S. economist at Barclays Capital Group.

Stick to Knitting

``The decline in stock prices has reached a magnitude that makes its probable impact larger than the offsetting effects from interest rates and exchange rates,'' Willmore said. ``There are more risks now. Playing them down seems disingenuous.''

Misetich

Greenspan creditability is gone - soon he will be invited on SNL, Jay Leno,Letterman

Little does Greenspan realize that this 2nd wave of 2 1/2 trillions financial markets wipeout has caught the "sophisticated investor" the ones that knew the Fix was in but went with the trend-

As Wilmore aptly put it, ``He should focus on his job,'' Willmore said. ``Don't talk about the stock market. We can't know if productivity growth is sustainable. If he persists in talking about these things, he'll just end up looking stupid.''

A lot of people believed in Greenspan...the famous Greenspan put has now disappeared

Got gold?

R Powell

(07/16/2002; 18:17:40 MDT - Msg ID: 80697)

Metal parity

We may be approaching parity between the price of palladium and gold. The current difference is only two FRNs and four bits.
Pizz, close that swampland deal asap! I bought today's dip, Sept @502 but she may go lower. Still no word as to George W's signature on the silver purchase bill.
How will the general public react to suddenly finding that the government has been for years "managing" the markets through PPT. ESF, etc. In light of all the current fraud disclosures, will government intervention in the "free" markets of American enterprise be viewed as more scandal. Et tu, bruta?
Rich

misetich

(07/16/2002; 18:50:00 MDT - Msg ID: 80698)

Market Sentinel: Do Fund Managers Have The Right Focus?

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1026844260000&sn=1&banner=mainwireSnip:

By Gavin Friend

LONDON, July 16 (MktNews) - Should markets be encouraged when a
significantly sized and influential collection of fund managers refuses
to throw in the towel on equities or be concerned that their dogged
pursuit of a positive return from an asset class that is currently
severely under water gives way to suggestions they have their heads
stuck in the sand?

According to the latest Merrill Lynch fund manager's survey for
July, 279 managers presiding over some $632 bln believe that, on
balance, with interest low and expected to remain steady recent equity
market declines make valuations even more attractive. It may be
difficult to argue against this point, but as managers found out to
their cost last month that doesn't mean the market is set for a rebound.

While the number of respondents in the Merrill survey was reduced
by just three, the total value of funds under management dropped by
almost $100 bln over the same period, reflecting the sharp decline in
global equity markets.
................
The underlying message, therefore, is that fund managers who remain
optimistic that global equity markets have not capitulated, they are
acknowledging the growing attractiveness of bonds versus equities.
......................

Misetich

The Big Bad Bear is licking its chops at the thought- though $632 billions seems more an appetizer than a good meal (compared to 7 1/2 trillion thus far)

Physical Gold investors who have taken advantage of Gold giveaway prices in the last few years have done exceedingly well in the last little while and are poised to do EXTREMELY WELL in preserving their wealth - and then some -

Got gold?

Goldentrill

(07/16/2002; 18:52:13 MDT - Msg ID: 80699)

Reply and Welcome to Sweet 16

Hi Sweet 16:

Im an old girl! Wise 56! I learned investing from my dad too, started with dad about 25 years ago. I own lots of gold mining stocks, silver stocks made a bundle on oil stocks earlier this year, am in foreign government bond funds and bear funds that short the market debacle which is growing by the day and will make dough on the continuing drop of the US$ which you can be sure is just happening.

Dad was one of the original gold bugs. Made lots of money in golds bought mining stocks in '72 and sold at the top making huge profits which he plowed into treasuries at the Jimmy Carter inflation rate of 18%. I was a young gal at the time watching him do all this stuff..and asked him to learn the markets with him. Best thing I ever did. He made alot of money in his day and was a brilliant strategist. He taught me to read profusely, learn as much as I could, put together a scenario and have the courage to act on it. Im not as good a fundamental number cruncher as dad was but I seem to have a great knack for identifying trends. I have been quietly reading the guys here for about 3 years and they are fantastic dudes! Very noble too..(unlike my dad who was a sort of plain kind of guy who just loved making money).

Dad was a contrarian and a tough nosed value player. His books to me were and still are my favorite: get The Intelligent Investor by Ben Grahm, The Battle for Investment Survival by G. Loeb; get the MaGee on Technical Analysis and He loved Granville...OBV technicals. So I read Granville and still use it to this day for OBVs. To those books which are my favorites my last pillar has been James Dines two books The Invisible Crash which is ALL about what is happening now..about gold and currency markets..and the wonderful book Mass Psychology...a tremendous read and well worth the study. Buffet says the only book you need to learn investing is The Intelligent Investor. Its the grand daddy of them all. Incidentally, I read lots of Ayn Rand in my youth and thats not a bad idea either.

Keep your ears open here Sweet 16. These guys KNOW what they are talking about. This is THE place to be and to learn. I have learned more about world economics here than I would have learned in any MBA program in any ivy league school and I am way ahead in this market in my golds and oils. I sat out the internet bubble and stayed in cash and waited...and now its my turn like lots of others here.

There are very few of us gals here Sweet 16. Glad to see you come aboard. And thanks to all of you who have continued my education here as I just lost dad on Memorial Day. Incidentally, dad died at 86 a wealthy man - with 2 purple hearts. He was a Lieutentant in WW II, bomb disposal in London, rebuilt the town of Offenbach in Germany at the age of 25 was in the Normandy Campaign, lived through the depression as a young man and sw his father ruined in real estate. I would not own real estate right now if you paid me. That bubble ready to go to hell in a hand basket next...

Dad was a tremendous influence on my life like Im sure your dad is to you. I am heart broken to lose him but I feel so lucky and fortunate to come here and here all the guys talk. Kind of softens the blow.

Speak soon Sweet 16...buy more gold stocks and silver stocks on the dips.

Goldentrill

Black Blade

(07/16/2002; 19:02:36 MDT - Msg ID: 80700)

Re: AlanC - PPT

http://www.investavenue.com/article.html?ID=5065
The "Greenspan put" as mentioned in the article appears to be just risk management strategies that are used to justify lofty valuations. Essentially it is based on some derivative structures. Are these the same strategies employed by the President's Working Group on Financial Markets? I am not sure, but it may be among an arsenal of several strategies with various formulae used to intervene in the markets. However, I doubt that these strategies alone are used for intervention as they appear geared to mitigate investment strategies of highly overvalued stocks to perceived risk. The intervention of the PPT is to prevent a "blow off" in the market or to head off the herd as they all rush for the exits at the same time. The euphemism used is to ensure an "orderly market". Translation: We do not want a free market but a controlled market. The linked article gives a nice short concise definition though there are obviously more detailed articles about. The existence of the "President's Working Group on Financial Markets" is a fairly well known fact in most financial circles. The surprise is that the CNBC anchors and reporters did not know about this and that they actually spilled the beans before an international audience. Cheers!

- Black Blade

BTW, I got an email from CNBC thanking me for being a veiwer and that they value my "loyalty". Sorta a form letter. Hmmm...

SWEET 16

(07/16/2002; 19:17:12 MDT - Msg ID: 80701)

Gandalf

Thanks for writing.

I am painting the Firebird "Hot Pink" next week. Dad will pay for it on one condition - that I begin studying the markets with him. He said that he will call it tuition. That is why I am here - he thinks a lot of you guys. I asked him how long I had to study with him - he said forever!

Sweet 16

R Powell

(07/16/2002; 19:20:18 MDT - Msg ID: 80702)

Goldentrill

Excellent thoughts. Thanks for the book list. I think I'll try Dines' "The Invisible Crash".
People who love making money are indeed common. Those that can do so consistently and pass along the enthusiasm for learning required to do so, are not plain, they are most uncommon. Sounds to me as if your dad was an exceptional man who prefered to appear plain. Another worthy and uncommon virtue.
Rich

Black Blade

(07/16/2002; 19:23:55 MDT - Msg ID: 80703)

FOREIGN INVESTORS MAY BE SAYING ADIOS TO U.S. MARTS

http://www.nypost.com/business/52571.htm

Fed Chairman Alan Greenspan is worried that foreign investors, who hold lots of U.S. Treasury bonds, may sell.

Snippit:

NOW for the really bad news: If the stock market continues to misbehave, it could lead to big difficulties for the already-fragile U.S. economy. You already know the obvious way this happens. If the stock market goes down, people can't spend as much money on the nice things in life. So all businesses, except maybe the bread-and-butter industries, suffer. But there could be a more worrisome, back-door effect on the economy. It goes like this:

Foreigners aren't heavily invested in U.S. stocks, but they have substantial holdings in U.S. Treasury bonds. In fact, America couldn't have run those massive deficits for so many years if foreigners hadn't been willing to loan us money by buying our government's bonds. Fear of the stock market's performance and potential weakness in our economy could cause foreigners to repatriate their money. If that happens, then interest rates in the U.S. will rise even though the Federal Reserve wants them to stay down.

The value of the U.S. dollar has been falling rapidly and yesterday went below 1-for-1 with the Euro. Years ago some of us predicted that the then-poorly regarded Euro could replace the dollar as the world's "safe" currency. Non-U.S. investors by their actions are showing that this might be happening. And unless the American financial markets settle down, this capital flight to Europe and elsewhere might become irreversible.

Black Blade: The exodus may have begun, however, the foreign investors only have to stop sending new funds to US shores for it to unravel. Rates are staying low, making other investments more desirable. The overvalued US dollar is falling and that should be good for US exporters. However, the Japanese depend on exports and they are doing what they can to keep the US dollar strong relative to the Yen. Everyone is fighting over the remaining few scraps of a shrinking global economic pie. That amazingly has led to a "currency war" for the weakest currency. In short � "Check!" and "Mate!".

SWEET 16

(07/16/2002; 19:25:17 MDT - Msg ID: 80704)

Goldentrill

A great letter. You make me feel so welcome here. You are my Dad's age. He says parts of him are younger and parts are older.

Dad likes the people here (thinks a guy named Blackblade is very good). I like the people here too!

Thanks for writing Goldentrill - you are a neat lady. Time for me to go cruising with my friends.

Sweet 16

goldfool

(07/16/2002; 19:42:13 MDT - Msg ID: 80706)

Anatomy of a 400 point turnaround - PPT at work?

http://home.flash.net/~rhmjr/c0715DowDetail.gifAnybody have a clear description of how they function (e.g. repos, etc)?

Black Blade

(07/16/2002; 19:44:14 MDT - Msg ID: 80707)

The Bears Still Look Hungry

http://www.thestreet.com/markets/detox/10031794.html
Capitulation, my foot.

Snippit:

Monday's trading may have created one of the most gut-wrenching days in stock market history, but it hasn't brought equity values to a bottom. A broad market index like the S&P 500 must slide another 20% or more from here before it is properly valued. Chillingly, even after this year's 30% drubbing, tech stocks must lose half their current value to reach sensible levels. In other words, the S&P and the Nasdaq will both need to drop to around 700 before stocks hit a floor. The one piece of good news is that we're in the last leg of the postbubble correction. But as all action-movie fans know, the last sequence is always the bloodiest.

Black Blade: Yes and no. Based on historical valuations the S&P 500 should be at about 422. However, that was before several recent earnings reports. Those earnings could decline further � and I am talking about actual real earnings � not the "pro forma" or "operating earnings" kind. The Nasdaq is more difficult to value as the valuation of this index is actually negative. The DOW should fall below 7000. If one were to believe David Tice of the Prudent Bear Fund, the DOW should fall further to about 3,000. Regardless, the markets appear to have a long way to fall. This time we are not in a brief tumble in the markets but are in what appears to be a "secular" bear market as opposed to a "cyclical" bear market. According to Tice this bear market could be out of hibernation for as long as 15 to 20 years.

R Powell

(07/16/2002; 19:51:55 MDT - Msg ID: 80708)

Sweet 16

"I asked him how long I had to study with him - he said forever."

Does this seem too long? Maybe you could broker a deal with your dad. Perhaps he'll consider the obligation paid when you know as much as he does.
I study everyday and it is work but I love doing it. There aren't many things I'd rather do. Maybe there's something wrong with me?
May I add one easy to read and understand book to Goldentrill's excellent list? "How the Futures Markets Work" by Bernstein. I often recommend this one as a good place to begin as it doesn't require any financial knowledge to understand.
When I was your age, I was taught not to mark or write in books, especially schoolbooks. This was a bad habit that a good teacher ended by scribbling all over a brand new history book of mine. "Underline- in ink", he bellowed at me, "and write down your thoughts as they occur in the margins!" I did and still do with a small ruler for underlining. Then you can reread the book whenever you want in just a few minutes.
Rich

Black Blade

(07/16/2002; 19:54:00 MDT - Msg ID: 80709)

Could the United States suffer as much as Japan has?

http://money.cnn.com/2002/07/15/news/defation/index.htm
Snippit:

NEW YORK (CNN/Money) - For years, the Japan question has come up only to be quickly swatted down. There's no way we'd let our economy languish for 12 years like the Japanese have, said the optimists. This is America, and when we've got a problem we fix it. But a June paper from the Federal Reserve titled, "Preventing Deflation: Lessons from Japan's Experience in the 1990's," has got the U.S.-is-Japan worries revving again. "Everyone's talking about the Fed's deflation paper," said Credit Suisse First Boston bond market strategist Mike Cloherty. "You're starting to see a lot of people talk about Japan and comparing it to here." The comparison isn't hard to draw. Japan had a bubble, the United States had a bubble. Japan's banks are unwilling to lend to businesses despite low interest rates, and U.S. banks are increasingly unwilling to lend despite low interest rates. And now the Fed paper raises a worry that the same deflationary forces that have helped prevent a Japanese recovery could happen in the United States too.

Black Blade: As I said in the previous post about "secular" bear market lasting several years. That could conceivably be in our future. In a word � "Grim".

Pizz

(07/16/2002; 20:00:46 MDT - Msg ID: 80710)

R Powell

Rich, yea, swampland is supposed to turn to fiat on Thursday.

But you're right, good old Ag appears to be ready to jump. With a little luck I'm still early (usually the case), but if not, I think the stocks will blow to new highs and set another trading range - Ag 5.25 - 5.75 with somne nice percentage advances in the silver stocks 50 - 100% (for the cheap ones.

Could be wrong, but I don't think so.

-----------------------------------

I was not too surprised to hear the rumor of a major US bank having liquidity problems. If there's one, there's more. With the markets dropping like a rock, and no flight to quality in treasuries, the cash has to be going abroad.
As capital picks up steam and heads to whereever, it add to the drain on bank capital with all the nonperforming loans, and slowing economy. We may get our next leg up in PM's from the banking liquidity rather than derivitives.

After Argentina, Japan's problems, Brazil, etc. it will not take more than just a little tiny bit of fear for our banks and the gold and silver rush will be on.

I think it's going to take a 65 year old main line journalist with a strong PM position for retirement to break the news to the public that the Mint will have to start buying silver on the open market. It will probably be his (or her) last job for a while if you ge tmy drift.

We can hope.

Pizz

Golden Bear

(07/16/2002; 20:05:23 MDT - Msg ID: 80711)

R Powell (msg#: 80702)

"...I think I'll try Dines' "The Invisible Crash"...."Hey Rich,

Looks like you enjoyed the quotes from Gold Wars as much as I am at the moment. Fantastic insight into the history of gold...

It's next on my list also...

Cheers.

Black Blade

(07/16/2002; 20:23:09 MDT - Msg ID: 80712)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Bubble Troubles

Snippit:

The Fed has backed itself into a corner with no way out. Either option may prove unacceptable to the financial markets. In fact one can argue that the easy days of inflating your way out of a financial crisis are over. You can also argue over the efficacy of Fed policy. Lowering interest rates and flooding the financial system with easy money has failed to resurrect the financial markets and in addition has created new problems with the dollar and another housing bubble. How do you deflate one bubble (U.S. dollar) without harming the other bubble in the housing market?

The Fed now confronts many problems of its own making. Unlike the past, when a crisis presented itself, the Fed would lower interest rates, flood the markets with money and the stock market would respond. The money went into the financial markets driving stock prices higher. It happened in 1995, 1997, 1998, and in 1999. This time around monetary stimulus has failed to revive the stock market bubble, but instead has found a new outlet in the housing market. So we now have a housing bubble, a dollar bubble, a consumer bubble and a bond market bubble to take its place. The financial markets have failed to cooperate. So instead of one bubble (stock market) to contend with, the Fed now has multiple bubbles which have yet to deflate.

Black Blade: Quite a juggling act isn't it. It appears that there are cracks forming in the housing bubble now. Several places around the US report that home sales have stalled. This afternoon I posted a link to an article describing the deflating housing bubble in Salt Lake City. Here in Wyoming I see the same thing as most homes on the market when I came here last year are still up for sale now. I should check on the prices to see if they have come down. If housing prices decline we could see many people end up owing more than the house is worth. If they sell at lower prices they could still be on the hook for a mortgage. Will they just walk away or pay more for a house of lesser value? Quite a dilemma. Hmmm�

Black Blade

(07/16/2002; 20:40:03 MDT - Msg ID: 80713)

US banks see no turn in the credit cycle

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026553488312&p=1012571727183

Snippit:

FleetBoston Financial, the seventh-biggest US bank, on Monday reported a $386m second-quarter loss, reflecting setbacks in Argentina, telecommunications lending and investment banking. Fleet's difficulties provided a gloomy start to the reporting season for US commercial banks. Its own shares fell by more than 7 per cent by midday in New York. Before taxes, Fleet took charges of $925m in Argentina, bringing total charges to $2.3bn since the start of the Argentine financial crisis. The closing of Robertson Stephens - announced last week - cost the bank $388m before tax. Adding to Fleet's difficulties were continuing strains in its corporate loan book, with the telecoms sector a particular problem. Not including Argentina, it reported a $584m increase in loan chargeoffs. Fleet's bright spot was in personal financial services, which earned $265m, up from $251m in the first quarter.

Black Blade: Should be interesting to see how the other banks fare. Wait until the the derivatives books blow up.

Blackjack

(07/16/2002; 20:47:54 MDT - Msg ID: 80714)

Crops fry in Canada

Gold will make a strong move if inflation picks up. So far the
CRB index is going up. Farmers in Canada are selling cattle
right now, no hay, crops are getting scorched. We may see a rise
in food prices. Natural Gas however is strangely weak despite
hot temps. Nevertheless, with a falling US dollar, we should see
signs of inflation, then gold will move up with conviction. Right
now inflation is seen under control, without international crisis,
gold is treading water. Canada just raised interest rates again, Can$ Dollar moved up. Smart money must know that inflation is
in the pipeline, they should be accumulating. What are your thoughts about inflation? Deflation? Inflation? Whats next?

Black Blade

(07/16/2002; 20:48:46 MDT - Msg ID: 80715)

"Scandal Of The Day" - Raytheon Faces SEC Charge in First Disclosure Case, People Say

Black Blade

(07/16/2002; 21:04:57 MDT - Msg ID: 80716)

Internal communication at Salomon could cement case against Grubman for NY Attorney General Spitzer.

http://money.cnn.com/2002/07/16/news/companies/spitzer_grubman/index.htm
Snippit:

NEW YORK (CNN/Money) - Senior officials working with New York Attorney General Eliot Spitzer have gathered e-mails from Salomon Smith Barney executives that criticize one of its top researchers and could help the state's investigation into possible conflicts of interest among researchers and the investment banking units within brokerage houses, according to a newspaper report.

Black Blade: Another charlatan � Jack Grubman is about to be "allowed" to "pursue other interests". It also looks like his employer Salomon Smith Barney will be in the hot seat as well. This time emails got them just like Merrill Lynch charlatan Henry Blodget. Grubman testified before Congress too. I see perjury charges in his future and investor lawsuits against Salomon Smith Barney. The "entertainment" is about to begin.

Black Blade

(07/16/2002; 21:16:57 MDT - Msg ID: 80717)

System Failure

http://www.fortune.com/indexw.jhtml?channel=artcol.jhtml&doc_id=208314
Snippit:

Bankrupt Kmart is under SEC investigation for allegedly cooking the books. Adelphia's founding family is forced to resign in disgrace after it's revealed that members used the company as their own personal piggy bank, dipping into corporate funds to subsidize the Buffalo Sabres hockey team, among other things. Former telecom behemoths WorldCom, Qwest, and Global Crossing are all being investigated. Edison Schools gets spanked by the SEC for booking revenues that the company never actually saw. Dynegy CEO Chuck Watson denies that his company used special-purpose entities to disguise debt a la Enron--until the Wall Street Journal reports that, lo and behold, the company does have one, called Project Alpha. (Watson has just stepped down.) Most recently, of course, Tyco CEO Dennis Kozlowski resigns after informing his board that he is under investigation for evading sales tax on expensive artwork he purchased. Kozlowski has since been indicted--but even before the most recent disclosures, Tyco's stock was pummeled by the widespread suspicion that it used accounting tricks to boost revenues (a claim the company has consistently denied).

Phony earnings, inflated revenues, conflicted Wall Street analysts, directors asleep at the switch--this isn't just a few bad apples we're talking about here. This, my friends, is a systemic breakdown. Nearly every known check on corporate behavior--moral, regulatory, you name it--fell by the wayside, replaced by the stupendous greed that marked the end of the bubble. And that has created a crisis of investor confidence the likes of which hasn't been seen since--well, since the Great Depression.

Black Blade: The litany goes on. Daily scandals and corporate executives being led off in handcuffs don't lend to investor confidence. We have not seen the last of these scandals either. Where there is one cockroach (or several) there are certain to be many more.

goldquest

(07/16/2002; 21:59:39 MDT - Msg ID: 80718)

Just watched

a segment of Kudlow and Cramer, (only because there weren't any good cartoons or Eastwood movies on.) They were interviewing Wayne Angel, Kudlow suggested that there was a rumor going around Washington that Greenspan would be taking over Treasury and Robert Rubin would be brought in to run the Fed! Angel didn't think it would happen. I do believe that O'Neill will probably hit the bricks, but I doubt that Greenie will replace him. I hope that we have seen the last of Rubin, in the U S Govt.

Blackjack

(07/16/2002; 22:09:03 MDT - Msg ID: 80719)

Bank of China insolvent? 30%-50% loans non-performing

http://www.feer.com/articles/2002/0207_18/p023fcol.htmlHere's what Hong Kong's investment bankers are not telling us: The Bank of China is probably insolvent, the Chinese banking system could collapse and any financial turmoil in the People's Republic could result in the failure of Bank of China (Hong Kong), whose shares are about to be listed in Hong Kong in an initial public offering (IPO).

These days, the first two statements above have reached the status of gospel. If the Guinness Book of World Records had a category for the planet's worst banking system, China probably would obtain another entry. The People's Bank of China, the country's central bank, says that about 30% of the loans of the four biggest banks are nonperforming, but that assessment is based on accounting with Chinese characteristics. Foreign observers put the figure closer to 50%, and some even say higher.

In terms that bankers can understand, the central government will have to find at least $500 billion to recapitalize the Bank of China and the other "Big Four" banks. Tens of billions of dollars, perhaps more, will be needed to rehabilitate the other institutions that inhabit the swamp known as China's banking system. In Beijing's abnormal universe, insolvent banks can continue operating because they are liquid: Individuals have little choice but to keep their life savings in them. China's savers, perhaps the world's thriftiest, are the only reason that the banking system has not already crumpled.

Black Blade

(07/16/2002; 23:21:55 MDT - Msg ID: 80720)

Asia Awash In Red

http://quote.yahoo.com/m2?u
Asia takes another downturn into negative territory. Looks like another "entertaining" day shaping up in the world's equities markets. AG will continue to mesmerize the primates in Washington tomorrow (Humphrey-Hawkins). I wonder if CNBC will elaborate on their PPT discussion from yesterday.

- Black Blade

Elwood

(07/16/2002; 23:27:02 MDT - Msg ID: 80721)

goldfool (07/16/02; 19:42:13MT - usagold.com msg#: 80706)

"Anybody have a clear description of how they function (e.g. repos, etc)?"

Hello, Goldfool. They use program trading, or, more precisely, they create conditions in which the computer programs will start buying.

It's a game of arbitrage where market participants trade the difference in the stock index futures vs the value of the underlying stocks.

When the market is down big as we saw the other day all that's needed is someone to step in and start buying the stock index futures. When the index moves above "fair value" then the computer programs at all the banks and investment houses kick in and start buying the underlying stocks. The chart you present is interesting. Even more interesting, however, is your chart overlaid with a chart of the fair value of the index.

The mechanics are pretty simple to learn. It's the "why" about which you would do well to know better.

Regards,
Elwood

Black Blade

(07/16/2002; 23:28:27 MDT - Msg ID: 80722)

Looks Ugly For Wall Street

http://www.mrci.com/qpnight.asp
The market index futures are down sharply, the USD is under pressure again, petroleum is mixed, and Gold is slightly higher. It looks like tomorrow could be "fun".

- Black Blade

Chris Powell

(07/16/2002; 23:42:03 MDT - Msg ID: 80723)

Lots of talk and even print now about market manipulation

Thanks to Monday's miracle stock market rally,
there's lots of talk and even print about
surreptitious manipulation of the markets:

http://groups.yahoo.com/group/gata/message/1179

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

Chris Powell

(07/16/2002; 23:42:54 MDT - Msg ID: 80724)

Lots of talk and even print now about market manipulation

http://groups.yahoo.com/group/gata/message/1179Thanks to Monday's miracle stock market rally,
there's lots of talk and even print about
surreptitious manipulation of the markets:

http://groups.yahoo.com/group/gata/message/1179

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

Black Blade

(07/17/2002; 01:12:08 MDT - Msg ID: 80725)

European and Asian Markets Dive

http://quote.yahoo.com/m2?u
The Euro markets are awash in red. Looks ugly in Europe this morning. Blame is put on Intel. Intel announced that they "see no sign of recovery". That is quite a different take than the Trolls and Pied Pipers trotted out daily on CNBC, CNNfn, and Bloomberg. I see that on Euro financial television their Trolls do not act like used car salesmen as they do in the US.

- Black Blade

Black Blade

(07/17/2002; 01:21:52 MDT - Msg ID: 80726)

US Dollar Poised For Sub 104 - Gold Higher

http://www.mrci.com/qpnight.asp
Gols and silver are rebounding in overnight trading while the USD looks to sink below 104 again. Oil and NG are slightly higher. Market Index Futures are all shrply negative though off of the lows. There has been a reference to US market intervention in the stock markets the day before yesterday on the Euro finance television tonight. However, there has been no follow up story. It was a short and matter of fact statement. This is certainly not the kind of reporting we see in the US. Meanwhile stock markets in Europe are falling off sharply.

- Black Blade

Gandalf the White

(07/17/2002; 01:32:34 MDT - Msg ID: 80727)

YEP, BB !! There goes the US$

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=iDid someone yell "DIVE DIVE DIVE" ?
Any submarineres here ?
<;-(

TownCrier

(07/17/2002; 01:52:03 MDT - Msg ID: 80728)

Words count... HEADLINE: J.P. Morgan Denies Liquidity Rumors

http://biz.yahoo.com/rb/020716/financial_jpmorgan_4.htmlNEW YORK (Reuters) - J.P. Morgan Chase & Co. Inc. on Tuesday denied rumors in European markets that it was having liquidity problems.

"The rumors are untrue and irresponsible," a spokesman for J.P. Morgan, the No. 2 U.S. bank holding company, said in New York.

...The bank was a leading lender to bankrupt energy trader Enron Corp. and also to telecommunications company WorldCom Group, which recently disclosed what could be one of the largest accounting frauds ever.

...year-over-year profits have dropped each quarter since the December 2000 merger of Chase Manhattan and J.P. Morgan...

------(click URL for full article)------

With the Federal Reserve able to monetize even Morgan's door mats in a lender of last resort capacity, it is undeniably a fair statement for the bank's spokesman to make about potential liquity problems -- "The rumors are untrue and irresponsible."

(That claim assumes, of course, that the liquidity issues being discussed are monetary, not commodity, in nature).

Now that we're on the same page, let me say this: Issues of "liquidity" (monetary) in this day and age are a mere distraction for feeble minds and the media, and Morgan is therefore probably all the more pleased for this child's play challenge.

Now, questions about SOLVENCY on the other hand...

Been playing the game for years. A nuance here, a nuance there... stick around, kiddo, and I'll "learn ya" a thing or two.
:-)

R.

Black Blade

(07/17/2002; 03:26:39 MDT - Msg ID: 80729)

Reversal

http://www.mrci.com/qpnight.asp
No news, however, everything flipped. USD stronger, Gold flat, Oil lower, market index futures rallying, and Euro markets going positive. "Interesting"

- Black Blade

Boilermaker

(07/17/2002; 04:34:48 MDT - Msg ID: 80730)

Massive Intervention Today?

Just a guess but things are shaping up for a huge rally (strictly spontaneous of course) in the SM and the $US along with a trashing of gold.

A 500 point DJI rally would be a nice ovation for Greenspan's performance on the Hill.

TownCrier

(07/17/2002; 04:40:35 MDT - Msg ID: 80731)

Latest 'CB Insider' update

http://www.usagold.com/centralbank/current.htmlIn keeping with their reputation, Benedict Mander and Co. from Central Banking Publications have delivered another rousing, revealing, and at times ruthlessly irreverent review of the latest news of our friends behind the big desks.

The BIS and its general manager, Andrew Crockett, figure prominantly in this installment as Mr. Crockett casts an eye toward the top job at Threadneedle, and meanwhile the Bank prepares to pop the corks and cut the ribbons over the opening of its new facility -- being only its second representative office outside of Basel.

You may recall from previous discussion at the forum that the first ( a Pacific Office) was opened in Hong Kong a couple years ago, and that this newest representative office, for the Americas, had been slated a year ago to be (already) opened -- and NOT in Washington or New York, as might be generally expected, but in Mexico City.

Read that as, "Dollar favoritism is NOT built into the woodwork"... or stonework as the case may be.

Click the URL to read about all this and more.

R.

USAGOLD / Centennial Precious Metals, Inc.

(07/17/2002; 04:46:29 MDT - Msg ID: 80732)

"How does your garden grow?"

http://www.usagold.com/ProductsPage.html

Harvest Time
Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

1-800-869-5115
Centennial has three decades of experience in the field

NEMO me impune lacessit

(07/17/2002; 05:11:50 MDT - Msg ID: 80733)

Testing subject

Testing linkTesting message

mas

(07/17/2002; 06:30:06 MDT - Msg ID: 80734)

Euro Gold

Lease rates USD at bottom? Money for nothing and ....
Euro gold price now below USD gold price, who's calculating what? Did we miss something here, or is this the greatest traps of all times? The Europeans want higher gold so what they do is drop the price below dollar price and now for the sting? The Euro gold price gets moved up and the Dollar price has to move along otherwise paper game folds? Now the question is who controls the Euro gold price?
Presently we are at 1 to 1, USD = Euro. Best time for real action isn't it?
Sit back and watch the game unfold gents.
Been around, just no time to submit and write.
BB, Belgian can you help? My head is spinning with these thoughts.
mas

Cometose

(07/17/2002; 07:53:34 MDT - Msg ID: 80735)

Greenspan's ommission in testimony

The patient is in the emergency room ....the patient is unconcious...We have the patient on life support...We are trying everything in our power to revive the patient but without response...

An inspection of the emergency room might reveal that the patient has been moved.....quietly .... by ambulance...
and transferred to another location where the blood of the patient is being drained and replaced with formaldehyde.

God: "Alan , why did you overjuice the economy , You knew what the effects on the people would be...You knew that you were promoting greed , and that that would lead to a host of other ills throughout the society inside the hearts of people....and inside institutions....everywhere..which would also lead to Catastrophic results economically and politically...turning people from freedom to slavery and from light unto darkness....and from love to fear and hate...

Alan: It was part of a plan to better society to take the people up on their hopes and then give them a correction in attitude when we brought them back down through a process of social engineering....

GOD: So you wanted to play .....GOD.....

Cartoon : Picture Alan sitting in a sandbox
Caption reads ; Alan's life in and for ETERNITY

Cometose

(07/17/2002; 08:13:26 MDT - Msg ID: 80736)

r-e-ally

does this mean that there's more bad news just around the corner that requires the market to be bouyed up again...we must be getting pretty close to a critical area in investor perception....and awareness relative to our postion on the indexes

CoBra(too)

(07/17/2002; 09:12:46 MDT - Msg ID: 80737)

JPM Profit Doubles on higher Mortgage and Credit Card Revenue

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APTVlxRPMSi5QLiBN... And Citi's Earnngs increased 15% as consumer banking surges.

Seems to me ever more consumption is financed on ever more credit.
According to the Mogambo Guru- and here's a quote:
... -Well, tax collection averages out to about 24%
of income. So income ain't no stinking nine trillion.
After tax, it's only $6.8 trillion. Bummer. Now, using
these much different numbers, that $1.7 trillion in
consumer installment debt is now a full 25% of income.
- unquote

Great source of revenue for the major investment and bullion banks. Especially after taking into account the direct hits of Argentina et al, closely followed by the LTCM's, and now the Enron's, Tyco's World Com's and what ever else is happening below the water line.

Wonder if the loss provisions are adequately "updated" from these great earnings. Though, after all this qu. showed is the first eps hike in 6-8 quarters - It's all a matter of perception - or, is it - after rumours of liquidity problems were indignantly denied. Hmmm... cb2

Carl H

(07/17/2002; 09:23:59 MDT - Msg ID: 80738)

Why No Gold Advertising?

Does it strike anyone that now would be a great time to run a full page ad in someplace like the WSJ. Something like this in the biggest print they can manage:

PHONEY PROFITS.
STOCKS CRASHING.
BONDS DEAFULTING.
DOLLAR PLUNGING.
GOT GOLD?

It seems like between marketers of PM's, mining companies,
GATA, WGC and upset gold/silver bugs someone should be able to find the gumption and money to do this. I know the WGC said they are planning to do something in 6 months, but it really seems like now is the time to act.

Cavan Man

(07/17/2002; 09:57:17 MDT - Msg ID: 80739)

Hello CB (too)

Was it the weather here or perhaps the reading of today's DR that sent a chill down my spine? I am ever looking at the big pricture and seeing the entire forest and not the trees. Hope to see you soon....CM

Pizz

(07/17/2002; 10:06:58 MDT - Msg ID: 80740)

Tyco

Tyco has been down over 20% today. My news feed hasn't said a word. Must be some really good news being surpressed other than yesterdays downgrade. The selloff didn't really start till after the first hour this morning.

Hourly charts for SM not looking too good, but PM's are the inverse. PPT or whomever really are going to have their work cut out for them.

Pizz

The Hoople

(07/17/2002; 10:50:53 MDT - Msg ID: 80741)

Ron Paul, a great American

What a thrill to watch Ron Paul grill AG about gold suppression and fiat inflation! He even threw AG's own words back at him about fiat theft without a gold standard. Imagine if the rest of congress were as aware as Ron and not just bobblehead lackeys for the elitists. Someday I swear the people will take back control of our government. Honest money will return. It must or we will perish.

sector

(07/17/2002; 10:51:15 MDT - Msg ID: 80742)

@pizz Tyco is live bait for the bear market as...

...the behemouth mutual funds liquidate into each rally as a result......of redemptions.

The talk this morning at my gym is "Where do I put what's left of my money?"

Consensus answer from the free-weight room guys...CDs...for now.

Speaking about gold now to them is just too soon...better to ease them into the idea after they have gotton used to not losing any more dollarprinciple.

That seems to be the huge hurdle with joe six pack. Accepting the notion that the big gains of the late nineties are over and breaking free of CNBC's propaganda.

As for TYCO...short the filthy pigs.

Rock

(07/17/2002; 12:10:43 MDT - Msg ID: 80743)

Goldentrill's Message 80699

Greetings Goldentrill, my name is Ken aka Rock, I really enjoyed the story about your life and your fathers life. You sound very interesting and you have some of that same good DNA in you as dear ol dad had. Its perpective's like yours as wells as others I have mentioned from time to time that keep me coming back here, where the unlearned become the learned. USA Gold is always one of my daily pit stops and although I don't always respond I do appreciate what these fine minds are trying to do to better society. Bless you sis.

Cheers,

Rock

Black Blade

(07/17/2002; 12:39:36 MDT - Msg ID: 80744)

Japanese housewife guide to investment

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?eo20020714a1.htm

Snippit:

Earlier this year Japanese and U.S. television stations carried pictures of Japanese housewives queuing up to buy kilo bars of gold, costing around $10,000 at the time. Their action and subsequently that of investors around the world have resulted in a 15 percent increase in the price of gold since the beginning of the year. February saw a 700 percent surge in Japanese gold imports. Gold sales surged in other markets, too. Investors everywhere are turning to other assets. House prices and prices achieved in auctions for fine art and collectable wine, for example, are moving up in many financial centers. Anything but paper investments is the order of the day. Gold is one winner.

This goes for China. In addition to global causes of the bull gold market, domestic factors at work in China have led to a jump in demand for investment gold. Gold sales in China rose by 5 percent in the first quarter of this year. Almost all of the increase was accounted for by a growth in jewelry sales. Worries about Chinese banking with its nonperforming loans, worries about governance problems with companies listed on the Shanghai and Shenzhen stock exchanges, political uncertainty ahead of the Party Congress in the fall, growing unemployment and related civil unrest as well as fears for world peace all make gold look like a preferred haven for investment, especially with falling interest rates on the main alternative -- Chinese government bonds.

Until recently gold would not have been much of an investment option for Chinese investors. Gold jewelry was available, but it could only be sold back to the People's Bank of China on a gold-content basis, with no allowance for the quality of the value-added design and workmanship. There was no access to investment gold, as there was no market in it; gold bullion could be bought direct only from the People's Bank of China by fabricators and jewelers. There was a small black market in small ingots and gold coins from farmers in the south and for bribery purposes in the north.

Black Blade: A very good article. Note that the Shanghai Gold Exchange is set to open later this month. There is a lot of pent up Asian demand ready to hit the market. There is also the upcoming "April Fools Day Surprise" when Japanese bank deposits lose full insurance coverage � these deposits are more widely used by the public and the insolvency of the Japanese banking system should have Japanese worried.

Old Yeller

(07/17/2002; 12:43:36 MDT - Msg ID: 80745)

Gold Insiders' Round Table

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256BF8007FFAB2?OpenDocument
Lots of divergent opinions here.

CoBra(too)

(07/17/2002; 13:24:15 MDT - Msg ID: 80746)

@ CM - Under the Weather ...

OH, Yeah - after 3 muggy days of unprecedented - btw still goin' on - thunder storms and floodings et al in the Alps - some areas say it's 150 y's ... when the mountains came down and drown the inhabitants of former safe valleys ...
and we - as in the Kyoto Protocol's not even give a dam(n) to stop the - man made global warming via CO2 - and go just ahead and flood the rest of the low lyam? globe...

- Interestingly - the biblical flood waters - says Noah, are akin to the green floods of bucks... shucks - says cb2 -

misetich

(07/17/2002; 14:30:04 MDT - Msg ID: 80747)

Brazilian real ends at record low after rate cut

http://www.forbes.com/newswire/2002/07/17/rtr665160.htmlSnip:

SAO PAULO, Brazil (Reuters) - Brazil's currency closed at its weakest ever level on Wednesday after the Central Bank cut interest rates by more than most expected and confounded expectations it would carry out a debt auction.

The real, which was introduced in 1994, weakened to to close at 2.897 per dollar from Tuesday's close of 2.873, leaving it 20.1 percent below where it began 2002. The previous record low of 2.985 per dollar was chalked up on July 1.

Misetich

We'll stay on this Trail - who knows where it may lead - this one ball is getting hotter for the jugglers-

Got gold?

Black Blade

(07/17/2002; 14:58:02 MDT - Msg ID: 80748)

U.S. working group has not met to discuss markets

http://biz.yahoo.com/rc/020716/bush_markets_2.html

Snippit:

WASHINGTON, July 16 (Reuters) - The U.S. government has not convened its top-level working group on the financial markets to discuss the slide in U.S. stocks and does not try to manage the market's daily moves, the White House said on Tuesday. "They have not met with particular reference to stock market activity because we don't try to manage stock markets' daily movements," White House spokesman Ari Fleischer said of the President's Working Group on Financial Markets.

The group, which includes representatives from the U.S. Treasury, the Securities and Exchange Commission, the Federal Reserve Board and the Commodity Futures Trading Commission, was created after the 1987 stock market crash to promote close cooperation among key agencies at times of market volatility. There were rumors in European markets on Tuesday that the group might have met to discuss the U.S. stocks slide. The New York Fed called key market players in recent days to gauge what the market needed to hear from Federal Reserve Chairman Alan Greenspan in his testimony to the Senate Banking Committee on Tuesday to soothe investors, market sources said. One hedge fund adviser suggested this might have sparked the rumors of government intervention.

Black Blade: I guess that you have to read carefully between the lines to filter out the spin (remember these guys sometimes don't even know what the meaning of "is" is). Of course they did not "meet", as the markets fell rapidly the day before yesterday. They typically do not meet for urgent action, however, they do meet for strategy sessions and long term planning. Then again the calls from the Fed to "key market players" suggests that marching orders were given. I suspect that this is the more common "modus operandi".

Off to the gym!

sector

(07/17/2002; 15:08:06 MDT - Msg ID: 80749)

Message Below from BB...Nothing is Confirmed Until...

...It is "officially" Denied.Ari Fleischer's denial is all we need. The Europeans and allot of other folks know what is going on and the White House now has been pressured to react.

It will only get worse as the stakes rise.

NEMO me impune lacessit

(07/17/2002; 15:34:10 MDT - Msg ID: 80750)

My compliments to the Forum - participants

Been lurking for three years - learned alot.
Hopefully using it when I�m investing.

Best to all
N

Gandalf the White

(07/17/2002; 15:38:55 MDT - Msg ID: 80751)

WELCOME Sir Mas ! Things are a "little" hectic now, BUT --

I am sure that you will be answered soon!
<;-)

Gandalf the White

(07/17/2002; 15:47:01 MDT - Msg ID: 80752)

ALSO -- WELCOME Sir NEMO

Any relation to that Goldheart Capt. Nemo ?
The Hobbits are wondering what you said "unpunished me "
After three years lurking, we hope that you will join us more often !
<;-)

sector

(07/17/2002; 15:50:18 MDT - Msg ID: 80753)

Motorola reports $2.3bn loss due to charges [Celebrates Return to "Profitability"]

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026851657870&p=1012571727183By Caroline Daniel in Chicago
Published: July 17 2002 0:14 | Last Updated: July 17 2002 0:14

Motorola on Tuesday sought to put its worst times behind it, as it reported its largest-ever loss of $2.3bn for the second quarter, amid a spate of restructuring charges totalling $3.4bn.

The scale of the charges, which had been announced in guidance at the end of June, follows an aggressive period of restructuring at the troubled telecoms and semiconductor group over the last year.

Last month, the company said it was laying off a further 7,000 jobs, taking the total it has cut amid the slowdown to about one-third of its workforce.

In spite of the extent of its losses, Motorola beat analysts' forecasts for the second quarter and said it had returned to profitability, excluding the impact of the special items.

Edward Breen, president and chief operating officer, said: "After 21 months of hard work, this quarter's results add the return to profitability, excluding the impact of special items, to Motorola's improved cash and balance sheet performance."
+++++++++++++++++++++++++++++++++++++++
We here are doing FINE! .....Wayyyy Coool!...Havin a PARTY...we are.

The $3.4 Billion "Restructuring loss thingy?" Well�THAT was only a one-time charge�don't you see. We actually MADE our number. We're PROFITABLE! Can't you bozos read a press release?

Of course we might have ANOTHER one-time charge just like it next year but that's next year�RIGHT? And by that time we will be surgically implanting millions of cell phones in teeth...so THERE!

Goldentrill

(07/17/2002; 16:03:06 MDT - Msg ID: 80754)

Thanks Rock

Rock:

Thanks for the response. I thought I would say something to Sweet 16 because I noticed a real vacuum of women on this site. I understand because I became acutely aware when I was younger that most women are very much put off by financial matters. In fact, lots of guys I knew were really blow hards about it. (Liked to discuss it but did'nt know a cottin picking thing.) I knew that as I was around my dad all our lives and he was a really brilliant guy. He was a mathmetician and wanted to be a physicist but had five kids (I was the first) and came home from the war and started his own business which he ran for over 30 years. He was one of those self made men, producers that Ayn Rand describes in society. He then as I told Sweet 16 yesterday battled his way through the financial markets. Dad was a real gold bug and yes, its in my DNA for sure. I was always interested in golds. Infact before dad died, my joke was to him give diamonds to the other girls...I want to learn how to make lots of dough in financial markets. I love it! I love reading everything, especially here. Black Blade is WONDERFUl and Gandaf and I cant even remember all the names and fabulous posts ...I was recommended here by an economist friend of my dads who dad used to talk to for years. He is a gold bug too. Several years ago he told me to come here and several other sites and learn...and that I HAVE. When I here the poison pablum they feed the populus on the media it about makes me sick. So many people have gotten killed in this market and more to come Im afraid. My fiancial literacy has improved a thousand fold since coming to this site Rock and I check in her most everyday too, like you. As it all unfolds, right on schedule, it is an amazement to me. I understand so much more now about currencies, the gold standard, the interplay about foreign investment in our system, the complete disarray that we are facing and maladjustment to our fianancial markets. I cannot be any other place than invested in gold. To me it is the ONLY place to be. The other things I hold are kind of like side show amusements - gold is the main stay of my investment future right now as far as I am concerned. I sleep at nights very well and know this is exactly where I am supposed to be. The more I read here the more I fear for our country and the future of our country though. I wish that more of the minds that are here in this forum were in policy making positions in the country...we sure would not be in the mess we are in now Ollie.

Thanks again Rock..and all here. Love you all.

Goldentrill

misetich

(07/17/2002; 16:09:32 MDT - Msg ID: 80755)

IBM sees higher restructuring charge than expected

http://www.forbes.com/newswire/2002/07/17/rtr665445.htmlSnip:

SAN FRANCISCO, July 17 (Reuters) - International Business Machines Corp. (nyse: IBM - news - people) will take higher charges than expected for job cuts, selling its hard disk drive business and other restructuring moves announced in June, Chief Financial Officer John Joyce said on Wednesday.

Joyce told a conference call after announcing second-quarter earnings that charges at the No. 1 computer maker would total $2.5 billion to $3 billion, higher than the $2 billion to $2.5 billion he had previously forecast.

The charges reported so far, in the second quarter, included $825 million related to restructuring its microelectronics operations, $802 million for job cuts and $428 million related to the sale of the disk drive business.

Misetich

This ONE TIME charges keep on recurring - frequently-

Got gold?

misetich

(07/17/2002; 16:12:43 MDT - Msg ID: 80756)

Celestica to Cut as Many as 6,000 Jobs as Sales Fall

misetich

(07/17/2002; 16:15:21 MDT - Msg ID: 80757)

Capital One Shares Plunge After Regulators Step In

misetich

(07/17/2002; 16:18:30 MDT - Msg ID: 80758)

Advanced Micro Has 2nd-Qtr Loss as Sales Plunge 39% (Update2

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∣dle=ad_frame2_topfin&s=APTXpHRQDQWR2YW5jSnip:

Sunnyvale, California, July 17 (Bloomberg) -- Advanced Micro Devices Inc., Intel Corp.'s biggest rival in personal-computer processors, had a second-quarter loss as sales sank 39 percent and demand for PCs slipped.

............
The company will cut capital spending in fiscal 2002 by 5.9 percent to $800 million from $850 million previously planned, Chief Financial Officer Robert Rivet said on a conference call. The cuts won't come in factory spending, he said.

Misetich

Didn't Greenspan testify yesterday semiconductor industry was doing well?

Got gold?

NEMO me impune lacessit

(07/17/2002; 16:42:17 MDT - Msg ID: 80759)

To Sire Gandalf the White - I humbly bow

Actually motto of the Scots:" No one hurt me unpunished."
One can find it in their coat of arms.(No sloppiness there)
My ancestors came from Scotland 1748 after the battle of
Culloden(1746).Where do I live? In Scandinavia.

Very best regards - specially to the hobbits,
N

Arcticfox

(07/17/2002; 16:46:03 MDT - Msg ID: 80760)

Quote of the week...

"Bulls of 1929 - like their 1990s counterparts - had their eyes glued on improving profits and stock valuations. Not a thought was given to the fact that the rising tide of money deluging the stock market came from financial leverage and not from savings."
- Dr. Kurt Richebacher

Canuck

(07/17/2002; 17:03:31 MDT - Msg ID: 80761)

Nortel

Nortel being sued for "overstating revenues"

Pizz

(07/17/2002; 17:14:59 MDT - Msg ID: 80762)

@Misetich

Couple weeks ago I made mention of the fact that we should expect A LOT OF RESTRUCTURING CHARGES from some of our top companies that have strayed over the line on aggressive accounting.

The companies with new auditors, or the rest with their "born again" current auditors are forcing the companies to clean up their balance sheets. When the whole system is on the line, I guess we can redefine "restructuring" and "one time" to include the reversal of bogus book entries and "reevaluation" of assets, and "reassessment" of future investment earnings (pension accounting).

Fraud is a bit too blunt (the sheeple might sell!!!), and I guess we need a really bad quarter so we can say we're improving in the second half of the year. But you know,
I have a hunch that the second half of the year is going to have a whole new set of "one time" problems for the markets to overcome.

Kind of like pealing an onion, but with gold and silver we shouldn't have as many tears, but it's still not going to be an easy decade.

Oizz

TheJuniorMiner

(07/17/2002; 17:16:28 MDT - Msg ID: 80763)

debate on the following articl

From REAUTERS news service

Gold bears show their fangs

London - Gold bears gave out a warning on Wednesday that the precious metal could be heading for a sharp fall as stock markets and the dollar regained some composure after their recent slump.
Spot gold was quoted at US$315.90/316.40 an ounce by 15:51, down from the New York closing level of $318.10/318.60 an ounce on Tuesday.
The losses were tied to a rally in stock markets with the Dow Jones industrial average rallying more than 2.5% in opening trade and the dollar gaining in its wake.
Sharp losses in global equity markets and the dollar's slide against major currencies this week had rekindled expectations that bullion was back onto its bull run as funds sought a safe-haven for their funds.
Gold rose to $330.30 an ounce last month, its highest level in more than 2-1/2 years.
But gold's failure to break through $320 an ounce as stock markets made a recovery was ominous for the metal in the short run, analysts said.
"Unless gold regains some upward momentum soon the market will be vulnerable to stale long liquidation and a move back down to the recent low of $310," said Howard Patten, metals analyst at Barclays Capital.
The industry-backed World Gold Council (WGC), which represents the world's biggest producers and retailers, agreed.
"Gold's failure to breach the $320-321 an ounce resistance is helping to prompt long liquidation from some of the funds," the WGC said in a market note.
Key to future price direction would be stock market performance and the dollar's performance against the euro.
Gold faces tough times
The recent stockmarket losses could also hamper gold, analysts said.
"It is possible that the falling stock markets are now being viewed as deflationary within the fund community, which in turn should be bearish for the yellow metal," Standard Bank London said in a daily report.
"With the funds looking to reduce their substantial long positions and emerging as aggressive sellers on any rallies, together with the appearance of significant selling (possibly official) around the $320.00 area, gold may well be set to head back towards the $310.00 level," it said.
Ross Norman, metals analyst at TheBulliondesk.com said gold's disappointing performance was partly linked to the need of equity investors to meet margin calls on these investments during the recent slump in stock markets to five-year lows.
Other precious metals took their lead from gold, which hit a session low of $315.60 an ounce.
Silver dipped to $4.94/4.96 from the previous New York closing levels of $5.00/5.02.
Platinum was quoted at $522.50/530.50 an ounce versus $525.40/533.40 previously, while palladium was broadly flat at $319/331 an ounce from $318.50/330.50.

Does $310 justify the beatings the gold stocks have taken lately?
What sabout the plunge in the dollar over the last few months?

Is this propaganda?

Cavan Man

(07/17/2002; 17:33:02 MDT - Msg ID: 80764)

Hey sector....

RE: MOTWhile I understand your main points, I can tell you from first hand knowledge and experience that Motorola has made some very painful adjustments. Their market share is growing in key segments. I believe they have turned the corner though would not recommend the stock in the overall context of equity malinvestment

sector

(07/17/2002; 17:50:11 MDT - Msg ID: 80765)

@Jr.Miner It's Propaganda

The Dollar Index Price of gold is RisingWhich is to say when one divides pog by the dollar index each day for the last month or so, one gets a rising number. BTW ,POG breached $325 on June 22 contrary to the Reuters piece.

Daily Data:
DATE----POG----Dollar Ind.---POG�DI
7/3/02 ---311.30---107.55------ 2.894
7/8/02---312.50----106.72------ 2.928
7/9/02---316.50----106.05 ------2.984
7/10/02--315.10---106.57-------2.957
7/11/02--317.60----106.19----- 2.991
7/12/02--315.90----106.22 -----2.974
7/15/02--319.90----104.80----- 3.052
7/16/02-- 317.50---104.85 -----3.028

Monthly Data

DATE Dollar Index----POG---------POG�DI
Jan-02 114.67_____ 281.75 ___2.457
Feb-02 115.66____ 296.22 ____2.561
Mar-02 114.60____ 294.38 ____2.569
Apr-02 113.96_____300.00____ 2.633
May-02 110.64____ 327.50____ 2.960
Jun-02 108.45 ____313.90____ 2.894
Jul-02 105.58______318.00 ___3.012

DI Source:Federal Reserve H.10 [G-10/Dollar Index]

That means that the dollar index price of gold is still rising and not "Fully controlled" .

The shares of miners got ahead of themselves thinking that "The Big One" had arrived AND the hot Wall Street money swept in. Now the WS hotties are just trading the index funds up and then down...it's where the money is...placed on volatility.

You will know the Big One when it gets here. The Fed's acolytes will tell us just as condemned men signal the moments just before their execution with sweat, pleading and a rush of redemption statements such as... "We were only looking out for America's best interests". Or "We has our orders".

PS Just got an earnings report for one of my miners...cash costs for their flagship mine were $29 per ounce. Funny...I can't find their pro-forma earnings report...Oh well!

Got Gold?

Trurl

(07/17/2002; 18:01:48 MDT - Msg ID: 80766)

A reminder...

http://www.treas.gov/press/releases/po3034.htmDoes the date 10/23/02 mean anything to you?

It is by then that the US government will implement new rules which may impact PGAs.

a snippet:

The Department is also exercising its authority to defer, for a period of no more than six months, the application of section 352 to the remaining categories of financial institutions under the Bank Secrecy Act to allow Treasury time to study these new industry sectors and develop regulations applicable to them.

The business sectors subject to further study include dealers in precious metals, stones, or jewels; pawnbrokers; loan or finance companies; private bankers; insurance companies; travel agencies; telegraph companies; a business engaged in vehicle sales, including automobiles, airplanes, and boats; persons involved in real estate closings and settlements; investment companies other than mutual funds; and commodity pool operators and commodity trading advisors.

end snippit

What spun me around today was I recalled for the first time in years how things *used to be* in the USA. This reminder is very timely since we now have a government which will never forget anything once submitted; ever again.

...Remember for years how if you bought *ONE* bullet or a box of ammunition, or a box of primers that *EVERY* purchase had to be recorded by the dealer? In the current climate how unlikely do you think it is to happen again? For our security, of course.

I had always assumed that with the implementation of this financial reporting act that there would be a minimum, so likely the act wouldn't impact me.

...Even buying one little 99 cent 50 round box of .22 LR ammo would have your name, address & driver license number recorded in a dealer log...

Now with the web, with computer networks of basically infinite capacity, what is to prevent rather invasive reporting requirements of all sorts of "bad" but legal items?

I'm reviewing my shopping list and checking it twice.
I'll be a patriot and spend...now

Hello CPM --

barnaclebob

(07/17/2002; 18:31:50 MDT - Msg ID: 80767)

"How Tyranny Came to America"

http://www.theawaregroup.com/tyranny.htm

The following critique of the present state of our nation and what the author (Joseph Sobran) refers to as "post-Constitutional America" is one of the best articles I have ever seen. It is quite long, 13 pages, but I found it such an excellent explanation of where we stand today that I down-loaded it, printed it out and have read it three times. I am going to make copies for each of my children and grandchildren, and a few extra for my friends.

Got Gold?

Black Blade

(07/17/2002; 18:39:40 MDT - Msg ID: 80768)

Re: JuniorMiner - Gold Bears

I for one am not concerned. Note that Howard Patton of Barclay's is just one gold bear among many that have completely missed the recent gold rally. To justify their position they continue to call for a major drop in gold prices, if for anything but to save face. I do laugh occasionally when other bears like Andy Smith and Ted Arnold suddenly become gold bulls near the top only find they missed the run up in prices. Then they reverse position and call for a drop in prices. Also the good SJ Kaplan is another gold bear who has completely missed the gold rally only to make a bet on utilities a the top and on bonds when rates are at all time lows.

These gold bears do make for excellent contrary indicators. Unfortunately they do not focus on the big picture of the global economy so they are doomed to miss out more often than be on the right side of the call when the market are ready to make powerful moves. The only other possible reason they have to be so wrong would be to mislead investors for somewhat nefarious reasons.

Considering that the summer months are typically slow for precious metals, it is surprising that gold has held its ground even with all the economic problems and geopolitical threats. The real rise in prices could come this fall as Asian "wedding season" and traditional buying through the western holidays picks up. If the global economy looks pathetic as it does now and the US dollar continue to "correct" we could see explosive gold rallies going forward. I also would expect to hear that these gold bears are crying loudly that gold prices will retract.

In all of this commotion with the accompanying "wailing and gnashing of teeth" over a minor pull back in Gold, the POG has only come off about $11 from its recent high for krissakes!

- Black Blade

Black Blade

(07/17/2002; 18:47:08 MDT - Msg ID: 80769)

Re: sector - Good Data

Hey, that's a good find. I knew that the general trend was intact, however, it is good to see the numbers all lined up for a nice "reality check". Thanks.

- Black Blade

BTW, I also got the same info about Meridian Gold. They are increasing profits with the higher POG and are fully unhedged. Curiously, the mega-hedgers (the dark side aka "evil empire") that helped to destroy the industry over the past few years are not fairing as well. We should see the POG rise and that will put their feet to the fire so to speak. The POG is poised for some strong moves in coming months.

JackFlash

(07/17/2002; 19:19:42 MDT - Msg ID: 80770)

Price fixing

http://corporruption.enviroweb.org/mugshots/agribusiness/adm.htmAs I read this article, I was struck by the parallels to current events in corporate/financial culture as well as the interesting discussion of the attitudes of the various players. Here are a couple of "teasers".

Snip:

This case study discusses price fixing in the lysine feed supplement business. It focuses on developments leading up to a June 25, 1995 raid by the FBI on Archer Daniels Midland's headquarters in Decatur, IL and the company's subsequent conviction for price fixing. This case study is an example of cultural exculpation and ceremonial regulation of white collar crime. Available transcripts of secretly recorded conversations illustrate a freewheeling organizational culture at ADM as its top officers contemplated, engineered, carried out, and then denied the existence of a price fixing conspiracy/scheme, only to then plead the company guilty to charges. Several top ranking officers were subsequently convicted.
END snip

Snip:

Interestingly, however, one very typical caveat to news stories about the ADM case, heretofore unmentioned, has been this question; "How commonplace is the price fixing activity the government uncovered through its investigation?"

... the DOJ's self-congratulations in this single case cloud the most troubling question of all: How many fish get away? Are ADM, LaRoche and friends an exceptional pack of industrial rogues - or is price fixing business as usual? The Wall Street Journal, running to ADM's defence, said the company's only crime was 'bad luck'. Every industry, they argue, 'rationalises' output. ADM was singled out for punishment only because one psycho manager couldn't keep his mouth shut. In fact, Justice Department officials estimate that there are roughly 750 illegal world wide price-fixing accords in operation. It has the resources to investigate 30 (Palast, 1998, p. 6).
END snip

JackFlash:
It's only a matter of time before more of these "psychos" start talking, especially if they are granted immunity.

Black Blade

(07/17/2002; 19:24:38 MDT - Msg ID: 80771)

Options Must Be Treated as Expenses, Global Panel Says

http://www.washingtonpost.com/wp-dyn/articles/A15856-2002Jul16.html

Snippit:

LONDON, July 16 -- The International Accounting Standards Board, which writes the accounting rules for many companies, decided unanimously today to require that executive stock options be treated as a cost of business, a move that increases the public pressure on U.S. corporations and accountants to do the same. The new accounting rule will be mandatory for corporations in the European Union by 2005, as well as for Australia and several other nations that follow the IASB regulations.

Black Blade: Warren Buffett and Alan Greenspan are among those who agree. If stock options were to be expensed then US corporate profits would be about 10% lower. It is worse for some companies than others. Foe example, the profits at Motorola would decline by �500%, Cisco �67%, Microsoft �22% and Amgen �12%. The pressure is on now that Coca Cola will expense options next quarter and today Bank One announced that they will do the same. It appears to be the beginning of a trend that will rip apart corporate balance sheets as corporate profits will be cut closer to the bone. The list of "dirty tricks" is getter shorter. However, most US companies will not join in as this is another means to pull the wool over the eyes of shareholders. Honesty is not a common trait in American business. Hell, you can't even get them to give up "Pro Forma" and "operating earnings" accounting in favor of real net bottom line earnings after expenses - One look at a clean balance sheet would scare the hell outta the shareholders if they did.

sector

(07/17/2002; 19:32:03 MDT - Msg ID: 80772)

Bush: Invest Soc. Security in Stock...

Financially Battered Voters to Bush: Drop Dead with this Hair-Brained Social Security, Pad Wall-Street's Pockets Scheme
By THE ASSOCIATED PRESS

Filed at 8:17 p.m. ET

WASHINGTON (AP) -- The plunging stock market and recent corporate implosions won't stop the White House from driving ahead with plans to overhaul Social Security to allow personal investment accounts.

President Bush's views haven't changed, spokesman Ari Fleischer said Wednesday.

``The president believes that is the right long-term policy,'' Fleischer said. ``He thinks it's good for young people if they want to pursue this on a voluntary basis.''

Bush wants to let younger workers invest a portion of their Social Security payroll taxes in the stock market, and campaigned on the idea two years ago. A White House panel late last year recommended three plans to consider.

But even Republicans are skittish about running on Bush's Social Security plans this election year, and GOP strategists have warned rank-and-file lawmakers that the issue poses a serious political threat. Control of the House and Senate is at stake in November.

Democrats are eager to exploit Bush's Social Security plans when Enron and WorldCom are on people's minds and the stock market is handing hefty losses to retirement plans.

``The American people are watching their 401(k)s and retirement savings vanish in the stock market,'' said Rep. Robert Matsui of California, the top Democrat on the House Ways and Means Social Security Subcommittee. ``The last thing they should have to worry about is that their Social Security benefits will follow suit.''

But Fleischer said if the system isn't changed, younger workers paying taxes will not get the money returned as benefits.

``The one certainty is demographics work against younger people in Social Security,'' he said. As the large baby boom generation retires, fewer workers will be paying into the system to fund the increased draw on benefits.

Asked if Bush would counsel young Americans about the risk of the stock market, Fleischer said: ``It's not the president's job to counsel people about investment decisions. That's why this is a voluntary program under the president's proposal for people to make those judgments themselves.''

Next year is the earliest that legislation would be considered. Democrats argue that Republicans seeking re-election have an obligation to talk about Social Security because they potentially could be deciding its future.

``The president really should rethink his approach now that he has empirical evidence showing that privatization is not a prudent policy,'' Matsui said. ``But if he remains committed to this misguided policy, he and his Republican colleagues in the House have an obligation to bring these plans for a vote before the election.''
++++++++++++++++++++++++++

Can there be ANY residual doubt as to the pathogenic nature of advice currently being given to the President? Surely this is a joke!

@JackFlash There's soooo much more to the "Manipulation" stories. Lysine, copper [JPM, Hamanaka, Sumitomo], energy. The WSJ is always there for the cover-up.

Drug profits from Mexico channelled to Washington. Pretty soon it's money.

Black Blade

(07/17/2002; 19:39:29 MDT - Msg ID: 80773)

IBM 2nd-Qtr Profit Declines as Computer Sales Slow

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topsum&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APTXUnBSASUJNIDJu

Snippit:

Armonk, New York, July 17 (Bloomberg) -- International Business Machines Corp., the world's largest seller of computers and related services, said second-quarter profit declined as sales of computers, software and data services slowed.

Black Blade: Can't wait to hear the spin on this. This DOW component could heavily influence the market tomorrow, but I expect that there will be a lot of "damage control" overnight with spin such as "met lowered estimated earnings" or some other phoney excuse.

Black Blade

(07/17/2002; 19:57:49 MDT - Msg ID: 80774)

Vacancy signs

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/07/17/BU155069.DTL&type=business
With storefronts empty, owners of prime S.F. retail spaces desperately seek tenants

Snippit:

In real estate, it's all about location, location, location. Yet some of the most desirable retail spaces in San Francisco are glaringly vacant as the city's once-mighty commercial market -- where the office vacancy rate has reached a stunning 25 percent -- struggles to find its footing.

Black Blade: The commercial real estate bubble is popping in parts of the US. I expect to see this scenario played out from LA to NY, and from Houston to Chicago. The first spin will be "cost cutting" followed by "chapter 11".

Black Blade

(07/17/2002; 20:06:49 MDT - Msg ID: 80775)

"Scandal Of The Day" - Corzine tied to stock scheme

http://www.washtimes.com/national/20020717-574068.htm

Snippit:

Senate Majority Leader Tom Daschle lately has kept Mr. Corzine at his side frequently as Democrats call on President Bush to get tougher with corporate executives who fraudulently inflate company earnings to boost stock prices. But Goldman Sachs, the firm that Mr. Corzine left as chairman in May 1999, has been a target of class-action lawsuits and accusations by a former broker who complained to the Securities and Exchange Commission that the investment house engaged in a scheme to force unwitting investors to pay artificially high prices for certain stocks.

Nicholas Maier, who was syndicate manager of the Wall Street firm Cramer & Co. from 1996 to 1998, told SEC investigators in the spring that Goldman Sachs routinely forced him to buy stocks at inflated prices if he wanted to purchase shares of an initial public offering (IPO). "Goldman, from what I witnessed, they were the worst perpetrator," Mr. Maier said. "They totally fueled the [market] bubble. And it's specifically that kind of behavior that has caused the market crash. They built these stocks upon an illegal foundation � manipulated up, and ultimately, it really was the small person who ended up buying in."

Black Blade: With high profile politicians having been involved in corporate fraud, it is no wonder that nothing will ever be accomplished in this fight against corporate corruption.

Siochain

(07/17/2002; 20:11:17 MDT - Msg ID: 80776)

Gold upside potential $100-200

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B242256BF9005FF782?OpenDocumentJOHANNESBURG � Global investment bank HSBC has published a report on the gold market in which commodities analyst Alan Williamson predicts the bullion price will peak at $350/oz in the final quarter of this year. The bank's London-based commodity research team also says the gold could "potentially�be looking at the most bullish scenario in twenty years", with a potential upside of between $100/oz and $200/oz. .........(continued)

sector

(07/17/2002; 20:45:34 MDT - Msg ID: 80777)

Gold's upside potential $100 to $200/oz - HSBC

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B242256BF9005FF782?OpenDocumentBy: Stewart Bailey

Posted: 2002/07/17 Wed 19:28 ZE2 | � Miningweb 1997-2002
JOHANNESBURG � Global investment bank HSBC has published a report on the gold market in which commodities analyst Alan Williamson predicts the bullion price will peak at $350/oz in the final quarter of this year. The bank's London-based commodity research team also says the gold could "potentially�be looking at the most bullish scenario in twenty years", with a potential upside of between $100/oz and $200/oz.

The bullish outlook will be published in HSBC's Senior Gold Book which is to be released later this week and is based on the bank's own currency, general equity and macroeconomic forecasts. It comes as the bank increased its average gold price projection for the year to $313/oz, up from its previous forecast of $305/oz. It expects gold to average $325/oz next year. Williamson says gold's peak will coincide with a "final trough in global equity prices" at the end of the year.

"Into next year prices are likely to be volatile as the positive impact of a weakening dollar and ongoing improvements in supply and demand are at odds with the negative effects of a stock market recovery. Over the longer term, however, the risk to prices remains firmly on the upside," said Williamson.

Interestingly though, HSBC says this upside potential for bullion could be as much as $100/oz to $200/oz if gold benefits from the confluence of a bearish equity market, rising investment demand for bullion and an assertion of bullish supply-demand fundamentals.
+++++++++++++++++++++++++++++++++++++++
Sorry for the repeat story siochain but it's a goodie...

The problem with this bullish report is that they ignore obvious gold manipulation and the ultimate exhaustion of limited bullion needed to sell into rallies [Pay no mind to Greenspan's denials of no trading in gold since his Chief Counsel, Virgil Mattingly has referred to gold swaps in the officially approved Fed FOMC minutes of Feb 1995]. It also ignores the $288 Billion in loans already extant from the BIS [Annual Report 2001]. Those derivatives will be [Should the HSBC report come to pass] irretrievably lost metallic gold in addition to massive BIS balance sheet losses.

The upshot here is the $200 high side gold price is light by at least one zero.

Waverider

(07/17/2002; 21:00:45 MDT - Msg ID: 80778)

Puplava: Wednesday's Stock Market WrapUp

http://www.financialsense.com/Market/wrapup.htmSnip:
The five-year mania in the stock market came to an end in March of 2000. Initially when the markets began to crack during the first quarter of 2000, financial experts told us that this was a mere correction. By the second half of the year, the markets would resume their upward trend. It didn't happen. Instead of double-digit gains, investors experienced double-digit losses. By 2001 investors were told the same story. The forecast for prosperity was off by just a few quarters. The Fed was now on board and there should be no worries about the economy and the financial markets. There would be no recession and there would be no bear market. This was just a normal correction and delay in what was a permanent bull market trend. The Fed easing would take care of any recessionary fears and lower interest rates would make stocks that much more attractive. The second half recovery became the mantra of Wall Street. The best and the brightest economists and analysts had plugged the numbers into their computer models and they all spit out "Recovery!".

While financial scandals make the front pages, very little time is spent in examining the easy money and credit binge of the 90's. Nobody in Washington or on Wall Street seems to understand the dangers of this mountain of debt. However, it hasn't been forgotten in the credit markets. Credit spreads are widening and credit-default swap premiums are rising. This signals that greater credit problems and more Enrons and Global Crossings lie in front of us. The unwinding of the 90's credit binge has just begun.

When this cycle comes to an end, many questions will need to be answered. How could stock prices rise, so fast? How could investors have been so willing to pay so much for what they knew so little about? Our leaders will need a scapegoat�who will it be? Will it be Wall Street or Washington? Whose face will they put on the tragedy�The new era accolades will be replaced by the sarcasm of hindsight. The hubris of the media will change to exaggerated calls for reform and regulation�The era will have its villains and heroes. We'll remember the millionaires and the billionaires, as well as the rogues and the traders. In the end we will ask ourselves how we could have been so easily mislead. Was it the technology that mesmerized us or was it the fascination with wealth�While Wall Street and Washington will look for answers to explain today's technology stock market bubble, they need look no further than human nature itself. The stage and the props may change, but the actors are the same�man himself.

Waverider: A good market wrap-up today from Puplava - well worth the read.

Blackjack

(07/17/2002; 22:58:03 MDT - Msg ID: 80779)

Crop Failures around world as El Nino returns/Bloomberg

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∣dle=ad_frame2_topfin&s=APTYgrhTgQXNpYSdzSingapore, July 18 (Bloomberg) -- Australian farmer Sid Plant heard in December that El Nino might be returning, and immediately sold half his cattle. It was a good call.

Plant's rivals, fearing regional weather disruption, followed suit, causing cattle prices to slump. By late last week, when the U.S. government officially confirmed the return of the weather pattern that brought storms, floods, drought and $96 billion in damage worldwide in 1997, prices had dropped more than a third.

Now Plant -- despite his foresight -- and other farmers across Asia and Australia face production cuts and crop failures as the decade's first El Nino parches coffee and rubber plantations in Southeast Asia, washes away rice fields in China and worsens Australia's drought.

``Every day it stays dry, the worse it gets,'' said Plant who also grows grain at Samarai, a farm 200 kilometers (124 miles) west of Brisbane he runs with his wife Merilyn. ``There's a lot of pain -- farms being sold, people having heart attacks, the odd suicide, bankruptcies and bank foreclosures.''

Meanwhile, dry weather in Southeast Asian countries such as Indonesia, the biggest rubber producer, Malaysia, the top palm oil grower and Vietnam, the No. 1 producer of robusta coffee, threatens to reduce supply as crops fail, causing prices to rise.

Palm oil prices this year are up 24 percent and rubber up 35 percent. Robusta coffee, the bitter-tasting variety used to make instant coffee, has surged 39 percent since Jan. 1 on the London International Financial Futures & Options Exchange.
________________

El Nino will cause crop failures around the world. Inflation in the pipeline? Bloomberg Article

MarkeTalk

(07/17/2002; 23:46:38 MDT - Msg ID: 80780)

Blackjack--Crop Failures and Suppression of Grain Prices

Lately I have been watching with astonishment the weird weather worldwide, which the link you posted confirms. The return of El Nino signals that another drought similar to that of 1988 is entrenched here over America. From the recent temperatures of 127 degrees in Death Valley, California to 116 degrees in Redding, California to the extremely dry conditions here in Colorado and the West to the massive floods in Texas to the burgeoning drought in the grain belt of the Midwest--all of these signs are the unmistakeable fingerprints of El Nino.

Just today I heard that soybean and corn prices should be much higher based on the foregoing drought scenario coupled with the huge and growing demand food, except that "certain parties" are selling massive amounts of paper contracts against rising prices. All I was told is that "growers" in Argentina and Brazil are selling futures contract like mad into the rising prices of the last two weeks. Sound familiar?

So the cabal has its tentacles in the commodities markets in general to keep the CRB Index down which, in turn, keeps the wholesale or producer price index (PPI) down. That index influences the retail or consumer price index (CPI) which directly affects the cost of living adjustment (COLA) for senior citizens. This suppression of commodities was mentioned to me very recently by one of our esteemed posters, The Hoople. I give him the credit for sniffing out the evidence before it became public.

Even though certain money interests are trying to suppress commodity prices--especially foodstuffs--I still believe they will fail because people have this nasty habit of needing to eat every five to seven hours. I always tell people, "You can print currency but you can't print cornflakes or soybeans or wheat." And this drought scenario is becoming a global phenomenon, as the ice in Alaska heats up (69 degrees in Fairbanks and 80+ degrees in Anchorage) and the glaciers in Austria, Italy and Switzerland are melting with the resulting runoff bursting dams downstream and flooding entire villages. We live in most interesting times.

GC

Golden Bear

(07/18/2002; 00:15:39 MDT - Msg ID: 80781)

MarkeTalk (msg#: 80780)

".... All I was told is that "growers" in Argentina and Brazil are selling futures contract like mad into the rising prices of the last two weeks..."If it was in fact growers selling the grain futures contracts into rising prices, does it not seem logical for a producer to lock in prices and therefore profit margin as he produces his product? Isn't this why the futures markets were developed first for the commodities industries, to protect producers against the vagaries of the industry they were in?

The financial instruments is where the total corruption and distortion of the reason for their existence has occured, and especially the gold market, as we all know...

It is important to discern between manipulation of markets for the advantage of the cabal, and for the routine needs of participants in particular markets to be able to hedge risk of doing business on a day to day basis.

When you see smoke, there is obviously fire, however, fire can be used for beneficial reasons as well as for destruction, and as always, it is the intent behind its use that determines good or otherwise...

Cheers.

Blackjack

(07/18/2002; 00:16:39 MDT - Msg ID: 80782)

Hello Marketalk

Can't print gold, silver, oil, gas, wheat.......can't hide food
shortages. The weather will be affecting economics for sure.
Interesting times.

Black Blade

(07/18/2002; 00:18:04 MDT - Msg ID: 80783)

Calif. takes steps to avoid natural gas shortage

http://biz.yahoo.com/rc/020717/utilities_california_cpuc_1.html

Snippit:

SAN FRANCISCO, July 17 (Reuters) - California regulators moved quickly on Wednesday to boost supplies of natural gas to head off a rerun of the crimped stocks and sky-high prices that helped fuel the state's energy crisis in 2000-2001. The California Public Utilities Commission flashed the green light to a Canadian-owned company to double the capacity of an underground gas storage field in rural Northern California to about 29 billion cubic feet of gas. The regulators also ordered the state's investor-owned utilities to sign up for 725 million cubic feet day of shipping capacity on the El Paso Corp. (NYSE:EP) interstate gas pipeline system that the CPUC feared could be lost to California. Although the commissioners quibbled about some of the details in their decisions today, most agreed they needed to act urgently to head off a repeat of the supply shortfall and soaring prices that marked the power crisis. Natural gas fuels about half of California's power plants.

Black Blade: It's about time that they actually took some precautions. Of course after about three years of making the people suffer.

Black Blade

(07/18/2002; 00:30:37 MDT - Msg ID: 80784)

El Ni--o Weather Pattern and Food Supply

As I have repeatedly advised here, aside from reserving cash, accumulating precious metals, getting out of debt, etc. � start a storage program of nonperishable food and basic goods. Not only is this a good idea in case of unemployment due to illness, layoffs, etc., it is also good to have a supply in case of fast rising prices due to drought, floods or any calamity. I always rotate my supply of canned and dry goods as I consume from my storage. I continuously replace these items as I find them on sale (usually cheaper case lots). Food shortage? Yes it can happen here. Argentina was once the bread basket of South America and now people scrounge the landfill, garbage cans, east rodents, cats, and toads. Always � prepare for the worst and hope for the best.

- Black Blade

Blackjack

(07/18/2002; 01:02:42 MDT - Msg ID: 80785)

Japan losing faith in US investments, US Dollar to Fall further?

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∣dle=ad_frame2_topfin&s=APTZLwRV7SmFwYW5lTokyo, July 18 (Bloomberg) -- Japanese investors' plans to move money to the U.S. this fiscal year are vanishing faster than you can say WorldCom Inc.

Yasuhiro Miyata, manager for investment planning at Dai-Ichi Mutual Life Insurance Co., was among investors who dropped his plan to buy U.S. stocks in the days after regulators began probing accounting practices at WorldCom, the No. 2 U.S. long-distance phone company. Japan's second-largest life insurer had planned to put more money in U.S. equities starting April 1.

Miyata and other investors say the dollar may weaken as U.S. stocks fall and other companies draw attention from regulators and investigators.

``We don't know when stock prices will stop falling,'' said Miyata at Dai-Ichi, with 2.9 trillion yen ($24.9 billion) of overseas assets as of March. ``The cases turned out not to be accidents, but a constant stream that undermined the whole accounting system of the nation.''

Some fund managers are also concerned more losses may follow after the Standard & Poor's 500 Index fell 21 percent this year and the dollar dropped almost 12 percent against the yen.

The U.S. currency will probably fall below 115 yen by September, said Masafumi Tsuchida, manager for the Finance Group at Toshiba Corp., the world's second-largest chipmaker. He said he's looking for any gains in the dollar as opportunities to sell it.

Finance Minister Masajuro Shiokawa, speaking earlier this month when the dollar was at about 120 yen, said it may weaken to 115.

Bond Losses

Japanese fund managers aren't just losing money on U.S. stocks. An index of Treasury bonds maturing in a year or more has handed yen investors a loss of 8.3 percent over the past three months, according to the European Federation of Financial Analysts' Societies. An index of like-maturity Japanese bonds rose 1 percent.

``Declines in the dollar and stocks are damping the attraction of the U.S., in turn increasing the attraction of Japanese assets, especially bonds,'' said Yuuki Sakurai, who helps manage about 1.7 trillion yen in yen debt at Fukoku Mutual Life Insurance Co.

Fukoku Mutual, the nation's 10th-largest life insurer, reduced its overseas holdings by selling Treasuries earlier this year and may not increase them soon, Sakurai said.

The danger now is that falling stocks will stall the world's biggest economy by making Americans cut back on spending, traders said. On Friday, an index of consumer confidence compiled by the University of Michigan had its steepest decline since the September terrorist attacks against the U.S.

Negative Spiral

``The risk is increasing that tumbling stocks and the economy go into a negative spiral, pulling each other down,'' said Takashi Miyazaki, one of the investors for 1 trillion yen in stocks at UFJ Partners Asset Management Co. His company has fewer U.S. stocks and more Japanese equities, proportionally, than are in benchmarks used to gauge performance.

Some Japanese investors say they're still considering moving money to the U.S., even if their plans are on hold for now, because the U.S. economy may still grow faster than Japan or Europe. Federal Reserve Chairman Alan Greenspan said this week the nation's economy is gaining strength and can overcome a loss of faith in its corporations.

Earnings for U.S. companies may rise in the second half, analysts said. Profits will probably climb 16.3 percent in the third quarter and 28.6 percent in the fourth quarter, according to Thomson First Call.

`Losing Confidence'

``We'd like to buy U.S. stocks if coming corporate earnings show improvement,'' said Dai Higashino, who helps manage 500 billion yen at Sakura Investment Management Co.

New regulations for corporations may also help U.S stocks, he said. U.S. lawmakers are working on new criminal penalties for corporate fraud.

The bulls are in the minority.

``We are losing confidence in the U.S.,'' said Kazuyuki Takigawa, one of the investors for about 100 billion yen in overseas debt at Fuji Investment Management Co.

Takigawa sold dollars for euros in June and said he doesn't plan to change that position. ``The dollar is not a currency we can buy right now.''

Black Blade

(07/18/2002; 01:04:00 MDT - Msg ID: 80786)

Low prices may spark another Western power crisis

http://biz.yahoo.com/rc/020717/utilities_west_outlook_1.html

Snippit:

LOS ANGELES, July 17 (Reuters) - Western states, rushing to add power plants to avoid a repeat of last year's energy crisis, could face new blackouts in just a couple of years if generators lack incentives to build, planners warn. "It is looking very familiar out there at the moment. With low prices we may be back in the same situation by 2004 where we were a year and a half ago," said John Harrison, spokesman for the Northwest Power Planning Council. Harrison said power plant developers were receiving the same signal they received in the build up to the last crisis, that "now is not the time to build."

The chronic shortage of electricity in western states in 2000 and early 2001 was partly caused by the lack of new power plant construction after several years in which wholesale prices had remained in the doldrums. "Now market prices are back down in the 20s (dollars per megawatt hour) we are beginning to worry that some of the plants that are proposed for completion might not get completed," said Harrison of the planning council, which represents Idaho, Montana, Oregon and Washington.

Steve Larson, Executive Director of the California Energy Commission, said major plants where construction is already underway would be completed but said he was concerned about some which are due to come on line about 2004-2005. He noted that by that time demand for electricity is expected to have grown, draining the current supply surplus.

Black Blade: I see a potential disaster in the making. It isn't only the lack of sufficient power plants, but also the decaying antiquated power grid, and lack of NG pipeline capacity that will hit the economy like a ton of bricks if the economy ever recovers. This in fact will guarantee any economic recovery will be short lived as energy costs go straight to the bottom line and will likely squelch any recovery. Fortunately we are entering an economic depression that could help reduce energy demand.

DOWNUNDER

(07/18/2002; 01:31:04 MDT - Msg ID: 80787)

IT HAD TO HAPPEN - - - - -- GOLDMAN SUCKS --

A new web site has emerged dedicated to listing the bad behaviour of our well known gold enemy ---- check it out!
http://www.goldmansuchs.com/

Black Blade

(07/18/2002; 01:32:05 MDT - Msg ID: 80788)

California's Reliance on Natural Gas Puts State at Risk

http://199.97.97.163/IMDS%PMAKRT0%read%/home/content/users/imds/feeds/knightridder/2002/07/17/krtbn/0000-0503-SJ-NATL-GAS

Snippit:

Depending on the economy and other factors, RAND, which wrote the report for the Energy Foundation, a non-profit organization in San Francisco, projects that California's natural gas consumption will increase between 18 percent and 50 percent by 2010, mostly due to power plants. Natural gas has significant benefits, including low smog levels. But researchers are concerned that unless more pipeline capacity is built, there could be bottlenecks. "California has a real vulnerability to price shocks and power outages for consumers because of its increasing dependence on natural gas and inadequate infrastructure to move it," said Mark Bernstein, director of the research project. The state shouldn't abandon natural gas, he said. Instead, state officials should reduce red tape in permitting new pipelines and should expand incentives for electricity conservation, along with boosting renewable energy. As it is now, California produces 15 percent of the natural gas it uses, with the rest imported from Canada, the Rocky Mountains and New Mexico. Those fields have a projected life of 30 to 75 years. Part of the hesitation over renewable energy is its cost. According to the Energy Commission, the wholesale cost of power from natural gas is 3-5 cents a kilowatt-hour. By comparison, wind costs 4-6 cents; biomass is 6-12 cents; and solar can top 20 cents.

Black Blade: As I have said before, the lack of infrastructure is a major stumbling block that will plague the state for years to come. Californians had just better get used to higher energy costs unless they ramp up power plant construction and infrastructure. This will be especially critical if the economy ever does recover.

Black Blade

(07/18/2002; 03:34:09 MDT - Msg ID: 80789)

Wild Ride Set For Wall Street

http://www.mrci.com/qpnight.asp
The market index futures are sharply higher with the DOW futures over 100. There is good news that Nokia met its earnings estimates (although greatly lowered from last quarter) - oh yeah, these are "pro forma" earnings. So the markets are all gaga over this news. However, the direction of sentiment can easily change as a new "scandal of the day" is breaking. AOL is under fire for phoney accounting practices. Meanwhile the USD index is rockin' higher against the world's currencies. Gold is lower by a buck and oil is falling off on news of an 8.5% reduction in imports suggesting a weakening economy. Yet the markets look to move higher at the open. However, we know how quickly things can change.

- Black Blade

Black Blade

(07/18/2002; 03:42:17 MDT - Msg ID: 80790)

World Markets Rockin' and Rollin'

http://quote.yahoo.com/m2?u
World markets are charging higher except in Finland where Nokia is headquartered. Hmmm...

Nokia also reports that sales are falling off and the next quarter will be less profitable. Of course they will likely beat these new lowered earnings estimates.

Wall Street appears to carry forward with this dead cat bounce until all the giddyness over earnings season wears off and reality sets in. The lowered "actual real net" earnings will result in lower pe ratios that could raise a few eyebrows among the value investing crowd. Either way, it appears that today will be quite "entertaining".

- Black Blade

Black Blade

(07/18/2002; 03:55:03 MDT - Msg ID: 80791)

AOL Made Unconventional Deals

http://biz.yahoo.com/rb/020718/media_aol_1.html

Snippit:

WASHINGTON (Reuters) - America Online Inc. boosted its revenue figures through unconventional deals from 2000 to 2002, before and after its merger with Time Warner Inc., the Washington Post reported on Thursday. A chart printed in connection with the Post article shows a total of $270.1 million in unconventional deals. Robert O'Connor, then vice president of finance for AOL's advertising division, told the Post he outlined concerns in a series of meetings with top executives in 2001 and this year. "Clearly, a lot of what they were living on was revenue that was not of the highest quality. I don't know if they're still in denial, but there were some pretty big business issues they were not willing to face. "For nine months, I tried to get these guys out of denial. I tried to take the perfume off the pig," O'Connor told the newspaper. He resigned in March.

Black Blade: Perfume? What about the lipstick?

Black Blade

(07/18/2002; 04:00:26 MDT - Msg ID: 80792)

"Scandal Of The Day" - AOL Made Unconventional Deals

I think that this may be today's scandal.

BTW, CNBC will have a report on the CPI and why it does not really account for inflation. Exposing the BLS scam? Oh my! It will be on "Business Center" today after hours. I wonder if they will discuss hedonic deflators, seasonality, and other bogus filters used to "massage" the data and designed to cheat seniors outta their COLA adjustments for Social Security.

- Black Blade

misetich

(07/18/2002; 05:18:12 MDT - Msg ID: 80793)

ANALYSIS-Money flows to Europe, but bourses don't benefit

http://www.forbes.com/newswire/2002/07/18/rtr665971.htmlSnip:

Instead, there is growing evidence that money is being "parked" in European cash and short-term investments, waiting for global equity markets to calm down and for some new direction to emerge after a nearly two-year stock sell off.

Where the money eventually goes will determine whether Wall Street continues its historic dominance or whether European assets or something else breaks away and outperforms.
.............
Second, the European Central Bank (ECB) has reported surging net inflows of direct and portfolio investment into the euro zone at the same time that its money supply figures have grown sharply, indicating money sloshing into the financial system.

The latest figures from the ECB show such inflows jumping to 19.3 billion euros in April from 2.2 billion in March.

Usually wary of the inflationary dangers of money supply growth, the ECB and its officials have dismissed much of it this time as simply the result of investor flight from stocks into safer assets such as money market deposits.

Third, many fund managers have been throwing in the towel on equities, particularly in the United States, and upping their cash portfolios.

Misetich

The Gold Market has not benefited (YET) - Cash is being "parked" - A spark is needed for this sloshing money to Gold

Any clue on what IT WILL BE?

Got gold?

Zygoat

(07/18/2002; 05:50:48 MDT - Msg ID: 80794)

What ever happened......?

What ever happened to all of the righteously indignant calls from the avidcow public and congress to invest social security funds in the stock market? Looks like this would be a good time to start with all the "good buys" out there now....

misetich

(07/18/2002; 05:51:12 MDT - Msg ID: 80795)

European Bonds, Swaps Jump as Insurers Buy: Rates of Return

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∣dle=ad_frame2_topfin&s=APTaG8RUYRXVyb3BlSnip:

``There has been some disturbance in the capital markets, and we have lowered our exposure to stocks,'' said Christoph John, a spokesman for Allianz Leben, the life-insurance unit of Allianz AG, Europe's biggest insurer. The company has bought more fixed- income securities, particularly corporate bonds, he said.

Insurers such as Allianz, France's Axa SA and Swiss Life are required to guarantee annual rates of interest on investments such as life insurance and pensions. Germany, France, Italy, Spain and Holland require a minimum return of 2.75 percent or more, and contracts from before the mid-1990s often promised returns of more than 4 percent.

Those returns are harder to make with stocks in a third year of declines. The Dow Jones Stoxx 50 Index has lost about 26 percent in 2002 alone. German 30-year bonds have climbed, driving their yield down to a five-month low of 5.16 percent this week. A basis point is 0.01 percentage point.

``Insurers are staring at their accounts and saying `Oh my God, I've got a serious problem,''' said Meyrick Chapman, head of derivatives strategy at UBS Warburg. ``They are under pressure and part of the strategy is to buy more fixed income.''

Swap Rates Fall

While some financial institutions are buying bonds, many are using the $21 trillion interest-rate swaps market, which is about seven times bigger than the euro government bond market. In a swap contract an investor can receive a fixed interest rate in exchange for floating-rate payments.

Misetich

Insurers, pension funds have been taking a beating with stock market investments-
Can they afford to CONTINUE on gambling and taking additional RISKS in the Stock Market? I don't think so...

This problem is not unique to European insurers. Japanese insurers, pension funds along with US are facing the same dilemma

The gold market WILL SKYROCKET if only a fraction of this money flows into it

What will pull the trigger? OIL?

Got gold?

misetich

(07/18/2002; 06:05:07 MDT - Msg ID: 80796)

Fidelity Magellan June Assets Lowest Since 1998: Mutual Funds

misetich

(07/18/2002; 06:23:02 MDT - Msg ID: 80797)

W.T.O. Says U.S. Tariff Law Violates Rules

http://www.nytimes.com/2002/07/18/business/worldbusiness/18TRAD.htmlSnip:

By BLOOMBERG NEWS

ENEVA, July 17 (Bloomberg News) � The World Trade Organization said today that the United States was violating trade rules with a law that has allowed the government to turn over almost $500 million in import duties to companies like U.S. Steel and Hershey Foods.

The preliminary decision by the organization is a victory for the European Union, Canada and nine other United States trading partners that challenged the law. It may strain trade ties already frayed over disputes that include steel tariffs and farm subsidies.

Misetich

Friction continues between the two Economic Superpowers-
This is a serious of setbacks for the US - as they are continuosly being challenged on all fronts

Got gold?

misetich

(07/18/2002; 06:34:48 MDT - Msg ID: 80798)

Taking Stock of Paul O'Neill -Treasury Secretary's Words Not Always Carefully Chosen

http://www.washingtonpost.com/wp-dyn/articles/A21817-2002Jul17.htmlSnip:

Last week, Treasury Secretary Paul H. O'Neill stood before a packed audience at the U.S. Chamber of Commerce to address the continuing scandals of corporate irresponsibility, banking on his own history as chief executive of Alcoa Inc.

"When I was at Alcoa I never sold a single share of Alcoa stock," he said, repeating a claim he had made on CBS's "Early Show" the day before. "I wanted my financial success and the company's success inextricably linked. Other executives should do the same."

But O'Neill did sell Alcoa stock, 662,547 shares in April 1999 worth nearly $30 million, when he was the company's chairman and chief executive. The proceeds were used to pay the tax liability on stock options he had just purchased, said Treasury spokeswoman Michele Davis. And at the end of the transaction, he had more Alcoa stock, unlike many chief executives who have cashed out of the companies they run.

"This was one integrated transaction, and the net result of the transaction was to increase his holdings of Alcoa stock," she said.

Nonetheless, O'Neill's very public and disputable claim about the stock sale reinforces concerns about what critics say is the secretary's propensity to speak first and think about the consequences later.

No one has suggested any impropriety on O'Neill's part. Selling the stock to raise cash for a tax bill was wise and proper, said Stephen Gallagher, chief economist for SG Cowen. But to then say he had made no stock sales underscores an unflattering reputation, he added.

"He doesn't inspire much confidence," said Vincent Farrell, managing director of Spears, Benzak, Salomon & Farrell, an investment management firm in New York. "He seems to put his foot in his mouth and stumble. I don't think he's helping the cause."

Such comments are particularly vexing for the White House at a time when the financial markets are in turmoil and some observers say the administration needs a credible spokesman for its economic policies and its position on corporate malfeasance.
.................

"Where has O'Neill been during an economic crisis? Africa? Ukraine?" Moore asked
...............
"He didn't sell a share. He sold a lot of shares," said Marc Steinberg, a law professor at Southern Methodist University and a former SEC enforcement lawyer.

O'Neill did eventually sell all his Alcoa stocks and options -- 2.37 million shares -- after joining the Bush administration. He did so from April through June 2001 in response to criticism that he would face a conflict of interest as Treasury secretary if he continued to maintain such large holdings. The sale was worth nearly $100 million.

Misetich

Confidence is eroding in O'Neil's leadership - In time of crisis he's floundering
How can O'Neil inspire confidence to astute foreign investors?

Got gold?

Golden Bear

(07/18/2002; 06:41:50 MDT - Msg ID: 80799)

Defending the American Dream How the Wealthy Defend Against Taxes, Tort and Terrorism

http://www.actionamerica.org/taxecon/defdream.htmlWhen the wealthy are leaving, its time to take notice...., and prepare.

misetich

(07/18/2002; 06:50:42 MDT - Msg ID: 80800)

Greenspan Predicts Companies Will Restate Earnings Downward

http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=18&u=/dowjones/20020718/bs_dowjones/greenspan_predicts_companies_will_restate_earnings_downwardSnip:

WASHINGTON -- Federal Reserve ( news - web sites) Chairman Alan Greenspan ( news - web sites) predicted Wednesday that a large number of U.S. corporations would restate earnings downward in coming months, but that such a development wouldn't hurt the American economy.
.................
"I do believe there are going to be significant restatements," the Fed chairman told the House Financial Services Committee. But, he added, "I am not terribly concerned about any impact" on the economy.
...............

Misetich

Greenspan the bubblemaniac - is denying that a housing bubble exists - just as he denied that a stock market existed -
In a recent poll 34% of US investors replied they were depressed over the stock market declines -and Mr. Print doesn't think a declining market doesn't affect the economy -as unemployment keeps on rising- budget deficits soaring out of control - the $ is tanking and on...and on..

With O'Neil and Greenspan at the help we can only say one thing -

Got gold?

misetich

(07/18/2002; 06:57:07 MDT - Msg ID: 80801)

California power woes could return-Grid operator warns of power-plant delays

http://www.msnbc.com/news/782085.asp?cp1=1Snip:

CONSIDER:
The two biggest utilities still aren't creditworthy, and state government continues to buy the bulk of California's power.

State and federal regulators can't agree on how to fix the flawed system. Wednesday, frustrated federal regulators ordered the state's grid operator to replace its board, increased the price cap on regional power sales and established a new system to detect price-gouging. But a ranking state official said the new price cap "could cost consumers billions of dollars," and called the board restructuring "nonsense."
Energy-generating companies, unsure of the state's plans and facing a credit squeeze fueled by questionable business practices in California and elsewhere, are canceling and delaying planned power plants.

Misetich

Energy problems are not going away soon due to lack of developed resources (Oil, gas) and poor planning (hydro) IF and that's a big IF the economy would turnaround - energy prices would skyrocket

Tougher times are ahead ...for all ...

Got gold?

misetich

(07/18/2002; 07:07:59 MDT - Msg ID: 80802)

A rocky ride ahead for car parts makers

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1026916469900&p=1012571727108Snip:

Like its rival Visteon, which reports earnings on Friday, Delphi is starting to see the benefits of a cost-cutting drive. Both companies - former units of Ford and General Motors respectively - can justifiably point to results as they try to diversify their customer bases away from their former parents
...........
However, many industry analysts are not convinced that the recent strength of US vehicle sales that has been so beneficial to the parts makers can be sustained. "We believe it is more likely that the current near-record, [financing] incentive-fuelled sales pace will decline next year, than post further gains," UBS Warburg said in a recent note.

Second, rising steel prices could become a serious problem when the parts makers' current steel purchasing contracts expire - some of them next year. Steel is one of the biggest raw materials in the car parts industry.

"The whole steel situation is of concern to us. It would be an issue for us next year. We're very concerned that it will be impacting our supply chain," Alan Dawes, Delphi chief financial officer, said yesterday.

Third, there is the spectre of rising warranty costs. Currently, only about 5 per cent of the $10bn in total warranty costs recovered in North America annually are borne by the suppliers, with carmakers paying the rest.

Misetich

Housing industry is booming, car manufacturers are producing at record level - fuelled by cheap financing, refinancing, and incentives -and investors wealth are getting wipeout
Keep in mind that automanufacturers balance sheets keep on deteriorating - Ford is rumored to have significant problems.
Pension plans are underfunded

How long can consumer demand keep up? How much more debt can consumers afford to take on? What happens when interest rates rise?

Got gold?

The Hoople

(07/18/2002; 08:06:25 MDT - Msg ID: 80803)

Naming rights up for grabs

In another sign of the economic times the Philadelphia Phillies have reveived practically no offers for naming rights for the new stadium scheduled to open next year. They even have an on-line site for anybody wishing to bid. So far the best offers are a local car dealer that will supply free cars to the Phillies brass (no cash) and a local bargain furniture dealer. Hey MK: Here's your chance! I can see it now. The USAGOLD Phillies Stadium. Maybe a free ticket with every 100 sovereign order. Like shooting fish in a barrel.

sector

(07/18/2002; 08:37:21 MDT - Msg ID: 80804)

"Everyone Is Selling, No One Is Buying"

http://www.businessweek.com/magazine/content/02_29/b3792139.htmJULY 22, 2002 INTERNATIONAL -- FINANCE

Sinking stocks threaten Europe's growth--and the new shareholder culture.

Europeans are recent converts to the cult of equity. But by now, many European investors must have decided that their newfound faith was misplaced. After 2 1/2 years of declines, markets are suffering a crisis of confidence that shows no sign of abating. In London, the FTSE 100 index is off 36% since its December, 1999, peak. Germany's Xetra DAX 30 has fallen by almost half, and France's CAC 40 is down by 47%. "The market sinks lower and lower," laments Matthew Patterson, a broker at Metzler Bank in Frankfurt. "Everyone is selling, no one is buying."

Now, the fear is that falling markets are touching off a broader landslide. One worry is that European insurers will be forced to step up sales of their equity holdings to meet capital requirements and cover losses--and thus accelerate the markets' plunge. In Britain, for instance, insurance companies own one in three shares, far more than in the U.S. "There's a distinct possibility that the markets could fall 40% more," says Hugh Hendry, a hedge-fund and mutual-fund manager at Odey Asset Management in London. That would mean a return to levels not seen since 1995.
++++++++++++++++++++++++++++++++++++++

It seems that confidence matters. It also seems that efforts from the Master of the Universe, GWB, Paul "Mr. Stick Foot In Mouth" O'Neill are only serving to exaserbate the problem.

Of course, Bush's clever plan to move Social Security into Wall Street is dead on arrival.

His political opponents are beside themselves with glee. Never mind that they too drag baggage in the form of Senator "Sleaze" Corzine.

Gimli_

(07/18/2002; 08:42:35 MDT - Msg ID: 80805)

Value of World Gold Reserves... help me with the math

I had heard that all the worlds gold reserves are about $80-90 Billion or the approximate worht of Bill Gates. However, the figures below say otherwise:

All countries holding - 29355.1 tonnes
Institutions holding - 4196.0 tonnes
World - 33551.2 tonnes
(1 metric tonnes = 32,151 troy ounces)

I hope someone can provide credible verification of the above data, but if it is correct, then:

33,551 tonnes x 32,151 = ~1,000,000,000 troy ounces

-- ONE TRILLION TROY OUNCES!!!

So @ $300/troy ounce, the value of the worlds gold reserves exceeds $300 TRILLION DOLLARS!!

I think the world's total annual output in goods and services is about $30 trillion, so gold reserves at present value are a whopping 10 TIMES or TEN YEARS worth of total World Gross Produce of goods and services.

Help me! I must be wrong somewhere....

USAGOLD

(07/18/2002; 08:54:27 MDT - Msg ID: 80806)

Hoople.. . .

If one only had an unlimited advertising budget, what fun we'd have.

Here's an offer that came by e-mail the other day:

*

For the Head of Press Office/PR Relations

The untold story of the last U-Boat mission .. to smuggle Nazi gold to Argentina

We are looking for a Project Sponsor.

We are leading the U-1238 project in September of this year to conduct the full exploration of the recently discovered U-1238, a Nazi U-boat, sunk in July 1945 in 90
metres of water on a rocky seabed off the coast of Argentina. The occupants left the sinking U boat in rubber dinghies, so it is not a war grave, but it will contain looted treasures -
which could include 10 tons of gold - and waterproof containers full of documents which were ready to start the Fourth Reich in Argentina.

The Argentinian Navy are supplying a 50 crew warship plus a helicopter for 10 days this September to help with the exploration.

We are looking for a Project Sponsor who will underwrite the complete 10 week project. The cost involved of such a sponsorship is in the region of �80,00 ($115,000) which
includes the Argentinian Navy supplying a warship and a helicopter to the project. This story will generate worldwide interest and we can assure the Project Sponsor will benefit from
huge international media coverage - for full details please visit our website at _______which includes our recent 1,100 word press release.

If you have any queries please contact me.

**

MKComment: Just think a stadium and a U-boat salvage both sponsored by USAGOLD!! I wonder if all those stadium named after telecoms, high-tech blow-ups and other various and sundry bubble companies will sink toward the center of the earth as this mania continues to unwind and the accounting scandals take their real toll. . . . . . . .

Max Rabbitz

(07/18/2002; 08:55:08 MDT - Msg ID: 80807)

Gimili

1,000,000,000 is a billion not a trillion. Total value of world gold reserves would thus be closer to only $300 billion. However, I velieve at least half is lent out never to be returned.

Econoclast

(07/18/2002; 08:59:54 MDT - Msg ID: 80808)

MarkeTalk... (et al)

Unfortunately. I'm not sure commodity price suppression...will result in shortages that would expose the current system and end it. I have known and maintained that the gold market is only a proxy in this respect for the larger commodities market. Of course it is going on, and for the reasons that have been discussed.
I have been trying to get my mind around this suppression.
If a farmer of anything is forced to sell his crops for less than the natural market price due to a pricing mechanism that can be influenced downward by paper, what is he/she going to do? The farmer will sell all he/she can. They will streamline and achieve maximum efficiency in their farming. They will grow as much as possible to make their nut on volume.
I have read that there is more than enough food in the world. Our distribution system is the only reason there is even one hungry person on the planet. So the technology and possibility is there for the farmer to survive. He/she is just "kept down by the man" with the price suppression. But the food is produced, maybe even more so.
If the farmer just can't make ends meet, then what? They will take on more debt. This serves a couple purposes (for the suppressors). It puts his assets on the hook to the same system that is holding down his prices, pressuring the farmer to produce more. It also adds to debt, which as we know, lets the system create more of its "money".
If/when the farmer goes bankrupt, the system takes his assets (farm) and sells them to (probably) a large corporate interest who has better economies of scale and also has a financial wing which is active in the paper world making paper profits, maybe even off of the paper suppression (there is your grower who is shorting) which is allowing the company to subsidize its production wing to stay afloat.
Where does it all go and how does it all end?
I don't know, but anyone that can acquire real things at these suppressed prices (whether gold or bushels of wheat) is taking advantage of the subsidy and protecting themselves the best way that the system will let them.

Gimli_

(07/18/2002; 09:08:27 MDT - Msg ID: 80809)

1,000,000,000 is a billion not a trillion

Gimli
1,000,000,000 is a billion not a trillion. Total value of world gold reserves would thus be closer to only $300 billion. However, I velieve at least half is lent out never to be returned.
----------

Well DUH!! Thanks you for checking my math. I feel so much better about my physical and PMM holdings now!

:-))))))))))))

Max Rabbitz

(07/18/2002; 09:12:29 MDT - Msg ID: 80810)

Gimli

WOW, You had me going there for a minute. Those mulitiple zeros get confusing. Almost sold my stash. :-)

Chris Powell

(07/18/2002; 09:26:57 MDT - Msg ID: 80811)

Paul questions Greenspan about gold

http://groups.yahoo.com/group/gata/message/1182U.S. Rep. Ron Paul questioned Fed Chairman Alan
Greenspan about gold at Wednesday's hearing of
the House Financial Services Committee:

http://groups.yahoo.com/group/gata/message/1182

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

Gimli_

(07/18/2002; 09:30:11 MDT - Msg ID: 80812)

Scared me too! Reality check is worth the scare though! :-)))

....so gold reserves at present value are a measly 1/100 (1%) of total World Gross Produce of goods and services.

(07/18/2002; 10:02:27 MDT - Msg ID: 80813)

HSBC Holdings Director New Chairman of Anglo American

The Global investment bank HSBC was mentioned in yesterday's

afternoon USA gold report. A current director of HSBC

Holdings, Sir Mark Moody-Stuart, is the new Chairman

of Anglo American.

sector

(07/18/2002; 10:26:14 MDT - Msg ID: 80814)

Global: Still Blowing Bubbles

http://www.morganstanley.com/GEFdata/digests/20020718-thu.html#anchor1Stephen Roach (New York)

I'll be the first to concede that the US economy has been more resilient than I had expected in this post-bubble era. So far, all we have seen is the mildest and shortest recession on record -- a surprisingly benign outcome given the seemingly lethal combination of rising unemployment and a sharply negative equity wealth effect. Ever-rising property values -- and the ability of households to extract purchasing power from these inflated assets -- appear to be one of the key missing pieces of this puzzle. Can this asset-driven growth dynamic be sustained?

The short answer is, I doubt it. Three key reasons come to mind: First, the housing cycle is extended and increasingly vulnerable to a downturn. Second, the American consumer must now face up to the legacy of an asset-driven consumption binge -- a debt overhang with a painful workout. A third consideration could prove most vexing. The Federal Reserve is doing everything in its power to forestall the endgame. Monetary policy is being aimed increasingly at prolonging the housing cycle -- a strategy that runs a growing risk of adding yet another bubble to the Fed's recent track record. To me, all this paints a picture of an increasingly slippery slope for an already precarious US economy. In what follows, I deal with each of these three considerations in turn.
[�]
That's where the Fed comes in. I must confess my surprise and disappointment at Fed Chairman Alan Greenspan's assessment of this issue in his recent monetary policy report to the Congress. He left little doubt, in my mind, that the central bank would be delighted if American households continued to spend newly extracted equity from rapidly appreciating property values. He went out his way to stress the role that monetary policy has played in supporting consumer spending by encouraging "households to purchase homes, refinance debt and lower debt service burdens, and extract equity from homes to finance expenditures." In a shaky demand climate, this source of growth has suddenly taken on even greater importance.

I find this approach particularly worrisome in a post-bubble US economy. With the real economic reverberations of the popped equity bubble only just starting to sink in, the Fed seems more than willing to risk inflating another bubble in order to temper the distress. This may sound harsh. But I continue to believe that asset bubbles are to be avoided at all costs and that it is the central bank's responsibility to temper these excesses before they get out of hand. Otherwise, "infectious greed" -- as Greenspan puts it -- takes on a life of its own.

In my opinion, the Fed squandered the opportunity to pop the equity bubble in late 1996 and early 1997. Back then, an "irrationally exuberant" equity bubble was suddenly rationalized by a Fed that embraced the New Economy with open arms. Today's script seems hauntingly familiar. An overly extended housing cycle is now being legitimized as a sustainable source of economic expansion. From bubble to bubble -- there seems to be no stopping the follies and perils of asset-and debt-driven economic growth.
++++++++++++++++++++++++++++++++++

Each Federal Reserve move is designed to delay the inevitable financial collapse. This tactic is a manifestation of Mr. Greenspan's principle character defect�that of conflict avoidance. Lawrence Meyer's recent abrupt resignation with only two weeks notice tends to support the premise that the results-oriented Meyer and the do-nothing Greenspan were incompatible.

Like all deep analyticals, Greenspan fears loss of face more than anything else and cannot deal with conflict, so his Federal Reserve Bank "Exit Strategy" is to continue the charade�to avoid the necessary confrontation of a huge policy failure�to, at ALL COSTS, avoid personal loss of face.

In the end, Congress will be forced to accept that imbuing so much power in a single person was a grave mistake and we will see a kind of Glass/Stegall Act limiting Future Feds...IF the country survives.

USAGOLD / Centennial Precious Metals, Inc.

(07/18/2002; 10:47:35 MDT - Msg ID: 80815)

The Fruit of Your Labor: another day, another dollar...

http://www.usagold.com/ProductsPage.html

Harvest Time
Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

1-800-869-5115
Centennial has three decades of experience in the field

Aragorn III

(07/18/2002; 12:20:01 MDT - Msg ID: 80816)

A very simple tale of gold and traveling time

Told in this special way, the peoples of two superpower continents, dollarland and euroland, will see the same truth without the usual confusion of thought translation between their two experiences.

To begin, a small history. No need to trust accuracy of others books, you may know this history looking back over your own shoulder:
Jan 1999 launch of ECB. Euro at $1.18 zigs and zags lower against dollar for 22 months with multiple crossings of this exchange rate through parity: one euro equals one dollar, a similar thought in these two lands. From here we shall speak (and listen!).

The price of gold at these successive "meetings as equals" tells a tale like Sunrise in the East: much may cloud the minds of men among intervening days, but this dawn shall ever be the way of the living world. So it is with the gold tale, too, seen in cloudless morning's light.

1st Almost-Parity Benchmark:
euro dip near dollar mid July 1999: gold price = 253 your money

Next Parity Benchmark:
dollar = euro at early Dec 1999: gold price = 280 your money

Next Parity Benchmark:
dollar = euro at late Jan 2000: gold price = 284 your money

Next Parity Benchmark:
dollar = euro at late Feb 2000: gold price = 295 your money

[History: euro falls to record low (dollar to record high) below 83 U.S. cents late Oct 2000, then turns net movements upward against dollar to present day.]

Next (being the latest) Parity Benchmark:
euro = dollar at mid July 2002: gold price = 317 your money

Over this time the many clouds have blown through to hinder your ease of navigation: strong dollar, falling euro, falling dollar, strong euro. Let the clear sky offered by these parity benchmarks provide for your correction if you have been wayward, then hold steady this course to fortune!

got gold?

MarkeTalk

(07/18/2002; 13:10:05 MDT - Msg ID: 80817)

Grain prices suppression--Golden Bear, Econoclast et al

It appears that my post from last night has stirred some discussion about the suppression of grain prices by unknown parties. I am glad to see such a lively discussion here on the Forum!

In response to some comments made today about normal producer hedging, I called my source and discussed this in greater detail. Here is the short version. The U.S. and Brazil are the two biggest growers and exporters of soybeans in the world. Since each country is located in different hemispheres, they alternate every six months or so in planting and harvesting. Our spring in the north is Brazil's autumn in the south.

Brazil planted this year's crop in November 2001 and harvested it during May/June 2002. Supposedly it was a record harvest at 43.5 million metric tons (according to our USDA) but Brazil's equivalent agricultural department said the yield came in at only 41.5 million metric tons due to drought conditions. The discprepancy in both numbers shows that the USDA does not want to face reality and give credence that the food supply is dwindling. But enough with the actual numbers. That is not my point here.

The main point my source stressed was that for Brazil and Argentina to start selling massive amounts of paper futures contracts now--just after their harvest--is highly unusual. If any normal producer hedging in done, it happens once the crop is being planted or is already in the ground--which means this coming November or December 2002 and not today. An argument can be made, however, that a nominal amount of forward hedging takes place well in advance of planting IF the market price for soybeans is unusually high. Thus, in terms of recently devalued Brazilian reals, the market price of soybeans is very high. Even in terms of U.S. Dollars, the market price of soybeans is above average due to drought conditions in the Midwest.

In closing, while nominal amounts of selling future Brazilian soybean production is considered normal, the current pace of selling future Brazilian soybean production is out of the ordinary and lends credence to the belief that this market is being intentionally and deliberately manipulated.

GC

White Rose

(07/18/2002; 13:27:24 MDT - Msg ID: 80818)

Stree in the system: Banks are dropping on the SM

Bank stocks are selling hard. There are rumors of bank problems. Sometimes I wonder who will be hurt the most by the lack of accurate financial information in the mainstream media.

Black Blade

(07/18/2002; 13:49:35 MDT - Msg ID: 80819)

WorldCom To File Bankruptcy

Just across the wire - WorldCom will file for bankruptcy protetcion on Monday according to the WSJ.

- Black Blade

sector

(07/18/2002; 13:56:07 MDT - Msg ID: 80820)

DOW Diving -127

Golds Spiking into the closeThere will be no magic "Levitated" rebound today and most likely tomorrow either.

The vaunted options expiration day may be very ugly indeed.

Black Blade

(07/18/2002; 14:19:48 MDT - Msg ID: 80821)

Stock Declines Prompt Lifestyle, Portfolio Changes

http://www.washingtonpost.com/wp-dyn/articles/A21904-2002Jul17.html

Snippit:

The sharp decline of the stock market is slowly but steadily prompting many investors to make changes in the way they manage their money and even how they live from day to day. For some, plunging share prices have meant shifting funds from equities to more conservative bonds and money-market funds. For others, it has meant lifestyle changes.

Black Blade: Some interesting examples in the linked article. However, the pain is only just begun. Get defensive now or suffer even more financial pain.

BTW, tonight should be "entertaining" in overseas market action. I see that the Pied Pipers are out in full force on CNBC telling us that we are at a bottom. They have been harping this old line for the last 2 or 3 years. Hmmm...

R Powell

(07/18/2002; 14:57:21 MDT - Msg ID: 80822)

Agricultural hedging // MarkeTalk

Good to hear from you Most of today's large growers of soybeans, wheat, corn and cotton are exactly that- large agribusinesses. The difference between a crop's yearly high price and it's yearly lows is probably the difference between making a profit or not. Even the small family run farm has a computer and probably at least one family member knowledgeable about and closely monitoring the futures markets. The idea of hedging is by no means unique to the metals' markets. IMHO hedging by agribusines is not limited to a specific time of year although most analysts' will advise their clients to buy and sell certain percentages only according to price. A good deal of this decision making now depends on the nuances of the government's loan programs.

With the combination of the weaker Brazilian currency and the big run up in grain prices over just the last month or so, it does not surprise me that a greater percentage has been sold. Remember, these are futures contracts which can not only lock in a profitable price but also can be bought back for a profit should prices drop! Sell the crop, then buy it back cheaper, all while dad and the kids are still planting or harvesting and the real crop can still be sold. Or, mom can lock in that high price and deliver the crop at that price assuring a profit. There are numerous strategies.

Add to this that all grown commodity prices have been so low (many at 20, 25 or 30 year lows) that the recent move up seems like that gift from heaven that so many have waited so long for, and massive selling is not surprising. Some of this has been weather related with corn in a position of needing almost perfect weather from here to harvest to produce a good crop BUT, if mother nature co-operates, prices will break. This is another incentive to sell now. The Brazilian farmer may also fear higher export competition from the USA if the world price of our exports becomes more attractive with a weakening dollar. I'm sure the average Brazilian is much more knowledgeable about currency exchange rates than is her American counterpart.

American corn was planted late, with some acreage loss to soybeans which can go in later. This late planting was due to wet fields which promotes shallow root systems (making drought damage more likely) for that corn that did get planted and a latter "silking" timeframe which increases the danger of heat stress. Also this late planting increases the frost danger from a later harvest.
So... corn prices could skyrocket even more. Wheat has been damaged by drought and heat.

If, as so many think, the value of paper assets is declining and will cause prices of real commodity to rise, then is it not also logical that there may be some fundamental reasons for a general CRB rise? The diehard technical guys are calling for an untrend. The fundamentals seem to support this call. Of course, I'd say that the fundamentals move prices verifying the technical call. The declining dollar will help exports and the government has passed another HUGE farming subsidy bill (so complicated that few can understand it) called, in typical doublespeak, the "Freedom to farm" act.
It negates the healthy market forces of supply and demand but what politian will ever be caught voting against the American farmer? I'd love to get paid for NOT pouring concrete!

Sorry to be off subject but the subject of hedging is gold related and the rising CRB index (rising commodity prices) will lift metals along with everything else. Remember, we know that gold and silver is money but we are few. Most of the money managers, that will play a huge part in moving metals prices skyward, couldn't care less whether it's pork bellies or silver. The chart reading analysts might only look at the commodity identifing name on the chart in order to place their buy/sell orders. "Yes, that's correct, puchase 500,000 bushels of that gold colored metal on the December contract, please."
Rich

Canuck

(07/18/2002; 15:32:22 MDT - Msg ID: 80823)

Grab a beer and catch this one; the BEST LAUGH EVAR!!!!!!!

http://biz.yahoo.com/rc/020718/economy_wallstreet_1.html"WALL STREET BEGS CORPORATE AMERICA TO CLEAN UP ITS ACT"

Hahahahhahahahhaahahahhahahahahahahahah

misetich

(07/18/2002; 15:49:00 MDT - Msg ID: 80824)

Microsoft's Profit Rises on Windows XP Sales; Forecasts for Year Lowered

misetich

(07/18/2002; 16:00:17 MDT - Msg ID: 80825)

Bloomerg headline news - Sales dropping

http://www.bloomberg.com/bbn/index.html?sidenav=frontSnips:

Sun Micro Has Profit of $20 Million; Sales Fall for Fifth Quarter in Row
Nortel Loss Narrows as Acquisition-Related Costs Decline; Sales Drop 40%
Baxter Shares Plunge After Sales Growth Falls Short of Forecast, Net Drops
Lilly Says FDA's Manufacturing Concerns May Delay New Drugs, Hurt Earnings

Misetich

Massaging Earnings is more difficult (impossible) in this environment -
Balance Sheets are worse then presented as many off-balance sheet items exist- too many fudged numbers

Expect more CEO's and CFO's to quit as they don't want be made an "example" of new SEC rules -

Would anybody guess why Bush is taking the fall? After all Clinton, Rubin, Greenspan are the individuals in whose tenure the "infectious greed" took place aided by the Threesome cheerleading
And is it ironic that Democrats are trying to capitalize on "scandals"

Got gold?

misetich

(07/18/2002; 16:25:00 MDT - Msg ID: 80826)

Gap between US corp earnings, taxes paid rose-study

http://www.forbes.com/newswire/2002/07/18/rtr667433.htmlSnip:

WASHINGTON, July 18 (Reuters) - The gap between pretax earnings reported by companies to their shareholders and the amount of income those companies reported to the Internal Revenue Service rose in the mid- to late 1990s, according to a study released on Thursday.

The gap reached $159.02 billion in 1998, according to a paper in the Statistics of Income Bulletin, issued by the IRS.
...............
Plesko's study also showed hundreds of large companies reported pretax profits to their shareholders but also told the IRS they had no income subject to taxes in the 1996-1998 period.

Misetich

That makes sense - evading taxes is a federal offence punishable via prison terms if convicted- defrauding investors on the other hand is called "infectious greed".

No wonder systemic risks are rising and a severe US $ decline is assured

Got gold?

Canuck

(07/18/2002; 16:31:51 MDT - Msg ID: 80827)

"Far from a bottom"

http://www.comstockfunds.com/index.cfm?act=Newsletter.cfm&category=Comstock%20Daily%20Comment≠wsletterid=770&menugroup=Home&aol=1Canuck:

The theme so far in 2Q02 reporting and 2nd half guidance is that profits are not going anywhere and revenues will be flat to down. The SM's have a major problem, HUGE. S&P cracked 900 today and the DOW is nearing the 911 lows, the last index to do so. Puncturing the Sept. low will devasting.

And look out below. If investors see the third year of losses there will be blood. Everyone I talk to moans and groans of losses, 10%, 20%, 50% more. I don't mention the handsome PM gains, they know. ;)

And watch out for Aug. 14 when CEO's must attest to their numbers and watch the snowballing approval of expenses stock options. Apparently expenses stock options can account for 10% of bottom line, Ouch!

This could go anywhere in the next couple months, maybe couple weeks. The cloudt thought is how gold will fare out. Some theories have it that commodities will 'roll over' in this deflationary bust and so does gold roll too? Or does the supreme safe haven bust out. Thoughts are if the US takes it on the chin in the near future and thus dollar declines gold of course will retest 325/328.

The next couple weeks will be CRITICAL my friends, it may well set the intermediate future, "crash helmets on" is old news, "adjust jockstraps" I'm afraid is in order.

Canuck.

TownCrier

(07/18/2002; 16:35:10 MDT - Msg ID: 80828)

Another gloomy day on Wall Street calls for a look at this week's Storm Watch by Jim Puplava

http://www.usagold.com/gildedopinion/puplava/20020712.htmlThis time Jim warns of the dangers of excessive debt and reminds us of society's prediliction to create and throw new money at its problems.

Excerpt:

Investors and voters cry out for Washington intervention to fix things and make them better. ...Every time there was a crisis, the Fed flooded the financial markets with money to fix the problem -- whatever its source -- the peso crisis or the insolvency of a hedge fund. The standard solution was always to create more money.

Throughout the 1990's the supply of money and credit in the system expanded nonstop. ...It created the illusion of prosperity. This prosperity turned into a full-fledged boom, then turned into a bubble, producing malinvestments in the economy and speculation in the financial markets. The secondary effects of that bubble were a grossly inflated stock market, rising debt levels at all levels within the economy, an expanding trade deficit, and a negative savings rate.

..The fact remains that investing has always been an uncertain endeavor. There are no guarantees, only degrees of risk. An American President and Congress can't guarantee investment outcomes. Nor will they be able to replace the trillions of dollars lost in this bear market. The more they try to interfere, the more they try to legislate, the more they try to tax, the worse things will become.

-----(click url above for full commentary)-----

R.

Gandalf the White

(07/18/2002; 16:46:02 MDT - Msg ID: 80829)

Thank you, KING Aragorn III

Aragorn III (07/18/02; 12:20:01MT - usagold.com msg#: 80816)
A very simple tale of gold and traveling time.
---
The Hobbits love your "simple stories" !! Please keep them coming. This also ties in well with the data in Sir Sectors earlier post.
--
sector (07/17/02; 17:50:11MT - usagold.com msg#: 80765)
The Dollar Index Price of gold is Rising
===
Question to ALL --- WHY do you think that people can learn so much more easily from "STORIES", than from other forms of communications -- (say instructional VDO's or books).
===
<;-)

R Powell

(07/18/2002; 17:47:38 MDT - Msg ID: 80830)

Gandolf the White

Learning from stories?
A spoonful of sugar helps the medicine go down.
One really good teacher is usually all it takes to inspire learning. Would that there were more and thanks to all who have aided me in my search.
To learn, have some fun and profit.
Rich

longj

(07/18/2002; 18:22:38 MDT - Msg ID: 80831)

POG chart vs time of ARAGORN III data

http://www.kitcomm.com/comments/gold/userimages/paritypog.jpgLooks like we have an outlyer from the trend....maybe we should get to 440??

Black Blade

(07/18/2002; 18:53:29 MDT - Msg ID: 80832)

Everyone Is Selling, No One Is Buying

http://www.businessweek.com/magazine/content/02_29/b3792139.htm
Snippit:

Now, the fear is that falling markets are touching off a broader landslide. One worry is that European insurers will be forced to step up sales of their equity holdings to meet capital requirements and cover losses--and thus accelerate the markets' plunge. In Britain, for instance, insurance companies own one in three shares, far more than in the U.S. "There's a distinct possibility that the markets could fall 40% more," says Hugh Hendry, a hedge-fund and mutual-fund manager at Odey Asset Management in London. That would mean a return to levels not seen since 1995.

So what will it take to get stocks to reverse direction? Probably a bigger drop in valuations. "Valuations aren't compellingly cheap yet," says Michael Hartnett, director of European equity strategy at Merrill Lynch & Co. in London. On average, European shares are trading at around 20 times earnings, vs. about 25 in the U.S. But the market won't pick up again until major blue chips such as Deutsche Telekom, Britain's Vodafone, and even BP trade at roughly 10 times earnings, argues fund manager Hendry. In all European bear markets since World War II, markets didn't bottom out until price-earnings ratios fell to the 5-to-12 range, he says. So Hendry is snapping up shares that play on that trend, such as Dutch shopping-mall developer Rodamco and South African gold-mining company Durban Roodepoort Deep Ltd. "It's the height of madness to be fully invested in equities now," says Hendry. No doubt many a disillusioned European investor agrees.

Black Blade: Of course the US markets are in similar straits. The markets are grossly overvalued and must fall much further to reach fair value. It gets much worse of course as earnings are falling faster than share prices. This will extend the spread between grossly overvalued levels vs. fairly valued levels. This is going to be one ugly bear market. I pointed out this scenario long before George W. Bush was elected to the presidency. I even began to refer to "Dubya" as the Herbert Hoover of our generation � not because of anything he did, but because the course toward disaster was already set and nothing could be done to stop it. The energy crisis pushed the energy devouring "New Economy" over the edge. Now we have come to where we must pay for the excesses built up during the speculative market mania. Those who took advantage of the "cheap gold" prices then are sitting pretty now. Precious metals are the anchor to any prudent portfolio and insures against the economic disaster that we are witness to today.

misetich

(07/18/2002; 18:57:06 MDT - Msg ID: 80833)

Once bitten twice shy

http://www.bridport.ch/BridPublic/news.html Each time the market stages a short-term recovery, it is a reflection of the hope of a bottom being found. Many analysts are now preaching the "oversold" message. We find little argument in their favour. There is nothing to say that equity valuations over time in the 21st century should be very different from in the 20th. When, even after the recent falls, average PEs are at 23 for the DJIA and 36 for the S&P 500, versus a 20th century PE average of 16 and 12 respectively, then it is difficult to conclude that the market correction is over. We rejoice that Greenspan can reassure investors that the US economy is fundamentally sound in terms of production. That does not alter the need for a weaker dollar and debt reduction among households and corporations. Neither does it change the issue of irrational stock valuations.

We hold to the view that neither terrorism nor accounting fraud is the prime cause of the present malaise. To be sure, the former has changed the pattern of US Government spending, but cheating at high levels is better understood as a symptom of delusion, including belief in an economy with new rules, and the ability to spend on credit without a day of reckoning. Understanding current events may be better helped by seeking basic changes in the economy, and it is in this regard that the feedback effect of financial markets on the real economy can be relevant.

Baby boomers are coming up to retirement. That is already making them more conservative in their investments - the natural result of preferring protection of assets already earned over taking risks to expand them further. In addition, this large group of investors has had its fingers seriously burnt since early 2000 and has just about had enough. They are unlikely to jump back into the markets yet again even when it is apparent that the bottom has been found. A rerun of the 1990's bull market is therefore off the agenda for years.

If "once bitten, twice shy" is one aspect of human behaviour, another is the tendency to shift blame from oneself to others. We have very mixed feelings about this in the context of investors suing financial advisers. On the one hand it is clear that advice was often frivolous or self-seeking, but, on the other hand, mature adults are meant to have sufficient discernment to decide for themselves. The iniquitous US contingency fee system is allowing all manner of lawsuits for investors seeking someone to blame. Such "let's blame someone" lawsuits are spreading to the UK under "Conditional Fees", allowed since 2000. Fortunately the new UK rules are not so extreme as to allow the absurdities of the US legal system.
...............

Greenspan sang his cheery refrain, but his listeners had heard it many times before. The President and the Administration just lack all credibility when it comes to getting tough on accounting fraud. Nevertheless, more regulation is inevitable since self-criticism and proactive improvement by the US audit profession seems very unlikely. We take our hat off to Coca-Cola for biting the bullet on expensing options (as we do, by the way) and giving the lie to those who resist this practice on the grounds that it is too complicated.

Misetich

Stock options is only one of the many issues that crooked CEO's, etc have used and it appears that its been overemphasized

Derivatives - off balance sheet transactions- allows these crooks to cook their books see: Enron, JPM etc.

Surprisingly current administration, Treasury, Greenspan have been unable to find a "diversion" - A little war here and there always helps (Iraq) but can the US afford it this time, if OIL zooms up to $60-70?

I don't think so!

Got gold?

Black Blade

(07/18/2002; 18:59:48 MDT - Msg ID: 80834)

Bankruptcies possible as airlines' losses continue

http://www.usatoday.com/money/biztravel/2002-07-18-airline-recovery.htm

Snippit:

Ten months after the terrorist attacks, major airlines' march toward recovery has stalled amid weak travel demand and a sea of cheap fares. Instead of an expected summer turnaround, demand hasn't improved since March and revenue is off 20%. More expected losses in the third quarter � typically the industry's strongest � mean some airlines could be at risk this fall and winter, the slowest travel periods of the year.

Bankruptcies are "definitely" possible, says Dave Swierenga, chief economist for the Air Transport Association, the major carriers' trade group. "If we're seeing this during our peak cash-generating time, some airlines are going to have no alternative" to a Chapter 11 filing, says Bill Swelbar, an aviation consultant at Eclat. "This could be a long, cold winter."

Black Blade: I guess I had better use up those frequent flyer miles sooner than planned.

steady

(07/18/2002; 19:01:14 MDT - Msg ID: 80835)

the owners of the federal reserve(private) bank

http://www.rense.com/general24/whocontrolsfed.htmNow that we know the Federal Reserve is a privately owned, for-profit corporation, a natural question would be: who OWNS this company? Peter Kershaw provides the answer in "Economic Solutions" where he lists the ten primary shareholders in the Federal Reserve banking system.

1) The Rothschild Family - London 2) The Rothschild Family - Berlin 3) The Lazard Brothers - Paris 4) Israel Seiff - Italy 5) Kuhn-Loeb Company - Germany 6) The Warburgs - Amsterdam 7) The Warburgs - Hamburg 8) Lehman Brothers - New York 9) Goldman & Sachs - New York 10) The Rockefeller Family - New York

Now I don't know about you, but something is terribly wrong with this situation. Namely, don't we live in AMERICA? If so, why are seven of the top ten stockholders located in FOREIGN countries? That's 70%! To further convey how screwed-up this system is, Jim Marrs provides the following data in his phenomenal book, "Rule By Secrecy." He says that the Federal Reserve Bank of New York, which undeniably controls the other eleven Federal Reserve branches, is essentially controlled by two financial institutions:

1) Chase-Manhattan (controlled by the Rockefellers) - 6,389,445 shares - 32.3%
2) Citbank - 4,051,851 shares - 20.5%

click link for the rest of the story
got gold? give it a silver lining!

Bulldog

(07/18/2002; 19:25:40 MDT - Msg ID: 80836)

retirement funds

Got tired of hoping for another run on the gold stocks. In
fact, phoned the broker and told her to cash up, pay the government the tax and give the rest to me. You can guess what I do with the proceeds. I agree with many here that we are on the cusp of a free-fall in the markets. I have no idea how gold will perform, but my sense tells me that that in $U.S. terms, it should go to the moon as the fiat sinks into oblivion. Good thing they got all those colored new money to replace the useless old stuff.

Here in Alberta and most of North America, the farmers have drought. The government today supplied $324,000,000 in aid
to Alberta farmers who supply 60% of Canada's beef. Hard to continue the family farm without having a full time job in town. Shades of the 20's and 30's.

The layoffs in Corporate America must be starting to affect housing prices but there certainly is no hint of that in Canada. I assume that the shenanigans going on in the States
will follow here.

When does oil break out and climb to $50/bbl? The Middle East needs to get ready for it's war with America and to finance their needs, they require a big hike in crude. Saudi
seems to be distancing itself from the U.S.. You don't take on just Saddam, but the whole Muslim world.

The Great Disruption is upon us, God bless you all.

Black Blade

(07/18/2002; 19:28:14 MDT - Msg ID: 80837)

A SECULAR CASE FOR GOLD revisited

http://www.mips1.net/mgdld.nsf/2090f74ba5297296422567b5004b8fb2/85256bcd005228b642256bf90052dd9f/$FILE/A%20Secular%20Case%20for%20Gold%20revisted%2031%20May%202002.pdf

Snippit:

Three months ago on 25 February 2002 we published a very bullish argument for gold and gold shares in A Secular Case for Gold. Since this report the dollar gold price has appreciated by 10%, while the gold shares have skyrocketed, with the un-hedged producers appreciating by over 100%.

We see little prospect of further falls in fabrication demand, as "it is important to note that the fabricators and consumers have already adjusted to the higher price range. This has helped yesterday's price ceiling become today's price floor. Producer hedging is expected to decline further due to industry consolidation (i.e. un-hedged large acquirers continue to unwind hedge positions of smaller acquired gold producers). In time, if interest rates were to rise, the contango might increase sufficiently to tempt some producers to add to their hedge books � but this is not expected to occur to any great extent in 2002. As long as producers and their shareholders are convinced that prices will rise, hedging is likely to remain out of favour. The problems in the Middle East (Israel vs. Palestine, US vs. Iraq), Southern Asia (India vs. Pakistan) and the former Soviet States, coupled with the risks of terrorist attacks in the developed world have clearly increased gold's allure as a safe haven.

Black Blade: A good short concise statement of the pluses for a higher gold price are presented. Well worth reading (in pdf format � see link).

Blackjack

(07/18/2002; 19:36:55 MDT - Msg ID: 80838)

Drought Emergency, Crop Failures hit Italy hard, Security forces on Alert!

http://www.reuters.com/news_article.jhtml?type=worldnews&StoryID=1221891ROME (Reuters) - Italy said on Thursday it will spend millions to counter a southern drought that has withered crops, damaged industry and caused a public outcry.

Agriculture Minister Giovanni Alemanno told a news conference the government will spend 670 million euros ($674 million) and has introduced three measures to ease a crisis, which has prompted a state of emergency in four regions.

The interior minister has also put security forces on alert in response to growing protests by exasperated farmers and others angered by continued shortages in recent months.

The Italian farmers' federation said the crisis will cost members 3.5 billion euros this year and warned that the situation could worsen as reservoirs farther north run low.
______________

Not much major media coverage of a growing drought and crop
failures problem world wide. Grain prices going up? We shall see.

Arcticfox

(07/18/2002; 20:02:57 MDT - Msg ID: 80839)

Will US$ Index drop below 104??

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s&w=5&t=c&a=2EOM

Black Blade

(07/18/2002; 20:05:08 MDT - Msg ID: 80840)

My Oh My! - Gold Is Rockin' Tonight

http://quotes.ino.com/exchanges/?c=metals
Gold looks primed to jump through the $320 an ounce level. Considering that Mr. Softy (Microsoft) missed big, it is no wonder. OK, so they missed big if the one time charges and expensed options are included. The people are seeing through the phoney baloney book keeping now.

- Black Blade

Black Blade

(07/18/2002; 20:15:38 MDT - Msg ID: 80841)

Asia Starts Off Ugly

http://quote.yahoo.com/m2?u
Asian markets are starting off in negative territory. It looks like an "entertaining" night ahead. Meanwhile Gold has forged higher. There is a lot of talk about the profitless and jobless recovery (oxymoron?). The jobs data released this morning is quite interesting. What isn't mentioned is that these peoplebeing laid off are not finding jobs or at least jobs that compensate for those lost. Many are simply not finding jobs and so they fall through the cracks of the BLS data.

As always, get outta debt (and stay outta debt), get Gold and Silver portfolio insurance, and start a nonperishable food and basic goods storage program. Get defensive - it looks like it will get quite ugly.

- Black Blade

Arcticfox

(07/18/2002; 20:21:49 MDT - Msg ID: 80842)

Now at 104...

eom

Arcticfox

(07/18/2002; 20:34:24 MDT - Msg ID: 80843)

Euro Smoken...Do I hear A buck and two...

Blackjack

(07/18/2002; 20:35:12 MDT - Msg ID: 80844)

Reservists called up in build-up for Iraq

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2002/07/19/nirq19.xml&sSheet=/news/2002/07/19/ixnewstop.htmlThe Ministry of Defence is planning a mass mobilisation of key reservists beginning in September, heightening expectation that the United States and Britain are stepping up preparations for an attack on Iraq.

British troops have also been pulled out of Nato's ACE Mobile Force rapid reaction corps and British involvement in a large number of exercises has been cancelled or scaled down to leave troops ready for the attack on Iraq.

The Prime Minister has strongly backed the idea of a pre-emptive strike on Iraq and refused to commit the Government to a vote in the House of Commons on the deployment of British forces.

British military planners are working on the basis that Britain will provide a very large force, including an armoured division, a naval task force and substantial numbers of combat aircraft.

The decision to pull out of the Nato rapid reaction force was taken at the same time as it was announced that the bulk of British forces were being withdrawn from Afghanistan and Bosnia.

It means that the 1,500 British troops previously earmarked for the force will not now be taking part in two major exercises this autumn, in Germany and Ukraine.

In another move to free forces for an attack on Iraq, 3,000 members of Britain's main fighting force, 1 (UK) Armoured Division, have been withdrawn from a tank exercise in Poland. The MoD insisted that no decision had been made on Iraq but did not deny that planning was under way. "Any government department has contingency plans," a spokesman said.

Defence sources said the reservists who would be called up would cover key shortages such as pilots, medical staff, special forces, intelligence and signals.
____________
War clouds looming.

Truthcaster

(07/18/2002; 20:35:45 MDT - Msg ID: 80845)

Dollar @ new lows

Hi all at the last trade the dollar 103.97 and sinking
I think it's time for the PPT. Tomorrow
looks like more red fun..

cyberbat

(07/18/2002; 20:38:26 MDT - Msg ID: 80846)

Gold Jail Break

Gold just shot up to $318.50 as it hit Hong Kong. This could be the break we've all been waiting for. Even the Hedge Boys and the gold banks can't stave off pent up demand in the whole world. Got gold ? Plenty of it ? Hang on!! we're fixin' to take the wild ride !!
Cyberbat

Golden Bear

(07/18/2002; 20:44:37 MDT - Msg ID: 80847)

PPT, intervention in markets, including commodities... Normal vs abnormal market behaviour.

http://www.capital-insight.com/freearchive.aspThe Plunge Promotion Team

5th July 2002

�Let's say there has been a bear market going on for a week. Now to a pit trader, that's a MAJOR bear market: five straight trading days of declining prices, with small rallies along the way. It's already worn him out.

One day, the traders are watching the tape and it's kind of slow because volume has receded during the decline. Suddenly, the market seems to be stalled out. A couple of traders, who have been there the longest, you know, the grizzled old guys that really know the game�.say, �Buy me ten, buy me 50, buy me a 100.�

A few heads turn because these are pretty good sized lots. Sure enough the market starts to tick up a little bit. Then it stops and starts to recede very slowly. Most people are saying, �Ah, it's the same old story, a rally and a decline. It's going to come back to new lows just like it's been doing for a week. Forget it!�

This is the point of lethargy and conviction that marks a second wave.

Soon they notice that the market isn't making a new low � it's holding at a higher bottom .Well, to traders, that's a fundamental news event. They start watching more closely and all of a sudden they get a bit excited and one or two orders pop out. Then the floodgates open. They are screaming and yelling buy orders and , sure enough the prices are roaring up.�

Robert Prechter in The Wave Principle of Human Social Behaviour.

Though far from being initiates into the arcana of Elliott Wave Theory, we do have a deal of respect for Bob Prechter's understanding of market behaviour and psychology.

Our preferred system, known as Market Profile, too, is all about how well a market does in facilitating trade and how that clues us into the evolution of the participants� subjective valuation scales.

On a new probe down below previously established value, if volume picks up, it means the new, lower price is attracting trade � that initiative sellers are stepping up the intensity because perceptions of value have altered substantially downwards.

For such eager selling activity to run into a brick wall of solid, obdurate, longer timeframe buying activity is almost unheard of.

In economic terms, it may well be that a supply schedule moves down � that is what the new, initiative selling implies � but for the demand schedule � the eagerness of buyers at a given price - to move up simultaneously is almost unthinkable.

Longer timeframe players � the ones who can be ultimately thought of as the market drivers - in any case, very rarely differ so much in their immediate assessment of the market's price as to compete with one another directly in this fashion.

Like ancient generals they may hurl insults at one another from behind the mass of their troops and they may certainly direct their forces into violent confrontation, but they will not be wielding gladius and scutum with the rankers, much less duelling ostentatiously in No-Man's Land like Homeric braggarts.

Price may move rapidly back away from a failed probe into oversold (or overbought) territory as these longer horizon value hunters snuff out the impetus and give rise to a rejection, but it is unusual for this to take place with much volume being present � for the victory is simply too rapidly won and, in any case, it is only the skirmishers in the opposition's van who are repulsed, not his main grouping.

A much more typical case is that a frenzy of panicked selling erupts as anguished longs, their collective resolve broken under the unremittingly lower bent of prices, clamour to get out and the locals and daytraders to whom they sell play instant pass-the-parcel.

The auction lower in these circumstances is fraught, rapid and usually extended. It often incorporates, if not gaps, at least lacunae of low volume as liquidity is strained.

As in hoplite warfare, we can see the battle is not lost from the front, but the rear, as morale crumbles and the line suddenly dissolves into flight.

Then, suddenly, like a passing thunder shower, it stops. The great convective downdraft is exhausted and a momentary calm descends like the falling of a curtain at the end of a violent Wagnerian climax.

Seconds tick agonisingly by as the market hovers on that intense gravitational cusp where, not so much spacetime, as pricetime, is elongated beyond the range of normal experience.

Then the tide turns and the merest trickle back upward again serves instantly to trigger a reverse avalanche, a snowballing, kicking, screaming counter-reaction which bears the market violently and triumphantly higher, leaving the victorious buyers in possession of the field, with a close well above the middle of the day's range and often well inside the previous day's value area, too.

THAT is �capitulation�. THAT is a signal for the unbloodied veteran to re-enter and BUY.

So far, we have not had one of those days, but instead a welter of false signals to swamp out the messages which the price action usually sends us.

What we have had increasingly of late, is the phenomenon of the sort we had last Wednesday when, as the market gapped open sharply lower on the open, reacting to the WorldCom revelations, instant heavy volume was witnessed, holding the lows and pushing prices up against the initiative selling.

Not content with once, but twice, that day the same thing occurred, for - when the FOMC statement that evening contained the phrase that demand was �moderating� - stocks swooned again late in the session.

Again, miraculously, a wave of heavy futures buying emerged, halting the slide and then recouping the losses.

Once more, this week, Wednesday was set to open in ugly fashion after No 2 chipmaker AMD had cut its Q2 revenue forecast for the second time in weeks to a level only two-thirds of what it had reckoned on as recently as April.

With the Nasdaq having held precariously on the LTCM Panic spike lows of 1357 the night before, there was little support ahead of the July 1996 spike to 1008, or the October 1995 low of 959.

Thus, things looked bleak when, to a roll of drums and to applause cards being held up before the studio audience, another heavy wave of buying reinforced the crumbling defences, this time making its appearance in the Qubes � the Nasdaq 100 tracking index.

America could retire to its Independence Day barbecue and fireworks, with the market safely back in positive territory.

So what is at work here?

There is a parallel to this sort of behaviour which manifests itself in the forex market when a big player attempts to prevent prices breaching a barrier option knock-out before expiry of the contract.

Thus, suppose there are thresholds for these highly non-linear derivatives whereby, say Y120 would erase (or perhaps activate) a big Dollar-Yen options position. Then, as the price grinds toward this, the big boy might be aggressive on the bid, attempting to take out the sellers and leave his options intact.

Now, it is just conceivable in these days of derivative dipsomania, that something analogous might arise in equities, but, even granted that, we must be dealing with some very strange and complex strategies since the price being �defended� only seems to be of import for the briefest of periods.

These anomalous volume spikes � usually more clearly present in the index trackers, DIA, SPY and QQQ � never seem to occur at the same price, something which would be akin to a forex heavy buying ahead of Y120 one day, then Y121 the next and Y119 three trading days later.

If that serves to rule out the possibility that these options trades are really behind the phenomenon we are trying to explain, we have, by a process of elimination, only one thing left to reckon on � non-market behaviour, or, in less euphemistic language, lightly-disguised intervention.

This is not such a far-fetched conclusion as one might suppose.

It does not require Scully and Mulder to believe what was rehearsed, for example, at the CFR's �Financial Vulnerability� wargame in January 2000, might one day be put into practice.

Here, a range of complex and inter related financial and geopolitical events were played out - with the active involvement of such luminaries as finance's Mr. Fixit, Peter �Fly� Fisher himself.

Among the things casually discussed � with something of an eerie prescience - were such matters as shooting Venezuela's maverick president Hugo Chavez to keep oil flowing to the US (read it if you doubt us) and inviting JPM to bail out a big mutual fund in total contravention of all rules and regulations, but with clandestine underwriting from a Fed which provided the necessary funds.

The first, naturally, had no bearing on the recent coup attempt in Caracas, nor could the latter possibly be associated with the unexplained $24 billion surge in the provision of funds to the Money Centre banks of New York on May 29th this year (much less anything that happened after the WTC assault).

However, as Greenspan himself put it in a keynote address to a conference in the July of that year, convened to debate the lessons learned in the sandbox:-

Private-market processes have served this country and the world economy well to date, and we should rely on them as much as possible as we go forward. This is not to say that the official sector will have no role to play in the next global crisis, or the one after that. Official safety nets and interventions cannot be eliminated entirely. There are limits to the size and extent of the shocks that the private sector can manage, at least in the short run, without official assistance.

Of course, in the aftermath of the LTCM crisis, our heroes were only too eager to satisfy their personal vanity and to further their political ambitions by lifting the curtain a little on their titanic efforts to save the world.

Brett D. Fromson, a Washington Post staff writer, for example, filed a story on Sunday, February 23, 1997 which actually bore the title, �The Plunge Protection Team� in which he painted a detailed picture of what was involved.

These quiet meetings of the (President's) Working Group (on Financial Markets � official title of the PPT) are the financial world's equivalent of the war room. The officials gather regularly to discuss options and review crisis scenarios because they know that the government's reaction to a crumbling stock market would have a critical impact on investor confidence around the world.�

"The government has a real role to play to make a 1987-style sudden market break less likely. That is an issue we all spent a lot of time thinking about and planning for," said a former government official who attended Working Group meetings. "You go through lots of fire drills and scenarios. You make sure you have thought ahead of time of what kind of information you will need and what you have the legal authority to do."

In the event of a financial crisis, each federal agency with a seat at the table of the Working Group has a confidential plan. At the SEC, for example, the plan is called the "red book" because of the colour of its cover. It is officially known as the Executive Directory for Market Contingencies. The major U.S. stock markets have copies of the commission's plan as well as the CFTC's.

What does this entail? Well, the article becomes a little coy at this point:-

The Working Group's main goal, officials say, would be to keep the markets operating in the event of a sudden, stomach-churning plunge in stock prices -- and to prevent a panicky run on banks, brokerage firms and mutual funds. Officials worry that if investors all tried to head for the exit at the same time, there wouldn't be enough room -- or in financial terms, liquidity -- for them all to get through. In that event, the smoothly running global financial machine would begin to lock up.

Then, revealingly, it states:-

In a crisis, a lot of deference is paid to the Fed," a former member of the Working Group said. "They are the only ones with any money."

In an even more explicit article, entitled �How to turn a Dive into a Bungee Jump�, the Daily Telegraph's Ambrose Pritchard-Evans actually capped a broadly similar exposition with the startlingly overt assertion that:-

There is also speculation that it intervenes directly in the stock market, buying shares and futures contracts to prop up the indexes. Some analysts believe this form of market rigging is already going on in the US, quietly, using a $US40 billion ($67.7 billion) slush fund, known as the Exchange Stabilisation Fund, under the direct control of the Treasury Secretary.

Of more recent vintage, The Observer filled in the anxious wait for US markets to re-open after the WTC attack with a piece filed by Richard Wachman and Jamie Doward which remarked:-

A secretive committee - the Working Group on Financial Markets, dubbed 'the plunge protection team' - includes bankers as well as representatives of the New York Stock Exchange, Nasdaq and the US Treasury. It is ready to co-ordinate intervention by the Federal Reserve on an unprecedented scale.

The Fed, supported by the banks, will buy equities from mutual funds and other institutional sellers if there is evidence of panic selling in the wake of last week's carnage.

The authorities are determined to avert a worldwide slump in share prices like the crashes of 1987 or 1929. Investment banks and their broking subsidiaries are to block short-selling by speculators and hedge funds by making it hard for them to obtain prices on favourable terms.

'Everyone is eager to avoid "contagion", where prices fall rapidly as investors react lemming-like to a falling index,' said one banker.

The 'plunge protection team' was established by a special executive order issued by former President Ronald Reagan in 1989. It is known to include senior bankers at leading Wall Street institutions such as Merrill Lynch and Goldman Sachs. It has acted before, in the early Nineties and during the 1998 LTCM hedge fund crisis.

In the October 18th 2001 WSJ, we had this about the WTC turnaround:

As stocks hit their lows that day, Wednesday, Sept. 19, traders noticed a hopeful sign. Goldman, Merrill and Lehman were large buyers for their clients of S&P-500 stock-index futures and NDX futures, tracking the Nasdaq 100 index. That suggested some big investors(!!!) believed that the market was due for an upturn.

"People were looking for a ray of light," says Terence Duggan, a trader at Pimco Equity Advisors. "When [futures contracts] started to move, everyone dove in."

A bout of buying lifted the Dow Jones Industrials by more than 250 points in the last hour of trading that Wednesday, trimming the loss for the day to about 144 points. By the following Monday, 13 days after the attack, stocks were clearly on the rebound. The industrial average, which fell Wednesday by 151.26 points to close at 9232.97, is now down just 3.9% from before the terror attack.

So the system had steadied, with a little help from its friends. Says Laszlo Birinyi, global trading strategist for Deutsche Bank: "The financial markets were held together perhaps more than anyone expected."

Yes, we bet they did.

But, does this matter?

The Fed and the UST routinely intervene in markets, indeed the Fed was set up to intervene. Bonds, currencies, gold � not to mention oil, via the Strategic Petroleum Reserve, and all manner of agricultural products, through the agency of other arms of government all these are regularly targeted for Governmental price-fixing..

The BOJ, BOK and HKMA openly interfere in stock markets, too, so what's the big deal about any hypothetical PPT activity?

Considerations of constitutionality, while of prime significance to Libertarian concerns about the role of the state, are not the issue here, but the functioning of markets is.

It is a prime tenet of von Mises and the rest of the Austrians that any government intervention in the market serves to pervert it and to pave the way for more intervention, usually to undo the unforeseen and unfailingly malign effect of the first.

Suppressing market activity in setting free and fair prices in exchange is like introducing a necrosis, a financial leprosy, if you will, into an extremity, even a limb, by preventing the unadulterated propagation of those critical market signals which allow the efficient allocation of resources to take place and for production, and hence income, to be maximised.

Just as in the case of a real leper, that lack of feeling, that desensitization allows for injuries and infections to occur without remedy, until, in the end, the victim succumbs to a life of blight, disfigurement and even incapacity.

So if the PPT is truly active � as we suspect, but cannot ever prove � we must draw two profound conclusions;

firstly, that markets are weaker than they seem � with all that lesson implies for traders - and that the short-sighted attempt to circumvent a violent decline is only likely to prolong the agony, while increasing the risk that the misled innocent, as well as the consciously culpable, are put at loss by being inveigled to overstretch themselves as part of the wrong-headed fetish for increased consumption as a panacea for all ills:
secondly, that the retardation of the necessary liquidation of the excesses of the Boom serve no purpose other than to prolong � but not perpetuate � the incumbency of those in positions of power, both governmental and corporate, who have been most at fault in reducing us to our present straits. This is a much more serious hazard to the commonwealth because, while the first is the way to turn a Bust into a Depression, this is the path by which a Depression is turned into a Dictatorship � however disguised in the rhetoric of economic �security�.
Rather than a Plunge Protection Team, what we need is the emetic of a Plunge Promotion Team.

Send �em all to Chapter 11, let God sort them out, and let the entrepreneurs get on with investing scarce capital as best they can to alleviate Man's needs.

Waverider

(07/18/2002; 20:49:27 MDT - Msg ID: 80848)

US $$

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s&w=10&t=l&a=2Sinking into oblivion...

Arcticfox

(07/18/2002; 20:51:24 MDT - Msg ID: 80849)

Can any of the TA crowd out there list the next support(s) for the US$ index..

Black Blade

(07/18/2002; 20:53:02 MDT - Msg ID: 80850)

Lotsa Fun After Hours

http://www.mrci.com/qpnight.asp
Gold is rocking, USD is falling, Oil is lower, and market index futures are off sharply. The boys and girls on Wall Street must be burning the midnight oil trying to work out this one.

- Black Blade

Blackjack

(07/18/2002; 20:54:18 MDT - Msg ID: 80851)

Siebel to Cut 16% of Staff as 2nd-Qtr Profit Drops

San Mateo, California, July 17 (Bloomberg) -- Siebel Systems Inc., the world's biggest maker of customer-service software, said it will eliminate about 1,150 jobs as second-quarter profit plummeted 61 percent, missing estimates..."
___________

"Toronto, July 17 (Bloomberg) -- Celestica Inc., which makes electronics for brand-name companies, said it will eliminate as many as 6,000 jobs, or 15 percent of its staff, as the company reduces production because of lower demand.
...
``We don't see a significant turnaround in the next two quarters so elected to make the adjustments that we had been holding off on,'' Polistuk said. Cutting 10 percent to 15 percent of the company's workforce and reducing manufacturing capacity ``will help us raise our utilization,'' he said."
___________
If Siebel is doing these kinds of cuts, start watching others in the software sector.

Golden Bear

(07/18/2002; 20:55:55 MDT - Msg ID: 80852)

Secret World of Banking....., by Ralph Nader

http://www.counterpunch.org/nader0715.htmlSnippit

"...All the headlines about corporate disclosures and the need for transparency are sending shivers through the banking industry and its regulators who have always lived in a protected and largely secret world.

Hundreds of millions of dollars are expended on examinations of depository institutions, but most of the key findings are treated as inside information between the bankers and the regulators who see a mutual advantage in keeping the depositors and investors-and even Members of Congress-in the dark about the gritty details of their performance. Only when an institution actually fails and taxpayer-backed deposit insurance funds are lost do the hard facts of mismanagement and regulatory miscues become public knowledge...."

------------------------------
GB: All part of history's biggest scam... Fiat money

cyberbat

(07/18/2002; 21:05:54 MDT - Msg ID: 80853)

Flood Gates From Hell

Dollar U.S.- .9839 to Euro 1.0164
Nikkei down -248.10
Gold uo $2.00 to $318.90
Get you some popcorn and coke and get a ring side seat. Too much in our favor now. The unwinding is unleashing the "dark vision" on all that are not in gold and euros. Too many holes to plug. Everything coming apart at the seams. Man your battle stations for tomorrow the killing fields will begin. Wall Street first, then the dollar, options falling apart, oh how I'm going to love that herd mentality all headed for the door at once.

TheJuniorMiner

(07/18/2002; 21:25:16 MDT - Msg ID: 80854)

Golden Bear

Wow Golden //bear..What a great essay! My complements

sector

(07/18/2002; 21:33:04 MDT - Msg ID: 80855)

About Tomorrow's Option Expiration

Either an all-out stock market rout or another DOW, V bottom "Levitation" act
But by now even the President's loyal press secretary, Ari Fleischer must be having second thoughts about market manipulation and the PPT.

Should the cabal manage to save the day, AND the options expiration, the questions will rain on him and the Prez like hail.

There comes a time when the game is up...maybe tomorrow is it...maybe not ...this time.

Then there's gold...with Morgan Stanley's Barton Biggs going over to the gold bugs...jeeze! Thats TWO biggies this week, HSBC and MSs Biggs to go with the Royal Bank of Canada, Richard Russell, The King Report and a long escalator full of upwardly moving formerly gold quiet analysts.

Golden Bear

(07/18/2002; 22:14:03 MDT - Msg ID: 80856)

TheJuniorMiner (msg#: 80854)

Greetings TJM,

Not my piece. I thought it was such an excellent article that I copied it in total for all to appreciate. The kudos deservedly belongs to Sean Corrigan, for his eloquent presentation and melding of the technical and fundamental aspects of the markets...

Cheers.

Chris Powell

(07/18/2002; 22:15:15 MDT - Msg ID: 80857)

Leading Arabic newspaper features GATA

http://groups.yahoo.com/group/gata/message/1184The world's leading Arabic newspaper, Alhayat,
publishes a big report about GATA. This may
have substantial impact in the Arab world.

http://groups.yahoo.com/group/gata/message/1184

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

Black Blade

(07/18/2002; 22:24:10 MDT - Msg ID: 80858)

US petroleum imports mark largest 6-month decline in more than a decade

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=GenIn&ARTICLE_ID=149475

Snippit:

HOUSTON, July 17 -- Due to a combination of increased domestic supplies and "exceptionally weak" demand, US petroleum imports fell more than 8% during the first half of this year�the largest 6-month decline in more than a decade, officials at the American Petroleum Institute in Washington, DC, reported Wednesday.

Black Blade: This energy indicator shows that the US economy is falling off into the abyss, and therefore not as much energy is needed. Welcome to the new Great Depression.

Shermag

(07/18/2002; 22:43:58 MDT - Msg ID: 80859)

Econoclast: Lower prices of an agricultural commodity does reduce production

As a part-time farmer, I can attest that lower prices induce less production.

One of the most significant effects of a price drop is a shift to alternate crops deemed more profitable. Beyond that, once a particular crop is commited to, there are numerous inputs such as fertilizers, herbicides, insecticides, and fungicides which are all subject to declining marginal value, whose break-even point shifts with a change in commodity price. Farmers that I know continually weigh the cost benefit of all yield enhancing actions throughout a growing season.

Having said that, there are the insidious effects of subsidies that distort or obscure the market balancing mechanisms normally at play. American (and European I believe) farmers of many commodities have a floor price for their products, losing that important price signal.

Shermag

(07/18/2002; 22:57:00 MDT - Msg ID: 80860)

One year dollar index chart

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12A rather telling picture of a major change in fortune for the dollar.

Waverider

(07/19/2002; 00:00:23 MDT - Msg ID: 80861)

A History of the Commodity Research Bureau (CRB)

http://www.crbtrader.com/history.aspThis is an interesting link for some background information on the CRB for anyone interested. Cheers!
Waverider

Blackjack

(07/19/2002; 00:03:30 MDT - Msg ID: 80862)

China Shanghai Gold Exchange to open soon/ Silver needed for no-lead solder policy.

http://www.gold-eagle.com/gold_digest_02/chapman070802.htmlThis is the most significant event since Americans were allowed to own gold bullion in 1971. We expect China will be a major gold buyer quickly, and will continue to be for years to come. This will be part of China's plan for economic supremacy rather than accomplishing power through war. The sale of dollars for gold would be natural for the Chinese. Gold adds to China's economic power.

That is also why Russia is accumulating gold. Short-term we will experience rising inflation due to the declining dollar, which will cause further dollar selling and more gold purchases. Remember gold is the ultimate currency and all the desperate, surreptitious, devious acts of the FED, Treasury, and gold bullion bankers to suppress gold and manipulate the gold market will be unsuccessful.

The Silver Eagle mintage for the first six months of 2002 was 770,083. The mint will need at least 5,000,000 ounces to continue the program until the end of the year; this while investor demand is moving up sharply. Next year and following years more than 10,000,000 will be needed yearly. This should put major upward pressure on silver prices.

House Resolution 4971 the Silver Eagle Coin Continuation Act passed; it also previously passed the Senate as S2594 and now awaits George W. Bush's signature.

The US silver stockpile has gone from 5.9 billion ounces to 110 million ounces in 60 years or an average draw down of 3,000 tons a year. Last year 7,700 tons or about 250 million ounces was consumed. Global production is about 575 million ounces. Global demand is about 888 million ounces. That is about a 315 million ounce shortfall. Above ground silver supplies should be exhausted within 18 months.

The Defense Logistics Agency has delivered all of the remaining 467 tons of silver in the National Defense stockpile to the US Mint for use in its coinage program. This is the end of an era as we look forward to a silver supply squeeze.

Electronics manufacturing companies are starting to pursue a no-lead solder policy. The replacement solder is lead-free and 3.5% silver. The usage could be enormous as the Japanese government has outlawed lead in solder in electronics by 2005 and OSHA is requiring more reporting and record keeping for companies that consume more than 100 lbs. of lead a year.
_________

Maybe Gates bought a lot of Pan American Silver because he knew about silver being used in solder instead of lead for electronics? This could create a huge demand for silver by 2005.

Black Blade

(07/19/2002; 01:11:00 MDT - Msg ID: 80863)

Indonesia will no longer guarantee some bank deposits

http://biz.yahoo.com/ap/020719/indonesia_banks_1.html

Snippit:

JAKARTA, Indonesia (AP) -- Looking for ways to save money, the Indonesian government has announced plans to gradually phase out a costly program that guarantees depositors money when a bank fails, The Jakarta Post reported Friday. If a bank is shut down, the government normally covers all of its obligations including depositors' money. The government plans to abolish this by February 2004, when deposits above $11,000 will no longer be guaranteed, The Jakarta Post reported.

Black Blade: Following in Japan's footsteps.

Black Blade

(07/19/2002; 01:26:24 MDT - Msg ID: 80864)

Gold sentiment index remains bullish

http://cbs.marketwatch.com/news/story.asp?guid=%7B345DD08C%2DFF96%2D4848%2D8BAC%2DE22F96C4A86D%7D&siteid=mktw
Snippit:

As of the close on Thursday, the index stood at 23.1 percent. That means that the average timer is allocating 76.9 percent of his gold portfolio to cash. This is bullish because it means that most timers remain skeptical that gold is in a bull market. On all other occasions in recent years when gold approached or exceeded $300 per ounce, gold timers fell over themselves jumping on the bullish bandwagon -- with the Hulbert Financial Digest's gold sentiment index sometimes getting to as high as 90 percent.

This spring and summer, in contrast, the average gold timer has refused to turn bullish, even though gold has risen further than it has on any prior occasion of the last five years. During the current gold market, the highest level to which the HFD's sentiment index rose was 45.8 percent -- or just half of its peak levels during previous gold rallies.

Black Blade: Works for me.

Black Blade

(07/19/2002; 01:48:44 MDT - Msg ID: 80865)

European Markets In Full Retreat

http://quote.yahoo.com/m2?u
European markets are following Asian markets into oblivion this morning. A total sea of red. US market futures are still in negative territory and the USD is under pressure. Yep, another "entertaining" day in the global markets.

- Black Blade

Blackjack

(07/19/2002; 01:49:27 MDT - Msg ID: 80866)

90 Billion Euros wiped off market value in few minutes! WOW

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1222854 LONDON (Reuters) - Europe's biggest companies had 90 billion euros wiped off their market value at the open on Friday after U.S. shares slumped to fresh five-year lows in late trade on Thursday and as Ericsson posted gloomy earnings.

The world's biggest maker of mobile networks reported a worse-than-expected second quarter loss of 3.5 billion Swedish crowns, its seventh straight loss, and announced a long-awaited $3.25 billion rights issue.

That hit Ericsson shares hard in unofficial trading and knocked fellow telecom equipment makers Alcatel and Nokia down between 5.1 percent and 6.7 percent.

Epcos AG added to the tech gloom after the German electronic components maker unexpectedly announced a loss for the third quarter and said it saw no improvement in the fourth quarter, pushing its shares down by 13 percent.

"It's worrying that companies are not managing to transfer the seemingly good macroeconomic data into good profit growth, which indicates some sort of structural problem," said Sharon Coombs, European strategist for HSBC.

That echoed talk earlier in the year of a 'profitless recovery', although a weak Philadelphia Fed survey after most European markets closed on Thursday suggested the U.S. economy was flying into fresh turbulence anyway.
____________
When will it occur to people to buy gold? hmmm

Aragorn III

(07/19/2002; 02:37:44 MDT - Msg ID: 80867)

Sir Steady, your message 80835

Your words: "Now that we know the Federal Reserve is a privately owned, for-profit corporation, a natural question would be: who OWNS this company? ...1) The Rothschild Family - London 2) The Rothschild Family - Berlin 3) The Lazard Brothers - Paris 4) Israel Seiff - Italy 5) Kuhn-Loeb Company - Germany 6) The Warburgs - Amsterdam 7) The Warburgs - Hamburg... Now I don't know about you, but something is terribly wrong with this situation. Namely, don't we live in AMERICA? If so, why are seven of the top ten stockholders located in FOREIGN countries? ...how screwed-up this system is..."

To comprehend an importance in your post, may it be concluded that you and your business associations are tightly descendant from, exclusively,
Iroquois?
Delaware?
Shawnee?
Cherokee?
Powhatan?
Creek?
Dakota?
Arapaho?
Cheyenne?
Comanche?
Navajo?
Sioux?
Natchez?
Illinois?
Chickasaw?
Osage?
Wampanoag?
Blackfoot?
Crow?
Ute?
Hopi?
Zuni?
Pomo?
ChinooK?

If we are not frightened away by April showers, we may be around to enjoy the May flowers they bring. And if we examine Mayflowers, we inevitably find Europeans at their roots. This rattles you?

got ancestors?

Aragorn III

(07/19/2002; 03:22:41 MDT - Msg ID: 80868)

Longj, I am honored by your graph construction (again below)

http://www.kitcomm.com/comments/gold/userimages/paritypog.jpgAny two points may define a line, that is true, but four points asks for best fit. Even as the old tide turns and gold finds merely its tender footing in these numbers given here, we must agree even the flat 25% (first point joined to last) for these three years is no niggling thing. Compare with Wall Street during this time???

If curious, the euro channel today supports gold between 315 to 355 in euro money, but in dollarland do not be lulled by current currency parity for future price notions -- it is a snapshot for only this moment.. The dollar channel today opens to hyperbolic.

Mr. Greenspan has much to weigh on his mind these nights.

got gold?

Black Blade

(07/19/2002; 03:22:47 MDT - Msg ID: 80869)

Very Ugly In Europe

http://quote.yahoo.com/m2?u
It has gone from bad to worse as Euro markets are hit hard this morning. The US market index futures are hammered hard this moring. It appears that more accounting problems are coming to light in the US in the premarket. Nicor (GAS) will restate earnings for the last few years on accounting irregularities - Scandal of the day? It looks like Duke Energy is being punished for suspicious trades. Also, Ericsson appears to have missed its numbers badly. They will also issue a 1:1 rights offering. Euro markets are wooried. Several more corporate losses are to be reported today. In a word - "Grim"

- Black Blade

Black Blade

(07/19/2002; 03:45:32 MDT - Msg ID: 80870)

Dollar Plunges vs Euro, Yen on Waning Demand for U.S. Stocks

Black Blade

(07/19/2002; 03:48:50 MDT - Msg ID: 80871)

Currency Intervention?

There is a rumor that Japan has just entered the currency markets again this morning through foriegn markets. I guess it's possible that the Japanese are desperately attempting to weaken the yen against the USD. Should get "interesting".

- Black Blade

Golden Bear

(07/19/2002; 03:49:03 MDT - Msg ID: 80872)

US Dollar Losing Its Position As Asia's Reserve Currency

http://www.rense.com/general27/rec.htmSnippit:

North-East Asian central banks have turned away from US dollar foreign exchange reserves, accelerating the US dollar's fall and boosting the euro's claim to become the world's second reserve currency. �

Westpac's currency strategist, Robert Rennie, said the euro's surge through the $US1 barrier on Monday night was propelled in part by buying from North-East Asia. �

A report by Mr Rennie shows the central banks of China, Taiwan, Hong Kong and South Korea accumulated an "unprecedented" $US66 billion ($117 billion) in foreign reserves in the first six months of this year, but they did not spend those reserves on US dollar assets.

Kev

(07/19/2002; 03:54:38 MDT - Msg ID: 80873)

Centaur Mining to be wound up... what with 40 ton hedge?

Fri, Jul 19 2002 6:55 PM AEST
CANTAUR MINING TO BE WOUND UP NEXT MONTH
http://www.abc.net.au/news/business/2002/07/item20020719144455_1.htm

May 7-May 11, 2001
On Wednesday gold remained rangebound in the morning, fixing at $265.20 in London. Market talk that failed Australian producer Centaur Mining & Exploration Ltd might be FORCED to close out its hedge book brought the market suddenly to life later in the day and gold surged upwards, reaching above $270 before running into overhead resistance.

May 14 , 2001 :
Centaur has an obligation to deliver gold against a forward contract. But because the company stands to be wound up on Monday, it is FORCED to go to market and buy more than a million ounces of gold at an average $423 a troy ounce in order to close its hedge books.

April 23, 2001 * Robert Chapman:
Australia's Centaur Mining has defaulted on 40 TONS of gold to Chase Bank, yet the media fails to carry the news.

*** What about those 40 tons? Is that already settled? Or do they have to buy it back within one month? ***

Golden Bear

(07/19/2002; 04:09:50 MDT - Msg ID: 80874)

Bank Of Japan Sees 1971-Style Dollar Crash

http://www.rense.com/general27/japsees.htmSnippit:

EIR on June 7 ("Asia Debates End of Deregulation") and June 14 ("Moody's Attack Last Straw for Japan?") examined the questions: Is Asia starting to reject the "Wall Street Model" of deregulation? Is it Japan's economy which is about to blow up the global financial system, as Moody's Investors' Service claims? Or isn't it rather the dollar which is about to blow up, due to "junk bond economics" not just at Enron, but across the whole U.S. corporate sector, trade deficit and federal budget? �

The answers are yes, no, and yes. Once again Lyndon LaRouche and EIR had the story first. Now, leaders in Asia have begun to speak in public about the demise of the dollar, of the "Wall Street Bubble," and of the U.S.-British Model of "free-market" deregulation. Bank of Japan Governor Masaru Hayami made a shocking public warning July 11 of a coming 1971-style U.S. dollar crisis, the kind which collapsed the postwar Bretton Woods monetary system. "The possibility of a worldwide move to dump the greenback is fairly high," he told a televised meeting of the Japanese Diet. "A deterioration in U.S. fiscal conditions could lead to a weaker dollar," which "could prompt investors outside the U.S. to withdraw assets from the country."

Such blunt statements by Japan's Central Bank, let aloneby the highly conservative 85-year-old BOJ Governor, are unheard of.

Kev

(07/19/2002; 04:12:15 MDT - Msg ID: 80875)

Barton - Morgan Stanley - Biggs gold bull !

MORGAN STANLEY "NAME" BACKS GOLD
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256BFA00770F6E?OpenDocument

In a report circulated on Wednesday, Biggs wrote: "�I have never believed in gold, for all the conventional reasons, but now I am changing what's left of my mind. I think there is a plausible case that a professionally managed portfolio consisting of the metal itself and gold shares could realize returns of 15% real per annum in the difficult environment ahead."

The firm believes the "long-term equilibrium or inflation-adjusted price of gold in today's dollars is about *** $500/oz ***, as compared to the current price in the low $300s."

Blackjack

(07/19/2002; 04:17:45 MDT - Msg ID: 80876)

1 Trillion Euros market value wiped out this year/European consumer confidence falling hard

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∣dle=ad_frame2_topfin&s=APTfVUhV_SXRhbGlhRome, July 19 (Bloomberg) -- Italian consumer confidence dropped to the lowest level in more than three years in July as stock markets slumped, threatening Europe's economic recovery.

An index based on a monthly survey of 2,000 households by the state-funded Isae institute fell to 113.4, from 117.0 last month. The survey, conducted in the first two weeks of July, is the first monthly measure of consumer optimism in Europe.

``Millions of ordinary savers have lost a significant portion of their investment,'' said Sergio Bille, head of Confcommercio, Italy's biggest industry group, representing more than 850,000 retail, tourism and services companies. ``This has provoked a real crisis of confidence.''

Declining share prices and job losses at companies including Fiat SpA are crimping consumer spending, which accounts for about 60 percent of Europe's fourth-largest economy. The Dow Jones Stoxx 50 Index fell 3.5 percent today, extending a decline that's erased around 1 trillion euros ($1.02 trillion) in market value this year.

A 20 percent drop in stock indexes may slice a fifth of a percentage point off economic growth, Goldman Sachs Group Inc. estimates. Italian clothing retailer Stefanel SpA, which has about 1,000 shops around the world, said last week its fiscal first- quarter loss widened as demand dropped.

``It's been a very bad year,'' said Anna Garcea, 40, owner of Contemporanea, a home furnishings store in central Rome. ``I have friends who invested in stocks and they lost a ton of money.''
______________
Things are looking bleak. Got Gold?

Blackjack

(07/19/2002; 05:42:22 MDT - Msg ID: 80877)

WorldCom biggest bankruptcy in US History

CNBC right now is reporting WorldCom......WOW.....
biggest bankruptcy in history. What banks and financial
institutions have exposure to this?

Blackjack

(07/19/2002; 05:42:23 MDT - Msg ID: 80878)

WorldCom biggest bankruptcy in US History

CNBC right now is reporting WorldCom......WOW.....
biggest bankruptcy in history. What banks and financial
institutions have exposure to this?

Waverider

(07/19/2002; 06:44:28 MDT - Msg ID: 80879)

Jump Spot

http://www.kitco.com/charts/livegold.htmlSpot's pole vaulting on the NY open - jumping $6.40 at the moment!

turkey hunter

(07/19/2002; 06:47:53 MDT - Msg ID: 80880)

(No Subject)

Did the yellow dog break the chain? Got gold? I do.

Gauntlet-Runner2("GR2")

(07/19/2002; 06:57:29 MDT - Msg ID: 80881)

They ran out of gold to sell in NY.

POG is doing that famous "we ran out of gold to sell" so "we scale the cliffs of Dover", NY-NY nice place to visit, maybe. Like the exchange, don't care for the city. This is bizarre, such a lull in London then watchout. I think the shorts are forced to cover. That massive open interest was alot of short open interest. So we built a base at 318 and now it's on to the next event of the gold triathelon. Bicycle race is over. Straight vertical, how often do we see that? This has after-shock value, tremors felt for three days and beyond. I bought in yesterday bigtime, and this is the suffering I go through. Great days in gold to all.

sector

(07/19/2002; 07:56:51 MDT - Msg ID: 80882)

@kev Centaur's 40 tonne gold hedge obligation becomes...

...JPMs obligation. Perhaps this is contributing......to JPMs cash flow problems.

That would be 40 X 32,150 X $323/oz. = $415,378,000 immediate cash debit.

But only IF the contract specifies a cash-for-gold option. If the contract specifies metal then they must deliver metal.

Today...somebody's buying metal....or at least trying to.

Blackjack

(07/19/2002; 08:23:27 MDT - Msg ID: 80883)

Scandal du jour JNJ

New Brunswick, New Jersey, July 19 (Bloomberg) -- Johnson & Johnson shares dropped as much as 17 percent because of a criminal investigation of the Puerto Rico factory where the company makes an anemia drug.

Shares of New Brunswick, New Jersey-based Johnson & Johnson fell $6.43 to $43.30 in early morning trading, after touching $41.50.

The U.S. Food and Drug Administration investigation is probably tied to a whistleblower's lawsuit by former employee Hector Arce, fired in 1999, Johnson & Johnson spokesman Jeffrey Leebaw said.

``We're aware of the investigation and assume it's related to the lawsuit,'' Leebaw said. ``We are unaware of the precise nature of the FDA's investigation.''

sector

(07/19/2002; 08:36:22 MDT - Msg ID: 80884)

Tech sector's options culture kaput

http://www.msnbc.com/news/782220.asp?cp1=1
Stock compensation gives way to �show me the money�

By Rebecca Buckman and David Bank
THE WALL STREET JOURNAL

July 18 � Stock options were the near-magical currency of Silicon Valley, financing much of the huge success of companies such as Cisco Systems Inc. and Sun Microsystems Inc. For years, tech companies didn't have to give employees much in the way of real money, because options, tied to the value of the companies� stocks, were so valuable.

TO EMPLOYEES, options were better than cash, offering the chance for riches far beyond any salary. Options inspired creativity, fiercely hard work and enough loyalty to stick around for the payoff.

But that formula depended on a surging stock. Now, U.S. stocks are in a dismal retreat, with tech stocks among the biggest losers. Employees of tech companies hold millions of options that have lost all of their value and may never regain any, because their exercise price is far above the price of the stock itself.

With little prospect of a tech rebound soon, the rip-roaring stock-option culture of Silicon Valley is another casualty of the worst stock slump in three decades. Says George Paolini, a former Sun vice president: "The options culture of the 1990s is dead."
+++++++++++++++++++++++++++++++

Forced to claim stock options as expenses Microsoft cannot make a profit. Only 35 cents of each dollar reported comes from the sale of software.

They are, in effect, dead men walking.

General Motor's pension fund expenses are crushing them. 300,000 people on pensions, 300,000 on payroll...you do the math.

General Electric's quarterly report is a maze of labyrinthine, accounting jibberish...Except the part where they say revenue is down 4% and earnings are up 15%.

Ford Motors is...well toast. The Explorer suits will suck them dry. Thank you Jacques Nasser.

Merrill Lynch et, al faces tobacco-style litigation with hundreds of billions in jury trial awards.

The Hoople

(07/19/2002; 08:37:29 MDT - Msg ID: 80885)

JPM breaking down?

Looking at the JPM chart I'd say it is sending a message of a whole lot more trouble than just a measly $5-8 rise in gold is reflecting. They must be gooning gold real good today or otherwise it seems like a total breakout would be occurring. Interesting to overlay JPM stock as it breaks down with a gold chart. $3 JPM = $1,000 gold?

Econoclast

(07/19/2002; 08:42:10 MDT - Msg ID: 80886)

Shermag, tahnks for the response

That was a very simplified example I described trying to decipher what is going on (the big picture) in our world. I don't know the answers but I am trying to figure out as much out as my little mind will let me.

Something is going on.

Markets are not behaving normally or rationally. Commodity prices ARE depressed/suppressed across the board. I went to the UN Food and Agriculture Organization's website and did some digging. I rely on observation and recognition of trends to form my thoughts and opinions. Looking at their statistics did confirm the trends that I thought I had recognized.
Food production has been rising in the world.
Yet the prices have not been. (this is my observation-I did not search out statistics to confirm)
I believe this is due to improved methods/technologies coupled with the financial pressures that are being applied to the producers-You.
Production gains have allowed the suppressive principles to continue to operate.
But how much longer can the squeeze go on before real shortages start to show up? That is what I am searching for.
Look at gold. The price is 320 or whatever but if I want to buy 100 tons, can I? Not at that price.
What does it mean when the price of any commodity is X yet there is none to be had at that price? But the price is not allowed to move because too many derivatives are dependent on and locking in that price.
Is that the price? Or is the price a multiple of X that will make available that 100 tons to purchase?

I'm going off on a tangent here so I'll stop and end with wishing you the best and praying for a return of FREE markets so that you are properly compensated for your production and the wheels of Capitalism are allowed to roll smoothly. These financial/derivatives markets are really fostering major problems in our economy.
How did it get to the point that bankers are allowed to determine the price of soybeans?

Econoclast

(07/19/2002; 08:43:42 MDT - Msg ID: 80887)

Oops...Thanks Shermag

My eyes must be going.

sector

(07/19/2002; 09:23:53 MDT - Msg ID: 80888)

The Fed's Lose/Lose situation

If the PPT intervenes... everybody now knows...if they don't...the market is down 400+And there is that much more buying pressure in the worldwide gold markets .

The PPT may be able to rescue the DOW today but at the cost of official Washington's credibility. Wall Street corruption, corporate corruption, Congressional corruption all combined with a general decline in moral standards. An increased probability of US social unrest happens when the average folks keep watching [Every month] their retirement accounts vanish and politicians blowing ever harder from their taxpayer paid pulpits.

If the PPT manages to prevail today, the victory will be hollow. Their gold supplies are shrinking. Their acolytes and allies in the gold fraud are dwindling in number AND quality. Recall that AIG [The former gold-trading, $85 per share stock is now trading at $56] is slumping fast along with JPM. The Japanese are no longer satisfied playing chumps to Washington and will certainly dump dollars as their finance minister said recently.

So...let the PPT muscle around...huff and puff about�they are taking just enough rope...to effect a self-hanging.

This time it's different.

Gandalf the White

(07/19/2002; 09:48:35 MDT - Msg ID: 80889)

GOOD START, SPIKE !

GREAT JOB, SPIKE !! A $7 jump is good PRACTICE. Now let SPOT catchup and then I will raise the bar, and you can see if you can beat that mark.
(PS: SPIKE, I know that you can !)
What is that LIMIT in the PAPER Futures contracts ?
NAW, "forgetaboutit" !! It does not have any effect on SPOT. Hang on for the ride ! (All Goldheart's holdings are going to join Alice, "To the MOON !")
<;-)

RobotGuy

(07/19/2002; 10:08:30 MDT - Msg ID: 80890)

Hey Kids!! - - - Get outta that jello tree!! (no subject)

Will we see another amazing recovery today on wall street, or is it okay to let it slide a little? Are people gonna make the mad dash for old yeller? I think it's about time we have a real spike day!

Cheers!

sector

(07/19/2002; 10:19:50 MDT - Msg ID: 80891)

Waiting for the "V"

It's the signature of the PPTAbout two o'clock, watch for a deep fall in the DOW. That is the PPT "Releasing" the trading manipulation lever in order to cause a rapid drop.

It is the signal that the trading houses wait for to move in and buy using their freshly printed Fed "Repos". On the way back up, there is an additive buffer of PPT interventional buying that augments the upward DOW movement, causing the "V" shaped daily bottom that has become the signature of the PPT's work.

If there is no steep drop between two and 3:15 PM, then the slow bleed in the DOW should continue downward straight through to the bell...perhaps with a fall right at the end.

This will be devastating to the redemption-challenged mutual funds. Perhaps causing a big name or two to default. Which is to say customers call for their damaged accounts to be transferred into money market status and find that they get a run-around with no transfer.

slingshot

(07/19/2002; 10:25:24 MDT - Msg ID: 80892)

George of the Jungle

***********************************George, George, George of the jungle.
Brave as He can be.

AAAAAAArrrrrrrrggggggggggghhhhhhhhhhh! CRASH!!!!!!!!

Watch out for that TREE!

Good Day to you all. Gold spike of $6.00. Stock Market is within recovery range if PPT kicks in. Co-workers are now paying more attention to DOW. Checking it out on net during working hours against company rules. Scared.
Slingshot-----------------------<>

RobotGuy

(07/19/2002; 10:44:02 MDT - Msg ID: 80893)

Okay,... what's going on with that dang loonie?

.
Does Canada have anything left to sell to the rest of the world, or has it all been consumed in forward sales?

Knallgold

(07/19/2002; 10:49:25 MDT - Msg ID: 80894)

40t

Centaur?JPM?40t Gold?How much did Russia "sell"?

Pizz

(07/19/2002; 11:02:37 MDT - Msg ID: 80895)

@Sector

Keep pounding home the message. The only way we're going to get out of this mess in any reasonable amount of time (five years???) is to get the manipulation out of the markets and banking sectors.

IMHO, the best and fastest way to free the markets and get gold /silver back into their rightful positions (AS MONEY) WILL BE MAKING PUBLIC THE INTERNAL BANK RATINGS FOR ALL BANKS AND MAJOR FINANCIAL INSTITUTIONS.

This subject has come up in a few places over the past few days, and it needs to be pushed by the public, the news media, and specifically our elected representative.

I personally have no faith in the current political system for solving any kind of major problem, but I do have faith in the politicians' ability to "change horses at a full gallup" especially if the one their riding is about to get shot out from under them.

Full transparency for banking? What a novel idea. Last time I checked it wasn't their money that they have been screwing around with. What's wrong with the public knowing what they are really doing, OR are they afraid we might vote NO for bad loans, derivitives, and manipulation by removing our deposits? Have a nice day.

FOR ALL OF YOU NOT SO MAINLINE MEDIA GURUS WHO STOP IN HERE EVERY ONCE IN A WHILE TO SEE WHAT'S ON THE MINDS OF OUR LITTLE FRINGE GROUP, MY SUGGESTION WOULD BE TO RUN WITH THE IDEA OF MAKING THE INTERNAL BANK RATINGS PUBLIC, and keep on running with it until we get it.

If there is nothing to hide, how will it hurt? (big smile)

Pizz

sector

(07/19/2002; 11:39:35 MDT - Msg ID: 80896)

Magellan assets hit a 4-year low

http://www.boston.com/dailyglobe2/200/business/Magellan_assets_hit_a_4_year_low+.shtmlDrop reflects decline in share value, investor fear

By Bloomberg News, 7/19/2002

The assets of Fidelity Investments' biggest fund, Magellan, fell to the lowest monthly level in almost four years as US stock markets dropped and investors withdrew.

Magellan Fund's assets slipped to $65.9 billion at the end of June from $71.9 billion in May, according to Fidelity's Mutual Fund Guide. The fund peaked in August 2000, when it had $109.8 billion in assets, the company said.

The fund was hurt by a decline in the value of the shares it held and about $519 million in redemptions, analysts said. Investors yanked up to $15 billion from stock mutual funds last month, estimated Avi Nachmany of Strategic Insight, as accounting and management scandals at companies such as WorldCom Inc. and Tyco International Ltd. eroded confidence in the markets.

''We are in one of the greatest bear markets of all time - the third-worst bear market in stock market history,'' said Jim Weiss, chief investment officer at State Street Research & Management Co. ''The buying power is there. Investors are not willing to put it in.''

Magellan's outflows last month were the biggest since September, when investors took out about $809 million in the wake of the terrorist attacks, according to Fidelity Investor. It leaked $1.76 billion in the first half, putting it on pace for a third year of outflows, said David Pittelli, a senior analyst for the Needham, Mass.-based industry newsletter.

Other funds' assets also are shrinking as the Dow Jones industrial average declined 15 percent this year, the Standard & Poor's 500 index fell 21 percent, and the Nasdaq Composite index dropped 28 percent.

Vanguard Group's 500 index has about $77 billion in assets, down almost one-third from a peak of $110.5 billion in August 2000, according to Financial Research Corp. Vanguard 500 and Magellan are the largest stock mutual funds in the United States.
++++++++++++++++++++++++++++++++
And the Bear market has not really started yet. The "Bottom" will be characterized at the outset by the removal of CNBC from the broadcast airwaves. Their shill message long-since a bad karma topic...an embarrassment to General Electric Corporation's senior management. That day, the "Bottom Day" rests in the distant future.

DOW's long-term mean is 6000, NASDAQ is 500, S&P is 500ish.

The back-breaker is what happens when we eventually get to the bottom�we will soon discover a new stock market word� Japanization�meaning at least another decade of flat bottom performance all the while watching Asia soar and marvelling at the wisdom of gold bugs.

admin

(07/19/2002; 11:45:47 MDT - Msg ID: 80897)

Special Offers For Immediate Delivery. . . . .for the Early Birds

We would like to ensure that you are aware of our new program for selling gold -- in addition to our traditional metals brokering services. We are offering certain products available for immediate delivery and at reduced prices.

The catch?

You can only find out what they are and the prices by calling our offices and talking either to
Marie Ballard (ext.106),
Jonathan Kosares (ext.110),
George Cooper (ext.102).

First Come, First Served. Limited quantities of each item daily for immediate delivery. Items will come off the SPECIAL board as they are sold out.

Call toll free (800) 869-5115

RobotGuy

(07/19/2002; 11:47:08 MDT - Msg ID: 80898)

Someone's got to be making money off of the PPT.

They dump money in and the profit takers sell. Buy again tomorrow and wait for the PPT to throw more money your way. It's like a big magic money pit, the more you try to fill it in, the deeper it gets. I should be throwing money into tech stocks and dot.coms and taking advantage of the handouts, but that would be the one day they shock everyone and stop trying to fix the bilge pump on this sinking ship.

sector

(07/19/2002; 12:14:24 MDT - Msg ID: 80899)

Dollar Index Value of Gold [DIVG] Continues to Rise

The cabal is losing it's grip in a retrenchment strategy...OR they are managing a rise in gold as expressed in World currenciesDate------------POG-----Dollar Index---DIVG*

7/12/02-------315.90--------106.22------2.97
7/15/02-------319.90--------104.80------3.05
7/16/02-------317.50--------104.85------3.03
7/17/02-------317.70--------104.78------3.03
7/18/02-------317.60--------104.25------3.05
7/19/02-------323.85--------104.00------3.11

*Dollar Index Value of Gold

Black Blade

(07/19/2002; 12:23:16 MDT - Msg ID: 80900)

Rediscovering the Gold/Silver Ratio

http://www.thebulliondesk.com/reports/socgen/pmw1507.pdf
Interesting report (pdf format). More of a curiousity than useful I think.

- Black Blade

nickel62

(07/19/2002; 12:24:05 MDT - Msg ID: 80901)

No offense Sector,

But my bet on the bottom would be Dow 3500 Nasdaq 500, S&P 500 250 , Interest rates in the mid to low 8 percent range. Estimated time to arrival eighteen months...

Ag Mountain

(07/19/2002; 12:34:37 MDT - Msg ID: 80902)

Hail to the king!

A giant thanks to Aragorn III for your message yesterday that helped knock more sense in my head and just in time by the looks of the market today. My grattitude has now grown to awe from seeing your 3 a.m. message posted prior to today's spike. You said, the "euro channel today supports gold between 315 to 355" but that in dollarland the "channel today opens to hyperbolic."

You called it! How do you do it? Now would it be asking too much to give us a little longer warning next time? Some of us out here need more time to get in on these deals. Thanks again!

Pizz

(07/19/2002; 12:35:42 MDT - Msg ID: 80903)

Black Monday Coming?

The conditioning of the market participants is amazing.

Lot's of positioning for a "last hour technical bounce", selling gold shares and buying index options as we near.

Problem is, too many people are banking on it. Right now, I think all the PTB can do is keep these markets from having a Black Friday - and a 1000 point drop in the Dow. But Monday?? There won't be any cheap, premiumless options to deal with.

Technically, I'm looking for a 750 S&P and a 7100 Dow before this move is over.

Could be an interesting weekend. Hope someone doesn't feel we need an excuse for "capitulation".

Sector: So far your call is right on (the 2:00PM drop for the run to the close), but I'm also watching a NYSE specialist swallowing gold stocks like there is no tomorrow.
These guys don't make too many mistakes. If we do rally into the close, I don't expect it to hold thru next week, but just my opinion, not investment advice.

Pizz

sector

(07/19/2002; 12:43:06 MDT - Msg ID: 80904)

@Sir NI-62

You are probably correct since the mean is often overshot......due to the downward momentum.

The really important number is the number of current generation investors who will never again trust Wall Street. The wisdom of the grandparents must be relearned over and over by the young. This wisdom is very painful to many.

We are in the PPTs "Twilight Zone" where black is white, up is down, fast is slow and richer become poorer.

And the patient gold bugs ultimatly win.

We should learn from nature. The polar bear often waits by a seal airhole for a day or longer. He knows they must breathe. He knows the laws of probability dictate that HIS air hole will be selected sooner or later. He is rewarded by patience...and knowledge.

R Powell

(07/19/2002; 12:44:22 MDT - Msg ID: 80905)

sector

POG and dollar index Why not multiply the dollar POG times the dollar index (relative value of the dollar)

7/12/02
315.90 POG x 106.22 = 33555

7/19/02
323.85 POG x 104.00 = 33680

Siochain

(07/19/2002; 12:47:10 MDT - Msg ID: 80906)

MM action

Looking at the Big Boys action....they so far seem to expect gold to fall on Monday

Last two days they were quietly accumulating....now they are selling gold stocks.

sector

(07/19/2002; 12:57:58 MDT - Msg ID: 80907)

Power Crisis Brewing ~Forbes

www.forbes.com/2002/05/13...print.html
Power Crisis Brewing ~Forbes

Dan Ackman, 05.13.02, 9:00 AM ET

Energy firms are under siege because of their possible role in the manipulation of last year's electricity shortage in California and because of questions about their financial statements. The revelations are mounting daily, but the seeds of doubt have been obvious for some time, as the financials of Dynegy, Reliant Resources, Williams Cos. and others bear some disturbing resemblances to those of Enron.

Last week, the U.S. Securities and Exchange Commission announced it was investigating whether Dynegy (nyse: DYN - news - people ) engaged in sham trades to boost its apparent revenue. Reliant (nyse: REI - news - people ) may have acted similarly. Federal investigators are investigating it as well and the firm was forced to abruptly cancel a $500 million bond sale. Moody's Investors Service is reviewing Williams' (nyse: WMB - news - people ) investment-grade credit rating for a possible downgrade. Meanwhile, in California, Gov. Gray Davis, lesser state officials and the state's U.S. senators are calling for criminal investigations and billions in refunds from the energy industry.
+++++++++++++++++++++++++++++
A very good economic indicator has been brought to our attention by Sir Black Blade. It is petroleum imports, now down 8% for the first six months of 2002 and at a ten-year low.

The Administration and Fed can flap their arms all day but they cannot sweep this figure away. It spells a long recession as everybody conserves.
++++++++++++++++++++++++++++++

@RPowell

It makes for smaller chart scale numbers. I do allot of dual axis stuff.

Gandalf the White

(07/19/2002; 13:04:11 MDT - Msg ID: 80908)

Sir Siochain -- Please look at it ANOTHER way ! <;-)

Siochain (07/19/02; 12:47:10MT - usagold.com msg#: 80906)
MM action
Looking at the Big Boys action
==
Notice that the BIG OPENING GAP in the XAU Index this morning was effectively closed and -- NOW on MONDAY ---
"TO THE MOON, Alice"
<;-)

Pizz

(07/19/2002; 13:31:52 MDT - Msg ID: 80909)

Finally A Market Comment I Agree With

Just heard an editorial on my web news feed that described our chances for market recovery about the same as a possum just hit by an 18 wheeler.

Wait till monday.

Pizz

sector

(07/19/2002; 13:38:54 MDT - Msg ID: 80910)

Twenty Minutes to Go...

...and still no meaningful spike downward through the linear regression trendline.But anything can happen with the PPT.

There's still HOPE.

It's not a 400 point down, options expiration day...YET

Pizz

(07/19/2002; 13:40:21 MDT - Msg ID: 80911)

Going to be an ugly close

Just heard there's an 8 million+ share block of some stock (I think it was drug related) set to trade at the close.

Wonder who's going to be crazy enough to buy it? Maybe some of these market pundets who have a long term horizon? Like somewhere in the second half of this century?

Sub 8000 Dow comin up (today!!!)

Pizz

Siochain

(07/19/2002; 13:40:56 MDT - Msg ID: 80912)

Sir Gandolf

Actually I agree with you...it was just so fascinating to see the MMs play their games as if things are normal....they bought up at low prices and now are selling (unless they buy at close)....they do not understand the whole gold infrastructure .....so business as usual...sell gold stocks...then have funds to buy SM

This game is coming to an end...if not Monday....very soon!

Lady Siochain
(I guess I'll have to put an a on the end of my name...and make it Siochaina...I chose Siochain for it means Peace in Celtic...and that is something we need....well I have some peace personally holding gold/silver both physical and some stock which I sell and buy more physical)

Jon

(07/19/2002; 13:43:12 MDT - Msg ID: 80913)

(No Subject)

No, not down 400. Down "only" 378 at 3:42PM.

Jon

(07/19/2002; 13:48:35 MDT - Msg ID: 80914)

(No Subject)

At 3:48 PM Dow is down 404!!! Where is PPT???

Black Blade

(07/19/2002; 13:49:37 MDT - Msg ID: 80915)

DOW To Go Sub 8000?

The DOW is plunging - now off over 400 points. If the DOW sinks below the psychological level of 8000, then a stronger freefll plunge could be expected. Look out below! I thought that today was going to be "entertaining". but WOW!

- Black Blade

sector

(07/19/2002; 13:51:50 MDT - Msg ID: 80916)

The "Miracle Finishes" Won't Be Seen Today

Pontificate they will..the Market Pundits. Let's watch them call for more buying on Monday.The entertainment value is priceless.

Black Blade

(07/19/2002; 13:53:44 MDT - Msg ID: 80917)

Thar She Is - Sub 8000!!!

The DOW just tumbled below 8000 and falling off faster. Perhaps a little intervention will surface? It looks like it could easily crumble to at least 7800 by the end of next week from here (as long as there is no "interventionist" activity). Welcome to the New Great Depression. Grab your gold and hang on for the ride!

- Black Blade

Jon

(07/19/2002; 13:55:09 MDT - Msg ID: 80918)

(No Subject)

Yes, Dow now down 426! M. Bartiromo on CNBC is indeed pathetic to watch. Why, in Heaven's name, do they keep her on? Now down 440 at 7970. Is she related to a power person on NBC?

Pizz

(07/19/2002; 13:57:29 MDT - Msg ID: 80919)

Got Gold?

Big blocks of gold stocks crossing the tapes on the upside.

Pizz

Cavan Man

(07/19/2002; 14:00:53 MDT - Msg ID: 80920)

As for next week.....

I would think we'll see a lot more selling.

Cavan Man

(07/19/2002; 14:03:53 MDT - Msg ID: 80921)

Most important news of the day IMHO.

Trade Deficit Hits Record $37B

By Jeannine Aversa
Associated Press Writer
Friday, July 19, 2002; 8:52 AM

WASHINGTON �� The United States trade deficit ballooned to a record $37.6 billion in May, reflecting Americans' ravenous appetite for foreign-made cars, TVs and clothes.

The Commerce Department reported Friday that the deficit was 4.1 percent higher than the revised $36.1 billion trade gap reported for April.

Black Blade

(07/19/2002; 14:07:04 MDT - Msg ID: 80922)

DOW Pulled Above 8000 in the Last 20 seconds.

A 30+ point surge in the last 20 seconds of trading pulled the DOW above 8000 at the close. It would have been devastating for Wall Street if the week ended below 8000. Maybe will will see a dead cat bounce on Monday now. Still a 400 point plunge is quite impressive. It was both "entertaining" and "interesting" today.

- Black Blade

R Powell

(07/19/2002; 14:14:28 MDT - Msg ID: 80923)

Stock markets

Bad hair day. How much more before we see some real gold fever? What is Hamilton writing right now? Perhaps some historical analysis of market crashes, investor psychology and traits of final bottoms (not yet, I know!)
Guess what day this is? Right
Happy Weekend Time!
Rich

mikal

(07/19/2002; 14:21:53 MDT - Msg ID: 80924)

Dow close at 7984.02 at 4:18 EST

Just checked INO.com site, what is the FINAL close?

Waverider

(07/19/2002; 14:27:51 MDT - Msg ID: 80925)

DOWn

A little too entertaining - checked the DOW and boom - my glass of water landed all over my desk! Mikal - I get 8019.26

Black Blade

(07/19/2002; 14:31:09 MDT - Msg ID: 80926)

Re: mikal

DOW closed at 8019.4, off 390 points, Nasdaq -37.9, and S&P 500 off 33.8. It was the DOW that recovered strongly at the end while the other indices held near the lows. BTW, blocks of gold stock trades are going through in after hours. The hedgers are sinking while the nonhedgers are holding gains and some even gaining. The word is that money is leaving stocks and going into bonds, real estate, and gold. Gee, what a surprise.

- Black Blade

sector

(07/19/2002; 14:31:37 MDT - Msg ID: 80927)

Perhaps the Search for "Anything Going UP" has just Begun?

Monday Will Be Even MORE Interesting Than TodayWe will have a tonne of misleading advice from "Experts" over the weekend and then on Monday we can observe the consequences for those poor fools who actually listen.

Make no mistake, the PPT was in all day...they just didn't let the market steeply dive and then steeply recover...it would have been "Too Obvious" coming so soon after the last ham-fisted efforts.

We will have ALL weekend to receive more rumors about JPM, AIG, Goldman Sachs [The Insider Sales Kings, of late they take the cake], J&J, Baxter et, al�more time to welcome new investment banking, expert, "Born Again" "Converts" to the growing gold bug family.

What Fun!

Did I mention that Douglas Warner the "3rd" sold all $48 Million dollars of his JP Morgan Chase stock [@ about $65] in 2001? How convienent for the gentleman...coming just before all this stuff.

Do you suppose anyone will notice... as JPM breaks $25 next week? Oh yeah...JPM is one of the Federal Reserve's Largest banks.

Pizz

(07/19/2002; 14:37:42 MDT - Msg ID: 80928)

Think we might have a few margin calls on Monday?

The worst thing that can happen to a market is to have a major break on a Friday and close at the lows. The last minute bounce was nothing more than squaring up expiring options. My guess is that there were a lot of puts exercised today at the close.

If you want a little fun this weekend, socialize a bit and listen to the market comments. I'm getting them at lunch at my local greasy spoon.

Now all we need is a short squeeze on a few gold derivitives. Alcohol/drug sales ought to be brisk this weekend, at least for those who hang out in the upstairs offices of all the financial suites.

Pizz

mikal

(07/19/2002; 14:38:09 MDT - Msg ID: 80929)

@BB, Waverider

Thanks, INO Dow ticker just caught up- 8019.

Black Blade

(07/19/2002; 14:48:27 MDT - Msg ID: 80930)

The Angry Market

http://www.businessweek.com/magazine/content/02_30/b3793701.htm
Snippit:

But in recent weeks, an epidemic of corporate scandal seems to have picked up where Osama bin Laden left off, demoralizing investors and threatening the economic recovery. Wall Street and Washington now are embarked on what amounts to nothing less than a restating of the 1990s. The markets will be a long time sorting through the economics of corporate reform. In the meantime, investors should find solace in the hope that the next bull market will rest on a solid foundation of reality. Some $7 trillion has vanished since the market peaked in March, 2000, but it seems that only in the past week or so has it dawned on most of us that no one--not George W. Bush, not Alan Greenspan, not even Warren E. Buffett--has the power to prevent the further depletion of America's retirement accounts.

Black Blade: One thing avoided by the financial media Trolls, is that companies are reporting lower earnings this quarter � but more importantly are saying that next quarter does not look any better. OUCH!

Off to the gym!

misetich

(07/19/2002; 14:48:33 MDT - Msg ID: 80931)

Cisco Unlikely to Join Coke in Expensing Options

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∣dle=ad_frame2_topfin&s=APThelhSMQ2lzY28gSnip:

Intel Corp., the world's biggest semiconductor maker, would have had an 80 percent drop under this method, which it opposes.

.................

Earnings of the Standard & Poor's 500 Index companies would have fallen 23 percent last year, instead of 19 percent, had option costs been expensed, according to Lehman Brothers strategists Jeffrey Applegate and Charles Reinhard
.............
Cisco Systems Inc.'s fiscal 2002 loss would have been $1.69 billion wider with option costs, according to its annual report. Microsoft Corp.'s fiscal 2001 net income of $7.3 billion would have been cut by 44 percent. Intel's $1.29 billion in earnings would have shrunk to $254 million.

Misetich

No wonder they don't want to expense stock options - though they do so for tax purposes!

What a scam! US Treasury O'Neil doesn't want options to be expensed!

Stocks are STILL OVERVALUED- as the crooks through their lobbying power don't want any rules changed -

The stench of this scandalous fraudlent accounting practices is reaching overseas investors- and the likelyhood of them pouring money in US financials are slim and none.

Got gold?

mikal

(07/19/2002; 14:57:33 MDT - Msg ID: 80932)

@Cavan Man

That is a monster monthly trade deficit they reported today, and a record. I agree "next week we'll see more selling". Foreigners have access to these kinds of numbers and the kind of plain, honest editorials that inspire them to act in their self-interest. Each day it becomes more obvious, they've been taken for granted too long. And each day brings greater objectivity to western media outlets and investor's decision making.

misetich

(07/19/2002; 14:59:50 MDT - Msg ID: 80933)

Record US trade gap depresses some GDP estimates

http://www.forbes.com/newswire/2002/07/19/rtr668627.htmlSnip:

NEW YORK, July 19 (Reuters) - A record U.S. trade gap in May prompted some Wall Street economists on Friday to reduce already-modest second-quarter U.S. economic growth estimates.

John Youngdahl, senior money market economist at Goldman, Sachs & Co., said the widening in the May U.S. trade gap, with imports surging, caused Goldman to cut its second-quarter real GDP growth estimate to 1.5 percent annualized, from its previous forecast of 2.0 percent.

"Net exports apparently were a major drag on economic growth last quarter," Youngdahl said.

The U.S. Commerce Department said on Friday that the international trade deficit reached a fresh record in May as imports jumped 1.8 percent on top of the upward-revised 4.8 percent rise a month earlier.

Misetich

The record trade deficit story got little play today from the press-

Inventories are rising - exporters profits are dropping due to US $ devaluation- importers prices are rising due to US $ devaluation -

It all adds to a CONTINUATION OF EARNINGS RECESSION AND DECLINING CAPITAL SPENDING

Debt Deflation is continuing at a hot pace as BANKRUPTCIES -Debt Defaults are SOARING- Insurancers portfolios are getting wiped out - as are pension plans -

What protects investors wealth in this climate?

Got gold?

Cavan Man

(07/19/2002; 15:21:34 MDT - Msg ID: 80934)

mikal

I had lunch with my Dad today. He made an interesting point.

We've always known that the "game" is rigged; that those that are on top are corrupted and, that those on top, "in the know" etc. will always make out better than John and Jane Doe. However, THEN, most if not all of us got a piece of the action and we WERE satisfied. Now, we not only getting REAMED but, the true extent of the corruption is becoming public knowledge.

Before, a smart "thief" would take a little and leave a little. Now, they take it all. Now, too many are too dumb to steal without getting caught.

misetich

(07/19/2002; 15:21:37 MDT - Msg ID: 80935)

GOVERNMENT continues to be Tech's best customer

http://www.pimcofunds.com/PIMCO?op=www&mainsection=daily_commentary⊂section=daily_commentary&content_id=38237Snip:

The public sector (basically government) continues to be IBM's strongest sector � which has been the case with other tech companies as well. That's because telco and financial services customers have cut spending dramatically as their profits have fallen or disappeared.

Misetich

US budget deficit is SOARING - Government produce very little -
Greenspan boast -productivity gains - yet most of the economy growth has been fuelled by housing and government spending

Productivity numbers are a delusion to begin with - read it here
http://www.grantspub.com/productivity/GR18n06a.pdf

and are getting worse -

Got gold?

USAGOLD / Centennial Precious Metals, Inc.

(07/19/2002; 15:27:27 MDT - Msg ID: 80936)

In bookstores for $14.95 (plus tax). Get it here for ONLY $5.95 ($3 postage)!

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

Operative

(07/19/2002; 15:34:29 MDT - Msg ID: 80937)

Tens of MILLIONS

Forgive me if the following information is incorrect, but I just walked into my office and saw the following on my live trading screen. Tens of Millions of ABX and NEM shares traded after hours! I scrolled the ticker of each trade back to 16:43 and it was showing volume levels like I have never seen. ???????????? I assume this has to be some kind of glitch on the trading system. Just wondering if anyone else showing similar volumes. Could this be the beginning???

misetich

(07/19/2002; 15:37:50 MDT - Msg ID: 80938)

Confusion Reigns in US Capital Mkts- INVESTORS SELL US TREASURIES

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1027102380000&sn=1&banner=mainwireSnip:

NEW YORK, July 19 (MktNews) - "What is going on?" was a ludicrous
question to ask anyone involved in the U.S. capital markets Friday.

"It's all over the place and no one knows exactly why or where we
are going," one honest and very exasperated, bond market veteran said.

.............
Investors were selling U.S. Treasury and U.S. agency paper to put
the money in euro-denominated debt, market sources said.
............

Misetich

You're going to love this one- from the CPI report-

"housing was a tame +0.1%."

We are in the midst of a HOUSING BUBBLE-

Foreigners are beginning to catch on- and not only they're stopping investing in the US- they appear to be pulling money out - OUCH!

Got gold?

Operative

(07/19/2002; 15:51:12 MDT - Msg ID: 80939)

ABX last tick at 17:40:09 was 9,997,500 shares

Correction, ABX and PDG not NEM. All other afterhours in gold stocks appear pretty much as normal activity. Still trying to confirm earlier post.

Arcticfox

(07/19/2002; 15:54:20 MDT - Msg ID: 80940)

Analogy...

I think the comparison yesterday on CNBC of WALLSTREET to the WWF is one of the more appropriate comments that I have witnessed in a while..lol

Also, as the US$ continues down and Americans want to buy goods from abroad (imports), will this not be inflationary?

Further, if as I suspect, that the retail consumer in the US (who is responsible for two thirds of the economy)is heavily in debt, starts to back off and housing values head South (which have been refinanced to facilitate Bushe's call for Joe sixpack to get out there and spend)than the E of P/E will in turn take a drastic move to the South resulting in P/E ratios heading North. Combine this with all the accounting chances being considered. That's why I'm amazed to see bewildered looks on CNBC concerning broad market corrections. Is it just me or are there many others out there for which all this is not obvious?..

misetich

(07/19/2002; 16:08:19 MDT - Msg ID: 80941)

Investigation of J&J sends stock plunging

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1027089293933&p=1012571727108Snip:

Johnson & Johnson shares fell on Friday as the Puerto Rico plant that makes its blockbuster drug Eprex was the subject of a US regulatory investigation.

They were down $7.88 to $41.85 at the close in New York. The US Food and Drug Administration is likely to investigate claims by a sacked maintenance worker in a lawsuit that the company falsified records hiding manufacturing problems.

Eprex is designed to boost red bloodcell production to fight anaemia. However, it sometimes inhibits bone marrow from making red bloodcells.

The drug is the target of intensified medical scrutiny because of its links to 141 deaths.

Operative

(07/19/2002; 16:10:57 MDT - Msg ID: 80942)

????

IF...the information on my trading screen is correct, there were 100,000 MILLION PLUS Shares of ABX and PDG traded after hours this friday afternoon. I have not been able to confirm any of this yet. I somehow doubt the accuracy of this information because...??... I have no reason to doubt it, maybe its simply my eyes cant believe the figures. But IF this is correct monday may be the start of something very nice for the gold bugs. Have a great weekend. I have got to run to a wedding rehearsal (my daughters). If anyone can confirm any of the after hours volume please post a note. Thank You.
Signed,
Confused?
PS>) as a gift to my future/new son in law, I am giving him a Gold eagle,(along with a discussion of properly providing for my daughter by investing in REAL Money) my daughter is getting a gold & diamond necklace. GO gold.

TownCrier

(07/19/2002; 16:14:00 MDT - Msg ID: 80943)

Gold component within the U.S. international trade balance

A May goods and services deficit of $37.6 billion is big. Where our imports have exceeded our exports, this represents foreigners gifting $130 worth of real goods and services to each and every man woman and child of the United States, acknowledged by us as this net payment with our token money. Just about the same thing happened the month before, and the same could be said for the month before, and so on, and so on...

An exorbitant privilege that we (American's) can only hope will never end.

Needless to say, (I'll say it anyway) there are vested interests on the other side of this equation that would dearly appreciate a more level playing field. In fact they are striving for it. The euro project is a testimonial to that fact.

The good news is that Americans may be waking up to the inevitable, and are preparing themselves for the day the dollar collapses. As of this time last year, the cumulative gold imports into the United States was only $777 million, whereas this year it has outpaced that with current year-to-date gold imports standing at $969 million.

Despite our appetite for imports in general, and despite our growing demand for gold, our gold trade is one area of our overall trading operations that bucks the trend and actually helps to balance the books. That is, we actually export more gold than we import. Last year at this time our gold exports were outpacing our imports at $2,984 million (against the previously mentioned $777 million imported). This year, the level of our gold exports is running only $121 million ahead of our current slightly stepped-up imports.

I imagine at such a time that our gold flows go into deficit as the U.S. becomes a net importer along with everything else, the price we will be paying for it then will adjust accordingly... if you know what I mean.

R.

R Powell

(07/19/2002; 16:14:14 MDT - Msg ID: 80944)

Operative

I heard the same mention of huge block market-on-close precious metals mining company buy orders but haven't heard confirmation. I heard this from someone at GE who claims to have been watching these markets since before Noah decided to build an ark but forget exactly who it was. So, anyway, I guess I can confirm the rumor as such.

I keep waiting for the short covering for profit taking from the index players. Short covering is done with buying. Question is, did the shorts decide to keep their positions open over the weekend OR was selling so intense as to cut right through the short covering? I thought this bear would grind down over many years. Maybe DOW 6000 is coming to a ticker near you next week!
Thoughts on the lack of any sort of short covering bounce?
Rich

misetich

(07/19/2002; 16:20:30 MDT - Msg ID: 80945)

The dissenting billionaire- Buffett

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1027089294985&p=1012571727108Snip:

Speaking barely two months ago, after this year's annual meeting, Mr Buffett told journalists that when it came to excessive chief executive pay, he and Mr Munger had found that "no matter how much stock we own we can't do much about it".

In spite of the presence of compensation consultants and committees, most chief executives influence decisions on their pay and benefits, Mr Buffett suggested. As for stock options, Mr Buffett told shareholders: "It's going to be hard to change, because the CEOs have their hand on the switch."

Misetich

COT numbers are in - commercials piled it on adding to their short positions- no bidders showed in SM

Crooked CEO's may have their hand on the switch- shorts are pulling the power out - by devasting trapped investors who fell prey to the CEO's, investment houses fruadlent ways

As the over 20 year old tired stock market bull is being put to rest the Gold Bull is flexing its muscles

Got gold?

Siochain

(07/19/2002; 16:21:18 MDT - Msg ID: 80946)

Well ,Well !!!!

I just got home, having missed the last fifteen minutes of the market....that was definitely some spike at the close in gold stocks.

From what I saw during the day and in particular the specific MMs involved....it's my opinion that something spooked them....I just don't think those last minute buys were originally planned.

Could it be some nervousness that the DOW didn't recover?....Are they finally getting the message?...Did they learn something new to be uncovered shortly?...or are they just plain scared????,,,,this day most definitely had a different feel and pattern

Stay tuned....Stay Gold/Silver...Monday will be most interesting!!!!

misetich

(07/19/2002; 16:32:23 MDT - Msg ID: 80947)

Bush financial working group has no plans to meet on stock market decline

http://www.afxpress.com/afxpress2/afx/bn204218.xml.htmlSnip:
WASHINGTON (AFX) - The Treasury Department has no comment on today's drop in the Dow Jones industrial average, and there are no plans by the top-level presidential working group on financial markets to meet and discuss the stock market's decline, said chief Treasury spokesman Michele Davis.

"We don't comment on the daily movements of the stock market," Davis told reporters.

She said the President's Working Group on Financial Markets has not met in the past two weeks and has no plans to meet to discuss the drop in US equity valuations.

Earlier, the DJIA closed down 390.23 points at 8,019.26, for the lowest close since Oct 1998, while other US stock indices hit five-year lows.

The group is a long-standing body which includes Treasury Secretary Paul O'Neill, Federal Reserve Chairman Alan Greenspan, and Securities and Exchange Commissioner Harvey Pitt, and Commodity Futures Trading Commissioner James Newsome.

Bush tasked the group in January to propose corporate governance reforms.

This week widely-discredited rumors had spread in financial markets that the group had initiated stock purchases by the federal government to stem the market's decline.

Misetich

ANOTHER denial - "and there are no plans by the top-level presidential working group on financial markets to meet and discuss the stock market's decline,"

You mean to tell us that regardless of what could happen on Monday that there are no plans? What if???? No contingencies??

Or are do we have to decipher "what is..is" again and assume that the a "plan" is ALREADY in place and subordinated to the "hands'on" market manipulators

Free market system is being threatned - not only by crooked CEO's, investment houses and infectious greed

There's ony one barometer that never fails against the fiat system

Got gold?

Pizz

(07/19/2002; 16:38:53 MDT - Msg ID: 80948)

@Siochain

Re: MM's and the spike in gold shares.

I watch Level II on HL pretty close mornings and the last hour. For the last hour the specialist in NY was taking virtually 90% of all the sell orders as the XAU and HUI drifted down right before the last hour. From what I saw, if he hadn't been in the market, HL could have dropped 10%.

During the last 15 minutes, as soon as most knew the close would be ugly, some buying appeared in the gold stocks. I think most thought we were going to bounce off 8000 pretty good. The spike in gold shares came as we blew thru 8000.

I think the spike was gold shorts covering, because of the terrible close and the strength that appeared in gold late in the day.

Pizz

Cavan Man

(07/19/2002; 16:45:24 MDT - Msg ID: 80949)

misetich

I think the question is, should there be a plan? Perhaps a diversion is in order?

misetich

(07/19/2002; 17:02:21 MDT - Msg ID: 80950)

First Call reduces expected earnings 2QO2 to 2%

http://www1.firstcall.com/commentary/market/commentary2.html?commentart|market|full reportSnip:

The impact on the aggregate S&P500 earnings for 2002 is to lower the expected earnings growth rates by almost a full percentage point. Therefore, our expectations for 2Q02 earnings goes from a 3% gain to a 2% gain. The current 3Q02 estimate of a 16.3% gain drops to 15.8%, and the 4Q02 estimate of a 28.6% gain drops to 27.7%.

Expected 2Q02 Earnings

Do not worry about the 2Q02 earnings, and do not focus on them. They will be okay but they are not the issue.

As we have said since the beginning of 2Q02, enjoy the 2Q02 numbers, since they will look good relative to expectations, but don't enjoy them too much because the earnings in 3Q02 and 4Q02 likely will fall far short of the very ambitious expectations. Both aspects of that statement still look like they will come true. The only deviation is that brought on by S&P's changes in the components that lowered our expectations for 2Q02 earnings growth from 3% to 2%.

Misetich

Oh my, lets re-read this one again," The current 3Q02 estimate of a 16.3% gain drops to 15.8%, and the 4Q02 estimate of a 28.6% gain drops to 27.7%. "

Lets not forget Alan Greenspan aka Mr. Print, Mr. Bubble who said, "To spot a bubble in advance requires a judgment that hundreds of thousands of informed investors have it all wrong. 6-17-99

I guess they did have all wrong, Allan my boy!

Got gold?

misetich

(07/19/2002; 17:10:07 MDT - Msg ID: 80951)

Cavan Man - Is there a plan?

Headline: Crisis simulation - US experts play at global meltdown)Is there a plan????
Here's something interesting from Euromoney archives:

Source: Euromoney
Date: March 2000
Author: David Shirreff

It's July 2000 and the world economy is in crisis. Who will save it? The US cavalry of course. Sixty grown men and women, some of them high rankers in the US government or civil service, spent a full Saturday in a New York mansion, wrestling with a hypothetical global meltdown, sending frantic messages from room to room, while the snow fell outside. David Shirreff was a fly on the wall

Russia is close to invading Ukraine, which has repudiated its foreign debt; Brazil has agreed to pay the European banks but refuses to pay the Americans; the equity derivatives market is thrown into chaos by a UK insurance subsidiary; thousands of Americans are suing their pension funds for being overweight equities when the stock market dived.
These are just a handful of the crises that hit four teams of US policy-makers as they sat in their respective rooms trying to hammer out a response - for the White House, for Congress and for the American people.

The setting was the imposing Harold Pratt house on the upper east side of Manhattan, headquarters of the US Council on Foreign Relations ( CFR ) , a body founded in 1921. These modern policy-makers bent to their task were watched quizzically by the busts and portraits of their illustrious predecessors - Cyrus Vance, David Rockefeller, Walter Mallory and General Tasker H Bliss.

Why were they doing it? The CFR decided its members should pay more attention to financial and economic crises. This is a way of "forcing us to think our way through high-cost, low-probability events" says CFR senior research fellow Roger Kubarych, who led the project.

Simulations or "hypotheticals" are increasingly used to test people and their organizations. Historical models extrapolate the past and might help us fight yesterday's battles. But scenarios based on projections of the future may give us a better flavour of what lies ahead. Policy-makers need to be prepared for extreme situations, even if they are highly improbable and uncomfortable to think about.

Euromoney has reported on two previous simulations, The Crash of Mulhouse Brand ( September 1997 ) and The Sigma Affair ( October 1998 ) . The CFR plot was designed to test US policy-making in the financial and economic sphere, rather than, as in the other cases, to have a cast of bankers, regulators, policy-makers and others, including villains, attempting to outsmart each other. The protagonists in the CFR game were anonymous committees. The committees included people who are, or were previously, in the US administration, at the forefront of policy-making. To name just a few: John Heimann, chairman of the Financial Stability Institute; Ernie Patrikis, former number two at the Federal Reserve Bank of New York ( NYFed ) now with AIG; Peter Fisher, current head of capital markets at the NYFed; Bob Hormats of Goldman Sachs; Jessica Einhorn, former treasurer of the World Bank; Scott Pardee, economics professor, formerly with the NYFed; Bob Carswell of Shearman & Sterling; David Hale, chief economist of Zurich Financial Services.

Kubarych and his team, which included naval research fellow Captain David Duffie, fired salvoes of economic and foreign policy whammies at four expert groups. The groups covered respectively foreign policy and national security; economics and trade; central banking; and financial regulation. They were expected to absorb the information and send recommendations to an overall decision-makers group - representing the US congress and the White House administration.

Kubarych and seven controllers played god on the fourth floor, from the Cyrus Vance Board Room. They sent email messages to each group, containing new information such as market data, US indicators, special intelligence, or news of further disasters. Each group had to decide what news to act on and what to ignore. The hope was that, whatever the disaster, and whatever crazy solutions the policy-makers came up with, the decision-makers group would take action optimal to the interests of the US and the world economy.

July 1 2000

A crisis has been brewing since April when the US stock market first started its decline. The trigger was the downturn in demand for IT hardware and software after Y2K proved such a non-event. Political violence has erupted in Mexico just before a presidential election; computer hackers with links to Venezuela threaten to jeopardize a giant US-Mexican bank merger; a robust oil price has tempted Venezuela and Saudi Arabia to throw their weight around their own regions. Wall Street uncertainty is exacerbated by the class action against US pension funds - they may have to do a massive rebalancing of their portfolios, while the US securities affiliate of a UK insurance company, a market-maker in equity derivatives, abruptly liquidates its positions, causing panic. Turkey has torn up an agreement with the IMF and a banking crisis looms. China is threatening to devalue the renminbi.

These are the challenges facing the teams of experts in their separate rooms. They can communicate by telephone, by email and by physical visits to other expert groups. But for a while they need to sit tight and absorb the information. The trick of these games is to separate the important issues from the noise, to anticipate the effect, and take action accordingly.

The US financial regulators' first concern is the state of the US stock market. They wonder whether to intervene as the Hong Kong Monetary Authority did in 1998 and buy a proportion of the country's stock market.

"I doubt if we have the resources to stop this market adjustment," says one wise participant. They decide to convene the president's working group on financial markets. They also call the Financial Services Authority ( FSA ) in London about the UK insurer. "The easiest way to deal with a subsidiary is to put pressure on the parent," says one regulator. As they sit in their room, on day one, they wonder whether it is early enough to label this a systemic crisis. "It's not unlike LTCM [Long-Term Capital Management]," notes one.

The Central Banking group, one floor higher, is worrying about interest rates and the weakness of the dollar. The Dow is at 8,800 ( from a high of 10,000 in April ) , the Nikkei at 16,800, the Dax at 5,000, the yen at 92 to the dollar and the euro at $1.07. "The interest-rate differential with Japan is huge," says a central banker. Risk premiums are widening, however. The spread between US treasuries and high-yield bonds has widened by 150 basis points and Mexico's sovereign risk spread has moved to 500bp. But the inclination of these central bankers is to stay calm and avoid any indication of alarm.

The Foreign Policy group across the corridor is considering Venezuela's threat to limit fuel exports to the US, and its suspected interference in the Mexican elections. "It won't cause a national gas crisis. We'll be able to absorb this," says one policy-maker. The group looks at the latest domestic figures: the Nasdaq index has fallen to 3,000, the Dow to 8,500. "Retail sales are down. What's the Fed doing - isn't it time for them to pump in liquidity?"

"Our job is to deal with foreign policy and not worry about the politics," corrects a colleague.

"But this is a Clinton administration."

"The importance of Venezuela isn't oil," claims one expert, "it's whether Venezuela is going to start a wave in Latin America." What message should they send to the interfering president Chavez? Should the Treasury seize Venezuelan assets? Should they assassinate Chavez? "Before there's a covert action we have to get clear what are the foreign policy goals," cautions one staffer.

The foreign policy-makers seem to be a trigger-happy bunch compared with the regulators and central bankers. This may be because international relations are slower-moving and less volatile than financial markets. A hint that assassination was being considered to solve a tricky central banking question would hit asset prices in seconds.

July 4

The complex art of simulation is still in its infancy.
Independence Day. The financial regulators learn that Brazil has repudiated its debt to American entities, while agreeing a deal with the Europeans and others. Can the Brazilians get away with this discriminatory behaviour.

A former senior regulator reacts as follows: "We need to do some prophylactic work. We need data from supervised parties on Brazilian exposure. We need to figure the knock-on effect of Brazil defaulting on dollar debt. Events will come fast. Will the government apply exchange controls?"

The Decision Makers group is focusing on Saudi Arabia and Russia. The Saudis, they learn, are trying to secure new solidarity with Iraq and Iran, by getting UN sanctions lifted from Iraq and by a joint pact to defend Gulf shipping lanes. That would threaten US bases in the Gulf.

More information keeps pouring in, about a rate cut of 50bp by the Federal Reserve and positive response by the Dow; but bad news from Brazil, Ukraine, Turkey, Mexico. "This is typical of what happens to the president," says a decision-maker. "There's a huge flow of information. The important thing is to keep his eye on the ball, to get him to stop watching the Simpsons on TV and write that speech that tells the people the world isn't collapsing."

Decision-makers discuss the use of the government's exchange stabilization fund to bolster Brazil and other emerging markets. But they fear the congress on Capitol Hill "don't have a clear sense of what's going on"

July 5

There are signs that the US has become horribly isolated. ( This may have been a flaw in the structure of the game, since only US policy-makers are playing. When they want a response from the European Central Bank ( ECB ) or the G7, they have to ask the control room. The control room tends to stonewall. For example, the Central Bankers ask the control room: "What happened to other interest rates after we lowered ours? Did any banks match us and did they make any comments about our move?" The control room replies: "Other central banks have kept short-term rates constant. Only the ECB has criticized the Fed's easing of rates." )

In the Economics & Trade group one expert complains: "It's almost inconceivable that US influence has fallen so far in six months. It seems that Europe and Japan want to deal differently with Brazil and Mexico than through the US-led IMF."

Towards the end of the day Argentina suffers contagion, asking for a new swap line with the Fed and access to the US exchange stabilization fund "otherwise it may have to abandon its currency board". The Bank of Japan says it can't go on supporting the dollar.

A central banker shows that the health of the US economy is the main concern: "We've been concentrating on interest rates and maintaining a strong US economy. We're not targeting any response to asset prices."

Up in the control room the requests are coming thick and fast:

How much capital do US banks stand to lose?

Up to 50% of their pre-crisis capital.

Can I talk to the G7?

We don't have in the game a separate G7 negotiating team, talk to me.

The treasury secretary says he doesn't intend to close markets, is that OK?

We don't care what their decisions are we just want them to make them.

July 7

The Dow has recovered to 8,100; the dollar is down, to �95 and $1.07 against the euro.

Bad news for equity derivatives and the equity market generally. The Bank of England believes the problems of the derivatives subsidiary should be dealt with by the US and local US regulators. But the UK's Financial Services Authority suggests that financial support from UK and US authorities will be needed to stave off "large-scale refutation of existing equity derivatives contracts". The potential maximum loss to counterparties is $75 billion.

The Central Banking group wants to know US entities' exposure to Turkey, and whether that means problems for the payments mechanism. Figures come back from the control room: $20 billion but mostly on the books of hedge funds and insurance companies. The Central Bankers are relaxed: "If the hedge funds are getting hit, let them be."

A delegate enters from the Foreign Policy group to ask: "What's your response to the Asian financial crisis?"

"What crisis?"

China's 35% devaluation has hit other Asian currencies and their stock markets.

The Central Bankers, ever sanguine, observe: "Under these circumstances the dollar is actually strengthening, on a trade-weighted basis."

July 8

The Central Bankers consider a rate cut:

"I believe it's time for concerted action by the G3 ( the US, Europe and Japan ) on short-term rates," says one.

"I don't want to get trapped into doing something like that," says another.

"We should put out a statement: 'We urge everyone to avoid a cycle of competitive devaluation'."

"Logically the short end of the money market is awash with money. But somebody must be buying."

"A week has gone by since the crisis started. Let's adjourn and play tennis." This quip by a senior Fed official makes a strong point. The worst thing a central bank can do is overreact and overshoot, adding to market volatility.

The Central Bankers' biggest problem is lack of co-operation from Europe, which is becoming endemic. "There's a lot of hostility in Europe for this US go-it-alone stuff. We should keep reaching out. If we can't make it with [Wim] Duisenberg [the ECB governor], we should call that nice Italian [Tommaso Padoa-Schioppa, board member of the ECB]."

They decide to call a G10 central bank governors' meeting.

The Foreign Policy group, looking at the Saudi situation, believe the oil price will soon fall, given the state of world stock markets. "It's primarily a financial crisis," says one expert. He suggests liquidity should be pumped into Asia, but "through the multilateral route rather than the US".

July 9

Now the focus of the crisis appears to be Japan. Japanese banks, heavily exposed to Asia, have also taken a capital hit because of the falling Nikkei index. "We know the Japanese banks get hurt if the Nikkei goes below 15,000," says one regulator. Their intelligence is that the Japanese ministry of finance and the Bank of Japan are studying a tax on foreign bank deposits.

"This is not a regulatory issue," says a regulator, neatly sidestepping responsibility. "It's a discrimination issue. It will hit the big foreign banks, but it's not as bad as the German stance."

Germany has been hit by a new real-estate crisis, and has decided to bail out its own banks, but not foreign banks or the subsidiaries of foreign banks in Germany.

Each step of this crisis appears to be pushing the US and its banking system into further isolation. The Europeans seem to want to solve their problems on their own. Is this a sign of fortress Europe learning to flex its muscles?

The US regulators' first concern is their own banking system. A check with the control room reveals that, although eight banks are under special surveillance, no US institutions' marked-to-market exposure to Turkey, Brazil, equity derivatives, Asia, or Germany has taken it below its minimum capital. The regulators don't want their concerns about the eight banks to be made public. "The only time we said anything about institutions in difficulty was with Drexel [the liquidation of Drexel Burnham Lambert in 1990]."

The regulators conclude that these eight institutions would quickly be underwater if they took their losses. Does this denote a systemic crisis?

"Five banks and three securities firms will face capital problems. I don't think that says we're on the brink of a systemic crisis," argues one regulator. But they conclude that an easing of US interest rates would help.

July 10

The Decision Makers group is preparing a presidential speech as a means of calming the situation. With a president who is not running for re-election, although it's an election year, they reckon he can call wholeheartedly for Americans to unite for the sake of "the overall stability of the world".

The biggest worry is Japan's threat to discriminate against foreign banks. This calls for swift action, which they fear they won't get out of Congress. One decision-maker suggests invoking the president's Emergency Powers Act, which evolved out of the Trading With the Enemy Act of 1970. In 1971 president Nixon forced Japan to back down on trade protectionism by secretly giving it a 60-day deadline. "The Japanese waited 59 days and 23 hours but then caved in," recalls a decision-maker. The Federal Reserve could also put the heat under Japanese banks in the US by saying that they "hadn't met their capital standards", a decision-maker suggests.

The decision-makers don't want the president's speech to isolate the US, however. They want him to mention the support of the multilateral agencies, "not forgetting Nato". "The president also has to say something about the stock market, which is 30% down. Maybe about tax cuts."

At the end of day 10 the Dow is at 7,700, the Dax slightly up at 5,200, the yen strong again at 90 to the dollar and the euro at $1.12

Half-time summary

At a press conference after the president's speech, the administration try to reinforce what they hope was its calming effect. Why didn't the president do this himself?

"Is the president incapacitated?"

"No, he's in fine shape."

Ernie Patrikis, at 12 o'clock,
spearheads the regulators in
familiar crisis territory

Secretary of state Madeleine Albright sums up the geopolitical situation. There's a resolution in the UN security council to keep Russia out of Ukraine. There have been overtures to dissuade the Saudis from allying with Iran and Iraq, backed by a threat to send US forces into the Gulf, where an aircraft carrier battle group has already been dispatched. The president will veto any congress action against Turkey on human rights, provided the US can continue to use Incirlik air base.

Treasury secretary Larry Summers sums up the financial situation: concerns about the banking system in Mexico; fear of contagion from the Brazil crisis - where US banks, insurance companies and hedge funds have ruled out debt reduction, while European banks have been willing to cut their loans. "There's a moratorium just for US entities. We went to the G8 [top industrial nations plus Russia], but the G8 is basically not co-operating. They're saying the US banks should share the pain." The treasury is now considering seizing all Brazilian assets in the US. Despite these trouble spots, "the US economy is still very strong," Summers says.

Federal Reserve chairman Alan Greenspan denies there's a rift with the Europeans and the Japanese. The ECB had simply criticized the Fed for wanting to lower rates and hadn't followed suit. The German banking problem is one for the ECB, he says, but the Fed is prepared to provide liquidity to US banks where necessary. So far it hasn't seen numbers bad enough to require any action. The Fed's job first and foremost, he says, is to "do no harm".

But the crisis continues.

July 12

Talk of tax cuts to revive the economy is in the air. The Central Banking group believe there should be a US undertaking "to provide sufficient liquidity to the system". They debate a proposed rate cut of 150bp.

"You don't want to do things you can't do again. 100bp would be pretty aggressive and less likely to scare people."

"Every study says the flaw of using monetary policy instruments is you tend to move too slowly."

"There's a big increase in delinquency rates."

"I would second 150bp, because we are likely to go to 3% by the end of the game."

"We can't say our expectation is that things will get worse."

"We'll do what's best for the US economy and let Europe and Japan adjust."

"I think it's a little excessive, but for the game let's do it."

"All the indicators show a decline in the US economy."

"The yen is at 82. The currency is anticipating our move."

"The Japanese are screaming for a rate cut."

A rate cut of 150bp is decided, partly to have some impact on the game.

July 15

The Economics & Trade group are discussing tax cuts to pump confidence back into the economy. One suggestion is to remove withholding taxes on interest income and the savings of foreign investors.

"Removing the tax on dividends would help the stock market," affirms one expert.

"I think the focus should be on the economy and unemployment, not the stock market," objects another.

The Decision Makers are wondering how much damage will be done by class actions against pension funds for overweighting their portfolios with equities. Should they now be forced to rebalance, causing even more of a market sell-off? "It's not that easy for a CalPERS [the $140 billion California Pension & Retirement System] to rebalance - in terms of the integrity of the financial system."

The Economics & Trade group brings them a tax-cut package: cut all tax rates; provide people with a sales tax rebate from treasury; invest some of the social security funds in the stock market; bring forward all government spending; announce that an additional 13 weeks of unemployment benefit will be paid.

July 16

The Regulators send a delegation to the Decision Makers group, saying they have been able to do very little to avert the crisis. "In a crisis we can shut markets and shoot the wounded, but nobody has failed. The US banking system has lost 50% of its capital. But only eight institutions out of 11,000 are causing concern. What started out as a liquidity crisis may now turn into a solvency crisis, but as regulators we can't do anything because the real funds aren't there." As an afterthought they add: "The Japanese banking system is now probably dead in the water."

But noises from the Federal Reserve, that it will make "significant loans to institutions in trouble", are greeted with scepticism.

"The Fed hasn't done that since 1933. It's a highly complex thing."

The Fed has advised its regulated banks to honour their commitments to brokers and refrain from foreclosing in the event of failure to pay margin.

July 17

New economic figures say that confidence is at its lowest since 1987. The Dow is at 7,100, the Nikkei at 17,000, the Dax at 4,600, oil at $36 a barrel, the long bond at 6.7% and the euro at $1.22.

The Central Bankers are worried that the split with Europe is widening.

"I think they [the controllers] are building us up for a trade war with Europe."

"In terms of the euro, oil is very cheap."

"The euro is only 2% stronger than it was in January 1999," points out one expert. But the downturn in consumer confidence "would hit the Fed's open market committee ( FOMC ) like a ton of bricks", warns one central banker.

"Let's give them a 100bp cut - there's only half-an-hour left in the game."

"We can't just put the rate down. We have to say 'in the light of consumer confidence, we...'."

The Decision Makers group, despite problems with Libya and Russia, are more concerned with the US economy, which shows further evidence of decline, despite the rate cut to 3%.

"We're risking a trigger effect where we could really have a panic," says one decision-maker.

"We need to get to the Economics & Trade group and agree a statement by the president."

"The president has got to say how we got into this mess. It's not good enough to blame Greenspan and $33 oil."

July 18

In the Economics & Trade group, methods of protectionism not seen for 30 years are being discussed, such as a "temporary import surcharge" and "wages and prices controls".

The Regulators and Central Banking group are suddenly faced with a new crisis. Two of the biggest mutual funds have come to the SEC saying they are experiencing redemption rates that could be life-threatening. They need an injection of cash to meet the payments without having to dump their portfolio on the market at fire-sale rates. Failure of one, let alone several mutual funds, would cause a huge loss of public confidence, and a run on the entire multi-billion dollar US mutual fund industry.

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misetich

(07/19/2002; 17:14:38 MDT - Msg ID: 80952)

Cavan Man - Is there a plan?

Headline: Crisis simulation - US experts play at global meltdown)For whatever reason the cut and paste failed - hopefully this will work on the garbled characters:

.......................

The Regulators approach blue-chip bank JP Morgan and discuss the Fed secretly guaranteeing a huge line of credit to the two funds. Morgan would take excess collateral, but it wouldn't be taking the credit risk of the mutual fund companies themselves. That would be borne by the Fed.

Fed chairman Greenspan is uncomfortable but he agrees to the deal.

"All the public will see," says one regulator reassuringly, "is that the Fed's volume of loans to banks has gone up."

The game ends.

Conclusion

There hasn't been a financial or economic meltdown, although the world seems to be approaching one. The exercise was a test of the policy-making process, rather than the robustness of the global economic architecture.

There were other geopolitical crises that aren't dealt with here. For example, a report that Libya had acquired a nuclear weapon from the Russian mafia. There was also a Turkish banking crisis, with the US promising to help if it kept an important air base open. Saudi power-broking in the Gulf also prompted US sabre-rattling. These were a backdrop to the economic and financial crises, which are of more interest to Euromoney readers.

Until the tapes are transcribed and the emails collated no-one has a full picture of what was said or decided. What you have read is the experience of one observer moving from room to room, following only snatches of what each group was discussing. The sense of crisis and information-overload was palpable.

Participants familiar with the committee process said it felt close to the real thing, as they tried to block out the noise and reach the most important decisions. "It had the feel of a task-force group at the State Department," said one veteran. "But there weren't as many egos in play as there would have been on our seventh floor."

Said a New York Fed official: "It was realistic, sitting in isolation with a cavalcade of information. But I don't believe that all relative prices can go in the same direction. Where does all the money go?"

The unthinkable doesn't happen, until it happens.

--------------------------------------------------------------------------------

What did it achieve?
For some it was just an amusing way to spend a Saturday and a chance to fraternize with their peer group. But it meant more to those who believe simulation has a future as an aid to crisis management.

The January 22 exercise was an interesting variation. The emphasis was on policy, which meant that egos were suppressed in favour of policy-making by committee. Only in a couple of cases were people assigned roles, such as those of treasury secretary Larry Summers and governor of the Federal Reserve Alan Greenspan. So the debate was free of oratory and overriding political bias. It was a highly cerebral game played by high-level, experienced people. That meant they brought to it their own baggage and their own sense of how they would behave in a crisis.

On the other hand, the game lacked built-in drama. The groups were bombarded with information, and they were forced to make decisions, but those decisions tended to get lost in cyberspace. They appeared to have little impact on the course of the game, apart from one swingeing rate cut of 150 basis points by the Federal Reserve.

Players instinctively wanted to talk to their global counterparts, the G7, the European Central Bank, the IMF. But these weren't represented except by controllers.

In the end it was a policy game played by the US against itself. The US needed some opposition - the Japanese and the Europeans, and maybe a needling press corps.

This is now planned. The next simulation to be arranged by the Council on Foreign Relations, as part of its "financial vulnerability" programme, is likely to be played globally, with Europeans and Japanese participating in real time by email and telephone.

The use of email to transmit news and messages instantaneously showed that these games could also be played entirely in cyberspace, although the aspect of personal interaction, and peer group networking would be lost.

That leaves two questions: first, should players be assigned characters and individual roles, or are these crises played out more meaningfully by committees? In the first case, maverick characters and criminal minds can affect and perhaps distort the outcome; in the second case, perhaps it is unrealistic to rule out egos, manias and personalities. A mix of both techniques could be the answer.

The second question is the time horizon: what speed should the clock be ticking at? Compressing time adds to the sense of urgency, but that risks leaving less scope for negotiation and deliberation.

http://www.euromoney.com/

Cavan Man

(07/19/2002; 17:16:42 MDT - Msg ID: 80953)

misetich

With the sheer size of the task, hyperinflation is assured.

CoBra(too)

(07/19/2002; 17:17:11 MDT - Msg ID: 80954)

Is a USSR of A - too far away?

To contemplate?
I don't know, do you?

Well, now we're getting Homeland Security - sounds kind'a terrible, though the affinity to the -Vaterland- is not only stunning - but scary.

As I'm afraid and very afraid - I still hope the economic problems of the globe's only empire, empirically, since only by advantage of superior technological force today, becoming desolate tomorrow - may not lead to a WWIII - as GWB seems to try to deflect his country's problems.

And, yes it may be fair to suspect that the US $ Hegemony has run its c(o)urse.

Is it fair to assume -
- that the SEC has been sleeping on their watch?
- that the CFTC has been A'Oled by Warnerin' about Time?
- that FDA was lookin'the other(a)way from Merck and J&J
and that - Orange County (Merrill, Lynch)-LTCM (Goldman Suchs), argentina, Enron, Tyco, Global Crossing , World.Com and many more out there ... caused by the establishments preferred outcome - don't rock the boat - led to the supposed impartial accounting malaise of the giants of its industry.

... and if that's fair - it may be time to look into the alledged slime of the ESF, the PPT and the private Banking Enterprise, (ir-)responsible in its privilege to emit FR-Notes - a kind of monopoly money - whose properties no Chairman could explain, yet! -

Meanwhile, I guess the US of A has become the country of opportunity for the established bureaucracy, (in-)justice and perverted rule of law, where you need a fortune just to
protect your good name - from attacks of the laywer's gang.

The Land of the free need not ever revert to enterprise - as nothing is free - and the last entrepreneurs also know it's total success (for the sweet , though short term)or everlasting process of laywers, judges and in the end accountants to envy the success.

... And - unfortunately, the Bush administration, seems to have surrendered to the (seemingly) inevitable end-game of the US$ -hegemony (hierarchy)- and in the wake of 911 are playing the patriot game, carrying former american liberty to almost fascistoid extremes - the "American Way of Life" has surrendered to its embattled political -Belt 'WAY'!

Being kind'a complacent -recently - as a Euro guy - I still feel I got'ta load up on ever more physical - cb2

Cavan Man

(07/19/2002; 17:18:26 MDT - Msg ID: 80955)

misetich

Free markets must find thier natural equilibrium. Agree? The alternative has always been available to everyone. Any amount is enough.

Pizz

(07/19/2002; 17:19:18 MDT - Msg ID: 80956)

R Powell

Rich, on short interest.

The shorts only represent a very small percentage of the overall market participation. Big buyers push the market up and since the shorts are such a small force compared to the rest of the market, they are a bit more nimble and run to cover very quickly as the bigger boys buy.

Right now there are virtually no big buyers, having had the perverbial heck kicked out of them over the past two weeks trying to pick (or force) the market to bottom.

One reason we haven't seen more than a quick bounce back is, IMO, that not only are the funds net sellers, but the foreigners are also selling heavily into any kind of strength.

Another reason there may not be any big buyers left is that yesterday a trader that reports for Webfn corrected an analyst about short covering, and he said that there is some very big and important money still short this market, and he saw no indications of any weakening (covering of these positions). I'm also watching gold and silver stocks being accumulated over the last week. Most are still above technical support.

The largest concern I have right now, is, that we are not going to get enough juice next week for gold to break to new highs. If we get an early week meltdown (dow down quadruple digits) without busting 330 gold, I'll be a little pessimistic for a few months. Not enough to sell my long term paper positions, but I'd probably hedge them with some cheap out of the money puts.

Keep in mind, the 330 to 360 gold price is going to be defended with every piece of worthless fiat that can be found. A short squeeze would probably take a couple bullion banks down. I wish the gold derivitives were spread out among a few more players so we could get a renegade or two to cover.

Politically, I think Bush et al are going to have to let the bullion banks, etc. fend for themselves. If there have been any verbal promises of government guarantees, etc. I have a feeling the politicians are going to get a bit of amnesia. The liquidity rumors floating around this week probably have merit, because we're getting too many reports of capital (cash) heading over the pond. This has got to be affecting reserve positions, and quite frankly, the bullion banks may not have the liquidity to defend their derivitives, the stock market, and the bond market if we get any panic.

We shall see, but next week ought to be a once in lifetime experience.

Pizz

R Powell

(07/19/2002; 17:20:54 MDT - Msg ID: 80957)

misetich // COT numbers

You said, "COT numbers are in, commercials piled it on adding to their short positions- no bidders showed in SM."

Thanks for the info. Is this the answer to my question of why there was no short covering bounce? Maybe. Can you give more specifics as to where the commercials added shorts? Must be index futures if tracked by the COT. S+P index? They couldn't sell without buyers. Do you suppose the PPT was there buying to ramp up the television viewed index numbers and simply got blown away by overwhelming commercial selling??
It would be most unusual for these index shorters to carry positions over a weekend. Wow. Monday, monday oh watch out for Monday! I think it's cash out of the bank and under the mattress time.
Can you give more information?
Thanks
Rich

Cavan Man

(07/19/2002; 17:21:07 MDT - Msg ID: 80958)

@CB (too)

War in Iraq is assured as evidenced by administration comments. So, where does that leave us? Will markets be closed while the WAT is prosecuted? This won't be a reprise of GWI. Welcome to the commune Comrade.

CoBra(too)

(07/19/2002; 17:50:12 MDT - Msg ID: 80959)

@CM - WAT vs Saddam

- Fine with me - Let's play the last greasy - sorry oily - card and identify this guy, together with Iran(ian) Mullah's as the devil's own triad.

- While, on the other hand (forgive me, I also know all the jokes from the right hand)- no joking, I will fratern-(al)ize with the most savage Afghani - I'd usually despise - just to explain El Quaeda - or any other Muslim Organisation can NOT Ever - control OUR oil - nor will we forgive the attack on our SOIL - EVER!

Clever? Do you know?

We'll probably find out...

and may ask the question - WHY?

I don't know - do you? cb2

PS - only a (d-im-... nah) partial insultation ...

R Powell

(07/19/2002; 17:54:36 MDT - Msg ID: 80960)

Pizz

I'll agree that the big buyers almost always scare the shorts away when they enter the game to buy. The short has got to be wary, elusive and quick because he will get vaporized even in the one day uptrend wonders of great bear markets.

If then, as you suppose, the big buyers have left (at least for now) the game leaving the shorts bold enough to carry their positions over the weekend, is this not a major event? I remember from accounts of the 1929 crash that traders commented that it was not the overwhelming amount of selling but, rather, the total absence of any buy bids that caused the crash. I heard the adjective "freefall" used on CNBC today to describe the late day action.

If, as misetich says, the COT report shows "commercials piled it on adding to their short positions" were they also selling stocks as fast as possible? They must have been. Has the big money decided to bail out of the long side of stock ownership admitting defeat for now but knowing that this will also put index numbers in freefall. Thus, short the index numbers. This would explain why there was no bounce whatsoever today. By my reasoning, this can only mean the Great Market Crash of 2002 has officially started.
If so, the Globex futures index numbers will fall fast and hard. And precious metals? Wow
Am I thinking straight?
Rich

Blackjack

(07/19/2002; 17:55:15 MDT - Msg ID: 80961)

Iraq invasion sooner than expected?

http://www.haaretzdaily.com/hasen/pages/ShArt.jhtml?itemNo=188407&contrassID=2⊂ContrassID=1&sbSubContrassID=0The U.S. operation to topple Iraqi leader Saddam Hussein will take place in the coming months, even before November's Congressional elections, according to high-level sources in the French government following talks with American decision-makers and professionals in Washington.

The French assessment is based, in part, on what National Security Adviser Condoleezza Rice told new French Foreign Minister Dominique de Villepin this month. Rice emphasized U.S. President George W. Bush's determination to topple Saddam "soon," according to the French sources.

Frequent media reports about difficulties in deploying American troops and completing preparations for the operation are meant, according to French government experts, as disinformation to achieve tactical surprise with regard to the timing, place and method of the assault. This will partly make up for the lack of strategic surprise given Bush's declared policy and Saddam's preparations to absorb an attack.

Reports and analysis based on official sources in Washington reiterate the assumption that the operation will take place this winter, so that any failure will not reflect badly for the Republicans at the polls. But the French regard that as a strategy to lower Saddam's guard in the coming three months, while Congress is in recess and the election campaign heats up. Paris won't be surprised if the blow comes in the middle of August, while Bush is seen vacationing at his Texas ranch, in the form of a special forces raid backed by the CIA and precision air attacks.

misetich

(07/19/2002; 17:57:49 MDT - Msg ID: 80962)

R Powell

You may find this of interest:

Here's an excerpt that came across the newswires in early afternoon:

In futures, S&P 500 traders said the downtrade has been very orderly and does not smell of capitulation, but rather just a plain and simple lack of bids. Dealers have been continual sellers and the pit is also massively short so that could mean later this afternoon, the stock
market might be in trouble.

Shermag

(07/19/2002; 18:01:20 MDT - Msg ID: 80963)

Operative: Beefy trading volumes in ABX & PDG

Checked regular hours volume on these two and noticed a large jump today.

ABX for instance typically trades in 3 to 6 million daily volume, with its busiest NYSE day over the last three months at 11 million. Todays volume, by contrast, is over 47 million on NYSE, with another 10 million on the TSE.

PDG regular NYSE vol is 2 to 4 million, while todays is over 29 million, with another 8 million to boot on the TSE.

Looks like some large players are changing lanes.

Arcticfox

(07/19/2002; 18:09:11 MDT - Msg ID: 80964)

CNBC

Anyone watching Jim Cramer tonight. He is very $is$ed off. Very entertaining...

R Powell

(07/19/2002; 18:20:26 MDT - Msg ID: 80965)

misetich // Pizz // anyone interested

"a simple lack of bids"
Perhaps the crash will not be the result of a fierce battle between the bull and the bear but simply the lack of buyers. Sell at the market orders will be filled between the last quoted price and zero. Headlines will read, "Bear wins by default, bull is a no-show."

Will no buyers of stocks precipitate no sellers of gold? After so many tries at shorting the S+P I finally gave up but was sorely tempted at its last rebound to 1175! Oh well, bought silver instead and have not suffered.
I've not heard anything to lead me believe POG's jump today was anything but a direct response to the SM action.
If this corrolation is true and next week sees the commercials moving to the SM short side, POG may very well trigger that much talked about short covering we've waited for. Margin calls for all markets, redemptions, foreign investment money bailing out etc.
Why else could there have been no bounce in the stock index numbers today? And bigger commercial COT short side numbers? If it weren't over a weekend I'd not be as amazed that short positions weren't offset. Thanks guys. More thoughts!
Rich

Golden Bear

(07/19/2002; 18:52:53 MDT - Msg ID: 80966)

misetich (msg#: 80952) Cavan Man - Is there a plan?

"....This is a way of "forcing us to think our way through high-cost, low-probability events" says CFR senior research fellow Roger Kubarych, who led the project...."

This is the tripe that most market participants have been lulled into drunken stupor with. A central bank created fiat money global economy becomes a high cost, HIGH probability crisis at some point in time.

Now we watch as these uninformed market participants, whether active bying stocks, or passive via their 401K's, are watching their dreams being shattered day by relentless day.....

R Powell

(07/19/2002; 19:01:30 MDT - Msg ID: 80967)

Rukeyser and gold?

Just caught the end of his program where he asked his special guest for her thoughts on the two alternative investments he had mentioned earlier, namely bonds and GOLD!
The guest admitted to knowing nothing about gold other than that the related stocks were up 62% YTD (her figure). Louis Rukeyser mentioning gold as an alternative investment!? Strange times indeed.
Can anyone report what he had said earlier that I missed?
Rich

Chris Powell

(07/19/2002; 19:08:14 MDT - Msg ID: 80968)

Today's volumes in ABX and PDG

Weren't these huge increases the result
of the addition of these two companies
into the S&P index after today?

Black Blade

(07/19/2002; 19:09:51 MDT - Msg ID: 80969)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
It's Time To Think About Some Things

Snippit:

At a time of extreme pessimism, it may be hard to think about buying, but there are many shares of companies that are in the business of providing essential services or making "things" that have become grossly oversold because of short selling. Several of the key power producers are now selling at 3-4 times earnings. If you believe we will still need to turn on the lights, some of these companies are now screaming bargains. Several of the best oil companies are selling at the same multiples, and I hate to say it, but our energy situation is going to get a lot worse over the next few years. According to an analyst at Standard & Poor's, the depletion of U.S. oil and gas wells, limited access to known low cost producers, trade restrictions, environmental regulations and political unrest in the Middle East and Latin America, are moving the U.S. towards a major energy crisis. In the words of Tina Vital, an energy analyst at S&P, "One has to ask, where are we going to get our oil from� It just seems that America has its head in the sand."

S&P estimates a $4 war premium in the price of oil. If war breaks out with Iraq, which is looking more likely, the price of crude could head to $40-50 a barrel. In case anybody hasn't noticed, the price of oil has gone from under $19 a barrel in January to today's closing price of $27.84. If there is going to be surprise earnings in the second half of the year, it is going to come from the energy and precious metals sector and other natural resources if paper company profits are rising.

Black Blade: Bang on! My two favorite sectors are energy and precious metals. If the economy falters then preciousmetals are that portfolio insurance that will save the day, whereas if the economy is ever to emerge from the depths of depression it will do so on the wave of "cheap energy". "Cheap Energy" requires that there be a boom in energy development and that is not happening right now. We must have a lot more pain in the markets yet. Meanwhile it is Gold and Silver that keep my ship sailing through these stormy seas.

His commentary about the wealthy investors at the "wedding" reminds me of those who I have had known over the last few years. I too have told them that I invested in Gold, Energy, and dabbled oh so lightly in banks, techs, telecoms, and biotech. I get the same response � "oh, you're one of them". Well, now I did what I could to help them see the folly of their ways. Now I will watch the carnage as "entertainment". Yes, Darwin was right about "Natural Selection". It is the same old analogy that I draw from Aesop's fable "The Ant and the Grasshopper". Even today I talked to a couple of investors who have thrown in the towel on the markets. As the losses mount in the equities markets I notice that I have actually made some very nice gains and also have that secure knowledge that I have a stash of cash and a pile of Silver and Gold to fall back on. Everything is going perfectly to plan. I even have my storage of nonperishable food up to about 9 months to a year supply. I have absolutely no debt on top of that. Yep, being an Ant is sure a lot better than being a Grasshopper.

Black Blade

(07/19/2002; 19:14:47 MDT - Msg ID: 80970)

Re: Chris Powell

Actually ABX and PDG are kicked out of the S&P 500 today. Also, all foreign companies are booted today. So these two miners have got hit by being ejected from the index but also they are less desirable due to their mega-hedger status. Of course one would expect Newmont as the remaining gold miner in the index to benefit. The nonhedgers had slightly higher than normal volume and they did rise in price today. Now that ABX and PDG are out of the picture, they are now less relevant. Cheers!

- Black Blade

Pizz

(07/19/2002; 19:20:38 MDT - Msg ID: 80971)

R Powell

You're thinking the same way I am.

Carry short positions over the weekend? You bet it's significant, because over the past few years, nearly everytime there is a big move either way in the SM on expiration, it reverses the following Monday.

The selling of gold stocks late in the day and shorting of them in anticipation of a short squeeze rally in the SM was normal. But again, late in the day the shorts covered in gold, and did not in the markets.

Something is up, and whether it's a complete lack of bids, or something else, the big boys know.

I'm just worried that the PTB might need an excuse rather than have about 95% of the population start to realize the system has failed. Things tend to happen when they're not supposed to. If I was Sadam, I'd be spending the weekend in the country about as deep as I could get. Start a war in the ME in the dead of summer? Especially after all the press on the fact that it won't be until next year.

I seem to remember that there was a report 3-4 months ago that the MASH units were being called up. My younger sis was an Army nurse for 30 years stationed out of Fort Brag.
Sixty to 90 days were all that was required for them to be completely deployed and set up, and in an emergency, it could be done in two weeks.

Starting to be a bit more than interesting.

Pizz

Black Blade

(07/19/2002; 19:25:48 MDT - Msg ID: 80972)

The crash of 2002

http://money.cnn.com/2002/07/19/markets/markets_newyork/index.htm

Dow hits lowest level in nearly four years as crisis of confidence worsens; J&J latest casualty.

Snippit:

NEW YORK (CNN/Money) - The Dow Jones industrial average sank to its lowest level in nearly four years Friday in a selloff that only further highlighted the drastic loss of confidence in the stock markets in the United States.

It was the seventh-biggest point drop ever for the world's most widely watched stock average. Mixed earnings results from big-name companies, news of a government investigation at Johnson & Johnson, and worries about a possible bankruptcy filing by WorldCom gave already jittery investors more reasons to head for the exits.

"It shows you how much confidence has been shattered," Morgan Stanley senior economist William Sullivan told CNNfn's Street Sweep program. The sharp declines in stock prices in recent weeks are likely to erode consumer confidence, which could in turn hurt the economy's prospects in the second half of the year, he said.

Black Blade: You know what I find interesting about this crash is that more and more financial media Trolls and Wall Street pimps are actually starting to admit that the economy is falling apart. Amazing! After 2 and half years of falling markets, compounding crushing record debt mixed with an energy crisis, these people are finally beginning to notice the cracks in the economy. Ron Insana of CNBC said that the economy appears to be in bad shape. Well No S*** Sherlock! The fun is just about to begin come August 14th when CEO's will be required to personally sign off on the corporate earnings reports. Analysts are also going to be required to sign off on what they pass off as "research". Oh yeah, the fun is only getting started. And we are only half way through "earnings season".

White Rose

(07/19/2002; 19:30:48 MDT - Msg ID: 80973)

The race for the hedged miners

We have spoken of the fact that ABX put in a clause that they could defer their deliveries of gold to their counterparties for up to 15 years. Is could be awkward for the bullion banks who may need the gold yesterday.

Is the bullion banks bought up a controlling interest in ABX, they could insert a management team that would keep the gold sales on schedule.

So buying ABX could be a good short term play. Of course, in a week, you should use the proceeds to buy the real thing. The idea place to buy physical is right at this establishment.

Black Blade

(07/19/2002; 19:34:34 MDT - Msg ID: 80974)

This bear is here to stay, Mobius says

http://finance.canada.com/bin/story?StoryId=CptEoWd8bote0mJu2&Topic=Financial_Post&Type=hom

'Excessive valuations': Franklin Templeton equity guru says two more years of pain

Snippit:

Mark Mobius, the Franklin Templeton fund manager and emerging markets specialist, predicts the bear market is here to stay for another two years because valuations remain "out of whack" and investors have yet to reach the point of "disgusted selling."

"It's a bear market that's not going away anytime soon," said Mr. Mobius, the Singapore-based manager of the company's Emerging Markets fund and one of the industry's heavy hitters. He was in Toronto yesterday for the annual meeting of the Templeton Growth Fund, one of the benchmark products of the Franklin Templeton Investments family of products.

"People are not willing to face the fact that valuations are excessive from a historical point of view, which they are," Mr. Mobius said during an interview with the Financial Post. "You have to reach the point of disgusted selling, and we haven't reached that yet. When you reach that, then you will see the bottom form. But I don't think we are there yet. There's still too much hope out there."

Black Blade: I agree, though I find his choice for a top holding a bit amusing. The top holding is his funds is South African breweries PLC. Now I do like my brew, however, this is "interesting". That said, he is certainly right about market valuations and with the excessive debt, I think that we are headed for the New Great Depression. Definitely get defensive!

Black Blade

(07/19/2002; 19:41:21 MDT - Msg ID: 80975)

SEC to Require Analysts Certify Reports

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1225164

Snippit:

WASHINGTON (Reuters) - Wall Street research analysts, under the gun for privately trashing stocks they were publicly endorsing, will have to certify their reports under a new rule to be considered by federal regulators.

The Securities and Exchange Commission has scheduled a vote on Wednesday, July 24 to consider proposing a new rule that would require analysts to provide certification of their report and disclose their compensation related to the reports

Black Blade: No more charlatans like Mary Meeker, Henry Blodget, and Jack Grubman will be able to hide like cockroaches when the lights are turned on. Now they are likely to have to certify their work and reveal their compensation. This could put an end to some abuses of "pump and dump".

Black Blade

(07/19/2002; 19:47:44 MDT - Msg ID: 80976)

Shareholder Class-Action Lawsuits Are on Record Pace

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∣dle=ad_frame2_topfin&s=APTg19xXgU2hhcmVo
Snippit:

Palo Alto, California, July 19 (Bloomberg) -- Shareholders sued at a record pace in the first half of 2002 after accounting irregularities were disclosed at companies from WorldCom Inc. to Adelphia Communications, according to a class-action database. Investors sued 130 companies, including Tyco International Ltd. and Merrill Lynch & Co. Inc., for securities fraud in the first six months of the year, according to the Stanford Law School Securities Class Action Clearinghouse. That pace was 53 percent faster than in 2001, when shareholders filed 170 such cases for the entire 12-month period.

Black Blade: We should see this number of shareholder lawsuits skyrocket now as many corporations and Wall Street firms have been intentionally misleading shareholders. Now as shareholders pile up horrendous losses, they will look for someone to pin the blame on. Just another nail in the coffin.

turkey hunter

(07/19/2002; 19:49:05 MDT - Msg ID: 80977)

funny picture on the Drudge website

http://www.drudgereport.com/I get a chuckle out of this picture on the Drudge Report website. I'm trying to think of a caption that would fit it. Maybe "Do I got gold? What's that"

Blackjack

(07/19/2002; 20:02:05 MDT - Msg ID: 80978)

Just could not resist posting!

What is the difference between a Wall Street stockbroker and a pigeon?

A pigeon can still make a small deposit on a new BMW.
____________________
As the bear market grinds on, here are the clues to a bottom:

1) MSNBC hangs up on Louis Rukeyser when he tries to get them to pick up his canceled
show "Dogs of the Dow"

2) You hear that Maria Bartiromo of CNBC has become a stand-up comedian, and that Stuart the Ameritrade guy has gone back to cleaning pools

3) Martha Stewart is released from jail ...early ...for good behavior

4) Warren Buffet is accused of insider trading, but the FBI finds his trailer hasn't been lived in for months when they go to arrest him

5) Peter Lynch has disappeared after admitting that buy and hold strategy bankrupted him! LOL

Black Blade

(07/19/2002; 20:15:50 MDT - Msg ID: 80979)

Lies About Ayn Rand from The Wall Street Journal

http://www.capitalismmagazine.com/2002/july/rs_lies.htm

Snippit:

A WSJ editorial today ("Parson Greenspan") alleges that what Ayn Rand taught Greenspan was to be "a shrewd political operator." Of course, she taught him no such thing. In fact, she railed against the very thing he's doing; she called it "power lusting" and the "scape goating" of capitalists. She also taught that greed (rational self-interest) was good and that businessmen are essentially heroes, not latent crooks. But look how the WSJ portrays it: not as Greenspan rejecting Ayn Rand's teachings, but . . . . abiding by them! Of course, the WSJ editorialists, in criticizing Greenspan's moralizing, could not say that he was rejecting Rand's views�since they hate her philosophy. So instead they just lied.

Richard M. Salsman, CFA
President & Chief Market Strategist
InterMarket Forecasting, Inc.

Black Blade: Indeed, I just saw Paul Gigot on CNBC a few moments ago making some odd statements about Ayn Rand and Libertarianism. Obviously he has absolutely no clue. Of course Greenspan has abandoned any link with Ayn Rand and "objectivism" long ago.

Golden Bear

(07/19/2002; 20:40:09 MDT - Msg ID: 80980)

07/19/02 DOW BELOW 8000. START OF THE CRASH?

http://www.whatreallyhappened.com/".... Investors have lost trust in the earnings reports of companies, but they know the balance of trade deficit is real�and the national debt is real. Years of government-sanctioned market rigging via the Plunge Protection Team have created a stock market more overvalued than that of
1929 and poised at the brink of a dizzying drop. When it happens, remember that you were warned, but chose to believe those impressive looking numbers on the brokerage report over common sense and the fundamentals of economics. As the bottom falls out, remember that the war didn't create this situation, Osama didn't create it, and even corporate greed isn't the root cause. Nor did just the Republicans or just the Democrats cause it.

The US Government as a whole and with the willing participation of both parties mismanaged the nation's economy, opting for short-term, quick-fix,� spend-now-and-stick-the-kiddies-with-the-bill policies designed� solely around the political needs of the next election cycle..."
----------------------------
GB: Well, that about sums it up.....�

Siochain

(07/19/2002; 20:46:51 MDT - Msg ID: 80981)

Now or October??? One scenario

Next week �especially Monday and Tuesday�.will most likely determine Market and PM direction for the next 6 to 10 weeks IMO.

-Monday is looking like a major Market drop: shorts didn't cover SM today�...no last hour save�..Big Money is sitting and waiting �gold stocks had a remarkable last minute buying spree today

-Some Technical Analysis leans towards Monday DOW low �..A report I respect and which previously predicted the June 4 gold high and the recent NAZ low which has held �..has predicted (using wave theory and cycle progressions) that a low for the DOW and S&P could be set Monday�.that this is critical point and we could have a major low and reversal next week

-If the low and reversal occurs in SM�.we could have a short top to gold and then a drop till Sept or early October�some pullback but good time to accumulate for Fall looks shining for gold

-The Administration �with an important Congressional election coming in the Fall MUST find way to restore confidence in the Market�.calling a "capitulation" next week with a following summer rally is just what is needed�.and there are most likely more tricks in their bag to do it one more time

-Sadam appears to be on agenda for Sept/October �.read the article regarding UK reservist call-ups for a possible "pre-emptive" strike (http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2002/07/19/nirq19.xml&sSheet=/news/2002/07/19/ixnewstop.html)�.now this also would be timely for elections if economy drops more and SM summer rally peters out �.Rally round the flag! Support our troops! (And Prez � with a Republican Congress)

But then again�a terrorist attack�India/Pakistan troubles�further Palestine/Israeli fighting could throw a wrench in the above

Either way�gold WILL go up�.in my book�it is just a matter of when...though of course I would prefer next week and for the good of the Country I would also prefer that we face reality now rather than later....Be safe....buy gold and prepare!

Waverider

(07/19/2002; 20:51:32 MDT - Msg ID: 80982)

Koizumi stands firm on deposit refund limit

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20020720a1.htmSnip:
"Prime Minister Junichiro Koizumi on Friday rejected calls from senior legislators and bankers to postpone plans to cap deposit guarantees at failed banks, scheduled to take effect April 1. The Second Association of Regional Banks had appealed to the Financial Services Agency to put off its plan to limit guaranteed refunds for liquid savings."

Waverider: The regional banks requested this because they fear that ending the full refund guarantee will create panic and cause depositors to relocate savings - I'm sure they're right. I wonder how many more "panic-aversion" strategies we'll see come to light. A friend told me today that her monthly investment statements no longer have the purchase price on them - when she contacted her broker about it she was told that too many people were panicking, so they stopped providing that information. I guess it's a rude awakening to discover that money heaven really does exist!

Siochain

(07/19/2002; 21:02:37 MDT - Msg ID: 80983)

The tale of the donkey

A city boy, Kenny, moved to the country and bought a donkey from an old

farmer for $100. The farmer agreed to deliver the donkey the next day.

The next day the farmer drove up and said,

"Sorry son, but I have some bad news, the donkey died."

Kenny replied, "Well then, just give me my money back."

The farmer said, "Can't do that. I went and spent it already."

Kenny said, "OK then, at least give me the donkey."

The farmer asked, "What ya gonna do with him?"

Kenny, "I'm going to raffle him off."

Farmer, " You can't raffle off a dead donkey!"

Kenny, "Sure I can. Watch me. I just won't tell anybody he is dead."

A month later the farmer met up with Kenny and asked,

"What happened with that dead donkey?"

Kenny, "I raffled him off. I sold 500 tickets at two dollars a piece
and made a profit of $898."

Farmer, "Didn't anyone complain?"

Kenny, "Just the guy who won. So I gave him his two dollars back."

Kenny grew up and eventually became the chairman of Enron

Note: Also a good snapshot of the SM action of recent months/years

Pizz

(07/19/2002; 21:16:36 MDT - Msg ID: 80984)

Siochain

Good analysis for next six months. Now lets hope we can bust gold to at least the 330 - 360 range for consolidations.

Let the war games begin (financially speaking).

Pizz

mikal

(07/19/2002; 21:18:01 MDT - Msg ID: 80985)

Greenspan knows where governmental, corporate and investor "irrational exuberance" leads

A couple years ago the gold chat rooms were reporting an encounter between a pro-gold journalist and AG as he was leaving a building in Washington after giving a speech. Asked for his thoughts on the US internal deficit and the risks of uncontrolled derivatives growth. To paraphrase his reply: "We did the best we could". By his words, tone and body language, resignedly acknowledging the hopeless and inevitable outcome of it all!

White Rose

(07/19/2002; 21:21:07 MDT - Msg ID: 80986)

The Drudge Site has a link to a gold story

"Flight becomes gold rush"

Gold surges

Fri Jul 19, 5:29 PM ET

NEW YORK - Gold for current delivery closed at dlrs 323.90 per troy ounce Friday on the New York Commodity Exchange, up from dlrs 317.00 late Thursday.

HSBC Bank USA gave a late quote of dlrs 323.50, up from dlrs 317.25 Thursday.

Gold closed in London at dlrs 317.50 bid per troy ounce, unchanged from Thursday.

In Zurich the bid price was dlrs 322.25, up from dlrs 317.10.

Gold rose dlrs 2.50 in Hong Kong to close at dlrs 319.55.

Silver closed in London at dlrs 5.06 bid per troy ounce, up from dlrs 4.98.

-----------------------------------------------------------

The story of gold as an investor option is starting to be told! It should get interesting

sector

(07/19/2002; 21:56:37 MDT - Msg ID: 80987)

@ Black Blade -- The Wall Street Journal's Anti Gold Bias

They have an agenda regarding gold...kill it.One of their top reporters took detailed notes when we met seven days prior to 9/11 in Washington, DC. Nearly every facet of GoldGate was presented in board-room style precision, complete with graphics. We then went to his office, Paul Gigot was also operating from that floor location. I left my card. The Dow Jones News service was also there. I met with their top Fed reporter for an hour. He commented that intervention wasn't "Illegal". Never a thought to the collateral damage in the Third World.

Only in retrospect, was it clear that they were on a mission to find out what we knew. They know GATA has the goods on a very big scandal. Even the DJ News guys started to get involved by reporting the Mattingly[Fed lawyer] "Gold Swaps" FOMC lie. Thereafter there has been radio silence on gold from DJNS.

Take ANY investment sector that has risen in this falling stock market environment and it would be plastered all over the front pages of the WSJ...not gold. They know all about the scam being perpetuated by anti-Ann Rand, Fed sycophants...so does Congress. But there is a problem with the truth.

As Chris Powell has recently said, "There has been a 43 month news boycott covering GATA." The rest of the World is getting the true story in spite of the news boycott and the Wall Street Journal's bias.

Al Hayat, the most respected Arab news outlet [London published] has carried today [Of all days] a detailed GATA report...on their front page. They interviewed Colin Powell recently. The Arabs haven't been happy about petroleum "Paper oil" manipulation...today they are learning about the wider truth.

The truth cannot be conquered, by morally weak, ideologically false and intellectually dishonest journalists. Whatever good the WSJ has performed over the years in defense of individual freedom, the Amerault case of false child abuse [Dorothy Rabinowitz] , is evaporating due to its deliberate oversight of the wrongs of GoldGate. Only when it suits the political bias of the paper does it choose to move on a particular issue. Their party-line today is that we have a fundamentally strong economy. America knows this to be rubbish on it's face. So perhaps some day the WSJ will eventually "Get it". For now they remain shills, more sophisticated than CNBC to be sure, but shills none-the-less.

If America must parasitize Third World economies in order to prosper, then America has been hijacked by men of greed and weakness. These are not the men who believe, deep down, in our Constitution.

Shermag

(07/19/2002; 21:57:49 MDT - Msg ID: 80988)

Econoclast, thanks for your response regarding farm markets

I fully agree that these markets are not behaving normally. Take wheat for example. We are at a carry-over stock position that is as low as 1996, a previous low, yet prices are fully 30 percent lower. Wheat production in the US and Canada are set to be a major dissapointment, yet the recent price moves are late and tepid. It has long been my belief that some dark forces are conspiring to suppress the price.

Lastly, I also wish fervently for a return to free markets that allow all producers a fair return.

Got wheat?

mikal

(07/19/2002; 22:01:22 MDT - Msg ID: 80989)

Deluge of evasive declarations cast from the same mold

Mark Mobius, the Franklin Templeton Fund manager and emergng markets specialist, "predicting" two more years of bear markets? Could he possibly speak his mind and reveal his true state of awareness and personal holdings? Like so many former market bulls, professional gurus, and analysts, they can only play up to their clientele or subscribers, without offending them lest they betray their complete incompetence and deceit. Endangering, instead of preserving, their credibility, prestigious payment packages, and professional image and "status", playing both ends against the middle ,before attaining notoriaty and/or quiet "retirement".

Waverider

(07/19/2002; 22:09:23 MDT - Msg ID: 80990)

US Stocks Torture Europeans

http://www.zealllc.com/2002/euro.htmSnip"
"Most American investors are probably feeling more than a little down right now. Even though American investors think they've had it bad, European investors in US stocks have fared even worse. European investors have to exchange their euros into dollars before deploying capital in the US equity markets, so in addition to the enormous general US market risk the Europeans also face the unwelcome specter of exchange rate risk.

Riddle me this� The US markets decline. Foreign investors begin to sell US stocks because they are tired of sustaining year after torturous year of huge losses in US equities. The foreign investors then sell their dollars and buy back their local currencies. This creates downward pressure on the dollar as the supply of dollars for sale increases at the same time demand for other currencies, like the euro, increases. As the dollar continues its downward spiral, the remaining foreign investors in the US watch in horror as their already large losses balloon ever larger. They gradually reach their own pain thresholds and liquidate their US stocks. The stock sales increase stock supply pushing US stock prices even lower and the bear market intensifies. The foreigners then sell their US dollars and repatriate their capital to rising local currencies.

The net effect is a vicious circle that could continue to intensify and feed on itself like a financial hurricane over warm tropical waters. The lower the US markets plunge, the more pressure on the US dollar. The farther the dollar falls, the lower the US markets plunge. This is a very scary scenario for anyone long the US dollar or US equity markets, whether they carry a foreign or American passport.

Waverider: Another excellent read from Adam Hamilton.

Blackjack

(07/19/2002; 22:36:13 MDT - Msg ID: 80991)

Gold jumped after inflation report.....surprised?

When inflation data was released indicating no inflation pressure.........
the talking heads rejoiced and declared it good news. Then gold
popped. We have a growing budget deficit...and a growing trade
deficit.....that weakens the US Dollar. With the Fed NOT going to
raise interest rates for some time.....no support for the US Dollar.

One way to defend your currency is to raise interest rates. The
Fed is in a bind......raise rates and weaken market, economy,real estate. So the Fed has decided to let the US Dollar go......down.

That means more inflation in the pipeline.....hence gold jumps.
The CRB is rising.......inflation reporting by the Government I do
not trust......or their unemployment numbers. If you noticed over the
last couple months.....they revise last months numbers from gains
in jobs to losses....unbelievable BS. The Government is desperate.

BTW.....Aug 14 is an important date. Companies have to report to
the SEC revised earnings. GDP calculations for the last couple years will be revised down. Earnings will be revised down. Monday
is not that important.......the Perfect Storm is coming.

This time its different.....not just another buy the dips cycle. Debt out there is huge. I think there is a real possibility of many years of market anguish. Buffet is talking stagflation for years. Hold on to your gold for sure.

Waverider

(07/19/2002; 22:52:35 MDT - Msg ID: 80992)

Puplava Storm Watch Update: The Economic State of Our Union

http://www.financialsense.com/stormwatch/update.htmSnip:
"From my perspective, the economic state of our Union looks unhealthy and terminally ill. All of the excesses of the 90's, which resulted in a mania in financial assets and a debt-induced spending binge on behalf of consumers, have left the economy with a huge hangover. It is hard to conceive that the consumer, who is already burdened by debt, could be expected to go even deeper in debt in order to sustain a lifestyle. Growing job layoffs and collapsing equity markets should be giving consumers reason for pause. If policy makers and strategists see a booming economy and a surging equity market, it would be hard to find the catalyst outside of war. Companies are reluctant to spend and expand capital investments. They are in the process of reliquifying their balance sheet. This points to further contractions ahead. Consumers are tapped out. Marginal borrowers are already going into default or delinquency on loans. It is just a matter of time before more households find themselves in greater financial dire straits."

Waverider: Puplava provides an excellent overview of the current state of the economy along with interesting graphs.

Gandalf the White

(07/19/2002; 23:40:20 MDT - Msg ID: 80993)

Thank you for the STORY, LADY Siochain(a) ! <;-)

Siochain (07/19/02; 21:02:37MT - usagold.com msg#: 80983)
The tale of the donkey --
===
The Hobbits loved it !
<;-)

Golden Bear

(07/20/2002; 04:18:28 MDT - Msg ID: 80994)

Time to head for the bunkers...

http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=13702Doug Nolan at PrudentBear...

"..... It is difficult to know what to write tonight.� Everything I look at ? the things that I believe are the key determinates for the soundness of the financial system ? signal to me that we are basically witnessing an unfolding implosion of the U.S. Credit system.� This sounds extreme, but I am convinced of the acute fragility of underlying debt structures ? I am convinced the crisis that has been held at bay for so long has now commenced.� I am very fearful of systemic financial dislocation and a plunging dollar.� It is time to have one?s house in order.� The run on U.S. financial assets has commenced, although so far financial stress has buttressed the key Treasury, agency and mortgage-back markets.� We continue to look at this as an unfolding dislocation in the ?risk? market, with distress at the fringe having now clearly made it to the core of ?structured finance.? This is an enormous problem.� A WorldCom bankruptcy would be a problematic development for the impaired CDO (collateralized debt obligations) and Credit default swaps markets.� Yet, the implosion of the stocks of some major borrowers such as AOL Time Warner leads us to fear we haven?t seen the last of major bankruptcies.� At the same time, recent developments at the fringes of the consumer Credit Bubble signal that consumer lending problems must now also be factored into the equation.� It appears the worst-case scenario is unfolding right before our eyes..."

Golden Bear

(07/20/2002; 05:48:57 MDT - Msg ID: 80995)

The next leg up in the PM Bull Market....

It has been fascinating watching this first bull leg up in the PM's and their stocks following the long and torturous bear market. It has been equally fascinating reading about concerned goldbugs, as the pullback from the recent highs has forced some to be concerned whether this was another bear rally, and the PM's possibly going lower breaking support, back to new lows.

It seems as if the current levels in the XAU have held and support is building here. If the XAU holds onto the 65-69 level, I feel we are going to see the next leg of this new bull market explode upward very shortly!

As the fundamental reasons are known to all here for the PM's to be much higher than current levels,they do not need repeating. However, it was important for rest and revitalization of this new bull after its first stellar run for quite a while. The bull has caught its breath, and now is ready for its next assault, to the glee of all lovers of these rare beauties, and to the anguish of the sheeple, who continue to hope for a recovery in their battered portfolios and 401K's. And their pain will be increased, when they witness this stupendous phenomenon unfold, and they unfortunately wll not participate in its glory....

Cheers to all.

Boilermaker

(07/20/2002; 06:26:39 MDT - Msg ID: 80996)

CNN/Money advice to the sheeple, or, How to get mauled and eaten by the bear

http://money.cnn.com/2002/07/12/pf/investing/market_survival/index.htmWe all got burned -- what now?

Forecasts, picks and strategies for putting the pieces back together.
July 15, 2002: 11:50 AM EDT

NEW YORK (CNN/Money) - A movie opened this weekend in which dragons cruise the air breathing fire and the few people left on the planet cower in fear of being scorched.

Investors can relate. With U.S. stocks having lost more than $7 trillion in market value in the past two and a half years, even conservative portfolios have gotten burned, while more aggressive ones are deep-fried to near nothing.

Worse, it's tough to see things getting better any time soon.

Well, if you feel lost in this market, you're not alone. And after 2-1/2 years of losses, giving up now is tempting. But throwing in the towel could be as big a mistake as riding the market down from its peak. That doesn't mean the market won't fall further, but the values are out there.

The following articles can guide you through these confusing times.

Forecast: So are stocks cheap or not?
Stocks have been whacked back to valuations not seen since 1997, and by at least some valuation models, the market is way undervalued. But there are still clouds on the horizon.

Does the Fed think stocks are cheap? According to one popular valuation model, stocks are undervalued by 20 percent.

Bracing for an earnings hit Two new studies show just how overvalued earnings may be.

Picks: Think trust and safety
Stocks aren't out of the woods yet (and some are probably heading to the woodshed). But even in these scandal-ridden times, there are some good values.

Funds you can count on Now more than ever, it's best to go with the best of breed. Clean up your portfolio with mutual funds from MONEY Magazine's brand new Money 100.

Six classic growth plays They led the last market cycle -- and likely will lead the next one too.

Stocks you can trust Bottom Line columnist Adam Lashinsky profiles Procter & Gamble, Caterpillar, Quest Diagnostics and Illinois Tool Works.

Big-cap bargains Two top fund managers on where they're finding value now.

Strategies: Coping with the bear
Feeling a lot poorer these days? Join the club. But as much as it hurts, you've got to put your emotions aside and start dealing.

Three-step action plan: Ask the Expert: I've lost half my savings in the market slide. What can I do?

Retiring into a bear market Smart portfolio strategies are key when your income is on the line.

So you haven't sold yet... It's a tough choice: Hang on or (finally) get out?

401(k): Stay the course Your instinct may be to run and hide. That would be a mistake.
------------------------------
comment;
We clearly won't see the bottom until this crap disappears.

Boxman

(07/20/2002; 06:27:08 MDT - Msg ID: 80997)

Time to head for the bunkers, part 2

http://www.financialsense.com/stormwatch/update.htmGolden Bear, looks like Noland is not alone.

Snippett:

What happens when the final asset bubble in housing collapses? What's next -- a major war? The bubble in housing will come to an end. When it does, the full impact of the debt and spending binge of the 90's, which continues to this day, will hit the economy and the financial markets with full force. The effects will be devastating on households, businesses, and the financial markets, as well as for the country. It is only then we will have learned that there is no such thing as the alchemist's stone. The endgame is drawing to conclusion for central bankers. They thought it could be postponed. But fiat-based money systems have historically ended tragically. The end will be brought about by a financial storm. It is now my greatest fear that we are getting closer to my storm scenario -- a storm front in the credit markets, clashing with storm fronts in the stock market, combining with a storm front in the economy to form The Perfect Financial Storm.

The financial jet stream, which is the international monetary system, is moving the storm fronts towards a collision course. Like the Perfect Storm of 1991, the financial markets could erupt with a force so intense it will be unlike anything present-day investors have ever seen. The Perfect Storm was a rare occasion of fate, a freak act of nature. It was the result of a cold Artic cold front joining forces with a warm tropical hurricane that created a pressure gradient most meteorologists will never see in their lifetimes. Let us hope that we never see its equivalent in the financial markets. ~ JP

Golden Bear

(07/20/2002; 07:28:12 MDT - Msg ID: 80998)

Time to head for the bunkers, part 3

Hey Boxman,

watched James Stack yesterday on NBR (I subscribe to his newsletter). He has been tentatively bullish of late as long as the Fed didn't lose control. He shifted to a 33% cash position on Tuesday.

Today he stated that the portfolios he manages have been shifted to 66% cash (I believe since Tuesday). I'm waiting for his update to confirm this. He has been one of the best performing fund managers for a long period with the smallest risk profile according to a previous study, well worth paying attention to...

Cheers.

Boxman

(07/20/2002; 07:41:43 MDT - Msg ID: 80999)

Golden Bear post # 80998

Golden Bear, Stack may be a trend setter, but I would prefer hearing the pundits state "Today he stated that the portfolios he manages have been shifted to 66% physical gold". -:)

De Ronin

(07/20/2002; 08:31:34 MDT - Msg ID: 81000)

Bob Prechter's nailed it

http://www.amazon.com/exec/obidos/ASIN/0470849827/qid%3D1027174368/sr%3D11-1/ref%3Dsr%5F11%5F1/102-1886296-3852943It amazes me how so many traders and money managers will utilize an Eliott Wave perspective with their 30 minute trading software and their short term market evaluation and then apparently totally ignore the long term implications of chart patterns such as the clear-as-a-bell implications of the 5th wave of a 5th wave on the Dow and most other stock indexs that is so evident since '29 (and even earlier).

Prechter has definately missed some market timing calls in the past, such as the duration of this current 5th wave, but with the publication of Conquer the Crash (published June of '02) and recent stock market activity, he is being vindicated. I had the book pre-publication ordered and just finished it. I highly recommend it as a great basic primer on this hugely profound Eliott Wave theory and what's currently unfolding. Whats even more important than calling any big market tops is the increasing valididity of his underlying theory on 'Socioeconomics'. Societies do dance to the cadence of a dynamic fractaled pattern which are reflected in stock market charts. This shift in social mood caused 9/11 and lots more violence, warfare and economic carnage to come. We on the cusp of a deflationary collapse which will adversely affect almost all asset classes (including precious metals?). I've watched and traded Prechter's signals since well before 9/11. Since 9/11 he's been right on.~~~~ Poster has no affiliation with Prechter's group other than a subscriber and an admirer. If it wasnt for Prechter (and his co-author on the first book). Elliott's work would never had emerged. Comments?

Golden Bear

(07/20/2002; 08:36:36 MDT - Msg ID: 81001)

Boxman (msg#: 80999)

Me too! He has been invested in small caps which have outperformed the market over the past few months, and has a position in Newmont...

I actually sent him an email regarding GATA's work after a comment in his newsletter stating that he was a bit surprised by gold's strong run. Waiting for some comment.

Physical: premium quality at a discount price...

Golden Bear

(07/20/2002; 08:45:45 MDT - Msg ID: 81002)

De Ronin (msg#: 81000)

I agree, his socioeconomic work is brilliant, and by coincidence, I was reading an April 02 newsletter a few hours ago...

I was a subscriber in the mid 90's, and boy, was his timing off! He has been calling that the market has peaked for 7 YEARS, and it kept rising until March 2000.

His points about being prepared for the deflationary bust that's around the corner is excellent also, sounds very similar to one our our esteemed colleagues right here on the forum ;)

Golden Bear

(07/20/2002; 08:52:33 MDT - Msg ID: 81003)

401K's?

No one here at the forum has commented on what they have done with their 401K's AFAIK...

Living in Australia, the regulations for retirement funds are quite strict (a joke if you ask me). Can't invest in physical, and have just shifted over to a cash and short term bills option. The only way for me to invest in a gold fund would have been to set up a personal fund and invest it myself, however it is prohibitively expensive to run on a year to year basis, about $A1000/year.

Just curious what goldbugs in the USA/Canada are doing?

Boxman

(07/20/2002; 09:31:41 MDT - Msg ID: 81004)

Golden Bear, Black Blade, CavanMan

Golden Bear, since I retired in April, I don't have a 401 anymore. However, I will tell you that I rolled my 401 over into 50% Prudent bear fund, and 50% Prudent safe harbor fund. My only regret is that I didn't do this until June 28th, as it was in an interest bearing account(therefor only losing out to inflation), and I wanted to be comfortable with where I placed it. Both funds have done well, especially the the Prudent Bear Fund. Should the mining stocks rebound, the dollar continue to fall, and the markets continue to tank, I would expect both funds to perform admirably.

Where I have been stung of late is buying the mining stock I own, on the dips. Thankfully, it is not a lot of money, as I bought the stock, along with my son, to get him interested in the mining sector. I kind of have egg on my face at the moment, as he is only 19, and thinks this doomer mentality is weird. He can't fathom that things will get dire. I'll keep workiing on him, but like most, it will take getting hit right between the eyes before he understands.

PS to Black Blade: Some time ago you inquired as to how I was enjoying retirement. It has been more enjoyable than I would have imagined. I wanted to tell you a little story. The week before last, my plant manager called, and in the course of the conversation, I asked him how business was. He said that they could use more business. This surprised me, as when I left, the plant was bringing on a substantial amount of new business as a result of a nearby plant that was being shut down. Since we had been quite busy before the infulx of the new business, I had assumed that they had all that they could grace over. Since this is the companies flagship plant, I have to wonder how the sister plants are doing, as they did not have the advantage of business coming in from other plants that were shut down, as only two plants nationwide were being shut down. This cannot be a good thing. Maybe CavanMan can shed some light on the state of the box business. Seems like the last time he said anything was a couple of months ago, and it was gloomy. I am planning on visiting the plant next week, so I will see what is going on with the sister plants.

Cavan Man

(07/20/2002; 09:51:43 MDT - Msg ID: 81005)

Hello Boxman

The box business is steady but don't forget we typically lag any downturn by about six months. I haven't been hurt yet though most of my business is in the retail sector. Company missed earnings last quarter. Industry still controlling the supply side rather well and expect to get a price increase through this month if you can believe that in this economic climate. At least a few of our competitors are struggling where you have a large, tree killing behemoth working on a cash flow basis. Can you say GP (e.g.). They (and others) are whacking large pieces of business.

TPTG I am having my best year ever. I am hoping to squeeze out one or maybe two more years before I need to transition to something else. Good time to have a large portfolio of food industry customers. Kind regards....CM

PS: I read so many gloomy posts here and I say to myself, "It ain't that bad." Then, I think again and say well, maybe it is. I should be mostly debt free by the end of this year TBTG.

Chris Powell

(07/20/2002; 11:05:11 MDT - Msg ID: 81006)

GATA's story is now all over the Arab world

http://groups.yahoo.com/group/gata/message/1185An English translation of the story published
Friday by the world's leading Arabic newspaper,
Al-Hayat, about GATA, and the paper's
interview with GATA Chairman Bill Murphy:

http://groups.yahoo.com/group/gata/message/1185

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

Siochain

(07/20/2002; 12:35:29 MDT - Msg ID: 81007)

Great GATA Inteview, Chris

A terrific and vital interview!!!

IMO, getting the GATA message out in non-USA areas will ultimately and more quickly have the biggest impact for change and action....the US media is not open to the facts.....GATA MUST go elsewhere....unfortunately!!!

A couple of months ago, I shared with Bill the story of Dr. W. Edwards Deming, the world renowned Management expert, with whom I was very fortunate to be associated.

Dr. Deming tried to tell the US that our quality was not good enough and our methods of management needed overhaul but this was initially at a time when what the USA made, the world took...we wouldn't listen for we knew it all!

Finally Japan listened and had Dr. Deming help them change their methods ....and they moved from making junk to world class quality....and in the process started to take away US business in late seventies and eighties... our industries suffered ...from steel...automobiles ...electronics etc

The US after being hit hard finally paid attention and quality revolution ensued which transformed our methods and technologies ....though they did pick and choose what to listen to (i.e. ignored such things which Deming called deadly diseases that would undermine and eventually destroy us if not changed...such as being driven by short term thinking...especially quarterly profits....anyway you can as it now turns out...as top priority ...and Japan didn't listen about banking etc). Deming thought the short term stock market view was a disease which would kill our Country if not abated....shame we didn't listen to that part of his teachings!

Summary was that the Quality revolution which revitalized US did not and could not start here.....Deming couldn't get his message heard

It was only after overseas exposure and success...and resulting kick in the pants to US industries and Companies, did we wake up (to some extent)

I believe the same will be true for GATA ....unfortunately for US but necessary if change is to occur....more such stories in non-USA areas will bring GATA's mission to light and to action....and success....unfortunately I am afraid that the USA will learn the hard way again...but better late than never!

Keep up the great work!!!!

Boxman

(07/20/2002; 12:38:26 MDT - Msg ID: 81008)

Cavan Man-Congratulations

Cavan Man, I told the other salesmen before I left, that any box salesman who could hold their own this year on volume, would be considered a hero by years end. Looks like you are a hero. Yup, food industry should hold up better than most, unless it is Con Agra. Looks like they stepped in it big time.

I had heard of the price increase, and yes, I was surprised. The consolidation that had taken place, coupled with closures, and down time seems to be paying off. The industry is smarter than they used to be. The ones that are whacking prices will be take over targets down the line.

I like that debt free statement. I know that you have your physical. You following Black Blades advice on the other counts? I hope so, as it really is "that bad", and looks to get much worse.

Have a great second half.

Christian

(07/20/2002; 12:55:45 MDT - Msg ID: 81009)

Conspiracy thinking

Conspiracy to supress the price of gold = Known off balance sheet derivative debt in the USA = $152 Trillion. Half or $76 Trillion is placed to serve as on balance sheet insurance and the other half $76 Trillion is invested in off balance sheet revenue enhancement units. Physical gold is fractionalized to serve as reserves for paper gold just like bank C.D.'s are fractionalized to serve as reserves for loans. All money is debt money in our system. There is no other source of money except to borrow it into existence. Income cannot be dollarized except by becoming more debt. No dollars are issued in non-debt form. However gold in debt free hands can be used as a source of money with the use of derivatives i.e. futures/forwards/option format. Public gold is now mostly in private hands who use the futures/forwards/option format to turn their holdings that never get moved into a paper format to make loans with. Corporations, state governments and even the federal government borrow gold in paper form and off balance sheet and pay the interest in metal which has to be purchased in the open market. This debt is a off balance sheet liability in order to hide debt in order to enhance revenue. These off balance sheet debt does not show up as an expense and are mostly used and reported as cash flow. And some of this so called cash flow which is really a off balance sheet paper gold loan that can be used to buy shares of its own stock. Example of this is IBM. Their off balance sheet paper gold debt is larger then the value of their entire stock float. I wish I could do that with my checkbook. I need an off balance sheet loan to float my checkbook. The off balance sheet physical gold loans represented by paper gold loans are now two times larger then all fiat debt. Fiat Federal debt = $6 trillion, private and corporate debt = $32 trillion while off balance sheet corporate, state, federal gold or silver debt = $76 trillion.

USAGOLD / Centennial Precious Metals, Inc.

(07/20/2002; 12:57:06 MDT - Msg ID: 81010)

Buy online and save 60% off the price in retail bookstores.

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

"Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

TownCrier

(07/20/2002; 13:44:45 MDT - Msg ID: 81011)

Ahead of the curve -- you knew about this earlier in the week fromour 'Central Bank Insider'

http://biz.yahoo.com/rf/020719/economy_argentina_advisers_2.htmlHEADLINE: IMF "wise men" due in Argentina on Monday

BUENOS AIRES, Argentina, July 19 (Reuters) - A group of current and former central bankers chosen by the International Monetary Fund is due in Buenos Aires on Monday to seek to overcome hurdles in Argentina's talks with the IMF over a vital new loan.

...The so-called panel of "wise men" is comprised of Bank for International Settlements General Manager Andrew Crockett; John Crow, a former governor of the Bank of Canada; former Bank of Spain Governor Luis Angel Rojo; and Hans Tietmeyer, former president of Germany's Bundesbank.

...The IMF does not usually turn to experts for advice, but it has done so in the past with countries like Indonesia, where a start to negotiations proved difficult.

...Argentina's financial troubles have rocked the financial systems of neighboring Uruguay and Paraguay, while Brazil grapples with its own jittery markets...

------(click URL for full Reuters text)-------

The article goes on to report how Argentina has since this time last year printed half again last year's money supply, and the IMF is urging the government to slow the presses.

R.

In case you missed it earlier, you can read the latest 'Central Bank Insider' at the following address.
http://www.usagold.com/centralbank/current.html

TownCrier

(07/20/2002; 15:57:37 MDT - Msg ID: 81012)

Thanks to Barton Biggs of Morgan Stanley for this latest addition to The Gilded Opinion

http://www.usagold.com/gildedopinion/Biggs.html"The True Believer" from Morgan Stanley Global Investment Research -- Strategy and Economics -- US Investment Perspectives, July 17, 2002

Excerpts:

With equity markets having fallen so sharply and the rally in high-grade bonds, our ten-year return study needs tinkering with. Nevertheless, nothing has happened that changes our long-term assumption that we are in for an extended period of mid-single-digit returns in both stocks and bonds. Large portfolios are going to have to be imaginative and unorthodox to beat 6% nominal in my opinion, and there will be bigger allocations to hedge funds, arbitrage strategies, real estate, emerging markets, and private equity. Whether all these asset classes work as advertised or the capital markets arbitrage out the excess returns is a horse of another color.

...It certainly is possible that gold can return to its long-term equilibrium inflation price of $500 an ounce, or even take a run at its all-time high of close to $1,000. What would cause such an explosion? A steep decline in the equities market, higher inflation, or competitive devaluation of the major currencies. In a bleak world, gold could beat almost everything else.

-------(click URL for full commentary with charts)------

Old Yeller

(07/20/2002; 17:46:01 MDT - Msg ID: 81013)

Chipping at the pedestal

http://www.upi.com/view.cfm?StoryID=20020719-051453-3173r
Mainstream press finally starting to arrive at the root cause of the accounting scandals and the pillaging of America's future.

I've read that Alan Abelson has also had some harsh words regarding Mr.G in this weekend's Barron's.

Keep digging,boys and girls,he's really just a surface indicator of the cancer known as the Federal Reserve Board.

aussie

(07/20/2002; 17:52:28 MDT - Msg ID: 81014)

??? Golden Bear - MSG 81003

Hey, Golden Bear, are you absolutely sure that Retirement Funds in Australia are not permitted to invest in Physical. I guess that also counts out speculative stocks. I attended a Lion Selection Meeting last week and a new mining company Westonia are looking to float. They have required capital but need over 400 shareholders to do so. I was considering buying some for the Retirement Fund. This maybe a no-no according to the Super Regulations. Any advice would be helpful as close off date is this week. Thanks.

Golden Bear

(07/20/2002; 18:18:25 MDT - Msg ID: 81015)

aussie (msg#: 81014)

Hi neighbor!,

I spoke with my accountant about a month ago, and asked him directly if I could open my own personal super fund so that I could dictate the investment decisions and invest in physical. He had never had that request from a client before (even though he and his brother had owned some silver a while back), and he said that as far as he knew, it wasn't allowed.

I'll do some further digging and let you know.

Cheers.

Topaz

(07/20/2002; 18:27:23 MDT - Msg ID: 81016)

Aussie Super - G-Bear - aussie.

While the cost of setting up /running a fund in Oz is fairly exxey, (A$750 s/u and A$750 pa accounts) once committed you can then purchase and hold PM's. They don't encourage it tho.
For the past 3 Yr's my annual fund contributions have covered these costs and I've been able to add slightly to my Bullion holdings. (my fund is 100% physical Au)
If the Senate EVER passes the relaxed Super Bill, then ALL my salaried contributions will be going to Physical via my Super Fund.

Check it out....it will be worth the effort.

Golden Bear

(07/20/2002; 18:54:54 MDT - Msg ID: 81017)

Topaz (msg#: 81016)

Hi Topaz,I have been contemplating it for a while, but what has prevented me from contributing to Super is the fact that you have no access to the investment until you retire, and that the tax regulations are constantly changing (to our detriment of course).

Being fully invested in Au would bypass one of these problems, as the investment would be in my hands, even if technically, it cannot be used for any purpose other than further investment in the fund....

Still evaluating...

Topaz

(07/20/2002; 19:18:31 MDT - Msg ID: 81018)

G-Bear.

Yep mate, it's a Horses for Courses thing - my fund came about as a result of a job change where I was in a position of having to "roll-over" a (substantial) preserved component, at the time physical Gold was the logical choice (still is;-) and the ONLY option for full exposure to the upside on Au was to go the personal super route....it's a good move if you've got a lump-sum (preserved) but otherwise a less attractive proposition.
If Gold plummets I'll buy it out of the Fund thus setting it free...and if Gold rockets....I'll retire early!!

Black Blade

(07/20/2002; 19:53:13 MDT - Msg ID: 81019)

Nervous Investors

http://www.msnbc.com/news/781971.asp

Snippit:

In one survey, about 6 out of 10 people said the recent wave of corporate scandals has made them less likely to invest in the stock market. Yet polls also have found that more than half of investors have not actually changed the level of their investments. If our survey is any indication, most investors are gritting their teeth and taking the punishment, hoping this downturn is little more than a bad memory by the time they retire in 10 or 20 years.

Excerpts:

"I was excited about the possibilities of early retirement in the summer of 2000. I looked forward to spending quality time with our 3-year old granddaughter, working on two old cars, riding my Harley Davidson motorcycle and becoming the domestic partner in our 32-year marriage. Now almost 56 years old, I am contemplating coming out of retirement. This is not what I envisioned just 24 short months ago."

Stan Miller

"I'm angry. I'm angry at our government for failing to police the markets and public companies. I'm angry at the cheating executives of major public corporations. I'm angry at the brokerage firms who should be leading the way to reform. Most of all I'm angry at my fellow Americans for their apathy and timid response to the demise of our capital system. When are you idiots in the press going to start telling it like it is? The American people have been betrayed."

Allan L. Krehbiel

"I am 21. I currently do not have any stocks or 401(k) plan. I follow the market closely and each day and I see the market drop which makes me think more about buying bonds. These older CEOs and accounting companies need to remember that the younger generation is growing up now, and we will not buy into this type of crap!"

Mike Hughes

"There is no substitute for a sound, long term market strategy. Choose a plan that works for you and stick with it. I use dice and a random number generator."

Buddy Towne

Black Blade: It appears that there is a long way to go to shake out those who hang on to these overvalued investments. I have long given up feeling any sympathy for these people. It must be a tough lesson that requires "tough love". They like the Grasshopper of Aesop's fable laughed and scorned those who took responsibility by preparing for days like these. Like the Ant, those who got out of debt, stashed cash, accumulated Gold and Silver portfolio insurance, and stored nonperishable food and basic goods are not feeling the heat. These Grasshoppers are now just beginning to feel the heat. This bear market is not a cyclical bear market such as the insignificant dip in 1987. This bear market is a secular bear market that will require years to work out. Corporate earnings are falling faster than the share price, corporate and consumer debt are at record levels, capital expenditures have not materialized, layoffs continues to exceed new hires, investor confidence is sinking fast, new regulatory rules will shine a bright light on the corporate cockroaches, and the number of shareholder lawsuits are about to explode. Life is about to get ever more "interesting".

Black Blade

(07/20/2002; 20:05:09 MDT - Msg ID: 81020)

Re: Boxman

Glad you're enjoying retirement. It looks like the "box" indicator tells us that the economy isn't exactly booming along as we hear from the media pundits. Also, one major downside to this economy is the lack of capital spending growth. Companies may have slashed inventories, laid off workers, and cut costs at every turn. Yet these companies are not increasing their capital spending. If the economy was in recovery the first sign is an increase in capital spending and it just isn't there. You'll have to keep us informed of your next "visit" to the old "sewat shop". ;-)

I have been getting a bit more prepared today. I slayed some fish (2 nice browns and a rainbow) and got a couple of cases of black beans, a couple large jars of pickled haba--eros, and a large bag of rice. Then I went to the gym. In all a nice day (that's how I spend my "involuntary" retirement for now). Now to relax with a couple of Negra Modelos. Cheers!

- Black Blade

Black Blade

(07/20/2002; 22:19:50 MDT - Msg ID: 81021)

Market drop may take economic toll

http://www.msnbc.com/news/782999.asp
Wall Street's slide could tip U.S. back into recession

Snippit:

The speed of the market's decline has been truly breathtaking. In just 10 sessions, the Dow has lost 14.5 percent, equivalent to its loss in the first two years after it peaked in January 2000. Of the $7.7 trillion in market value lost since the bear market began nearly 28 months ago, $1.5 trillion, or nearly 20 percent, evaporated in just the past two weeks, according to the Wilshire Total Market Index, which closed Friday at its lowest level in more than five years. "Could it lead to a double-dip recession? Absolutely," said John Silvia, chief economist of Wachovia Securities. "It's a question of the magnitude and duration of the downturn." The impact of the market's slide already has shown up in a sharp drop in consumer sentiment as measure by the University of Michigan, and retail sales due out next month could show a decline in spending on discretionary items like automobiles and restaurant meals, said Silvia. Evidence of consumer jitters is likely to make businesses postpone investment plans and delay hiring, or perhaps even cut costs through additional layoffs.

Black Blade: Of course other than we really never emerged from the recession, there is a very good possibility that we have not even come close to the bottom yet. There is a long list of reasons why the downside is more of a possibility than a strong rebound. That said, it is possible that we could see a "suckers rally" or a "dead cat bounce" on Monday.

Black Blade

(07/20/2002; 22:27:01 MDT - Msg ID: 81022)

Will the bear move to Main Street?

http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={5CE7201E-1AAE-4C63-8E11-455B377F105A}&siteid=mktw

Snippit:

WASHINGTON (CBS.MW) -- We all know the stock market isn't listening to the economy these days. As the overall economy scrambles out of the recession, the market falls further and further each week. The more pertinent question now is: Is the economy listening to the stock market? Could the bear market move from Wall Street to Main Street? Could the sell-off in stocks drag the economy back down with it?

"The stock market plunge is a major wild card in the second-half outlook," said Ethan Harris, economist at Lehman Brothers. Harris figures that the loss of about $8 trillion in wealth in the past two years, including some $2.6 trillion in the last quarter, could have some profound effects on spending, saving and investment in the real economy. The market's collapse is the main reason Harris is giving 1-in-3 odds that the Federal Reserve will be forced to cut interest rates again.

Black Blade: Indeed the global economy is looking rather poorly these days. Even the currency war may not help as every nations economy is in the toilet. Some call this the "profitless" recovery and other call this the "jobless" recovery. If consumers are no longer spending there isn't much of a recovery at all.

Black Blade

(07/20/2002; 22:40:09 MDT - Msg ID: 81023)

Dollar May Fall for 15th Week in 17 Vs Euro as Stocks Tumble

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∣dle=ad_frame2_topfin&s=APTloxxPwRG9sbGFy
Snippit:

New York, July 20 (Bloomberg) -- The dollar may fall for a 15th week in 17 against the euro as investors wary of further losses in U.S. stocks move their money to other countries. ``We're having a fire sale in U.S. assets,'' said Bill Sterling, chief investment officer at Trilogy Advisors LLC, which manages $4.8 billion. ``The euro will continue to strengthen against the dollar.''

Black Blade: The overvalued US dollar must weaken. The Japanese will attempt to keep pace as they rely on solely on exports. Meanwhile foreigners will continue to withdraw funds from US markets.

Black Blade

(07/20/2002; 22:47:53 MDT - Msg ID: 81024)

International Currency Analysis

http://www.investavenue.com/article.html?ID=5757
The linked article has some impressive charts demonstrating a sharp correction in the US dollar.

- Black Blade

Black Blade

(07/21/2002; 00:10:35 MDT - Msg ID: 81025)

Investors See No Respite From Declines: U.S. Stocks Outlook

Black Blade

(07/21/2002; 00:19:42 MDT - Msg ID: 81026)

More Selling, but Snapback Seen on Street

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1226939
Snippit:

NEW YORK (Reuters) - Expect no reprieve, as the stock market is likely to get shellacked next week by more languid earnings and deep-seated investor mistrust. "The mood is just horrible. There is one crisis after another. Anything people can point to as a negative they are jumping all over it," said Mike Driscoll, a Bear Stearns managing director of listed trading. "Markets tend to go to extremes, and I am seeing a lot of good companies that are being completely annihilated without reason." Still, a small decline could offer some comfort for investors stunned by the Dow's nearly 1,400-point drop since July 5, a span in which it fell nine days out of 10.

Black Blade: A small decline is "good news"? Hmmm�

timbervision

(07/21/2002; 00:28:28 MDT - Msg ID: 81027)

Golden Bear

In Canada, too, in our RRSP (registered retirement savings plan), we can not buy physical gold. There is one investment that I know of which is essentially a holder of bullion. It trades on both the Amex and the TSE. If you are permitted a certain percentage of foreign investment in your pension plan this one could be for you. It is Central Fund of Canada. The only purpose of the company is to hold in bullion form gold and silver. Of course, if there is a financial meltdown and confiscation becomes a real threat the gold in their vaults would be an easier target than gold in possession.

I am completely in the camp of our host that pre-1933 gold coins must be a part of any porfolio, but you might find this the only way to be in gold bullion while remaining invested in your Australian pension plan.

Blackjack

(07/21/2002; 02:09:19 MDT - Msg ID: 81028)

More debt piling up/NY Times

SACRAMENTO, July 20 � California plans an $11.1 billion bond sale, believed to be the largest one-time borrowing by a government agency in American history, to alleviate a deficit built during the state's electricity crisis of 2000 and 2001.

The money is intended to replace $6.5 billion California spent for electricity in the winter and spring of 2001 and to repay a $4.3 billion loan also used to buy power.

Lawmakers also are counting on the bond sale to help the state make ends meet as a $23.6 billion shortfall in the overdue state budget looms. Without the sale, the state would have to take out short-term loans to keep cash flowing.

Within weeks, Wall Street rating agencies expect to grade the riskiness of buying the California bonds.

"This is a very unique situation," Dan Aschenbach, senior vice president for Moody's Investors Service, one of three major Wall Street rating agencies, told The Los Angeles Times.

"I don't think there's any other type of bond issue that's had to be put in place to resolve an issue as significant as a $6 billion deficit to the state," Mr. Aschenbach said.

The cost of retiring the new bonds is built into utility rates, so the debt will be paid off gradually as customers of Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric get their bills over the next 20 years.

The bond sale is intended to spread the financial pain of an extraordinary year of blackout threats and astronomical power prices.

The state treasurer, Philip Angelides, had sought to sell the bonds 14 months ago, but a deal was delayed by concerns over possible lawsuits and by a dispute between the California Public Utilities Commission and the administration of Gov. Gray Davis.

Even with an "A" rating and interest rates between 5 percent and 6 percent, over the next two decades utility ratepayers will pay nearly as much in interest on the bonds as the $11.1 billion the state borrowed.

Black Blade

(07/21/2002; 02:30:50 MDT - Msg ID: 81029)

Re: Blackjack

The really sad thing is that California could have avoided this whole mess if they truly had deregulated the energy and utility industry. The utes were prevented from buying long term supply of energy by the state's reregulation scheme. The state also prevented the build up and upgrading of energy infrastructure and the building of new power plants. So don't feel too bad for the state's situation. There are those who can only learn by experience while others can learn vicariously, and yet others can make common sense dicisions. I prefer to think of it as "natural selection". ;-)

- Black Blade

Golden Bear

(07/21/2002; 02:42:09 MDT - Msg ID: 81030)

timbervision (msg#: 81027)

Thanks to you and all for your replies. Curiosity got the better of me as I was in the process of shifting my retirement funds to a more defensive position.

By the way, the long term Coppock indicator, which is used by technicians for longer term top and bottom confirmation has just broken down according to James Stack, after signalling a tentative bottom recently.

The first false buy signal in 50 YEARS!

Blackjack

(07/21/2002; 03:05:22 MDT - Msg ID: 81031)

This Puplava interview is very good, would not want to be long GE right now!

http://www.financialsense.com/transcriptions/Sinclair.htmPart of interview:

The second thought contained herein is the transition of GE of the '50s from a superior, well-organized and well-managed manufacturer to a money changer by the '90s, and now July 19, 2002, the downside of GE transformation. That downside is the now occurring. It is the public transition from absolute trust in paper assets, such as shares of GE and the worship of CEO like GE's past super star Jack Welch, to the realization that corporate money changing and superstar, super-PR CEOs may have been hollow businesses with no valid purpose (except fancy accounting to produce profits) with false gods as leaders after all. GE's technical chart is a duplicate of Enron's chart during the demise of Enron. That fact shocks me. Both GE is and Enron was a triple Head & Shoulders formation with triple neckline breakdowns pull backs and fall away. GE is now a Classical Case of Financial Ebola. GE is a huge hedger in the cost of money derivatives and deals with complex leasing arrangements. Is there something in that equation which is amiss? The market says there is, but maybe GE itself does not know where or how. GE and IBM are the Big Blue as key opinion makers in the psychology of the markets. Both are now defensive with GE looking technically like a technical cripple.
________________
Thanks for all your info Black Blade, I appreciate your work here.

aussie

(07/21/2002; 04:48:44 MDT - Msg ID: 81032)

Aussie Retirement Plans

Thanks Timberview, - our timing is so different from yours, - I login-in at times when you are most probably are asleep. I guess Golden Bear is experienced at the time to log-in, - don't know if he is on the east or west coast which makes approximately 3 hr difference which means whether it is necessary to check yesterday's message. (Anway, I will get the timing right sooner or later, - even when in the US I had to do a double take when it was Christmas day in US, or the day before in Australia so I could ring the family at the appropriate time).

This query is obviously one to re-check with the accountant. I know that companies can invest in physical as it is currency, - I just took it as 'taken' that Supers could do the same, but Supers must be another story judging from Golden Bear's comments,- he seems to have his finger on the pulse of the Australian situation. Cheers and thanks.

Golden Bear

(07/21/2002; 07:20:51 MDT - Msg ID: 81033)

aussie (msg#: 81032)

I still get thrown out of whack with the posting times... I'm on the East coast and am usually synchronized with New York time as I watch the markets open before going to bed and get up for work right on the close. However, I haven't looked into the time differential between NY and Denver yet, so I sometimes post into the dead zone and some may miss the messages if they don't scroll back to the previous day....oh well, some research to do...

As for super investing rules, I've been looking at government sites regarding super, and haven't found much as yet.

Cheers.

Waverider

(07/21/2002; 08:29:02 MDT - Msg ID: 81034)

Shedding Debt Becomes a Burden for Biggest U.S. Power Traders

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∣dle=ad_frame2_topfin&s=APTq6GxU2U2hlZGRpSnippit:
"Fourteen of the top 20 electricity traders -- including Calpine, American Electric Power Co., El Paso Corp., Mirant Corp. and Williams Cos. -- have debt levels jeopardizing their credit ratings and trading businesses, according to Bloomberg data and criteria suggested by Moody's Investors Service. In December, after Enron filed for bankruptcy, Moody's managing director John Diaz said an energy trader's ratio should be less than 50 percent to earn an investment-grade rating. Calpine has a debt-to-capital ratio of 75 percent, according to Bloomberg data.

To reduce debt and revive credit ratings, those energy companies have sold more than $9.5 billion worth of assets this year and agreed to sell another $5.7 billion, according to U.S. Securities and Exchange Commission filings, Bloomberg data and company statements. They've also sold about $3.5 billion in stock. The companies, many with junk debt ratings, have little choice, industry officials said. They must raise cash to protect or restore investment-grade credit ratings. Companies need access to low-cost financing for new projects and to limit the risk of default on energy trades.

Analysts at the debt-rating companies saw rising debt ``and rising risk, said William Chew, a managing director at the Standard and Poor's, the biggest credit-rating company. ``That's a business no-no.''

Black Blade

(07/21/2002; 11:24:42 MDT - Msg ID: 81035)

Look Out Below

http://business-times.asia1.com.sg/companies/story/0,2276,51852,00.html?
Snippit:

In this connection, the words of fund manager Marc Faber, quoted in this column on Jan 28 this year, spring readily to mind: "the American economy is a disaster waiting to happen. Greenspan's interest rate cuts have supported consumption artificially and borrowed from the future. The so-called booms in car sales and housing will come to a bitter end. Greenspan basically moved the bubble from Nasdaq into other sectors of the economy and these bubbles will also burst". The final nail on the coffin is that even with all the support provided by bogus book-keeping, there may not have been any US earnings at all worth speaking of over the past decade. This was the chilling conclusion reached by analysts Ben Stein and Philip Demuth in a July 15 article in Barron's.

Black Blade: It should be quite "entertaining" this week as the markets could continue to crash. "The Emperor Wears No Clothes". I await the housing bubble implosion next. The "fun" is just beginning.

Black Blade

(07/21/2002; 11:33:58 MDT - Msg ID: 81036)

With Wall Street reeling, investors need nerves of steel, level head and courage

http://www.boston.com/dailynews/201/nation/With_Wall_Street_reeling_inves:.shtml
Snippit:

SAN FRANCISCO (AP) As the stock market's losses piled up last year, brokerage executive Charles Schwab began appearing in TV commercials urging individual investors to remain calm. It's advice not many seem to be heeding. ''You can start to see people get a sense of panic now,'' Schwab said of Wall Street's latest dive. ''You see it in the market, you (hear) it in conversation, you see it in the writings to the letters to the editor. For some investors, it's getting pretty desperate. Of course, that's the time you just got to hold your cool.'' Remaining levelheaded is getting tougher for individual investors caught in the maelstrom of accounting scandals, terrorism fears and economic queasiness that last week shoved the stock market to its lowest levels in nearly four years.

Black Blade: Tomorrow should be "interesting". Will the next phase be a "dead cat bounce" or "Suckers Rally", "Capitulation", or just a long grinding downward death spiral? I vote "Death Spiral". I think the Death Spiral myself. It is just one bad scandal after another on Wall Street. People are running for the exits and there is absolutely no positive news on the horizon. I see the pundits on television explaining how the markets are "undervalued", "fairly valued", "bargains", etc. It is quite amusing to watch these desperate Pied Pipers worry that there are fewer pigeons to pluck.

Black Blade

(07/21/2002; 11:49:32 MDT - Msg ID: 81037)

Argentine pensioners turn to prostitution

http://news.bbc.co.uk/hi/english/world/americas/newsid_2136000/2136564.stm

Grandmothers sell their bodies to feed their families

Snippit:

A documentary recently broadcast in Argentina has revealed how the grip of economic crisis has meant that many older women are now working as prostitutes in order to survive. "When your life is ok you judge people without thinking that maybe tomorrow you might have to do the same thing as them. It is easy to judge when your belly is full and your bed is warm." "They are women who have lost everything. Who have no pension and the only thing that they can think of doing is overcoming embarrassment and prostituting themselves." "We came across a woman who worked as a prostitute so that she could afford medicine for her disabled son," he told.

Black Blade: Sad. In a word � "Grim". I posted in the past about how the hungry in Argentina were scavenging the landfills, garbage cans, eating household pets, and killing rodents for food. Is this the fate of the west? As always, get outta debt, stash cash for several months expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

Black Blade

(07/21/2002; 12:05:21 MDT - Msg ID: 81038)

NYSE's Grasso: Monday Could Be Rough Day

http://biz.yahoo.com/rb/020721/markets_stocks_grasso_5.html

Snippit:

WASHINGTON (Reuters) - The head of the New York Stock Exchange cautioned on Sunday that Wall Street could face a rough ride when stock markets open this week but urged investors to stay calm and focus on the wisdom of long-term investing. "Mondays following Friday declines have always been difficult and I suspect tomorrow will be no different," Richard Grasso, chairman of the world's No. 1 exchange, told NBC's "Meet the Press."

Black Blade: Yep, more bad news. Now the head of the NYSE is publicly worried.

Black Blade

(07/21/2002; 12:33:42 MDT - Msg ID: 81039)

Markets expect yet more misery

http://news.bbc.co.uk/hi/english/business/newsid_2142000/2142015.stm

Snippit:

Investors are entering "capitulation" phase, traders say. Nervous traders see no end to the stock market rout, after a week that saw blue-chip shares plunge 8%, and with little good news in prospect. "There are going to be a lot of couples sitting across from each their dining room tables this weekend and saying: 'That's it. We've had it. Let's get out of the market and take something off the table while we still can,'" said Tom Lydon, president of Global Trend Investments. Individual investors, who account for a high proportion of US market turnover, are heavily invested in hi-tech shares, which took a battering in 2000, and which are suffering renewed agonies now.

Black Blade: It should be "entertaining" tonight when the Asian markets open. Euro trading will be very "entertaining" as well. When the foreign investors bail out in force we will see the US dollar collapse further. Gold markets open in a couple of hours.

Gandalf the White

(07/21/2002; 13:14:49 MDT - Msg ID: 81040)

Interesting FIVE-YEAR chart comparison !

http://informer2.comdirect.de/de/detail/_pages/charts/main.html?sSymbol=GLD.FX1&sTimeframe=5Y&useSettings=0&showSettings=&sid=&hiddenTimeFrame=&disclaimer=ok&sOrdType=perc&sScale=linear&sMarket=GLD.FX1&iType=1&sAv1=38&sAvfree1=&sAv2=200&sAv2free2=&sAv2count=1&iInd0=na&sBench1=INDU.IND&sBenchcount=1&sBench2=&sBench2count=1&showBenchmarkSearch=&iInd1=na&iInd2=na&iIndcount=1&sSettings=naPlease analyze that CHART !
Thanks Black Blade -- The Hobbits are gathering to watch the FIREWORKS start in the DOWNUNDER on the GOLD board.
<;-)

USAGOLD / Centennial Precious Metals, Inc.

(07/21/2002; 13:46:51 MDT - Msg ID: 81041)

For $5.95 you can know more about gold investing than your financial advisor ever will

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

misetich

(07/21/2002; 15:03:33 MDT - Msg ID: 81042)

Pension plans lose ground as stocks fall-Covering deficits could eat into corporate profits

http://www.chicagotribune.com/business/chi-0207200540jul21.story?coll=chi%2Dbusiness%2DhedSnip:

By James P. Miller
Tribune staff reporter
Published July 21, 2002

Because of the stock market's long swoon, a growing number of U.S. companies are finding their pension plans no longer have enough money to ensure full benefits for future retirees.

That may sound scary for employees. But in truth, for companies with underfunded pension plans, including corporate titans like General Motors and Ford Motor Co., the situation is more a potential problem for their stockholders than for their workers.
.................
When Washington-based human-resources consulting concern Watson Wyatt Worldwide surveyed 500 U.S. companies in 2000, 82 percent said they had plans funded at 100 percent or more. As of Jan. 1, 2002, said Watson Wyatt researcher Ken Steiner, "we estimate that 82 percent had dropped to 37 percent."

And "the market's dropped a lot more since then," he said.
....................
Last week, for example, GM reported that during the second quarter it had put $3.2 billion into its underfunded pension plan. Although GM officials have sought to downplay the potential financial impact of the plan's funding, the state of the automaker's $67 billion pension plan "is indeed something to be concerned about," said UBS Warburg analyst Saul Rubin.

Although GM has said it expects to inject an additional $9 billion in cash or stock into the fund by 2007, Rubin said the company's estimate may prove to be too low.

According to Sean McAlinden, economist for the Center for Auto Research in Ann Arbor, Mich., GM has 2.5 retirees for every active worker, compared with 1.2 retirees per active worker at Ford. "Of every GM vehicle sold," he said, "$2,500 covers the cost of meeting the company's pension costs."

Like other auto companies, GM has stepped up its early-retirement program in order to cut labor costs--a move that swells the ranks of retirees to whom GM's pension plan must mail a monthly check.

At Ford, pension-fund assets declined by 6.7 percent through the year's first half, resulting in an underfunding of $3.2 billion. The company says it doesn't expect to have to inject cash into the fund until 2006, but investors remain wary. Ford's pension problems, compared with those hanging over GM, are "minor, for now," said Rubin.

"I think all of corporate America is going to be facing this issue," in the future, Ford Chairman and Chief Executive William Ford Jr. said last week.
.....................
Topping off an underfunded pension plan hurts company profits because it soaks up cash flow that could otherwise be used to pay debt or buy new equipment. But some companies got even more mileage out of their plans' investing success: In the late 1990s, pension-fund holdings grew so lush that companies could properly account for excess fund profits as part of their earnings.
......................................................
Misetich

Stock Option Expenses, Underfunded pension plans, off-balance sheet items, other accounting tricks add up to continued EARNINGS RECESSION, Lower Capital Spending, poorer balance sheets , higher credit risks, lower stock values

Stocks have are inversely correlated with GOLD - to the tune of 88% in the last 7-8 years.

Forecasted corporate earnings growth has not materialzed hence the market re-evaluation - and corresponding higher GOLD prices - due to higher investment demand -

Stock markets are STILL OVERVALUED and it wouldn't surprise if we go down significantly in the next few weeks-

As the PANIC, FEAR sets in - GOLD INVESTMENT will increase significantly -

Got gold?

sector

(07/21/2002; 15:31:53 MDT - Msg ID: 81043)

The Economy IS Doing FINE...Boomed The Master of the Universe

http://www.federalreserve.gov/releases/cp/
Scroll to the bottom of the page of the above link and examine the Federal Reserve Commercial paper "Outstandings" Chart. It is divided into two traces, Blue for non-financial commercial paper and Red for financial borrowings.

The Blue trace has fallen off a cliff and continues downward while the Red financial borrowings even remains in a steady downtrend.

For the Chariman of the Federal Reserve to say the US economy is "Fundamentally sound" is absurd, given his own measures of corporate borrowing revealed in these charts.

The party-line from the Admin is cracking badly. It isn't washing in Peoria.

Look for a new party-line... coming soon to a radio station near you.

misetich

(07/21/2002; 15:34:47 MDT - Msg ID: 81044)

Where will stocks go Monday? It's likely to be a rough ride

http://www.chron.com/cs/CDA/story.hts/business/1503016Snip:

"Mondays following Friday declines have always been difficult and I suspect tomorrow will be no different," Richard Grasso, chairman of the world's No. 1 exchange, told NBC's Meet the Press.

On Friday, the Dow Jones industrial average sank to 1998 lows, crumbling 390 points, or 4.6 percent.

A slew of corporate accounting scandals have left investors deeply mistrustful, prompting them to dump equities.

Over the the past two weeks, the Dow has fallen in every session but one, losing 14 percent of its value. Other market gauges have also fallen to multiyear lows as well.

With the Dow perched just above the psychological threshold of 8,000, Grasso made a plea for investors to keep a cool head and think about long-term goals like saving for retirement or their children's college education.

"Please be patient," he prodded. "Please don't do something that emotionally feels good but in the long term will be a mistake."

He noted that over the long haul stocks outperform fixed-income assets.

The New York Stock Exchange chairman also urged tough measures to crack down on corporate managers who commit fraud.

Misetich

Thus far from Enron, to Worldcom, Tyco, Arthur Andersen NOBODY has been convincted of Fraud - yet investors are being CONNED in believing that tough new measures are being implemented - and encouraged in staying put

Yes, it is possible to make a case and show that stocks outperform fixed-income assets - but what these so called "experts" fail to point out- that these statistical models are being built on either indexes, or averages, rather than specific corporate stocks, which the majority of investors have in their portfolio.

Ask a XEROX shareholder, if the hold and wait strategy works.

Investors need to adjust to the times to survive and protect their wealth. In uncertain times GOLD outperforms

Got gold?

misetich

(07/21/2002; 15:47:39 MDT - Msg ID: 81045)

ENRON - is being put on the "back burner" as Worldcom takes center stage

http://www.dallasnews.com/business/stories/072102dnbusenronone.927b8.htmlSnip:

Hollywood couldn't have concocted a more chilling plot for American investors. Enron's ascent from unremarkable pipeline company to Fortune 500 juggernaut showed how simple it was to flout controls thought to assure the integrity of corporate America.

No one has yet been charged with wrongdoing as investigators continue to search the financial ruins. But the obstruction of justice conviction of Enron's auditor, Arthur Andersen LLP, returns prosecutors' focus to unraveling how the energy trader inflated itself to many times its actual size.

.............
And the board's audit committee boasted the kind of credentials befitting directors of such an august company. They included Robert Jaedicke, a former dean of the Stanford Graduate School of Business, frequently cited as one of the nation's top five business schools, and Wendy Gramm, a former director of the federal agency that regulates the trading of commodity futures and options contracts. In an editorial, The Wall Street Journal described her as the "Margaret Thatcher of financial regulation."
............
Misetich

Go ahead Mr. Bush, Mr. O'Neil, and make our day! bring these crooks to justice
or
is it dejeveu all over again "read my lips, no more crooks "

Got gold?

misetich

(07/21/2002; 15:55:32 MDT - Msg ID: 81046)

Airlines still in midst of dreadful conditions

http://www.dallasnews.com/business/stories/072002dnbusairearns.85afe.htmlSnip:

The industry's recovery has stalled, with second-quarter losses topping $1.4 billion, and a number of airlines have warned that their third quarter probably will be worse than their second quarter deficit.

And this is summer, when profits are supposed to be at their highest. It won't be long before the slower fall and winter travel seasons make a bad situation worse.

"The environment is still pretty dire for most of the major airlines," said analyst Mark Oline, who follows airlines for Fitch Ratings. "We have seen that the capacity cutbacks really have not had enough of an impact on their cost structures."

.........................

Misetich

Consumers are opting for low cost fares - the big spenders (business travel) obviously have cut back -

Deflation destroys earnings and re-investments

Got gold?

misetich

(07/21/2002; 16:04:41 MDT - Msg ID: 81047)

The New Rules of Retirement -The party was fun. But reality has set in

http://www.msnbc.com/news/728121.aspSnip:

IT WAS SURE nice while the fantasy lasted. But it didn't last, of course. The stock market, down 25 percent from its high, has posted two years of losses and is barely breaking even this year. And the future of Social Security isn't looking too great. Thanks largely to the Bush tax cuts, there's no money left in the federal budget to shore up Social Security, which will start running monster deficits in a decade or so. So now, with your portfolio trashed and Social Security looking insecure, you may be having nightmares about spending your retirement haunting the mac-and-cheese earlybird specials, or else not being able to retire until six years after you've died. With the bull market gone, will the impending retirement of the post-World War II generation be the Boomer Bust?
...............

Let's pause for a little perspective. For almost 18 years�an entire generation�stocks produced returns way beyond the dreams of previous generations� avarice. From August 1982 through March 2000, the Standard & Poor's 500 Index returned an astounding 19.8 percent a year, compounded, according to Ibbotson Associates, a research firm. This means that if you came of age during this period, you could double your money every three and a half years or so by keeping it in a boring old S&P 500 Index fund. By contrast, Ibbotson says, the S&P returned only 8.8 percent a year from January 1926 through July 1982. At that rate, it took more than eight years to double your money.
................

So much for that. With the boom two years behind us, everyone is recalculating some fundamental assumptions about the market, or should be. Ibbotson now says that stocks have returned 10.6 percent on average since 1926. But that's not a guarantee of future performance. Remember that a few years ago the long-term number was well over 11 percent. And even today's number is skewed by the fabulous 18-year period that ended so recently. During those halcyon days, the economy turned from weak to strong, interest rates plunged by two thirds and stocks� price-earnings ratios�their price divided by earnings per share�doubled. Given current high P/Es, already low interest rates and the reasonably OK economy, we're unlikely to see that trifecta again. If I had to bet, I would put my money on a return of 9 percent or so for the next couple of decades. (Roger Ibbotson, using a complex theory, comes up with a projection of 9.3 percent.) Even 9 percent may be a stretch. Here's why. The pre-bull-market return of 8.8 percent consisted mostly of dividends, which were at a much higher level 20 years ago than they are now. In 1982, the dividend yield on the S&P�dividends divided by share prices�was 5.5 percent, about five times the current level.
The one set of numbers we can rely on are Social Security numbers. Stock-market projections are only estimates, but Social Security numbers are based on demographics. In 2016, when baby boomers will be retiring en masse, Social Security is projected to collect less in taxes than it pays out in benefits. (It may move up to 2014 or 2015 when updated numbers emerge in a few weeks.) Once the lines cross, Social Security, now a huge plus in the federal budget, will start becoming a big negative.

CLOSING IN ON RECORD LOWS
The people who have been hit hardest by the market collapse are recent retirees and people who had hoped to parlay huge stock gains into early retirement over the next few years. Not only have their stock portfolios been trashed, but so has their income from short-term investments. With short-term interest rates closing in on record lows, money-market fund returns have shrunk to less than 2 percent. (Fed chairman Alan Greenspan has all but guaranteed that number will rise soon. So don't start taking big chances to get a couple of extra percentage points.)

Misetich

Investors would be wise to add a minimum 5 to 10% of portfolio insurance - GOLD - as we enter the twilight financial zone

Got gold?

misetich

(07/21/2002; 16:09:20 MDT - Msg ID: 81048)

As earnings forecasts turn, recovery stays out of reach

http://www.boston.com/dailyglobe2/202/business/As_earnings_forecasts_turn_recovery_stays_out_of_reach+.shtmlSnip:

That image captures a lot about the stock market of the moment and its suffering investors. The carrot, a business and economic recovery consistently forecast to be six months away, remains within sight but out of grasp. A smart market analyst once told me to beware of predictions of recovery within six months. That's simply as far ahead as anyone dares to project and it's usually more of a wish. Six months is what you say when you don't know.
.............
But the most serious force working against stock investors is the conclusion that the carrot has been moved yet again. The economy, or at least business conditions for capital-intensive technology and industrial companies, isn't as good as many people thought.

The ratio of companies that lower forecasts compared to those that increase guidance had been slowly improving for nearly a year. But that trend has reversed itself and turned more pessimistic in recent weeks, according to Thompson First Call, a financial data company based in Boston.

Forecasts for third-quarter financial results from technology companies, compared with pathetic numbers from the same period last year, have slipped from being 81 percent better to 72 percent higher in just the past two weeks. The same forecast comparisons for industrial companies have fallen from a 2 percent improvement to a 1 percent decline since July 1.

Misetich

The goal posts keep on getting moved (Right Mr. Greenspan!?) but investors are catching on - Its time to get defensive

Got gold?

misetich

(07/21/2002; 16:15:18 MDT - Msg ID: 81049)

Gold, real estate lure investors from stocks

http://www.boston.com/dailyglobe2/202/business/Gold_real_estate_lure_investors_from_stocks+.shtmlSnip:

WASHINGTON - Falling stock prices, investigations of corporate deceit, and money market funds that yield little more than inflation have pushed investors to real estate and precious metals as a shelter for their cash.
US homebuyers are increasing down payments as a share of property values, and consumers are becoming reacquainted with gold pieces such as American Eagles and Krugerrands. Bullion has won converts among younger Japanese investors, even as the government is trying to entice them into bonds with ads by a movie star
................

More Americans are seeking the comfort of precious metals as well. This week, a banker bought 1,524 one-ounce American Gold Eagle coins, worth about $500,000, says Michael Kramer, head trader at Manfra Tordella & Brookes Inc., a metals dealer in New York.

''One guy is buying 200 to 300 ounces of gold a week,'' Kramer says. Many people started picking up bullion at below $300 per ounce earlier this year, he says, so ''it is the first time in years that somebody has been able to have a profit.''

At FH Coins & Collectibles, a dusty, standing-room-only shop crammed with old porcelain and crystal as well as coins on New York's Upper East Side, owner David Heller says people are calling up or walking in off the street three out of five days a week and asking how to buy gold. Usually, he sells them American Eagle, Canada Maple Leaf, or South African Krugerrand coins.

''A year ago, you couldn't give it away,'' he says. Gold, which doesn't pay dividends, was trading below $300 an ounce and ''you couldn't interest anybody in buying.''

Demand at his shop now is almost as strong as it was in 1999, when investors hoarded gold on fears that the arrival of Jan. 1, 2000, would cause computers to malfunction and throw business into chaos. ''With everything going on in the economy, people want something substantial,'' he says.

Misetich

This article appeared in Bloomberg a few days ago - but it is worthwhile that it is being picked up by local newspapers

Got gold?

misetich

(07/21/2002; 16:31:55 MDT - Msg ID: 81050)

Are we on the verge of a double bubble?

http://www.signonsandiego.com/news/business/20020721-9999_1b21perry.htmlSnip:

The bubble in high-tech stocks burst emphatically back in March 2000. Now, just two years later, some financial advisers wonder whether a second bubble isn't over-inflating in our own back yards � literally.

Thanks to extremely low interest rates and stable employment, real estate prices in San Diego County have swelled dramatically in recent years, with the median price of new and resale homes hitting a sizzling $323,000 in June. That's up 81 percent from the median price of $178,000 just five years ago.

In some areas, condos are appreciating by $100,000 in one year, and first-time buyers are paying as much as $500,000 for a home.

The rapid appreciation in real estate and the continued battering of the stock market are leading some people to conclude that the only place left to make money is real estate.
................

Misetich

ANOTHER bubble courtesy of the bubble master - Mr. Print - and we all know that sooner or later interest rates are headed higher - if for nothing else - to attract foreign investments and protect the US $- at which point the housing bubble will be history

We are headed in the Financial Twilight Zone

Got gold?

misetich

(07/21/2002; 16:49:27 MDT - Msg ID: 81051)

Does anybody remember what DIVIDENDS are?

http://www.guardian.co.uk/business/story/0,3604,758736,00.htmlSnip:
West is beset by phantom menace

This is turning out to be a very unusual cycle for many western economies. Usually jobs, not share prices, have been the first victims of a downturn.
................

This time things are different. Steady employment levels have been a feature of most developed economies over the past couple of years while financial markets have been in turmoil.
..............
The current problems are also hurting areas of the economy previously viewed as immune to the cycle. We are used to steel or chemical companies having to shed labour and scale back operations. Now we are seeing supposedly growing sectors such as telecoms, media and even biotechnology stocks hitting the sorts of problems we expect of cyclical manufacturing industries in long-term decline.

Financial markets are struggling to cope with this new sort of cycle. The bewilderment of many fund managers has been compounded by the way companies, not Gordon Brown, have rewritten the rules about dividends.

Dividend payouts in Britain have fallen sharply over the past 18 months. In the past this has happened only in the middle of very sharp recessions. In this cycle, cash-strapped companies such as BT have found themselves with little choice but to cut payouts to investors, yet the economy is suffering only a relatively mild slowdown.

..............
In reality, blaming current problems on management is as silly as blaming previous recessions on the unemployed. The linking theme of most of the companies hitting the headlines for the wrong reasons this spring and summer is that a huge slice of their balance sheet were invested in intangible assets. Many of our major companies now have almost "virtual" balance sheets, with the majority of the "assets" of the company being accounted for by brand values, intellectual property and other forms of what the accountants call "intangibles".
...........

There are two fundamental problems for regulators and investors. The first is that intangible assets are now far more important for many companies than traditional ones such as plant and equipment. This is inevitable as western economies move away from manufacturing.

The second is that managements, auditors, bankers and investors are lousy at valuing these intangible assets. In many cases, consensus views on how much assets are worth have more than halved in 24 months. That suggests that no one really knows.

The implications are profound and still working their way through the real economy and financial markets. One of the reasons the dollar is sliding is that, if the heavy US corporate investment in intangibles has been misplaced, estimates of trend US economic growth of 3.5% plus, way above Europe's 2-2.5%, look far too high.

Moreover, as the asset side of a company's balance sheet evaporates as intangibles are written off, bankers worry. This is forcing more and more businesses into dismemberment.

Perhaps the real issue, however, is that the economy is becoming more and more reliant on assets that, by definition, have no measurable physical existence and whose value is often a matter of opinion. This must push up the risks.

The past 20 years or so have seen rising hopes that better economic management and tighter banking, stock market and corporate regulation had succeeded in dampening the cycle. What we may now be witnessing is that the swing to a "knowledge based" economy, dominated by companies with virtual balance sheets full of intangible assets, is starting to inject a volatility which the authorities cannot manage with their traditional tools.

There are moves to blame auditors for recent problems. In many instances, however, it is fair to argue that the core problem was that accountants were being asked to attach a worth to assets which no one had any idea how to value. Audit reforms will do little to solve this and, until some new basic valuation tools are forged, investors need to recognise that the world, like the stock market, is a riskier place than they once thought.

� George Hodgson was an equity strategist for 20 years working primarily for UBS Warburg and ABN Amro.

Misetich

Great read - A must read- "Moreover, as the asset side of a company's balance sheet evaporates as intangibles are written off, bankers worry. This is forcing more and more businesses into dismemberment. "

The capitalization of intellectual property and other intangibles looks great in fun times-

Got gold?

misetich

(07/21/2002; 16:55:45 MDT - Msg ID: 81052)

The day of the bear -Stock markets across the globe are crashing as investors take flight.

http://www.guardian.co.uk/recession/story/0,7369,759192,00.htmlSnip:

Suddenly 2002 is starting to feel a lot like 1929. But this time the effects could be even more devastating.

The fact is that share prices now affect everyone: it won't just be stockbrokers flinging themselves out of windows. The share price boom of the Eighties and Nineties - the longest bull market in history - has drawn the whole world into investing in markets.

From pension funds to councils, to the Church of England, to private investors looking to get lucky, a share crash now affects every one of us. Pensions can be destroyed, savings wiped out and towns bankrupted. Yet many ordinary people know little about the inner workings of the City and the people who are at its hub.

................
That collapse begins just after lunch. It is caused by the release of US trade figures at 1.30pm that hint at worsening conditions in the American economy. Immediately the gold price jumps $8 an ounce. Why? Gold is safer than shares. The share markets are becoming too dangerous.

'If you think the US economy is going to collapse, then you use gold as a safe haven,' says another Durlacher trader Graeme Hatch. These are not encouraging words.

Misetich

Gold is safer than shares - you can say that again!

Got gold?

misetich

(07/21/2002; 17:03:27 MDT - Msg ID: 81053)

On the edge of a precipice -The US stock market collapse could trigger the biggest global recession since the 1930s

http://www.guardian.co.uk/recession/story/0,7369,756011,00.htmlSnip:

The underlying problem is that since the mid-1990s, share prices are up by 200% but corporate profits - as measured by sober government statisticians rather than dodgy auditors - have risen by 40%. It is conceivable that Greenspan would have to cut, cut and cut again before Wall Street responded. Even then (and assuming there is no invasion of Iraq to complicate matters), there is a risk that the easing of policy will simply lead to a re-run of this year - a short-lived burst of euphoria followed by the realisation that companies cannot produce the earnings expected of them. Greenspan and Bush would then be in an even worse quandary than they are now, having used up nearly all the shots in their locker. Meanwhile, Europe and Japan - heavily dependent on a US recovery to keep their economies ticking over - would be faced with the prospect of deep, prolonged recession.

If this sounds gloomy, that's because it is. It would be the most critical moment for the global economy since the 1930s. There would, however, be one silver lining: people would ask how we got into this mess in the first place. The answer is that policy makers, dazzled by Cramer, Glassman and their friends in the financial markets, deliberately removed the brake pedal from global capitalism. And, as any engineer knows, the brake pedal is what allows the machine to travel safely at speed. Without it there are only two speeds - dangerously fast and dead slow.

..............

Misetich

"The underlying problem is that since the mid-1990s, share prices are up by 200% but corporate profits - as measured by sober government statisticians rather than dodgy auditors - have risen by 40%."

and don't forget it is not in the best interest of the crooks to tells us the rest of the gloom - as the reported balance sheets are more fraudlent than the income statements - thus they pose a HIGHER CREDIT RISK than is known

Got gold?

misetich

(07/21/2002; 17:16:45 MDT - Msg ID: 81054)

What's Behind the Low U.S. Personal Saving Rate?

http://www.frbsf.org/publications/economics/letter/2002/el2002-09.htmlSnip:

In recent years, the personal saving rate in the United States has fallen sharply, and it is now at a very low level compared either to U.S. historical experience or to the savings behavior of many other industrialized countries. From 1980 through 1994, the U.S. saving rate averaged 8%; thereafter, it fell steeply, and since mid-2000, with allowance made for the tax rebates that boosted household saving in the months of July, August, and September 2001, it has averaged approximately 1%. By contrast, the personal saving rates from 1980 through 2001 averaged 13% in Japan, 12% in Germany, and 15% in France, with no steep declines after 1994; in fact, in France, the saving rate rose slightly. For the United Kingdom, the personal saving rate was close to the U.S. rate during the 1980 to 1994 period, averaging 9%, but it has since declined only modestly to an average of 7% after 1994, while exhibiting very large swings throughout the sample period. For Canada, the personal saving rate did decline sharply during the latter half of the 1990s, but it is still higher than the U.S. rates, averaging 16% from 1980 through 1994 and 7% since 1994.

.............
Will the low personal saving rate persist, and is it a cause for concern?

One concern that has been expressed over a low personal saving rate is that it may cause national savings to be insufficient to support the level of investment necessary to sustain a high level of long-run economic growth without excessive dependence on foreign capital. However, when savings by businesses and government are added to personal saving, this measure of aggregate gross saving as a percentage of GNP is estimated to have been 17.2% in 2001:Q3, which is likely to have been the nadir of the current recession. This figure is only moderately lower than the post-World War II average of 19.2% and is not out of line with previous dips in the quarterly series.

..........

Misetich

No wonder Greenspan is encouraging a HOUSING BUBBLE - somehow "Consumers" need to feel wealthy - as most of their "perceived" wealth is in the stock market and housing.

Well the "perceived" stock market wealth has mostly disappeared forcing consumers to dip on their "housing" perceived wealth -

Greenspan forgets not all AMERICANS own homes - most depend on job compensation - and those are disappearing - The reported 5.9% unemployment is understated - Just check out the higher borrowing of municipal, state and federal government

US fortunes are in the hands of foreigners - It is a death match -

Got gold?

R Powell

(07/21/2002; 17:50:41 MDT - Msg ID: 81055)

Quotes and comments

http://www.mrci.com/qpnight.asp From the link above at this time,
Sept. mini S+P -8.50
Sept Nasdog -5.00
Aug. Gold +1.50
Sept. Silver +3.2

I trade with a very large broker in Chicago. I've a working order on the mini S+P placed above the asking price which has not yet been filled. I was even foolish enough to raise the ante. Nothing yet on the electronic globex where fills are almost immediate. Perhaps no one wants to take the other side of my bet? The order clerk suggested I call back periodically as they are unusually busy and already behind in reporting results.
Interesting and Grim but not dull!
Rich

sector

(07/21/2002; 18:17:12 MDT - Msg ID: 81056)

German Gold Price Site Shows UP $1.75

http://informer2.comdirect.de/de/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1&sTimeframe=iD&useSettings=0&showSettings=&sid=&hiddenTimeFrame=1&sOrdType=price&sScale=linear&sMarket=GLD.FX1&iType=1&sAv1=38&sAvfree1=&sAv2=200&sAv2free2=&sAv2count=1&iInd0=na&sBench1=na&sBenchcount=1&sBench2=&sBench2count=1&showBenchmarkSearch=&iInd1=1&iInd2=na&iIndcount=1&sSettings=naUsually reliable, very nice cumulative daily chart with current high and low shown.

Truthcaster

(07/21/2002; 19:09:09 MDT - Msg ID: 81057)

WorldCom

Well WorldCom just filed chapter 11 bankruptcy
This out of Bloomberg.com The biggest bankruptcy
ever. I also saw the nikki is Down below 10,000 Wow..
kitco has gold up 1.40 Looks like a fun Monday
is on it's way

sector

(07/21/2002; 19:59:10 MDT - Msg ID: 81058)

Biggs on Gibson's Paradox...Does He Really Know What the Significance Is?

Does it matter?Bill Murphy, this evening [Over at the Cafe], suggests that Barton Biggs' mention of Gibson's paradox means that he has had a sort of "Born Again" epiphany with respect to a wider understanding. Maybe so...

Here is what Summers said in his 1988 J. Political Econ. Article:

"Since the authorities peg the nominal price of gold at a constant [In a gold standard regime], the general price level is the reciprocal of the price of gold in terms of goods.

Determination of the general price level [Inflation], then amounts to the microeconomic problem of DETERMINING the relative price of gold. Since gold is a durable asset, its price is sensitive to the long-term interest rate". [Emphasis added].

The above quote is the heart of this scholarly piece. Summers and Barsky found that the price of gold is directly related, in an inverse manner, to real returns [The real interest rate]. Therefore IF one controlled the price of gold, one ALSO controlled real returns [Real interest rates]. They had discovered the Goldilocks Economy. All they had to do was to cap gold.

I think Barton had a parlor discussion with gold�knowledgeable friends and was trying to sound authoritative after having read a few pieces probably from Hathaway. I could be wrong.

The big news from Summer's "Finding" is that he hatched an academic plan to rig all of economics by rigging gold. Other gold experts still are in the dark regarding the nature and scope of the gold manipulation. It has very little to do with commodities markets, "It's the economy stupid!".

Doug Nolan's best analogy on derivatives is to use the flood insurance comparison. Derivatives are flood insurance. In dry times, folks build willy-nilly on the river's edge ignoring the threat of flood because they have "Insurance".

Nolan has yet to acknowledge or appreciate is that the "Financial rain" which might cause the derivatives river to rise is actually controlled by capping gold. All those $16 Trillion in interest rate derivatives at JPM would never have been established without such a scam in place. It would have been TOO RISKY.

The cockroach between the Boston and the Cream Pie is that gold is an exhaustible resource and it therefore cannot be sold forever.

So maybe we should nominate Summers for a Nobel Prize in Economics. Better to give THAT opportunity to President Mbeki.

At the end of the day, Biggs HAS come over to the gold bugs�perhaps I should not complain too much.

Maybe Abby will be next.

Cavan Man

(07/21/2002; 20:02:11 MDT - Msg ID: 81059)

Tokyo PPT on the job!

Monday, July 22, 2002 10:01 a.m. JST

Nikkei Falls Briefly Below 10000; 1st Time Since Feb 21

TOKYO (Nikkei)--The Nikkei Stock Average extended losses from the start of trade Monday and fell briefly below 10000 at around 9:19 a.m., after futures traded below the threshold. The index fell below the 10000 mark for the first time since Feb. 21. The Nikkei later recouped some of the losses, traded at 10173.26, down 29.10, as of 9:55 a.m. _Read More...

Waverider

(07/21/2002; 20:19:22 MDT - Msg ID: 81060)

Japanese PPT - Realtime

http://64.227.236.52/public/japan.htmlCavan Man - my thoughts exactly - check it out realtime.

cyberbat

(07/21/2002; 20:31:02 MDT - Msg ID: 81061)

A riddle for you

an easy riddle for this august body, but I will offer it anyway. I hear the naying of cattle at the gate. Barely audible in the distance, I hear a singing voice. I hear waling and crying and nashing of teeth, but all is wrapped in a golden hue.
Answer: The naying of cattle are the bulls all headed for the exits at onced in a mad flurry. The barely audible singing voice is the fat lady warming up for tomorrow's opening bell. The waling and hand ringing are the investment houses that now have no more suckers to buy their stocks. The golden hue is the rising price of gold as investers flee in to the best store of value in the world.
If you are out of stocks but in to gold then please enjoy history in the making!!
Cyberbat

USAGOLD

(07/21/2002; 21:03:44 MDT - Msg ID: 81062)

Sector. . .Gibson's Paradox

Why did Summers & Co. believe that capping the real rate of return was as simple as capping the gold price? I don't understand how this thinking prevailed. There is no correlation going from capping gold to a real rate of return on the dollar. It sounds good but its contrary to economic reality. My view is that the Gibson Paradox, if it operates as you described it, was academic clap-trap and Summers knew it. In the real world, the real rate of return is achieved by design when the central bank deliberately keeps the interest rate above the inflation rate. It has nothing to do with gold. This of course revs up the currency and, wallah, you have the Strong Dollar Policy. Capital flows to the strong currency country's equity markets, Wall Street gets its bonanza, and you've got heaven on earth -- at least for awhile. Few people realize this, but Wall Street has become a Democratic, not Republican Party, stronghold. That's why Clinton was invited to speak at Morgan Stanley right after the election and Morgan Stanley clients raised holy hell. What's good for Wall Street is good for the Democratic Party. The Strong Dollar Policy made Wall Street Rich and that was largely Rubin's creation. But alas all markets cycle. . .and all good things must someday end. I believe that, if the gold price was capped, there were many reasons for it, but one I'd put at the top of the list is that money center banks are at perilous risk if they didn't control the price. That, I believe, is now all out the window.

What Summers, Rubin, Greenspan et al really discovered is that if you control the statistical source, you can control the numbers the market deems necessary and important. (In other words, government numbers aren't any better than corporate numbers.) By doing this, you can prolong the up cycle which serves the political class. What you can't control there, you can control through the use of derivatives if you really want to -- viewing them as a cost of doing business. This thinking and the markets we experienced in the 1990s and now represent the culmination of Keynsian, socialist / Democrat economics -- and this bubble and crash are their creation with Greenspan more the happy facilitator than conspirator.

I don't believe that real interest rates result from capping the gold price. That's nonsense. To the contrary, I believe investors flock to gold in periods like the one we are in now, when the central bank is forced to lower interest rates to prevent the banks (and financial sector as a whole) from becoming insolvent, and the real rate of return collapses. Look at the companies declaring bankruptcy -- they are more hybrid financial - industrial firms than pure product oriented producers. Greenspan tried to allude to this phenomena a couple of months ago and just about everyone missed it. Watch out for companies like GE. Puplava is right on this. It too is a hybrid financial firm -- and thus vulnerable. If Summers believed that capping gold kept the real interest rate in place, he had it backwards. A rising gold price is the result of market recognition that a real rate of return on the currency has evaporated. The Weak Dollar Policy is a reality no matter what the Bush administration says publicly, and one of the most immediate beneficiaries has been gold. It wasn't GATA that set gold free and it wasn't the mining companies renouncing their hedges. The seminal act was Greenspan lowering the dollar interest rate to a level that the juice was taken out of the gold carry trade, and he didn't do it because he wanted to, he did because he had to -- to buy time for the financial sector. Unfortunately, today's money is political money, and the people in charge aren't governed by 'economic religion' as much as they are day to day politics. The only important fire is the one right outside the central bank's back door . . .and that's the long and short of it. Your best hope is to get the fire crews in there and get the wild fires contained. That's what Rubin tried to do with Enron. The Bush administration, God bless it, didn't buy the fact that another bailout and manipulation was needed. That's how we got to where we are today -- and the historians will fight for the next 100 years as to who is to blame. I think you can tell by this post who I believe is to blame. If we didn't get there now, we would have within a short period of time anyway.

By the way, I checked the national debt accrual over the past year -- and believe it or not the politicos in Washington have added $400 billion to the national debt over the past year. I couldn't believe the figures when I saw them. . . .but that's the reality and I think there's quite a bit going on to post a number like that beyone the war on terrorism.

Like Greenspan, the Bush administration finds itself the thrall of the old Clinton administration. That's why Greenspan has been so quiet of late, why he's thinking of getting out of Dodge, and why the Bush administration finds the whole thing so frustrating.

Aureo Speedwagon

(07/21/2002; 21:15:55 MDT - Msg ID: 81063)

"Dark Vision:" contest

Ahoy, USA Gold!

Thank you for the Brazillian gold coin. It was waiting for me when I returned from an 8,000 mile car trip across the USA. I started the trip before the Dark Vision judging and neglected to bring my password with me on the trip, so I couldn't respond until now. I was surprised that the date on the Brazilian coin was 1898, but I guess it's been a long time since there was hard money in South America.

I've changed my harsh view of the future since my car trip. I drove from San Jose to Santa Barbara to Las Vegas to Detroit to Florida to Oklahoma and then home, and I was pretty much out of the Internet loop during that time. During my journey I discovered that almost everybody is preoccupied with other stuff and our gold-bug obsession is a rare trait. I saw the interstate highways clogged with trucks moving goods from one location to another, and trains clogged with containers.

My first stop was Santa Barbara, and my brother there has taken a $30,000 equity loan out of his house and paid off the car loans on his Chevy pickup and his wife's SUV. Their new house pay-off date is now ten years away instead of fifteen years. She's away on training seminars for her income tax business, and he's back full-time building robot handlers of silcon wafers for a metals sputtering company now that orders for two new machines have come in.

Next I drove to Las Vegas, where my sister and her husband have paid $200,000 cash for a vacant lot where they plan to build a 12-room mansion. They showed me blueprints for their construction plan, but they are planning to pay $100,000 for another vacant lot in a less toney part of Vegas and build a spec house there and then use the profits to finance the big house on the $200,000 lot. One problem is that the land contract requires that construction begin within x months of the purchase, and if they don't get the spec house built and sold before x months, they'll be screwed.

My brother-in-law is a hard-charging Gen-X'er, 31 years old, and he took a new job in Vegas four months ago to bring a mining company into the computer age, moving overnight from Marin County to Henderson, NV.

Next I drove to the Detroit area, a two-day drive including an interesting stretch through Nebraska and Iowa, where every newscast on every radio station included comprehensive commodities reports, including gold and silver, and then reverted to call-in talk shows with corn farmers going ballistic about futures price changes. It was just like reading gold forums, except in audio format.

In Detroit I endured 24/7 media warnings about the illegality of fireworks, and then on 7/4 I went to a holiday barbeque at a lakeside home owned by the top Photoshop retoucher in the Detroit car ad biz. I brought a box of bottle rockets, but at dusk local time (9:30pm) huge fireworks displays went off around the half-mile-diameter bowl of Watkins Lake, each neighbor attempting to prove how cheap and pallid the next guy's stuff was.

In Detroit my brother and sister and I went to an indoor pistol range and I rented a Smith & Wesson .357 Magnum revolver, Model 686 with a four inch barrel, 7 rounds in the cylinder, and I fired 100 rounds of .38 Special ammo at targets 15 yards away and kept an 8-inch circle both double and single action. I shot two magazines from my brother's 9mm Beretta and one magazine from my sister's 9mm Glock, and I guess I'm a wheelgun guy forever. I can't hit shit with a semiautomatic.

Later that day we took our aged aunt out to dinner, and then played penny-ante poker at her house. She mentioned that she had a basket of coins her late husband left behind. My brother and I looked at her holdings, and they were mostly wheat Lincolns of no value, Susan B. Anthonies, and seriously worn silver coinage from 1910-1950. They had lots of Kennedy halves, and I showed them how to look at the rim to spot the silver vs. clad versions.

I drove to Florida to visit my father, and he showed me his plans to sell all his real estate nationwide and buy rental properties to fund his support for his Alzheimers' wife. One of my reasons for driving rather than flying was so I could take my father's computer system from Detroit to Florida so we could rejoin him in the Web net.

My father was mesmerized by the cost of homes in Florida... he wanted a three-bedroom home for under $150,000, and there were hundreds of target homes.

Then I drove across the Gulf coast for a couple of days and landed at my mother's

My Detroit sibs were obsessed with the real estate market. They've put our father's house on sale, a shorefront property just south of Grosse Pointe, for half a million bucks. I drove south to Florida and spent a couple of days with my father, who is selling all his

Black Blade

(07/22/2002; 00:23:27 MDT - Msg ID: 81064)

Asia Awash In Red

http://quote.yahoo.com/m2?u
Asian markets all negative though some bizarre trading patterns in Japan. The BOJ is known to step in to buy the Nikkei 225 from time to time, so perhaps there may be some market defense underway. The US market index futures look very negative tonight as well. Maybe the Hang Seng will go sub 10,000 first.

- Black Blade

Black Blade

(07/22/2002; 00:29:38 MDT - Msg ID: 81065)

US Market Index Futures Plunge

http://www.mrci.com/qpnight.asp
The US market futures are very negative. The USD is lower, petroleum prices are collapsing, and Gold is only marginally higher. Also, the news is out that WorldCom has filed chapter 11, as expected. Some Euro markets should be opening up now. Looks like a lot of "entertainment" tonight.

- Black Blade

tedw

(07/22/2002; 00:31:21 MDT - Msg ID: 81066)

Plunge protection team

I dont have an opinion on this but pass it on to you for consideration.

Summary and brief quote from 7/19/2002 edition of the Wall Street Journal., Page C5.

Article entitled Government Secrets

Morgan Staley economist sent out a research note in which he reminded readers in bold letters: "THE FED DOES NOT HAVE THE LEGAL AUTHORITY TO INTERVENE IN THE S&P FUTURES MARKET.

Meanwhile IFR Thomson Bond-Data service surveyed its readers many of whom would have seen Fed orders coming through their desks. IFR got 30 responses in a few minutes. The results: No one saw the business, no one spoke to anyone who had seen it, and no one believed it.

tedw

(07/22/2002; 00:32:53 MDT - Msg ID: 81067)

Plunge Protectio team

Message below should read:

Morgan Stanley Economist David Greenlaw.

Golden Bear

(07/22/2002; 00:56:45 MDT - Msg ID: 81068)

USAGOLD (msg#: 81062) Sector. . .Gibson's Paradox

Hall of Fame nomination!Sir MK,

Kudos to you for such a succinct summary of the relationship between Gold and interest rates. It allows for greater understanding of the opaque subject of real interest rates which many find difficult to grasp.

I wish to nominate this post for the Hall of Fame for it deserves reading and analysis by all who enter this hallowed hall, and for it not to be buried in the archives, rarely to be seen again...

For those having difficulty, further contemplation is advised:

Quoting...

"...I don't believe that real interest rates result from capping the gold price. That's nonsense. To the contrary, I believe investors flock to gold in periods like the one we are in now, when the central bank is forced to lower interest rates to prevent the banks (and financial sector as a whole) from becoming insolvent, and the real rate of return collapses......

.... If Summers believed that capping gold kept the real interest rate in place, he had it backwards. A rising gold price is the result of market recognition that a real rate of return on the currency has evaporated. The Weak Dollar Policy is a reality no matter what the Bush administration says publicly, and one of the most immediate beneficiaries has been gold. It wasn't GATA that set gold free and it wasn't the mining companies renouncing their hedges. The seminal act was Greenspan lowering the dollar interest rate to a level that the juice was taken out of the gold carry trade, and he didn't do it because he wanted to, he did because he had to -- to buy time for the financial sector. Unfortunately, today's money is political money, and the people in charge aren't governed by 'economic religion' as much as they are day to day politics..."

Under ideal conditions (no beaurocratic intervention), the market sets the real rate of interest, as participants decide whether to spend their hard earned profits, or to save and deploy these profits for future gain in entrepeneurial activities following the careful evaluaton of these opportunities.

By manipulating interest rates downward, the Fed distorts the market, thus skewing the viability of a potential future project so that entrepeneurs believe it is profitable, when in reality it is not, and the easy credit which it helps create allows these entrepeneurs to get funding for these marginal projects easily, leading to misallocation of capital.

Can anyone say Global Crossing? Billions of dollars deployed to rollout fibre optic cable, and this company didn't have customers!

We are now witnessing the unravelling of all these unprofitable endeavours, and the deceipt used to obscure this fact, and many will pay dearly for the experience...

Gold, never misallocated in your hands.

Black Blade

(07/22/2002; 01:45:49 MDT - Msg ID: 81069)

European Markets In Full Retreat

http://quote.yahoo.com/m2?u
Euro markets are negative across the board. More "entertainment" across the pond.

- Black Blade

Blackjack

(07/22/2002; 02:43:19 MDT - Msg ID: 81070)

Real Budget deficit US$400 Billion, not US$165 Billion

http://cbs.marketwatch.com/news/story.asp?guid=%7BBEC43F76%2D337C%2D4D9F%2DA8E0%2DBB0C830942F8%7D&siteid=mktwThe $165 billion the administration is claiming for this year may be closer to $400 billion if a surplus in retirement funds that's earmarked toward paying future liabilities is discounted, he said.

Aragorn III

(07/22/2002; 03:49:09 MDT - Msg ID: 81071)

Mr. Kosares, you are a bastion of competence, a captain among the rank and file in your field

Elsewhere without trying it is easy to find that gold talk is cheap and so many mouths produce an endless flow, to reach scarcely twice as many ears, in a losing effort to fill a void of understanding.

You do a great service to all who might hear your clarion call. This I do know. To run a good business -- and to keep it well -- is for the Chief Executive a full life's effort leaving precious little to spare. Yes, you play super hero -- make a good show for the friends and family at the golf course... but you slice drives and leave six-foot putts two feet short. You know why, Michael. Because your mind remains Chief Executive of a good company intent on running it well while your muscles swing with the "autopilot" motion learned years ago.

If drinks are on you at the 19th hole for high score, your loss is as a sacrifice generously made to your fellow man... all that will take heed of your time, your words, your service to that which pertains gold.

My impetuous yet well-meaning friend said here once that there are those who charge into dark places with guns blazing from the hip. I see that you, Michael, use the approach I admire. You raise your hand and at your words the shadow is driven back as under attack by a beacon, prelude to the coming of dawn.

For the hard charging hipsters who will not hear your wisdom for the deafness brought about by their own "blazing guns" may it be suggested that you be so kind to leave for them a dim corner and orc hole here and there as playthings? It will keep the talk heard at your Castle's world renowned Round Table lively, full of knowing smiles through the light of new day.

Of that daylight, you must know I feel ANOTHER and FOA to be prime hands driving the wheels through which the world turns to dawn... an influence upon timing and intensity. Know then also that you stand prominently among them, a peerless businessman and public figure letting your golf swing suffer for all that you do so that others might be better positioned to see the light.. Your hand, with all of this USAGOLD, too, is surely firm upon the wheel.

Please do not tax your time in fitting together any public words of response. I will ring during your office hours as there is good need to talk, you and I.

got gold?

misetich

(07/22/2002; 05:18:02 MDT - Msg ID: 81072)

WorldCom Bondholders to Lose $1 Billion in Interest This Year

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∣dle=ad_frame2_topfin&s=APTuJ2xWdV29ybGRDSnip:

Of the 20 biggest holders of the bond, 17 were insurance companies. About $20 billion of WorldCom's notes and bonds come due between 2003 and 2011, with the other $8 billion maturing after 2022. WorldCom has $2.65 billion of bank debt outstanding.

``They were just loaded up with so much debt, they kept pushing it out into the marketplace,'' said Glenmede's Mahoney. ``Sooner or later, that's going to come home to roost.''

The market value of the company's notes and bonds has sunk to about $4.2 billion.

J.P. Morgan Chase & Co. and Citigroup's Salomon Smith Barney arranged WorldCom's $11.9 billion debt sale in May 2001. The borrowing -- in dollars, euros and pounds -- is the third-biggest corporate bond sale ever.

Default Swaps

Some holders of WorldCom hedged their bets. As much as $10 billion of WorldCom's $24 billion of bonds may be insured against default, said John McEvoy, co-founder of Creditex, an online exchange for credit derivatives that is partly owned by Deutsche Bank AG, J.P. Morgan Chase and Morgan Stanley. Derivatives are contracts whose value is tied to the value of another asset or an index.
.........................................
Misetich

Telecom Debt is in the trillions - as the global economic recovery fails to ignite and stays around the current levels - we can expect further credit deterioration as earnings will not cover principal repyaments due and annual interest -

Thanks Mr. Kosares for your illuminating post (USAGOLD (07/21/02; 21:03:44MT - usagold.com msg#: 81062)

It is interesting on how little has been heard of Mr. Rubin lately - he was the 1st rat to jump ship

Got gold?

misetich

(07/22/2002; 05:25:30 MDT - Msg ID: 81073)

Falling stocks may hurt Japan banks - Hayami

http://www.forbes.com/newswire/2002/07/22/rtr669464.htmlSnip:

TOKYO, July 22 (Reuters) - Bank of Japan Governor Masaru Hayami warned his fellow policymakers last week that the recent fall in stock prices could hurt the health of the country's frail banks, minutes from the meeting showed on Monday.

"They say there's been no March crisis or June crisis, but to put it simply, share prices were relatively stable both in March and June. If share prices fall now, banks will have unrealised losses," he was quoted as telling the last Council on Economic and Fiscal Policy meeting on July 17.

"There is little buffer in their own capital, so if they have unrealised losses it will have an impact on their capital," he said.
...................

Many analysts say a fall in the Nikkei to 9,000-9,500 would mean banks' capital-to-asset ratio -- a measure of their financial health -- could drop below 10 percent.

Hayami was also quoted as saying that policymakers should ensure the financial system is stable by next April, when the government is due to terminate its full guarantees on deposits.

Misetich

That would explain why the Nikkei 10,000 level is being "defended" -

Central bankers have more than fire to put out -

Got gold?

misetich

(07/22/2002; 05:32:21 MDT - Msg ID: 81074)

Europeans Split With U.S. on Need for Iraq Attack

http://www.nytimes.com/2002/07/22/international/europe/22EURO.html?ex=1028001600&en=9bcfc7fe702d6bd0&ei=5040∂ner=MOREOVERSnip:

But the American talk of overthrowing Saddam Hussein by military force is raising alarms in European governments.
..............
Those reports continued with a British newspaper report on Friday that Prime Minister Tony Blair is preparing for a significant call-up of military reserves in the fall and that he has pulled an armored division out of training exercises so it could be made available for special deployment later this year.

................
In the House of Commons, Mr. Blair said that Britain has gathered extensive evidence that "Saddam Hussein is still trying to develop weapons of mass destruction" and that Britain will publish the evidence "at the appropriate time." Last fall, the British government published the first detailed report that Osama bin Laden was directly linked to the Sept. 11 attacks on the United States, thus laying down an important predicate for the war in Afghanistan

Misetich

Got gold?

misetich

(07/22/2002; 05:44:00 MDT - Msg ID: 81075)

Senate Hearing Set on Enron's Bankers

http://www.nytimes.com/2002/07/22/business/22ENRO.htmlSnip:

By RICHARD A. OPPEL Jr.

ASHINGTON, July 21 � In the six years before Enron filed for bankruptcy protection, major banks helped the company camouflage more than $8 billion in financing and increase its cash flow through deals permitting Enron to raise money without listing it as loans on financial statements, Senate investigators have found.

About $5 billion of the amount was outstanding when Enron filed for bankruptcy in December, according to the Senate's Permanent Subcommittee on Investigations, which has scheduled a hearing on Tuesday to look at the role of the banks in Enron's collapse.

"The question the subcommittee will examine is the extent to which major financial institutions like J. P. Morgan Chase and Citicorp knew of and aided Enron's accounting deceptions," said Senator Carl Levin, a Michigan Democrat who is the subcommittee chairman.

The panel's investigation has found that J. P. Morgan Chase, in 12 deals, did more than $3.7 billion of the questionable transactions with Enron from 1992 to 2001, and that Citigroup did 14 deals valued at $4.8 billion from 1993 to 2001. Of these amounts, respectively, $1.4 billion and $2.5 billion were outstanding at the time Enron sought bankruptcy protection. Executives of both banks are expected to testify on Tuesday.

A J. P. Morgan Chase executive said the deals were in keeping with generally accepted accounting principles and that the bank never tried to help Enron misrepresent its financial statements.

A Citigroup spokesman said the deals were "entirely appropriate at the time, based on what we knew and what we were told by Enron," and that the bank had been assured that Enron's auditors had approved the deals.

According to people close to the investigation, many deals occurred before the close of the quarter and might have helped Enron meet financial goals. Among the issues the subcommittee plans to examine is J. P. Morgan Chase's relationship with entities called Eastmoss and Mahonia that were set up in the Channel Islands off the coast of Britain.

In one transaction, on Sept. 28, 2001, J. P. Morgan Chase transferred about $350 million to Mahonia, which simultaneously transferred the same amount to Enron, people close to the investigation said. The deal called for Enron to repay the sum, plus about $6 million, six months later. To people close to the investigation, the deal appears to be nothing more than a short-term loan to Enron, made to look like a natural gas deal.

J. P. Morgan Chase has told Congressional investigators that it did not control Mahonia, but investigators are skeptical. The hearing may examine whether documents obtained by the panel suggest otherwise.

One document is a letter dated April 24, 1986, from Chase lawyers in the Channel Islands � Chase did not acquire J. P Morgan until 2000 � describing how the bank was trying to raise money for companies "not by way of borrowing but by way of a related transaction" using special-purpose vehicles. The same letter also noted that "for obvious reasons it is important that the S.P.V.'s are controlled by Chase but, for accounting and other requirements, it is not desirable that they are wholly owned by Chase."

Another document, on Nov. 19, 1999, describes the incorporation of Mahonia II, which it says "will be invited from time to time to enter into arrangements that will assist the Chase Manhattan Bank in providing finance for major U.S. oil and gas companies."
...................................................

Misetich

Investigations, investors lawsuits, accounting scandals-

How will this all end?

Got gold?

Truthcaster

(07/22/2002; 05:50:50 MDT - Msg ID: 81076)

Stocks look to open higher

Wow things have really turned around
looks like stocks will open higher s&p's are up
sharply. So is the Nas.

misetich

(07/22/2002; 06:00:30 MDT - Msg ID: 81077)

Citigroup's Enron arrangement -Report: Firm set up complex facility to help Enron look richer than it was.

http://money.cnn.com/2002/07/22/news/companies/citigroup/index.htmSnip:

NEW YORK (CNN/Money) - Citigroup arranged a complex financing facility that made Enron appear rich in cash rather than heavily indebted, according to a published report Monday.

Details of the financing arrangement are coming to light as the Senate's Permanent Subcommittee on Investigations prepares to look at Wall Street's role in helping Enron hide its debt load while it headed toward bankruptcy.

The arrangement created by Citigroup, called Yosemite, allegedly helped Enron book borrowed money as income from energy trades rather than loans, which created a gap as large as $1 billion between Enron's cash flow and financial position on paper, the Wall Street Journal reported, citing an Enron memo.

"The transactions we entered into with Enron were entirely appropriate at the time based on what we knew and what we were told by Enron," Citigroup said in a statement, the paper reported. "We were assured that Enron's auditors had approved them, and we believed they were consistent with accounting rules in place at the time."

News of the "round-trip trades" were disclosed as several other energy firms, such as CMS Energy and Duke Energy, are under scrutiny for conducting similar moves.

In an interview last week, Citigroup Chairman Sanford Weill said "I wish I'd never heard of Enron," the paper reported.

Misetich

"We were assured that Enron's auditors had approved them, and we believed they were consistent with accounting rules in place at the time."

Oh yes blame it on Arthur Andersen -

It will be interesting to see the markets reaction toward JP Morgan and Citigroup -

Our good friend, Chapman, says JP Morgan has a solid floor about $12 -

Lets stay on the JP Morgan TRAIL shall we -

Got gold?

aussie

(07/22/2002; 06:10:40 MDT - Msg ID: 81078)

Aussie Super

Hi Golden Bear and any other Aussie Investors,

I hope to get your before you go to bed, - I'm in WA, so hence the 3 hours delay - I hope to get you before you head off to bed. I spoke to the Accountant tonight, and will quote, "the overiding condition is that assets have to be in a form suitable for Superanuation given that age of members and liquidity of funds. Super Funds can't be seen trading nor buying put and call options." He said for instance we couldn't trade such as in buying Bakers Delight (maybe you don't have that bread company on the east coast.)

Ok,- that is in regards to shares so it is ok to buy mining stocks, and he also said it was ok to buy physical. Thank heavens for that!

I will be hanging around for the opening of Wall Street. Do you think ASX will keep going south? Cheers.

misetich

(07/22/2002; 06:21:49 MDT - Msg ID: 81079)

US stocks traded in Frankfurt - Red flashing

http://money.cnn.com/markets/morning_call/new_stocks.html

Boilermaker

(07/22/2002; 06:57:00 MDT - Msg ID: 81080)

Len Kaplan's Prospector Asset Management Report for 7/22/02

http://www.thebulliondesk.com/reports/prospector.htmsnip;
To get off on a tangent, I see the stock market as doomed. If one believes, as I do, that markets have more to do with psychology than reality, that perception is more important than facts, then certainly investor psychology will only worsen as events unfold. Pardon the language, but you are only a virgin once. Confidence and integrity, once lost is impossible to regain. First, investors learned that some of the Wall Street analysts were simply shills and touts, without integrity or any prescient ability in the market. Secondly, investors were shocked to hear to learn of the fraudulent practices of some accounting firms, who completely shirked their responsibilities to uncover corporate misdeeds, and who were happy to conspire with corporate management for the benefit of a large fee. And then, you have news of corporate scandal after corporate malfeasance hitting the markets. Add to the recipe the fact that, since early 2000, the DJIA is down about 32%, the NASDAQ down 81%, and the S&P's down almost 50%, and one can sense that all hope is gone for a vibrant long-lasting recovery. Even if the economy begins a substantive turnaround, the damage has been done to the equities markets. Confidence has been destroyed.

As the economic and investment cycles change, from a complete worship of "paper assets" from the 1982 to 2000 era, to a beginning desire for hard assets, investors will begin to seek refuge from the cataclysm in other markets and will buy the precious metals. This process is still in its infancy as such paradigm shifts in psychology take a whole lot longer to take hold than one would think. But, we are seeing recommendations for the purchase of gold from respected analysts that would have seemed impossible in years past. Last week, Morgan Stanley's global strategist, Mr. Barton Biggs joined the goldbugs, in years past thought of as the lunatic fringe, in recommending gold. In his words, "I have never believed in gold, for all the conventional reasons, but now I am changing what's left of my mind. I think that there is a plausible case that a professionally managed portfolio...could realize returns of 15% real per annum in the difficult environment ahead". Continuing with his quotes, "In a bleak world, gold could beat almost everything else, it certainly is possible that gold can return to its long-term equilibrium inflation price of $500 per ounce".

comment;
Len sees clearly what's coming but he's still trading "paper assets" for his clients. I hope he gets some hard stuff before the paper game goes up in smoke.

Tommy P

(07/22/2002; 07:09:44 MDT - Msg ID: 81081)

My stocks

Looks like my pre-open prices on my stocks on Gold/silver are down which tells me they will destroy Gold and Silver today at the open.

Carl H

(07/22/2002; 07:11:08 MDT - Msg ID: 81082)

@USAGOLD Re: Sector. . .Gibson's Paradox

You ask: "Why did Summers & Co. believe that capping the real rate of return was as simple as capping the gold price? "

This question presumes that only the gold market was rigged. I believe that the strong dollar policy includes rigging of anything that might make the dollar look weak.

Consider what is known about some of the other markets:
1. Food commodities -- Huge increases in farm subsidies during the Clinton and Bush II administrations.
2. Silver -- I think most here are familiar with Ted Butler's work.
3. Natural Gas -- The EIA is phoneying their data.

Also observe that it seems like whenever the dollar gets in trouble, there is a currency crisis in some other country. (Hence driving the holders of that currency to the dollar as a "safe havan".) Does anyone else think this is not just coincidence?

Basically, I think that the strong dollar policy has been much more far reaching that just gold. But I also believe that gold is the lynch pin. (Hopefully literally for some of the people responsible.)

Golden Bear

(07/22/2002; 07:15:52 MDT - Msg ID: 81083)

aussie (msg#: 81078) Aussie Super

Hey aussie,

Yeah, we sure do have Bakers Delight out east, and they make damn fine bread rolls!

Thanks for heads up on physical. I knew mining shares were allowed in our super funds. My accountant is also a broker for a financial planning firm who have a product whereby you can invest in a selection of blue chip shares on their own, outside of a managed fund. The only gold stock on the list is Normandy Mining Ltd, now owned by Newmont.

As for the ASX, I believe it will be dictated to by what happens on Wall Street. The markets have fallen far very quickly, and markets tend not to go in a straight line. So after possibly falling further this week, we are due for a bounce, even if it's a small one before the Bear resumes its long term downtrend.

Have a look at the chart of the week at www.safehaven.ca of the Dow ready to crack and plunge. If that isn't a good enough reason to be on the sidelines, then I don't know what is...

Cheers.

R Powell

(07/22/2002; 07:24:37 MDT - Msg ID: 81084)

Aureo Speedwagon

Nice report, it sounds like you had a good time.
May I ask about what you saw and heard in Nebraska and Iowa where "every radio station included comprehensive commodities reports." What's the corn and wheat situation? Is Nebraska as dry as reported? Why are "corn farmers going ballistic about futures prices changes." Are they satisfied with the recent gains or looking for more?
Also, you mentioned gold prices reported on radio stations. Were there any comments other than just the current price? Most people in New England have no knowledge or interest in commodities or gold/silver.
When I was very young, there was one fellow in our group who constantly dreamed of traveling in Europe. One day his rantings were answered with a "stop telling us about what you want to do. Do it. Then come back and tell us what you've done." We didn't see him after that for a few months. When he did appear again we heard tales of his trek through Europe. Now you have 8000 miles behind youself, well done!
Rich

sector

(07/22/2002; 07:45:57 MDT - Msg ID: 81085)

Gibson's paradox

Chicken or eggSir MK ,you wrote:

"Why did Summers & Co. believe that capping the real rate of return was as simple as capping the gold price? I don't understand how this thinking prevailed. There is no correlation going from capping gold to a real rate of return on the dollar. It sounds good but its contrary to economic reality."

[s]

Of course there is a correlation between the price of gold and the real interest rate. Fig. #4 in Summers article is a chart of this correlation. It shows the log Inverse of the Real gold price vs. Real Interest Rates from 1972 to 1984. When real rates fell, gold rose and vice versa. It follows that IF gold were capped then real rates would not fluxuate. This is exactly what Rubin, Summers,Greenspan and the cartel did.

Moreover, the opening lines of the abstract read,

"This paper contributes a new element to the explanation of the Gibson paradox, the puzzling correlation between interest rates and the price level seen during the gold standard period."

By capping gold AND dropping interest rates, the Fed thought they had created a "New Economy" because they knew that the general price level would be controlled as well.

MK, you also wrote:

"In the real world, the real rate of return is achieved by design when the central bank deliberately keeps the interest rate above the inflation rate. It has nothing to do with gold."

The record shows that the real rate of return has everything to do with the price of gold. Real rates go down, gold goes up.

The problem began when the government interfered with this relationship by manipulating the gold price. Gibson's paradox broke down. The long-standing relationship between real interest rates falling and gold rising was nullified.

The date of this breakage matches to a three week period in mid-June 1996, the date of a once in 1,538 years [4.22 standard deviations] COMEX gold trading preemptive selling orgy. This cannot have been be due to anything but a coordinated effort to cap gold�it succeeded. Gibson's paradox was broken. JPM's interest rate derivatives skyrocketed by 225% during that same period in June 1996. There can be no mistake that a coordinated plan existed. By lowering the price of gold they had removed any threat to the dollar and therefore were free to safely lower interest rates to rock bottom levels in order to pump up their interest rate derivatives in the Trillions. The Massive GSE mortgage debt growth also matches this date. There are just too many matches.

Summers statement is correct. "Determination of the general price level then amounts to the microeconomic problem of determining the relative price of gold."

He thought he had found a way to perpetually stabilize the general price level�to have his cake and eat it too.

GATA never claimed to be responsible for the current gold bull�only that its price was manipulated and that the policy of central bank loaning and selling was unsustainable.

You are quite correct in observing that Greenspan wants out of Dodge City. He has discovered that gold loans and sales from central banks are approaching their end and with that end is the destruction of an empire built on a scam.

Siochaina

(07/22/2002; 07:47:41 MDT - Msg ID: 81086)

And the beat goes on

Oh this is rich...Lehmans is cutting their year end estimates on the DOW and the S&P!!!!

Also as has been noted...things are being propped up (or down as in PMs) so far....hmmmm...that fishy smell is really getting overwhelming

So now how long will it last...till later today or this week.... SMs will go down again ...though more tricks will be coming....yes Pizz ...the games (eh > financial wars) are really heating to sizzling

BB I think I'll follow your fine example and buildup my supplies more.

The Hoople

(07/22/2002; 07:59:51 MDT - Msg ID: 81087)

Carl H , MK

Carl H , well put.(No disrespect either to MK's usual brilliant analysis) It's commodity suppression, period. Cargill and ADM are merely variations of JPM and Goldman. Same scheme, different cabals. In order to prevent entitlement insolvency a phony inflation index had to be devised to perpetually lie to the public. And to further hide the truth derivatives were created to perpetually distort true market forces. That in a nutshell is "strong dollar policy". It really should be "weak commodity policy". Acceptable inflation occurs when assets- housing mainly - courtesy of Fannie create yet another illusion of wealth while masking mountains of debt. Gold is indeed the linchpin of the fraud. Imagine the Gross Public Debt now if entitlements were racing ahead 10 - 15% annually. It would be all over. In some ways if gold ever becomes $1,000 or more it will be all over for the majority of people. For their wealth in dollars will have been largely stolen by then.

sector

(07/22/2002; 08:01:09 MDT - Msg ID: 81088)

Global: Cracking Denial

http://www.morganstanley.com/GEFdata/digests/20020722-mon.html#anchor0Jul 22, 2002
Morgan Stanley
Stephen Roach (New York)

This is obviously an extremely painful period for equity investors. Oversold is an understatement in describing current market conditions. Yet experience has taught a generation of investors that such sell-offs should be treated as classic dip-buying opportunities. Such a chance may well be at hand. I'll leave that to the strategists. But there's one key premise in all this that continues to eat away at the economist in me: The current state of affairs is still diagnosed as the market's problem, not as an economic problem. That's where I continue to take issue. Until denial cracks on this pivotal presumption, I continue to fear that any trading rallies will be short-lived and that financial market conditions will remain exceedingly treacherous.
++++++++++++++++++++++++++++
Brokerage house and mutual fund selling into rallies may need many iterations before people catch on that THEY are the dumbest guy in the room.

sector

(07/22/2002; 08:11:59 MDT - Msg ID: 81089)

33% of layoffs from tech field

From the Rocky Mountain NewsJuly 22, 2002

The numbers are staggering.

Chicago-based Challenger, Gray & Christmas last week said about 33 percent of the 735,527 Americans laid off in the first half of this year were employed in the telecom and technology sectors.

John A. Challenger, chief executive of CGC, said the tech layoffs - more than 243,000 of them - were the largest for a single industry since the firm began compiling records nine years ago.

There were fewer layoffs in high-tech fields such as computers and electronics - which could mean the worst is over for those businesses - but Challenger predicts this could be the worst year for telecom.

Telecom layoffs are 27 percent higher than a year ago and likely will top last year's record 317,777 jobs lost.

And even though computer-related layoffs are down year-to-year, a troubling trend has emerged. Challenger said there were 25,392 layoffs in the computer industry in June - more than the previous four months combined, primarily because of continued slumping sales of PCs "due to more cautious consumers and business clients who are unwilling to purchase new computer equipment in this era of uncertainty," Challenger said.

sector

(07/22/2002; 08:26:00 MDT - Msg ID: 81090)

Are we on the verge of a double bubble?

http://www.signonsandiego.com/news/business/20020721-9999_1b21perry.htmlBy Ann Perry San Diego

July 21, 2002

The bubble in high-tech stocks burst emphatically back in March 2000. Now, just two years later, some financial advisers wonder whether a second bubble isn't over-inflating in our own back yards � literally.

Thanks to extremely low interest rates and stable employment, real estate prices in San Diego County have swelled dramatically in recent years, with the median price of new and resale homes hitting a sizzling $323,000 in June. That's up 81 percent from the median price of $178,000 just five years ago.

In some areas, condos are appreciating by $100,000 in one year, and first-time buyers are paying as much as $500,000 for a home.

The rapid appreciation in real estate and the continued battering of the stock market are leading some people to conclude that the only place left to make money is real estate. It's little wonder that a book titled "Flipping Properties: Generate Instant Cash Profits in Real Estate" is currently a brisk seller.

John M. Smith, a certified financial planner with Old Mission Mortgage in Serra Mesa, says the rapid appreciation is creating some eerie similarities with the Nasdaq market before it fell in 2000. People are saying, "We can't lose if we buy real estate."
+++++++++++++++++++++++++++++++
It's YAHOO!�All over again. Someone I know well is building a $2.5 million mansion to be completed in 10 months. Their mortgage will be "Only" $600,000. He will "Retire" in three years. How will they pay the real estate taxes? Where does he come up with the monthly interest on $600,000?

Elsewhere in town, a really big out-of-towner mansion owner was a week late on a house payment�the bank is in foreclosure court to nab the property.

Real estate is worth ONLY what people are willing to pay for it. The day the bids stop�well�the house is worth the bid. Once the bids start falling buyers wait�if there ARE buyers with that kind of money.

Carl H

(07/22/2002; 08:45:59 MDT - Msg ID: 81091)

@Hoople: Weak commodities policy

I like the term "Weak Commodities Policy". (I count other currencies into commodities.)

Cavan Man

(07/22/2002; 09:13:44 MDT - Msg ID: 81092)

Algore again!

Gore: Bush administration has lied to Americans about nation's economy
Sat Jul 20, 8:48 PM ET
By BILL POOVEY, Associated Press Writer

MORRISON, Tenn. - Former presidential candidate Al Gore ( news - web sites) accused the Bush administration Saturday of lying to Americans about the nation's economy.

At a campaign event for a congressional candidate, Gore told Democrats that electing Lincoln Davis could be the difference in continuing the Bush administration's economic policies.

The Bush administration has "lied about the future liabilities they have put on our shoulders as taxpayers," Gore said.

The former vice president prompted a cheer when he said: "I don't care what anybody says. I think Bill Clinton and I did a damn good job."

The recent spate of corporate corruption cases reflects the administration's policies and its appointees, who are supposed to police big business, Gore said.

He compared the administration's handling of the economy to business decisions that led to the collapse of Enron, saying Bush is creating a huge deficit.

"It's going to lead to bigger deficits than when the first Bush was there," Gore said.

He said the administration should "completely scrap its economic plan and its team on Monday ... start over from scratch and start rebuilding this economy."

White House spokeswoman Anne Womack said Saturday that the economy was fundamentally strong and that Bush has additional proposals before Congress to strengthen corporate accountability and promote trade.

CM comment: It is important to note that with the extreme polarization engendered by both democrats and republicans in American society at large; politicizing even the most minute details of economic and social life; it is (highly) unlikely that the fundamental and core problems/issues facing this country today will even be recognized, let alone addressed. The US has lost her competitive edge.

R Powell

(07/22/2002; 10:01:42 MDT - Msg ID: 81093)

Carl H / Hoople

Weak Commodities Policy Yes sir, I believe it started about the same time the Dasdoggie mania really shifted into high gear. However, the commodities are a group started showing signs of recovering shortly after the SMs topped. The CRB is gaining and seems to have that same feeling of solid support that I began to sense underlies gold and silver. $300/ounce gold and $2.00/bushel of corn may both be memories.

Egor simplified it for me recently. He said, "Paper assets bad, tangibles good!" It may be mostly attributed to the strength/weakness of the American greenback, no?

Commodities- get you some if you need to diversify.
Rich

Siochaina

(07/22/2002; 10:37:03 MDT - Msg ID: 81094)

History of New World Order

http://www.viewfromthewall.com/fwch2.htm"Jefferson wrote to James Monroe(who later served as our 5th President, 1817- 25) in January, 1815: "The dominion which the banking institutions have obtained over the minds of our citizens...must be broken, or it will break us." In 1816, Jefferson wrote to John Tyler(who became our 10th President, 1841-45): "If the American people ever allow private banks to control the issuance of their currency, first by inflation, and then by deflation, the banks and the corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their father's conquered...I believe that banking institutions are more dangerous to our liberties than standing armies...The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs."

...In a letter to Edward M. House (President Wilson's closest aide), dated November 23, 1933, Franklin D. Roosevelt said: "The real truth of the matter is, and you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson." Henry Ford, founder of the Ford Motor Company, said: "It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." In 1957, Sen. George W. Malone of Nevada said before Congress about the Federal Reserve: "I believe that if the people of this nation fully understood what Congress has done to them over the past 49 years, they would move on Washington: they would not wait for an election...It adds up to a preconceived plan to destroy the economic and social independence of the United States."

Note: Site contains fascinating facts on Central Bank "development"/New World Order in US

Gandalf the White

(07/22/2002; 10:41:05 MDT - Msg ID: 81095)

Ok SPOT, Tis past High Noon in New York !

Time to, JUMP SPOT, JUMP !!!
<;-)

Gandalf the White

(07/22/2002; 11:11:37 MDT - Msg ID: 81096)

SPOT ! Listen up --

I did not say "ROLL OVER" !!
<;-(

RobotGuy

(07/22/2002; 11:22:14 MDT - Msg ID: 81097)

Watch the U.S. dollars fly out of Canada! Loonie down 2 whole cents since this morning.

Okay I think it's obvious we're in trouble now!

R Powell

(07/22/2002; 11:40:33 MDT - Msg ID: 81098)

CNBC Poll

Question is-- Which one of these four do you think is the least risky to invest in now?
Vote for one only,
The choices are
Stocks
Bonds
Real Estate
Gold
The peoples' stock picking television channel will announce the results later in the day.

R Powell

(07/22/2002; 11:44:19 MDT - Msg ID: 81099)

Grains!

We don't need a weather man to know it's not raining in the nation's breadbasket heartland. Wheat, corn and soybeans are soaring.
Gandalf, is Spot feeling okay?
Rich

canamami

(07/22/2002; 11:56:07 MDT - Msg ID: 81100)

CNBC poll

The fact that gold and real estate are even mentioned - at all - is a sign of the times.

Truthcaster

(07/22/2002; 12:05:44 MDT - Msg ID: 81101)

Those Fed's

Well I'm just guessing here but it looks
like the PTT has made the move
The dow has been coming back at the rate
of 20 points a minute wow. More of our tax
dollars at work. Spot gold didn't do to bad
down only .30 Boy a nice sharp "V" in the dow
chart. I think they want it ti close above 8,000.

sector

(07/22/2002; 12:13:53 MDT - Msg ID: 81102)

WATCH OUT FOR DOUBLE SLUMP

By TERRY KEENAN - NY POSTBAD NEWS:

Morgan Stanley Chief Economist Stephen Roach still believes in a double-dip recession. Conference Board Economist Gail Fosler is at left.
- AP
July 21, 2002 -- AS the stock market continues its mid-summer swoon, much has been made of the hopeful signs that the economic picture is a lot healthier than the sickly stock market suggests.

Indeed, it looks like the U.S. economy grew at an average annual rate of about 4 percent in the first six months of 2002 - the same period in which the Dow lost 20 percent and the Nasdaq cratered to five-year lows.

Obviously, there's a disconnect but is the stock market wrong?

Why do so few consider the possibility that the chasm will narrow as the economy stoops to the market's foreboding forecast?

Sure, the world's greatest discounting mechanism can be wrong - and often early - when it comes to economic forecasting. But it is right more often than not.

So what is the market saying? A lot, and most of it is not good.

Behind the falling stock prices, the market is screaming that the twin engines of growth - retail spending and housing - are starting to stall.

Since Wall Street began its post-Independence Day fireworks the Dow has lost about 11 percent of its value, but key home-building, auto and retail stocks have doubled that dismal decline.

Among home builders, Toll Brothers and Ryland are each down about 20 percent since July 5 - even before news that housing starts in June fell by a surprising 3.6 percent. Retailing stocks are much the same, as the granddaddy of them, Wal-Mart, has plunged 15 percent in the past two week and now sits at its September low.

Meantime, shares of credit-card issuers such as Capital One and MBNA have around 40 percent in the past month, clearly suggesting that something on Main Street may be amiss.

These dog days for the Dow have confirmed predictions of a tiny camp of economists who have been warning that the economy could "double-dip" back into recession.

Leading the double-dippers is Morgan Stanley chief economist Stephen Roach, who's now worried corporate America's "crisis of confidence" will turn into not only weaker consumer spending but more corporate belt-tightening.

In other words: if the CEO can't use fuzzy math to make the numbers - old fashioned cost-cutting and layoffs will have to make up the difference.

The fact that consumer debt service is at record highs, even with interest rates at 40-year lows, doesn't help either.

Roach was the first and strongest voice on Wall Street in predicting the 2001 recession. Now that Mr. Market has joined him in the double-dip posse - it's hard to bet against them.
++++++++++++++++++++

XAU and HUI are down today with POG choppy but holding...what's up?
Well...maybe (1) the mutual funds are liquidating everything to meet redemptions and/or (2) the institutional holders and speculators of PM stocks are getting margin calls.

Whatever it is, it represents opportunity for the strong hands and minds. Of course the only REAL opportunity is metal in the hand. One holds independence with gold...the real thing. Freedom from sleaze soaked bankers.

USAGOLD / Centennial Precious Metals, Inc.

(07/22/2002; 12:23:02 MDT - Msg ID: 81103)

Does the foundation of your security hold up under water? Gold does.

http://www.usagold.com/ProductsPage.html

Gold Today!

Because you never know what tomorrow will bring.

In this modern marketplace, developments anywhere quite beyond your control can suddenly and adversely affect the performance and credibility value of the commercial positions within your investment portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.

In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

1-800-869-5115

admin

(07/22/2002; 12:25:55 MDT - Msg ID: 81104)

What's on today's 'Specials Board' for immediate delivery?

We would like to ensure that you are aware of our new program for selling gold -- in addition to our traditional metals brokering services. We are offering certain products available for immediate delivery and at reduced prices.

The catch?

You can only find out what they are and the prices by calling our offices and talking either to
Marie Ballard (ext.106),
Jonathan Kosares (ext.110), or
George Cooper (ext.102).

There are several different items now on SPECIAL. . . . . .

First Come, First Served. Limited quantities of each item for immediate delivery. Items will come off the SPECIALS board as they are sold out.

Call toll free (800) 869-5115

sourdough

(07/22/2002; 12:33:59 MDT - Msg ID: 81105)

RobotGuy (7/22/02; 11:22:14MT - usagold.com msg#: 81097)

Look at the cup half full.
Maybe we Canadians are investing in so much physical gold that all those Canadian dollars are getting switched to U.S. dollars to buy it?
Didn`t I see a poll that said about 50% of Canadians surveyed figured gold and real estate was the best bet?
I hope so, doesn`t seem to be going into the venture exchange.

Siochaina

(07/22/2002; 12:57:42 MDT - Msg ID: 81106)

Belly up to the table Boys

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Stories%20Europe&tp=ad_uknews&T=news_storypage99.ht&ad=euro&s=APTvY0BMDU29jaWV0Societe Generale to Join London Gold `Fixing' (Update1)
By Craig Mellow

Paris, July 22 (Bloomberg) -- Societe Generale SA, France's No. 3 bank, will join a five-member group that sets gold prices in London as bullion prices and trading activity surge.

Societe Generale's investment banking unit, SG, will join the twice-a-day meetings behind closed doors at N.M. Rothschild & Sons Ltd.'s London office to ``fix'' the gold price, the bank said in an e-mailed statement. The meetings began in 1919. SG is taking a seat vacated last year by Credit Suisse First Boston.

London gold prices have risen 14 percent since CSFB quit the fixing on Oct. 12, as investors sought a haven from falling stock markets, a sagging dollar and threats of war in the Middle East and South Asia. Gold trading volume reached a 13-month high last month, according to the London Bullion Market Association.

``The addition of such a strong, committed house as SG will serve to underline the continued importance of the London Gold Fixing,'' said Clive Turner, chairman of the London gold fixing, in the statement."

Note: I thought they had been involved all along....they are and have been definite players

Carl H

(07/22/2002; 13:46:20 MDT - Msg ID: 81107)

Short Positions

http://www.viwes.com/invest/Check out the short interest on PAAS, DROOY, SSRI on this site. PAAS and SSRI inparticular are up about 10x in June. I suspect that this is part of the reason why the gains have been muted.

Although I like the stocks, this demonstrates the problemt that TPTB can basically print stock certificates (by shorting).

I really get sick of these manipulations. I suggest that anyone that has shares in these or other gold/silver mining companies take delivery of the stock certificates. It keeps your shares from being used for shorting which should at least make things a bit more difficult for them.

Carl H

(07/22/2002; 13:47:59 MDT - Msg ID: 81108)

PAAS Short Inerest

It just occured to me that PAAS might have a large short interest because of the merger that is pending. (Arbitragers).

Mr Gresham

(07/22/2002; 14:12:33 MDT - Msg ID: 81109)

Always the bridesmaid...

http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=13702All this blood in the streets. And AU not moving.

I was able to read a few days' posts while away -- I think sector nailed the most likely explanation. Something like, they're just selling the rest of the US' gold. End of story. We'll know, soon enough.

great stuff from misetich & others too, still catching up. Michael's analysis was eloquent and comprehensive -- he ain't no "ordinary businessman", is he now? That Barton Biggs piece in the Gilded was a gem, and his friend sounds worth reading, too.

Thinking on FOA's timing of investment horizons. I think what will ultimately make him "right" is the compression of actually collecting on bear market bets. Yes, I've mostly missed out on some major movements, but things are happening so fast now, we might get a "credit event" (a systemwide one) sooner rather than later.

That makes gold in hand a "paid-up" winning, and all others trying to squeak through the black box maze of 800 numbers, back offices, banking system settlement processes, etc etc etc. Along with all those cashing their surviving funds out of their losing bets. The concentric circles of "safe" money inside of the "wacky" money ones are constricting fast.

Perhaps it is the money market funds lockup (Doug Noland says 25% in asset-backed commercial paper now) that will shake the herd. Dominoes falling fast, in an almost pre-determined order.

The flight into real estate then will be short-lived and contain little force, leaving only one man standing. Some will be left holding stocks and real estate as "real" assets outside of the banking system, and think they will be able to convert later. But the Red Sea parts for a few hours at most, and you want to (a.) get away from the Pharaoh's side, and (b.) not get caught in the middle.

Old Yeller

(07/22/2002; 14:23:06 MDT - Msg ID: 81110)

Boxing Greenspan

http://ca.us.biz.yahoo.com/rc/020722/economy_fed_bubble_1.html
Not talking fisticuffs.

Seems more of the mob are waking up to the nasty aftermath
the credit bubble and it's ultimate author.Could also be
a communications strategy to soften us up for the new man.

misetich

(07/22/2002; 14:32:12 MDT - Msg ID: 81111)

Brazil's real hits new low at 2.905 per dollar

http://www.forbes.com/newswire/2002/07/22/rtr670272.htmlSAO PAULO, Brazil, July 22 (Reuters) - Brazil's currency, the real , closed at a record low on Monday, pressured by speculation the government candidate and market's pick for October's presidential elections, Jose Serra, will fall further behind in a new election poll.

The real weakened by 1.3 percent, or 3.9 centavos, to close at 2.905 per U.S. dollar, or about 20 percent weaker than when it started the year.

Traders said the currency's strength had been undercut by volatility on Wall Street and by talk an election poll expected to be released on Tuesday would show center-left candidate Ciro Gomes extending his lead against former Health Minister Serra, who fell to third place in polls unveiled last week.

Misetich

So many tributary TRAILS - all leading to GOLD

Got gold?

Gandalf the White

(07/22/2002; 14:41:14 MDT - Msg ID: 81112)

Sir Rich, you ask: "Gandalf, is Spot feeling okay?"

Thanks for asking Sir Rich ! Well the Hobbits made an error today and let SPOT watch the DOW CHART !!
WHAT A ROLLERCOASTER RIDE !! UP 60 -- Down 300 -- up 330 --
Down 260 to end at a negative 234+ on the day !! Poor SPOT got VERY dizzy and just wanted to ROLL OVER all day. But, I think that he will be fine tomorrow, as SPIKE is coming !
<;-)

Black Blade

(07/22/2002; 14:47:22 MDT - Msg ID: 81113)

US retreat still has a way to go

http://www.smh.com.au/articles/2002/07/21/1026898945559.html
Snippit:

There are signs that the investor retreat will continue in the US this week. It certainly has momentum: in the first two weeks of this month alone, US investors withdrew more than $US23 billion from stock funds, a pace which if maintained will see twice as much money pulled out of shares in July than in the previous record month, last September.

Black Blade: Looks that way to me. Definitely get defensive if you haven't already. Even energy shares have been beaten up hard today suggesting a more serious fundamental decline in the overall economy and this also suggests that the talk of an "economic recovery" is a false assumption (as stated in today's Daily Gold Market Report). It looks "grim" out there.

RobotGuy

(07/22/2002; 14:51:54 MDT - Msg ID: 81114)

Gandalf - - - Someone is stepping on spot's leash!

Take a close look at the amount of activity in the POG today. There weren't any huge leaps or bounds, but I do believe there were many attempts. Today is probably one of the strongest days in POG manipulation I've ever seen IMHO.

I think the message is loud and clear,.. do anything in your power to keep people from removing their money from the market and placing it into gold.

Poor spot was trying to jump 'to da moon' but someone was stepping on his leash! :)

Cheers!

RobotGuy.

Boilermaker

(07/22/2002; 14:57:03 MDT - Msg ID: 81115)

CMS Energy CFO seeking new scam opportunity

http://biz.yahoo.com/rb/020722/utilities_cms_5.htmlsnip;

CMS Gets New CFO; Sells Oil, Gas Assets
Mon Jul 22, 4:08 PM ET
By Chris Sanders

DEARBORN, Mich. (Reuters) - CMS Energy Corp. , the subject of a government probe into false power trades, on Monday said its chief financial officer resigned as the company seeks to right its troubled financial ship.

The utility holding company also announced on Monday that it agreed to sell its gas and oil production unit and expects to close the $232 million sale by the third quarter as part of a move to shore up it balance sheet.

The Dearborn, Michigan-based company, whose chief executive quit in May, is under investigation by regulators for "round-trip" trades and plans to restate its 2000 and 2001 financial results to eliminate the effects of the bogus transactions.

Chief Financial Officer Alan Wright, 57, whose resignation comes just days after the company halved its dividend as part of a deal to secure $1.3 billion in loans, is leaving the company to work outside of the energy industry, the company said in a statement.

comment;
The electric utilities began to set up non-regulated subsidiaries in the 1990's and they typically put their younger and/or more "progressive" managers in these units. It seems like there was a monkey-see-monkey-do, follow the leader mentality that has dragged many of these enterprises into the same practices that blew up Enron. I also suspect there has been a lot of cross-fertilization of accounting "ideas" from their accounting firm's consulting units. There will be more utility revelations and revaluations to come.

Black Blade

(07/22/2002; 14:57:15 MDT - Msg ID: 81116)

Retire at 65? Better Change Your Plans

http://www.businessweek.com/magazine/content/02_30/b3793638.htm

The increase to 67 for getting full Social Security benefits is just one reason most folks will be working longer

Snippit:

Back in 1983, in an effort to shore up an underfunded Social Security system, Congress voted to do what today would seem like political suicide: It whittled back the amount paid to retirees. The cut was accomplished by increasing the age at which workers can begin to receive their full, life-long monthly benefit, to 67 from 65. That's "the same thing as reducing benefits," says William Gale, a senior fellow at the Brookings Institution who specializes in tax and fiscal policy.

Black Blade: There are many US retirees who are also losing their retirements in the markets. I am afraid that they will join the swelling ranks of seniors who now say "welcome to Wal-Mart" and "would you like fries with that?". These couple of years I have been glad to have Gold and Silver in my portfolio.

Hipplebeck

(07/22/2002; 15:03:22 MDT - Msg ID: 81117)

Swiss Sales

Are the Swiss selling more than a ton a day yet?

Black Blade

(07/22/2002; 15:09:59 MDT - Msg ID: 81118)

NASD to take action on Grubman

http://www.msnbc.com/news/783805.asp
Agency: Salomon research analyst misled investors on Winstar

Snippit:

The National Association of Securities Dealers is preparing to take regulatory action against Jack Grubman, a Salomon Smith Barney research analyst whose bullish telecom calls had made him a star on Wall Street. The move marks the first major crackdown by federal securities regulators investigating how big securities firms obtained investment-banking business with overly rosy stock picks.

Black Blade: This is yet another charlatan that played the part of a Pied Piper leading many investors down the road to ruin. He joins the ranks of Mary Meeker and Henry Blodget. Grubman was among those who were dragged before Congress during the recent WorldCom hearings. This is just the tip of the iceberg as many more scandals and corporate failures will be coming to light.

Off to the gym!

misetich

(07/22/2002; 15:11:25 MDT - Msg ID: 81119)

NASD investigating high-profile Salomon analyst

http://www.forbes.com/newswire/2002/07/22/rtr670337.htmlSnip:

NEW YORK, July 22 (Reuters) - Regulators are probing research on Winstar Communications Inc. penned by high-profile Salomon Smith Barney analyst Jack Grubman, who kept a "buy" rating on the now-bankrupt telecommunications company's shares even as its financial difficulties mounted.

Misetich

ANOTHER investigation - will probably lead nowhere- though investor confidence is destroyed - It is not only the little guys that got caught by these crooked people - The free market system is under threat -

Governments are alleged to be intervening in markets - investors believed that "they" wouldn't let the markets down - we're all in the same boat syndrome -
Unfortunately they were misled and now suffering the consequences as their portfolio and dreams are shattered -

Got gold?

misetich

(07/22/2002; 15:18:00 MDT - Msg ID: 81120)

RPT-UPDATE 1-Congress probers say hidden loans propped up Enron

http://www.forbes.com/newswire/2002/07/22/rtr670326.htmlSnip:

WASHINGTON, July 22 (Reuters) - Major investment banks helped Enron Corp. for years by lending the fallen energy giant billions of dollars via elaborately disguised commodity trades, a congressional panel said on Monday, linking Wall Street more closely to the Enron debacle.

Investigators for the Senate Permanent Subcommittee on Investigations said Enron, bankrupt since December, obtained $8.5 billion in financing from 1992 to 2001 from Citigroup Inc. (nyse: C - news - people) and J.P. Morgan Chase & Co. Inc. (nyse: C - news - people), which collected hefty fees and interest payments.

The subcommittee, chaired by Democratic Sen. Carl Levin of Michigan, said it would provide extensive details at Capitol Hill hearings scheduled to be held on Tuesday and next week, promising to shed more light on the flood of corporate scandal inundating Wall Street.

"The maze of financial transactions that Enron constructed to make its financial statements look good makes Rube Goldberg look like a slacker," Michigan's Levin said in a statement.

The commodity trades were known as "prepay" transactions. Enron booked proceeds from them as cash flow from operations, but should have booked it as debt, the committee said.

"Certain financial institutions knowingly participated in, and indeed facilitated, transactions that Enron officials used to hide debt and, thereby, make the company's financial position appear stronger than it actually was," Sen. Susan Collins, of Maine, the committee's ranking Republican.

Besides Citigroup and JP Morgan Chase, subcommittee staffers said smaller deals worth $1 billion in total involved Credit Suisse Group Inc., Barclays Plc, FleetBoston Financial Corp. (nyse: FBF - news - people), Royal Bank of Scotland Group Plc and Toronto-Dominion Bank.

Shares in all seven financial institutions fell on Monday on stock exchanges in New York, London, Zurich and Toronto, as markets swooned again amid widening investor mistrust.

Since the collapse of Enron, mounting scandals have hammered corporate America, including Sunday's record-setting bankruptcy filing of WorldCom Inc. (nasdaq: WCOME - news - people), the long-distance telephone and Internet traffic carrier.

Citigroup and JP Morgan were not immediately available for comment. A J.P. Morgan spokeswoman told The Washington Post the Enron prepays were commonplace and met accounting rules. A Citigroup spokesman told The New York Times the deals were "entirely appropriate" based on the bank's knowledge then of Enron.

Robert Bennett, a lawyer for Enron, was quoted by The Post as saying the company would continue to cooperate with various investigations and people should not "rush to judgment."

The subcommittee said it found that in 2000 Enron's total debt would have been 40 percent higher, and its funds from operations 50 percent lower, if not for the prepay deals, which helped to support its credit rating and its stock price.

The banks knew about this, and helped Enron hide its debt by letting it do complex, prepay trades through offshore, bank-controlled special-purpose entities, investigators said.

Massive class-action lawsuits filed this spring by Enron investors and former employees have named as defendantsCitigroup, JP Morgan, Credit Suisse, Barclays and other leading banks, alleging they schemed with former Enron executives to bilk investors out of tens of billions of dollars.

Copyright 2002, Reuters News Service

Misetich

Let stay on this TRAIL and let the public at large learn about JP Morgan etc

Got gold?

Hipplebeck

(07/22/2002; 15:31:06 MDT - Msg ID: 81121)

Observations

The US people went out and bought bought bought, just like they were supposed to, but they bought foriegn stuff. That's bad because it makes the trade balance get worse.

The US corporate stars got a once in a lifetime opportunity.
They had huge sums of money available to them to build the infrastructure of the new information age, only they blew it. They made a mess of the whole thing because they were not men and women of vision, but mortals corrupted by greed and power.
Now while the US wallows, trying to repair the damage, someone else in the world is positioned to lead.

The US is diminished a lot in the view of the rest of the world.

If war becomes the only way out of economic problems, then we are all worse off than I thought.

misetich

(07/22/2002; 15:40:44 MDT - Msg ID: 81122)

Outlook: A collapse in confidence that could take years to overcome

Snip:

The general run of results coming out of the US second- quarter reporting season has so far been no worse than might be expected, but almost without exception chief executives have referred to a deteriorating outlook. This is not what the doctors said would happen. Sharply improving productivity was meant by now to be delivering an equally sharp rebound in corporate profits, but it isn't happening.

President George Bush was at it again yesterday attempting to act as a cheerleader for the stock market. From what he hears "corporate profits are improving, which means value will be available for those who invest in markets". You have to wonder who he is talking to. That's not the word coming down the line from most companies. If Mr Bush's purpose is that of attempting to bolster confidence, he should take note of how little good came of it when his Treasury Secretary, Paul O'Neill, did the same thing. All Mr O'Neill's unswerving optimism about US equity markets has succeeded in doing is making him look a fool. The same thing is happening to Dubya.

Political leaders would hardly be thanked for saying the market is a screaming sell when asked for their opinion, but judging by reaction so far, their opinions don't count for anything anyway. They could save themselves much embarrassment by keeping their mouths shut.

Misetich

Clinton, Rubin, must be laughing non-stop as Bush's administration is taking the flak over the overvalued markets-

Bush did have a choice to "free gold" in the 1st few months of his tenure and chose not to - Whether the stakes might have been high - the inevitable cannot be post-poned- and his administration will be held responsible-

Gold will be free some day without any political help - as it the true barometer - of how the people feel and react during turbolent times -

Got gold?

Gauntlet-Runner2("GR2")

(07/22/2002; 15:42:55 MDT - Msg ID: 81123)

The 20 year gold chart is really showing it.

http://www.depression2.tv/ForTheRecord/This is a good link.

Patterns for hedged goldstocks are failing and PDG and ABX are messing up the XAU. DROOY and Bema are not so easily shorted being under $5,(brokerage shorting limits for most). They are doing a small flip-over along their consolidation band. Flipper goldbugs are selling out to bottomfish on Techwreck II. Soon they'll return to find tight supply. Slowly the shorts are being trapped and that is what we need for wave 2 to get the vertical component.

misetich

(07/22/2002; 15:50:01 MDT - Msg ID: 81124)

The bull's 18-year gain is cut in half

http://www.msnbc.com/news/784069.asp?0si=-&cp1=1#BODYSnip:

July 22 � One of the greatest bull runs in stock market history, which lasted nearly two decades and enriched a generation of investors, has come apart with astonishing speed and violence. By the end of trading Monday, the deepening 28- month-old bear market had wiped out half the gains accumulated from 1982 through the market's peak in March 2000.
................
"We'll probably end up overdoing it on the downside like we did on the upside, and by the end of it the Dow could be at 6,000." Johnson said the current downturn, with its destruction of entire industrial sectors, has been longer and more painful than the grinding bear market of 1973-74, "and I never thought that would be topped." Lehman Bros. Monday for the first time predicted that the stock market as measured by the S&P 500 would end lower in 2002 for a third year in a row, which would be the first time that has happened since 1939-41.
................
Still, the brokerage recommends a model portfolio that is 80
percent invested in stocks, 10 percent in bonds and 10 percent in cash.

Misetich

The Big Bad Bear isn't finished yet -specially when brokerage firms are so optimistic

Got gold?

Canuck

(07/22/2002; 15:54:48 MDT - Msg ID: 81125)

Confused?

Why is POG steady to up and the stocks are getting trashed, including the unhedged?

I have heard a couple of theories but still CONFUSED.

Boilermaker

(07/22/2002; 15:57:09 MDT - Msg ID: 81126)

Leverage goes both ways

Today the hard stuff was down 0.2%, my gold stocks were down 6.12%. Ouch!!
Jimbo take note. There is no free lunch.

misetich

(07/22/2002; 16:04:14 MDT - Msg ID: 81127)

Former Fed Governor Meyer: Greenspan's Testimony

http://quote.bloomberg.com/fgcgi2.cgi?T=markets_summary_columns01.ht&l=FGCGI&btitle=Caroline%20Baum∋cat=BAUM&n=10&touch=1&d=0&adt1=ad_topright_bbco&adb1=ad_bottom_bbco&ss1=baum&ss2=blk∣dle=blkmiddle=blk&s2=ad_right1_bbcoSnip:

New York, July 19, 2002 (Bloomberg) -- Former Federal Reserve Governor Laurence Meyer, also a senior adviser at Macroeconomic Advisers LLC, talks with Bloomberg's Caroline Baum about Federal Reserve Chairman Alan Greenspan's testimony last week before the House of Representatives Financial Services Committee. ("No Nonsense With Caroline Baum" is heard on WBBR Radio.)

08:00 View on Alan Greenspan's testimony on the U.S. economy
04:14 Risk of inflation; impact of Fed monetary policy on stocks
04:44 The impact of Fed monetary policy on the stock market
04:11 Post-bubble environment: similarities between U.S., Japan
01:37 The housing market's response to lower interest rates
02:40 Analysis of Greenspan's testimony: FOMC and personal views
05:16 Macroeconomics' forecast for the U.S. economy; technology

Running time 30:42.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Caroline%20Baum&touch=1&s1=baum&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APTvxrxGxRm9ybWVy&ao=19426457

Misetich

Interesting interview

Aragorn III

(07/22/2002; 16:43:09 MDT - Msg ID: 81128)

The French connection

Miss Siochana, thank you for bringing this out -- Societe Generale to join the fix.

What signs are to be read from Europe suddenly awash in French influence? What might a goldheart expect from this enhanced French position at the LBMA fixing table, symbolic, along with upcoming French leadership at the ECB?

We smile as we recall the French frustration with asymmetry of the dollar role fixed under Bretton Woods. We also smile with recollections of similar French frustrations with asymmetry of the deutsche Bundesbank's mark floating after the Smithsonian tunnel.

Frustrations fixed and frustrations floating! Where is one left to find a measure of independence and monetary satisfaction?

Accepted finally was that pegs were beyond any reach of global enterprise in the face of American resistance at 1975's Rambouillet summit, echoed January 1976 in Jamaica, leading to the IMF Second Articles to where Bretton Woods has since evolved.

French president Giscard d'Estaing sought improvements to these legacy UK-US dominated affairs with new structures designed in partnership with German Chancellor Schmidt. The Giscard and Schmidt agreements gained broader approval in 1978, resulting EMS in 1979 -- the union/compromise of the French goal of symmetry and the German requirements for discipline of price stability.

Schmidt acknowledged these economic harmonizations of EC member policies under EMS played good part in his vision of "broader strategy for political self-determination in Europe."

It was nearly predictable that Mitterrand's (French) government of the 1980's would find that this "new Bretton Woods" and the ERM of EMS was troubled as the old Bretton Woods. These frustrations were to be addressed in the Delors (another Frenchman) Report of 1989, growing into the EC's Maastricht Treaty in 1991 -- a three(+) stage timetable of reformation that now is seen ripening on the vine having grown through elimination of capital controls, transitional EMI, and succession by ECB to execute the common unprejudiced policy of price stability within monetary union.

Where does one find expression of the Frenchmen's desire for independence and "symmetry" in this? Look to the gold in your pocket. A New Standard for the world in function of the wealth you hold versus the money you spend.

For both independence and savings "good as gold" it comes naturally to all people to have gold -- this gold priced at full-bodied metal rates not promises of future delivery. (It does not endure otherwise. Free gold is what this is, you have heard this here before.)

For all else, economic convenience of business contracts and plaything of people and their governments, there is floating money, no better than paper over term.

This is not your father's gold standard. This is your gold standard. Freedom to choose and so to order his house remains with everyman.

got gold?

R Powell

(07/22/2002; 16:59:47 MDT - Msg ID: 81129)

Canuck

I believe (trusting to memory) that all stocks fell during the turndown that started in 1929. If the downtrend progresses slowly, there will be more time to assess which to dump and which to keep but if any kind of panic occurs, indiscriminate selling may take all down. Also, it's sometimes human nature to sell that which is showing a profit to offset losses from those which are way down but the investor does not want to sell at a loss. Crazy but true.
In a similar manner, investors will say that prices have turned up (or down) so much that it is too late to buy (or sell). Corn has come up about 25% in the last month or so. Is corn now too expensive? Not if the weather is bad and it is destined to double from here. But, in the buyer's mind, it is harder to buy now.
With the XAU and the HUI joining the downturn, were there any sectors at all with gains today? Selling panics will envelope all but perhaps mining stocks will suffer the least and come back the quickest?
I hold no stocks at all but-- if you are convinced that POG and POS are heading higher, can they do so without taking the mining stocks along? Perhaps the question is- will further stock market downturns eventually send money flowing into precious metals? Probably this is already occuring. When will we see gold fever??
Rich

A Canadian

(07/22/2002; 17:07:31 MDT - Msg ID: 81130)

@ CANUCK

Gold and gold stocks have been steadily rising - but not exploding for the same reason that the dow is steadily declining but not crashing. A 20 yr mindset is slow to change even in the face of overwheming evidence as to what is really happening. Patience my friend, patience. The pot is finally boiling and the lobsters will soon be chucked in!

slingshot

(07/22/2002; 17:51:38 MDT - Msg ID: 81131)

Seige Engine

Gold above $300.00The water seeped between the cracks created by the bombardment of the trebuchet, and increased its flow as it exited the hole at the base of the tower. Bringing with it more and more fill as the rain come down. Mortar weak from age and moisture released it grip upon the stones and they fell down to the foundation and destruction come from within.
Then it began.
The tower collasped slowly. First separating from the buttresses which held it high and then from the main wall itself, settling on the ramp of fill expelled.
Ressembling a man falling to his knees, it heeled over and the structure increased with speed till it impacted the far bank of the moat. A huge splash resulting from the overfilled moat and two waves raced out to pass through each other, washing back over the fallen tower.
The Lord of the castle had just entered the courtyard to see his symbol of authority come crashing down. He stood in the rain with his Knights.
The Goldbugs although watching this edifice crumble, stood in silence. They knew soon there would be a battle. One which would be remembered through history.

The Brother of the Lord of the Castle had sent a message to The Kind with No Name, Reinforcements had been put to a forced march. They too, were not far away.

slingshot

(07/22/2002; 18:00:17 MDT - Msg ID: 81132)

Seige Engine

***********************Should be, King with No Name. Sorry for the rush job but they keep kicking me off line and I lose everything.
Slingshot---------------------<>

TownCrier

(07/22/2002; 18:24:27 MDT - Msg ID: 81133)

Look to gold when your currency is held in thrall

http://biz.yahoo.com/rf/020722/economy_fed_ease_1.htmlWASHINGTON, July 22 (Reuters) - Federal Reserve Chairman Alan Greenspan hasn't said a word to suggest he has considered a cut in interest rates should the stock market rout begin to ring loud alarm bells about a double-dip recession.

But economists contend that the Fed chief must have such a game plan on his mind and could put it into action should a full-blown crisis emerge -- like a huge one-day stock market sell-off or a freeze-up of financial-market liquidity.

Roger Kubarych, economic adviser for Hypo-Vereins Bank ... predicted that if a change in rates comes this year, it is more likely to be a cut than a rise.

Just a few months ago, economists thought the Fed by now would be ratcheting interest rates up off their 40-year low of 1.75 percent. ...experts said the equity market sell-off could play out in such a way as to force the Fed to try to defend the economy against another downturn.

...if the market's woes begin to show up decisively in economic data, the Fed might rush to the rescue with a rate cut...

Greenspan said in a key August 1999 speech in Jackson Hole, Wyoming, that stock prices certainly are factored into the interest-rate equation.

-------(click URL for full text)---------

After reading this, take another long hard look at the subject line and content of today's graphic ad run earlier (12:23) at the forum by Centennial Precious Metals.

You have no say so in the formation of all-important dollar-policy and usage, which can change right out from under your feet. On the other hand, the last word on gold "policy" was had billions of years ago in the formation of the universe. The earth's full share has already been allocated, and beyond the slow task of mining what's left we can't get more except to print proxies with which to fool the gullible out of their share. And this goes on even as we speak. Don't be fooled. Called Centennial tomorrow for a healthy diversification long overdue.

R.

misetich

(07/22/2002; 18:55:33 MDT - Msg ID: 81134)

The Deflation Monster

http://www.gilder.com/AmericanSpectatorArticles/Deflation.htmSnip:

In 1995, I predicted that inflation's days were numbered. A year later I warned of a new, more exotic enemy�deflation.
..............
In late February, I advised my Wall Street clients that, until the problem was corrected, there would be no reason to buy equities. The adjustment to a monetary deflation takes time, but it is inexorable, forcing all nominal prices to fall�including the price of wages, assets, and all goods and services, even the price of haircuts. One hundred percent wage reductions, also known as layoffs, are frequent.

Japan is in the twelfth year of a deflation, the yen having doubled in value over the last decade. Equities there hit a 17-year low in mid-August, and only now are its political and economic leaders beginning to understand why interest rates cut close to zero percent have had no effect.

..............

The best, as I see it, is that the deflationary process has only been partially completed. It cannot be reversed unless someone the president respects picks up the phone and tells him there is no remedy except an inflation to readjust the gold price. With Greenspan now turning 75 and wishing to retire, the pieces may fall into place before year's end. When it does, the gold price will either shoot up and stop at a point where the interests of debtors and creditors are in balance, or it may shoot up much higher, as it did when the deflations of 1982 and 1985 ended. Long-term interest rates are as high as they are, even in this deflation, because they have experienced this phenomenon before.

Misetich

Got gold?

Golden Bear

(07/22/2002; 19:15:40 MDT - Msg ID: 81135)

Excellent Daily wrapup by Puplava

http://www.financialsense.com/Market/wrapup.htm"...The point to realize here is that while the Fed, Wall Street and Washington are urging the consumer to keep on spending and borrowing, another bubble in the housing market and in consumer loans has yet to begin to deflate. When that does, the bursting of the consumer credit bubble will be added to the bursting of the corporate and stock market bubbles to push us over to a deflationary depression in the general economy and in the financial markets. We will have deflation in all things associated with credit and paper and will have inflation in hard assets or things. Even on a day like today, when stock prices headed lower, the CRB Index of 17 commodities rose. That has been the story all year -- the fall of paper and the rise of "things."..."

Black Blade

(07/22/2002; 19:30:28 MDT - Msg ID: 81136)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Danger in Derivatives

Snippit:

The media attention has been on the companies that have defaulted on their loans or have filed for bankruptcy protection. To a lesser extent, the attention has been on the banks. A credit bubble has two sides to the equation: the borrower (Enron, Global Crossing, Kmart WorldCom) and the lender (J.P. Morgan Chase, Citigroup, Bank America). Banks have not only been the lender and underwriters on much of this debt, they have also been the writer of derivatives that go hand-in-hand with the expansion of credit. In fact, bank derivative growth has been growing at double-digit rates over the last decade. During the first quarter of this year the notional value of derivatives in bank portfolios increased by $946 billion. Interest rate contracts increased by $972 billion to $39.3 trillion. So in addition to the debt debacle, you also have the danger of another derivative debacle such as we had with LTCM back in 1998. Many of the top banks such as J.P. Morgan Chase, Citigroup, and Bank America are also the nation's largest writers of derivatives. These three banks have derivative portfolios totaling close to $40 trillion in notional value or roughly 87 percent of the derivative portfolio of the nation's top 354 banks. This is a high concentration in just a few players in what is a very risky business. On top of making bad loans, the banks also have exposure as the largest underwriters in the derivative business. J.P. Morgan Chase is leveraged over 700-1 when you look at the bank's exposure to derivatives. The net equity of JPM has to back those derivatives. If you look at J.P. Morgan Chase's derivative book, the bank looks and acts more like a hedge fund then it does a pillar of stability of the financial establishment. The credit problems are only one side of the problem. No one knows what the bank's derivative risks are other than that they have $23.4 trillion in derivatives against equity of around $40 billion.

Black Blade: Puplava also has a good read on debt - worth reading. The markets looks like they could continue to tumble toward the August 14th deadline. With triple digit losses as daily fare, we could see a lot of "entertainment" for a while yet. Meanwhile we are just another scandal from another wave of selling as nervous investors bail out of the markets. Mutual fund redemptions continue at a furious pace. Physical gold sales have been increasing though curiously the price has pulled back slightly. According to Asia traders every time the funds sell to take profits, some one is ready and willing to scoop up the gold as soon as it is available. It appears that there is another "stealth" transfer of wealth underway.

Operative

(07/22/2002; 19:31:12 MDT - Msg ID: 81137)

After Hours Trading

Monday : ABX traded approx 8.5 million shares between 09:30 and 16:00 hours. From 16:01 to 17:22 ABX after hours ticked off another 40,000,000 Plus shares traded at a price of $16.09 each. Anyone have a clue to what this means. Also, NEM traded approx 5 million shares during the normal business hours, and and additional 11,000,000 plus after hours. ??? Someone(s) is piling into gold big time after hours and in a stealth mode. Interesting ??

USAGOLD

(07/22/2002; 19:37:05 MDT - Msg ID: 81138)

Various. . .

Sector . . .I guess we are going to disagree on this one. It's the "vice-versa" that I have trouble with. If the price of bunnies and the price of eggs are inversely correlated, it doesn't necessarily mean that simply keeping the price of "bunnies" artificially down causes "eggs" to go up -- even if both can be placed in the same Easter basket (or on the same chart). I appreciate the quality of posting that you do here and by and large I agree with your approach -- particularly the correlations you've advanced between option volumes and the price of gold. In fact, I told Bill Murphy one time that the best proof I had ever seen on gold price manipulation was the Bolser work. He said, "Funny you should say that since Bolser is the only witness Reg Howe intends to call." Keep up the good work, Sector. I appreciate your presence here, even if I don't agree on the Summers / Gibson Paradox analysis. No matter how you bend or reshape it, I don't think you can get it to fit. It is not the smoking gun. Consider: What if the gold conspiracy were nothing more than certain traders passing around the same software program? A modern dilemma that I believe with which the courts will be faced to deal in future years. Which leads me to . . . ..

The Hoople/Carl H . . . Hoople statement: "Cargill and ADM are merely variations of JPM and Goldman." Absolutely. And the origins are not with some conspiracy but at the university level where the studies leading to these "trading" programs are engineered. Just as Cambridge, the London School of Economics, Harvard and Yale took academic "Keynsianism" to the next level as "political", then market, "Keynsianism", so the concept of using derivatives to control commodity values found birth with leftist professors and their research assistants at our top universities -- and believe I could care less if the pulled out their wallets and produced Republican National Committee cards. What they left in the bag was the understanding that markets tend to correct abberations no matter how high a degree held by those who act against it. Nature. . and markets. . .abhor a vacuum. That's what the world is finding out now as its "investor class" watch Wall Street plummet and life savings head toward the sewer. In the end, the Greeks again show us the way. Hubris -- human arrogance -- authors the Fall. . . . . . . . . . .

Aragorn III . . .Thanks for the kudos. Your perception is correct. I view the world as a businessman, not an academic -- and the distinction forces a bit of cynicism that I'm not always proud of. But, you are correct. My golf game has suffered the result of this baby bull, though on Easter Sunday I did accomplish my first "ace" in 40 years of slogging the links. ("Flog" is what my wife correctly calls it), and yes, all were present for The Event. Thank you for your presence here and your echoes of the Another / FOA years -- two people I dearly miss. By the way, I agree with you on Societe General. They will bring the French peoples' love of gold to the NM Rothschild table -- but this is all simply another building block in the new role of gold. We should not forget that it was the Rothschild people who started this whole "self-regulation" of the gold game, and this invitation to the French amounts to good politics and a "signal" -- for gold and the euro. I look forward to the Trichet regime. . .I hope it produces the changes we both anticipate.

Black Blade

(07/22/2002; 19:46:43 MDT - Msg ID: 81139)

The Real Price of the Slide

http://www.msnbc.com/news/783516.asp?cp1=1

The market has dropped by a dizzying $7.7 trillion since its peak. Will falling stocks cause a �double dip� recession�or will the rising economy help salvage our investments?

Snippit:

July 29 issue � With stocks falling and scandals rising, the death of the "new economy" has given us an unintended history lesson in both the glories and the delusions of American capitalism. The Wild Ride of the past decade recalls similar periods in the 19th century, when entrepreneurs, investors and speculators were first captivated by the vast promises of new lands, canals and railroads and then mauled by excessive investments, broken promises and financial panics. Viewed with hindsight, the "new economy" bears an eerie resemblance to these earlier episodes, exhibiting a rawness of ambition, optimism, overconfidence and greed unlike anything since World War II.

Black Blade: The collapse of the economy now is no different than the economic collapses of the past. Another constant in this cycle is the denial by the market makers on Wall Street who never seem to learn. Those who forget the past are doomed to repeat it � George Santayana. We appear to be headed to another Great Depression.

Black Blade

(07/22/2002; 20:06:00 MDT - Msg ID: 81140)

U.S. Stock Investors, Strategists Say Prices May Tumble Again

Cavan Man

(07/22/2002; 20:16:16 MDT - Msg ID: 81141)

sector.......any idea why this guy is so commited?

Tuesday, July 23, 2002 11:13 a.m. JST

Koizumi Stresses Commitment To Ending 100% Deposit Coverage Next April

TOKYO (Nikkei)--Prime Minister Junichiro Koizumi on Monday underscored his commitment to eliminating full government protection for all bank deposits as scheduled next April, despite mounting calls for a delay from within his own Liberal Democratic Party and smaller financial institutions.

Black Blade

(07/22/2002; 20:16:52 MDT - Msg ID: 81142)

THE RAPE OF POLAROID

http://www.nypost.com/business/52971.htm
Snippit:

July 22, 2002 -- GET ready for yet another 10-digit accounting scandal from the world of big business: The astonishing disappearance - behind the drawn curtains of a federal bankruptcy court in Delaware - of more than $1 billion of corporate assets from the books of Polaroid Corp., and the reappearance of most of it, free of charge, in the pockets of a Wall Street buyout fund. For what awaits them, check out the plight of bankrupted Polaroid Corp.'s shareholders, who are about to be shorn of $1.1 billion in balance sheet assets and $175 million of shareholder equity. Some of the biggest names in high finance are involved in this stunt, from the fancy-pants law firm of Skadden, Arps, Slate, Meagher & Flom to the infamous Arthur Andersen crowd. There are lawyers from Davis Polk & Wardwell in the game, along with attorneys from Aiken Gump, as well as advisers from Zolfo Cooper, Houlihan Lokey and Dresdner Kleinwort Wasserstein.

The assets? In reality, the assets hadn't disappeared at all. They'd simply been valued at zero for the purposes of the bankruptcy proceedings, even though the company had valued them at more than $1 billion in a public financial filing only eight weeks before going bankrupt.

Black Blade: It looks like the maggots are coming out to feed on another rotting carcass of corporate America while the shareholders and retirees are left staring on with broken hopes and dreams. I suspect that some enterprising lawyers along with already shafted shareholders and others will file a series of lawsuits over this one. Perhaps this will develop into a "Scandal Of The Day".

Black Blade

(07/22/2002; 20:27:36 MDT - Msg ID: 81143)

Consumer default fears rekindled

http://www.nationalpost.com/financialpost/story.html?id={C948320B-79FB-4B5D-B757-257B971947A5}Loan loss provision hikes stoke worries

Snippit:

The bad news is household debt has never been higher. The good news is the ability to pay it down has rarely, if ever, been better. Fears of massive consumer defaults after years of a gluttonous spending spree were rekindled last week when two major U.S. credit card issuers ran into trouble after it was revealed they were more exposed to defaults than previously thought. "During the wild party of economic growth and the stock market, excesses on the credit side came to the fore and as the bubble unwinds, we'll see who's standing naked on the shore," said David Rosenberg, chief economist for Merrill Lynch Canada. Added Michael Manfred, chief capital market strategist at Canaccord Capital, "The delinquency rates are rising with the negative job growth. It's just catching up with the [credit card companies] and there's more to come."

In the United States, credit card delinquency rates in the first quarter of the year were about 30% above last year's levels, or 3.88%, according to the American Bankers Association. Charge-offs, the amount of bad card debt that banks write-off, were up 22% in the first quarter, year-over-year. The increased delinquency comes amid higher than-ever-debt levels. The average credit card debt in the United States has reached US$8,367, triple 1990 levels, according to cardweb.com, an Internet-based industry tracker.

Black Blade: Just another "credit bubble" that is just starting to pop. As always, get out of debt, stash enough cash for several months expenses, get Gold and Silver portfolio insurance, start a storage program of nonperishable food and basic necessities. We do live in "Interesting Times"

Mr Gresham

(07/22/2002; 20:38:42 MDT - Msg ID: 81144)

Lambs

First, the shearing of the lambs.

Then, the slaughter of the lambs.

Finally, the silence of the lambs.

It was all so predictable. You just had to "think like a criminal" to see the complete picture. Not like an investor, an American, a parent, a fiduciary advisor, or a generally good human being.

It's good to be in the company of those who can keep all of these identities and viewpoints somewhat straight, as we all head "over the falls" together...

canamami

(07/22/2002; 20:52:28 MDT - Msg ID: 81145)

I would not want to be known as a "rigged market profiteer"

...in the land of the Second Amendment.

Many are suffering due to the antics of the relative few. Suffering people sometimes do crazy deeds.

Cavan Man

(07/22/2002; 20:56:14 MDT - Msg ID: 81146)

An overlooked point about US equities.....

Mr. Roach has said the market is grossly oversold and perhaps he is right though, I believe the market always trades both higher and lower at each end of the cycle than one could reasonably imagine.

Once the elevator arrives at the basement floor, HOW LONG will it take for equity indices to register capital appreciation? Dividends could become all the rage. Imagine that!

Cavan Man

(07/22/2002; 20:58:25 MDT - Msg ID: 81147)

Hi canamami

Was that a left handed compliment..eh? BTW, my kids are still talking about the holiday we had in N.S. last summer. I miss the Digby scallops and the PEI oysters and muscles. Salutations....CM

mikal

(07/22/2002; 21:04:08 MDT - Msg ID: 81148)

@BlackBlade, All

A minute ago the INO chart had the US $ Index at 105.51. Now look at it. 104.75! Still it's higher than at the start of overseas trading, thanks to Japan MOF- Ministry of Finnese.

mikal

(07/22/2002; 21:06:31 MDT - Msg ID: 81149)

Back up to 105.48

Is this possible or a glitch?

canamami

(07/22/2002; 21:09:31 MDT - Msg ID: 81150)

Reply to Cavan Man

I'm glad you enjoyed your holiday. I'm glad to be living here again, after having been away for a number of years. I hope I don't have to leave again.

I never realized my comment could be directed at goldbugs, but I guess it could. I was thinking of those who are were and are culpable for the rigged market(s), not the suffering goldbugs who saw what was going on and successfully kept positions. Many of us (myself included) folded to a great extent, out of hopelessness. I still have some modest gold positions from before (the only thing saving me right now). To be honest, I still have fear WRT to CB reserves. It's such a murky world world with the official sector, I doubt anyone really knows what "firepower" the manipulators have. However, I doubt the Bush administration will be into the Clinton clique's antics, and the ECB and the national Euro banks are unlikely to give up gold now, IMHO, so we could be seeing massive fireworks soon.

Black Blade

(07/22/2002; 21:13:37 MDT - Msg ID: 81151)

USD Rocketing Higher

http://www.mrci.com/qpnight.asp
The US dollar is climbing sharply against the other major world currencies and gold is falling off. Oil prices are also crashing on lack of world demand. The US market index futures are moving higher on a lack of bad news in after hours. Looks like another build up to some "entertainment" in the markets overnight.

- Black Blade

mikal

(07/22/2002; 21:14:17 MDT - Msg ID: 81152)

I DO love this little chart, but...

For what its worth, Nasdaq close is not 1319.15 as you see above, but 1282.65. Thanks!

Gandalf the White

(07/22/2002; 21:47:15 MDT - Msg ID: 81153)

Things are "STRANGER" tonight !

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=iYES Indeed, Black Blade, SOMEONE is buying US$ !!!
Let's see, whom could that be: Canada ? NAW ---
Japan ? WHY ? --- Some South American country ?
<;-(

Chris Powell

(07/22/2002; 21:48:01 MDT - Msg ID: 81154)

C-SPAN interviews GATA Chairman Murphy

http://groups.yahoo.com/group/gata/message/1186GATA Chairman Bill Murphy will be interviewed on
the C-SPAN cable television network program
"Washington Journal" in a live broadcast at 9 a.m.
Wednesday, July 24.

http://groups.yahoo.com/group/gata/message/1186

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

Blackjack

(07/22/2002; 22:08:15 MDT - Msg ID: 81155)

Japan selling Yen and buying Nikkie, does not compute

When the Japanese sell Yen to keep the US Dollar from crossing
115 Y (because exports will loose profit, back to recession) they are weakening the Nikkie. When they buy the Nikkie to keep it
over 9,500 (because then the banks crash under bad debt, hmmm
wonder why they don't want to insure depositors LOL) So when will
this no longer work? Japan cannot support the Nikkie over 9,500
without letting the US Dollar go down (back to recession) and
support the banks with a stronger Yen. BUT if they go back into recession the Nikkie will fall and the banks will collapse anyway.
No wonder they want to insure the accounts in the banks
at a lower amount. In any case, the market is not a free market
with Japan and maybe others manipulating huge amounts of fiat.

sector

(07/22/2002; 22:10:42 MDT - Msg ID: 81156)

@CavenMan About Koziumi's Firm Stance on Ending Japanese Deposit Insurance

It's MY PLAN and I'm Sticking to ItWhere else can Japan get the 1.2 Trillion need to bail out their ailing banks?

The PLAN is to fail the whole banking industry at once in a devaluation similar to the good President F. Roosevelt.

all the now private banks will be ONE big bank with commingled assets. Anyone with more than a few hundred dollars will lose that money just as surely as the Argentineans lost their deposits by a directive.

Under cover of a war it may seem a little less onerous.

They may not have time to move to gold...at least not ALL of the Japanese. Enough will see the light to effect a strong demand.
++++++++++++++++++++++++++++++++++

BTW the rising dollar is a pretty good sign that the big boys are scared to death about the markets. What they want is a "Dip" then a "Rally" into the elections.

When you want to make God laugh...tell him your plans.

Siochaina

(07/22/2002; 22:29:40 MDT - Msg ID: 81157)

Sad Day

Today, I finally and fully accepted what I "knew" ...what I feared...what I felt both in my heart and "gut"...and saw in my mind ....what had been a whisper which has grown louder in my internal whirl of chatter.

Today, I accept that we ARE in an unwinding depression ...a destruction not only of our financial world ...but of the very fabric of our society ...our freedom....our values.

In the days and months ahead, I shall seek to learn more how to deal with this Storm of storms...prepare more fully....and look to work in whatever constructive ways possible to also prepare for not only getting thru but also the rebuilding.

The world will be different ,,,,many will lose much...but I will believe we can get thru this....some day... though the hardships along the way will call for strength and courage and lots of sweat.

Perhaps the above seems melodramatic but better to be ready than to flounder and flay in the winds and waves bearing down on us.

Hold tight to your gold....it will be needed!

Yellow Metal

(07/22/2002; 22:36:57 MDT - Msg ID: 81158)

Why did I write this in my daytimer ?

" Watch for revised US GDP data "Some time ago there was discussion of July 31st as being significant re GDP.That date is almost here.
I don't remember the details but as I haven't noticed any discussion on this subject since then, I thought I'd bring it up.
Whose doing the revising ?
How significant might it be ?
There seem to be many revisions mentioned in "The Press" on a fairly regular basis but for some reason the 31st was considered more important here.

Also very interesting link from misetich (7/22/02; 18:55:33MT - usagold.com msg#: 81134)
The Deflation Monster . . .

I read it and had trouble with the concepts but thanks for a pointer to a very educational read.

Black Blade

(07/22/2002; 23:23:53 MDT - Msg ID: 81159)

Re: Yellow Metal - GDP Revision

On July 31st we will have the GDP data revison for the last year. Stephen Roach of Morgan Stanley believes that we could possibly see some downward revision. If true, then the markets could react negatively to the news. Another dat to keep in mind is August 14th. This is the date that CEOs must affirm their companies financial data to the SEC under penalty of law. If the data is incorrect then the CEO could face prison time. We should see a lot of revised financial data leading up to this date. The real question is how do they account for the phoney accounting as per "pro forma" and "operating earnings", among several other bogus ledger entries. Looks like a lot of "entertainment" is coming our way.

- Black Blade

Black Blade

(07/22/2002; 23:33:31 MDT - Msg ID: 81160)

Asian Markets Are Happy

http://quote.yahoo.com/m2?u
The Asian markets are mostly positive on the back of a stronger US dollar. Japan hopes to ride on the back of a stronger dollar and a weak yen. Japan is essentially a factory on a couple of islands that imports raw materials, assembles trinkets, and exports them abroad. They have virtually no other way to survive, and therefore they must have the weaker currency to gain a competitive edge. However, the US must have a weaker currency to compete in thesed shrinking international markets. The Europeans are in the same predicament as the US. The currency wars will continue.

- Black Blade

Buena Fe

(07/22/2002; 23:53:13 MDT - Msg ID: 81161)

Gandalf the White - my speculation

euro cut a deal (a little slack in the noose) to the US for an unknown(to me) favor.

A Canadian

(07/23/2002; 00:31:34 MDT - Msg ID: 81162)

U.S DOLLAR RALLY

...Will ultimately fail as all others since recent peak @ +120.. noting goes straight down...even a headless chicken keeps twitching!

Black Blade

(07/23/2002; 01:11:58 MDT - Msg ID: 81163)

'Paper' losses, real-world impact

http://www.csmonitor.com/2002/0722/p01s01-usec.html

As stocks losses mount � now $8 trillion since peak � tough choices face retirees, colleges, and nonprofits.

Snippit:

NEW YORK � Plunging stock prices, having already devastated the "paper" value of investor portfolios, are increasingly having tangible impact on Americans' lives � whether they own stocks or not. These are just a few ways that one of the worst bear markets in the nation's history is now starting to affect the fabric of American lives. Since their peak in March 2000, stocks have lost about $8 trillion in value, an amount equal to the annual economic output of Japan, Germany, and Canada combined.

One of the market's harshest cuts has been on older Americans and those approaching retirement. Economic statistics show that even in a so-called "jobless recovery," the number of older Americans joining the workforce is on the rise. Much of this is related to falling portfolios. Joseph Barker, a retired Miami Beach postal worker is on a prescribed medical regimen that involves being near an oxygen tank. "This is not the way retirement is supposed to be," says Mr. Barker, who has watched his investments lose most of their value over the past year. "I made arrangements to be comfortable in my golden years and markets have betrayed me."

Black Blade: Get prepared, get defensive. We may have a couple of "Dead Cat Bounces", however, the whole purpose of being diversified is so that you don't end up like those who were planning retirement and are now asking drive thru customers if they want fries with their order. Get Gold and Silver portfolio insurance as a back up for when the markets plunge and for the periodic economic depressions. Most of these people who are whining now only have themselves to blame.

Black Blade

(07/23/2002; 01:37:40 MDT - Msg ID: 81164)

Dollar Rallies, Euro Below Parity

http://biz.yahoo.com/rb/020723/markets_forex_2.html

Snippit:

TOKYO (Reuters) - The dollar staged a broad-based rally in Tokyo on Tuesday, pushing the euro below parity for the first time in a week amid heavy repatriation of funds by U.S. banks detected after plunges in U.S. share prices, dealers said. But with sentiment hurt by the continued weakness in U.S. share prices, some dealers expect the dollar to test its downside again once the slew of repatriation is completed. The greenback rose to a 1-week high of 117.35 yen while it strengthened to as high as $0.9956 against the euro despite U.S. stocks plunging to levels not seen since October 1998, they said.

While many traders saw the dollar's rebound as a natural correction after its recent drop, some said slides in global share prices may have forced U.S. investors to take profits in the euro and other currencies to make up for losses in equities. "There seems to be repatriation of funds to the United States," said Seiya Nakajima, chief economist at Japanese trading house Itochu Corp. U.S. investment banks were also rumored to be squaring off positions against the Australian and Canadian dollars and other currencies to secure cash to make up losses from WorldCom Inc., which filed for bankruptcy protection on Sunday. "I think the recent recovery of the dollar is a bit unnatural with stock prices plunging so much. Without U.S. operators repatriating, the dollar wouldn't have come up this high across the board," said a spot dealer at a European bank in Tokyo. "I don't know how long the present buying by U.S. banks will continue, but with present market sentiment, the dollar should test its downside again once the slew of repatriation is finished," he said.

Black Blade: I suspect that may be the reason behind the US dollar rise and the sell off in Gold. Apparently the troubles in the banking sector requires an infusion of ready cash and the sales in foreign currencies was necessary as bank shares plummet amid accusations of liquidity problems. The huge potential of a $40 trillion derivatives blowup probably has the banking sector on edge as well.

Black Blade

(07/23/2002; 01:49:03 MDT - Msg ID: 81165)

Uruguay economic crisis widens as minister quits

http://biz.yahoo.com/rf/020723/economy_uruguay_minister_1.html

Snippit:

MONTEVIDEO, Uruguay, July 23 (Reuters) -- Uruguayan Economy Minister Alberto Bension resigned after losing the support of part of the ruling coalition, in the latest sign of growing troubles in the small, recession-hit South American nation. "Economy Minister Alberto Bension has told me officially that tomorrow morning he will formally resign his position," Uruguayan President Jorge Batlle told reporters late on Monday, adding that Bension's replacement would be announced Tuesday. Uruguay floated its currency late last month amid a run on banks, a drop in consumer spending and the ripple effects of financial market woes in Argentina and Brazil. Brazil's markets and currency have been hit hard by investor concerns that political turbulence ahead of October's presidential elections will make it difficult to manage the country's massive $250 billion debt load. Uruguay never fully recovered from Brazil's 1999 devaluation and received another blow to competitiveness when Argentina devalued in January. The Uruguayan peso (RPNJ) has fallen more than 30 percent since being devalued. It closed at 25.0 to the dollar Monday.

Black Blade: Of course, these idiots want to deal with the devil (IMF). The spillover from Argentina threatens Uruguay, Paraguay, and Brazil. Colombia and Venezuela already are in deep financial distress. I have some Gold Uruguay pesos that were offered from the Castle treasury some time ago. I bet there are a lot of Uruguayans who wish that they had those Gold pesos instead of that toilet tissue (paper pesos). It is going to get much worse in South America as these problems spread like a plague throughout the continent.

Black Blade

(07/23/2002; 02:21:01 MDT - Msg ID: 81166)

New Member in London Gold Fix

http://www.neftegaz.ru/english/lenta/show.php?id=25777

SG, the corporate and investment banking arm of Societe Generale Group will take up a seat on the London gold fix from August. SG takes up the seat made available by the withdrawal of Credit Suisse First Boston International. The five Gold Fixing Members meet twice a day in London at the offices of the Fixing Chairman, NM Rothschild and Sons Ltd, to determine and publish a single fixing price for gold in line with the 24-hours a day spot market. The addition of such a strong committed house as SG will serve to underline the continued importance of the London Gold Fixing in providing the twice daily benchmark for the world's gold price. From August the five fixing members will be Deutsche Bank, HSBC Bank USA, N.M. Rothschild and Sons, Scotia Mocatta and SG.

Black Blade: Credit Suisse First Boston International is booted out eh? Hmmm�

Black Blade

(07/23/2002; 02:37:55 MDT - Msg ID: 81167)

US Dollar Is Rockin' Tonight

http://quotes.ino.com/chart/?s=NYBOT_DXY0
What a chart! The dollar is pummeling the world currencies tonight. Looks like US exporters better close up shop and find other businesses. It appears that the Euro and Yen win this round of the "Currency War". Maybe Gold will hold above $320 an ounce.

- Black Blade

Black Blade

(07/23/2002; 02:54:24 MDT - Msg ID: 81168)

World Markets Rockin' and Rollin' On US Dollar Strength

http://quote.yahoo.com/m2?u
The world markets are flying high as the US dollar has strengthened overnight. It appears that the marching orders have been given and all the stops are pulled out in order to secure a stock market rally - even though there is little hope of economic recovery and no positive trading news. "Interesting Times"

- Black Blade

Black Blade

(07/23/2002; 03:15:59 MDT - Msg ID: 81169)

Market Set To Rally Hard

http://www.mrci.com/qpnight.asp
The US market index futures are very strong indicating a sharp ly higher rally at the open on Wall Street. Gold prices are falling off sharply and Oil prices are collapsing hard while the US Dollar is leaving world currencies choking on the dust. The excuse is that WorldCon has another $2 billion to squander. Looks like this morning could get rather "interesting".

- Black Blade

Bullway

(07/23/2002; 05:24:04 MDT - Msg ID: 81170)

Interesting Theory on Economics

If you had bought $1000.00 worth of Nortel stock one year ago, it would be worth $49.00.

With Enron, you would have $16.50 of the original $1,000.00.

With Worldcom, you would have less than $5.00 left.

If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year year ago, drank all the beer, thenturned in the cans for the 10 cent depoist, you would have $214.00.

Based on the above, my current investment advice is to drink heavily and recycle.

Bullway: Got the above from a brocker friend, wonders why it's been years since I took him seriously.

TownCrier

(07/23/2002; 05:25:30 MDT - Msg ID: 81171)

Excerpts of WGC weekly gold market report

http://www.usagold.com/wgc.htmlSome of these comments may be helpful in understanding the price action of the past day in conjunction with market losses.

Excerpt:

...given the sustained weakness in the equity markets, it did look also as if some of the [gold] selling, as well as the stale bull liquidation, was done in an effort to raise funds to offset equity losses -- and possibly to meet margin calls,. It is common practice, and indeed we have commented on it before.

It is perhaps worth iterating that gold's settlement period is two trading days, whereas the vast majority of equity markets are longer; NYSE, for example, being three. A gold sale will therefore settle before an equity trade executed on the same day and the funds are therefore available more quickly.

misetich

(07/23/2002; 05:31:02 MDT - Msg ID: 81172)

Citigroup, J.P. Morgan Marketed Enron-Type Deals to Other Firms

http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=8&u=/dowjones/20020723/bs_dowjones/citigroup__j_p__morgan_marketed_enron_type_deals_to_other_firmsSnip:

Citigroup Inc. (NYSE: C - News) and J.P. Morgan (NYSE: JPM - News) Chase & Co . , already facing scrutiny for devising allegedly deceptive transactions for Enron Corp., marketed similarly structured deals to a slew of other companies, Tuesday's Wall Street Journal reported, citing testimony that a senior congressional investigator will give at hearings that start today.

The names of the other companies weren't disclosed
......................
Now, a person familiar with the matter says, the Justice Department ( news - web sites)'s Enron Task Force also is looking into the roles that financial institutions, including Citigroup, J.P. Morgan , Merrill Lynch & Co . and National Westminster Bank, now a unit of Royal Bank of Scotland PLC, may have played in Enron's demise.

...............
Banks such as J.P. Morgan and Citigroup were "willing to go along with and even expand upon Enron's activities."

J.P. Morgan , in fact, had a "pitch book" to sell other companies on similar financing vehicles, according to a copy of the testimony. J.P. Morgan entered into similar transactions with seven other companies, while Citigroup shopped such deals around to as many as 14, with at least three entering into such relationships, the testimony says.

Wall Street Journal Staff Reporters Jathon Sapsford and Paul Beckett contributed to this report.

Misetich

A forensic audit of JP Morgan and Citigroup would be interesting - but it'll never happen

Nevertheless JP Morgan credit risks are mounting - as previously unknown deals are exposed - and this is one TRAIL to follow

Got gold?

TownCrier

(07/23/2002; 05:35:09 MDT - Msg ID: 81173)

Cheap suds

Does anyone besides me reckon that works out to $8.81 per case of product?

misetich

(07/23/2002; 05:48:39 MDT - Msg ID: 81174)

Complex El Paso Partnerships Puzzle Analysts

http://www.nytimes.com/2002/07/23/business/23PASO.htmlSnip:

HOUSTON, July 22 � While other energy companies rush to simplify their businesses and balance sheets in hopes of escaping Enron's taint, one industry giant, the El Paso Corporation, is growing ever more reliant on deals so complex that securities experts call them incomprehensible.

The deals come courtesy of Wall Street bankers, who helped El Paso forge a new identity starting in 1999 with something called Project Electron. The venture is at the center of a series of off-balance-sheet partnerships that have helped El Paso book hundreds of millions in profits years before they will be realized while keeping billions of dollars in debt off its books.
.............
were not clearly disclosed to investors by either El Paso or the banks. Like Enron's off-balance-sheet partnerships, experts said, the El Paso deals pose a variety of conflicts of interest.
.............
Oscar S. Wyatt Jr., the colorful Texas oil executive who sold the Coastal Corporation to El Paso last year for $10 billion, dismisses Project Electron as "accounting nonsense" and an effort to "inflate short-term earnings."

"I am 180 percent diametrically opposed to these things," Mr. Wyatt said. "They don't need to Enron-up their earnings."

.............
The logic was compelling. Energy companies like Enron were already "monetizing" long-term deals the way auto and mortgage companies had been doing for decades with consumer loans. If El Paso had a 10-year contract worth $100 million in profit, why not sell the stream of uncollected income to investors for cash upfront?

The intricate web of partnerships had an added bonus. El Paso was able to book "management fees" it collected from the off-balance-sheet vehicles as cash flow from operations; without the partnerships, the financing would have to be accounted for as cash flow from financing activities. Investors and credit rating agencies have a much higher regard for operating cash flow as a measure of a company's ongoing business.

...........
Frank Partnoy, a professor of law at the University of San Diego and a former Wall Street banker, said the El Paso deals reflected Wall Street's skill at creating "shell games."

Misetich

No wonder there is a "jobless recovery" - don't government numbers, productivity etc reflect these reported earnings and revenues such as ElPaso, Enron?

Undisclosed Off-balance sheet transactions and derivatives, stock options, underfunded pensions - will keep the scandals going for a long time to come

Got gold?

misetich

(07/23/2002; 06:20:49 MDT - Msg ID: 81175)

U.S. Regulators Tighten Policy on Problem Loans

http://www.washingtonpost.com/wp-dyn/articles/A47263-2002Jul22.htmlSnip:

Federal regulators will force credit card lenders to be much more conservative in how they account for problem loans, a change industry sources say will cost some of the nation's biggest banks hundreds of millions of dollars in the next few months.

Citigroup Inc., J.P. Morgan Chase & Co. and MBNA Inc. are among the financial institutions that will have to take a one-time charge against earnings to comply with the new policy, bank industry sources say. Federal banking regulators plan to have in place by Aug. 16.

...................
He added: "These will be noticeable dollar amounts. This is sensible to make it apparent what's going on."
............
A spokesman for J.P. Morgan Chase declined to comment.

Misetich

There goes that JP Morgan again! This TRAIL is getting hotter by the minute-

Got gold?

Black Blade

(07/23/2002; 06:37:49 MDT - Msg ID: 81176)

Dead Cat Bounce

http://quote.yahoo.com/m2?u
The Euro markets are going negative and the US market index futures are flirting with going negative as well. However, gold is off over $3.00 so far. The US dollar is on a tear. Should be "entertaining" today.

- Black Blade

Black Blade

(07/23/2002; 06:44:11 MDT - Msg ID: 81177)

"Scandal Of The Day" - Citigroup Said to Mold Deal to Help Enron Skirt Rules

http://www.nytimes.com/2002/07/23/business/23CITI.html?ex=1028088000&en=521970df2888ac6e&ei=5006∂ner=ALTAVISTA1
Snippit:

enior credit officers of Citigroup misrepresented the full nature of a 1999 transaction with Enron in the records of the deal so that the energy company could ignore accounting requirements and hide its true financial condition, according to internal bank documents and government investigators. The records and interviews with investigators demonstrate for the first time that bankers intentionally manipulated the written record of their dealings with Enron to allow the company to improperly avoid the requirements of accounting rules and the law, thus keeping $125 million in debt off its books.

Black Blade: It figures. JP Morgan Chase must be in there somewhere too.

Siochaina

(07/23/2002; 06:52:55 MDT - Msg ID: 81178)

Market Drop

BB ...something has happened ..I don't know what yet but market is spooked...too sudden a change

The German DAX went from up 121 to down 10. The FTSE, the CAC, you name it, they are red. Our NASDAQ futures were up 9, they are now red by 1. The S&P was up 11 they are up 1.

This is panic reaction on a planned "recovery" day ...rest assured something is out there.

Siochaina

(07/23/2002; 07:03:42 MDT - Msg ID: 81179)

Market Drop

Whatever spooked the market (and we may never know for sure) seems to have abated as the futures are ticking a bit higher again. they are still far and away from their highs, but well off their lows too. ....Curious to say the least ...they are edgy

Mr Gresham

(07/23/2002; 08:27:31 MDT - Msg ID: 81180)

Siochaina (07/22/02; 22:29:40MT - usagold.com msg#: 81157)

Excerpt of your:
"Sad Day"

"Today, I finally and fully accepted what I "knew" ...what I feared...what I felt both in my heart and "gut"...and saw in my mind ....what had been a whisper which has grown louder in my internal whirl of chatter.

"Today, I accept that we ARE in an unwinding depression ...a destruction not only of our financial world ...but of the very fabric of our society ...our freedom....our values."

G: A glimmer of that hit me yesterday, too, as I try to peer ahead around the corner of time. It had all been much more abstract to me -- how to play this, when to do that, "I'm going to really buckle down and get this item in place" etc etc -- but recent contact with family and seeing their vulnerabilities is staying with me these days.

Gold is the backstop, to which many facets of the economic crisis seem to direct us, something that seems likely to be waiting to assist us at several difficult arrival points ahead -- but not a perfect remedy for everything, not by a long shot.

It's just so easy to focus in one one thing all the time. But you know how it goes: "...forest....trees."

For most of us "Little Giants", seeing what we see of "the Big Picture" is actually only staying one step ahead of the crowd, and they're not really that far behind us now, are they?

sector

(07/23/2002; 08:29:30 MDT - Msg ID: 81181)

HUI and XAU Down Second Day

It's the Margin Calls Stupid...AND the phenomonon has historical prescedent from 1929 when most gold stocks fell along with other equities then rose later.

I see the WGC recommenting about this development too. The thing about margin call sales...they are the forced sales of investments that are ahead...the early extraction of profit. As such the holders have not given up on the investment they simply were forced to sell. When they rearrange their portfolios and obtain additional cash they will be right back to ride the HUI and XAU back up.

Of course if one simply owned the real thing, one could pop over to the beach while everyone else fretted.

Let's hope some of us haven't been "Too clever by half" holding gold equities.

Mr Gresham

(07/23/2002; 08:36:17 MDT - Msg ID: 81182)

Pizz: You should like this one!

http://www.bearforum.com/cgi-bin/bbs.pl?read=246419"The Rape of Polaroid" by Christopher Byron (NYPost)

Some interesting detail on how bk assets are "disappeared" from the still-cooling corpse into new hands. We'll be seeing more of that...

sector

(07/23/2002; 08:52:30 MDT - Msg ID: 81183)

Gold Mentioned in CITI, JPM's Enron Transgressions

Ever so close to GoldGateBusiness - Dow Jones Business News
Citigroup, J.P. Morgan Marketed Enron-Type Deals to Other Firms
Tue Jul 23, 1:07 AM ET

Citigroup Inc. (NYSE: C - News) and J.P. Morgan (NYSE: JPM - News) Chase & Co . , already facing scrutiny for devising allegedly deceptive transactions for Enron Corp., marketed similarly structured deals to a slew of other companies, Tuesday's Wall Street Journal reported, citing testimony that a senior congressional investigator will give at hearings that start today.

The names of the other companies weren't disclosed.

The hearings, part of a Senate investigation into the role banks played in Enron's troubled finances, are the latest in a series of investigations into the two banks regarding their ties to Enron, which filed for bankruptcy-court protection late last year. The investigations include separate probes conducted by the Securities and Exchange Commission ( news - web sites) and the office of Manhattan District Attorney Robert Morgenthau.

Now, a person familiar with the matter says, the Justice Department ( news - web sites)'s Enron Task Force also is looking into the roles that financial institutions, including Citigroup, J.P. Morgan , Merrill Lynch & Co . and National Westminster Bank, now a unit of Royal Bank of Scotland PLC, may have played in Enron's demise.

Citigroup and J.P. Morgan declined to comment on the hearings or the investigations. Merrill and Royal Bank of Scotland couldn't be reached for a comment.

The deals under congressional scrutiny include arrangements known as Yosemite, devised by Citigroup, and Mahonia, devised by J.P. Morgan , both of which were designed to make Enron's public disclosures more appealing to investors, according to the testimony.

An official familiar with the investigation will testify at today's hearings before that panel that Yosemite, Mahonia and other deals allowed Enron to understate its debt by 40% while overstating cash flow by as much as 50%, according to a draft of his statement. Cash flow is a crucial measure of financial health for energy companies such as Enron.

"The evidence indicates that Enron would not have been able to engage in the extent of the accounting deception it did, involving billions of dollars, were it not for the active participation of major financial institutions," says a copy of the testimony.

Banks such as J.P. Morgan and Citigroup were "willing to go along with and even expand upon Enron's activities."

J.P. Morgan , in fact, had a "pitch book" to sell other companies on similar financing vehicles, according to a copy of the testimony. J.P. Morgan entered into similar transactions with seven other companies, while Citigroup shopped such deals around to as many as 14, with at least three entering into such relationships, the testimony says.

The hearings will focus on a commodity-trading vehicle known as a prepay, in which a financier gives money in exchange for future delivery of a commodity such as:

gas, GOLD or oil.

Such arrangements are common, but in the hands of Citigroup and J.P. Morgan , they became the building blocks for extremely complex transactions that Enron used to disguise debt as trades and create the appearance the company was generating cash, people familiar with the matter said.

Wall Street Journal Staff Reporters Jathon Sapsford and Paul Beckett contributed to this report.
+++++++++++++++++++++++++++++++

Avoiding the "G" word in these Senate hearings will be exceedingly difficult as we move into the election season.

The dilemma that the President suffers is that he cannot prosecute the Enron, CITI and JPM crooks without them "Outing" GOLDGate on the one hand while voters will skewer the Republicans if he does not prosecute.

As always, the truth can set him free. We will know the truth is coming when his economic advisors leave.

Mr Gresham

(07/23/2002; 08:54:30 MDT - Msg ID: 81184)

More on Polaroid asset grab

http://www.bearforum.com/cgi-bin/bbs.pl?read=246435Excerpt from link below, after I finished it -- phew! the stench reeketh on high! It really IS the formula for fleecing the flock!

Link above (from the same Polaroid thread) is from one very good poster there who's taking time out of the "Bear Game", ("As for the market I'm considering we are in the middle stages of the 'even the bears will be suprised how bad this gets' mode right now") and watching the carnage with sharp eyes and a poignant sense of others' pain.

"As for Polaroid, expect to see stock in the company offered by One Equity Partners to investors all over again, via an initial public offering, as Wall Street's endless cycle, from IPO to Chapter 11 and back again, repeats itself once more. It's the way Wall Street really works, and it's why, from cradle to grave, the tricks of accounting lurk at every turn. "

sector

(07/23/2002; 09:05:00 MDT - Msg ID: 81185)

CITI and JPM's Enron Loans from CITI, JPM

They Hid Debt, Are CITI, JPM Gold Derivatives Similarly Borrowed ..."Assets"?These two giant Federal Reserve banks claim to have assets in their gold derivatives. $48 Billion worth of "assets" at the last OCC Report.

However, IF these gold derivative assets cannot be reliquified in the gold market, are they really assets?

This was the core problem at Enron...their reported assets were actually phantom loans from Citi and JPM. In a similar manner, the gold derivatives that these banks carry are loans too...only they come from the United States Treasury Department with the complicity of the Federal Reserve Chairman, Alan Greenspan. They are liabilities in reality, just as Enron's "loans" were liabilities...

...and their balance sheets are not what they say they are.

sector

(07/23/2002; 09:41:23 MDT - Msg ID: 81186)

Cornucopia of Headlines from the "Sound" Economy

"We have a fundamentally sound economy", Alan GreenspanLucent Posts 9th Straight Loss, Cuts Jobs
By Ben Klayman

CHICAGO (Reuters) - Telecommunications equipment maker Lucent Technologies Inc. (NYSE:LU - News) on Tuesday posted a $7.91 billion net loss, including a large noncash charge, and said it would have to cut another 7,000 jobs because the telecom spending slowdown has not relented.

AT&T: $12.7 Billion Loss After Charges

NEW YORK (Reuters) - Long-distance telephone and cable-television giant AT&T Corp. (NYSE:T - News) on Tuesday posted a $12.7 billion second-quarter loss after charges to write down the value of some of its assets, and revenues fell as telephone sales and calling volumes dropped.

Tyco Posts $2.3 Billion Loss Amid Charges
By Tim McLaughlin

BOSTON (Reuters) - Tyco International Ltd. (NYSE:TYC - News) on Tuesday posted a $2.32 billion quarterly loss, mostly due to charges associated with restructurings and the conglomerate's recent sale of CIT Group Inc. (NYSE:CIT - News)

Novellus Says Profit Down, Customers Cautious
Mon Jul 22, 6:06 PM ET

SAN JOSE, Calif. (Reuters) - Novellus Systems Inc. , a maker of semiconductor production equipment, on Monday reported an 80 percent fall in second-quarter profit as a slump in chip sales led to weaker demand for its products.

+++++++++++++++++

With such a good economy rolling along, let's all go build a new house....I'll have three spiral staircases and a couple of hot tubs like the kind in Marin County, California.

Tommy P

(07/23/2002; 10:02:47 MDT - Msg ID: 81187)

Die J.P.Morgan

All time low of $21.50 NEM is higher get Gold. J.P. down to $5.00 what goes around comes around.!!

Carl H

(07/23/2002; 10:13:39 MDT - Msg ID: 81188)

JPM

Perhaps the gold companies should downgrade JPM and start shorting it. ;-)

Carl H

(07/23/2002; 10:22:41 MDT - Msg ID: 81189)

Gold Price

Dropping like a rock. Haven't we observed that they do this when there is a big train wreck coming. I wonder who will be the scandal of the day...

Anyway, looks like a buying opportunity.

Knallgold

(07/23/2002; 10:28:53 MDT - Msg ID: 81190)

Goldcrash

Do we have the Goldcrash FOA predicted?I mean when the XAU as Index loses 10% it is officially a crash.It is either
-a shakeout,
-there is an agreeemnt to stop support paperGold with a Goldsale.Yes,POG made advances when a sale of real Gold was in the pipeline.Is it now going to Shanghai instead of Comex???When does this market in China open?I have nowhere seen any prices reported yet-a surprise in the work?
-margin sales
-or something else fishy going on.As was the last Friday spike which also lacks still a good explanation (probably a one day wonder=something optionrelated)

Siochaina

(07/23/2002; 10:36:02 MDT - Msg ID: 81191)

Re Gold Price

I had expected a drop....but not this fast....could this be tied to the JPM & C drop and their related derivative & Enron problems finally coming under more scrutiny

Siochaina

(07/23/2002; 10:36:04 MDT - Msg ID: 81192)

Re Gold Price

I had expected a drop....but not this fast....could this be tied to the JPM & C drop and their related derivative & Enron problems finally coming under more scrutiny

Siochaina

(07/23/2002; 10:37:45 MDT - Msg ID: 81193)

Sorry for duplication

Guess finger dropped too fast also

Gandalf the White

(07/23/2002; 10:49:55 MDT - Msg ID: 81194)

LOOK OUT SPOT !!! Run for the Hills !!!!

PAPER AVALANCHE !!!!
<;-(

Knallgold

(07/23/2002; 10:59:10 MDT - Msg ID: 81195)

The Unwinding

A strategy has been short Gold,long its shares (as hedge,Bill and others have mentioned this years ago).

Maybe the shorts are/were eliminating their Goldshares to free cash for the next round of covering.It has been masked probably during the last stages of the mining boom as the little guy has been pushed into it-but latest as last Friday the picture started to look a bit ominous,as if they tried to max the profits a last time with a Goldspike.Today,the fuel is obviously out.

As cash has become a bit scarce these days,it will be used now only for covering Goldshorts-350 coming!?

Hipplebeck

(07/23/2002; 11:39:17 MDT - Msg ID: 81196)

let's complete the banking scam story.

The banksters loan out money at interest and in return they get a piece of paper that says they have a certain commodity commited to them. Now what do they do with that piece of paper? I'm sure they have found a way to make money off of it. It apperars to me that this would give the market a very false indication of how much of that certain commodity was really out thre available for that price.

The Hoople

(07/23/2002; 11:51:57 MDT - Msg ID: 81197)

Old saws broken

No mention lately of those old Wall Street saws you heard ad nauseum. Safety in utility stocks? Horrific crash in process, this alone is a stunning collapse. Banking sector? JPM and C have lost almost 50% in July alone. These two sectors alone are practically pricing in depression. This has to be unnerving beyond belief to Wall Street and its mouthpieces. Gold's steep selloff is equally unbelievable in light of the omens being given. This is the weirdest day of them all and I've seen quite a few.

Christian

(07/23/2002; 12:02:10 MDT - Msg ID: 81198)

Creating bubble firms

Wall Street Banksters have found a way to create bubble firms from off balance sheet loans and asset swaps. These outfits are then IPO'd to the stupid public. With the sale of these air IPO's a new pool of money is created for the next air IPO created out of off balance sheet loans and asset swaps. These asset swaps are listed as work in progress contracts by the new firm along with the big profit to be made. A good way to increase air profits per share is to only claim 1/10th of the stock float as shares outstanding. This game has a scheme. That scheme is to take the burden of wealth from the investor who was stupid enough to play this game. Ther has got to be a better way.

sector

(07/23/2002; 12:06:21 MDT - Msg ID: 81199)

@Hipplebeck...What Do They[The Big Fed Banks] Do with the Piece of Paper...

...that says they "Own" a commodity?..They sell it short in a carry trade for a decade shafting everyone who produces the commodities.

What they cannot do however, is recover the commodity when they need to balance their "sheets"...like now.

Mr Gresham

(07/23/2002; 12:29:51 MDT - Msg ID: 81200)

Choices

Haven't read the posts immediately below, but a quick renegade thought before I'm called for lunch:

The supports (PPT or whoever) for the big players' positions in markets do -- or don't? -- come out of the same "budget"?

If so, then it looks like they are choosing to pour "budget" resources into suppressing gold over supporting the SM, right? Must be a closer tie-in there with supporting the much more important currency and bond markets, which come under the suspicion of being "just paper" very soon now. Gold suppression is their backstop, while SMs are just a sideshow for J6P?

Gotta go...

Zygoat

(07/23/2002; 12:30:02 MDT - Msg ID: 81201)

Maybe its true

My "Elliot Wave" friend has been telling me for the past 2 years that the Wave says gold must go down to $200 before the gold bubble can then begin to form. I always thought that was counterintuitive until what ive seen today....maybe he's right. If so, the buying opportunities of a lifetime await just around the corner.

darkhorse

(07/23/2002; 12:44:35 MDT - Msg ID: 81202)

In the immortal words of Will Smith in MIB...

"This definately rates about a 9.0 on my weird s***-o-meter." Everything seems to be taking a dive today (except the DOW, which is up very little)...so where's all the money going? In the Marine Corps, we had a little gem for times like these. The first two words were "What the" and it ended with a question mark.

Bound Spirit

(07/23/2002; 12:49:28 MDT - Msg ID: 81203)

When?

OK, now I'm feeling great angst! As of the time of this writing, Gold is down $9 Silver is off $0.10, Drooy is down 13%, Gold Corp is down 14%, Newmont is down 7%, Harmony is down 11%, etc. etc. This morning's drop comes on the heels of what feels like about a month of un-relenting downward pressure on the gold market � even on last Friday when spot finally rose by over $6, mining stocks were getting hammered. Now all this is happening when, there is no positive news regarding the economy, SM, world peace, corporate scandal, etc, etc. What gives?

I understand the bit about the gold market manipulation, I understand about the PPT, I understand about the currency race toward the weakest fiat. But a large part of my faith in gold is that it is a safe harbor from financial turmoil and that this concept should not be too difficult for your average investor and fund manager to comprehend. Are the contributors at this forum going to tell me that the PPT, central banks, etc.more in control of this small gold market than the millions of investors that must be currently scared out of their wits? (NASDAQ down 75%, 911, mid-east, accounting scandal, high debt, trade deficit, over valued dollar, etc) Has the propaganda campaign against gold been so effective that not even a small percentage of these petrified investors interested in the security of Gold?! (I.e. in my mind it shouldn't take more than a small percentage of these investors to overcome the manipulators)?

Just step back for a minute and lets look at the last three years. There has been nothing but negative economic news � worldwide. If fear is truly a stronger motivator than greed, should we not have seen gold increase in value at an equal or greater clip to the equity mania of the late nineties? What I'm loosing patience with are the overwhelming circumstances that are necessary to make gains in the gold market juxtaposed against the insignificant events that lead to its rapid decline. The dot com.'s never behaved like this! Apparently, there must be very little "smart money" currently invested in gold. I can think of no other reason, short of total gold market domination, that would explain why gold isn't presently going vertical. We are truly existing in an artificial matrix, and our notions of reality lack the gravity necessary to influence even a small portion of all other deceived and indentured subjects. I guess things just haven't been bad enough yet � aren't you all shocked? What the H__ does it take!?

Why do we discuss things like Citibank's role in the Enron scandal? That's a rhetorical question. Ostensibly, the answer is that these subjects reaffirm what we here at this forum have known for years about the world's prognosis. What we don't know, or I have seen little reference to here, is the degree to which our lives and the economy are controlled. There may be blind faith that the laws of supply and demand eventually will win out over market controllers. But so can totalitarianism win out over a free market. (E.g. 70 years of soviet rule) Its beginning to feel like it will just have to come to that before gold rises � that is only after, our totalitarian rulers ancestors destroy themselves and our world is either completely destroyed or completely reduced to the simple fundamentals of physical struggles for food, water and shelter. (The winners get the gold).

I don't know about you, but I'm having a hard time waiting that long. So come on you guys, let me know what you really think � when do you think enough will be enough to make a majority of these incredibly deceived automatons stand up � take notice � and buy gold in protest - for truth instead of lies - and for just plain survival.

A Canadian

(07/23/2002; 12:57:11 MDT - Msg ID: 81204)

@ Bound Spirit

The wall of worry you are scaling is providing the vital conditions for a true bull. You'll need to hang on with both hands for a blue ribbon. Few will make it to the victory circle. Hope to see you there.

Socrates964

(07/23/2002; 12:59:45 MDT - Msg ID: 81205)

Intriguing...

big money center bank stocks tanking, euro tanking against US$, gold tanking, bond market unchanged.

Suggests to me that:

a) JPM, C, etc. are importing large amounts of capital from foreign subs to shore up equity base.

b) the similarities with the gold spot price bash at the start of the month are another desperate attempt to stop some kind of gold derivative time bomb from going off.

c) someone large knows this and is demonstrating to JPM and C that they no longer have control of their stock price and hence (presumably) their capital base.

d) I wonder how far these stocks have to go down before they need to hit the market for a rights issue;

Merely my own musings -all comments welcome.

Clint H

(07/23/2002; 13:00:38 MDT - Msg ID: 81206)

Paper Gold

I recall FOA/Trail Guide saying paper gold and delivery gold would separate. All paper gold contracts will be dumped at cheaper and cheaper prices. The separation comes when a person calls their supplier and finds that there is a premium added to each ounce for actual delivery.
Buy a contract for $210 per oz or actual delivery at $2100 per oz.
Are we headed there today?

nickel62

(07/23/2002; 13:01:49 MDT - Msg ID: 81207)

Dear Bound Spirit and others who are interested...

The stock market is not a perfect world. You must remember that the only people who make money in stocks in the long run and intelligent and patient investors who invest with their brains for the long term in those sectors which are improving over the long term and avoid the short sighted thinking that has gotten so many in trouble in the general stock market mania of the last ten years. What you are seeing is a break down of many of the rigged manipulations that have held the broad stock market up at levels well above what it was intrincically worth for many years. You have interest rates that are much lower than they would have been without the government monkeying with the free markets. Gold will and all real assets will rise out of the ashes of the current financial meltdown but not exactly cue for all of those investors who measure things in what is happening today. So relax, open a beer and learn patience with your investments. It is a tough world out there and many investors never have learned this lesson before. They are learning it today. Gold investors, whether gold stock investors or bullion investors have the fundamentals at their back. The rest of the market has a very long way to fall before it is even reasonably valued. Over the next several months the gold stocks and the gold price will resume their upward progress to their true fair market price, but it isn't going to happen today just because you happen to own it. Long term is the only way to invest and reap the rewards of the assets you own, take the time to understand that that means years not days.

Paper Avalanche

(07/23/2002; 13:05:20 MDT - Msg ID: 81208)

Up or down, the paper market will fail....

Does it matter what the paper "price" is when the divergence between physical and paper occurs? It is that singular, watershed event which will be the dawn of a new economic order as foreseen by those on the trail. To paraphrase FOA (if my memory serves me correctly), "fail up, or fail down, the paper market will indeed fail due to the lack of credibility in the marketplace as a true price discovery mechanism for physical gold."

Fret not at the "price" of gold as you see it spike in either direction. Note that it is mathematically impossible for this paper market to retain any of its remaining credibility for much longer, and time waits for no one.

The trail challenges us to alter our valuation of things to no longer be denominated in dollars. The world is already a few steps ahead of us in embracing this new mind set. To succumb to panic as a result of having a "market" value your physical gold in paper dollars is folly. If you have not completely walked the golden trail, I encourage you to do so.

The Paper Avalanche is fast approaching and will stop for no one.

PA

Paper Avalanche

(07/23/2002; 13:21:30 MDT - Msg ID: 81209)

BTW - who saw Barton Biggs last night on CNBC?

I think the conversation went something like this...

"Barton, that article on you being pro-gold has caused a #%@& storm and may bring down the house if folks think you have gone pro-gold. So here is what your gonna do. You're gonna go on CNBC and Ron Insanna is gonna ask you about gold and you are going to say that only crazy people buy it. Are we understood?"

Gandalf the White

(07/23/2002; 13:26:03 MDT - Msg ID: 81210)

WELCOME Sir Socrates964 !! Intriguing INDEED !!

Socrates964 (07/23/02; 12:59:45MT - usagold.com msg#: 81205)
Intriguing...
==
Let us hear from you OFTEN !
<;-)

Around The Corner

(07/23/2002; 13:28:16 MDT - Msg ID: 81211)

The Tide Always Goes Out...

...just before the big wave hits.

ATC

Black Blade

(07/23/2002; 13:28:51 MDT - Msg ID: 81212)

GE Power Systems to Cut About 2,500 Jobs

http://biz.yahoo.com/rb/020723/manufacturing_ge_jobs_2.html

Snippit:

ATLANTA (Reuters) - GE Power Systems, a key contributor to General Electric Co.'s (NYSE:GE) profits over the past several quarters, on Tuesday said it will eliminate about 2,500 jobs, or nearly 7 percent of the unit's work force, over the next nine months as gas turbine shipments are expected to fall sharply.

Black Blade: The "Bone Pile" grows. There is no need for gas turbines (or energy) now that the US economy is crashing into a new Great Depression. US business will not expand and new business will not start up.

Paper Avalanche

(07/23/2002; 13:29:54 MDT - Msg ID: 81213)

Does this send up any red flags?

http://finance.yahoo.com/q?d=t&s=JPMBTW, check out the volume. Something big is going on and we hobbits can only guess how the game will end.

My gut tells me this is the thunder that precedes the storm and that the SM ain't seen nothing yet.

JMHO for what it's worth.

PA

Black Blade

(07/23/2002; 13:31:27 MDT - Msg ID: 81214)

Re: Paper Avalanche - Biggs

He looked and responded like he had been drinking heavily. He wasn't all that coherent. The very least someone like that could do is stay sober before going on national television. I still don't believe his gold "conversion" - never did.

- Black Blade

Black Blade

(07/23/2002; 13:32:52 MDT - Msg ID: 81215)

Charges Abound as Tyco Posts $2.3 Billion Loss

http://biz.yahoo.com/rb/020723/manufacturing_tyco_earns_8.html

Snippit:

BOSTON (Reuters) - Tyco International Ltd. (NYSE:TYC) on Tuesday posted a $2.32 billion quarterly loss, mostly due to the recent sale of CIT Group Inc. (NYSE:CIT), but also because of the telecom bust and lower margins in its plastics, electronics and security businesses. The sharp drop in cash flow came as the conglomerate works to reduce debt and restore investor confidence after the abrupt resignation of its longtime chairman.

Black Blade: One resigns, another indicted. Something very serious is happening at this mini-version of General Electric. It looks like another "Scandal Of The Day" is about to come to light.

Black Blade

(07/23/2002; 13:33:59 MDT - Msg ID: 81216)

Citigroup, J.P. Morgan Off on Enron Worry

http://biz.yahoo.com/rb/020723/financial_citigroup_stocks_2.html

Snippit:

NEW YORK (Reuters) - Shares of Citigroup Inc. (NYSE:C) and J.P. Morgan Chase & Co. Inc. (NYSE:JPM) dropped anew on Tuesday, as concerns grew that the two largest U.S. banking companies may have peddled the type of disguised loans used by bankrupt energy trader Enron Corp. (Other OTC:ENRNQ.PK) to other firms. "The real problem is that nobody knows what's going on," said Dion Darham, an analyst at Arnold & Bleichroeder. "If they've been pitching these kinds of deals to other people, the fear is these kinds of structured finance deals might come back to haunt them." A U.S. congressional panel will address Wall Street banks' ties to Enron on Tuesday. Investigators for the Senate Permanent Subcommittee on Investigations on Monday said major investment banks helped Enron for years by lending the collapsed energy trader billions of dollars via elaborately disguised commodity trades.

Black Blade: Live by the sword, die by the sword. The markets are punishing these crooks. Couldn't happen to a nicer bunch.

Siochaina

(07/23/2002; 13:35:09 MDT - Msg ID: 81217)

Roger Bentley Arnold PM comments

The Gold Report Update

Market Update- July 23rd �2:30pm

The Futures market (December contract) slammed down to a low of 313.50 and closed down $11.00 to $314.70. Confluence on the contract is from 313.32 to 307.41 Confluence is a brick that acts as support. They should have been able to take it below the last swing low of $311.30.The way cause (volume) and effect (price) work is that both must go in the same direction. They did go in the same direction but the price point that had to be taken out was the swing low of July 8th ($331.30) .We also didn't take out the low of June28th which was the last time they traded the contract. The low there was $312.00

The Dollar index bounced today and is going up to fill the gap left open from July 5th at 108.33.Conflunce is at 108.46 to 108.96 ( A brick on the upside)

What we have going on today is a shake out. A shake out can be on light or heavy volume. The confirmation is that within 3 to 4 days you come back into the pattern. The individual equities traded up to .25 below the offer. That is saying to me it was an effort to trash the Gold equities so the public will stay in the broad market. Gold has an inverse relationship to the broad market and the banks are working as hard as possible to keep the price down. You can see their footprints and desperation in the market today.

There were two trades on HL at 12:36 pm under the market by .24 at $3.00, which stopped us out. I know most brokers won't take the stops under $5.00 stocks. If you have it keep it. If you got out get back in.

When I look at the broad market, especially Citigroup and JP Morgan the writing is on the wall that the end of the manipulation in the Gold market is very close. They both have broke down on volume today.

Folks, You don't have the two biggest banks in the world break down on volume without heavy problems in the next few years. As I heard Jim Sinclair say in an interview this week. They will burn the store before they give up. That is what you are seeing today. The banks know they're done and their obituary will be written in the Gold market.

Black Blade

(07/23/2002; 13:35:40 MDT - Msg ID: 81218)

AT&T Loss Adds to Telecom Sector Woes - $20 Billion Loss

http://biz.yahoo.com/rb/020723/telecoms_earns_3.html
Snippit:

NEW YORK (Reuters) - Bad news keeps calling in the telecommunications industry, as a big loss posted by long-distance giant AT&T Corp. (NYSE:T) on Tuesday brought reported second-quarter losses in the industry to more than $20 billion in just two days.

Black Blade: Whoa!!! $20 billion in one quarter!!!! And the deadline of August 14 th approaches.

Black Blade

(07/23/2002; 13:41:14 MDT - Msg ID: 81219)

U.S. SEC sues InterBank owner for fraud in debt sales

http://biz.yahoo.com/rf/020723/financial_fraud_1.html
Snippit:

NEW YORK, July 23 (Reuters) - The Securities and Exchange Commission on Tuesday filed a securities fraud suit against the owner of the InterBank Funding Corp., an investment business, in connection with the offer and sale of $189 million in debt securities between 1997 and 2002.

Black Blade: Yep, another scandal.

Gandalf the White

(07/23/2002; 13:41:26 MDT - Msg ID: 81220)

THANK YOU, Lady Siochaina !! WE needed that ! <;-)

Siochaina (07/23/02; 13:35:09MT - usagold.com msg#: 81217)

Mr Gresham

(07/23/2002; 13:42:40 MDT - Msg ID: 81221)

Bound Spirit & others

Great questions, great answers. Craziness out there, circle the wagons. We here pretty much gave up faith in paper long ago, so it's hard to look back and measure its strength in others, but it sure looks like a whole lotta shakin' goin' on.

Anything I still have left in paper of any kind is getting a thorough examination tonight. I'm not sure I'm ready -- as Another said the CBs holding enough gold would be -- to "throw down" my fiat as a complete writeoff.

Maybe it is (as Zygoat reminds us) going to be a time to back up the truck to the PM loading dock (having dropped the wife & kids off at the pawn shop along the way...)

mikal

(07/23/2002; 13:45:02 MDT - Msg ID: 81222)

"It's always darkest before the dawn."

@Socrates964Welcome, great to hear from you. Thank you for your post, I'm savoring it over and over again.

Black Blade

(07/23/2002; 13:53:20 MDT - Msg ID: 81223)

Joe Lieberman's Cover-Up � Enron and Citigroup

http://www.nationalreview.com/levin/levin072302.asp

Snippit:

Given the central role played by Citigroup in concealing Enron's debt from investors, the general public, and government regulators, why, then, hasn't former Clinton treasury secretary, Robert Rubin, now the chairman of Citigroup's executive committee, been called to testify before Congress? In particular, why hasn't the chairman of the Senate Governmental Affairs Committee, Senator Joseph Lieberman, sought Rubin's testimony? After all, Lieberman is heading up the Senate's investigation into Enron's bankruptcy and fraudulent dealings.

And there's ample reason to hear from Rubin. In addition to this week's disclosures about Citigroup's assistance in cooking Enron's books, during Enron's final days Rubin played a direct role in attempting to conceal Enron's financial condition from credit-rating agencies.

Black Blade: Yeah, I know that this isn't news But it is worth revisiting.

The Victorian

(07/23/2002; 13:54:49 MDT - Msg ID: 81224)

"semi-secret banking meeting"

I only caught the news with one ear on CNNFN but Paul O'Neil had a meeting with the likes of Merrill Lynch and Goldman Sachs etc. to determine what could be done to instill confidence in the markets. I am not sure how many banks/brokerages were present at the meeting, but I'd be willing to bet that the JPM and Citibank problems are bringing the markets and the US economy close to yet another crisis point.

Black Blade

(07/23/2002; 13:59:54 MDT - Msg ID: 81225)

TD accused of helping Enron hide debt

http://www.nationalpost.com/financialpost/story.html?id={CFDBD4E8-AA5F-4A4E-BF51-149BA10DB2D3}
Senate targets banks

Snippit:

A U.S. Senate committee yesterday accused Toronto-Dominion Bank of helping Enron Corp. hide debt from investors before the giant energy firm collapsed last fall.

Black Blade: Yep, another bank tied into the Enron shell game ("hide the debt").

Black Blade

(07/23/2002; 14:08:32 MDT - Msg ID: 81226)

Investors abandon stock funds

http://money.cnn.com/2002/07/22/pf/investing/investing_confidence.reut/index.htm

Investors are cashing out of stock mutual funds, delaying retirement as stock markets tumble.

Snippit:

NEW YORK (Reuters) - Investor confidence -- already fragile in the wake of deep stock market drops and waves of accounting scandals -- is cracking even further. U.S. investors are cashing out of stock mutual funds, delaying retirement as their savings vanish and questioning whether the stock market -- which millions of people believed was their ticket to Easy Street as they jumped on the investing bandwagon in the late 1990s -- is really the best place to park their money. "Let's face it, Corporate America is not giving us a lot of reason to invest, to trust money with them," said Anthony Ogorek, a certified financial planner in Buffalo, N.Y. If the stock sag continues over the long haul, "investors really may make a profound reassessment of the role of equities in their lives," he said.

Black Blade: Looks very ugly in the markets. The DOW is barely clinging to just over 7700, and the S&P 500 dove under 800. And they are still overvalued!!!

Siochaina

(07/23/2002; 14:28:10 MDT - Msg ID: 81227)

@ Zygoat

And my "Elliott Wave" friend ...who has been pretty accurate...tells me ...we "might" retrace to 290-300 at lowest....and that only if some critical points are breached....which we have not done

We are IMO now in a new ballgame....I expected gold to go down this week ....and a stock rally to be engineered ...BUT I am now rethinking for if much publicity gets out re JPM & C ....it is going to be hard to pull off the summer rally....not impossible with TPTB bag of dwindling tricks....but hard....just think our two biggest banks are in serious trouble...we've known but now it seems as if more people will know...and will be scared to death and retreat to their bunker

Worst IMO case is a short possible multi week gold pullback ....chance to buy more physical...and then the SM bill will be presented to the public

Alternate case....well just maybe JPM & C will bring about a collapse....of at least consumer spending and market buying ....granted I wish we were not heading for bad times BUT TPTB have ruined much in their greed and private agenda

Socrates964

(07/23/2002; 14:30:32 MDT - Msg ID: 81228)

Greetings

Greetings Mikal, Greetings Gandalf, thank you for the warm welcome. I will endeavor to post intelligent comments.

a) Has anyone noticed that JPM is now trading below book value of $20.16 per share (according to YHOO).

b) I can't say that I find the FOA thesis of physical gold going to a huge premium to the futures contract very credible. Let's assume that a big fund buys futures contracts on Comex, requests delivery of metal and none is forthcoming. It will presumably get its lawyers onto the exchange and demand satsifaction. Assuming that Comex is defaulting on its contractual delivery obligations with the blessing of the US authorities because there is a genuine gold shortage, it seems to me that it is very easy to deal with the matter - the exchange merely informs the fund that the rules have changed and it is allowed to settle in paper.

All that then happens is that Comex gets pariah status among the world's gold investors, who simply move their gold trading elsewhere, be it to London, Dubai, Istanbul, S�o Paulo or wherever. For this argument to hold water, it seems to me that the US has to be able to control both supply of the physical and be able to enforce legislation on every futures exchange in the world.

Black Blade

(07/23/2002; 14:35:03 MDT - Msg ID: 81229)

Lucent posts $7.9 billion loss, slashes 7,000 jobs, as telecom spending drops more

http://www.boston.com/dailynews/204/nation/Lucent_posts_7_9_billion_loss_:.shtml
Snippit:

NEW YORK (AP) With battered telecommunications companies spending little on new hardware, equipment maker Lucent Technologies posted a quarterly loss of $7.9 billion Tuesday and said it will cut 7,000 more jobs. Lucent, which counted 155,000 employees at its peak in July 2000, will have cut 70 percent of its work force with the current round of layoffs. Almost 50,000 of those workers departed during the spin-offs of Agere Systems and Avaya and the sale of Lucent's optical fiber business.

Black Blade: More nonessential "Bones" off to the growing "Bone Pile" and nearly $8 billion in losses. So what happened to the second half recovery that the Pied Pipers were touting. What happened to Abby Jo? Did she step outside and see her shadow? It appears that corporate America is in deep **** up to its neck. Earnings are not materializing. It is quite humorous to listen how the earnings are meeting "earnings estimates". Well, guess what? It is easy to meet or beat the numbers when the bar is lowered so much that it can't possibly be missed no matter how crummy the business environment.

BTW, Amazon.com loses over 25 cents a share, but has a "pro forma" profit of a penny a share. Even Joe Kernan on CNBC is confused. Hmmm�

Time to "capitulate" myself to the gym!

Siochaina

(07/23/2002; 14:43:07 MDT - Msg ID: 81230)

Good sign so far

"Twilight Hour" (after NY close) gold trading is moving UP a little..more often than not the "twilight hour" is a good indicator of subsequent broader Asian & next day action

USAGOLD

(07/23/2002; 14:49:37 MDT - Msg ID: 81231)

Some thoughts from Mr. insider. . . . . .

Talked to Mr. Insider this afternoon and this is what he says about today's drop in the gold price;

"Today's drop in gold was precipitated by significant fund selling. While nobody knows for sure, the general feeling is the funds were raising capital by selling their most liquid assets. The size of the break was extended when technical chart patterns in the high teens were violated and gold is down to support in the $311-312 area -- and is now trading $1 higher at $313 London 24 hour market. We think they were selling out of their pool positions to raise capital. Generally, the market should find support in this area and be seen to work its way higher with the continued weakness in the U.S. equity markets."

Siochaina

(07/23/2002; 14:49:47 MDT - Msg ID: 81232)

Additional Bentley Arnold comments

Gold

As per your many requests - Gold - my thoughts

The gold spot market is getting pounded right now. I believe this is being driven by massive gold shorting by the money centers Citi, Morgan and others to meet the demand for gold that is coming from the sale of their stock. Theses companies can neither let gold rise nor the stock prices fall. So, they have to meet this by raising capital to both depress gold and buy their own stock back. If their stock falls, their reserves fall and they become insolvent. If gold spikes over $354 their derivatives trades collapse and they become insolvent. They must contain both and I believe that is what is going on right now. Although this may allow them to postpone having to deal with this it will not contain gold rising or their stocks

misetich

(07/23/2002; 15:25:32 MDT - Msg ID: 81233)

Layoff Tracker Update: July 23, 2002

misetich

(07/23/2002; 15:38:43 MDT - Msg ID: 81234)

Investors pull $14bn out of US mutual funds

Snip:
Investors, hit hard by a slew of corporate accounting scandals, a dismal earnings outlook and the recession, pulled $13.8bn out of US equity mutual funds in June.

...............
Thus Wall Street is facing a surge in redemptions from mutual funds, which could have long-term effects on equities.

.............
Mr Perritt said the funds facing the biggest redemptions - Vanguard, Janus and Fidelity - are keeping silent about their losses.

Misetich

They've been keeping "silent" for the past couple of years -Investors are being encouraged to "buy and hold" and see their hard earned dollars vaporize - thanks to the bubble creators and cheerleaders

How can these investors get their money back?

Buy gold and burn the perpetrators of this fraud: the investment bankers! Hello JP Morgan!

Got gold?

AllanC

(07/23/2002; 15:39:44 MDT - Msg ID: 81235)

From the Yahoo front page news

http://biz.yahoo.com/cbsm-top/020723/9b7caf35536e131bc4f2846e25f4977e_1.htmlTwo opposing viewpoints here:

One analyst representative of the mainstream keeps making excuses, failing to recognize the SM was a bubble to begin with.

(snip)----"What we're seeing has everything to do with psychology. It has nothing to do with fundamentals. People don't trust corporate America and they don't trust Wall Street," said Art Hogan, chief market analyst at Jefferies & Co. ----

My take on it:"Yeah, sure"

Another analyst is more objective:

(snip)---Analysts at research and money management firm Bridgewater Associates point out that this is the first time since 1930 that the stock market has fallen in the face of aggressive Fed easing.

"In that sense, we are in uncharted waters. Clinically speaking, a recession is an economic contraction brought on by tightening and ended by easing. A depression is a self-reinforcing economic contraction, perpetuated by debt liquidation in which central bank easing is impotent to reverse the contraction. Recent market action is symptomatic of depression," Bridgewater pointed out. ------

Wow! He mentioned the "D" word!

sector

(07/23/2002; 15:53:55 MDT - Msg ID: 81236)

@misetich If investors didn't like JUNE...

...imagine what their reaction will be when they see JULY's report!Can you say Blowing their TOPS?

There must be a land-office business in telephone tape cassettes used to record mutual fund investor's ire so the broker's bosses who are skeptical that their customers are THAT MAD can personally listen to the "Music".
++++++++++++++++++

JPM at $20.08? Good Lord. Credible rumors that they have a massive derivative "Problem" somehow linked to a $20 closing JPM stock price.

IF this is true, they are exactly 8 cents from what Mike Tyson calls "Bolivian" [Meaning that place where one goes to escape all detection after a beating].

Moreover, the ramifications of a Chapter 11 filing for JPM, is a Chapter 11 for all of Wall Street.

misetich

(07/23/2002; 16:04:24 MDT - Msg ID: 81237)

Barometer of Japan's GDP falls 1% year-on-year

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1027089326860&p=1012571727192Snip:

A key gauge of Japan's gross domestic product fell in May year-on-year, according to official figures released on Monday, with a recent surge in exports slowing, but unable to reverse, a year-long decline in the measure.

Misetich

ANOTHER recovery - Not - in Japan
The US $ is grossly overvalued - who will buy US products - China is willing - sure advanced sensitive technology
Europe is slowing down
South America is in deep doo-doo
Japan - forgeett aboutt itt
Central Asia - I don't think so
Canada and Mexico - slowdown occurring

Global economy recovery is anemic at best and now they've the global stock markets crumbling-
Japan cannot afford to let the Nikkei go below 9000 - as the banks would say bye-bye

US economy is being held up by consumer spending (debt, debt and more debt) facilitated in part by mortgage refinancing and interest free auto loans- In the meantime job losses are increasing, confidence is waning and stock portfolios wiped out, investment income crumbling

Got gold?

alanka

(07/23/2002; 16:10:07 MDT - Msg ID: 81238)

gold drop

please somebody out there why did gold drop $10.00. is it due to the rising dollar stock market falling or selling short or what?
what is next?

misetich

(07/23/2002; 16:15:32 MDT - Msg ID: 81239)

Compilation of rating actions and commentary relating to Enron since October 16, 2001.

http://www1.standardandpoors.com/Forum/MarketAnalysis/Enron/index.htmlCongressional Review

Senate Permanent Sub-Committee on Investigations
July 23, 2002> S&P at Senate Hearing: Enron Didn't Disclose Debt-Like Nature of Certain Transactions
July 23, 2002> Testimony of Ronald M. Barone, Managing Director
July 2, 2002> Enhancing Financial Transparency: The View from Standard & Poor's
July 2, 2002> Accounting Abuses and Proposed Countermeasures
October 9, 2000> New Issue: Enron Credit Linked Notes Trust

Misetich

The above is an excerpt of Lots of reading material on Enron fiasco's

JP Morgan and Citi are in for a rough ride!

Got gold?

Paper Avalanche

(07/23/2002; 16:36:18 MDT - Msg ID: 81240)

CNBC story on housing bubble

These people ought to be tarred, feathered, flogged and sent into exile. The fact that I just saw a story on CNBC on the housing bubble where the underlying premise was "if you sell now you are a moron" simply reinforces the fact that we are in such a bubble. Given that there never existed a bubble that did not collapse, and given the likelihood that the people who put this piece together are very aware of that, it is nothing short of criminal to posit the notion in the minds of the gullible and trusting that they will benefit from holding tight to their residential property (maybe even make up their loses from the mutual funds).

I saw some hack chick extole the virtues of a mortgage to include the tax benefits. I wonder if she ever tells clients that they will pay a total of $460,000 for a $200,000 home if they pay it out over 30 years at 7% interest.

I truly believe that God has set aside a special place in hell, aside from the general inferno, to especially and eternally punish those who take advantage of the gullible, trusting and simple minded.

This is nothing short of disgusting. If Ron Insana or anyone from NBC, GE etc. should read this board... Ron, you are nothing short of a scum bag.

Paper Avalanche

cyberbat

(07/23/2002; 16:38:31 MDT - Msg ID: 81241)

to anybody!!

How much money had to be injected to short the gold market $11.00 in 15 minutes ? The frightening part is that whoever is doing it, can do it at all. Physical gold is no good when short paper will do the trick. Sad part is I don't have any idea as to where to go with my money.

Canuck

(07/23/2002; 16:51:28 MDT - Msg ID: 81242)

@ Bound Spirit (msg 81203)

What a great way to say, "What the hell is going on?!"

I wish I had the time to compose a note as flowing as yours but quite frankly I am too damn pissed to even attempt such a feat.

Some will call me a newbie as I have been at this forum and in the 'gold world' for 4 years but I will tell you that I am DOWN. Yes, Sept. 99 as I bought late and Y2K as I bought heavy have been hazardous to my financial health. I have been a little wiser during this run-up, selling at tops, trying to buy the dips and low and behold I find myself near even after 4 torturous years.

Now I find myself watching this latest gold gallop wain and I ask myself "is this a prolonged version of Sept. '99?". And yes you hit the nail on the head, "What does it take?"

I honestly don't know if I have the intestinal fortitude to hang in much longer. I have my 'sell stops' in place and I may just get out, completely. This will be a crushing, crushing blow if the dollar pops 110 and gold retreats below 310.

I hope I am completely wrong.

misetich

(07/23/2002; 17:01:39 MDT - Msg ID: 81243)

Americans sour on the economy-NBC/WSJ poll: Confidence

http://www.msnbc.com/news/784520.aspSnip:

July 23 � Corporate accounting scandals and the plummeting stock market have taken a heavy toll on public confidence in the economy, and almost two-thirds of Americans think there should be more investigations and prosecutions to clean things up, according to results of an NBC News/ Wall Street Journal poll released Tuesday.
...................

Three-fifths of Americans believe "the economic and political systems in America are stacked against people like you." Only a third disagreed.

Misetich

Two thirds want more investigations and prosecutions - Believers in free markets are being let down - It is not only Corporations, investment houses on trial here- it is government lies and deceit - with their cooked up CPI manipulations, budgets and off-budgets items - illegal and improper market interventions with a wink-wink

Investors have been had - "they" kept the true barometer - Gold - depressed - with paper derivatives avalanche - so they could SUCKER investors into the stock market - and eventually clean them out of their perceived savings

What a scam !

Who has benefitted from this scam?

Unless Gold is freed the scam will continue! and it will be much worse for the ordinary person -

Investors should buy gold and blow these crooks out - then and only them will these crooks be prosecuted as the ultimate scam is exposed

Got gold?

Tate

(07/23/2002; 17:05:52 MDT - Msg ID: 81244)

Who runs United States of America?

We know that Rubin was a money bag for Clintons election political campaigns.
We also heard that Enron was big contributor to G. Bush election. We now finding out how these easy funds where pumped from City and JP Morgan to Enron.
Who runs United States of America?
In the past whenever two European Kingdoms fought bankers like Rothschild's supported each one of them. This always guaranteed 100% victory.
We may find that above mentioned names or their subsidiaries will be main supporters of future president who replaces G. Bush.
Who runs USA?

Simply Me

(07/23/2002; 17:11:25 MDT - Msg ID: 81245)

Who's afraid of a $10 dip in the POG?

@Canuck
If you are buying peaks and selling dips, then the most you can hope for is to break even. That's Nas-duck '90s investing strategy and it doesn't work with gold.
To paraphrase "Another", physical gold should be acquired according to one's understanding. Buy it and hold it with an eye to surviving the one time revaluation that will surely come.

Simply

misetich

(07/23/2002; 17:13:11 MDT - Msg ID: 81246)

JP Morgan, Citigroup helped Enron to hide debts with disguised loans

http://www.iii.co.uk/shares/?type=news&articleid=4429151∾tion=articleSnip:

"It's (Mahonia) a shell, it's a shell game and Chase should own up to it," Levin said.

Levin said he was dissatisfied with Dellapina, and his colleagues, responses to the matters of the hidden loans, and that he is likely to call JP Morgan Chase chairman and chief executive officer William Harrison to come before the subcommittee to give fuller answers to his questions.

The senator also stressed that he will be passing the subcommittee's evidence, and testimony gathered from the bankers today, to the Securities and Exchange Commission and the Department of Justice.

The obtained documents show that Enron obtained 3.7 bln usd from JP Morgan Chase through 12 so-called prepay deals, and that it obtained 4.8 bln from Citigroup -- mainly through another offshore entity named 'Delta' -- in 14 transactions.

Misetich

The bigger they are the harder they fall! Lawsuits galore will precipitate against JP Morgan!!!!!!!!!!!

JP Morgan synonymous with CREDIT RISK!!! Has a nice sound to it, doens't it? Lets stay on the HOT TRAIL - Who knows where it may lead?

Got gold?

Aristotle

(07/23/2002; 17:18:40 MDT - Msg ID: 81247)

Great day to tune in!

Best quote of the day (that I've read thus far) is from MK's "Mr. Insider" who said:

"Today's drop in gold was precipitated by significant fund selling. ... We think they were selling out of their pool positions to raise capital."

Yeah, I'd be selling out of POOL (Unallocated Gold) positions, too!

With the prospects for success being slim to none in achieving any meaningful metal withdrawal and delivery from these fractional-reserve deposit schemes, I'd definately be cashing out now before the illusion bursts and the pool gets bankrupted even while you wait the required waiting period for physical allocation. That's how these things work, folks.

Sheeeeesh! It's a no brainer. Take the cash this minute, and run with it somewhere that actually brokers physical Gold for a living. (That is, if you don't have margin calls from dalliances in the stock market eating you alive.)

You see, the smartest folks bought fully allocated (or for delivery) physical Gold right from the start.

The next smartest are the ones who know enough to see this pool thing for what it is and assuming they arrive while the doors are still open, they go through the "EXPRESS" lane and they walk away swiftly with cash in hand as they exit their pool positions.

The naive folks are the ones who stand in line waiting fto file for withdrawal/delivery of Gold that isn't there, meanwhile the pool is making bankruptcy arrangements even as the line forms around the block and the telephones ring off the hook. What you'll receive is their bankruptcy notice in the mail long before your designated waiting period is up. No Gold for the innocent chumps!

That's the great think about pure metal brokerages like Centennial. They play the go-between among those who have Gold (but need to raise cash) and those who have cash (but want to exchange for Gold.) As a result, unlike the circumstance with the Gold pools and Unallocated Accounts, there's no worries about pending bankruptcy or delivery because the deal is struck and cleared for the available Free Gold at then-pending prices between willing buyer, willing seller.

And woe is the poor soul who finds his situation so bleak at this time to *need* to be a "willing seller" these days under paper-dominated price fiction. But that's all part of what keeps the current market REAL. This, and the metal flowing out of the pool accounts in the first place as they are employed in a fractional-reserve fashion.

And looking around, there's Mr. alanka again, asking for the umpteenth time why the price of "Gold" dropped. Because, for the umpteenth time, price discovery is STILL dominated by the trade in Gold derivatives (i.e., COMEX futures) and anyone worth their salt knows that a paper contract for "future delivery" is not as good as the Real Thing during crunch time. And yes, this is a mini-version of Crunch Time! Therefore, the double play for the really BIG guys is to buy metal with one hand while selling the COMEX paper down the river. It is that simple, laddie.

God, how I do love days like these!!!!

Gold. Get you some. --- Aristotle

R Powell

(07/23/2002; 17:33:12 MDT - Msg ID: 81248)

Selling gold to support stocks // my 2 cents

If, indeed, as many have mentioned, metals and metal stocks were liquidated today by funds, big banks or others to raise cash to support their own stock or meet margin calls, this desparate strategy will only temporarily keep the wolf from the door. Many markets players will sell that which has shown a profit to cover losses (margin) on that which is failing. This is not good trading discipline but human nature is not adverse to closing a position at a profit while closing a losing one requires admitting your initial judgement was flawed and opening that position was a mistake!
So, perhaps the shorts (bullion banks) have sold more to raise much needed cash and perhaps some longs (funds) have liquidated to take profits, again to raise cash. What now? I guess some weak hands have folded. Stops were hit to exaggerate the move. For long term buyers of physical, this is a buying oportunity. For traders of stocks and such, a chance to buy the dips for that part of the budget allocated for speculation if they truely believe that prices will again rise.

The POG will not trade at $20 or $30 dollar per day moves without first moving in the $5, $10, and $15 per day ranges. There will be up days and down days. Hopefully more ups than downs. The same is true with silver or any market entering a big move. A bigger range makes it easier to see the tops and the bottoms of the trend. Buy low, sell high!

Many have spoken of a multiyear stock market downturn but maybe the big decline will be more similar to the two year fall of 1973-4. If so, will not all sectors fall in value including, initially, precious metals?? With fund redemptions and margin calls, is there time for careful analysis of what to save and what to liquidate?
Any thoughts? I wish "The Stranger" or one with his experience would comment. TV note: As much as we've dumped on the cheerleaders on CNBC over these past years, I've noted that they seem eager to understand this downturn and are questioning their "guests" with a bit more authority and insight. Except, of course, Joe Kernan. He's still out in left field. Just my own opinion, but the more intense the situation becomes, the more apparent it is that Kudlow and Cramer are all mouth and no intelligence. Do they really entertain?
Rich

Canuck

(07/23/2002; 18:03:31 MDT - Msg ID: 81249)

Don Coxe's latest, one of his best

http://www.jonesheward.com/commentary.cfm"...in past mama bear sell-offs financial stocks have fallen apart, I do not see problems in the financials...if financials hold together a great bounce is in store....."

So...are financials holding together?

Also gold comments at 20 minutes in and by first caller.

Canuck

(07/23/2002; 18:04:47 MDT - Msg ID: 81250)

And a quick question........

.....with all the negativity of the US dollar why the wicked bounce in the last 2 days?

slingshot

(07/23/2002; 18:12:19 MDT - Msg ID: 81251)

Canuck Msg# 81242

What does it Take!Good Evening my friend. I too have asked that question many times. The answer to that question is questionable at best. Correct me if I am wrong but, it looks you have paper gold instead of physical. Not owning paper has freed me from that worry of paper burning. I like to keep things simple so when I see the POG up, just see it as good insurance. When I see it go down,it becomes a buying opportunity. You have to ask yourself with all the research here and at other sites is,
What in Hell are THEY up to! My catch is that in the future THEY will engage in a War for your mind and HARD EARNED MONEY to invest in paper to further their cause which has no place for you and I. If they get away with it this time they will do it again. Only more clandistine.

I paid my house off and no debt except a truck payment soon to close. I get many calls per week to take out a loan or credit card. They are desperate.They smell my free money.
I do not know the ins and outs of paper gold so I stick to Physical. Just my point of veiw.
Slingshot-------------------<>

Canuck

(07/23/2002; 18:12:42 MDT - Msg ID: 81252)

@ Ari

I would like to agree with you but some of the hardest hit today were non-hedgers ie;goldcorp

Goldcorp has been stockpiling physical, some 17 tonnes if I am correct, putting their money where their mouth is, and still got pasted.

If there is a movement from paper (derivatives) to semi-paper (non-hedged stock) to physical why was the divergence not clear today?

R Powell

(07/23/2002; 18:12:42 MDT - Msg ID: 81253)

Paper Avalanche

I too saw that segment on holding on rather than selling your house. If housing prices are overvalued and will depreciate significantly in the near future, then it might be profitable to sell your house now with an eye to rebuying after the bubble burst. However, for most of us this means selling our homes (as opposed to houses).
I have a friend nearing retirement who recently did sell his house. He told me he thought the housing prices were much too high and would come down so he sold and is now renting with the idea of buying again after retiring. This way, he reasons, he can buy wherever he likes.
I agreed with him. Is he a financial expert? Hardly, he drives a concrete mixer and occasionally works at the town dump. Whenever he delivers a load of concrete to me he always asks about silver! He likes to tell me how the government devalues money to steal from the old folks and veterans on disability. This angers him. Salt of the earth!
Rich

misetich

(07/23/2002; 18:25:27 MDT - Msg ID: 81254)

Banks reduce exposure to Brazil

http://www.euromoney.com/index.htmlSnip:

Headline: Banks reduce exposure to Brazil
Source: Gazeta Mercantil
Country: Brazil
Date: 22 Jul 02

The rising perception of risk of emerging markets, coupled with the global liquidity crisis, has caused a shift in the credit portfolios of the international banking system. The world's banks are preparing to comply with Basel II's stricter rules.

The impact of this can explain part of the recent lack of export credit for Brazil. To get around this, some banks have been financing importers of Brazilian goods. "Not even during the era of default (in the 1980s) did we experience such a situation," explained Jackson Gomes, risk management director at Ita�, a leading private bank in Brazil. The reduction of Brazil's sovereign rating by international agencies has caused international banks to lower their exposure to emerging markets. As sovereign ratings fall, banks with exposure to these economies are required to make larger provisions and the new Basel II rules will make the rules of exposure even tougher.

"The higher the risk of an asset, the greater the commitment on shareholders equity," explained Dresdner Bank Brasil risk management director Uwe Mossakowsk. "And shareholders equity for banks costs money. In the middle of a global recession, banks look for more mature markets, such as North America, Europe and Japan. This is flight to equity."

Misetich

Lets stay on ANOTHER hot TRAIL - shall we!

Got gold?

Canuck

(07/23/2002; 18:28:22 MDT - Msg ID: 81255)

@ slingshot

Good evening Sir.

For a while I thought I was understanding some of this stuff. It is indeed disenheartening. The return of 324 POG the other day was exciting while I watched my favorite non-hedger paper burn.

I am equally split between physical and stock (in terms of money). It is trully sickening, the chase for paper that is.
If I had enough 'money' I would not chase it, would there be a need?

I reminded my brother-in-law last week-end of a phrase that he himself coined a few short years ago. When one has enough 'money' the chase is not so vigorous but when one is broke the chase is perpertual.

Sad story. I am thankful that I am trying to break even, I know so many that are hurting large. Except for the grace of God, there am I.

Maybe I should sell the paper and stop the chase?

Canuck.

Black Blade

(07/23/2002; 18:32:21 MDT - Msg ID: 81256)

Potentially Explosive News!!!

There is a rumor that Treasury Secretary Paul O�Neill has been called to a "secret" emergency meeting with the Federal Reserve Bank in New York. There are no details, however, it has been suggested that it is in regard to the precipitous decline of the stock markets. Perhaps this is a meeting of the "President's Working Group on Financial Markets" (aka PPT). It has also been suggested that there may be concern about the turmoil in the world currency markets and the supposed "strong dollar policy". Though this is only a rumor, it has been the talk this afternoon on Wall Street and was mentioned at least twice by Larry Kudlow on his "Heckel and Jeckel" show with James Cramer. If these rumors are proven to be true, it could be a sign of some serious government intervention in the stock and/or currency markets.

- Black Blade

misetich

(07/23/2002; 18:39:03 MDT - Msg ID: 81257)

Krueger says IMF ready to support Brazil

http://www.forbes.com/newswire/2002/07/23/rtr672523.htmlSnip:

BRASILIA, Brazil, July 23 (Reuters) - The International Monetary Fund is ready to work with any new Brazilian government but no fresh loan deal has been discussed in high level meetings, the Fund's No. 2 official Anne Krueger said on Tuesday.

"We stand ready to work with the Brazilian government or any future government that follows sound policies," she told a news conference in the Brazilian capital after meeting with Brazil's President Fernando Henrique Cardoso and Finance Minister Pedro Malan.
...............
A big lead by the left-wing candidate over the government's nominee in election polls has hammered Brazilian markets in recent months for fear of mismanagement of the economy and Brazil's $250 billion debt load after the vote.

Misetich

Got gold?

slingshot

(07/23/2002; 18:44:00 MDT - Msg ID: 81258)

Canuck

*********************************In my story Seige Engine, the trebuchet is a symbol of how to acquire wealth. One Stone (ounce) at a time.

When the Goldbugs cross "The Field Of Years",(20 plus years Gold in waiting), you will be in their ranks.

Slingshot-----------------------<>

Nomad

(07/23/2002; 18:47:29 MDT - Msg ID: 81259)

Here's an idea ...

I saw BB's post about O'Neill and added the speculation that 'someone' (a big fund ???) is selling the euro and the yen as well as gold to prop up their stock market losses ...

Maybe we have another LTCM on our hands ?
Or a big mutual fund is about to go down the tubes ??

SOMETHING is UP !

I am not a conspiracy believer, but how is it possible that not ONE area went up today as the stock market tanked ???

Come on ... gold drops $ 10 ... the euro drops more than 2 percent in less than 18 hours ... AND the S&P 500 goes UNDER 800 all in the same day ?

What are the odds ?

Black Blade

(07/23/2002; 18:59:18 MDT - Msg ID: 81260)

Re: Nomad, MK, all

You know, you guys just might be on to something here. The sale of liquid assets (currencies and precious metals) to become liquid. A recent report that JP Morgan Chase and a couple of other major banks were experiencing liquidity problems. Now a rumored supposedly "secret" emergency meeting with Treasury Sec. O'Neill and the NY Federal Reserve. It does raise more than just an errant eyebrow here. Something big may be happening tonight. Will we see a fresh infusion in the markets? Is this all in combination with today's Enron/Citibank/JPMC hearings on Capital Hill? Is it in response to the stock market implosion? Or is this likely a combination of all these things in a desperate bid to head off the coming New Great Depression? There are some ominous rumblings making waves across the land tonight. Pray like hell, check your supplies, secure your cash reserves, and hang on to your precious metals - maybe even boost your PM reserves. Some dark clouds are gathering.

- Black Blade

R Powell

(07/23/2002; 18:59:55 MDT - Msg ID: 81261)

Why did POG crash today?

This seems to be the question of the day.
Can this be compared to the price of soybeans? Beans were up about 20 cents yesterday, a huge move caused supposedly by weather fears. Today, soybeans are down 19.75 cents. Why, certainly weather forecasting has advanced beyond the one day at a time forecasting!
So, Rich, what do you think of beans? Well, I've some thoughts but overall beans have been trending up strongly. Up and down, down and up but overall, stronger. What's this to do with gold? What's the overall trend? Is it still up?

There is no definitive answer to explain market moves. Imho there are many answers to many questions, some will prove through hindsight to be true, some not. Many questions will never be answered. Two sides to the story, this is what makes a market.
FWIW, I still believe based on what I can find for supply/demand type information, that a silver shortage is simply a matter of time. Probably more time now with weaker demand from a weakening economy. The patience of Job may be required. Has anyone heard anything concerning silver lately?
TIA
Rich

Black Blade

(07/23/2002; 19:01:35 MDT - Msg ID: 81262)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm

Snippit:

As mentioned earlier, gold and silver are emotional investments. They move on emotion, especially fear. There is no better barometer of fear in the financial markets than gold. This is why the financial industry doesn't want to see its rise. But bare in mind, this is a thin market. There are 1500-ton annual deficits in gold and 100 million ounce annual deficits in silver. The above-ground stockpiles of silver are dwindling; while gold is kept low by a constant supply of gold being sold into the markets by central banks and gold leasing. This game cannot last forever unless central bankers are prepared to tell the citizens of their country that there is nothing to back their national currency. Eventually, like the London Gold Pool of the 60's, this game will be abandoned as it is realized that it is hopeless to stop the transition from gold as a commodity to its historical role as money. That is exactly what it is doing now.

Look around and tell me what you see. The financial markets are imploding. Bankruptcies are becoming a weekly, if not daily occurrence, scandals and fraud are being exposed almost on a daily basis. What you are seeing is the evaporation of confidence in the financial system. What remaining confidence that is left will disappear when we get a string of bankruptcies in the financial system, especially in the banking sector. That is what is coming next. You can't have all of these bad loans, leveraged derivative plays, and overextensions of credit, hidden loans, frauds and scandal without consequences. Look at the charts of all of the financial sector from the major banks, credit card companies, government sponsored entities, mortgage insurance companies, to regional banks. The financial system is headed for trouble. That is what the rise in gold is signaling.

This is not the time to hesitate or the time to be without firm convictions or beliefs. If you don't have them, get into cash and be content with what you have left. For those of you that believe what the rise in gold and fall in the financial markets are telling you, it is time to take advantage of those who are subsidizing the price of gold and silver. It is the time of mice and men. It is a time when those who have convictions must stand by their beliefs because those who have none will eventually follow.

Black Blade: As I mentioned in the DGMR. This is yet another opportunity to dip into the Gold market. It appears that there are some desperate moves being, made on Wall Street. Things did not go as planned today. Wall Street was prepared for a "dead cat bounce" and did not get it. "Earnings Season" has been an absolute bust! If the rumors are true, then even the administration is plenty worried as Sec. Of Treasury O�Neill is being called on the carpet in the NY Fed. There is still time and a renewed opportunity to accumulate gold at lower prices. "Interesting Times"

R Powell

(07/23/2002; 19:07:57 MDT - Msg ID: 81263)

BB // Nomad

Emergency meeting? Maybe, an interest rate cut to weaken the dollar and lift the markets?
Many thought the Greenman couldn't cut again for fear of panicing the stock markets. That is no longer the case so why not cut now?
Rich

Black Blade

(07/23/2002; 19:10:14 MDT - Msg ID: 81264)

Re: R. Powell

Why did the POG decline today?

That is the big question. In the Daily Gold Market Report I touch on the possibility of sales for liquidity and MK has hit on that as well. I focussed primarily on the currency wars as did most bullion traders and dealers. The strong US dollar certainly had an influence, however, the response should have been muted as the stock market resumed the slo-mo crash. However, as I have been mulling this over and as MK has noted the possibility of fund/bank liquidation, as well as the "big rumor" of the emergency meeting between the Sec. of the Treas. and the NY Fed. Reserve (PPT meeting?), I am beginning to lean toward an emergency liquidation of assets by some major players who got their tit caught in a wringer. We should see some bizarre market movements over the next several hours and maybe some curious announcements by some banks or funds. This just get more curious, however, add these facts and "rumors" together and the possible conclusions look very ominous indeed.

- Black Blade

mikal

(07/23/2002; 19:11:34 MDT - Msg ID: 81265)

@BlackBlade, All

@ BlackBlade "...it could be a sign of some serious intervention in the stock and currency markets". Yes, if the rumor is true as you say. How often does O'Neill actually meet with the Fed? Probably more than we know. So this may be a common occurrence, trading floor rumors definitely are. But the outcome of a meeting would likely be more of the same, standard operating procedure, at this point, as the banks are in deep #%it. JPM's share price closed just below the derivative "trigger" level, among other happenings. Money center bank shares sold off big on high volume. Overseas subsidiaries dollar funds brought in, shorts and long positions sold, closed out for cash, gold shorted, bank shares repurchased, etc. What can the FED and Treasury do now? Just damage control and profiteering behind the curtain. Siochaina and others pointed out the first resistance levels for the dollar and gold were not breached today, let alone any major resistance points, so there is room for more adjustments before resuming trend.

misetich

(07/23/2002; 19:13:04 MDT - Msg ID: 81266)

Emerging debt-Brazil dives as poll fans election woes

http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n23211924&feed=reu&date=20020723&cat=USMARKETSnip:

NEW YORK, July 23 (Reuters) - Brazil's sovereign bonds swooned on Tuesday as investor concerns over October's presidential vote reached a fever pitch after a new poll showed two left-leaning candidates cementing their lead over Wall Street's favorite.

Brazil's share of the benchmark J.P. Morgan Emerging Markets Bond Index Plus sank 3.74 percent in terms of daily returns, while spreads over comparable U.S. Treasuries -- a gauge of perceived risk --- widened 0.85 percent to 16.83 percent.

.................

Brazil, which accounts for about one-sixth of the broader emerging debt market, helped sink the EMBI-Plus 1.2 percent in terms of daily returns.

Emerging markets as a whole were also pinched by a sullen mood in U.S. equity markets, where the Dow Jones Industrial Average (DJI) closed below the 8,000 level on Monday for the first time since mid-October 1998, said traders.

Colombian debt shed 2.14 percent in terms of daily returns, while Ecuador lost 3.67 percent and Russia slipped 0.71 percent, according to the EMBI-Plus.

Misetich

Sooner than later.....

Got gold?

Black Blade

(07/23/2002; 19:17:27 MDT - Msg ID: 81267)

Re: R. Powell - Panic?

I think that the Fed is now beyond worries of a panic. The Street is already in a panic. If the hearings today on Capital Hill are an indication. Unfortunately these senators are asking the wrong questions. Want to see a panic? What if the senators atart to hammer away on the "Notional derivatives" with a potential implosion of $40 Trillion? Then will will see real panic. Heck, even Japan cut interest rates to nothing and that did not help. It won't matter in the US either for the same reasons. The only hope now is a weak US dollar and to cut the interest rates to the bone. I am afraid that we like Wylie C. Coyote have run off the cliff and are only now noticing that we are about to plunge into oblivion. We already see panic and are looking at the beginning of abject fear. There is only one way for this to end and it will not be very pretty.

- Black Blade

Aristotle

(07/23/2002; 19:17:52 MDT - Msg ID: 81268)

Canuck and Goid prices, movements, things, timing and such

You got my apples all mixed with your bag of oranges and pears. I promise not to ask for my apples back, I'll leave to you the ultimate task of telling one from the other or even of deciding if you really care at all, because like some people, you may not, and far be it from me to force you into something.

But please allow me to clear the air of fruitflies before I hit the submit key.

Why are you dragging goldcorp into the context of what I laid out? They're a mining corporation, and "getting pasted" is what has been happening somewhat discriminately and indiscriminatey to all corporate stock holdings these days. You expect them to rise above the the broadbrush painting and selling as investors through in the towel?

Alright. alright, I'll get into this apples and oranges thing.

On your final note, where are you getting that there is (should be, could be, might be, whatever) a "movement from paper (derivatives) to semi-paper (non-hedged stock) to physical"? In many of my postings I have addressed the ins and outs of a fundamental shift to physical from inferior "paper" proxy Gold products (derivatives) in the grand tradition of our rich and storied history of banking. Modern times are no different in this general regard. I struggle (fail) to get that point across, seemingly. What on earth are you doing dragging "semi-paper" non-hedged corporate mining stock into the traffic? Fundamentally it's a side road, and with regard to the connections that can be made, the effort would be surely wasted as I am already failing to communicate effectively on much more direct and simple matters.

Why was the divergence not clear today? What divergence do you mean, exactly, with all these apples, oranges, and pears rolling around?

Puting stock aside, do you mean a divergence between paper and metal prices? My good sir, if you please, here are to opposing questions.

!) Why should today be the day among all others that it shows itself?

And if that one stumps you, try this one on for size.

2) How do you know it HASN'T already begun?

In other words, were you a metal buyer today -- do you know what the premiums did? In the divergence under contemplation, intuition would tell us that the paper Gold (such as Comex futures) prices would fall against expections that a rise was in order. And indeed we saw that today -- the "price of Gold" sold off amid a broader market malaise. A divergence would begin to express iteself in stability and growth of the coin and bar premium bought for delivery above the paper "spot." Again, did you buy metal friday and again today to be able to state that divergance was not clear following the paper selloff?

It may not be clear. Not yet. Maybe not ever. Maybe paper Gold will always be as good as Gold. Whatever we'd like to believe about the future of paper Gold, the wise money flows against the notion that it will bear up like the metal over term.

My own guess is that by the time a price divergance between paper and metal Gold becomes clear to see, it will be too late to do anything about it. By the time you see this sort of telltale flash at the muzzle of the gun, your fate is already sealed -- either you are already standing in a safe place, or else you are not pleased with the outcome.

Gold. Get you some. --- Aristotle

Golden Bear

(07/23/2002; 19:21:24 MDT - Msg ID: 81269)

Black Blade (msg#: 81223)

BB,

This IS news. When the likes of Rubin aren't called to testify, we know that things are rotten to the core. It almost guarantees that this will all end badly, and politicians will look for scapegoats, as the real villains slither away in the dark of night...

Grim, as you would say...

Cheers.

USAGOLD

(07/23/2002; 19:24:46 MDT - Msg ID: 81270)

Aristotle, Black Blade. . . .

The unsaid, but logical extension of Mr. Insider's comments given the circumstances (i.e., the stock market and dollar crashes, etc) is that the need to raise capital has to do with margin calls, which means the funds raised go to pay off debt not boost the stock market. That's why I think the stock market struggled today despite gold's drop. If there is a meeting at the New York Fed, my guess it has to do with liquidity problems -- you don't bring in the Fed unless you've got bank collapse potential. The ghost of J.P. Morgan will no doubt be present -- cigar in hand, grumpy demeanor in place -- shaking his head wondering how another "Panic" lurched in motion. Somebody might be on the ropes. And with the bank stocks dropping like rocks (Thanks, Lynn A. for putting the bug in my ear), there's more to the potential than investment types testing theory. . . . Keep your ear to the rail. . . . . . The potential exists for a quick rebound in gold, when the "players" realize that gold is the only game in town. Big day today at USAGOLD ~ CPM as the price came down. The goldmeisters like to buy when the market provides gift prices -- always good to get your insurance on the cheap.

Nomad

(07/23/2002; 19:28:45 MDT - Msg ID: 81271)

A Big Question ...

Pretend you are GreenSponge (or Little Bush) ...

How do you stop the markets from tanking ?

Yes, it is possible that the G-man will drop the interest rates, but as Japan has shown, this is NOT a solution when the rates are already so low.

And in any case, I think it is possible that the markets could do the unthinkable ... i.e. almost completely shrug off a rate decrease. After all, lots of 'unthinkable' things have happened in the last few days ...

So tell me what you think ?

You are the president of the US ... how do you prop things up ???

Black Blade

(07/23/2002; 19:29:31 MDT - Msg ID: 81272)

The Gold Price Is Performing Well! � Sinclair and Schultz

http://www.financialsense.com/editorials/sinclair/072202.htm

Snippit:

The government bond market is still soaking up liquidity from securities liquidation and will continue to do so for awhile. This period of intermediate and long-term bond strength will become exhausted as soon as the non-dollar denominated investors start to curtail their buying as a result of the weakness of the US dollar. There is also the continued selling by the gold dealer's cartel to consider. We believe that this supply of gold is from continued gold leasing by central banks to these entities. However, we believe that selling will be limited by the perception of a credit risk as the share values of the financial holding companies continue to fall. Chase Morgan has a huge multi-year head and shoulders indicating credit risk. We believe both "credit risk" and this holding company will be spoken of in the same sentence in the not too far future. To everything there is an end. The end of gold leasing will occur when credit risk enters the picture. Look for an upward bias in leasing rates as the signal for the astute gold traders of this impending positive occurrence.

Black Blade: How appropriate in light of current discussion. Finally I do like this statement that they offer: Avoid gold producers who are hedgers, as one would avoid Ebola.

Black Blade

(07/23/2002; 19:39:06 MDT - Msg ID: 81273)

Re: MK

Thanks for reminding me. I was going to bring up LTCM and the "panic" that ensued during that fiasco. Anything similar involving the major banks with their potential destructive power should their "notional derivatives" be in danger should have Alan Greenspan and Paul O'Neill trembling in terror. The Great Depression would be repeated at least 10 fold this time around and the people now are not well suited for survival now. Then (1929 - 1941) we were still a largely rural agrarian society that could somewhat live off of the land and th government could provide "work" in sponsored programs. Today it would be complete chaos and possibly even a breakdown in society where the government could provide little in help. And yes - Gold is looking more like the only game in town. Cheers!

- Black Blade

R Powell

(07/23/2002; 19:49:53 MDT - Msg ID: 81274)

Black Blade

I agree with you that the past damage has been too extensive to be fixed with an interest rate cut. We know this but do those who might make such rate cuts understand? What alternatives do they have? Checkmate?
Yes, I too sense the panic with each 100-200 point Dow fall having the potential to turn into a 700-1000 point down close.
So, why not cut them and see if the market will respond? A drowning man will grab at a twig to try to stay afloat.
Good time perhaps to short the markets and buy some gold?? Maybe a good time for this old construction worker to sell his overvalued house and return to "the hills" where it takes a whole lot less fiat to survive. Basic living with a whipowill that sang every summer night just before 9:00. Good night, all. Thanks for the thoughts
Rich

Nomad

(07/23/2002; 19:50:22 MDT - Msg ID: 81275)

A small answer ...

OK, here's what I think ...

You're Bush ...

1) you can drop the interest rate, but most likely it won't work. Only postpones the inevitable by a few days/hours.

2) You can bring in the PPT, but if that would have worked, the NAZ wouldn't be down 80 percent and the S&P down 50 percent today.

3) You put some corporate honchos behind bars ... unfortunately this infuriates the guys who pay your re-election tab, so not really an option ... and in any case, much too little, much too late. The effects of a massive crackdown on corp crime would still not solve the problem for years ... and if you're bush you have 2 deadlines, Fall 2002 for the congressional elections and Fall 2004 for your own.

Only one answer I can see ...

Start a war. Preferably a big one with an easily identifiable 'enemy'. Saddam is perfect. Even better if he retaliates with nukes or chem/bio weapons ... after all, not too many people are going to be worried about the old 401k if half of new york state is contaminated with radioactive waste.

French Intelligence puts the earliest start date for Iraq v. USA as August during Bush's vacation at the ranch (catch old Saddam by surprise). I think Bush will wait for the anniversary of 911 to drum up the max support, so I'd guess we are looking at 5 to 8 weeks.

And BTW ... I think it's going to be a double-header ... India - Pak is still on the backburner. India is just waiting for Sept. for the monsoons to cease and then Pak is going to get smacked.

And anyone for a triple-header ? Israel just killed a whole bunch of kids along with the Hamas guy. Major retaliation for that one I think.

Just my 2 cents.

Curious

(07/23/2002; 19:56:39 MDT - Msg ID: 81276)

New Definitions for Modern "Investors" or Why the market is risky for the uninformed.

Watching the markets these days indicates that there is a critical need for new definitions as the old definitions no longer have the same meaning. The following examples are offered:

Investor (old) A person who studies the market, earnings, demand for the product, and prospect for the industry and makes a judgement of the amount he can pay for the projected earnings. (new) A person with no knowledge of the market who wants to get rich quick and buys based on the recommendation of a broker, TV talking head or his conclusion that the stock market always goes up. He pays zero attention to earnings, demand for the product or the competition.

Spin (old) a public relations strategy to emphasise the strong points and minimize the weak points to make a company or product look good. (new) A campaign of deliberate lies and untruths for the purpose of deceiving the potential investor. This technique is also used by both political parties and by most politicians to deceive the voters.

Auditor (old) An independent auditor, often a Certified Public Auditor, who would analyize and verify the books of a business to assure that the numbers were valid,accurate and supported by sufficient documentation. (new) A firm that often provides audit advice and consultant advice on how to make the financial status appear to be better than it really is by the use of "legal" tricks that distort and obfiscate the true earning of the company such as off book debts and hidden costs or reporting operating costs as investments.

Conflict of Interest (old)Any apparent conflict that would appear to influence the objective judgement of the person making the decision that would be reported as the reason for the person not taking the assignment. (new) This definition has been deleted from the current lexicon of business terms.

Ethics (old) A set of core beliefs and values that would not be violated in the performance of the duties of the position. (new)Do whatever you can get away with.

Politician (old)A person who was elected to represent the public interest to the best of his ability. (new) A person whose primary objective is to collect campaign contributions for the next election and to do so will attempt to achieve the goals of his contributors even if that may be against the public interest.

Board of Directors (old)Independent experienced businessmen who would advise management on the direction that the firm should take to serve the public and to increase the profits and viability of the firm. (new) Lapdogs often appointed by the Chief Executive Officer who will let him do anything he wants without supervison while they collect big salaries for failing to supervise the operations of the cheif executive officer.

Chief Executive Officer (old)The person managing a corporation who made decisions in the best interest of the corporation. (new)The person managing a corporation who sees his main mission in life as increasing the share value of the corporation so that he and his fellow executives can exercise their obscene stock options before the company collapses.

Earnings (old)Actual earnings reduced by valid daily operating expenses (New)A sum of money massaged to hide adverse information to deceive the investors and increase the value of the stock by such devices as the use of proforma earnings, and the reporting of earnings far in advance of the receipt of the earnings. This can be any number that the public is likely to believe.

Securities And Exchange Commission. (old) A watchdog agency established to monitor the activities of the securities industry to assure that fraud and abuse are identified and prosecuted. (new) A gutted organization not given sufficient funds and personnel by Congress to do the job and further encumbered by the passage of laws by Congress that protect executives who violate these laws.

Will our esteemed Colleges and Universities ever get back into the mode of teaching the old beliefs before the idea of being Politically Correct became more important that teaching ethics and morality in the conduct of our affairs? I am not holding my breath. Maybe the coming collapse will demonstate the need for more attention to these old definitions.

Chris Powell

(07/23/2002; 20:00:50 MDT - Msg ID: 81277)

C-SPAN confirms live interview with GATA chairman at 9a ET Wednesday

http://groups.yahoo.com/group/gata/message/1187C-SPAN confirms that it will broadcast live at 9a
Eastern time Wednesday an interview of GATA
Chairman Bill Murphy on the program "Washington
Journal."

http://groups.yahoo.com/group/gata/message/1187

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

R Powell

(07/23/2002; 20:06:13 MDT - Msg ID: 81278)

Nomad

Again, I agree (FWIW) that another rate cut will completely panic the markets but do those with the power to cut rates evaluate the situation the same way. Perhaps they will think they've not much to lose and give it a try. Perhaps they think the market will welcome lower rates with a "Fed to the rescue" and "happy days are here again" big time rally. Most financial managers might think a rate cut is just what the doctor ordered, even thought we disagree with that.
Myself, I don't think rallies can get above 150 points up anymore on the Dow before the smart money sells into them big time. There is big money to be made here but it's not on the long side. The premium on index options has skyrocketed. This will happen with metals too, probably about the time Michael has trouble finding any to broker.
Buy cheap, buy now
Rich

Black Blade

(07/23/2002; 20:15:42 MDT - Msg ID: 81279)

Plunging markets fuel fears about economy

http://seattletimes.nwsource.com/html/businesstechnology/134498458_markets23.html
Snippit:

Another roller-coaster day on global stock markets yesterday left the Dow Jones industrial average below 8,000 and economists wondering aloud if the plunge in stock prices will bring the real economy down

Black Blade: The talk of an "economic recovery" of the "real" economy is absurd in light of slanted BLS data. However, if some economists want to believe that the stock market crash will drag the "real" economy down, then so be it. We were not fooled as we saw this unfold for the last 2 � years. The declining corporate earnings, increasing record level debt, lay offs, bankruptcies, etc. did not suggest a robust recovering economy to most rational thinking bipedal hominids, however, to the chest thumping primates on Wall Street and CNBC who ignored such obvious facts this seems to come as a bit of a surprise.

Black Blade

(07/23/2002; 20:28:07 MDT - Msg ID: 81280)

Two Wall Street Strategists Cut Market Forecasts: Taking Stock

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Latest%20Columns&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=APTx0lha0VHdvIFdh
Snippit:

New York, July 22 (Bloomberg) -- Strategists at Lehman Brothers Inc. and Banc of America Securities Inc. lowered market forecasts after the Dow Jones Industrial Average dropped to its lowest level since 1998. ``The sharp stock-market drop since March simply makes our S&P 500 year-end price target of 1200 fanciful,'' Lehman's Jeffrey Applegate wrote in a note to clients.

Applegate lowered his year-end expectation for the Standard & Poor's 500 Index to 1075 from 1200 and for the Dow to 10,250 from 11,500. That suggests a 32 percent gain for the Dow and a 31 percent jump for the S&P 500 from today.

Banc of America's McManus trimmed his 12-month targets for the S&P 500 and Dow to 1000 from 1150 and 9,400 from 10,400, respectively. The S&P 500 would have to rally 22 percent from today's close to meet McManus's target and the Dow 21 percent.

Abby Joseph Cohen of Goldman Sachs left unchanged her estimates that the S&P 500 would reach 1300 by yearend and the Dow 11,300.

Black Blade: Oh jeez! These charlatans are becoming insufferable. The S&P 500 is just under 800, and the DOW sits at about 7700. There is absolutely no fundamental reason to even suggest that these indices will rally to such lofty levels as these intoxicated buffoons suggest � even in their wildest drug induced hallucinations. Maybe they ought to trot out Abby Joseph Cohen � maybe she will see her shadow. Hmmm�

slingshot

(07/23/2002; 20:30:32 MDT - Msg ID: 81281)

Nomad

Saving the Market Why save the whole market? Why not 70%.
The idea is to keep the FIAT FLOWING so the game continues.
The President comes on TV and states that since we are stepping up the war on terrorism he uses the ploy to buy into the market but just those stocks suitable to the war effort. Furthermore he states that those companies that wish to be considered, hire those unemployed as part of the terms. Tax breaks also. He does not have to enter a major war . Just a prolong one. Lowers unemployment. Gets more control over the market. Let the other 30% fight for the crumbs.
Slingshot---------------<>

Black Blade

(07/23/2002; 20:41:08 MDT - Msg ID: 81282)

Falling dollar is great tonic for economy

http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={7024C864-FFE5-4B0A-AB6C-96CDAF2D1499}&siteid=mktw

Snippit:

NEW YORK (CBS.MW) -- There are more pluses than minuses to the falling dollar, so relax and enjoy it. Because deranged despair is the theme du jour down on Wall Street, investors and traders are only looking at the dark side of the dollar decline -- its potential to scare away foreign money.

Black Blade: As I have argued here that a weak US dollar is a must for the US economy. Robert Rubin's and Paul O�Neill's "Strong Dollar Policy" is a disaster. The markets have to go through a "cleansing" to squeeze out the excesses built up during a massive speculative mania. It is curious that the government should not want to heal the patient rather than prolong an agonizing cruel death.

slingshot

(07/23/2002; 20:48:50 MDT - Msg ID: 81283)

Nomad

**************************With this plan all Greenspan would have to do is watch TV and clap saying,"Thank you Mr. President, Thank you".
Cause he would not have to cut rates.:0)
Slingshot----------------<>

Black Blade

(07/23/2002; 21:08:39 MDT - Msg ID: 81284)

Man with gun headed for broker stopped by police

http://chestertontribune.com/PoliceFireEmergency/man_with_gun_headed_for_broker_s.htm

Snippit:

A Valparaiso man, armed with a weapon, headed for his broker's office, was apprehended by Chesterton Police Monday afternoon in the parking lot of A.G. Edwards and Sons, Inc. at 751 Porter Ave. According to police, at 1:20 p.m. CPD was dispatched after the wife of the unhappy man called 911 to warn police her husband told her he was first going to the credit union then to his brokers. He left the house with the gun wrapped in a towel. The secretary and two brokers at A.G. Edwards said they feared for their lives. They and the wife all have filed restraining orders against the suspect. And the brokers said they were filing formal letters that they no longer want the suspect as a client.

Black Blade: This must be serious - The brokers filed formal letters that they no longer want the suspect as a client. I guess he opened his "statement". I think we could easily see more of this as more distraught investors go to see their brokers. With PM portfolio insurance we don't have that problem.

Black Blade

(07/23/2002; 21:19:56 MDT - Msg ID: 81285)

Asia Starts Off Ugly

http://quote.yahoo.com/m2?u
Asian markets are crashing hard right off the start. The race for sub 10,000 between the Nikkei 225 and the Hang Seng should have the bookies excited. Looks like more "entertainment" in store tonight and tomorrow. The rumored "emergency Fed meeting" is troublesome though.

- Black Blade

goldquest

(07/23/2002; 21:21:18 MDT - Msg ID: 81286)

Who Does Ron Paul Think He Is?

http://www.rense.com/general27/ryp.htmA bit of humor. Sadly, it's true!

misetich

(07/23/2002; 21:22:30 MDT - Msg ID: 81287)

Citigroup and JP Morgan Chase-Enron-style pre-pay transactions with at least 10 other companies

http://news.bbc.co.uk/1/hi/business/2147426.stmSnip:

Citigroup and JP Morgan Chase have reportedly entered into Enron-style pre-pay transactions with at least 10 other companies, which bank officials asked not be named.

Misetich

Who are these companies?

Stay tuned.

Got gold?

Gauntlet-Runner2("GR2")

(07/23/2002; 21:25:56 MDT - Msg ID: 81288)

POG performance link

http://www.financialsense.com/editorials/sinclair/072202.htmWoe to the paper goalbugs. Getting clobbered. JPM shorting gold with whatever ammo they can find. The article in the link explains the limits of their gold leasing.

Siochaina

(07/23/2002; 21:29:58 MDT - Msg ID: 81289)

Just a thought that goes with other posts re today's action & liquidity

I posted this morning (seems like a long time ago) about the sudden spooking of the overseas Markets and US pre market opening futures ...all in a matter of moments came a big decline...example German DAX dropped over 100 points at the snap of a finger.

Although a slight recovery occurred a short time later it didn't hold ....the IMO "planned" scenario for the day fell apart.

We did not have the SM rally scheduled....and in fact went red.

JPM & C began to get slammed hard....now I wonder if the info re their troubles was the cause of the initial spook....and if those in the know piled on the evil duo ....then did the duo in turn liquidate all they could to gather much needed (according to gossip) liquidity as well as support as best they could their stocks.....causing a dog eat dog day (actually dog is too nice a term...perhaps hyena is a better fit)

In turn if JPM & C are being hit (in stock plunge plus investigation going public)....you know the rest of the market is at risk....just a matter of time...so liquidity becomes the name of the game for many big players....and where have the profits been to grab....PMs....and added advantage is you get your funds out....gold drops....and you'll get a chance to buy in lower

It appears critical that JPM & C be bolstered by TPTB,,,,FAST....so the likelihood of the rumored evening meeting seems very possible indeed... checkmate is near!

Note: Maybe prophetic....when I ran spellchecker for this post....the suggestion for JP:...was JAM!!!

Black Blade

(07/23/2002; 22:16:10 MDT - Msg ID: 81290)

Japan Wins!

http://quote.yahoo.com/m2?u
The Nikkei 225 is the first to go sub 10,000 followed closely by the Hang Seng. In the spirit of weakening ones currency (the yen), this was probably no contest. The Japanese are good at destroying their market indices, banking system and currency. Looks like they soon will follow in the steps of Argentina.

- Black Blade

Shermag

(07/23/2002; 22:18:30 MDT - Msg ID: 81291)

Looks like Japan won the race

http://quote.yahoo.com/q?s=^N225&d=1dJapan Nikkei just deciccively broke below 10,000. It's dropping hard.

Horatio

(07/23/2002; 22:24:26 MDT - Msg ID: 81292)

stay the coarse

The time to reef your sails is when you first think about it.
Thw wind is picking up,the clouds are rolling and an erie smell of ozone is in the air.A firm hand at the helm will be needed.
I have sailed through storms before both Cheaspeake bay and Carribbean sea.We are well seasoned gold bugs and know what to do.Stay out of debt,away from margin ,not be tempted by options
and you will come through ok.When other ships are sunk because of too much leverage (sail) your reef will stand you in good stead.Use gold for ballast,its the best!!!

longj

(07/23/2002; 22:30:55 MDT - Msg ID: 81293)

Hello Aragorn III

http://www.kitcomm.com/comments/gold/userimages/6history.gifIt has been several years since we last spoke. Even after the pounding by the NY market today we remain very close to that last point on your graph. The trend line for POG is still just intact from the bump up last year. We rest on the line of support. This has shaken out speculative longs and opens the door for some solid and rational revaluation of gold relative to the paper currencies. This can only bring more conviction to the market if the trend persists after such a volatile test. Onward then with the slow march to a true value for money with value built in.

I see the counterfeiters are giving the fed cause to adjust manufacturing practices, this isn't required for real money. The color and properties of gold are well recognized, and not economically imitated, as can be the case for those monies create by keystroke.

This price point presents a good entry point for the moment, and with any truth in the market, some time to come. FWIW I did do the regression fit on your four data points. The end lines do basically connect, but I think the struggle between the paper currencies will give us more opportunities to find the true line of their depreciation against real money.

All the best.

darkhorse

(07/23/2002; 22:37:52 MDT - Msg ID: 81294)

this ain't your Grandma's Sunday comics page...

http://money.cnn.com/2002/07/09/pf/investing/q_alternatives/index.htmI hope this link works for everybody. It's their idea of alternative investments to the SM...and it runs the gamut from bonds and treasuries to, get this, COMICS and EMU's! The closest they get to PM's is coin collecting. What a joke; these people are supposed to be investment professionals and they come up with this crap...only in America!!!

Black Blade

(07/23/2002; 22:45:40 MDT - Msg ID: 81295)

Market Indicators

http://www.mrci.com/qpnight.asp

The US market index futures are negative. The USD is weakening against major word currencies, gold is higher, and petroleum prices are recovering. Asian markets have crashed tonight and Europe looks to follow Asian markets lower. Lotsa fun tonight and plenty of "entertainment" is on tap for tomorrow.

- Black Blade

Black Blade

(07/23/2002; 22:54:54 MDT - Msg ID: 81296)

SBC to Cut 3,000 Jobs; Annual Profit to Fall Short

Carl H

(07/23/2002; 23:05:13 MDT - Msg ID: 81297)

Emergency Federal Reserve Meeting Tonight

From Gold-Eagle:

(AG) Jul 23, 22:34

Emergency Federal Reserve Meeting Tonight
� on: Today at 7:35pm �

CNBC:

the Federal Reserve may be meeting tonight to discuss the exposure of Citibank and JP Morgan Chase to derivatives and the stock market collapse.
Possible that both banks have billions of derivatives that need to be unwound. Would collapse the banking industry

CarlH: Hasn't Greenie been saying how wonderful everything is. I'm sure that they are just getting together to play cards tonight.

Mr Gresham

(07/23/2002; 23:13:36 MDT - Msg ID: 81298)

Thanks Carl H, Horatio, Siochaina, Ari & Ara

What a day! This is like sitting around in the Members' Lounge at the Financial Detectives Club, poring over the latest clues together -- as up-to-the-minute as any non-Player can get or hope to be, and yet holding the ultimate trump cards, and reminding each other that, while the winds may blow, we need not be disturbed by each and every gust...

Mr Gresham

(07/23/2002; 23:19:14 MDT - Msg ID: 81299)

Fed rumors

http://www.bearforum.com/cgi-bin/bbs.pl?read=246762Bits & pieces on possible Fed moves, including ban on short selling...

?rumors as tactics to shake out the shorts? Desperate measures for desperate times? A few tricks left in their bag of tricks? Could these all be just manageable moves to (personally) profit from volatility (while selling their un-saveable institutions short?)

Black Blade

(07/24/2002; 00:20:13 MDT - Msg ID: 81300)

Asian Markets Get Slaughtered

http://quote.yahoo.com/m2?u
Asian markets got hammered last night and European markets look poised to take it on the chin as well. It still looks like Global Economic Depression could be the name of the game.

- Black Blade

DOWNUNDER

(07/24/2002; 01:10:09 MDT - Msg ID: 81301)

(No Subject)

RE GOLD SHARES - - - - Date: Tue Jul 23 2002 22:52
Dandelion (Heavy Sellers of Metals Today?) ID#235218:
Copyright � 2002 Dandelion/Kitco Inc. All rights reserved
The Banksters weren't selling metals down today, they were selling "paper" Gold. They managed to take down the miners as well.
FROM ANOTHER FORUM - -
Miners are not paper even though their stock price will behave as paper at times. But since Bre-X over a decade ago miners have the cleanest books in the world and they have Gold. They also happen to know how to get it out of the ground.

Run screaming if you must. But don't come crying back later. Now is the time to buy Gold and Gold shares.

There will be cheerleaders, bashers and trolls around here from time to time. IMHO now is the time to load up, not to lighten up.
-----------------------------------------------------------
For those of us who didn't have the crystal ball set up to see the top @ 330 AND who are still long - - - (Thats me)
perhaps the above makes some sense.

Anyway it sure wouldn't be the smartest move to now sell at a LOW. Sure it may go down further but I get some relief in noting that the volumes are very low.

No need for the smarties to come back with --Ya should have had physical! --- I do & plenty of it!

Blackjack

(07/24/2002; 01:21:33 MDT - Msg ID: 81302)

1982 Bull Market trendline broken, Check these charts

http://stockcharts.com/commentary/archives/cww20020720h.htmlThe 1982 Bull Market trend line has been broken with a huge head and shoulders pattern that indicates .....who knows.........
not looking good for markets.

Black Blade

(07/24/2002; 01:30:22 MDT - Msg ID: 81303)

US Market Index Futures Turn Positive

http://www.mrci.com/qpnight.asp
Strangely the US market futures have turned positive while Euro markets are tanking at the open. The USD index has stalled and gold has flat lined. It should get "interesting" today on Wall Street. The markets have been so volatile lately it does not really matter where the market futures sit at the open anymore.

- Black Blade

Black Blade

(07/24/2002; 01:59:08 MDT - Msg ID: 81304)

Green Issues May Hit Energy Firms

http://biz.yahoo.com/rb/020724/energy_investments_1.html
Snippit:

WASHINGTON (Reuters) - If the stock slump wasn't bad enough, shareholder value at some top oil and natural gas companies could fall by another 6 percent because of environmental costs and risks in the coming decade, according to a Wednesday report by an environmental think tank. "Investors ignore environmental issues at their own peril," said Duncan Austin, WRI economist and co-author of the report. "Environmental issues can have a significant impact on a company's bottom line and stock price." "Even without U.S. participation in the (Kyoto) protocol, U.S.-based companies could be affected by it," the study said. "Changes in the global oil market, transmitted by price, will be felt throughout the industry." Another risk to balance sheets is growing opposition to drilling in environmentally sensitive areas such as the Arctic National Wildlife Refuge, the think tank said.

Black Blade: Translation: be prepared to pay much higher energy and utility costs. On the bright side, higher energy costs will enhance the role of nuclear power and increase petroleum prices that in turn will do wonders for commodities prices and precious metals prices. I smell a lot of investment and speculation potential here. It is petroleum that fuels the economy and without it the economy simply dies.

Black Blade

(07/24/2002; 02:23:42 MDT - Msg ID: 81305)

European Markets In Full Retreat - Dive! Dive! Dive!

http://quote.yahoo.com/m2?u
The European markets are crashing hard this morning. Even the US market futures are turning hard into a nose dive. It appears that tomorrow we could see a real market crash on Wall Street. It has gone from ugly to outright medussa. Pedestrians had better watch their step - in fact it may be safer to walk in the streets rather than on the sidewalks as swan-diving bankers and brokers could pose a hazard. Perhaps the government will provide a lot of lipstick for painting pigs on Wall Street by the market open, however, these pigs won't fly right now.

- Black Blade

Canuck

(07/24/2002; 02:24:54 MDT - Msg ID: 81306)

@ Ari

http://www.financialsense.com/editorials/sinclair/072202.htmGoing back through our dialogue I see the disconnect between my post and yours, my apologies. In defense I can only say I am still having problems recognizing your hard line stance at physical and physical only.

This is the reason I brought up Goldcorp. The company is stockpiling significant amounts of gold, is there any other way of putting one's money where there mouth is? A shareholder in the corporation then becomes a holder in the physical. Is there any way a producer can become a better 'proxy' than that? If I am correct IAMGOLD (and possibly Goldcorp) intend to pay dividends in gold, is this the real McCoy? I mention these 2 companies not as a plug but rather as a notion that these 'paper' plays become as close to physical as one can get without the real thing, yes?

So.........

If the above is correct why would the above be painted with the same brush as all others? If the disillusioned price discovery of Comex is a hoax, why are the 'proxies' for physical getting clobbered as well.

I draw your attention to DownUnder's post just recently;

"Miners are not paper even though their stock price will behave as paper at times. But since Bre-X over a decade ago miners have the cleanest books in the world and they have Gold. They also happen to know how to get it out of the ground. "

Also to the above link which has a plug or two towards gold equites especially this;

"Avoid gold producers who are hedgers, as one would avoid Ebola"

Thanks.

Blackjack

(07/24/2002; 03:02:27 MDT - Msg ID: 81307)

Japan exports down for first time in 6 months.

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Economy%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_economy&s=APT4gYhVzSmFwYW4g&ao=11737942Tokyo, July 24 (Bloomberg) -- Japan's exports fell for the first time in six months in June, fueling concern a recovery in the world's second-biggest economy may falter as the rising yen threatens to cut earnings at companies such as Mazda Motor Corp.

Exports declined 3.9 percent last month from May, a Ministry of Finance report said. The trade surplus rose to 1.12 trillion yen ($9.5 billion) from 907.6 billion yen in May as imports dropped 10.6 percent, more than twice the decline in exports.
_________
Uh Oh.... no recovery for Japan.....watch their Banks.

Black Blade

(07/24/2002; 03:09:54 MDT - Msg ID: 81308)

Corning Reports Loss of $370 million and Fires 4,000

From yesterday - Corning announced huge quarterly losses and that they will send 4,000 off to the growing "Bone Pile". This "earnings season" has made liars out of Wall Street pied pipers who screamed that we would see an improvement by now. The guidance going forward for many companies suggest that the next quarter and the one after will be even worse. It just looks plain ugly!

- Black Blade

NEMO me impune lacessit

(07/24/2002; 03:59:37 MDT - Msg ID: 81309)

(No Subject)

Huge forced selling in Scandinavian countries.
Said to be the largest this year (so far).

Golden Bear

(07/24/2002; 04:31:47 MDT - Msg ID: 81310)

Not talking about Citibank....

Just viewed a special segment on Bloomberg called volume spikes. Discussed a number of companies that have shown volume spikes, shares which are incosequential to the grand scheme of things.

Now, Citibank, which had a volume spike of 120 MILLION shares traded yesterday, for some reason didn't even rate a mention. Its long term daily average volume is around 15 million. Hmmm....

misetich

(07/24/2002; 05:26:28 MDT - Msg ID: 81311)

O'Neil meets Investment Bankers

http://www.nytimes.com/2002/07/24/business/24MARK.htmlSnip:

Stocks fell again yesterday as concerns grew about the fate of telecommunications and energy trading companies and as Treasury Secretary Paul H. O'Neill traveled to Wall Street to discuss the markets and economy with senior brokerage executives

In the morning, according to people briefed on the meeting, Mr. O'Neill sat down with Philip J. Purcell, the chairman and chief executive of Morgan Stanley; David H. Komansky, chairman and chief executive of Merrill Lynch; John Thain, co-president of the Goldman Sachs Group; and Stephen R. Volk, chairman of Credit Suisse First Boston.
They discussed the state of the economy, markets and investor confidence, these people said. One of them said that after hearing Mr. O'Neill's views, one Wall Street executive recommended that the Bush administration tone down its language on corporate misconduct because it clearly had not helped the markets. He did not disclose what Mr. O'Neill had said.

..........................

Misetich

O'Neil's days are numbered. His optimistic spin - his stand on stock options (to be disclosed in a foot note) clearly demonstrates that he is of touch with investor's anger and discontent- Investors desire more Investigations not less and desire prosecutions!

Got gold?

misetich

(07/24/2002; 05:42:21 MDT - Msg ID: 81312)

Citigroup and Chase Defend Their Enron Roles

http://www.nytimes.com/2002/07/24/business/24ENRO.htmlSnip:

But the Senate panel investigating Enron's collapse produced evidence that lawmakers said seriously undermined the officials' contentions.

Using internal documents, tape recordings and e-mail messages � documents that at times appeared to surprise some bank executives who testified � the lawmakers painted a picture of how both banks set up supposedly independent entities that in reality were largely controlled by the banks and which allowed Enron to borrow billions of dollars that it did not disclose as debt to investors.

........................

At issue are more than $8 billion in so-called prepay deals the banks did with Enron, in which the company received money upfront in exchange for agreeing to deliver commodities at a later date. These deals involved supposedly independent third parties that the money flowed through; one entity, Mahonia, was used in deals with J. P. Morgan Chase, while an entity called Delta Energy was used in Citigroup deals.

But lawmakers on the Senate Permanent Subcommittee on Investigations produced what they said was evidence that Mahonia and Delta were actually controlled by the banks. Thus, they said, Enron should have been forced to count the money received as debt. That would have probably resulted in credit downgrades and more skepticism from investors long before the rapid chain of events that led to Enron's bankruptcy, they added. Moreover, documents collected by the Senate panel also suggest that the two banks knew the deals allowed Enron to burnish its financial picture.

....................
The two banks "were the biggest participants in Enron's phony prepay transactions," said Senator Carl Levin, the Michigan Democrat who is chairman of the subcommittee.
...................
The banker's e-mail message said, however, that the oral discussions with Enron would change the accounting, if recorded on paper. Moreover, in the approval documents submitted to senior Citigroup credit officers � and cited in the Times article � senior officers of the bank were informed that Enron had "verbally agreed" to pay back the money. In other words, either the analysis distributed today was wrong, or Citigroup's own documents submitted to the loan approval committee were.

Mr. Levin seized on the difference today. "You lied in this memo?" Mr. Levin asked one Citigroup banker, James Reilly, about the approval documents. Mr. Reilly said that the passages were meant to be a "statement of intention" by Enron, and not a binding agreement to pay the debt back. Another Citigroup banker, Richard Caplan, described the wording on the document as "unfortunate" and said it was meant to help the bank get "comfortable in making a credit decision."

Evidence disclosed by the committee today also showed that the two banks engaged in deals with similar characteristics with other companies. J. P. Morgan Chase told the panel that seven companies entered into "commodity prepaid forward transactions," including Columbia Natural Resources Inc. and Occidental Petroleum. Citigroup said it did prepay deals in 1992 with the Arkla Exploration Company and in 1993 with the Amerada Hess Corporation.

........................

Misetich

"You lied in this memo?" - It is the type of phrase will be hearing time and time again as these crooks get grilled

Investors lawsuits, Enron employees lawsuits will be flying against these crooks

REPOST OF http://www.financialsense.com/Market/wrapup.htm JULY 22

***************The net equity of JPM has to back those derivatives. If you look at J.P. Morgan Chase's derivative book, the bank looks and acts more like a hedge fund then it does a pillar of stability of the financial establishment. The credit problems are only one side of the problem. No one knows what the bank's derivative risks are other than that they have $23.4 trillion in derivatives against equity of around $40 billion.***************

Got gold?

misetich

(07/24/2002; 05:54:10 MDT - Msg ID: 81313)

Sinking Feeling Is Now Settling Over Citigroup

http://www.nytimes.com/2002/07/24/business/24PLAC.htmlSnip:

Citigroup should have the financial resources to deal with any legal or regulatory liability, several analysts said. But no one can estimate what the potential liability might be.

"I am being asked to quantify things that are not quantifiable," said Joan Solotar, an analyst at Credit Suisse First Boston. "I have no idea what the downside is."

.................
But at a time when investors fear the unknown, Citigroup's size is daunting. "This is a time when people should invest in companies they can get their arms around," said Michael F. Price, the former manager of the Franklin Mutual Series funds who now heads a private investment firm. Mr. Price, known as a value investor, said he was not tempted by shares of either Citigroup or J. P. Morgan, despite their steep declines in price. "They are black boxes," he said.
.................
But that consistency may now lead investors to worry that Citigroup is managing its earnings to meet expectations, said Thomas K. Brown, who heads Second Curve Capital, an investment firm specializing in financial services stocks. Mr. Brown has not been tempted by Citigroup shares.
...................
The company is facing three types of risk, said Michael Mayo, an analyst with Prudential Securities who has had a negative opinion of Citigroup shares since last December. The first is legal risk, related to securities that the firm underwrote and sold to investors who are claiming they were misled.

Then there is regulatory risk, as Congress could try to restrict Citigroup's activities. "The whole business model of the convergence of the investment banking and commercial banking businesses is now open to question," Mr. Mayo said.

The final concern is reputational. "A good reputation is integral to the investment banking business," Mr. Mayo said.

Misetich

Legal Risk, Regulatory risk, reputational risk, managed earnings, unknown derivatives risk, -

From slingshot (7/22/02; 17:51:38MT - usagold.com msg#: 81131)
Seige Engine
Gold above $300.00
The water seeped between the cracks created by the bombardment of the trebuchet, and increased its flow as it exited the hole at the base of the tower. Bringing with it more and more fill as the rain come down. Mortar weak from age and moisture released it grip upon the stones and they fell down to the foundation and destruction come from within.
Then it began.
The tower collasped slowly. First separating from the buttresses which held it high and then from the main wall itself, settling on the ramp of fill expelled.
Ressembling a man falling to his knees, it heeled over and the structure increased with speed till it impacted the far bank of the moat. A huge splash resulting from the overfilled moat and two waves raced out to pass through each other, washing back over the fallen tower.
The Lord of the castle had just entered the courtyard to see his symbol of authority come crashing down. He stood in the rain with his Knights.
The Goldbugs although watching this edifice crumble, stood in silence. They knew soon there would be a battle. One which would be remembered through history.

The Brother of the Lord of the Castle had sent a message to The King with No Name, Reinforcements had been put to a forced march. They too, were not far away.

Got gold?

Knallgold

(07/24/2002; 05:57:44 MDT - Msg ID: 81314)

JPM

Will they knock POG down to 290 to get their Goldbook above water?

Truthcaster

(07/24/2002; 06:02:40 MDT - Msg ID: 81315)

Drop In Spot Gold

I See this morning on kitco that spot gold
is down a buck and a half. Here I was hoping
for a turn to the upside today. US stocks look to
sell off again, the open may send the dow down
60 to 80 points right out of the gate.

misetich

(07/24/2002; 06:03:29 MDT - Msg ID: 81316)

Senate Panel Says 2 Banks Helped Enron Hide Loans

http://www.washingtonpost.com/wp-dyn/articles/A53153-2002Jul23.htmlSnip:

The transactions, known as prepays, brought Enron more than $8.5 billion in the six years before it collapsed last fall. Had Enron properly accounted for the loans, its debt obligations would have increased by more than 40 percent, to $14 billion in 2000, according to an analysis by the staff of the Senate Governmental Affairs Committee's investigations subcommittee.

That would have led to lower credit ratings, officials of debt-rating agencies testified.

Subcommittee Chairman Carl M. Levin (D-Mich.) called Enron's use of the prepays to disguise debt "an accounting sham" and said the company had "the help and knowing assistance of some of the biggest financial institutions in our country."

"Chase and Citicorp knew what Enron was doing, assisted in the deceptions, and profited from their actions," he said.

................
Chase and Citigroup also sold the prepay structures to at least 10 other clients.

"J.P. Morgan Chase and Citigroup are two of the nation's most prestigious financial institutions," said Sen. Susan Collins (R-Maine), ranking minority member of the subcommittee. "That's why I find their involvement so shocking. It appears as though they were willing to risk their reputation to keep an important client, Enron, happy."

.................
Prepays are arrangements in which companies are paid to deliver a product -- in Enron's case, oil and natural gas -- at a later date. But Enron and several large banks structured the deals in ways that compromised the independence of the transactions, making them loans rather than sales for accounting purposes, the Senate investigation found
............
Chase and Citigroup engaged in the deals by using secretive offshore entities called Mahonia, Delta and Yosemite. Senate investigators said the groups, based on the Isle of Jersey, in the English Channel, and in the Cayman Islands, are not legally tied to the banks, but are, in essence, controlled by them through lawyers and charitable trusts.

The banks deny that they control the offshore firms.

Senate investigators testified that the banks took pains not to use "requirements or descriptive language in the prepay documentation that would disclose the true nature of the transaction," according to a report prepared by Senate investigator Robert Roach.

.............
So few people knew about the extent of the prepays that when one Chase employee found out last October, he expressed shock. "$5B in prepays!!!!!!!!!" he wrote.

Another Chase worker involved in the deal replied: "shutup and delete this email."
Chase officials said the company preserves its e-mail messages for a long period of time and that the reply must have been a joke.

..................

Gary Brown, a lawyer for the full Governmental Affairs Committee, testified that participants in the prepay deals could have violated securities laws if investors were not properly warned about the risks. For example, he said, investors may have been given misleading information about Enron's health in the sale of notes via the Yosemite investment trust formed by Citigroup.

Citigroup raised more than $2.4 billion for Enron in six Yosemite bond offerings between 1999 and 2001, investigators said.

Sen. Peter Fitzgerald (R-Ill.) pressed Citigroup officials about the risks the bank passed to investors by selling Yosemite notes and certificates. He asked whether the repeal of laws preventing banks from selling securities heightened the risk that banks could move bad loans off their books by issuing securities to the public.

"Do you feel Citi contributed to misleading people who bought their securities?" Fitzgerald asked.

Maureen Hendricks, a Citigroup employee who had management responsibility for the investment banking relationship with Enron, said: "We disclosed what we knew to be correct. The purpose of Yosemite was to deliver senior unsecured credit to the public markets. It was disclosed throughout the prospectus."

Richard Caplan, a Citibank managing director, maintained that Yosemite had been fully vetted and was sold only to large and sophisticated institutional investors. The sales were "entirely appropriate," he said, and the fact that the money was used to fund other prepays was "absolutely" understood by Enron Treasurer Jeff McMahon.

"He's told us something very different," Levin said.

� 2002 The Washington Post Company

Misetich

"Do you feel Citi contributed to misleading people who bought their securities?" Fitzgerald asked.

slingshot (7/22/02; 17:51:38MT - usagold.com msg#: 81131)

Mortar weak from age and moisture released it grip upon the stones and they fell down to the foundation and destruction come from within.

Got gold?

Black Blade

(07/24/2002; 06:06:37 MDT - Msg ID: 81317)

European and Asian Markets Tank Hard

http://quote.yahoo.com/m2?u
For a gruesome picture - click on link.

misetich

(07/24/2002; 06:11:52 MDT - Msg ID: 81318)

Analysts Fear Impact On World Economies

http://www.washingtonpost.com/wp-dyn/articles/A53115-2002Jul23.htmlSnip:

As steep as the drop in U.S. stock prices has been, many markets overseas -- especially in Europe -- are faring just as badly or even worse. That raises anew the specter of a synchronized downturn among the world's largest economies.

............
"If the markets continue to decline, and have a negative impact on real fundamentals in the United States, it would very quickly have an impact on the global economy," said Kathleen Stephansen, director of global economics at Credit Suisse First Boston. "The problem is that, unlike in previous cycles, the rest of the world is lagging the United States in terms of recovery."

...............
Accordingly, with doubts about the U.S. expansion suddenly looming, "we are running the risk that we will have a serious world economic slowdown," Mayer said.

Misetich

American consumer - the world locomotive - how long will he/she be able to keep on spending? Debt, Debt, and more Debt has kept this engine going -

How will it end?

Got gold?

misetich

(07/24/2002; 06:19:40 MDT - Msg ID: 81319)

Down in the Dumps in Latin America

http://www.businessweek.com/magazine/content/02_30/b3793094.htmSnip:

When night falls in Buenos Aires, poor Argentines start pawing through garbage bags outside restaurants, in search of their family's next meal. In Arequipa, Peru, violent protests recently forced the government to shelve plans to privatize power plants. Many Venezuelans are agitating for the ouster of their President as the currency plummets. Meanwhile, Brazil's Central Bank chief is scrambling to reassure jittery investors that the country's massive public debt is payable even if a leftist triumphs in October's presidential election.

Concerned by the turbulence, U.S. Treasury Secretary Paul H. O'Neill will travel to Brazil and Argentina at the end of July to see how Washington, which has adopted a hands-off approach for most of the past year, can help those beleaguered nations. What he will see isn't pretty: disillusioned voters, panicky investors, rising unemployment, swooning currencies, and leaders desperate for solutions.

Misetich

USAGOLD (07/21/02; 21:03:44MT - usagold.com msg#: 81062)
Sector. . .Gibson's Paradox

The only important fire is the one right outside the central bank's back door . . .and that's the long and short of it. Your best hope is to get the fire crews in there and get the wild fires contained. That's what Rubin tried to do with Enron.

...............

Fire, Fire, Fire everywhere - O'Neil - will be overwhelmed - he's too erratic- he's doing less talking nowdays - being held on a tight leash - he's a walking time bomb!

Got gold?

misetich

(07/24/2002; 06:25:41 MDT - Msg ID: 81320)

The Bells: Apocalypse Now -- or Later?

http://www.businessweek.com/technology/content/jul2002/tc20020723_9369.htmSnip:

BACK TO THE FUTURE? Under the so-called Apocalypse Now scenario, technological innovation and its economic consequences are propelling the Bells, like the long-distance carriers before them, toward bankruptcy. The new generation of networking technology is undermining the Bells' business model at the precise moment that demand for their services is beginning to erode, making it impossible to pay off tens of billions of dollars of debt on time.
....................
The Apocalypse Now camp comprises tech-savvy network and financial experts, many of whom are former Bell employees. One of the ringleaders is financial analyst Roxanne Googin, who edits industry newsletter High Tech Investor. Googin has been warning about an implosion in the telecom sector since September, 2000, a year before Wall Street became aware of the problem's severity. Now she cautions that the crisis isn't limited to telecom upstarts. The problem is the Baby Bells, she says.

Here's why: When AT&T was split up and the Baby Bells were created in 1984, regulators ruled that the new companies would be allowed to earn a profit in proportion to the assets under their control. As a result, the Bells came up with an extremely expensive technical architecture and guaranteed customers 99.99%-reliable service to justify the cost. Under this new arrangement, the Bells took out 20- or 25-year bonds to finance the equipment, figuring that nothing would prevent them from paying back the money.
.................
High equipment costs and eroding revenues greatly increase the risk that the Bells could default on some of their loans, Googin says. That's a grim prospect: Verizon has $60 billion in debt, SBC has about $30 billion, and Bell South has just under $20 billion. "The return the Bells can get on invested capital is declining. EBITDA [earnings before interest, taxation, depreciation, and amortization] is going down year over year. And the cost of borrowing is increasing. It's Economics 101," says Cook. "The only question is how long it will take before you no longer have a viable business."
...............

Misetich

Fire, fire, fire everywhere - Will "they" free gold? or will gold free itself? Take your choice

Got gold?

DOWNUNDER

(07/24/2002; 06:26:12 MDT - Msg ID: 81321)

AN OPEN LETTER TO GATA & LE METROPOLE CAF�

For years now I have been a strong supporter of GATA & Bill Murphy of Le Metropole Caf�. When I have seen them disparaged (on another forum) I have been at the forefront to defend the excellent work they have achieved in shing a bright light on gold manipulation. For that if nothing else they deserve absolute & ongoing support from ALL who are invested in gold or silver.

Having said that - there is a problem that must be discussed openly & publically & it should be done now, with no delay. That is the issue of buying Newspaper space to alert potential gold investors as to guts of what is & has been going on with the manipulation of the POG. This is an issue that I have advocated directly to Bill Murphy on at least 2 occasions over the past 18 mths �the last time on the 13th June this year. Both times I have received a negative response YET I believe the idea has merit.

Preaching & educating to the same audience all the time does get boring ,even to the strongest gold supporter. Saying the same things week after week & month after month does not appear to be having the desired effect.We see the manipulators (obviously with the blessing of the powers that be) just continue on doing what they have been doing with no obvious regard for a fair & open market. This has to change & right now may be the right time to bring it all out in the open.

I believe now that GATA is probably the right vehicle to spearhead a media push that would be aiming to draw attention to WEBSITES -- featuring GOLD NEWS & LINKS to the whole sordid gold suppression story. We must widen our audience as talking ONLY to the converted is not very clever or productive. It need not cost a lot of money ---1/2 page or full-page ads are NOT required. We only need to grab attention & give Website details. USA GOLD --- FINANCIAL SENSE --- LE CAF� etc.

Following is my June letter to Bill � I hope to see full discussion re the merits - - - - -or otherwise.
------------------------------------------------------------
"Bill something I have long supported has now been put up by others. It is to take up space in a main run paper & put the crunch on the cartel. Whether it is to ask re The Fort Knox Gold (as below) OR make people aware of the Gold Hedge /Gold derivative position is another question.

I don't believe it needs to be a "full page"---or in the Wall Street Journal (ok if they'll accept) ---rather spread the message by smaller messages with headline grabbing statements with directions to various websites and/or selected articles. Most importantly I would like to see Le Cafe set this up & run with it. Call for a $20 or whatever donation to go to a fund set aside for this specific purpose. Right now may be the RIGHT time --- no point in just talking to the converted. What do you think?"
------------------------------------------------------------
**** Others were YGM & The Believer --from Posts @USA GOLD

Black Blade

(07/24/2002; 06:28:15 MDT - Msg ID: 81322)

Whoa!!! Real Estate Bubble Next?

Maria Bartiromo was just on CNBC and she made a call - that the real estate bubble is next to pop. She said that the growth in real estate is unsustainable. Sort of unual for her to come right out and make a prediction like that. She says that there appear to be no more safe havens. "Interesting"

- Black Blade

misetich

(07/24/2002; 06:29:39 MDT - Msg ID: 81323)

Congress should close accounting loopholes-Buffett

http://www.forbes.com/newswire/2002/07/24/rtr673116.htmlSnip:

NEW YORK, July 24 (Reuters) - Corporate America must "quit recording illusory pension-fund income and start recording all compensation costs" before it can regain investor confidence, according to billionaire investor Warren Buffett.

In a letter published in The New York Times on Wednesday, Buffett said assumptions about pension-fund returns and stock-option accounting, though legal, are "flagrant deceptions" that dwarf "the lies of Enron and WorldCom."
.................
"The Senate opened the floodgates in 1994 to an anything-goes reporting system and it should close them now ... rather than holding hearings and fulminating," Buffett wrote.

Regarding pensions, he said that companies in the Standard & Poor's 500 stock index <.SPX> are assuming investment rate returns as high as 11 percent.

"In many cases, an upward change of a single percentage point will increase the annual earnings a company reports by more than $100 million," he said. "It's no surprise, therefore, that many chief executives opt for assumptions that are wildly optimistic, even as their pension assets perform miserably."

Misetich

Attaboy Warren! tell it like it is - Future Earnings growth? As one famous ball broadcaster would say " you can kiss it goodbye"

Got gold?

misetich

(07/24/2002; 06:41:18 MDT - Msg ID: 81324)

An Excerpt from The Great 401(k) Hoax

http://www.businessweek.com/magazine/content/02_30/b3793639.htmSnip:

Authors William Wolman and Anne Colamosca believe the recent problems are just the beginning
'''''''''''''''
In the midst of this crisis of confidence comes The Great 401(k) Hoax: Why Your Family's Financial Security Is at Risk, and What You Can Do About It, by William Wolman and Anne Colamosca (Perseus Press). The book contends that the woes now plaguing 401(k)s are just the beginning. In the introduction, reprinted below, the authors contend that this "ugly combination of letters and numbers" will prove to be "the greatest systemic financial hoax ever perpetrated on an unsuspecting public."
......................
It felt great while it lasted. But the 401(k) will turn out to be the greatest systemic financial hoax ever perpetrated on an unsuspecting public. The danger inherent in the four characters is, as Vice President Dick Cheney would say, "big time." The problems with the 401(k) suddenly surfaced in late 2001, when a recession that was already underway was intensified by the attack on the World Trade Center. In quick succession, some leading corporations, including Daimler-Chrysler, Lucent, Bethlehem Steel, Wyndham International, and above all, Enron, scaled back their matching contributions to 401(k)s. And Enron and Lucent were shown to have forced their employees to hold company stock even against their will, with catastrophic consequences in a market where those stocks were plunging. Some 30 percent of assets held in 1.5 million 401(k) plans were in the stock of the company sponsoring the plan, putting many people at risk (see Chapter 8). In the wake of these revelations, employees around the country held their breath in case their 401(k)s should suffer a similar fate.

The financial threat of a 401(k) system gone sour goes beyond anything that has yet been seen. By comparison, the Dutch tulip mania of 1637 was a rose tournament in Portland, Oregon; the South Sea Bubble of 1720, a tempest in a backyard swimming pool; the gold rush of 1849, a treasure hunt at an eight-year-old's birthday party; the Great Crash of 1929, the production of an off-Off Broadway play. Protecting the American family from the potential ravages of the 401(k) will require radical changes in both private finances and public policy.
.................
The retirement revolution took the risks inherent in investing away from the corporation and put them squarely on the backs of employees. The 401(k) came to be known as a defined contribution pension plan. Theoretically, it left employees free to choose from a menu of their own investments, with the caveat that any risk that investments would turn sour would be the responsibility of workers.

In effect, 401(k)s ask American workers to ape the investment behavior of the rich, even though they obviously do not have the resources to ride out bad markets of the kind that we believe will prevail for the next decade. By law, working Americans own the money in their 401(k) plans and are free to invest it as they will. But in reality, most companies do not include an adequate range of investment choices to safeguard savings in volatile markets. At their core, the choices available in most 401(k)s represent a sometimes subtle, and sometimes not so subtle, implication that the employee would do best by investing in stocks.
................
By mid-February 2002, American investors had lost $5 trillion or 30 percent of their stock wealth since the spring of 2000. Yet Wall Street's propaganda in favor of the family market continued to be backed by gobs of advertising dollars and millions in campaign contributions and lobbying, along with brokers and analysts hired to promote stocks day after day, no matter how bad things got. Andrew Smithers, the brilliant British financial analyst, once told the authors that he could make a lot more money by being a bull and being wrong than by being a bear and being right.

The same cannot be said of those who depend on their 401(k) programs. The American public has been hoodwinked by political and corporate forces into relying on the 401(k) as the primary long-term investment mechanism. In doing so, the stock market has been put at center stage in providing for a comfortable retirement for the average American. The 401(k) represents an implicit promise to middle-class Americans that they can live off the income that they receive from stock ownership, just like the rich do. It is a promise that is impossible to fulfill: It is the great 401(k) hoax.

Misetich

Personal Savings rate are very low - The rich have perpetrated a hoax on American middle class - a transfer of wealth -

What a scam - and "they" suppressed GOLD to sucker them in!

Got gold?

Paper Avalanche

(07/24/2002; 06:44:47 MDT - Msg ID: 81325)

@ Black Blade

Maybe that story last night on CNBC urging people not to sell their homes was a bit over the top and they realized it after receiving feed back the likes of what I posted with respect to that story.

Some things just can't be sold to the unsuspecting no matter how hard you try.

PA

misetich

(07/24/2002; 06:46:19 MDT - Msg ID: 81326)

Prudential strong enough for major shocks

http://www.forbes.com/newswire/2002/07/24/rtr673149.htmlSnip:

Stock markets have been falling day after day, eroding insurers' reserves and hammering their net worth, as well as discouraging their clients from ploughing money into equity investments.

Prudential has been reducing its equity holdings significantly since 1999 and the company's life fund now has just 51 percent invested in stocks, less than many of its peers. Bloomer said he was comfortable with that level.

Misetich

Fire, fire, fire is spreading -

Will it free gold or will gold free itself - take your choice!

Got gold?

Black Blade

(07/24/2002; 06:47:16 MDT - Msg ID: 81327)

Don't look Now, But...

Gold is sinking fast. Now down $4.60 at $308 an ounce (was down $5.60). Also, market futures are crumbling and falling off into oblivion. Maybe funds are selling off gold to meet margin calls on stock positions this morning. It appears that this is the "Big One". I think we could be looking straight down the throat of the Big Crash today. This could carry us down into the abyss over the next several days into the New Great Depression. Hang on for the ride!

- Black Blade

misetich

(07/24/2002; 06:51:31 MDT - Msg ID: 81328)

Area tax appraisal protests skyrocket

http://www.dallasnews.com/latestnews/stories/072402dnmetprotest_.426aa.htmlSnip:

By ED HOUSEWRIGHT / The Dallas Morning News

Homeowners in Dallas County and several surrounding counties are protesting their tax appraisals in record numbers this year, lowering the revenue available to cities and school districts.

Appraisal officials say that homeowners � aware of the sluggish economy, numerous layoffs and the plummeting stock market � are finding it hard to accept that home values continue to go up.

Misetich

Of course there's no housing bubble - ask Grenspan and the Feds-
Local municipalities need revenues and will squeeze the homeowner with direct and indirect taxes-

Got gold?

Black Blade

(07/24/2002; 06:54:20 MDT - Msg ID: 81329)

WOW!!! DOW Futures Off 200 Points!

The DOW market futures are off 200 points! It has fallen over 175 points in the last hour. Looks like carnage on Wall Street today. Watch out for falling stock brokers. I hear that in 1929 through the 1930's they were a hazard to passing pedestrians. Well, I heard of the "Dead Cat Bounce", but I wonder what a "Dead Broker Bounce" is like? Hmmm...

- Black Blade

BTW, I did say before Dubya was elected that he would be remembered as the Herbert Hoover of our generation. Don't count on anymore Bush's in the White House after this one. Hey! I just remembered - Herbert Hoover was an oil man too!

Hmmm...

misetich

(07/24/2002; 06:57:17 MDT - Msg ID: 81330)

'Paper' losses, real-world impact

http://www.csmonitor.com/2002/0722/p01s01-usec.htmlSnip:

A decline in capital-gains tax revenues, meanwhile, is hitting many state governments.

Squeeze on schools

Or consider the education system. Many colleges and universities ended their fiscal year on June 30. As they assess their portfolio results, many will be looking at double-digit declines over the past two years.

"This will be painful," says John Griswold, senior vice president at the Commonfund Institute, which manages $30 billion for 1,600 nonprofits from its base in Wilton, Conn. To date, most of these organizations have resisted making cuts based on the stock market, he says. But, he says, "There will be some serious cuts in ... operating expenses this coming year. Some will need Draconian plans."

At Berea College in Kentucky, for example, investment officers are on edge. The small school does not charge tuition or room and board to educate 1,570 underprivileged students from Appalachia. Three quarters of its operating budget comes from its endowment, which is down 17 percent in two years. If the market continues to drop, the college will have to freeze hiring and cut its payroll through attrition.

Misetich

Greenspan gravest error was not disengage the stock market from the economy - He "saved" the world (elite cronies) in '98 and lower interest rates in a hot economy - and flooded the market again in Y2K preparation - and cheerleaded throughout - misleading investors

This is the "gold war" we've been waiting for - the final climax is around the corner -

Got gold?

Black Blade

(07/24/2002; 07:06:53 MDT - Msg ID: 81331)

Breaking News!!! "Scandal Of The Day"

John and Tim Rigas of Adelphia and other executives have been arrested for securities fraud. John Rigas is the former CEO and Chairman of the company. Postal inspectors carried out the raid and arrest. This has just elped to push market futures deeper into the crapper this morning. It's a scandal a day it seems!

- Black Blade

Siochaina

(07/24/2002; 07:25:39 MDT - Msg ID: 81332)

WOW is right!

Watching the market...while listening to Bill ....you may be right BB...if not today ...soon

Gold has violated two important levels...usually TA would say we could see lower in coming weeks ...still the 290-300 range looks TA bottom BUT at this point I think we could be beyond TA.....this is something different

Definitely going to be rough ride ...get your PM while it's there...and hold tight....physical feels darn good today!!!

Siochaina

(07/24/2002; 07:38:08 MDT - Msg ID: 81333)

Clarification

A CLOSE below 309.70 MIGHT ...repeat MIGHT...set stage for gold test retracement later this summer 290-300....but as I posted....this is I believe outside TA

Black Blade

(07/24/2002; 07:38:29 MDT - Msg ID: 81334)

USD Drops Lower

This is interesting. The USD has dropped sharply. Now it sits well below 106. Meanwhile gold has recovered some lost ground. Looks like an "entertaining" day shaping up.

- Black Blade

Horatio

(07/24/2002; 07:42:18 MDT - Msg ID: 81335)

GATA

GATA just blew Morgan Chase out of the water on C-Span
Murphey exposed it all on national tele with good exposure.

Black Blade

(07/24/2002; 07:47:02 MDT - Msg ID: 81336)

USD Chart Looks Interesting

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s
The USD chart is dropping sharply (at link). Looks like fun today - certainly likely to be volatile on Wall Street. I bet there is a concerted effort by the investment houses with a little help conjured up from last night's "secret" meeting.

- Black Blade

Going to slay some fish for a couple of hours!

USAGOLD

(07/24/2002; 08:07:09 MDT - Msg ID: 81337)

Misetich. . .Watch it Fly Away . . . . . .

Interesting post on 401Ks -- #81324. Is that the same Bill Wolman from CNBC?

John Denver croons softly in the background as you read this post. . ."Fly away. . . .Fly awaaaaaaaaaaaay......"

I think investors should understand that the name of the game in this environment, at least for the interim, is holding on to your money -- not making it. All the money going into bonds could go up in a puff of smoke should the twin-terror deficits end in massive inflation or default. And if you think that's impossible, ask yourself why Paul O'Neil is visiting the top banks and brokerage firms on Wall Street this morning. I'm not saying forsake government bonds ( you can forget corporates), but make sure you diversify. The Denver Post recently ran an article on ten things investors should do to batten down the portfolio against the raging financial storm you and Black Blade have so effectively chronicled over the past three weeks (I encourage all to stay tuned). First and foremost, they recommended: "Don't Panic" about the "Panic." In other words, maintain calm -- and a confident air -- while you watch the tornado rip through the family farm. Second they recommended what they called diversification. What did they include as a diversification? You'll never guess. . . .stocks (of course), bonds (of course) and cash. One problem: All three are nothing more than representations of the dollar -- and not a diversification at all. Real diversifications like real estate (of course) and gold (of course) were left out -- though they did mention "commodities" and "REITs" -- two things the brokerage firms are having fun promoting know that stocks have turned to lemon juice. Something like weather futures on the CBOT is likely what they had in mind. They even went so far as to recommend high-yield bonds -- you know good stuff, like Worldcom and Enron junk bonds. Gotta have that yield in times like these -- forget the fact that the principle is probably non-existent. Oh yea. . .stock brokerages make fat commissions on pushing junk bonds. Lots of room for profit. In reality, the front-line diversification, the one you should make before all others, is gold, but the newspapers and Wall Street will never give us the satisfaction and will try to discourage a run by the general public to that sanctuary as long as possible. And that's what this site is all about, to provide a little sanctuary for those who have seen the light, even if it is only the dimmest point of light on a very dark night at the outset. . . . Move toward the light, all you new visitors (and they are legion these days). Things will get brighter.

Oh well. . . if you can't take heed there's always flying on a wing and prayer and Abby Josehps Cohen's dreams of a 36000 Dow. Or was that 36,000,000? Something like that. . . . Go Abby. . . .

As I say. . . .Fly away. . . .sit back, do what CNBC and Wall Street tells you -- and watch it Fly Away. . . . .

The book you cite on 401K's illustrates my point. . . .

Socrates964

(07/24/2002; 08:41:14 MDT - Msg ID: 81338)

Two points

1. Gold leasing rates up this morning -not sure it means much per se, but at least we are backing away from ridiculously low levels.

2. An 86-trading day cycle between successive lows in the gold market seems to occur fairly regularly. Based on the London PM fix, I note that we are about 84 trading days from the previous lows in early March (not an exact method, as you have to average between dates when you have a double bottom/top). On past form, the start of a new upleg should be imminent.

Siochaina

(07/24/2002; 08:42:44 MDT - Msg ID: 81339)

JPM

JPM $20.45 after being down to $18.22 ....MAJOR prop job ....I guess today will not be the day BB

Knallgold

(07/24/2002; 08:44:35 MDT - Msg ID: 81340)

Some may remember 1998,August or so when the XAU collapsed and shot back up in the same short time,making a distinct V.Gold started then a longer lasting rally,on the back of an ugly financial crisis (Russia,LTCM).The problem could be "fixed" then,though.

The last days in Gold and equities look very similar.I doubt that the problem can be fixed again as easy-the confidence is now gone,for maybe the next 20 years.And we don't even know what exactly the acute problem is-altough JPM denied liquidity problems...

sector

(07/24/2002; 08:52:20 MDT - Msg ID: 81341)

@Knallgold- Will JPM Drop POG below $290...

...to bailout their shorts?They have $41 Billion in gold short derivatives at the last OCC report but $16 Trillion of notional Interest Rate derivatives.

The killer is IRDs. Those are vulnerable to a steep dollar fall because rates must rise to defend say...a dollar falling below 100. The minute the Fed raises rates to defend the dollar, JPMs IRDs go from a nice "asset" to lethal poison.

But it all may be academic as their stock is below $20 so far today... the rumored trigger level of a JPM derivatives explosion. Apparently their complex contracts were based in part on a closing price of $20.

Is $290 coming? Don't know...except that there will be a flood of buying that will overwhelm the last few bars left in the Treasury's and BIS vaults. Those vaults are already $288 Billion "light".

And what about the day AFTER they sell the last bar? Financial Armageddon? The rediculous "Stronf Dollar" [Weak gold] policy was and is unsustainable. Savvy planners will leave some gold in the vault and take their medicine. So the question becomes are there savvy people at the Fed?

That becomes one difficult question.

Siochaina

(07/24/2002; 08:59:56 MDT - Msg ID: 81342)

The Hidden Threat in the Mideast

http://www.opinionjournal.com/editorial/feature.html?id=110002031The Hidden Threat in the Mideast (Wall Street Journal Editorial)
Iran and Syria try to open a second front.

BY DENNIS ROSS
Wednesday, July 24, 2002 12:01 a.m. EDT

It's no surprise that the Israeli killing of wanted Hamas militant Salah Shehada and members of his family has drawn the world's attention. It is graphic and it reminds everyone of a seemingly endless struggle. But having just returned from the Middle East, I am struck by a burgeoning danger that is receiving scant attention. With a constant stream of supply from both the Iranians and Syrians, Hezbollah is building a formidable arsenal of highly mobile rockets.

Longer-range Katyushas are the mainstay of the arsenal, but the Syrians are supplementing these weapons with the Syrian 270mm rocket.

What makes these rockets so potentially destabilizing is their range. The rockets Hezbollah used to possess could only threaten the immediate border area of northern Israel. While bad enough from an Israeli perspective, the new rockets have ranges stretching over 70 kilometers. Israel's industrial area below Haifa will now be within the sights of Hezbollah rocketeers. Does anyone think Israel will tolerate such attacks? Can there be any doubt, should one be fired, that Israel would go after not only Hezbollah but Syria as well?....(continued)

Siochaina

(07/24/2002; 09:25:06 MDT - Msg ID: 81343)

JPM PR running full blast

Quite a few JPM stories out ...trying to shore up Co

Dow Jone wire includes several....such as CEO speaking at a Conference call aimed at halting stock decline ..."Believes the bank acted 'properly and with integrity' in all its dealings with Enron Corp"....

CEO goes on to say "We have not knowingly assisted Enron or any other company in misrepresenting facts about their financial condition and yesterday's hearings (Congressional)did not change my mind", he said!!!!!!!!!on't you just love

cyberbat

(07/24/2002; 09:33:39 MDT - Msg ID: 81344)

Bank bail out

Just as Greenspan bailed out the hedge boys a few years back, Look for the fed to say "JPM is too big to fail and it's debt to massive to let them work it out between themselves. Soooo, reach for your wallets America, I won't bail you out but hey! what are buddies for?" Anti up!

Gandalf the White

(07/24/2002; 10:49:38 MDT - Msg ID: 81345)

YO-YO Dow chart is UNBELIEVABLE !!

Tis a VERY STRANGE time !
the DOW chart shows -- open => Down 166 and then UP 435 !!! and now down again 135 at this point !
Hobbits are getting DIZZY !
<;-)

Graefin

(07/24/2002; 10:53:04 MDT - Msg ID: 81346)

Sector...to bail out their shorts...

That makes me laugh Sector, JPM will need to "bail out their shorts" here pretty soon! hehehehehe!
Peace!
Gr�fin

goldquest

(07/24/2002; 11:52:03 MDT - Msg ID: 81347)

Abbey Cohen on Bloomberg

Said the economy is growing, jobs are increasing and stocks are under valued! Is this woman living on the same planet as the rest of us?

Pizz

(07/24/2002; 12:11:58 MDT - Msg ID: 81348)

What Next?

Over the past couple days I've had to keep looking at the sign I put over my computer last year that say's "PATIENCE, DEFLATION IS NOT AN OPTION".

I still believe it.

One thing that has bothered me over the past few months is just exactly why Bush has not thrown the blame for the "hangover" onto Clinton/Rubin/Greenspan. The only thing I can think of is that as long as there was still some hope of a soft landing, Bush would keep to the higher moral ground, if there is such a thing in politics.

Politically, I don't think he has the option any more, but if you are about to throw rocks, you better have a plan. The government will not let JPM et al go under, period, and they have to find a way to inflate this economy. Since no one has bothered to get Rubin in front of Congress (yet), I have to start to believe that the previous administration really may have made some verbal promises to the money center banks that promulgated our strong dollar policy and the stock and bond bubbles of the 90's.

I do not see the downside to either a Goldgate or a Derrivitivesgate for this administration, properly spun with a couple ex-highlevel scapegoats. IMHO the only way to effectively bail out the money centers would be for the government to eventually take over the derivitives, because someone will have to. Defaulting on all these contracts would be systemic default and kaos.

If I am right, is this going to be how the US is to be relieved of our gold, assuming we still have any?

A real can of worms.

Pizz

Siochaina

(07/24/2002; 12:18:58 MDT - Msg ID: 81349)

Roger Bentley Arnold today

Don't panic. This too shall pass. But, it will get a lot worse before it gets better.

Rob Rubin is now out of the running for new FED Chairman. As the situation at Citigroup unfolds questions will be raised about his actions with respect to Enron. Specifically his calls to the S&P analyst in reference to the possibility of not downgrading the debt last November. There could end up being a very serious legal situation for Mr. Rubin. Most probable replacement for Dr. Greenspan is William McDonough, NY Fed President.

Collateralized debt contracts are going to trigger loan calls caused by reduced equity collateralization soon. This will mostly effect bond issues rather than C&I loans. (commercial and industrial, i.e. bank loans that make up about 20% of corporate borrowing and only available to the AAA credit quality companies)

C&I loans can be restructured or extended, bonds can't. As this occurs it could set the stage for a replay of the 1998 LTCM debacle, wherein bond defaults in Russia caused a corresponding rush out of all debt and into US treasuries. So far this has not happened. But, credit and rate spreads are widening and could spike if bonds begin to get called due because of reduced collateral.

Remember, this is exactly what happened at Enron. Their stock price dropped below the level allowed in some of their loans and it all unraveled from there. As this occurs, and it will, how many other companies will be found to have been cooking their books? How many other companies did JPM and CITI and BofA, etc. sell their financial engineering strategies to? How many of these banks and bankers now trust the loans that the other guy put together and would be willing to refinance them? How much gold will need to be shorted to contain its rise?

The situation we are in has gone from a company event to a market event to a systemic market event to an economic event. All along the way we have been told that "it's just a few bad apples". Well, it's a lot of bad apples and there are going to be more. The debt bubble must burst so just hang on.

Treasury Secretary O'Neill met with Wall Street executives last night. Whether formal or informal this is being viewed by the street as a meeting of the Plunge Protection Team. And, the market appears, for the immediate anyway, to like that. There has been great concern over Mr. O'Neill's "don't worry be happy" attitude.

sector

(07/24/2002; 12:21:47 MDT - Msg ID: 81350)

@Siochaina - JPM's Propaganda Releases...

...A Guy on CNBC said at noon that......"Enron's problems are due to Enron's employees but Enron has no cash so the lawyers are coming after us be cause we do have money".

This JPM guy looked like a crook with a five-o'clock shadow, had an accent like some Mafioso goon and was blinking a mile a minute.

The big money center Fed banks are reeling after the e-mails from the Senate committee have been made public. There's no place left to hide, no one left to lie to.

Perhaps the NYT will keep running with this story. I hope Gretchen Morgenson latches on to these scumbags...there's no fury like that.

Besides, I have a crush on her.

Mr Gresham

(07/24/2002; 12:24:39 MDT - Msg ID: 81351)

Hi Pizz

Just a couple thoughts dredged up halfway through your post, before I run out again.

Last night, remembered the "election cycle". GWB has to have all this behind him by Nov. '03, so shaking the worst stuff out now, rather than dragging it onward, is a priority. However, losing JPM and the payments system is not an option, as you say.

Other thought: tax collections rely on cash liquidity in the system, and capital losses carrying forward unto eternity guarantee deficits to the sky for years to come. Gov rakes off its 39% or whatever at the margin of peoples' incomes, and if it can fairly painlessly generate the cash to maintain those incomes, it stays ahead of the all-devouring ST T-bill rate spike (but runs into it the other way, as you well know.)

Image came to me -- the old algebra problem of the bumblebee flying relays back and forth between the two oncoming freight trains. Other than the trains colliding (somehow omitted from the gist of the problem), the bee runs out of flying room in X amount of time...

goldfool

(07/24/2002; 12:29:48 MDT - Msg ID: 81352)

goldquest - Abby Joseph Cohen

Let me remind you of the immortal words of Chance Gardiner (Peter Sellers) in the movie "Being There." "As long as the roots are not severed, all is well and all will be well in the garden." "In a garden, growth has its season. There
is Spring and Summer, but there is also Fall and Winter. And then Spring and Summer again." AJC is an permabull who gained recognition for "being there" during the late nineties when calling the direction of the market was a no-brainer. Goldman always parades her out in front the sheeple now when things are looking down to try to instill some confidence. Recently she told a group of reporters on a CBS news show that she advised her clients to get out back in 2000 before the markets started to tank. Must have been a "select" group of clients, someone like Martha Stewart for example.

sector

(07/24/2002; 12:38:03 MDT - Msg ID: 81353)

Why is US$ surging despite Wall Street?

http://business-times.asia1.com.sg/views/story/0,2276,52195,00.html?July 24, 2002

US fund managers may be cashing out their overseas investments and converting the proceeds back into US dollars

By Larry Wee

THE American dollar staged a smart recovery across the board yesterday - as US stocks continued to suffer one of their worst routs in recent memory.

Traders struggled to explain the greenback's rebound - especially with so much going painfully wrong in the US - as they were increasingly swamped by huge buy orders during Asian hours.

From America's huge (and growing) budget and current account deficits and the recent string of mega accounting frauds to the fear that Wall Street's sharp losses may turn into an unstoppable deluge, everything would seem to be negative.
++++++++++++++++++++++++++++++

A decent explanation for what will certainly be a short-lived episode.

YGM

(07/24/2002; 12:39:44 MDT - Msg ID: 81354)

@ DOWNUNDER

http://groups.yahoo.com/group/gata/messages/46?viscount=-30G'Day there DownUnder....

Saw your comments regarding the Newspaper Ad for GATA and a possible Gold Audit request etc....I do concur w/ you that media exposure is tantamount to GATA's success...Also I did support and still continue to support a separate (by Donation) fund for such an Ad blitz....Recently, and again this morning tho, I revisited the GATA Egroups message board to remind myself of what "GREAT ACHIEVEMENTS" have been wrought by Bill and Chris and the GATA team players....Now you'll have to excuse me here cause lack of time permitted only a cursory review..(I never even got past the 1999 reviews) BUT...
One must consider that even with all that as beeen done, some of which I'll detail below, just in the first year of GATA's existance, we still have not seen a Gold Cartel Capitulation. What we have seen tho, is a swing from being viewed as conspiracy nuts to having an INCREDIBLE FOLLOWING as well as massive financial support....Once again I must say that even in the early days of the GATA "Enveloping Horn" movement we have seen incredible things.....

GATA/Bill Murphy Featured in....Radio talk shows from NY to Aus, to S Africa, to Van B.C.....Bill on TV.. CNBC, and now C-Span..Bill being interviewed by Congressmen on Capital Hill,..GATA Members requesting Audits of Ft Knox Gold (message # 67 in Mar/99)..

News Media Features in Print..World Net daily (multiple times)..NY Post..Financial Times..London Sunday Times..Forbes..Reuters..Dow Jones Newswire..Jeff Rense Website, SF Chronicle and so many more it would take most of the afternoon to review and list them....

These achievements are all 3 years old and so much more has transpired up to this point in time thru the paper/magazine Media, Websites, Word of Mouth, Gold Shows, Reg Howes Lawsuit, Mining Conferences, Mining Analysts Conferences, Gold and PM's Newsletter writers, Dicussion Groups like ours and Gold-Eagle/Kitco/Eagle-Ranch & many others..Now even a GATA Website in China..Arabic News Media following GATA..

Speaking for myself personaly (and for you I'm sure), I find the GATA achievements thus far, "ASTOUNDING" and if Bill Murphy & Chris Powell (also a newspaper man) do not see any gain in the idea of an Advertisement blitz?....Well I guess we should trust their judgement, because these "TWO" who never tire, have done and are doing an "INCREDIBLE JOB" and success seems very close at hand no matter what the catalyst be..I intend to download someday, the entire GATA E-Groups message board, from the start to the day Gold trades freely in an unmanipulated Market and save for my own little remembrance of the History of the "Gold Wars"

PS: anytime one gets depressed at the slowness of GATA's success, they should visit the egroups site and start reviewing the headlines and read a few of the achievements thus far. It will make every effort undertaken and every Nickel or Nugget donated seem "VERY" worthwhile....Thanks for reading this, now back to my lurker's corner, Regards....YGM

PS: Any good jobs for Ex-Gold Miners or experienced Stock Promoters in OZ? I could sure use one right now!...Ken :>}

Operative

(07/24/2002; 12:48:07 MDT - Msg ID: 81355)

Abby Dearest

The continued trotting out of an old prop known as Abby Cohen is another scheme of the Public Relations crowd. Abby appeals to the aged members of the AARP. She is propped up to soothe the anxious members of this tribe and her message is therefore kept positive, simple, and exudes much needed confidence to those who face a diet of cat food should things not be as gabby Abby suggests. Just my observation of her continued appearances. Also, heard once that a great amount of the wealth in this country was in the hands of widowed over 60 women. Abbey is sent to target/comfort.
The other side of the coin is of course Kudlow&Cramer who are meant to appeal to the high testerone group with thier antics aimed at acting out what many of this group feel inside. All the raised voices and thrashing about still end with the "all is well" central message. The media, is as much to blame for the current "state of affairs" as JPM/Chase. The dumbed down sheeple neither have clue nor hope of making it through all this. I think I will go revisit that study of effects of floride in the public water system.

Mr Gresham

(07/24/2002; 12:55:44 MDT - Msg ID: 81356)

Pizz, Operative

Very good, Operative -- the demographic strategy of the scammers, and the public's weak points, exploited with tactical brilliance.

Pizz -- the model for "bailing" JPM might be there in LTCM (which must have been smaller by an order of magnitude). Close out the hollowed entity, but guarantee the counterparties -- the solvent ones anyway -- nothing more than a haircut. So they won't crash the markets trying to get liquid.

JPM & C & others are really just facets of the FRS, aren't they? Some could be set up to fail, and some to take over the baton. All calculated to extract maximum plunder from the serfs. 'Twas perfected centuries ago, or at least worked on -- today it's the pickpocket's art, to rob the man without him finding out until he gets home...

Pizz

(07/24/2002; 13:01:24 MDT - Msg ID: 81357)

Mr Gresham

Yes, Bush is running out of time. Read somewhere that the way things are going for corporate America, Republicans could lose 30 - 40 seats in November.

That's why I think it will have to be offset with something, and since everone already knows the government's probably more corrupt than the corporations, why not a massive, inflationary, fell swoop government bailout of the money center derivitives, corporate pension plans, and anything else that could be attributed to the inept financial shennanigans of the 90's.

He's gotta do something, and soon, besides start WWIII. My personal preference would be a criminal trials and the final incarcerations of Clinton, Rubin, and Sommers, Lay, etc., but I think that's asking a bit too much. (Might tend to get a few peoples attention regarding proper use of public and stockholders funds though).

Going to be real interesting few months.

Sure is funny how gold/gold stocks are following the money center banks. Are there people out there who think if JPM goes down, the short position goes away? Not likely.

Pizz

USAGOLD / Centennial Precious Metals, Inc.

(07/24/2002; 13:07:36 MDT - Msg ID: 81358)

Strong wisdom and customs endure because the strong SURVIVE!

http://www.usagold.com/productspage.html

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

Carl H

(07/24/2002; 13:29:11 MDT - Msg ID: 81359)

@MK Gold Prices

MK -- I once read that coin dealers have their own computer network that is used for buying and selling coins. Do you have such a system and if so, are the prices quoted on it still in-line with Comex?

I am just wondering if there are questions about Comex being able to deliver yet.

Pizz

(07/24/2002; 13:42:57 MDT - Msg ID: 81360)

Watch Tyco - we're not done yet

Dow up 400+ and Tyc is down a buck and just broke down thru 10.00.

Pizz

Tommy P

(07/24/2002; 13:53:20 MDT - Msg ID: 81361)

will close up 500 points

what a joke

Belgian

(07/24/2002; 13:55:28 MDT - Msg ID: 81362)

Late reflections on USAGOLD postings #80448/80449 - 7/13

Yes Sir, I do agree with your much broader vieuw on Gold's role as anchor without the attachment to any particular currency. As a maturing Eurolander and Goldholder, I am biased and gradually getting rid of my (our) Euro - inferiority complexes. But so do a growing number of confident Eurolanders vis � vis the dollar block.

And indeed we both "Hope" that Euroland is serious enough about its Gold policies. Yes, Gold will impose itself as ultimate rescue for today's VERY ugly picture. Gold- friendly Euroland will bring Gold into play, because it is still very closely tied to the Gold-Reflex. The (centralised) ECB will make it much easier to overcome the political diversities and "command" with increasing authority. Once the ugly/painfull lessons of the present paper-mania are filtered in...w'll go back to the Real good old business. Currency exchange controls and sickening speculation (gambling) will be history. Euroland banks and other financial institutions are getting burned with their dollar love-affair. More reason to get rid of the US$ ASAP.

Euroland goes "relatively" slow in its strive for euro denomination of Gold and Oil. But look at the daily evolutions of geopolitical influence building ! For instance : Pro euro Iran, fraternising with Iraq...etc.
The euro has no ambition "to fly". It prefers to infiltrate at its own pace. The past (and present) global dollar distribution, leaves the euro with no other choice to displace the ruler, step by step. No more blitzkriegs. Taking a step back is normal procedure. Remember that the dollar must collapse under its own weight. Starvation tactics. Euroland can't afford a frontal attack (yet). Still to many dollar infiltrants within the small euro army.

The swift run to �/$ parity has (imvho) very little to do with the full usage of the Euroland Gold weapon. But much more with the exposure (some of) of the huge dollar falsifications, much worse than the existing euro weaknesess.

Question remains : How much pain will Euroland (and allies !!!) suffer from the shifting �/$ exchange rate ??? The answer lies in the progressive euro-tactics. Slowly, slowly and very careful, step by step. Dollar depreciation puts pressure on the euro and the 2% inflation rate, agreed, might become a 5% (Pizz) !? Let's depreciate together (�/$) for a while. But remember we have 50% more Gold reserves for less euro. Different boats on the same lake, regardless of who's the most efficient operator ? Time will tell.

It's time for the 9 months bottom in the global paper circus. Time for some consolidation and technical reaction.
Doesn't change a iota on the continious, systemic, depreciation (overvaluation) of ALL paper. But Denial has shifted to Acceptance. Panic (Capitulation) must follow inevitably. This when "Systemic" is fully recognised and acted upon. And this will lead to your conclusions, Sir Kosares, that a Gold acquisition program remains the most viable option for any individual who cares about his personal independance and freedom.

POG anticipating an �/$ exchange rate of 0,95 (pause after the hyperbolic run-?)?
Panic (capitulation) when NASDAQ is on its decimation course : 5.000 >>> 500 ?
US$ - Repatriation by JPM/C (Socrates 964) ?

Bound Spirit # 81203 : Petrified investors (???-gamblers) losing 8 TRILLION $ that never were. They will shift to Gold with what's left of their gambles, as soon as is decided that Gold (POG) can/may set itself free. Ounces can't move tonnes. They can and will "only" join them .

Zygoat : Elliot Wave's 200$ POG was on its way (253$) when the WA decided to halt it (The euro-dam)!

Aragorn III : Societ� General (new London fixer) is notorious for its derivative promotions !? Brrrrrr...

Cavan Man

(07/24/2002; 14:05:34 MDT - Msg ID: 81363)

Stranger still....

Dollar down, market up; gold down and flat. We live in a strange world. I would think that if there is a shred of truth to FOA's futuristic scenarios we should be seeing some concrete footing along the trail sooner rather than later. If indeed there are GIANTS, they cannot fail to notice the STRANGEness of US markets.

Chris Powell

(07/24/2002; 14:09:59 MDT - Msg ID: 81364)

Advertising by GATA

Hello, YGM, old pal....

GATA is working on a newspaper ad but
the less said about it now, the better.
We expect to have trouble getting it
accepted for publication where we want
to publish it.

RobotGuy

(07/24/2002; 14:13:22 MDT - Msg ID: 81365)

Should history repeat itself....

It would appear to me that we're in for a big POG correction to match the volatility of today's market. After a quick study of historical ups and downs of a number of different possible indicators, the RobotGuy investment agency would issue a LOUD "BUY" in the PM Department. Volumes of shares traded in various small mining companies would indicate that there are a good number of investors hanging on to their mining stocks, and the recent drop in most cases is only occuring on a small volume of shares. Remember the big picture.

Cheers!

RobotGuy.

a nation of one

(07/24/2002; 14:17:18 MDT - Msg ID: 81366)

re: ducks

During the Crusades the Christian fighters encountered many new ideas and ways, while trying to defeat the Muslims. In the short term they won, appropriated land, built castles, and settled down. They stayed for centuries. But the Muslims won in the long run. By 1700 there were no Crusaders remaining in those beautiful, European castles the Christians had built there. And the armies that had thus temporarily suppressed the Muslims were no more. The Muslims, however, had never gone out of style. After the Europeans left, they simply resumed living in the way they always had, as though the Christian crusaders had never visited them. Even primitive peoples are not without resources, if they have the imagination and the will to use them. Such tactics still have successful results today, in the wars which primitive peoples find themselves in with the U.S., for instance. In Vietnam, the U.S. forces were eventually run out of the country by a poor-people's logisitcs involving, in part, bicycles deployed clandestinely on trails through virgin jungle. Today, boxcutters and cold nerve slay thousands. Therefore we can see that low-tech weapons can be at least traumatic to high-tech nations full of citizens able to calculate trajectories to celestial objects but incapable of figuring out when they are being swindled in the stock market. So where does gold come into all of this? The U.S. citizens' need for oil has caused a lot of dollars to be transferred to the nations of the Middle East since the 1930s. Where have they invested it? In gold, some of it. And some in U.S. properties. Also in U.S. stock markets. Do you think that the effect of their investments here can have no impact on the U.S. economy? I believe that they can. Further, all of their sympathizers against the U.S. would cause even more impact, were it to be orchestrated carefully. And we do know, from our fight with them during the middle ages, that Muslims can be very careful. If you were in a war against the U.S., and you had a lot of money invested here, and many more dollars at home, and lots of gold, enough to justify buidling an enormous wall of it in your palace's living room just for show, don't you think that you could harm the U.S. economy by using your wealth as a weapon? Gradually sell your common stocks in American companies, cashing in your many billions, preferably at a time when the market is weak already, thereby using its own weakness to help destroy it. Don't cause an outright crash though, because you'd lose too much money. Take your time. You have plenty of time. There is no hurry. Agony always plays better in slow motion. And be sure not to draw people's attention to what you're doing. Then while you are selling stocks, figure out some way to mistreat the dollar. It shouldn't be too hard. Sell your dollars for instance. Convert them to Reals or Drachma. And accumulate gold, so that, in the end, when it goes high, you'll still be rich, but drive the price down first so you can get plenty of it cheaply. This sounds like fiction, doesn't it? Even bad fiction. My encyclopedia says that the Arab mind is capable of deeply profound thought not characteristic of the west. I think that the next terrorist attack against the U.S. could be financial. And I think we could be seeing it now. In case anyone wants to show fault with these ideas, I will mention this, to give you ammunition. The source of my 'erroneous thought processes' should perhaps be obvious to me. During the 1950s I used to read a lot of science fiction. A lot of it was really bad, I mean grade C and D. Full of ridiculously absurd ideas. I particularly remember this one story in the 1950s about a boy who wrote letters to his friends by talking into a box. The box would write the letters for him, using a fountain pen, and then it would spit out an addressed, sealed, stamped envelope with the letter in it, and he could take it to the post office and mail it. If I am not mistaken, the truth has turned out even ridiculouser than that: Today I type a letter into my electronic apparatus, and my friend's typewriter, a thousand miles away, displays it on a CRT screen so he can read it, no postage, no post office, no nothing. Right now we lack the benefit of hindsight. I think that when this is all over, we are going to look back, and the thing that will astonish us the most is the incredible scope of our own pathetic, ignorant gullibility. And I am not just talking about myself here.

Black Blade

(07/24/2002; 14:17:46 MDT - Msg ID: 81367)

"Entertaining" Day On Wall Street

Well the equities markets turned around and the DOW rocketed nearly 500 points. Pedestrians are safe for one more day. There really wasn't any news that should have triggered the move today except the expectation that the Corporate Reform Bill would be passed. Earnings are still pathetic and corporate debt has risen to unsustainable record levels. Today's market action pushed through several critical levels for many stocks and this triggered short covering across the board creating a "feeding frenzy" mentality. Curiously this comes the day after an emergency meeting between Treasury Secretary Paul O/Neill and several investment bankers, and a rumored emergency Federal Reserve meeting today. There is speculation in some quarters that the Working Group on Financial Markets had orchestrated today's market rally. These levels are really unsustainable without any real positive market news. In all, it was quite an "entertaining" and "interesting" day. Gold has pulled off the support level of $310 an ounce and that gave support to gold mining shares. Considering all the volatility and the traditionally slow season for Gold, the metal has performed remarkably well. This could mean much better times ahead for Gold.

- Black Blade

Off to the gym!

a nation of one

(07/24/2002; 14:26:13 MDT - Msg ID: 81368)

upward surges

The strongest upward surges tend to take place in BEAR markets.

Gandalf the White

(07/24/2002; 14:27:09 MDT - Msg ID: 81369)

Sir Operative Re: your post on "Abby Dearest"

Operative (7/24/02; 12:48:07MT - usagold.com msg#: 81355)
---
You say; "Also, heard once that a great amount of the wealth in this country was in the hands of widowed over 60 (year old) women."
===
BUT, the far greater amount of WEALTH in this country (USA) is in the direct control of the NON-Widowed women !!!
(I can prove that at my Castle!)
<;-)

Pizz

(07/24/2002; 14:37:48 MDT - Msg ID: 81370)

Coments

Belgian: Thanks for the European perspective. Good post and makes sense.

Rich: Know anyone who makes silver bullets in 357 mag? Haven't made up my mind whether to buy some more physical AG to round out my stash or a case of ammo to defend what I have. If I can find some werewolf ammo it will solve both problems.

Can't imagine any weak holders of gold/silver stocks being left after this week. A lot of stock was bought by some real cheap.

Would sure like to have a micophone in O'neils briefcase. I've always wondered if these guys have the same demeanor in private as they do in public. My guess is that the tempers and four letter words fly behind closed doors.

Pizz

misetich

(07/24/2002; 14:58:03 MDT - Msg ID: 81371)

Citigroup hit with Class Action Law Suit

http://abcnews.go.com/wire/Business/ap20020724_1190.htmlSnip:

Meanwhile, Citigroup has been hit with a purported class-action lawsuit in federal district court.

The legal firm Lovell & Stewart said Wednesday it has filed suit on behalf of all persons who acquired Citigroup common shares between July 14, 1999, and July 23, 2002.

The suit alleges that during that time, Citigroup Chairman and Chief Executive Sanford Weill and Chief Financial Officer Todd Thomson misrepresented a 1999 transaction with Enron that was structured as a commodity trade but really served as a loan to help Enron keep $125 million in debt off its books.

The suit, which was filed Tuesday in a New York Federal court, seeks unspecified damages.

Citigroup spokesmen weren't immediately available to respond.

Misetich

ANOTHER tributary TRAIL worthwhile following. Who knows where it may lead -

Got gold?

misetich

(07/24/2002; 15:10:17 MDT - Msg ID: 81372)

JP Morgan Management In Denial

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Stories%20World&tp=ad_uknews&T=news_storypage99.ht&ad=worldtop&s=APT8MIhJHSi5QLiBNSnip:

In Denial'

``The company's in denial about how bad the problems are,'' said David Hendler, a fixed income analyst with independent research firm, CreditSights Inc. ``We need a change in management in top levels, a management that's more realistic about the problems and how to address them.''

While the bank's $42 billion of shareholder's equity -- or assets minus liabilities -- is higher than that of any U.S. bank except for Bank of America Corp. and Citigroup, the ratio of its capital to average assets stands at 5.4 percent, less than that of Bank One, Wells Fargo and Bank of America, Hendler said.

Shapiro said on the conference call that the bank has ``ample liquidity, probably more than we've had in the history of the company.''

Misetich

ANOTHER hot TRAIL to follow - Who knows where it may lead!

Got gold?

Socrates964

(07/24/2002; 15:22:17 MDT - Msg ID: 81373)

a nation of one

Good post! I remember reading that Bin Laden is obsessed by US financial markets (can't remember the source), and is no doubt at work on such a scheme to undermine the US through these as I am writing. I just wonder if there are lots of Saudi princes trying to shift their wealth out of the US and getting stonewalled - how easy is it to ship bullion out of NY for, say, Switzerland.

In any case, for a country possibly on the receiving end of enemy status imposed unilateral by Dubya and Cheney, I would have thought that gold beats the greenback as a reserve asset hands down, particularly considering a) low returns on US paper compared to possible appreciation of physical, b) vulnerability of the dollar to manipulation of monetary policy by the Fed, c) ease of concealment.

An idle thought occurs to me - could the real purpose of the Shanghai gold exchange be to act as an alternative haven for the Islamic world to trade its gold - given that they won't want to trade in NY for obvious reasons but don't trust each other enough to leave large amounts of bullion around in Dubai (think of the temptation to invade). Since the Chinese depend on the Middle East for oil, there would be an easy sanction for any shenanigans on the exchange.

misetich

(07/24/2002; 15:28:28 MDT - Msg ID: 81374)

BULLETIN: Market Concerns About Liquidity at J.P. Morgan Chase & Co. Unfounded

http://www.standardandpoors.com/RatingsActions/RatingsNews/FinancialInstitutions/Articles/072402_JPMC.htmlSnip:

Standard & Poor's Ratings Services said today that it believes market concerns about the liquidity position of J.P. Morgan Chase & Co. (JPM, rated AA-/Negative/A-1+), evidenced by steep declines in its stock price and rumors, to be unfounded. JPM is not currently having any difficulties meeting obligations or accessing capital markets. Cash and liquid assets at the holding company exceed the amount of debt maturing over 12 months (including $14.9 billion of CP and $6.6 billion of term debt) by $1 billion. In addition, the bank subsidiaries have more than $2 billion of dividending capacity. There are no stock price triggers in any debt covenants that would accelerate the need for funds. The markets appear to be fearful about the firm's solvency if current lawsuits and Congressional investigations take a negative turn. However, even if JPM were to lose its case on the $1.1 billion of surety bonds, the losses would be covered by earnings, which should surpass $4 billion for the year. As to other allegations, there is no way to responsibly quantify what the impact, if any, might be. In any case, the $37 billion tangible equity base should provide considerable comfort against any such event risk. However, the negative outlook on the holding company's 'AA-' rating continues to indicate the possibility of a rating adjustment in response to a deteriorating business environment that affects all universal banks and brokers. Commercial loan quality should also remain a concern through year end, although the consumer sector is improving.

Misetich

One makes you wonder on how SURE Standard and Poor could be - even though they claim THEY were kept in the dark of Enrons misdeeds -

How is it possible for a credit rating agency to be so supportive in light of the emerging testimonies and all the covered up deals.

Is/Was Standard and Poor aware of JP Morgan - conflicts of interest and professional conduct?

Is/was Standard and Poor aware of JP Morgan controlling interest in using secretive offshore entities called Mahonia, Delta and Yosemite, which Senate nvestigators said the groups, based on the Isle of Jersey, in the English Channel, and in the Cayman Islands, are not legally tied to the banks, but are, in essence, controlled by them through lawyers and charitable trusts.

The banks deny that they control the offshore firms.

The role of these Credit Agencies should also be reviewed as they have FAILED in providing the warnings that investors rely upon them for.

Standard and Poor was TOO QUICK and jump to conclusions on JP Morgan - The market disagrees.

Time will tell who is right! regardless of who's backing JPM-

Gold is the arbiter, the judge, the executioner.

Got gold?

YGM

(07/24/2002; 15:30:15 MDT - Msg ID: 81375)

Chris Powell (7/24/02; 14:09:59MT - usagold.com msg#: 81364)

Ahhhh Yessss!Anticipation is always the greater part of pleasure and GATA has afforded lots of both I must say.... Thanks much for the hint of things to come....Best Regards: the Ex-Yukon Gold Miner, but still & forever the Gold Advocate and GATA servant...Ken R.

"GO GATA, GO GOLD, & GO PHYSICAL"

"THANKS TO USA'S M.K. FOR THIS MEETING PLACE OF THE MINDS"..
To he and his staff we all owe our eternal gratitude...NOW WHERE THE HECK ARE ANOTHER AND FOA...Their time to soak up some thanks and glory is here and the wisdom taught is becoming reality....YGM.

YGM

(07/24/2002; 15:34:32 MDT - Msg ID: 81376)

misetich...........

"FIAT MONEY".....Gold is the arbiter, the judge, the executioner.............Now you should have that made into a wall plaque or desk ornament....How true....YGM

misetich

(07/24/2002; 15:36:31 MDT - Msg ID: 81377)

BULLETIN: Congressional Hearings and Lawsuits Involving Citigroup Inc.

http://www.standardandpoors.com/RatingsActions/RatingsNews/FinancialInstitutions/Articles/072402_Citigrp.htmlSnip:

Market concerns about the Congressional hearings and lawsuits involving conflicts of interest and professional conduct at Citigroup Inc. (Citigroup, rated AA-/Stable/A-1+) are running at high levels. Standard & Poor's Ratings Services said today that it believes it is not possible to quantify the potential impact on Citigroup's ratings in any responsible way at this time, nor is it even possible to say that there will be an impact. Therefore, Standard & Poor's ratings on Citigroup remain at 'AA-/A-1+' and reflect the broad diversity and earnings power of the firm, which has considerable resources to manage through some very adverse circumstances.

Misetich

"not possible to quantify the potential impact " Of course not - therefore lets do nothing - even though the news could have tremendous impact - from the NUMEROUS LAWSUITS which will be filed.

These suckers underestimate reality and anger of investors, pension plan managers who will seize this opportunity to recover some of their losses -

Got gold?

sector

(07/24/2002; 15:36:52 MDT - Msg ID: 81378)

SEC Investigates AOL Time/Warner

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∣dle=ad_frame2_topfin&s=APT8UrBPcQU9MIFRp
Top Financial News

07/24 16:57
AOL Time Warner Earns $394 Mln in 2nd Qtr; Sales Rise (Update2)
By Aimee Picchi

New York, July 24 (Bloomberg) -- AOL Time Warner Inc., the world's largest media company, earned $394 million in the second quarter on lower acquisition-related costs. Sales rose 14 percent as the company sold more magazine and pay-TV subscriptions.

Net income was 9 cents a share, compared with a loss of $734 million, or 17 cents, a year earlier, the company said in a statement. Sales at the owner of media outlets including Time magazine and the HBO cable-TV network rose to $10.6 billion from $9.3 billion.

The U.S. Securities and Exchange Commission is conducting a ``fact-finding mission'' about some advertising transactions at America Online, Chief Executive Officer Richard Parsons said on a conference call.

The SEC inquiry comes after the Washington Post reported that America Online used ``unconventional'' transactions, such as settling legal disputes with agreements to buy online ads, to help meet analysts' estimates for three quarters in 2000 and 2001.

The second-quarter results benefited from an accounting change in which AOL Time Warner will no longer reduce the value of acquired assets every quarter. The company reported a $54.2 billion loss in the first quarter to write down America Online Inc.'s 2001 purchase of Time Warner Inc. The merger hasn't lived up to promises that the online unit would boost profit at Time Warner media businesses.
+++++++++++++++++++++++++++++
More fraud. More shafted investors. More parachutes for greedy top management. More spin. More of the same.

misetich

(07/24/2002; 15:43:47 MDT - Msg ID: 81379)

OFFICIAL CORRECTION O'Neill delays South America trip to Aug 5-7

http://www.afxpress.com/afxpress2/afx/bn208343.xml.htmlSnip:

WASHINGTON (AFX) - Treasury Secretary Paul O'Neill has delayed his trip to South America in order to work on the administration's agenda to strengthen the US economic recovery, the Treasury said.

The initial Treasury statement said President George Bush had requested that O'Neill postpone the trip, originally scheduled for next week.

However, Treasury spokesman Tony Fratto later said it was O'Neill himself who decided to put off the trip until the week after next.

"While we sought and received clearance from the White House to postpone the trip, Secretary O'Neill made the decision," Fratto said.

O'Neill has come under criticism for his frequent overseas travel in recent weeks during the malaise in US financial markets and concerns about the solidity of the economic recovery from the recession.

He will now visit Argentina, Brazil, and Uruguay from Aug 5-7, instead of next week as originally scheduled.

O'Neill to put off the trip in order to work with Congress on approving a corporate accountability reform bill, legislation approving trade negotiating authority, and a bill to set up the new homeland security department.

These three bills are "important components of the President's agenda to strengthen our economic recovery," the Treasury said.

Misetich

"The initial Treasury statement said President George Bush had requested that O'Neill postpone the trip, originally scheduled for next week. "

It sounds like O'Neil was taking off again to put out fires in Latin America - when his boss called his attention to the fire going out of control in the US

Do you have any confidence in the leadership of the US Treasury?

Got gold?

Chris Powell

(07/24/2002; 15:47:57 MDT - Msg ID: 81380)

Great comments on GATA chairman's TV appearance

http://groups.yahoo.com/group/gata/message/1188Some great reviews for GATA Chairman Bill
Murphy's half-hour appearance on the C-SPAN
cable television network program "Washington
Journal" this morning:

http://groups.yahoo.com/group/gata/message/1188

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

Camel

(07/24/2002; 16:02:13 MDT - Msg ID: 81381)

Darkening of the Light

Everyone has been anticipating a big rally and maybe people just took their money out of gold and put it in the stock market. Funny gold didn't go down after the big run up in the SM, but before. Too bad there isn't someway to keep track of the a short interest on the gold stocks. That would probably be the way to tell if the insiders are planning something.

I took the occasion to do a reading from the I Ching for the gold hearts and here is what it said { these words date from beggining of the Chou Dynasty in China about 1150 BC,allthough the origin is much older, beyond any historical record}.

Darkening of the Light.
In adversity it furthers one to be persevering.

Not investment advice. Derived strictly by the laws of chance ,but certainly the most influencial book in all of Chinese history and was practiced extensively throughout China untill the time of Mao.

There is also a second part to it called "the image" but this is from a much later date ( 700-400 BC ) and is mostly fom the Confucian school based on older material.

The light has sunk into the earth.
The image of Darkening of the Light.
Thus does the superior man live with the great mass:
He veils his light, yet still shines.

*********

misetich

(07/24/2002; 16:03:27 MDT - Msg ID: 81382)

JP Morgan , Citigroup and other bankers - Di

http://news.bbc.co.uk/2/hi/business/2148534.stmSnip:

Don't the banks have some difficult questions to answer?

Yes, some expert observers view the banks' justifications with a jaundiced eye.

For Steven Philippsohn, a fraud specialist from London-based lawyers Philippsohn Crawfords Berwald, the key question is how the "prepay" deals worked in practice.

"If these trades were real, and the money passed through, what did the trader get in return?" he told BBC News Online.

"If there wasn't anything concrete in return, then the banks are in serious trouble."

And the banks have yet to come up with a plausible explanation for why they were running deals like these, says Mr Philippsohn.

"These trades, so called, were conducted through offshore entities controlled by the banks.

"But what does a bank need with an offshore company like that? And what is it doing paying in advance for energy trades in any case?"

But where's the actual proof of bad practice? Surely you need some of that?

The investigators have spent seven months wading through more than a million pages of documents - and yet again US corporate types are discovering that email is both highly permanent and extremely embarrassing.

The committee's investigators found messages which seem to confirm the bank's staff knew exactly what Enron was doing with the money.

One exchange between Citibank staffers, for instance, stresses that an oral agreement needs to stay that way.

"The paperwork cannot reflect their agreement," an email says, "as it would unfavourably alter the accounting."

Another one, involving bankers at JP Morgan, is even more succinct - and much more damning in an environment where destroying evidence is becoming the most heinous crime of all.

"Dollars 5bn in prepays!!!!!!!" one message reads, from an official who'd been adding up the exposure to Enron on his fingers.

"Shut up and delete this email," came the terse reply.

Worse still, an internal study Citigroup conducted in April 2001 found Enron was understating its liabilities by about $2.2bn - a fact the bank omitted to tell anyone else.

So what happens next?

That's where it gets sticky.

There are no signs yet of a Justice Department investigation into the behaviour of the banks.

And the general record of criminal charges against senior businessmen is pretty dismal.

But the civil courts are already filling up with class-action suits and other nasties directed at the banks for misleading investors.

About a dozen banks have been pursued to date, and one case - directed at Citigroup and Credit Suisse First Boston - links them to $2.5bn in debt sold at a time when, so the litigants protest, the banks must have known Enron was heading for disaster.

"If the banks knew there was debt - and there clearly was - and didn't mention it... it seems to me that they are liable for any loss sustained," Mr Philippsohn says.

Misetich

"There are no signs yet of a Justice Department investigation into the behaviour of the banks. "

Hopefully Bush means what he says - and will bring these alleged corrupt crooks to justice

Got gold?

Aragorn III

(07/24/2002; 16:26:00 MDT - Msg ID: 81383)

Sir Belgian on SG derivatives

In this zoo where a big cat is called for and the selection is among the many leopards, is it not still most encouraging to have a leopard of French connection when we anticipate reform -- that spots must somehow be changed among and upon these cats? Until then it remains a zoo, to be sure!

What is in the human spirit calling for adventure that men, like children, ever want to ride the ride, loose wheels only adding to the fun?

You and I and many know walking the plain ground is good, too, but only if not struck by falling parts of these other playthings. Therefore is the drift toward reform in this matter... from above or below --de jure or force majeure!

got gold?

goldquest

(07/24/2002; 16:27:52 MDT - Msg ID: 81384)

The Major News Networks

made a big display of the arrest and handcuffing of members of the Rigas family, of Adelphia Communications.
The government finally got to display someone actually being hauled off to jail! What a farce! The other real crooks of Inron, Worldcon, JPM, Citicorp and people like Cheney, Rubin, Greenspan, White, just to name a few, continue to live the good life with immunity.
A side note: Harvey Pitt thinks that he is doing such a great job that he wants a raise and cabinet status! Is there no end to this massive fraud and circus?

Max Rabbitz

(07/24/2002; 16:51:11 MDT - Msg ID: 81385)

Fed declines comment on emergency meeting rumor

http://www.USAtoday.com/money/economy/fed/2002-07-24-fed-rumor_x.htmWASHINGTON (Reuters) - 'The Federal Reserve declined to comment Wednesday on rumors it may act to stem the global tide of equity market losses, in keeping with its usual stance in times of market turbulence. "It is our practice not to comment on rumors," said Fed spokeswoman Susan Stawick.....

A spokesman for the New York Federal Reserve also declined to comment on the rumors of an emergency meeting.

While the Federal Reserve has repeated many times that it does not target asset values, it could respond to the possible consequences of the stock market rout, such as a freezing up of financial market liquidity.....

Extreme risk aversion in the past week has seen corporate bond issuance dry up, and the commercial paper market, which companies tap for short-term borrowing, is also under pressure.'

Max: Maybe someday our elite will be less squimish about these things and just do like the Japanese, openly state that the markets have diarrhea and this has got to stop!

mikal

(07/24/2002; 17:01:15 MDT - Msg ID: 81386)

@goldquest

Re: Cabinet status. Very interesting, but bigger gov't is inconsistent with declining tax revenues. Maybe they'll use social security as can excuse for it. In any case anything would be an improvement upon the SEC and the CFTC, IMO. Let's see what's on the agenda ... the Department of the Internet, the Federal Gaming Commission, the Office of Strategic Minerals... ;)

misetich

(07/24/2002; 17:26:43 MDT - Msg ID: 81387)

Citigroup under fire- Worldcom

http://www.timesonline.co.uk/article/0,,5-365099,00.htmlSnip:

But in a further blow to Citigroup yesterday, a lawmaker requested more information about the relationship between two analysts at Salomon Smith Barney (SSB), its securities division, and WorldCom, the bankrupt telecommunications company.

Representative Michael Oxley, chairman of the House Financial Services Committee which is investigating the apparent $3.85 billion fraud at WorldCom, has asked the company and Andersen, its auditor, to submit records of any executives who received special allocations from initial public offerings handled by SSB.

At a high-profile hearing led by Mr Oxley last month into the WorldCom debacle, at which Jack Grubman, SSB's star technology analyst was called to testify, the committee described the relationship between Mr Grubman and Bernie Ebbers, former chief executive of WorldCom, as unusually close.

A recent lawsuit filed by a former SSB broker claimed that the securities unit allocated shares of hot initial public offerings to senior executives, including Mr Ebbers, in exchange for a cut of the profits.

America's National Association of Securities Dealers (NASD) has launched a regulatory action against Mr Grubman for his upbeat stock recommendations on now bankrupt telecoms group Winstar Communications.

NASD officials believe Mr Grubman and SSB issued overly optimistic research reports on Winstar, a Salomon investment banking clients, amid wider evidence that Winstar was facing serious financial difficulties.

Mr Grubman and SSB are also facing a punitive damages lawsuit from US securities lawyer Jacob Zamansky on behalf of a client who claims Mr Grubman issued biased investment advice on Global Crossing, the telecoms group.

Misetich

Reputational damage -
Conflict of interest
Initial IPO's allocation
Lawsuits by mislead investors

Worldcom - Enron - and more to come...stay tuned

Got gold?

Jon

(07/24/2002; 17:31:46 MDT - Msg ID: 81388)

GWB speaks of punishment

As suggested in my # 80559, GWB spoke forcefully today. Perhaps this did [in spite of Aragorn #80566] inspire investment confidence [mkt up 488 today]!!!

misetich

(07/24/2002; 17:38:11 MDT - Msg ID: 81389)

Lawsuit: Martha Stewart IPO was rigged

http://www.chicagotribune.com/business/chi-020724stewart.story?coll=chi%2Dbusiness%2DhedSnip:

By James T. Madore
Newsday
Published July 24, 2002

Martha Stewart's stock problems extend beyond allegations of insider trading in shares of drug maker ImClone Systems Inc.

A lawsuit claims there was financial chicanery surrounding the successful initial public stock offering of Stewart's company, Martha Stewart Living Omnimedia, nearly three years ago. Shares rose 178 percent to $50 on the first trading day in October 1999 but fell steadily in subsequent months, reaching a low of $13.38 in April 2000.

Investors allege the IPO was rigged to benefit investment banks that underwrote the stock instead of individual shareholders, according to court documents. They also say Stewart, as chief executive and chairwoman of her company's board of directors, had a responsibility to warn investors about problems with the IPO but failed to do so.

While the suit's primary target is investment banks, experts say, it could further damage Stewart's public image and her company's stock price, which have been battered by charges that she sold her ImClone shares in advance of devastating news about federal regulators rejecting its cancer drug.
...................
Spokesmen for the lead underwriter, Morgan Stanley Dean Witter & Co., and most of the six other investment banks named in the suit declined to comment.

"We believe these allegations have no merit and we intend to vigorously defend ourselves in court," said spokeswoman Victoria Harmon of Credit Suisse First Boston, parent of Donaldson, Lufkin & Jenrette who participated in the IPO. Merrill Lynch spokesman Bill Halldin added, "We are confident we acted appropriately in our role in this offering."

Misetich

"IPO was rigged to benefit investment banks".

Bush is going after CEO etc as being the culprits - everybody else is suing investment bankers -

Got gold?

sector

(07/24/2002; 17:58:25 MDT - Msg ID: 81390)

@misetich About the Fed Banks [C, JPM] and Enron

The Big Question is below...[...And the banks have yet to come up with a plausible explanation for why they were running deals like these, says Mr. Philippsohn. ]

++++++++++++++++++++++++++

Where will the search for an answer to this question lead?

It's getting pretty close to GoldGate. See... the whole offshore thing was designed to mask the gold trade side of the energy "Round Trip".

Enron purchased a $450,000 precious metals trading membership from the London Bullion Market Association. They traded bullion. In the submitted documents there are certainly references to the bullion trade...the searchers just need to ask the right questions of the e-mail, electronic search engines.

The plausible explanation is that C and JPM were enriched by the gold trade half of the energy "Round Trip" operation...a kind of gold/energy carry trade...all of it secret, just the way the United States Federal Reserve likes things.

misetich

(07/24/2002; 18:00:35 MDT - Msg ID: 81391)

Corporate bond fund managers retreat amid chaos

http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n2477352&feed=reu&date=20020724&cat=USMARKETSnip:

"You have to be in the bunker; every day is unpredictable," said Tim Doubek, portfolio manager at American Express Asset Management in Minneapolis. "It's like catching a falling knife. How many times do you have to do that before you get cut."

Fund managers said post-September 11 market chaos and fallout from both the Asian and Russian crises of 1997 and 1998 do not compare with the market's current battering.

"This is the worst ever," said Doubek. "Even during the Asian and Russian crises, there was a feeling that the markets were functioning properly. The feeling now is that the markets are just not working right."

Mitchell Stapley, who helps manage $3.5 billion in bonds at Fifth Third Investment Advisors in Grand Rapids, Michigan, and is a 20-year bond market veteran, can't remember a worse time for bond managers.

"This is not a market where you're really trying to outperform," he said. "You're really just trying to survive. You check how your portfolio did overnight and as long as you (don't underperform your) index, you're grateful."

"In the morning, you check to see whose the top business scandal in the credit column and you hope you're not overweighted in those guys," Stapley said.

Misetich

Yep, it sounds like "they" inspired confidence today - the stock market is small compared to bond market

Got gold?

misetich

(07/24/2002; 18:21:54 MDT - Msg ID: 81392)

GoldGate

sector (7/24/02; 17:58:25MT - usagold.com msg#: 81390)
...............
It's getting pretty close to GoldGate. See... the whole offshore thing was designed to mask the gold trade side of the energy "Round Trip".
..............

No question we're getting closer, however I tend to think- as ANOTHER and FAO indicated, it is the unsustainability that will set gold free

***********************************

YGM (7/24/02; 15:34:32MT - usagold.com msg#: 81376)
"FIAT MONEY".....Gold is the arbiter, the judge, the executioner.............
Now you should have that made into a wall plaque or desk ornament....How true....YGM
****************************

Thanks for the suggestion!

Cometose

(07/24/2002; 18:51:38 MDT - Msg ID: 81393)

in correlation to post 81345/ Gandalf

Finally up 490.....something change since yesterday?
Is this a sign of a manic investor public out there....
that just can't make up its mind ..... it seems that the rallies are becoming more and more short lived.... and this is some extreme volatility.... ....is it the type of volatility that precedes a crash...... or did we get capitulation yesterday .......is the bear market getting over/( is the economy really turning around) .....or are we just getting our ankles wet here ...Is all the scripted/ talk on CNBC about finding the bottom been promoted to get the ignorant investor to jump in on this rally so that the Bankgsters can just sell another chunk of worthless paper at the rally's peak and short against it at the top ( so they can recoup some of their Gold losses)
How's that banking sector doing..... One of the key players holding "the everything's rosy " facade together ( paper masche : deep and wide )is getting a full blast of the light of day " and is now gasping for air as the light is suffocating to the darkness that it cloaks and that no one wants the public to know..The draculaean task that JPM was given was " more than he could bear"....{it's just paper / who cares ....they'll just print some more......the water cooler down there at the fed must have some awesome pharmaceuticals in it .....the absolute epitomy of the no limits frickin' 60's mentality... our tax??payer dollars????
paying the salaries of a bunch of liberal wacked out economists doing a frickin" monetary experiment...
I used to have a rather large paddle that i used as my big stick while I walked soflty around my beautiful brood of young children....I retired that paddle almost a decade ago when its usefulness was over..... but since we are on the subject of fantasizing....I envision a huge paddle and being wielded by a huge bounty hunter type, pursuing after those responsible for this escapade permanently ( this bounty hunter type should be funded with unlimited resources to pursue the guilty to the ends of the earth for say...the next seventy years....

This global information age is hard to beat when it comes to getting the facts and the truth out .....

Observing all of this is very confusing , i'm sure, to those that invest in mutual funds but have little time to study the markets.....There is definitely a battle happening out there......that the masses ( we ) are not priviledged to see......and the fed has been referred to before as an 800 lb Gorilla..... However, I do believe that the fed has met it's match because it is in the ring with an opponent that it cannot see and i suspect that the opponent is probably comprable to an 8000 lb Gorrilla.

sector

(07/24/2002; 19:03:17 MDT - Msg ID: 81394)

@misetich Absolutely...It is the Unsustainability...

...of an economic plan that demands the sale of an exhaustible resource.The gold bullion resource is finite, therefore the economic plan's duration is similarly finite. Financial Armageddon happens on the day the last bar is sold.

In fact there are many ways to trigger Financial Armageddon, perhaps gold will get beaten to the punch by...sday...interest rate derivatives. Or maybe Collateralized Debt Obligations [CDOs]. It's easy to lose count of the triggers for Doomsday...such is the legacy of the Master of the Universe.
+++++++++++++++++
More on gold equities.

Illiquidity hurts gold stocks. It makes sense since gold stocks are the leading sector and are well in the black for the last two years and they therefore represent a sort of cash pool with which to pay margin calls generated by all the other red junk in the institutional portfolios.

If the above is true, the HUI continue will rebound independly of gold as it did today. it also means that when there is another DOW crisis event the HUI will fall and then is the time to make wagers.

Buying metal on the other hand is actually never a wager.

Black Blade

(07/24/2002; 19:14:25 MDT - Msg ID: 81395)

AOL Time Warner Discloses SEC Probe

http://biz.yahoo.com/rb/020724/media_aol_earns_18.html

Snippit:

NEW YORK (Reuters) - AOL Time Warner Inc., the world's largest media company, on Wednesday posted its first quarterly net profit since completing its mega-merger, and said the U.S. Securities & Exchange Commission has opened an inquiry into accounting practices of its online division.

Black Blade: A possible "Scandal of the Day" here? There was also a rumor that the auditors have refused to sign off on the quarterly report. The company denied the rumor. There is also concern over other accounting practices over online ad revenues.

Golden Bear

(07/24/2002; 19:22:13 MDT - Msg ID: 81396)

Concerted effort to prop up JPM and Citibank

During the statements of JPM management assuring the market that no impropriety was done in regard to Enron and that their liquidity is not a problem, massive volume spikes in both stocks on the open to halt the decline in their share prices, and to show to the average investor that there is nothing to worry about...

PPT in action, and again, following a supposed meeting by TPTB.

Temporary respite, the Bear has mauled investors and its belly is full for the moment. Time for a nap to digest before she reawakens her fury...

Black Blade

(07/24/2002; 19:37:38 MDT - Msg ID: 81397)

Energy sector weakness could threaten power supplies

biz.yahoo.com/rc/020724/u...ure_1.html

Snippit:

WASHINGTON, July 24 (Reuters) - Recent credit downgrades and stock price declines could keep energy companies from building new power plants and transmission grids to ensure adequate electricity supplies, industry officials warned a Senate committee on Wednesday. Credit downgrades and plummeting trading volumes in wholesale electricity markets have already forced energy firms to slash their expansion plans. Announcements of new power plant buildouts have "dropped off dramatically" as credit downgrades "dramatically escalate the cost of credit in this industry," said Pat Wood, chairman of the Federal Energy Regulatory Commission, speaking at a Senate Energy Committee hearing on electricity infrastructure development. Credit downgrades and resulting stock price declines "bring us to a very critical place on the future of infrastructure investment in this country," Wood said. Energy firms have shelved or postponed plans to build nearly 92,000 megawatts of construction since the start of 2002 -- about a third of proposed developments, Makovich said. One megawatt is enough to power about 1,000 homes.

Black Blade: The rumor is that Williams and Dynegy could both be filing for chapter 11. Others such as CMS are also rumored to be on the ropes. New exploration projects, pipelines, transmission grids, and power plants have been shelved. This is a sign that there is no economic growth and that the deepening recession has resulted in less demand for energy.

YGM

(07/24/2002; 19:40:49 MDT - Msg ID: 81398)

Global Economic Brotherhood & NWO all out efforts....

http://www.bankindex.com/read.asp?ID=1058Excerpt:

Whilst the world is controlled by the economics of banks and whilst survival depends upon lending money at interest, there will always be rulers and the ruled and a need for war. This is because there will always be vastly more money in circulation than there is actual wealth to back it up; and when the borrowers run out of money to pay their lenders they have merely two choices: to become enslaved to their debtors or to conquer them. It is for this reason that the bankers must maintain their position of ownership over the military, law, oil, pharmaceuticals, media and education etc..

In order to maintain this position of absolute power, the world's borrowers must be kept in ignorance of the truth of the situation which is that they are little more than slaves to their lenders. True history, which is the story of billions of individuals, including their manipulation, must not be taught. Indeed, it most certainly is not. The history books are full of kings and queens, 'goodies' and 'badies', wars and conquered nations, when they should more accurately be described as the chronicles of greed and wealth. For the System to survive it must also suppress true science, true history and the full exploration of spirituality.

Steps towards a Global Bank

The World Bank
This lends money to finance projects in the Third World to meet the needs of the multinationals. By financing projects which are totally irrelevant to the needs of the local people; the local economy is destroyed and rainforests are decimated. This conveniently adds to the environmental 'problem' (see later). Bill Clinton nominated the current president of the World Bank � James Wolfensohn from the Schroder Bank, Population Council, Bilderberg Steering Committee, CFR and business partner of the Rothschilds.

International Monetary Fund (IMF)
When poor countries get into Elite-engineered financial trouble, the IMF intervenes to offer more loans (thereby increasing the debt) on the condition that the Elite's policies are followed e.g. giving up land, which should be used to grow crops to feed the country's population, to produce luxury cash crops instead, which are exported at cut down prices to the multinationals.

Free Trade
Agreements such as GATT, NAFTA and APEC are promoted as 'good' things, showing close co-operation between the peoples of the world. In fact, 'free' trade serves to make all countries reliant on global consumerism dominated by the multinationals. With no tariff on imported goods there is no financial protection for home production, so Third World countries become dependent on imported goods. Land and people in the developing world are therefore open to exploitation by global companies, and industries in the developed countries can be undermined at will.

European Monetary Union
The most obvious stepping stone to a global bank and currency is the move by the European Union towards a centralised bank and single currency. Despite the apparent debate, this has already been decided upon with the UK's supposed opt-out clause in the Maastricht Treaty being over-ruled by another.

Also in the Maastricht Treaty are details of the control of the European currency and the reserves of each member state by six members of the Executive Board of the European Central Bank who, through their eight years of guaranteed security of tenure, 'may not seek or take instructions from Community institutions�or any other body'.

Control of Food
One of the more unbelievable examples of corporate exploitation of particularly the Third World is the systematic destruction of natural agricultural seeds, replacing them with patented genetically engineered ones. According to UN estimates, 75% of genetic diversity in agricultural crops has been lost this century and in England, 1500 'unapproved' seed varieties have been withdrawn. The situation now is that, instead of using native seed varieties, Third World countries must pay royalties to the multinational companies for genetically engineered seeds, which have been distributed and chemically produced by the same corporations, and which are useless in a Third World environment. As a result the same people control the actual food that we can eat � 90% of all food trade is in the hands of five multinationals: 50% are controlled by Unilever (who's chairman, Paul Rykens was at the heart of the formation of the Bilderberg Group) and Nestl� alone.

YGM

(07/24/2002; 19:45:42 MDT - Msg ID: 81399)

Trilateral Commission: THE FACTS EVERY EDUCATED PERSON MUST KNOW..

http://www.bankindex.com/read.asp?ID=1057Excerpt:

The Trilateral Commission was established in 1973. Its founder and primary financial angel was international financier, David Rockefeller, longtime chairman of the Rockefeller family-controlled Chase Manhattan Bank and undisputed overlord of his family's global corporate empire.

Rockefeller's idea for establishing the commission emerged after he had read a book entitled Between Two Ages written by an Establishment scholar, Prof. Zbigniew Brzezinski of Columbia University.

In his book Brzezinski proposed a vast alliance between North America, Western Europe and Japan. According to Brzezinski, changes in the modern world required it.

"Resist as it might," Brzezinski wrote elsewhere, "the American system is compelled gradually to accommodate itself to this emerging international context, with the U.S. government called upon to negotiate, to guarantee, and, to some extent, to protect the various arrangements that have been contrived even by private business."

In other words, it was necessary for the international upper class to band together to protect its interests, and to ensure, in the developed nations, that political leaders were brought to power who would ensure that the global financial interests (of the Rockefellers and the other ruling elites) would be protected over those of the hoi polloi.

POCANTICO HILLS CONFABS
Although the initial arrangements for the commission were laid out in a series of meetings held at the Rockefeller's famous Pocantico Hills estate outside New York City, Rockefeller first introduced the idea of the commission at an annual meeting of the Bilderberg group, this one held in Knokke, Belgium in the spring of 1972.

(The Bilderberg group is similar to the Trilateral Commission in that it is funded and heavily influenced by the Rockefeller empire, and composed of international financiers, industrialists, media magnates, union bosses, academics and political figures.

(However, the much older Bilderberg group's membership is strictly limited to participants from the United States, Canada and Western Europe: i.e. the NATO alliance. For more on the Bilderberg group, keep an eye out for future stories in this paper.

The Trilateral Commission was unique, though, in that it brought the Japanese ruling elite into the inner councils of the global power brokers, a recognition of Japan's growing influence in the world economic and political arena.

A succinct summary of the commission's intent has been outlined by Holly Sklar who has conducted extensive research into the history and background of the Trilateral Commission in her book, Trilateralism: the Trilateral Commission and Elite Planning for World Management

RULING CLASSES UNITE
"The Commission's purpose is to engineer an enduring partnership among the ruling classes of North America, Western Europe and Japan -- hence the term 'Trilateral' -- in order to safeguard the interests of Western capitalism in an explosive world. The private commission is attempting to mold public policy and construct a framework for international stability in the coming decades.

"To put it simply, Trilateralists are saying: The people, governments and economies of all nations must serve the needs of multinational banks and corporations.

"In short, Trilateralism is the current attempt by ruling elites to manage both dependence and democracy -- at home and abroad."

Another Trilateral critic, now-retired Sen. Barry Goldwater (R-Ariz.), views the commission as a Rockefeller family operation through and through. According to Goldwater:

"The Trilateral organization created by David Rockefeller was a surrogate -- the members selected by Rockefeller, its purposes defined by Rockefeiler, its funding supplied by Rockefeller. David Rockefeller screened and selected every individual who was invited to participate." Cont'd....

Black Blade

(07/24/2002; 19:52:06 MDT - Msg ID: 81400)

Buffett lashes out on stock option accounting

http://biz.yahoo.com/rc/020724/accounting_buffett_3.html

Snippit:

NEW YORK, July 24 (Reuters) - Warren Buffett, the billionaire investor whose every move is closely watched by Wall Street, fired off another salvo on Wednesday in his crusade to get corporations to expense stock options, an issue gathering steam in the wake of recent accounting scandals. In an op-ed piece in the New York Times, Buffett, the chief executive of diversified holding company Berkshire Hathaway Inc. (NYSE:BRKa), said the most "flagrant deceptions" have occurred in the world of stock options and pension accounting. The misrepresentations in those areas "dwarfs the lies of Enron and WorldCom," he wrote.

In his article, Buffett attacked corporate critics who say share options really don't cost a company anything because handing them doesn't involve any cash. "Without blushing, almost all C.E.O.'s have told their shareholders that options are cost-free," Buffett wrote in a piece subtly titled "Who Really Cooks the Books". "For these C.E.O.'s I have a proposition: Berkshire Hathaway will sell you insurance, carpeting or any of our other products in exchange for options identical to those you grant yourselves. It'll all be cash-free." Then, without missing beat, he challenged corporate head honchos to give him a call - collect call, no less - if they still believed their company had not incurred a cost by handing over the options in return for Berkshire's products. "For their shareholders' interest, and for the country's, C.E.O.'s should tell their accounting departments today to quit recording illusory pension-fund income and start recording all compensation costs," Buffett finished with a flourish. "They don't need studies or new rules to do that. They just need to act."

Black Blade: I agree with Buffett. However, I doubt that many companies will stop cooking the books. Cisco flagrantly uses this phoney accounting strategy. If Cisco were to expense options then they would never have had a profit and still don't. Microsoft is yet another company that cooks the books. If Mr. Softy were to expense options then they would have to slash profits by about 27%. Overall, earnings for US corporations would be slashed by an average 12%. I have pounded the table on this outrage since early 1999. Finally some companies are beginning to come clean.

a nation of one

(07/24/2002; 19:55:50 MDT - Msg ID: 81401)

Socrates964 msg#: 81373

I was mostly exploring potentials. What the facts are I don't know. It does seem though that the Asian connection is likely to be different from the way we think of things in our own daily lives.

Pizz

(07/24/2002; 20:05:08 MDT - Msg ID: 81402)

JPM Bailout?

Here's hoping this may have happened over the past couple days:

JPM is in a liquidity trap. Their derivitives and stock positions are hemmoraging. We're going to war soon and the dollar is dropping. All negative for their short gold positions.

Now, if the Fed drops rates it will prop up the SM and bond Markets, decrease JPM's short term cost of funds, but it will trash the dollar and send gold higher.

Now, with gold lease rates up, I'm thinkin the PTB have been trashing the gold markets to allow JPM to hedge/offset their gold derivitives.

If I was trying to save the SOB's, it's about as good an idea as I can think of. Besides, a lower dollar IMHO is the gameplan for the inflation we have to have. All they have to do is limit the damage when gold starts climbing rapidly????

I hope I'm right. It would explain why gold didn't get hammered half as bad as the shares. (And if the stupid SOB's haven't been covering over the past few days and buying cheap gold shares, they deserve to go belly-up)

Plus, since a whole lot of weak paper gold bugs got stopped out and sold out, their will be some buying pressure later too.

Rambling a bit, but just trying to make some sense out of the action lately.

Pizz

Gauntlet-Runner2("GR2")

(07/24/2002; 20:21:22 MDT - Msg ID: 81403)

The Times They are a Changing

http://www.lewrockwell.com/tucker/tucker20.htmlWhen the "lunatic fringe" becomes the gurus.

And the "haves" become the "has been's new have nots".

If the writing on the walls include some commandments..........good times to be alive in.

Great days to be goldbugs.

=====================================================

If the indexes don't double bottom, then it is no bottom.

Black Blade

(07/24/2002; 20:26:43 MDT - Msg ID: 81404)

What Will Tomorrow Bring?

There are calls for the Federal Reserve to raise interest rates. That may be the case as there was a rumored emergency Federal Reserve Bank meeting last night, neither confirmed nor denied by the Fed. Tomorrow Treasury Secretary Paul O�Neill will be trotted out to cheerlead the markets higher with chants of all is well and that the economy is recovering. That is of course if you believe the massaged BLS data that has come under attack by skeptics and academics in recent years as being grossly biased and inadequate for using dubious statistical filters ranging from hedonic deflators to seasonality in unemployment, consumer and producer price indexing, and economic growth. The secretary was in meetings with Wall Street executives as part of his duties as a member of the President's Working Group on Financial Markets (aka Plunge Protection Team) per executive order 12631 signed March 18, 1988 by Ronald Reagan. The Working Group on Financial Markets includes the secretary of the treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission, the Commodity Futures Trading Commission, and various Wall Street investment houses.

In the event of a financial crisis, each federal agency with a seat at the table of the Working Group has a confidential plan. At the SEC, for example, the plan is called the "red book" because of the color of its cover. It is officially known as the Executive Directory for Market Contingencies. The major U.S. stock markets have copies of the commission's plan as well as the CFTC's. The red book is intended to make sure that no matter what the time of day, SEC officials can reach their opposite numbers at other agencies of the U.S. government, with foreign governments, at the various stock, bond and commodity futures and options exchanges, as well as executives of the many payment and settlement systems underlying the financial markets. "We all have everybody's home and weekend numbers," said a former Working Group staff member. What I would have given to have been a "fly on the wall" to listen to the discussions last night at the Fed and at the meeting between O�Neill and the Wall Street bankers. It should be quite an interesting day tomorrow.

- Black Blade

sector

(07/24/2002; 20:36:19 MDT - Msg ID: 81405)

@pizz - JPM Can't Be Bailed Out

For many ReasonsFirst and most important, the plaintiffs in the Enron litigation have a smoking gun e-mail and probably allot more of them there not showing at the moment. That evidence of fraud will sway any jury as effectively as tobacco juries have been swayed. The settlements will be in the $10s of billions. The lawyers are well financed and motivated. The judges are liberal. JPM is a dead man walking regardless of what happens in the gold derivatives arena.

Second the prop for JPM today came in the form of PPT and JPMs own share buying...it's only a temporary prop. Recall that Alan Greenspan cannot deal with controversy properly�he must ALWAYS avoid, avoid, avoid the conflict that come from a true problem resolution. He ALWAYS confuses activity with results. Thus the rumor of another pending rate cut. He must be seen as "Doing something". What the market does AFTER the rate cut will tell how quickly the dead man stops walking. They die when they close under $20. That might happen before the litigation gets rolling along or it might be catalyzed BY the litigation. The funds holding JPM will sell just as they sold Enron and about at the same rate.

We are nearing the end of what has been since 1998's LTCM gloss over, a runaway Fed Policy train that has somehow managed to stay on the tracks but now faces a sharp curve ahead.

That is the Hell of managers who cannot make difficult decisions. Things just build and build until Armageddon Day.

Black Blade

(07/24/2002; 20:37:04 MDT - Msg ID: 81406)

Americans Sour On Economy

http://www.msnbc.com/news/784520.asp?0si

Snippit:

THE DRUMBEAT of reports of accounting irregularities and massive stock losses appears to have led Americans to believe that the economy is in worse shape than it really is. More than two-thirds of those surveyed � 68 percent � said the United States had fallen into a recession or will within a year, even though government figures show that it has been growing strongly since January. And while economists generally predict that moderate growth will continue for the rest of the year and through 2003, 57 percent of the 1,014 adults who were questioned Friday through Sunday said they expected conditions to remain the same or get worse. Forty-one percent said they expected them to improve.

Black Blade: The government claims all is well, and yet the people say it isn't well at all. I guess it comes down to who do you believe? The government or your lying eyes.

Black Blade

(07/24/2002; 20:52:45 MDT - Msg ID: 81407)

Stocks� decline roils marriages

http://www.msnbc.com/news/784830.asp

Snippit:

That conversation is everywhere now � at family dinner tables, in marital therapists� offices, in divorce-mediation sessions, in visits with the in-laws. Back in the good old �90s, millions of people said to their significant others, "Hey, sweetheart, maybe we should take our profits." These days, they're holding it over their loved ones� heads. Their six-word battle cry: "I told you we should sell!" Bickering stock losers often have no choice but to stay together. Matrimonial lawyers say many clients can no longer afford to get divorced; there's not enough money left to split. At the same time, others headed for divorce are perversely gleeful about the market's fall. "People say, �This is a good time to split up the assets. My spouse will get less,� " says Ronald Bavero, an attorney in White Plains, N.Y. These last few weeks have been especially harried for those involved in pending divorces. Unless they can agree on a course of action, their stock portfolios just sit there, shrinking. "You get hysterical letters from opposing counsel saying, �We need to sell!� " says Nina Vitek, a divorce lawyer in Milwaukee.

Black Blade: I can see where this is leading. Some very interesting examples in this article and it is likely that this is quite common all across America. Even so, I have no sympathy for those who take no responsibility and refuse to get a bit of portfolio insurance against the ups and downs of gambling on the stock market. Lemmings are likely to follow the herd and fall over the cliff.

Black Blade

(07/24/2002; 21:25:21 MDT - Msg ID: 81408)

Monkey See Monkey Do

http://quote.yahoo.com/m2?u
Asian markets are following in the US markets footsteps. The Hang Seng and Nikkei 225 are back over 10,000 as expected. The question for tomorrow is whether the market action is just a "dead cat bounce" on aggressive short covering or if the market's fundamentals are really that good. Somehow I just do not see the tremendous improvement in corporate earnings, lowering of debt obligations, and growth in revenue to justify the optimism touted by the media Trolls. Sorry, but the economic improvement just ain't there.

- Black Blade

Gandalf the White

(07/24/2002; 21:29:33 MDT - Msg ID: 81409)

SORRY Mr. G !!!

The Hobbits were sorry to have missed you at BIG John's this afternoon. Maybe next time you fly into Town !
<;-)

Pizz

(07/24/2002; 21:29:57 MDT - Msg ID: 81410)

@Sector

JPM Bailout? You're probably right, but I'll settle for a short term patch job that get's those damn derivitives covered to free gold, or better yet, a patch job that forces them to start covering in anticipation of a bigger problem so we can get gold back where it belongs!!

Pizz

Chris Powell

(07/24/2002; 21:43:04 MDT - Msg ID: 81411)

GATA chairman's interview on C-SPAN is available on Internet

http://groups.yahoo.com/group/gata/message/1189GATA Chairman Bill Murphy's half-hour interview
on the C-SPAN television network's "Washington
Journal" program has been posted on the Internet:

http://groups.yahoo.com/group/gata/message/1189

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

Trurl

(07/24/2002; 22:19:24 MDT - Msg ID: 81412)

Is the hair on the back of your neck standing up yet?

http://cryptome.org/patriot-rules.htmThere have been recent developments in the PATRIOT Act, and new rules have been released. Thanks to the Cryptome site to mirror this information.

The rules for PM dealers continue to be deferred. Interesting facts can be gathered from the new rules imposed on other �financial� businesses.

Here is one quote to get your interest:

"The Secretary has determined that the records required to be kept by section
326 of the Act have a high degree of usefulness in criminal, tax, or
regulatory investigations or proceedings, or in the conduct of intelligence
or counterintelligence activities, to protect against international
terrorism."

Basically if you become a customer of a financial institution, you must provide a current, government approved photo ID, a tax payer ID, a mailing and physical address. "They" will keep copies of your documentation on file � for 5 years after you cease being a customer. There are no meaningful exceptions or minimum transaction size thresholds.

All institutions must be able to check if a prospective customer's name is on a gov supplied black list.

The new rules began July 23. If you already have an open account, you're already in the system.

So in the future, if they don't like you or your views, they just put you on the watch list for �investigation�.
Suddenly, your paper/plastic assets don't work anymore...

Is the hair on the back of your neck standing up yet?

Black Blade

(07/25/2002; 00:41:15 MDT - Msg ID: 81413)

Asian Markets Start With a Bang - End With a Wimper

http://quote.yahoo.com/m2?u
I really feel let down. I had high hopes that I would be "entertained" as the Asian markets run headlong sheep-like into that giddy irrational exuberance with wild trading action. There were flashes of trading spikes here and there, but they really let me down. I had hoped that they would charge on to new heights and suck in more greedy unsuspecting fools for a good fleecing. But alas, the sheep were few in number. Could it be that they tire of the game and are tapped out? Maybe they are beginning to catch on that they are being played for fools. That is the investment bankers run the prices up and create a mania, then as the sheep buy in near the top - whammo!!! Pull the chair out from under them and pull them onto the kill floor and reap the profits. Then start all over again for another good shearing. Oh well, European markets start up soon and maybe the european lemmings will provide me with some "entertainment". There are alway plenty of foolish sheep for shearing.

Maybe I should lay off the mutton. Hmmm...

- Black Blade

Belgian

(07/25/2002; 00:44:14 MDT - Msg ID: 81414)

@ Aragorn III

Yes Sir, the french connection...and their strong affinity with Gold (historical)!? Let us be careful with our assumptions and hopes.
Some budget deficits in Euroland are rising and fiscal harmonization (nice word) already points to higher taxation (budget balancing) (Bolkenstein and uniform (higher) oil taxes). Indeed, force majeure ! Higher taxes, evidence the "will" for stability but might erode, the growth element. Yes, force majeure might bring in the Gold tool, faster than anticipated, to give budgetary discipline a helping hand (for the less disciplined French/Belgians)?

Dollar weakness or euro strength ?
A military dollar against a political euro. Wich one is considered the most rational and sympathetic ? Wich currency is percepted to be falsified (mismanaged) ?
The general public on this globe will slowly start to ponder on this question. The US stockmarket (120% of GDP) rises and falls 5% and more in a matter of hours !? Is this evidence of superior dollar-management ? Is this the definition of dollarblock stability and growth ? No, this is panic-soccer, minimizing Euroland's problems in comparaison. Eurolands's Gold reserves can be saved for the day of final reckoning between $ and � (dollar-exhaustion).

Black Blade

(07/25/2002; 01:15:40 MDT - Msg ID: 81415)

Mixed Indicators

http://www.mrci.com/qpnight.asp
The US market index futures are lower, the USD is lower, petroleum and gold are flat-lining. It appears that there is nothing to focus on yet - though the US stock markets could dip at the open.

- Black Blade

neo 1

(07/25/2002; 02:49:38 MDT - Msg ID: 81416)

test

Black Blade

(07/25/2002; 03:11:46 MDT - Msg ID: 81417)

CIBC Forecasts Gold Rally

http://www.smallcapcenter.com/story.asp?mysection=headlines&mypage=headlinenews&storyid=16798

Snippit:

WINNIPEG, Man. (Resource News International via COMTEX) -- The price of gold is seen undergoing a substantive rally heading into the end of 2002, brought on primarily by a lower US dollar exchange rate, a report released by CIBC said today. Thus far in 2002, equity markets have not performed well, and it is estimated that only US$350 billion will be invested into stocks, bonds and the like.

Black Blade: Maybe so. Yesterday's "dead cat bounce" could continue forward for a while dragging down gold. However, the equities rally should be short-lived as there is absolutely no fundamental positive for the stock indices. Meanwhile the US dollar continues to fall against the major world currencies � reaching parity with the euro once again.

Black Blade

(07/25/2002; 03:15:21 MDT - Msg ID: 81418)

Breaking News!!! "Scandal Of The Day"

Warrants are said to be issued for the arrest of WorldCon CFO Scott Sulliva and Controller David Meyers for securities, wire, and mail fraud. It is expected that former CEO Bernie Ebbers could be arrested later if either Sullivan and Meyers agree to cooperate with the prosecution. - Still awaiting details.

- Black Blade

Maybe the Enron management will be next.

neo 1

(07/25/2002; 03:25:15 MDT - Msg ID: 81419)

Argentina : Quiet , pleasant and normal

http://www.worldnetdaily.com/news/article.asp?article_id=28397From Doug Casey,the International Speculator:

"I get to Argentina at least once a year and, in light of the collapse of the currency and the riots, I wasn't about to miss the party.
Listening to the news, you might have expected to see mayhem in the streets and starving kids. And, of course, there have been some riots, and a few people have been killed. Go down to the Casa Rosada, and you'll always find a few hundred people banging pots and carrying signs; big deal. It's just enough to cause the bozos in the media to foment hysteria, which serves to keep away unsophisticated tourists.
I went all over Buenos Aires, and I can tell you that, although there were a fair number of shops that had gone out of business and there weren't a lot of shoppers anywhere, the city is very quiet, pleasant and normal. Restaurants aren't as crowded as they used to be, and neither are the highways- but that's not all a bad thing...
I am, however, very encouraged by the fact the government no longer has any respect or credibility whatsoever among any sector of the people; many are simply refusing to pay their taxes- even if they're able to...
But, if you're a foreigner unlinked to the local economy, this country is one of the finest places in the world to be...

Black Blade

(07/25/2002; 05:08:32 MDT - Msg ID: 81420)

Dollar Slips Amid Fragile Confidence

http://biz.yahoo.com/rb/020725/markets_forex_3.html
Snippit:

LONDON (Reuters) - The dollar fell across the board on Thursday, probing below parity with the euro briefly as a dramatic rebound on Wall Street proved insufficient to shake off doubts about U.S. asset returns and the greenback's downtrend. U.S. stocks surged on Wednesday with the broad market chalking up its biggest gain since October 1987 as investors stampeded back to buy stocks at prices cut down to multi-year lows after three weeks of relentless declines. "Last night, most stock buying came out of the U.S. You don't see foreigners regaining confidence in the U.S. market just yet, and we are not out of the woods yet," said Rebecca Patterson, currency strategist at J.P. Morgan.

Black Blade: Manufacturers are not happy with a strong dollar as it make manufactured goods uncompetitive around the globe and at home against cheaper imports. It's a "no-brainer" that a stronger dollar translates into lost jobs.

misetich

(07/25/2002; 05:12:38 MDT - Msg ID: 81421)

Rubin from Singapore - Merit in Options as Costs

http://story.news.yahoo.com/news?tmpl=story2&cid=580&ncid=580&e=8&u=/nm/20020725/bs_nm/financial_singapore_citigroup_dc_2Snip:

By Jacqueline Wong

SINGAPORE (Reuters) - Robert Rubin, the chairman of Citigroup Inc's executive committee, said on Thursday the idea of treating stock options as expenses was worth considering but moves toward better corporate governance should be sensible.

..................

U.S. financial services companies such as Citigroup, the world's biggest, are particularly large issuers of options to top-performing executives.

"Various proposals have been made that seem to me, on the whole, to be constructive," Rubin, a former U.S. Treasury secretary, said in a speech at a finance seminar organized by the Monetary Authority of Singapore.

"In addition is the expensing of options, which is seriously worthwhile considering."

But he said there were "practical issues" involved and that responses by companies to improving the level of corporate governance should be "balanced and sensible."

"When you've had a long period of good times, some people take advantage of what they shouldn't do," he said in response to questions from the floor after his speech.
..........................
Citigroup itself is under investigation for its role in helping Enron Corp hide debt that led to its eventual collapse and is facing a lawsuit over allegations it did not properly disclose its dealings with the bankrupt energy trader.

Rubin declined to answer questions from reporters after the seminar.

U.S. MODEL WORKS WELL

Rubin said in his speech that, despite the recent setbacks, the U.S. corporate model had "served our country exceedingly well for a very long time" by allowing for rapid change, agility, experimentation and risk-taking.

Accounting firms played a quasi-regulatory role but their dilemma was how to reconcile this with making profits, he said.
................
On his outlook for the United States, where markets have been pummeled by a loss of confidence in Corporate America, Rubin said investors should look at its prospects in the long term.

"The long-term potential of the United States economy is very favorable due to great underlying strengths such as our flexible labor market, flexible capital markets," he said.

While the country's long-term fiscal position had deteriorated enormously in the past year and there were worries about terrorism and geopolitical instability affecting sentiment, Rubin said fundamentals remained sound.

But the United States must work to repair its long-term fiscal position and public education system, employ more effective measures to get the poor into the economic mainstream, and deal with terrorism and geopolitical issues effectively.

Corporate enterprise should also be highly disciplined on expenses, maintaining good liquidity and strong balance sheets.

Misetich

For those who've been asking the whereabouts of Robert Rubin - the Rat - is in Singapore.

He says
"In addition is the expensing of options, which is seriously worthwhile considering."

He did nothing to discourage this practice his tenure.

As most investors which are trapped holding on to their overpaid stocks (ei) Nortel, Worldcon, Enron, Xerox, etc.
he says - "the U.S. corporate model had "served our country exceedingly well for a very long time"

He says
"The long-term potential of the United States economy is very favorable " "But the United States must work to repair its long-term fiscal position "

Mr. Rubin must be suffering from amnesia - he forgets to mention medicare, the pillaged social security system -

The "good times" are over - earnings growth are going to be negligible at first if all "accounting irregularaties" are reformed - and negligible going forward as the fiscal deterioration will be worse than anticipated

Exactly what is long-term Mr. Rubin? 20-30-40-50 years?

Mr. Rubin is too modest when he says ""When you've had a long period of good times, some people take advantage of what they shouldn't do,"

Lets recap

Citigroup with Rubin at the helm "are particularly large issuers of options to top-performing executives"

Citigroup itself is under investigation for its role in helping Enron Corp hide debt

"Rubin declined to answer questions from reporters after the seminar"

I guess that what he means by " improving the level of corporate governance should be "balanced and sensible." "

Got gold?

misetich

(07/25/2002; 05:19:15 MDT - Msg ID: 81422)

Bonds Volatility - are the next accident waiting to happen in the financial markets.

http://www.guardian.co.uk/business/story/0,3604,762728,00.htmlSnip:

WorldCom filed for bankruptcy on Monday, an event that obliges holders of the company's bonds to recognise formally in their accounts that they will not be paid. Until Monday, those who had bought WorldCom's corporate bonds at the time they were issued could have accounted for them in their balance sheets at face value.

Some City analysts think corporate bonds are the next accident waiting to happen in the financial markets. The credit rating of many of the bonds has been artificially boosted by "credit-enhancers", firms which guarantee the bonds and then try to lay off the risk with other financial institutions, mainly insurance companies.

Spreads - the difference between the prices at which traders buy and sell - on corporate bonds have widened dramatically in the past fortnight, indicating that they are now seen as a more risky investment.

Mark Tinker, global head of debt and equity strategy at Commerzbank, said that many insurers were now having to recognise their corporate bond portfolios at the market value, a process called marking-to-market.

"What we are seeing here is an adjustment to reality in the corporate bond market having an effect on insurers," Mr Tinker said. "Where insurers are forced to improve their ratios by selling other parts of their portfolios, that has an effect on equities."

Misetich

The markets do not like volatility - traders -are afraid to turn their PC monitor and look at the scandalous headlines -are their holdings evaporated?

On the other hand PHYSICAL GOLD thrives under this conditions- as it is the ULTIMATE safe storage of value according to Mr. Greenspan

Got gold?

Boilermaker

(07/25/2002; 05:23:58 MDT - Msg ID: 81423)

What's With the DAX?

http://quote.yahoo.com/m2?uFTSE and CAC are both up 3 to 4%. DAX is down after a strong start. Any news to explain this?

misetich

(07/25/2002; 05:24:38 MDT - Msg ID: 81424)

Alcatel Posts $1.43 Billion Loss, Forecasts Difficult Conditions

http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=2&u=/dowjones/20020725/bs_dowjones/alcatel_posts__1_43_billion_loss__forecasts_difficult_conditionsSnip:

PARIS -- Alcatel (NYSE: ALA - News) reported a net loss of 1.44 billion euros ($1.43 billion) in the second quarter and forecast difficult market conditions for the foreseeable future
.............
Alcatel said it "expects markets to stay depressed in the second half of 2002, with no sign of recovery in view."

In a conference call, Chief Financial Officer Jean-Pascal Beaufret said Alcatel will take additional restructuring steps in 2003, which will mean more job cuts.

Misetich

Telecom industry woes continue unabated - we can expect further deterioration -

Issued equity and debt in this sector in recent years are in excess of $10 trillions

Got gold?

misetich

(07/25/2002; 05:29:34 MDT - Msg ID: 81425)

Wall Street Securities Firms Bracing for New Round of Layoffs

http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=17&u=/dowjones/20020725/bs_dowjones/wall_street_securities_firms_bracing_for_new_round_of_layoffsSnip:

The upshot: Employment levels are bound to catch up with this drastic dropoff in activity. "We are getting closer to larger cuts," Salomon Smith Barney analyst Guy Moszkowski says.

Misetich

US Feds, O'Neil continue on forecasting a "sound recovery" -meanwhile the Bone Pile gets new addtions daily. - Yes it is a jobless recovery.

Got gold?

Black Blade

(07/25/2002; 05:33:44 MDT - Msg ID: 81426)

The atom's rise to power

http://www.redherring.com/insider/2002/0724/atompower072402.html
What's going on in the world of nuclear power generation?

Snippit:

Blackouts and dependency on oil from the Middle East have once again brought the debate over nuclear power in the United States to center stage. At current resource levels, even with conservation practices in place, there won't be sufficient electricity-generation capacity to meet U.S. demand, which will rise by 1.8 percent annually over the next 20 years, according to the Energy Information Administration. According to the U.S. Department of Energy, meeting the expected demand will require an additional 355,000 megawatts of power, which works out to roughly 35 new mid-size (500 MW) plants each year for the next 20 years. Faced with such a situation, the government is now looking to nuclear power to help meet these needs.

Black Blade: One of the submitted designs is the gas-cooled, pebble-bed modular reactor (PBMR). It should be part of the answer to "cheap energy", however, politics and litigation will ensure we will have to look forward to high energy costs. Also, South Africa is planning the construction of PBMRs.

The Victorian

(07/25/2002; 05:40:16 MDT - Msg ID: 81427)

Boilermaker - re: what's up with the DAX

Apparently they are open later than the their European counterparts, therefore they participated in the US rally yesterday. I believe I heard they had been up at least 3% yesterday, so today they are giving back gains, particularly in view of a lower open this morning for the US indexes.

Black Blade

(07/25/2002; 05:43:46 MDT - Msg ID: 81428)

Re: Boilermaker - DAX

The DAX remains open longer than the CAC40 and FTSE. So yesterday when the US markets began to run up, the CAC40 and FTSE were already closed, however, the DAX was still open and they rallied on Wall Street's gains yesterday so they did not have to play "catch up" like the other Euro markets. It was essentially "Monkey See Monkey Do" time today.

- Black Blade

misetich

(07/25/2002; 05:47:07 MDT - Msg ID: 81429)

AOL Accounts Under Scrutiny From the S.E.C.

http://www.nytimes.com/2002/07/25/business/25AOL.htmlSnip:

The company said the investigation was started in response to two articles last week in The Washington Post that suggested that AOL might have inflated its revenue over a two-year period ending in March. The S.E.C. inquiry is the latest setback for AOL Time Warner as its new chief executive, Richard D. Parsons, struggles to cast off investor disappointment with the merger that created the company.

In January 2001, near the height of the Internet boom, America Online used its soaring stock to acquire Time Warner, an old-media company with four times its revenue. Since then the combined company's shares have fallen more than 75 percent as the promised fruits of the combination of old and new media have so far failed to materialize.

....................

But some analysts said yesterday that the S.E.C. investigation and the continued weakness at America Online overshadowed Mr. Parsons's reassuring comments.

"There are two new looming issues," said Jordan Rohan, an analyst at Soundview Technologies. "The investigation into AOL's accounting and the dramatic decrease in the growth of new subscribers at AOL."

Misetich

Lets stay tuned on this one - there appears a huge discrepancies on perception of what corporations say it is perfectly legal and investors perception of previous growth, earnings, value etc.

Got gold?

Boilermaker

(07/25/2002; 05:57:34 MDT - Msg ID: 81430)

US Nuclear Power Fleet

http://www.nrc.gov/reactors/operating/licensing/renewal/overview.htmlReactor License Renewal Overview

The Atomic Energy Act and NRC regulations limit commercial power reactor licenses to an initial 40 years but also permit such licenses to be renewed. This original 40-year term for reactor licenses was based on economic and antitrust considerations--not on limitations of nuclear technology. Due to this selected time period; however, some structures and components may have been engineered on the basis of an expected 40-year service life.

The NRC has established a timely license renewal process and clear requirements codified in 10 CFR Part 51 and 10 CFR Part 54, that are needed to assure safe plant operation for extended plant life. The timely renewal of licenses for an additional 20 years, where appropriate to renew them, may be important to ensuring an adequate energy supply for the Nation during the first half of the 21st Century.

Nuclear power comprises approximately 20 percent of all the electric power produced in the United States. The first operating license will expire in the year 2006; approximately 10 percent will expire by the end of the year 2010 and more than 40 percent will expire by the year 2015. The decision to seek license renewal is strictly voluntary and nuclear power plant owners (i.e. licensee) must decide whether they are likely to satisfy NRC requirements and whether license renewal is a cost effective venture.

Comment;
The US is fast approaching the end of the 40 year original operating license term for many reactors. This will force utilities to make decisions well in advance about the feasibility of opting for renewal. Renewal will be fought every step of the way by determined anti-nuke groups. As well, many owners will be forced to make major modifications and/or replacement of critical components.

Boilermaker

(07/25/2002; 06:03:04 MDT - Msg ID: 81431)

Re: Black Blade

Thanks for the DAX explanation. Perhaps the DOW will mirror the DAX today?

misetich

(07/25/2002; 06:05:48 MDT - Msg ID: 81432)

Foreign Investors - continue to cut US stock holdings

http://www.forbes.com/newswire/2002/07/25/rtr675072.htmlSnip:

POLL-Euro mgrs continue to cut U.S. stock holdings

LONDON, July 25 (Reuters) - European fund managers yanked more funds out of U.S. equities and boosted Japanese stock holdings as sentiment about the U.S. corporate sector continued to be mauled by accounting scandals and market slides.

A survey of 11 fund firms showed managers of equity funds continued to shift money out of the U.S. and into Japan against a backdrop of corporate woes such as the bankruptcy of U.S. telecom giant WorldCom (nasdaq: WCOEQ - news - people).

................
Insurance companies whose solvency ratios are affected by falling stocks may be forced to sell more equities, he said. "Some insurance companies would have to shift out of stocks an into bonds," he said.
.................

Misetich

Got gold?

misetich

(07/25/2002; 06:27:57 MDT - Msg ID: 81433)

ENRON - Will it be the catalyst that springs gold free?

http://www.forbes.com/2002/04/12/fullenroncoverage.htmlEnron congressional investigation, shareholder lawsuits, web of lies, deceit could very be the catalyst that will spring gold free.

Excerpt from Forbes Enron archives:

The banks, while creditors themselves because they made loans to Enron, may also wind up being liable to other creditors because of their role in selling Enron shares and debt. An independent examiner would have powers to investigate the role of the bank creditors in Enron's rise and fall to determine whether Enron should be making claims against them on behalf of its other creditors.

In the civil lawsuit, which is proceeding in a federal court in Houston, the basis for claims against Enron officials are clear: They made statements on which shareholders relied when buying stock. Claims against outside legal and financial advisers tend to be harder to win.

************************8

In light of recent congressional hearings and testimonies - JP Morgan and Citigroup may have their hands full- Standard and Poor estimated courts awards at $1 billion for JP Morgan - That amount appears to be on the light side - as it appears that both Citi and JP Morgan KNEW of the Enron scam and went along with it for fat fees - trying to do it legally of course -

We can expect tremendous lobbying pressure in the name to "preserve the financial system" applied to investigators -

Will this lobbying work? It is very doubtful as too many hounds are on this one - The more they try to coverup the more the likelyhood the chances of further investigations intensifying

Gold awaits - patiently - like a volcano - heat intensity is rising -

Got gold?

Black Blade

(07/25/2002; 06:39:03 MDT - Msg ID: 81434)

Whoa!!! Durable Goods Orders Down 3.8%

The durable goods number is down greater than expected -3.8%. Ex defense it is worse -4.8%. These are bad numbers reflecting a serious drop in future production. However, the BLS says that unemployment is only 362,000 for last week. I did not see the revision for the previous week though revisions have been higher for the last several months. Then again many simply don't qualify for benefits. Some are on their second or more layoff and haven't qualified for new benefits yet. Many others simply ave given up looking.

Yep, look at those market futures indices drop lower. There just might be some "entertainment" on the markets today.

- Black Blade

Operative

(07/25/2002; 06:39:35 MDT - Msg ID: 81435)

The Investment Secret of Joe6Pack and why he is winning!!

http://store.ino.com/products/sincere/ad.htmlSomething to mull over while watching today's antics on Wall St.

aussie

(07/25/2002; 06:45:00 MDT - Msg ID: 81436)

Safehaven site

Hey there Golden Bear, thanks for the site re: SafeHaven - very interesting and about to put up on my favourites list. The ASX sure took a battering yesterday along with the gold prices. Just really wonder where to turn next!!!! Certainly after this news I am reconsidering investing in a forthcoming gold float which I really think has great prospects.

I certainly hope the American legal system works faster and more efficiently than ours,- because I can bet your bottom dollar that by the time the lawyers, liquidators and 'hanger-ons' have taken their fair of the chop of any company proceeds that these bankrupt companies have, there certainly will not be any left for their shareholders or creditors. That is of course taking into consideration that they live long enough to see it come to court!

Very pessimistic viewpoint, - but talking from experience, having and still involved with the 'Finance Brokers Scandal', my views are somewhat coloured. I no longer believe that we in Australia have a fair justice system. The 'big boys' will always win out - morals do not get a look in. QC's for the 'big boys' will argue black is white and just drag the processes from one court to the next taking years in the process and financially crippling anyone who comes against them.

On a positive note, - gee it was nice on the golf course - shame of course about my golf score, but who cares when you are having fun.

Cheers

mas

(07/25/2002; 07:15:53 MDT - Msg ID: 81437)

Euro/Gold

http://finance.yahoo.com/m5?&a=1&s=XAU&t=EUR&c=0Gent's note how close the price is tracking to USD/Gold.
Is this on purpose? Hmmmm.
Should be interesting when she blows.

Golden Bear

(07/25/2002; 07:33:00 MDT - Msg ID: 81438)

aussie (msg#: 81436)

G'day aussie,

You're right about the legal system. But it's not only in Oz, it's everywhere....

I have only one piece of advice for you. LISTEN to the advice of the GIANTS at this forum. You are hearing advice that may come to you only once in a lifetime, and currently, there could be no more critical time to follow this advice.

Gold bullion in your possession, and cash, thats it! If we go into a deflationary spiral, you'll be high and dry while most are drowning....

It is difficult to fathom something like the Great Depression, but what we are witnessing now are events that will be talked about for hundreds of years, and personally, I plan to come out at the other end as unscathed as possible.

Cheers.

PS. I was reading a book called The Millionaire Mind on a recent holiday, and one anecdote in it caught my attention. A millionaire was asked how he became an economic success. He told a story about visiting his bank manager. In the manager's office high up in the bank building, they both looked out over the city landscape towards the horizon. The manager said: "Do you see all that out there, we OWN all of it, all the businesses out there. You borrowers run these businesses for us."

His point was that if you owe money, someone else controls you...

Around The Corner

(07/25/2002; 08:12:38 MDT - Msg ID: 81439)

Workers Compensation Rises 1 Percent

http://www.nytimes.com/aponline/business/AP-Economy.html
"The 1 percent advance in the second quarter was slightly bigger than many analysts expected and represented the largest increase in total compensation since the fourth quarter of 2001."
_______________________________________________

Wages increase 1% while at the same time, durable goods orders decline by over 3% (Thanks BB).

As counterintuitive as it sounds, we are about to witness the fed cutting rates in an environment where inflation is rising due to an increase in US labor costs, coupled with a huge increase in US prices of imports.

It looks to me like the fed will make two(?) 1/4 point rate cuts before the end of the year in the name of fighting a double dip recession. (Got to keep those free credit cards flowing to consumers while at the same time, keeping the price of gold suppressed until corporate profits rebound.)

A rate cut by the fed will weaken the dollar even more resulting in an increased rise in the price of imports (inflationary).

A rise in import prices (due to a weaker dollar) allows US corporations to raise their prices, keeping them just under the ever-increasing import prices, which will increase market share and profits for US based corporations.

Once US corporate profits rebound (4th quarter 2002 ???), capital spending will increase, US employment will rise and the Fed will raise interest rates.

As always, the outlook for gold remains positive due to the fact that nobody knows the truth.

ATC

Pizz

(07/25/2002; 09:11:08 MDT - Msg ID: 81440)

What's up with Tyco?

Down another couple bucks to around 8.00? Haven't heard anything major, maybe i just missed something, but we were in the teens a couple weeks ago.

Maybe it's just profit taking.

Pizz

USAGOLD / Centennial Precious Metals, Inc.

(07/25/2002; 09:45:05 MDT - Msg ID: 81441)

The Fruit of Your Labor: another day, another dollar...

http://www.usagold.com/ProductsPage.html

Harvest Time
Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

1-800-869-5115
Centennial has three decades of experience in the field

Gandalf the White

(07/25/2002; 10:15:40 MDT - Msg ID: 81442)

WELCOME Sir "Neo 1"

neo 1 (7/25/02; 03:25:15MT - usagold.com msg#: 81419)
===
Happy to have you posting with us Goldhearts !
Question
Are you in Downunder or the South Americas ?
(my guess -- based on your posting time)
<;-)

Siochaina

(07/25/2002; 10:19:35 MDT - Msg ID: 81443)

Question

During the last depression, were British citizens allowed to keep their gold....and if so, did this apply to those residing in US?

Chris Powell

(07/25/2002; 11:56:18 MDT - Msg ID: 81444)

Tyco denies bankruptcy rumor

BOSTON (Reuters) - Tyco International Ltd. (NYSE:TYC - News) on Thursday denied a rumor that it was preparing to file for bankruptcy as its stock tumbled as much as 30 percent to lows not seen since 1995.

Stock market sources said the shares were being slammed by a rumor that Tyco was seeking counsel to file for bankruptcy protection from its creditors.

"It's absolutely not true," Tyco spokesman Gary Holmes said. "We have absolutely not hired counsel for bankruptcy or restructuring, and we're not considering it. It's irresponsible to suggest so."

Holmes acknowledged the rumor was hurting Tyco's stock but said he did not know its source.

Tyco shares stood at $7, down $3, shortly after midday on the New York Stock Exchange. They had recovered to $8 at about 1 p.m. The shares last traded below $8 in late 1995.

"There was a rumor that the company was considering a bankruptcy filing. The company denies, but that (rumor) would hit a stock in this environment," said Joseph Dorilio, head of trading at investment firm ING Financial Markets.

"We're dealing with an uncertain market, a difficult earnings season, and now we have to deal with specter of CEOs and CFOs signing off on balance sheets," he said.

Tyco shares are down more than 85 percent so far this year on accounting worries, inconsistent corporate strategies and the abrupt resignation of Tyco's long-time chairman, Dennis Kozlowski.

Ron Muhlenkamp, whose Muhlenkamp Fund owns about 1.5 million Tyco shares, said the conglomerate's stock is worth more than $20 a share because of the strength of its underlying businesses, which includes electronics, ADT burglar alarms, diapers and medical supplies.

On Tuesday Tyco reported a $2.32 billion net loss for the June quarter, largely due to a loss on the recent sale of CIT Group Inc. (NYSE:CIT - News). Tyco's financial results also showed deteriorating cash flow from its businesses.

Tyco cut its cash flow forecast for the fiscal year that ends Sept. 30 and provided more conservative cash flow guidance for 2003.

R Powell

(07/25/2002; 12:17:29 MDT - Msg ID: 81445)

GATA's C-Span interview in print?

Chris, you're just the Powell I'm looking for.
I'm just back from following yesterday's link to Bill's interview on C-span but I found only an audio link. Unforunately my computer, while a rather amazing fellow, is totally mute. Is there a link to the interview in printed form or any news agency summary in printed form?
Thanks, and thanks for the ongoing work. May I suggest some good note taking of the crusade. You are the obvious choice to produce the best selling novel. May I get my copy autographed?

Rich

Mr Gresham

(07/25/2002; 13:18:34 MDT - Msg ID: 81446)

Cheese

The mouse is always oh-so-clever as he approaches the cheese. For he has a Plan. Yes, he does.

The avoidance of Paper is not merely a cultish devotion to some disembodied Internet "gurus" at USAGold. It is a defense against our own Cleverness. The conceit of our own unique ability to find a Shortcut to Wealth.

It's been three years since the WA Spike. Three years to unlearn a lifetime of the conceit about our Cleverness? (I'm sure there's a great OT Bible quote about it, too -- "the fool thinketh himself clever" or something like it.

(When Jesus talked about being "clever as serpents, harmless as doves", I think he meant being able to see through the devices of criminals, but not to fall in with their doings. We study well those types of issues here.)

I know I'm still far from overcoming that conceit, and you know we all probably have a long way to go to catch up with the simpler peoples of the world, the ones who haven't had such wonderful, modern opportunities to be Clever with regard to monetary matters as we have had. (Ever try to explain to a client the rationale behind Sec. 529 tax-deferred College Savings plans? With a straight face? Getting harder & harder...)

Clink, clink, clink...

Pizz

(07/25/2002; 13:26:20 MDT - Msg ID: 81447)

Rate Cut?

It totally amazes me that all the analysts and media pundits can't understand why the FED will probably cut rates. They keep saying that the economy is strong enough and it doesn't warrant it. Well, you can bet your boots they aren't ready to raise them, and O'Neil didn't rearrange his schedule because of the stock market, and the rumors of the FED's emergency meeting are just that - right.

If the economy hasn't already slipped into a drepression, than why have we got all these major corporations going BK after 10 years of record earnings? (Ok, maybe the earnings were a bit pushed, and OK maybe the government has been fudging the numbers a bit), but it's not the economy per se, it's the banks.

Of course, it would be a bit of a problem to say that the FED may be considering a rate cut because a couple money center banks have to have it to survive (until we start a broad enough and large enough war to repatriate some of the capital that's rocketed out of this country lately).

Tyco's in trouble again, after throwing CIT into it's own lifeboat (gee, wonder how the new stockholders feel after buying into that IPO five bucks into the ditch later?) and wasn't it TYCO that drew down 12 billion in short term loans from a consortium of moneycenter banks about 6 month ago? Wonder where that money went?

Why is the FED nervous? IT'S THE BANKS! How good of shape can they be in when a goodly portion of their foreign and domestic customers have one foot in default and/or bankrupsy? But they say they don't have a liquidity problem. Well, capital is going out of the country, and my guess is that a lot of bank liquidity is moving right along with it.

Kind of like the football player who gets hit in the groin, but because he's on National TV, he's told he has to hold on to his leg. Publically, the banks absolutely have to NOT be the problem.

What a fiasco, and it's so bad their selling anything gold related to give the derivitives shorts a window to cover as much as they can, while they can (IMHO.). I'll still take the other side of their position, cause theirs just doesn't pencil out longer term.

Pizz

Chris Powell

(07/25/2002; 13:33:31 MDT - Msg ID: 81448)

Answer for R. Powell on Murphy's interview on C-SPAN

Hi, Coz....

All we've got of GATA Chairman Bill Murphy's interview on C-SPAN is a videotape copy and the Internet archive version C-SPAN itself makes available. There's no transcript. I suppose GATA could hire someone to make a transcript if there was enough demand for one, but I doubt there will be.

Pizz

(07/25/2002; 13:43:22 MDT - Msg ID: 81449)

Mr G

I'm beginning to think the quest for cheese is going to be so overwhelming that not only will no one have time to set the traps, no one will have the resources left to build them.

Oh for a simpler way of life, but I think we'll be there shortly.

Taxes deferred but capital losses here and now? Reminds me of the logic of life insurance. The insurance company is betting I live, I'm betting I'm going to die, and I'm paying them to boot? The logic behind both elude me at times, but the common thread is in both cases someone else has your money right now.

Pizz

Black Blade

(07/25/2002; 14:07:20 MDT - Msg ID: 81450)

New silver market opens as Bush signs coin bill

http://www.spokesmanreview.com/news-story.asp?date=072402&ID=s1187087&cat=section.national
Federal law to bolster reserves could help N. Idaho producers

Snippit:

President Bush signed legislation Tuesday to create a new market for domestic silver in government-minted coins in what could be a boon to North Idaho silver producers. The initiative was prompted by news that the government's 730-million-ounce strategic stockpile of silver -- accumulated in the years immediately following WW II -- will be depleted this summer.

Black Blade: This almost slipped by without notice.

cyberbat

(07/25/2002; 14:30:01 MDT - Msg ID: 81451)

@ Black Blade

Can you tell me where the hedge funds will make their money when the x.a.u. drops below 40, the price of gold drops to around 270.00 to 280.00 (because we are going there), and the stock market is already too low for them to short it. I am truly interested in getting your answer.
Thanks,
Cyberbat

YGM

(07/25/2002; 14:39:55 MDT - Msg ID: 81452)

Another 'Coup' for GATA.....

30 Min Interview on Canadian "Money Talks Radio Show".....4:18p ET Thursday, July 25, 2002

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy will be interviewed live for
a half hour this Saturday, July 27, on "Moneytalks with
Michael Levy," Canada's leading radio program on
financial issues. On most stations, the show is broadcast
at 10:25a ET, 11:25a CT, and 9:25a PT. Radio stations
broadcasting the show include:

CKNW, Vancouver (originating station)
C-FAX , Victoria
CJAV, Port Alberni
CHNL, Kamloops
CJNL, Merritt
CINL, Ashcroft/Cache Creek
CHNL-1, Clearwater
CHNL-FM, Shuswap/Sorrento
CKOR, Penticton (9:06 to 9:59a only)
CHOR, Summerland/Peachland (9:06 to 9:59a only)
CJOR, Osoyoos (9:06 to 9:59a only)
CJOR-1, Oliver (9:06 to 9:59a only)
CIOR, Princeton (9:06 to 9:59a only)
CHQR, Calgary
CHED, Edmonton
CJOB, Winnipeg
CFPL, London, Ontario (2:35-4p ET)
CKGL, Kitchener
CHML, Hamilton

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

lifer

(07/25/2002; 14:46:08 MDT - Msg ID: 81453)

testing password

valid

YGM

(07/25/2002; 14:47:47 MDT - Msg ID: 81454)

Bill Murphy & Michael Levy MoneyTalks Show.....

This Radio show is listened to from East to West in Canada........& you can bet your "Bottom Dollar" it will lead to Canadian Television airtime very soon for GATA....We should all Email your favourite financial TV show or commentator and request that they do a feature on the "Gold Anti-Trust Action Committee". IMHO.....YGM

Black Blade

(07/25/2002; 14:51:32 MDT - Msg ID: 81455)

Re: cyberbat

That is what everyone would like to know. Many funds were caught flat-footed when the stock market turned sharply higher. Since many hedge funds seek leverage by using exotic instruments like derivatives, it appears that they were in a mad scramble to sell anything that was not tied down to met margin calls and to cover short positions when the stock market rallied. Gold happened to be just one of those liquid assets that was available to unload to raise cash. When everything settles down from the "one-day wonder spike" and the markets and equities continue to weaken, also taking into account the weakening US economy, many of these funds are likely to seek alternative investments including gold. At least that's my take on it. Cheers!

- Black Blade

misetich

(07/25/2002; 14:55:06 MDT - Msg ID: 81456)

States Raid Rainy Day Funds

http://story.news.yahoo.com/news?tmpl=story2&cid=519&u=/ap/20020724/ap_on_re_us/state_revenues_3≺inter=1Snip:

DENVER (AP) - States have used up two-thirds of their cash on hand and their rainy-day funds trying to cope with budget crises, legislative leaders from across the country said Wednesday as they called for government help.

By June 30, the end of the fiscal year for 46 states, the gap between revenues and spending hit $36 billion, leaders said at the National Conference of State Legislatures annual meeting.

The difference is expected to hit $58 billion during the next fiscal year, leaving many states scrambling to pay for continuing programs and federal mandates.

"The rainy-day funds are there for a rainy day. This is somewhere between a rain storm and a hurricane," said conference president Stephen Saland, a Republican state senator from New York.
........................
At least 26 states collected less revenue during the past fiscal year than they did the year before, and 19 tapped cash reserves, according to a survey conducted in June by the association

Misetich

Yep, the "US economic recovery" is showing up on Feds cooked up numbers only. State and Federal budgets tax revenues are dropping...as the UNEMPLOYED numbers increase and less income taxes are paid -

Below is the the economic weather forecast:

Rain has been coming daily steadily,(layoffs) but softly, dark clouds, financial tornado forming ( 7 1/2 trillion dollar market cap evaporated)high winds (congressional investigations and investor lawsuits) with chances of lightning (see AOL, JP Morgan, Citigroup) and VOLCANO activities reported (the gold market.)

State and Federal managers are warned to take the necessary precautions - prayers work

Got gold?

Socrates964

(07/25/2002; 14:56:07 MDT - Msg ID: 81457)

Points

cyberbat - if I can put my oar in - my suggestion will be shorting US bonds and real estate, although I'm not sure I share your gloom on gold.

Siochaina - I vaguely recall some UK legislation about only being allowed to hold gold coins minted before 1837 (i.e. which had numismatic rather than monetary value) - which was in force until the 1960s, although doubtless someone can correct me.

Point/Question to the forum:

Some Brazilian contacts of mine (futures brokers)decided to launch a 'real assets fund' given that everyone wants to get out of government paper (including $-linked government paper) before the country goes to the polls in September, and there's not much else to buy apart from land/real estate. This fund was supposed to be a $25-50m bullion fund, with some coffee on the side to make it look like a commodity fund. They inform me that they have given up...because...they can't buy enough bullion to launch it (surely not when there is such a queue of central bankers desperate to sell!). Now the S�o Paulo gold future, which is a shadow of its former self, trading only 2-300kg/day, has gone to a 6-7% premium to the Comex spot price (although Brazil has so many exchange rates that there may be some innocent explanation here). I just wonder if anyone else has any anecdotes from various corners of the world of investors trying to buy bulllion/buying futures and trying to arrange physical delivery and being told that the shelves are bare. How about a collective posting to keep Bill Murphy smiling?

misetich

(07/25/2002; 15:02:01 MDT - Msg ID: 81458)

Citigroup, J.P. Morgan Probed on Enron, Person Says (Update1)

misetich

(07/25/2002; 15:11:07 MDT - Msg ID: 81459)

Democrats won't question Rubin

http://www.washingtontimes.com/national/20020725-337287.htmSnip:

Senate Democrats investigating the collapse of Enron Corp. said yesterday that they have no plans to question former Clinton Treasury Secretary Robert Rubin, a top official at Citigroup Inc., over its role in hiding Enron's debt from investors.
"I don't," said Sen. Joseph I. Lieberman, chairman of the
................
Citigroup is Enron's largest creditor and is one of the top contributors to Mr. Lieberman and his political network in the past five years.
.................
"You can't ask questions on one side if you're not going to ask questions on the other side if something like this is done," said Senate Minority Leader Trent Lott, Mississippi Republican. "I think that they may want to call in Mr. Rubin and others before the Government Affairs Committee, and � if that's where the trail leads � and see what happened."
...............
Democrats "have been talking about the vice president and the president," Mr. Foley said on the House floor. "Let me suggest to them, if they want to have good hearings, let's call Senator Corzine, who headed Goldman Sachs. Let's call Secretary Robert Rubin, the Clinton secretary of treasury, who heads Citigroup.
"When we talk about Enron, we ought to talk about all the players," Mr. Foley said. "And there seems to be some real mischief. In fact Mr. Corzine used $60 million to run for the Senate. Goldman Sachs was hyping Enron stocks past $90. They encouraged people to buy it."
.................

Misetich

Mr. Rubin, Mr. Corzine, Goldman Sachs - that would be fun!

Got gold?

misetich

(07/25/2002; 15:15:15 MDT - Msg ID: 81460)

Euro junk bond default rate soars to 21 pct-Fitch

http://www.forbes.com/newswire/2002/07/25/rtr676426.htmlSnip:

NEW YORK, July 25 (Reuters) - The default rate for European junk bonds has soared to an annualized 20.9 percent, an unprecedented rate of decay that resulted largely from the speed with which new cable and telecommunications bonds have blown up, Fitch Ratings said on Thursday.

Fitch said 19 companies defaulted on $12 billion of European junk bonds between January and June, compared with 18 companies defaulting on $4.2 billion in all of 2001. The default rate for U.S. junk bonds is 9.5 percent, Fitch said.
.................
"The crisis engulfing telecom and cable will continue to produce more defaults through the end of the year," Fitch said. The first half annualized default rate for other European junk bonds was 2.4 percent, Fitch said.

Misetich

Fiat money is burner faster than Japan, US and Europe can print!

Got gold?

misetich

(07/25/2002; 15:32:00 MDT - Msg ID: 81461)

Is that a bell I hear ringing?

http://www.ntrs.com/library/econ_research/daily/us/020724.htmlSnip:

History Rhymes?
July 24, 2002

It has been alleged that some NYC bank holding companies aided and abetted Enron in "hiding" some of its debt. This obscured the true nature of Enron's financial situation. At the same time, other arms of these NYC bank holding companies were marketing Enron's securities to unsuspecting investors. In light of these allegations, I am rerunning (it is summer, after all) a "blurb" I wrote in the fall of 1999 on the imminent repeal of the Glass-Steagall Act. Enjoy.

The Repeal of Glass-Steagall - A Certain Irony
Tuesday, October 19, 1999

Congress and the Clinton administration are busy trying to work out some compromise legislation that would essentially repeal the Glass-Steagall Banking Act of 1933. Glass-Steagall, passed in the wake of the Great Crash of 1929, essentially separated commercial banking from other financial services activities, such as securities underwriting. It was believed at the time that had commercial banks stuck to their knitting, so to speak, fewer of them would have failed in the 1930s, and the Great Depression might only have been the Mediocre Depression. Another reason for the separation of commercial banking from speculative activities - as if making loans is not a speculative activity - was the establishment of the FDIC - the federal government's insuring of commercial bank deposits. Congress and the administration didn't want banks doing foolish things that would put taxpayers' dollars at risk. So, the bursting of one of the largest asset bubbles in the history of America led to the separation of commercial banking from many other financial services activities.

So, what's the irony? Some sober analysts believe that today's U.S. stock market is an even bigger asset bubble than was the one of 1929. And here we are, about to repeal the legislation that was put in place to help insulate the economy from the bursting of any future bubbles.

Is that a bell I hear ringing?

Paul Kasriel
Director of Economic Research

Misetich

Thanks Paul for the history rhymes.

Got gold?

YGM

(07/25/2002; 15:35:52 MDT - Msg ID: 81462)

Martin Armstrong the man with the evidence of Gold & Silver Price Manipulation...'There should be a public OutCry over his Government Incarceration to keep him "SILENT"

http://www.armstrongdefensefund.org/armstrong.htmI find it bizzare and disheartening that so little is being said or done to achieve freedom a/o a trial for Martin Armstrong....He is no enemy of Gold or Goldbugs, but he is an enemy of those who continue to conspire and reap immense illegal profits from the continuance of Rigging the PM Markets...anyone who doesn't believe Gold and Silver Metals Markets are manipulated and corrupt should read the Jan 7th & 15th /2000,discussions between GATA and Martin Armstrong (@ Link)...If he is ever released and lives to tell his tale and expose the documented evidence he has secreted away all hell will break loose. The 'power' of the US Gov. in cases like this and that of the Gold Cartel will never be broken unless people fight back and speak out. I NEVER dreamed I'd see the day I was going to send money to help defend Marty Armstrong whom I always considered part of the Manipulation Cabal, but we live in truly strange times...YGM

"GO GATA, GO GOLD, GO PHYSICAL"

PS: A letter writing campaign to Congressmen & Senators might speed up Martin Armstrongs release and we'd "ALL LOVE TO HEAR HIS STORY"....Needless to say it sure would speed up the end to the Cabal's plans..........YGM

misetich

(07/25/2002; 15:42:50 MDT - Msg ID: 81463)

Brazil's Currency Drops

http://story.news.yahoo.com/news?tmpl=story2&cid=530&ncid=530&e=18&u=/ap/20020725/ap_on_bi_ge/brazil_economy_3Snip:

By MATTHEW COWLEY, Associated Press Writer

RIO DE JANEIRO, Brazil (AP) - Brazil's currency plunged to its fourth record low in as many days Thursday, breaking through the psychologically important three-to-the dollar barrier before firming up slightly.
The real hit an intraday low of 3.03 to the dollar before closing at 2.995. It marked the eighth time this month the real set a new record closing low. On Wednesday, the real finished at 2.94 to the dollar.

Misetich

Lets stay on this Hot TRAIL-

Got gold?

Canuck

(07/25/2002; 15:51:47 MDT - Msg ID: 81464)

Well boys...............

things are looking a little rough out there.

I heard the T.A.'ers out there mention that failing to pop 325/328 on the third attempt would be bad news. Well here we are. Gold breaks 310 and 'lo and behold as the gold stocks lead on the way up, the stocks are sure leading it down.

I'm loosing faith boys, quickly. The non-hedgers are down 6-11% today, third big loss in as many days. My paper fund is down 30% and the physical fund down about 5. Breaching 305/308 is going to be sickening.

When does one puke?

Canuck.

misetich

(07/25/2002; 15:55:37 MDT - Msg ID: 81465)

Investor Sues Citigroup, Credit Suisse Over Enron Notes

http://biz.yahoo.com/djus/020725/200207251712001049_1.htmlSnip:

By Colleen DeBaise, Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- A Japanese software company that bought Y500 million in notes linked to bankrupt Enron Corp. (ENRNQ) filed a lawsuit claiming Citigroup Inc. and Credit Suisse Group sold the notes to transfer their Enron exposure to unsuspecting investors.

Hudson Soft Co . (J.HSC or 4822) of Sapporo bought the notes tied to Enron's creditworthiness in October, weeks before the energy-trading giant filed for bankruptcy protection.

The company's suit, filed earlier this week in Manhattan federal court, seeks class-action status on behalf of all purchasers of billions of dollars worth of Enron credit-linked notes.

..............
Hudson Soft's suit accuses Credit Suisse, Citigroup, and Enron's executives, auditor and lawyers of racketeering. It seeks an unspecified amount in damages

Misetich

ANOTHER day ANOTHER lawsuit - it is getting interesting

Got gold?

misetich

(07/25/2002; 16:01:48 MDT - Msg ID: 81466)

German Banks in Crisis, says Dresdner Chief

http://www.handelsblatt.com/hbiwwwangebot/fn/relhbi/sfn/buildhbee/cn/bp_artikel_e/docid/549719/strucid/PAGE_201097/pageid/PAGE_201097/SH/0/depot/0/index.htmlSnip:

HB/sms MUNICH. On the day when HypoVereinsbank AG announced the first operating loss in its history, Dresdner Bank AG Chairman Bernd Fahrholz was speaking of a crisis in Germany's finance world.

"We are dealing with a real crisis. We find ourselves in a very fragile situation," said Fahrholz of the situation on the capital markets.

Misetich

Fire, fire, fire everywhere -

Got gold?

Rockgrabber

(07/25/2002; 16:07:59 MDT - Msg ID: 81467)

CNBC these guys are good!!

Amazing, CNBC just had an astrologer on who in all seriousness claimed we are seeing a bottum due to our moon cycle having just been full. CNBC is running astrologers now as market cheerleaders. I cant believe they would run stuff like this before covering anything to do with GATA's claims. CPAN I must give some credit. I loved watching such a sureal event being explained to the public. This is just getting to good not to be a alcoholic!!! hahahahahah

misetich

(07/25/2002; 16:10:23 MDT - Msg ID: 81468)

Mutual funds suffer weekly outflow of $21 billion

http://www2.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid={01DB06ED-EB10-401F-80A8-4AEBCCFFE175}&Snip:

Investors pulled an estimated $20.5 billion from stock funds during the week ended Wednesday, after pulling $19.3 billion from such funds the prior week, Mutual Fund Trim Tabs reported Thursday. Domestic stock funds lost $18.5 billion, compared with outflows of $18.4 billion one week earlier. International funds had outflows of $2 billion after losing $900 million the prior week. Bond funds, meanwhile, saw inflows of $3.6 billion, compared with inflows of $3.9 billion the prior week. Trim Tabs tracks daily flows to 90 mutual fund families, representing 15 percent of all equity fund assets, and uses those results to estimate flows for the entire industry.

Misetich

The Paper bull market is over- What investment thrives when fiat burns?

Got gold?

Cavan Man

(07/25/2002; 16:16:36 MDT - Msg ID: 81469)

Canuck

Hi Canuck. You know, if you've learned anything these last 2-3 years here as I have then you know TA doesn't apply to the gold market. How could it when the market is not a "free" market? Have a Molson.

R Powell

(07/25/2002; 16:42:02 MDT - Msg ID: 81470)

Black Blade

Post number 81450 Thank you, thank you, THANK YOU!
Rich

TownCrier

(07/25/2002; 16:47:49 MDT - Msg ID: 81471)

Belgian, a moment of your time, please?

http://biz.yahoo.com/rc/020725/financial_singapore_rubin_1.htmlThis is a very short article of former SecTreas Rubin offering his views in favor of a policy for a "strong dollar".

You are good at finding sense (if there is in fact any to be found) where I cannot. What is your take on this?

Excerpts of Rubin, speaking at the Monetary Authority of Singapore's finance seminar:

"Under today's circumstances more than ever, a strong dollar is important."

[This is fine to say on the surface, but any given nation cannot have a strong currency for the simple wishing and wanting of one.]

"A strong dollar policy not only keeps inflation down, it also provides us favourable terms of exchange I think we should have a continued strong dollar policy -- that's Paul O'Neill's committment."

[I have no problem with the first part, insofar as the "strong dollar" curbing inflation refers to an exchange rate at which our excessive importing may be done cheaply. But on the second part, there is the obvious question about the intended mechanisms through which this committment will be brought to successful fruition in a dollar that is indeed "strong".]

The article indicates: "He said it was a "dangerous folly" to use the dollar as a solution to trade imbalances. "

[This is the part that most baffles me. Our chronic trade imbalance seems to naturally warrant a weaker dollar, in which case Rubin's push for an officially supported "strong dollar" seems to run counter to these latest comments. Any idea what his thrust is here?]

And finally, the article indicates he said, "At a time when our asset markets are under some pressure, it seems to me that confidence in our dollar is exceedinly important."

[That's possibly the understatement of the year!]

Thanks in advance for your thoughts.

R.

goldfool

(07/25/2002; 16:48:36 MDT - Msg ID: 81472)

Rockgrabber Astrologer on CNBC

Date: Thu Jul 25 2002 18:32
GoldFleeced (Not to be outdone by the goldbugs CNBC now has their own version of Mahendra....) ID#289288:
Copyright � 2002 GoldFleeced/Kitco Inc. All rights reserved
CNBC just had an astrologer on who claimed we are seeing a bottum due to our moon cycle having just been full. Yeah, I have a full moon cycle myself, every morning I get up, turn on CNBC, turn my back toward the television set, drop my drawers and show my bottom to Maria.

R Powell

(07/25/2002; 16:53:09 MDT - Msg ID: 81473)

cyberbat

Why do you think the stock market is too low to short? If it's going lower, is it too late to short? Those that shorted recently and took profits yesterday are probably now looking to establish new shorts. I believe these shorts covered yesterday afternoon adding bigtime to the 500 point Dow rally. Will they go short again? I hope so, I have.

Can you give any insight into your opinion of POG dropping well below the $300 level? Technical or otherwise, what makes you think so? TIA
Rich

R Powell

(07/25/2002; 17:03:44 MDT - Msg ID: 81474)

Top 50 U.S. Stock Funds

were listed today in the IBD on page A14. Of the top 20, 16 were listed as Specialty- Precious Metals.
Twenty of the top twenty-five were precious metals? Considering the beating the XAU and HUI have taken recently, think of how badly those funds not near the top performers have done?
Rich

TownCrier

(07/25/2002; 17:05:43 MDT - Msg ID: 81475)

Less than 5 years ago Brazil was WOWing investors. How quickly fortunes may fade!

http://biz.yahoo.com/rf/020725/markets_brazil_currency_chronology_1.htmlAt the URL above Reuters provides a recent chronology of the demise of the currency. It can happen there, it can happen anywhere.

Protect yourself with gold. Remember: one week of dismal market action does not repeal a millennium of proven service and function. Gold yesterday, gold today, and gold for the ages to come.

R.

Canuck

(07/25/2002; 17:12:52 MDT - Msg ID: 81476)

@ Cavan Man, All

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d3Hello CM,

3rd 'Molson' as a matter of fact, thanks. After 3 or 4 years I will tell you what I really think. I don't think there's the 'manipulation' or conspiracy that everyone talks about. I think that's hogwash. Let's start with Japan buying dollars to keep the Yen/dollar ratio where they want it. And then we say, "well they can do it for so long with little effect because the 'market' will take it where it 'deserves' to be; introvention is a short term event anyway". We moan and groan and then justify bullshit and then long-term it ends up the way it was intended. End of story.

When Japan (last spring as 'bank guarantee day' approached; April 1) 'outlawed' shorting and the market shot up we moaned and groaned and look today, the Nikkei is 10k as it was and who gives a rat's ass looking back.

So the FED is yapping a storm in the latest gossip train and we 'expect' introvention, manipulation and all sorts of semi-crooked adventures and guess what, in 6 months or a year the market we find it's natural level.

The 'manipulation' crowd should ask themselves a question, how is any entity going to move a multi-trillion dollar a day currency market even on an intermediate basis. Or even a bond market. Sure they can 'move' or 'manage' a thin 30 stock indice for a while but can they move it up or hold it up indefinitely.

These people, the PPT (PTB) have a vested interest in an ever increasing SM, think about it, people's retirements and pensions reside within these markets. When the baby-boomer hurricane hits in 2012 the DOW better be at 36,000, it better be or else invest in Quaker Oats because there will be alot of porridge consumed. So is the DOW and every other 'money' denominated entity managed? Perhaps in the short term until confidence is revived and it goes back up 'on it's own good merits' but at the end of the day (decade) it will be what it deserves to be.

This holds true for gold, in my very humble confused opinion. Gold hit 850 in 1980 because it was to be. Every monetary asset was 'broken' and during the '80's the planet got it's shit together and gold 'lost it's lustre'. There was a little pop (scare) in 1996 and then the greatest event happened in the second half of the '90's, everyone became rich and gold was abandoned.

Now we wait for the truth to reveal itself. If the 'richnesses' of the late '90's were BS, then perhaps gold was 'fooled' into suppression. It was not gold that was beaten into suppression, it was 'money' that was hailed to be God almighty. Well we shall soon find out.

If the United States of America has 'fooled' the world into a false sense of prosperity I am sure the world will be pissed. This, unfortunately, my good man is the essense of 911, sit down and talk with many a human from the other side of the planet. They live in tents and shacks while the 'white man' lives in a quarter-million dollar mansion while his buddies bid it up to a half-million. The profits subsidize the BMW, the Mercedes, and the swimming-pool maintenance personnel. Foreigners have a difficult time swallowing the per-capita 'sheiks' in America.

This my man is the reality of what is going on, end of story.

I post the dollar index. Notice the swan dive that was 'anticipated' by the gold market several months ago. The gold market now anticipates a leveling or a reversal (up). Smart money would not abandon 'en masse' otherwise.

Gold is inverse to the dollar, think about the simplicity of that mathematical question, it doesn't get any more rudimentary than that. Ounce per dollar; dollar down, ounce up.

Now I ask the BIG question. The dollar was anticipated to drop for a multitude of reasons, it happened. Gold was anticipated to rise in it's 'exact' reverse relationship, it happened. Since we are at the cusp of a financial hailstorm is the dollar going to reverse or is it going to continue to drop, notwithstanding the short-term 'manipulation' bullsnot.

A quick note just to keep you on your toes. It was also expected that another area of the world was to 'take up the slack' in economic activity. If a China or a Europe was to do such a feat the US would be groppling and thus we have a reason to conclude that the dollar would drop. However this is not the case. All parts of the world seem to be 'skating' and falling on par with the US and in some cases faster than. So, bearing that in mind, on what grounds would the dollar fall against all other currencies simultaneously? Secondly, on what grounds would gold rise against all other currencies simultaneously, notwithstanding the inverse mathematical relationship discussed above?

TIA

misetich

(07/25/2002; 17:38:54 MDT - Msg ID: 81477)

Thousands of Uruguayans protest govt spending cuts

http://www.forbes.com/newswire/2002/07/25/rtr676774.htmlSnip:

MONTEVIDEO, Uruguay, (Reuters) - Thousands of Uruguayan workers converged on Congress Thursday during a half-day strike to peacefully protest IMF-mandated government spending cuts that are a condition for access to aid.

Uruguay's economy, dependent on agriculture, tourism and banking, is facing one of its worst ever economic crisis and has been rocked in recent months by fears of a repeat at home of the economic collapse in neighboring Argentina, where a deep recession has battered the banking system.

Misetich

A few years ago we saw the collapse of the Tiger countries and how it affected its major lender- Japan -

We are now witnessing the unravelling of Latin America - country after country -

How will it affect the US economy? Its banks? Its exports?

Got gold?

misetich

(07/25/2002; 17:48:25 MDT - Msg ID: 81478)

US swap spreads expand on Moody's action

http://www.forbes.com/newswire/2002/07/25/rtr676770.htmlSnip:

NEW YORK, July 25 (Reuters) - Spreads on U.S. interest rate
swaps expanded on Thursday after Moody's Investors Service
revised the ratings outlook on J.P. Morgan Chase's
(nyse: JPM - news - people) debt
to negative.

Ten-year spreads had stabilized around Wednesday's close at
59 basis points for most of the session before the news. After
the announcement they popped out to around 62 basis points.

Moody's said the weakness in asset quality at J.P. Morgan's
wholesale banking portfolio may lead to more credit problems
and lower net income.

Traders also said investors had paid fixed rates in swaps,
causing spreads to widen, to profit on swap rates still close
to eight-month lows hit earlier in the week. Those rates
finished at 4.89 percent, just above their lowest closing
levels since last November at 4.86 percent.
..................
Fears of problems at major players in the derivatives
market often cause swap spreads to widen sharply as risk
premiums on top-rate firms rise.

"People were very tired from yesterday. A lot got burned
and didn't want to play today," one trader said.

Spreads were not expected to tighten much over coming
sessions with no major corporate debt deals on the horizon to
be swapped. Corporate debt issuance has dried up with turmoil
in financial markets and the blow to investor confidence making
it all but impossible for firms to tap capital markets.

Misetich

Gold is "holding up" unusually well - It has been "normal" to expect gold to be "trashed" in time of stress - with the "free press" citing flight to dollar, treasuries, as a safe haven -

Unusual to say the least-
We wait patiently for developments - though it wouldn't surprise to see a sharp spike down and interday spike up to higher levels

Got gold?

Cavan Man

(07/25/2002; 17:56:00 MDT - Msg ID: 81479)

Canuck

Buddy can you spare a Molson? I share your frustration and am tired of all the mental masturbation on the subject. I do think though that your money is better wagered at a real Casino rather than on gold stocks or gold derivatives which are fool's gold IMHO. Me; I'm ready to move on. Can't though and here's why: I think all roads point to a financial catastrophe of some unknown magnitude. I think European planners have long believed same and that is why they birthed the Euro. While they're waiting for the whole mess to blow up they continue to play the rottten game that governments and central bankers play. Build up your cash and hold onto your gold for a day is coming soon when Gresham's Law will be revealed in your personal financial plan. Good luck friend...CM (PS: I do own CA jrs. because of the need for reserve replacement)

YGM

(07/25/2002; 17:59:46 MDT - Msg ID: 81480)

Google Seach "Dollar Manipulation"

http://www.google.ca/search?q=Dollar+Manipulation&ie=UTF-8&oe=UTF-8&hl=en&btnG=Google+Search&meta=1-10 of 110,000 articles.....found in 0.27 seconds.....

misetich

(07/25/2002; 18:00:18 MDT - Msg ID: 81481)

Shortfalls in Pension Plans Soar

http://abcnews.go.com/wire/Business/ap20020725_1913.htmlSnip:

Shortfalls in Private Companies' Pension Plans Soar to $111 Billion Last Year, a Record Level
WASHINGTON (AP) Shortfalls in private companies' pension plans soared to $111 billion last year, the highest level ever reported by the Pension Benefit Guaranty Corp.

That was four times the $26 billion shortfall that companies reported for 2000, according to the PBGC, the government's insurance program for private workers' pensions. A shortfall is the amount of money that would be owed to pension participants if a plan was terminated.

"The implications of such massive shortfalls in pension funds are staggering," said Rep. George Miller of California, the top Democrat on the House Education and Workforce Committee. Miller urged the Bush administration to investigate and ensure that workers' retirement savings are not in danger.

................
But PBGC spokesman Jeffrey Speicher said the shortfall is "not as dire an indicator that you might think."

All companies with employer-sponsored pension plans are required to file a report with the government when a plan's unfunded liability hits $50 million or more. But in reality, those plans, on average, are still at least 80 percent funded or more, Speicher said.

"It's a volatile number and it fluctuates due to various factors, such as interest rates and the performance of plan assets in equities markets," he said. "These plans on average are still well-funded."

Misetich

Isn't refreshing to see that Mr. Speicher is not "concerned" - "It's a volatile number and it fluctuates due to various factors, such as interest rates and the performance of plan assets in equities markets," he said

Is this man on drugs? - "..performance of plan assets in equities markets" -

Perhaps is one of many that hasn't opened his mutual fund report lately...

Mr. Speicher's attitude is scary to say the least - Big Bad Bear hasn't finished yet Mr. Speicher and it is suggested you open your statements next month

Got gold?

YGM

(07/25/2002; 18:02:48 MDT - Msg ID: 81482)

Google Search "Gold Price Maipulation"

http://www.google.ca/search?hl=en&ie=UTF-8&oe=UTF-8&q=Gold+Price+Manipulation&btnG=Google+Search&meta=1-10 of 41,400 articles....search took 0.21 seconds....

misetich

(07/25/2002; 18:04:32 MDT - Msg ID: 81483)

Senate queries Chase, Citi on Enron, SEC probe seen

http://www.forbes.com/newswire/2002/07/25/rtr676815.htmlSnip:

WASHINGTON, July 25 (Reuters) - A Senate committee on Thursday sought more information from the CEOs of J.P. Morgan Chase & Co. Inc. (nyse: JPM - news - people) and Citigroup Inc. (nyse: JPM - news - people) on deals the banks did with Enron Corp. .

The deals were also seen as targets of a Securities and Exchange Commission probe.

Michigan Democratic Sen. Carl Levin, chairman of the Permanent Subcommittee on Investigations, and ranking Republican committee member Sen. Susan Collins, of Maine, wrote letters to the banks' chief executives requesting information on offshore entities involved in the deals.

The SEC was seen as probing the deals, as well, lawyers said.
....................
"There has been particular interest in whether or not the investment banking community facilitated Enron's concealment of its debt by structuring transactions in such a way as to make them look like capital, rather than debt," Taube said.

...............
Levin and Collins said in a statement they sent letters to J.P. Morgan CEO William Harrison and and Citigroup CEO Sanford Weill. The lawmakers said the letters requested "that they answer a series of questions regarding their use of shell off-shore companies to assist Enron's deceptive accounting."

Levin's subcommittee held a 10-hour hearing on Tuesday that focused on the two banks' roles in so-called "pre-pay" deals that investigators said provided Enron with billions of dollars in loans through disguised commodity trades.

Enron obtained loans of $8.5 billion over nine years from J.P. Morgan Chase and Citigroup via the transactions, investigators said, adding the deals relied on offshore shell companies known as Mahonia Ltd., based on the island of Jersey, in the English Channel and Delta Energy Corp., based in the Cayman Islands.

Copyright 2002, Reuters News Service

Misetich

This TRAIL is getting hotter by the minute- Stay tuned.

Got gold?

YGM

(07/25/2002; 18:05:51 MDT - Msg ID: 81484)

Google Search "Stock Market Manipulation"

http://www.google.ca/search?hl=en&ie=UTF-8&oe=UTF-8&q=Stock+Market+Manipulation&btnG=Google+Search&meta=1-10 of 128,000 articles.....Search took 0.13 seconds.....

cyberbat

(07/25/2002; 18:06:51 MDT - Msg ID: 81485)

@ R. Powell

Rich,
With the PPT firmly entrenched in the market place, they are at least going to keep it running sideways for a while anyway. This will then put the squeeze on the hedge boys to short bonds or gold. With everyone running to gov. bonds and T-bills that only leaves gold for them to short and that of course would be with the Fed's blessing. That's the way I see it anyway. When the stock market went south it hurt the hedgers too, so they will continue to try to short gold below 300. They lose money above that figure. Between them and the fed, there is a lot of firepower against gold, although I'm not reducing my positions in the gold stocks or my physicals because I do expect the unexpected. Only problem is, when it comes it will be uncontrollable!! I have no idea when that will come but you know the ole' saying "The best laid plans of mice and men OFTEN go awry."
cyberbat

YGM

(07/25/2002; 18:15:21 MDT - Msg ID: 81486)

Midas Bulletin....

Le Metropole Members,

Jim Sinclair just sent The Cafe the following note:

Bill:
The SEC served JPM the demand for documents subpeona at
5 PM concerning the derivative dealing with Enron. Keep
in mind Enron dealt in the gold derivativers with JPM.
Let see where this goes.
Regards,
Jim

***Now this could get really exciting.....JPM/C in the scandal a day club.....This will be the biggest one yet IMNSHO......Lookout JPM here comes the short sellers tidal wave (JPM/C @ $14-15.00 p/sh), and the kick off for a Gold Rocket perhaps.....YGM.

R Powell

(07/25/2002; 18:43:57 MDT - Msg ID: 81487)

cyberbat

I wonder if the PPT has the financial power and expertise to keep the stock markets churning sideways if that were their intent. However, if the big money were convinced that the markets were heading sideways, there are still opportunities to profit such as selling out-of-the-money puts and calls on sideways moving markets. The prices don't move and the options expire worthless with the funds gaining the premium on the sales.
Hedge funds are not, as far as I know, limited in their areas of investment. Nor are they limited to either the long or the short side of any investment. They are usually hedged somehow as the name implies but I can't think of any investment that can't be hedged. I don't follow your reasoning that they will be forced to short gold.
Rich

Cometose

(07/25/2002; 18:49:40 MDT - Msg ID: 81488)

81464

things are not as they appear ; they are not supposed to appear as they are .....nor are we supposed to grasp enough of the financial picture to be able to keep up with the antics , the head fakes the false recovery ; the play that is presented on the stage is being scripted and acted out for your eyes to decieve and delude ...and misdirect....( it did occur to me last night that it has taken me a finance degree and years of vigilance and study for me to comprehend the posts that appear on this forum and to comprehend the viability of what has been presented here re: fiat , gold manipulation and the present global tug of war that will surely end in a large shift in the balance of power in the world economically and politically....those without the benefit of time and ability to study and comprehend did not have a chance to have info or to protect against the lying intelligence {feeding he masses false information )the machine fed them in order to separate them from their money....

We can not make markets behave in the way that we anticipate ; we can only anticipate and prepare in a way that weighs risk and reward properly and assesses fundamentals......
Some one stated earlier this morning that the funds are going to have to sell c and jpm be cause of the law suits that are inescapable... When banks get in trouble and people percieve the risks in the world of finance they move to metals ....It is when perception has begun to change that someone with deep pockets can add a little kindling to the fire to bring the momentum that causes the masses to jump into a then self fulfilling prophecy.... I expect warren buffet and george soros to be the catalyst when the time comes ....to make silver start moving...

I am sure based on other posts i'm reading that physical gold is being taken off the market....because of the refusal to deliver.... as well as the price movement ....sell the securities to buy the physical ...sell the pool funds to buy the physical ......selling in this manner is establishing a cheaper price on the physical at which the hedgers can get out of their hedges and go long with the physical..///( it is also temporarily establishing a buffer for c and jpm.....If in the new world GOLD is going to be the standard of monetary value isn't it plausible that the bankers who should have access to the info are going to now position themselves to protect themselves from the game taking this new turn....

I spoke with a gentlemen in Aspen today in his home . He live on Bleeker St... As I was in his house on a service call, he had CNBC on the TV in the background.....and he was mumbling in kind of rebellious manner in disgust and in disregard to what the pundits were saying....and then he looked accross the kitchen bar counter toward me in the dining room and said to me ......We might be better off just burying cash in the back yard....I responded to him that because of the derivitives games that have been played at our largest banks that we might be better off burying gold and silver in our back yards because the money is not going to be worth anything...Dale Carnegie wrote in his book HOW TO STOP WORRYING AND START LIVING...that in a bad situation people seize up with fear when all they really need to do is asses " WHAT IS THE WORST THAT CAN HAPPEN "
THE worst than can happen is what really needs to be prepared for ...... For the masses this is an impossible assesment to make because of the lack of information.....and it's that lack of knowledge on the part of the masses that makes the dramatic changes happen in such a dramatic fashion ...... for the benefit of those that move these markets when sea change is on the horizon....and it is on the horizon..... This long term commitment to gold is a play that you recieve not return on (interest) it's not a get rich quick scheme ;;; it is a marriage of you and your money to an idea : portfolio protection... Gold has been money for 5000 years ...and in the last 20 the media and their propaganda campaign have tried to lay some good piled higher and deeper poopicah on the subjects of television......that paper is the same thing in value as GOLD.... PRECHTER goes very specifically into detail on the events that brought us to this precipice
and era when the massive perception is that US DOLLARS are backed by value ..... when nothing could possibly be further from the truth,........THe rest of the world is already hip to this misperception and they are voting with their feet .....the dollar is going down and with it dollar denominated assets....what's left ? The euro , and in financial crisis {which is not apparent (now ) to the naked eye } or war ; GOLD AND SILVER >

faith is the substance of things hoped for (the title deed)
the proof they are yours before you recieve them......
I think we are in an era where the world is rejecting the social engineering the went along with the money printing campaign and the imf do gooder crap that happened all over the world in the course of the years since WWII... and there may be a global reverting back to an OLD WORD IDEA : GOLD IS MONEY.....it is not a promise to pay or a pomise to back payment : it is GOOD FAITH AND CREDIT : it is real .. it is not virtual ...it is not digital.....it is ....
SUBSTANTIVE....and in times of a credit collapse its the only thing that is real...

chocolate is still real and coffee is steal real and toilet paper is still real but you can't get the stuff unless someone will trade you for it for something that you have of value ......GOT CIGARETTES , or SOAP , or GOLD???
IF you are a coffee aholic what is the next best thing to a cup of coffee? The smell of coffee , but it is a cheap substitute for the real thing.....

YGM

(07/25/2002; 19:06:37 MDT - Msg ID: 81489)

Cometose (07/25/02; 18:49:40MT - usagold.com msg#: 81488)

Wow!!!That sure was a wide awake post for one who sleeps all the time :>}}
Wish you'd do that more often.....Regards to your thinking and thnx for sharing.......YGM

Cavan Man

(07/25/2002; 19:08:38 MDT - Msg ID: 81490)

Nikkei

Watch Japan, Inc. Nikkei below 10K is death for the banking system = insolvency.

Cavan Man

(07/25/2002; 19:18:07 MDT - Msg ID: 81491)

Israel in Gaza city with ground forces

This isn't Bethlehem. This area is heavily fortified.

YGM

(07/25/2002; 19:24:41 MDT - Msg ID: 81492)

Cavan Man

Nikkei...Going down faster than I can hit refresh button....-192. @ the moment

YGM

(07/25/2002; 19:28:15 MDT - Msg ID: 81493)

Hong Kong Open Now....

Will Spot wake up????Could be an eventful day comin.....

Cavan Man

(07/25/2002; 19:28:41 MDT - Msg ID: 81494)

From G-E (where our host advertises)

Hope this is OK ?? @Canuck Sage words from Jim Sinclair
(vronsky) Jul 25, 16:19

You are absolutely correct that the launch of this gold bull market is going to be harder than ever before. Yet, it will develop and move above $354 in time to much higher prices, in my opinion. It is not the Fed that has pushed gold down. This is the third raid by
Goldman and by Chase/Morgan at $322. It is early in the long life to come in this gold bull market. The gold bulls do not truly believe it is a gold bull market as you do not truly believe it is a gold bull market. That is typical because all major bull market start up against a WALL of DISBELIEF falling back repeatedly. The fundamental case for gold is building mightily day by day and will be in my opinion 100% behind gold by the end of the year. This reaction looks to me to be limited to middle August and $302-$305 on the downside. I have said many times that all the fundamentals are not yet in for gold. The engine
behind the rise in the gold price is the "Risk Control Programs" of the gold banks. That is a two edge sword. As gold rises above $305 towards $330 the "Risk Control Programs" call for dealers to buy gold to maintain the risk factors to buy gold. As gold falls from under
$330 towards $305 the "Risk Control Programs" call for the gold banks to SELL the gold they bought to maintain the character of their short transactions and the risk factors they are comfortable with. Those that ignore their "Risk Control Programs" are called bankrupt
first. This is why the gold market has been a schizophrenic. This is why selling 1/3 of a gold position into strength and replacing it
on weakness is vallium for the gold bull early in a gold bull market. Many of the gold crowd are scared to death, in my opinion, without reason. Unfortunately they will be the ones that refuse to sell when the fields rallies again in August as I believe it will.
Shawn, ignore the pain, it is going to be hard. So what? Who makes millions easily? Forget the Fed is behind the gold attacks. Goldman Sachs and Chase/Morgan are the sellers and therefore it is these two derivative dealing gold banks that are killing gold from time to time. If the "gold guys" had the courage of Goldman and Chase/Morgan the price of gold would be $500 today. Regards,
Jim

Cometose

(07/25/2002; 19:31:39 MDT - Msg ID: 81495)

YGM /81489

If i don't increase my physical holdings in the next week ...i 'will' be guilty of sleeping " all the time" ...check in with me again next friday to make sure I'm not still sleeping.....unless you hear from me first....

R Powell

(07/25/2002; 19:47:32 MDT - Msg ID: 81496)

Cometose

Great definition of the Game "We can not make markets behave in the way that we anticipate; we can only anticipate and prepare in a way that weighs risk and reward properly and assesses fundamentals."

Then add some good money management, control emotions, know when to cut losses and when to take profits and we've got it made. Simple no? I wish it were!
Actually, if it were easy, we'd probably lose interest or, as I say of many construction jobs, if it were easy, no one would pay us to do it.
And when I hear (usually when someone is asking to get more work done than was bargined for) "All you gotta do, is......", I immediately reply "Who gotta do. Who is going to do this doing!"
However, nice quote! "Now all we gotta do is ...."
Rich

Black Blade

(07/25/2002; 19:48:40 MDT - Msg ID: 81497)

Claims Of Recovery Are Greatly Exaggerated

http://quote.yahoo.com/m2?u
Asian investors are running like the blazes. They are abandoning the stock markets en masse (see link). It is getting ugly in Asia tonight. Hong Kong has yet to begin trading. Notice that the US dollar is falling off as Japanese currency intervention has so far been a dismal failure costing the Japanese taxpayers $billions. The question is how long will the MOF and BOJ continue to throw yen down a rat hole. Even so, a recent report shows Japanese exports have fallen by 6%. For an export economy like Japan, this is very "grim" news indeed.

The insolvent Japanese banking system is on the verge of collapse and the current Nikkei 225 crash is wiping out bank investments. Note that the next "April Fools Day" surprise will limit government guarantees on all savings deposits. It was noted that Gold imports in Japan jumped higher during the month of June. It appears that there is a repeat of the Japanese Gold Rush underway (or at least the beginnings of a new one).

- Black Blade

Sancho

(07/25/2002; 19:49:38 MDT - Msg ID: 81498)

Comatose,Misetich,BlackBlade,All

There exists another Achilles Heel to this economic brouhaha. At the best of times attorneys still enjoy a feeding frenzy. At the worst of times, as this may well turn out to be, it is going to be a MAJOR feeding frenzy at crippling cost to virtually everyone. You cannot imagine the impact of lawyer fees on either side of anything. I had a deal I was close to (real close---I was a defendant sued for $240,000 on a $37,500 parcel of real estate wherein I won but the title company paid (their)(my)attorney $30,000.We might have even lost but the plaintiff couldn't keep paying their attorney. This was crazier than the millions paid on Clintons' $l00,000 land deal in Arkansas. So, in short, multiply out that type of carnage over several years coming up!!!!!! Sancho

goldquest

(07/25/2002; 19:56:41 MDT - Msg ID: 81499)

Doom and Gloom

http://home.flash.net/~rhmjr/index.htmlHave PMs in hand, do not trust your bank with everything. Banks can change the rules in a heartbeat, leaving you with funds locked up or with nothing!

cyberbat

(07/25/2002; 20:12:52 MDT - Msg ID: 81500)

@ R Powell

You are correct about the options and no they do not have to go short although they mostly do. Here's the catch; as you know from time to time, the fed will announce a gold sale in order to flush out the longs. This is for long consumption otherwise, they wouldn't say anything if they were trying to make a profit ie. Russia 10 years ago. Gold is the prime competitor of paper money. They can't allow the public to run to gold for a safe haven for, as black blade will tell you, it would collapes the u.s. currency markets along with any stocks that may seem viable. They must short gold to keep that from happening.The hedgers know this too. They may even be in collusion with each other. As you know, Greenspan would not allow one to fail just a few years back so he stole your tax dollars to bail them out. Good question about how much money they have left. My hope is that they will continue to print more in order to pour billions into the S&P 500 index to keep them and their buddies alive on wall street. When this happens, the currency markets will begin to punish them viciously and the dollar will drop. That is where gold will step up to the plate but keep in mind, they outlawed gold once and they will do it again.
I'm looking for 335 gold in about 2 to 3 months. At that point something is going to break in the system and I will sell off my original investment and let the rest ride in to oblivion. Please bear in mind that it would be a crushing defeat if they ever let gold out of its' cage. They will do ANYTHING to stop it.
What about you; what are your thoughts on this subject ?
Cyberbat

Black Blade

(07/25/2002; 20:18:59 MDT - Msg ID: 81501)

Argentine Jobless Rate Hits Record 21.5 Percent, Government Announces

http://biz.yahoo.com/ap/020725/argentina_unemployment_5.html
Snippit:

BUENOS AIRES, Argentina (AP) -- Argentina's urban unemployment rate rose to a record 21.5 percent in May, the result of years of grinding recession. The jobless rate eclipsed the previous record of 18.4 percent in 1995 when the Mexico's peso devaluation battered economies throughout Latin America, including Argentina's.

Black Blade: Beyond "grim".

Black Blade

(07/25/2002; 20:46:02 MDT - Msg ID: 81502)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm

Snippit:

One Day Wonder?

So far it has been a one-day wonder -- a big bounce, but no follow through. So the question is, Will there be a bounce or will the selling pressure continue? That is the big unknown at the moment. Technical indicators point to a short-term rally in the making. But nothing is assured in this market because it is full of so many surprises. What is known at this time is that there is a huge short position in the market and that there is a lot of cash on the sidelines. This can be viewed as a negative or a positive, depending on what happens with that cash. If it moves in with the help of the PPT, it could trigger a short-term explosive rally in the market as short sellers are forced to cover their positions.

Let's Get Shorty

If they really want to get a rally, then they would do what they did to dollar shorts under former-Secretary of Treasury, Robert Rubin. Keep buying into the market until you force a rally in stocks and keep buying into the rally on its way up. In other words "kill" the shorts. Once the rally gets going, then you may get momentum to come into this market and cash to come in off the sidelines. The combination of big futures buying and the aid of momentum players would draw money into the markets. If it were done successfully, then the shorts would have to cover because of the need to protect profits, especially if leveraged.

Black Blade: I heard that there was consideration of regulating "short selling" in the markets. I doubt that this includes gold though. Puplava says that the UK is considering taxation of short selling. Japan recently made changes that make short selling very difficult and many instances illegal. Could there be a plan in the works by the Working Group on Financial Markets (aka PPT) to "kill the shorts"? It wouldn't surprise me.

Black Blade

(07/25/2002; 21:08:42 MDT - Msg ID: 81503)

Fat Americans sue fast food firms

http://news.bbc.co.uk/2/hi/americas/2151754.stm
More than half of all adult Americans are overweight

Snippit:

A group of overweight Americans have sued several US fast food giants accusing them of knowingly serving meals that cause obesity and disease. The lawsuit - filed in New York State Supreme Court in the Bronx - says that McDonald's, Burger King, Wendy's and Kentucky Fried Chicken misled customers by enticing them with greasy, salty and sugary food.

Black Blade: It was inevitable I guess. So did these people just wake up one morning and say "oh no, I'm fat"? When your meal is dripping fat and oil in your lap that should be a sign that this is probably not all that healthy. Hmmm�

It does remind me of some obese BATF swat team people I saw participating in a training event with obstacle course a few years ago - quite funny actually.

Socrates964

(07/25/2002; 21:18:15 MDT - Msg ID: 81504)

Short Selling

If Japan is anything to go by, banning short selling is a wonderful way of ensuring that markets go nowhere for years - it also deprives the PPT et al. of the 'short squeeze' tool for engineering quick rallies, so often abused of late.- I would imagine that Wall Street is too inherently greedy to bear a largely volatility-free market that just drifts aimlessly for long periods of time, particularly when low volatility is the enemy of the dealing desk.

Then again, presumably short selling just comes in through the back door in the form of single stock futures, and we then multiply the number of paper pyramids of manipulation by several hundred.

Blackjack

(07/25/2002; 21:20:05 MDT - Msg ID: 81505)

Trouble with cleaning up Japanese Banks?

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∣dle=ad_frame2_topfin&s=APUCbKhTjSmFwYW4n``I remain confident banks can resolve their bad loan problems'' within three years, Takagi said. ``But if the economic outlook swings a lot, it would be a different story.''

Japan's retail sales fell 3.7 percent from a year earlier, a government report showed yesterday, more than the 2.6 percent decline economists expected.

Falling global stock markets may add to bank woes -- Mitsubishi Tokyo Financial Group Inc. and UFJ Holdings Inc., Japan's third- and fourth-biggest banks, both said this week that at the end of June the value of their stockholdings had fallen from the end of March, creating unrealized losses compared with a nominal profits three months earlier.

``Things may get tougher for both banks and investors in the coming months,'' said Muneyuki Tsuji, who manages 15 billion yen at Japan Investment Trust Management Co. ``It's not a pretty thing to think about.''

sector

(07/25/2002; 21:52:02 MDT - Msg ID: 81506)

@CavenMan

Feel The Force......flow within you. Don't give in to the Dark Side...the side that tries to intimidate you into a bailout. The side that fears the enemy's bluster.

On Monday at the peak of HUI bloodletting. a person I know reached back and redeemed a 7.5% CD and bought Meridian Gold for a net price of $14.18. it's holding. The same guy is ready to redeem more CDs and buy physical...from weak hands who don't realize they have power...who don't feel the force.

Fundamental forces underpin gold...they do not underpin overvalued darling "Blue Chips".

In such a market where everything is upside-down, one always wins with fundamentals...and patience.

Gauntlet-Runner2("GR2")

(07/25/2002; 22:13:33 MDT - Msg ID: 81507)

Priceless Link

http://messages.yahoo.com/bbs?.mm=FN&board=7082634&tid=jpm&sid=7082634∾tion=m∣=25546Goldstocks are tanking, microgolds should hold up as the trend is in tact it's just a slight problem with stuff going up 300% plus and having no POG support because of the manipulation. If you want out sell at the open because liquidity for goldstocks is drying up. Expect a gap down for some. Acapulco freefall with a banzai cheer before a jump from the carrier deck. Maybe going through the last shakeout as we form handles for the two year pans. Maybe like 30-35 trading days away from the big mega-breakout as they seemed to have forced a bottom on the DOW. It takes awhile to train a dog to rollover, at least a month. The paper-goalbugs will wish they were real goldbugs after tomarrow. IMO.

YGM

(07/25/2002; 22:35:28 MDT - Msg ID: 81508)

Nikkei Still Dumping....

Spots been whipped so bad lately, he's afraid to poke his head up or get off his belly.... Why bother the Cabal will just whip him some more....Well usually a whipped Dog will become mean and bite back....Time enough for Spot to get even....

Nikkei 225 ^N225 12:07am 9,583.50 -342.84 -3.45%

YGM

(07/25/2002; 22:41:30 MDT - Msg ID: 81509)

GR2 Link to JPM Message Board....

http://messages.yahoo.com/bbs?.mm=FN∾tion=l&board=7082634&tid=jpm&sid=7082634∣=25546Gr2...I also been reading there...Sad faces huh? Here's the link for a complete run down of sad tales. Just so others can enjoy what we've been doing....YGM

Black Blade

(07/25/2002; 23:22:34 MDT - Msg ID: 81510)

Japanese gold imports up 282 percent

http://www.brecorder.com/story.php?css=brecord.css&story=0000547754&m=007&s=002

Snippit:

TOKYO (July 25 2002) : Japan's imports of gold jumped 282.1 percent from a year earlier to 4,879 kilograms in June, data from the Ministry of Finance showed on Wednesday.

Black Blade: The situation in Asia tonight will likely lead more people to gold. Also the Shanghai Gold Exchange should be open next week.

Black Blade

(07/26/2002; 01:21:40 MDT - Msg ID: 81511)

Stock Market Crashes in Asia and Europe

http://quote.yahoo.com/m2?u
The Asian stock markets crashed in Asia tonight and the European markets are starting off in negative territory.

- Black Blade

Golden Bear

(07/26/2002; 02:46:41 MDT - Msg ID: 81512)

Fools will be fools....

A fund manager from Inscape funds was just interviewed on CNBC Europe. He was asked that since 911, hasn't the investing paradigm significantly shifted?

His response: "No. Larry Summers released a paper stating that when paradigm shifts occurs and stocks are falling, gold rises. Here we are seeing people moving out of tech and telechom. It's not a paradigm shift..."

GB: Well, at least the PPT's manipulations are fooling some...

Black Blade

(07/26/2002; 03:18:02 MDT - Msg ID: 81513)

Markets All Negative

http://quote.yahoo.com/m2?u
Global markets are all negative. US market futures are also negative. Meanwhile the USD is higher and Gold lower. Anything can happen yet.

- Black Blade

Black Blade

(07/26/2002; 04:17:35 MDT - Msg ID: 81514)

Gold Mining Costs Soar

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256C0200090DF5?OpenDocument

Snippit:

There's more bad news on costs which have shown an across the board increase, although Meridian gold turned in a huge 10% improvement on its total production costs. Nevertheless, on a weighted basis, the cost curve is on an upwards tear. The companies have done about as much as is humanly and technically possible. Reduced exploration expenditure and the apparent absence of easy-access deposits means the overall cost profile is likely to rise steadily from here on.

Black Blade: Actually this is very good news. Gold production will begin a serious decline in 2004 as mines are played out. Also, most companies have no significant exploration and are growing by acquisition, a foolish strategy that cannot continue for long. When the POG does rise and new reserves are needed, it will be a very long time as it takes as long as 5 to 7 years from exploration to the beginning of mining. That is a big time gap without sufficient production in a rising POG environment.

Paper Avalanche

(07/26/2002; 06:27:51 MDT - Msg ID: 81515)

Call it a hunch...

but I feel a huge spike in the POG happening as we go into the close this afternoon. Just my intuition, which is mostly wrong. I have a funny feeling about today.

Paper Avalanche

Cavan Man

(07/26/2002; 06:39:02 MDT - Msg ID: 81516)

Hello sector

I'm having a "sandwich at the beach" most days. Enjoy your comments the best as they are right to the heart of the matter and devoid of ambiguity cloaked in a suspect literary style.

Paper Avalanche

(07/26/2002; 06:44:52 MDT - Msg ID: 81517)

Looks as if someone knows what's coming down the pike....

http://www.washingtonpost.com/wp-dyn/articles/A2855-2002Jul25.htmlIf I wanted to enslave America I would do the following:

1. Inflate the money supply
2. Control gold and interest rates to hide inflation (also manipulate all economic data)
3. Create a vehicle for inflation to channel to equity markets (401(k) plans)
4. Create an equity bubble that draws in the uneducated and naieve.
5. Create a welath effect
6. Translate that wealth effect into a real estate bubble to pick up the gauntlet when the inevitable equity market crashes
7. Trumpet consumption and debt as economic virtues that drive the economy
8. Continue to manipulate gold and interest rates so as to provide no alternative for the weary who may be desperately seeking an alternative to their dwindling stock portfolios
9. Promote easy credit even further by pushing second mortgages to consolidate debt to a point where personal disposable income is entirely consumed just to make minimum payments.

Now all you have to do is allow the credit bubble that you have created to implode on itself (be sure to have passed legislation which will essentially make slaves out of all debtors first!) and you will have a nice plantation of debtors who will produce a healthy cash flow and work for you for many years to come.

YGM

(07/26/2002; 07:11:34 MDT - Msg ID: 81518)

JPMC and the SEC Subpeona News isn't even out of the shute yet....

http://messages.yahoo.com/bbs?.mm=FN∾tion=m&board=7082634&tid=jpm&sid=7082634∣=25668...and one poster at the JPM Message board is trying to garner support for a class action suit by shareholders....
Will the JPMC debacle be the catalyst we've all been wondering of and waiting for....Today should be one of the most interesting days yet!......YGM.

"Short JPMC & Go Gold & Go GATA"

Ole J Pierpont Morgan is over on the other side freaking out and trying to pay-off St. Peter to get back I suppose....Well maybe the PPT can buy the whole Dow for him this time to keep it from collapsing!

Socrates964

(07/26/2002; 07:28:45 MDT - Msg ID: 81519)

Paper Avalanche

Hope you're right about the rally - unfortunately the gold bugs seem to be going through a crisis of confidence, which suggests we test $303 (62% retracement of $287 to $329 move), or even the 78.6% retracement at $295. Longer-term charts for gold nevertheless look compelling, and fact that gold stock investors seem to be reaching a 'puke point' is probably a good buy signal.

Tend to agree with Jim Sinclair that we are under a cloud until mid-August and will test $301-05, even if the numbers suggest that we are about to start a new upleg.

Btw, think that foreigners have gone off the idea of financing Dubya's financial enslavement of the US.

Knallgold

(07/26/2002; 07:44:19 MDT - Msg ID: 81520)

POG action

There seems to be a hurry to run the stops ...

Carl H

(07/26/2002; 07:44:26 MDT - Msg ID: 81521)

JPM Subpeona

Has anyone see this story in the mainstream news this morning?

sector

(07/26/2002; 07:57:13 MDT - Msg ID: 81522)

Yen Heads for Biggest Weekly Drop in 4 Months as Stocks Slide

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APUDawhVDWWVuIEhl
Top Financial News

07/26 01:14

By Kanako Chiba

Tokyo, July 26 (Bloomberg) -- The yen fell toward its biggest weekly drop against the dollar in four months, as Japan's Nikkei 225 stock average sank to a 5 1/2-month low, choking demand for the currency to buy shares.

The Japanese currency fell to 117.57 against the dollar from 116.47 in New York yesterday, reducing gains on the year to 12 percent. Against the euro, it declined to 117.41 from 117.73 in New York. The Nikkei 225 stock average fell for a third day, shedding as much as 3.6 percent of its value. At the open, overseas investors were net sellers of the biggest amount of shares since Jan. 30, according to brokers.

``A drop in the Nikkei is pushing people to sell the yen,'' said Kenji Takei, a currency sales vice president at the Tokyo branch of Societe Generale SA. ``Also, earlier gains in the yen are hurting Japanese exporters and consequently the economy.''
++++++++++++++++++++++++

Here we have a clue in the frenetic effort to hammer gold. The yen has now resumed it's fall vs. the dollar � something that is a mandatory event if their export industry is to survive. Therefore gold's price in terms of the yen is rising unless the cabal forces the $USD value of gold down. The falling yen MUST be covered by a falling $USD gold price or else the Japanese will again move to gold as they did earlier in the year.

Let's see when the big boys come out to buy gold.

Dredsner Bank yesterday referred to a "Banking crisis" in Europe. In times of admitted crisis, banks may act in their own self interest and contrary to what the "Monetary Authorities" demand�it's only human nature. Secretly buying gold is clearly in a bank's self- interest.

Mr Gresham

(07/26/2002; 08:16:47 MDT - Msg ID: 81523)

Separation

Think "separation" here. (Sooner, or later.) What are the coins going for? I haven't tracked the premium to spot, but it seems higher lately. Michael? Are the wholesalers agreeing with spot, or fading it?

steady

(07/26/2002; 08:39:56 MDT - Msg ID: 81524)

paper avelanches 81517 message

http://story.news.yahoo.com/news?tmpl=story&ncid=68&e=3&cid=68&u=/nyt/20020726/ts_nyt/negotiators_agree_on_bill_to_rewrite_bankruptcy_lawsregarding his/her last few sentences.
Now all you have to do is allow the credit bubble that you have created to implode on itself (be sure to have passed legislation which will essentially make slaves out of all debtors first!) and you will have a nice plantation of debtors who will produce a healthy cash flow and work for you for many years to come.
look what was in the ny times this A.M.

Negotiators Agree on Bill to Rewrite Bankruptcy Laws
Fri Jul 26, 9:18 AM ET
By PHILIP SHENON The New York Times

WASHINGTON, July 25 Congressional negotiators announced today that they had reached agreement on a bill that would rewrite the bankruptcy laws, making it much harder for people to escape their debts when they declare bankruptcy

The agreement, a victory for credit card companies and other lenders, came late today after members of a conference committee reached a compromise on the language of an abortion-rights provision that had threatened to scuttle the overall bill. The compromise will restrict the ability of anti-abortion protesters to use the bankruptcy laws to shield themselves from paying court fines resulting from protests at abortion clinics.

The overall bankruptcy bill, which passed both houses of Congress by overwhelming margins more than a year ago, appears destined for final approval in the House and Senate, and the White House has suggested that President Bush ( news - web sites) will sign it. The House could vote on the measure as early as Friday, the day it is scheduled to begin a monthlong summer recess. Conference committee members were under pressure to reach an agreement before the break.

good timing paperavelanche!

Graefin

(07/26/2002; 08:48:18 MDT - Msg ID: 81525)

Chin up everybody...

Although SOME of youse out there think I'm a bit nuts for reading/watching the astrologers...did anyone see/hear the Arch Crawford interview last night on CNBC?? He said some wery interesting things about gold and the housing market. Now before those few of youse stop reading now, be aware there are other sources (besides astrologers) out there who speculate gold will begin shining again around september/october (after this correction if over {and could drop to $290 before the next major spike}). "Zo"...Arch said some interesting stuff about the housing market ending the end of July and gold begins to perform at the beginning of August. He had his "Bradley" chart out and it looked pretty similar to what the market is going through now. This PLUS other information gathering I find quite intruiging! BUT...only time will tell!

As always...peace, love, and gold bars...
Gr�fin ;-]

miner49er

(07/26/2002; 08:53:32 MDT - Msg ID: 81526)

Mr Gresham @ 81446 and 81523

Greetings, good Sir! Haven't spoken to you in ages... Just wanted to say, I enjoyed your line the other day: "The avoidance of Paper is not merely a cultish devotion to some disembodied Internet "gurus" at USAGold. It is a defense against our own Cleverness. The conceit of our own unique ability to find a Shortcut to Wealth."

And - on your separation question, yes I'd love to hear from Mike on it.

But one thing to be careful of here short term is that you will also have bunches of newbie investors who DID buy physical gold, who have no understanding of all the issues, who will get that pukie feeling in their gut... AGAIN... after having just vomited most of their life savings in equities, whose inevitable capitulation here will only add MORE physical TEMPORARILY to the market...

My hunch (and MK correct me if I'm wrong), is that the follow through from any further staying power to the current decline is a shrinking of the premium of "real" physical over spot -- at least in the short term.

As such, scoop it up while you can -- it WON'T last long!

The issue that still evades everyone, although it has been heralded with all but a clarion call, is that the currencies are in transition. With that, the raison d'etre of the contract gold exchanges, at least beyond old-fashioned production hedges for cash flow smoothing, is going away. As such, all the old strategies, just won't apply anymore... Please, all, agree or disagree with the conclusions of some of us here, do consider seriously the implications of a currency transition.

cheers,
miner

YGM

(07/26/2002; 09:08:05 MDT - Msg ID: 81527)

Optimists Creed.......

Gold Believers Need To Stay Focused AND Optimistic.....Creed for Optimists

by Christan D. Larsen

Be so strong that nothing can disturb your peace of mind.

Talk health, happiness, and prosperity to every person you meet.

Make all your friends feel there is something in them.

Look at the sunny side of everything.

Be as enthusiastic about the success of others as you are about
your own.

Forget the mistakes of the past and press on to the greater
achievements of the future.

Give everyone a smile.

Spend so much time improving yourself that you have no time left
to criticize others.

Be too big for worry and too noble for anger.

Siochaina

(07/26/2002; 09:13:55 MDT - Msg ID: 81528)

(No Subject)

I'll be away a few days...often gold goes up in the beginning when I'm away,,,,anything for a goood cause!

Tommy P

(07/26/2002; 09:45:27 MDT - Msg ID: 81529)

Ya we worry about terrorists.....

Little due the American people know they all work on Wall St.!!!! Who eles has harmed, raped and pilferied the American dream more then the Banks! And they worry about communists, 90 miles south off of Florida on a small island called Cuba!

canamami

(07/26/2002; 09:58:13 MDT - Msg ID: 81530)

Probably a CB helping the "cause"

This isn't a panic by newbie investors in physical. This is a dump of paper AND physical either by players with CB backing, or by a CB or CBs. It looks like the manipulators are still out there. Can't have gold sending signals we don't like, can we.

As I stated here years ago, gold needs a "white knight", a big public buyer to lift the threat of CB manipulation from the gold market. If China or some similar country/actor stepped up to the plate and publicly said "we're for gold, and we will buy more of it", the game would effectively be over.

Mr Gresham

(07/26/2002; 09:58:34 MDT - Msg ID: 81531)

miner49er, Siochaina

Siochaina -- travel well, and may there be good news awaiting your return.

miner -- thanks. It seems that either Sinclair or Kaplan had some remarks that went into the contract transition (though not about currencies -- you're about the only one who's done those elaborations on what FOA was trying to highlight), talking about adjusting their risk profiles, thus leading to market moves like this one. Do you really think it is new, small-time buyers? I just don't know, since I have no inside experience or view into the size and shape of these markets. I jus' clinks when I can.

So much to read, so little time...

Mr Gresham

(07/26/2002; 10:04:44 MDT - Msg ID: 81532)

canamami

Pretty weird, all right. My first thought is something like an inverse of the WA spike. When something happens so strong, and so fast, it is certainly some large insider(s) (not the small JQP with small accounts) who are either watching and anticipating (upward), or fighting a last rearguard action with all remaining resources (downward).

(Just saw a Battle of the Bulge movie last night, and you know what to say when the note comes over demanding your surrender: "Nuts!")

Again, Michael: What do dealer prices do in a time like this?

Cavan Man

(07/26/2002; 10:09:06 MDT - Msg ID: 81533)

canamami

I'd guess just a paper assault.

You're right. It will take a large buyer with conviction (BALLS). Hello to China or Europe. Your dollars are fast depreciating and casinoland USA is not running a clean game.

What a bunch of chumps!

sector

(07/26/2002; 10:18:17 MDT - Msg ID: 81534)

Pension underfunding soars 425%

http://www.boston.com/dailyglobe2/207/business/Pension_underfunding_soars_425_+.shtml$111b shortfall is record high

By Sue Kirchhoff, Globe Staff, 7/26/2001

WASHINGTON - US corporate pension plans were underfunded by $111 billion at the end of 2001 - a dramatic 425 percent increase from the previous year - as companies took a hit from the falling stock market and interest rate fluctuations, according to new data from the federal agency that guarantees private retirement plans.

The Pension Benefit Guaranty Corp. first disclosed the data in a Tuesday discussion with the staff of California Democrat George Miller, a member of the House committee that oversees the agency. Miller yesterday asked Treasury Secretary Paul O'Neill and Labor Secretary Elaine Chao to step up oversight of pension funds and make sure pension accounting standards were sufficiently stringent.

''The implications of such massive shortfalls in pension funds are staggering, for pensioners, taxpayers and for the private companies themselves,'' Miller said in a letter to the Cabinet officials. ''For taxpayers, the un-funded liability could mean enormous costs. And for private companies, failure to accurately account for their pension liabilities could cause them serious financial jeopardy.''
+++++++++++++++++++++++
Recall that General Motors pays for 300,000 penions from a fund they SAY makes 10% per anum. One can predict very bad things for GM when the "Born Again" accountants get finished with that fiction.

darkhorse

(07/26/2002; 10:18:44 MDT - Msg ID: 81535)

no time for a career change...

I'm glad I'm not a financial anal-yst...this week doesn't make much sense to small-ish minds like mine. Silver is taking it's turn bungee jumping this morning...and I think the cord BROKE!

Knallgold

(07/26/2002; 10:23:39 MDT - Msg ID: 81536)

canamami

Right.I even saw a journalist begging twice these days for central bank intervention (to save the stock market)

We knew LTCM was probably saved with 300-400t of Gold.Maybe the master of the universe has handed out US Gold directly to JPM.Intervention IS going on now-why has it only risen to 330 without problem but has now holding 300?

miner49er

(07/26/2002; 10:44:48 MDT - Msg ID: 81537)

Mr. Gresham @ 81531

Regarding risk management and other portfolio balancing via the paper markets, I thought it was suggestive of the ability of liquidating longs to tank the price, when the other day MK remarked about his "Mr. Insider." His take was that the $10+ drop that day was fund selling, possibly to cover redemptions (and imho possibly to have cash available for anticipation of another little bout to the upside as well in the general equities).

The shorts have a hard time containing a swelling demand, but have been able to beat it back for any of a host of reasons with some success, but if large paper holdings leave the table, observe the power with which the price drops. Again, imho, let that serve as both a foretaste and a warning...

Now as for physical buyers -- I don't have any way of knowing the real demographics of these buyers. I'm just taking my cues from human nature. After a couple years of sickening losses, having your chain yanked up and down, and nearly out of cash in many cases, people know instinctively it seems to turn to gold. But they really don't know why. They just know. And when, yet again, after they've had their other "sure" hunches obliterated..., to have what they thought was sure, seemingly also get trashed, they are likely to throw it in even more quickly this go round... Especially since their entrance was likely out of reaction more than deliberation... And without any knowledge of this environment -- which only comes with time and analysis -- they have NO staying power and NO conviction.

Your point is well taken, though -- do these people constitute enough volume to affect the price of "real" physical, so as to shrink the premium over spot appreciably. I don't know for a fact, but I am convinced that it made a difference over the past few years when the gold bear seemed like it would never end, and gold would go to a $100 as some analysts were hinting. So I have no reason to suspect it won't or can't make a difference today, at least in the short term..., especially when people are even less rationally motivated.

Would love to hear from Mike on this... maybe he's not responding because he's so busy taking buy orders...;->

cheers...

Old Yeller

(07/26/2002; 10:52:23 MDT - Msg ID: 81538)

China vs.the Almighty Dollar

http://www.atimes.com/atimes/China/DG23Ad04.html
Interesting read,especially on a day like today.

Siochaina

(07/26/2002; 11:35:47 MDT - Msg ID: 81539)

Why gold is under Pressure?

A last minute check of mail broght this from LeMet

Why gold is under Pressure?
By James Sinclair & Harry Schultz

There is no question in our mind that the extreme selling in gold by Chase/Morgan/Goldman, which occurred for the third time at $322 and continues today at $305 from the same source, has the distinct purpose of making sure that the derivative position which is enormous on Morgan's books (as reported to the Controller of the Currency), does not show the loss that, we believe, would have existed at $322 - - - as their credit standing is certain to be reevaluated. With the recent negative publicity concerning derivative transactions at Morgan with Enron, it is reasonable to assume that debt-rating services will examine their status. That has become normal procedure in such situations.

Clearly this has created an uncomfortable position for the gold bulls that are themselves not yet fully convinced of the integrity of the gold bull market. We can only tell you that we believe in that integrity. The forces at hand that are motivating the gold market lower, which is the derivative situation, is just what will contribute to the final higher prices. We have told you that this is a battle of Titans and the public so far has very little interest in the recent building of the price of gold. This drama is very far from over. It's barely into stage two.

USAGOLD / Centennial Precious Metals, Inc.

(07/26/2002; 11:49:03 MDT - Msg ID: 81540)

In a world of reality and illusions, seek the reality.

http://www.usagold.com/ProductsPage.html

You May In a Fall

Know REAL GOLD by its Jingling Noise.

PAPER Drops Without Sound.

When the DERIVATIVES sell off as we see today,
the METAL can be confidently claimed at influenced prices while it lasts.

Remember this:
in times of economic stress,
it is only ownership of the METAL that
carries the full complement of financial benefits
that have been reliably associated with gold throughout history.

In the final analysis -- in times of stress -- paper is worth only paper.

Have you got the real thing?

sector

(07/26/2002; 12:47:12 MDT - Msg ID: 81541)

Proof Of FED Panic

From G-E at 1:38PM todayUS Official Gold Assets�
(pahearn1) Jul 26, 13:58
AS of 7/25/02, Fed held $11,039,000,000 of Gold in Gold Certificate Account. For Balance Sheet purposes, it is valued only at 45.22/oz. so as you can see the dollar value of holdings is much greater based on POG of 304ish.Gold holdings are essentially unchanged from a year ago....No Fed Selling here. (http://www.federalreserve.gov/releases/h41/Current/ )
++++++++++++++++++++++++++++++

One always knows when he is wining a battle when the opposition begins to react.

Here is a post that is hopelessly flawed (1) because the report cited is not GAAP compliant (2) the Fed has already been implicated in numerous gold swaps as evidenced in FOMC transcripts (3) V.Mattingly was compelled to lie about these direct, approved Fed transcript references to gold swaps (4) the GAAP approved Consolidated Financial statement from 2000 reveals a $20Billion debit in the "Gold and Foreign currency" category which matches the 1,700 tonne West Point, NY Treasury depository change in designation from "Gold Bullion Reserve" to "Custodial Gold" (5) the case for manipulated gold has matured to such an extent that to believe otherwise classifies one as taking a "Fringe" position and finally the Fed can claim that all its loaned gold still is theirs AND the lessee's gold by rigged IMF rules that IMF's own lawyers and statistician accountants object to [Santiago, Chile October 1999].

Of course the Fed and Treasury are selling gold to hammer pog so as to permit JPM a modicum of mark-to-market gold derivatives balance sheet relief. It is just this action that certifies the rig job.

The problem with the Fed is they have so many rigs unwinding that they are losing complete control.

The JPM $20 derivatives detonation level is the most interesting of all. Fund managers now KNOW about it and are dumping like their lives depended on getting as far away from JPM as possible. These fund guys are being driven by redemptions which will skyrocket in early August as the incendiary monthly reports hit mailboxes.

Even IF the FED believes they can prop the futures, the fund guys will still dump. Another point, JPM doesn't have THAT much cash on hand to buy their own way up and out of danger. It was mostly all devoted to "Rocket Science" derivatives that couldn't go wrong...that could withstand 2 standard deviation shocks.

It's LTCM all over again times 10,000.

Perhaps some one here would like to post this message at G-E?

sector

(07/26/2002; 13:47:51 MDT - Msg ID: 81542)

China and the Almighty Dollar

http://www.atimes.com/atimes/China/DG23Ad04.html

For more than a decade, the US has kept the dollar significantly above its real economic value, attracted capital account surpluses and exercised unilateral policy autonomy within a globalized system dictated by dollar hegemony. The reasons for this are complex but the single most important reason is that all major commodities, most notably oil, are denominated in dollars, mostly as an extension of superpower geopolitics. This fact is the anchor for dollar hegemony. Thus dollar hegemony makes possible US finance hegemony, which makes possible US exceptionism and unilateralism.

The Chinese economy is at a point where it also can defy this Mundell-Fleming thesis and free itself from dollar hegemony.

China has the power to make the yuan an alternative reserve currency in world trade by simply denominating all Chinese export in yuan. This sovereign action can be taken unilaterally at any time of China's choosing. All the State Council (the Chinese government's cabinet) has to do is to announce that as of, say, October 1, 2002, all Chinese exports must be paid for in yuan, making it illegal for Chinese exporters to accept payment in any other currencies. This will set off a frantic scramble by importers of Chinese goods around the world to buy yuan at the State Administration for Foreign Exchange (SAFE), making the yuan a preferred currency with ready market demand. Companies with yuan revenue no longer need to exchange yuan into dollars, as the yuan, backed by the value of Chinese exports, becomes universally accepted in trade. Members of the Organization of Petroleum Exporting Countries (OPEC), which import sizable amount of Chinese goods, would accept yuan for payment for their oil.
+++++++++++++++++
Halfway through the last decade the US implemented a policy of gold manipulation, which is an ndispensable component of everything discussed above.

The overarching FED strategy absolutely depends on it.

But the Chinese apparently know something is up and have moved to start a robust gold market of their own.

The Chinese threat is but ONE of the many worries of the riggers in Washington and New York.

Tks to Maddog for the above link.

Cavan Man

(07/26/2002; 13:51:40 MDT - Msg ID: 81543)

@SECTOR

Dear friend: call me a cynic and a cad but I have read so much of the same here for over three years now I must in all sincerity ask:

1. Could you be exaggerating the scope of the predicament?
2. How can you be so sure your facts are correct?
3. Might you be underestimating the power of the "powers"?
4. Can JPM/Chase really be vanquished from the field?

Best....(just for starters)...CM

Cavan Man

(07/26/2002; 13:54:30 MDT - Msg ID: 81544)

PS: sector

Do you think both China and Europe have prepared for the apparent outcome of the current "predicament" beginning perhaps, years ago? Might the Euro qualify as a monetary moat (albeit imperfect) around EU members ?TIA....CM

The Hoople

(07/26/2002; 14:15:27 MDT - Msg ID: 81545)

Friday thoughts

As I watch the last of a Friday trading day sputter home this is what I will remember of this past week.

*JPM and C looked into the abyss. At %18 JPM probably is insolvent. The chain reaction of their misdeeds would probably implode the finances of the planet. A meeting occurred that only years later will be revealed. How truly horrific were things were on Monday, July 22?

*Dow sub-8,000 , NASDAQ sub-1,200. Huge stress to mutual funds, pensions, 401's and banking. Problems will surface as weeks and months progress. Another abyss stared down and postponed, albeit temporarily.

*Utility index crash. Little mentioned but as bearish as it gets. Failure now priced into the majority of the index corporations. Many other utilities also broke and running out of cash. Where wil this huge bailout come from?

*Pension fund stress. 111 billion and counting unfunded pensions. Toss in government and others not counted and it is an impossible number.

*Gold trashed like every systemic risk event since 1995. Like every time gold should (would) have performed its duty it is mysteriously less valuable within a week of the stress. Defying all rationale it seemingly gets dumped by people at the precisely worst possible time. This is obviously wrong and another symbol of what abyss must be like to a BB or CB. Like Marx said they musy have been "quaking in their stolen boots". What I take away from this event is a sense of a system coming unglued and no conventional media will ever announce it. With the help of Russian-style economics many will be clueless to the final fascist conclusion. Gold may and may not be a lifeboat but at the time it is the only lifeboat we have.

Sounding Board

(07/26/2002; 14:20:38 MDT - Msg ID: 81546)

Take a step back

I am not new to the forum, just have never posted. I thank the host and all those post here for the wealth of information and valuable insight. With gold and silver taking a beating right now, my husband and I have revisited our investment strategies. He actually encourage me to post and share our thought process which may benefit others. Some times through these hard times, it helps to have friends to tell you that you are not insane. Let me share with you our investment story, then my thoughts of this past week.

We started to have little money to invest once we got out of graduate school 5 years ago. My husband has always been interested in finances although he got his doctorate in Electrical Engineering. He researched investment strategies, and decided to follow Warrant Buffett's teachings. Back around 1998 he concluded that the stock market is a bubble. He invested in bear mutual funds. Later, because of concerns that the Fed could potentially enter the stock market and prop it up at an arbitrary value, he switched to gold and silver. At that time he found this forum. It was frustrating at that time because the stock market kept going up. It did not matter much because we did not have much money invested at that time.

By a stroke of luck, we hit the California real estate jack-pot, sold and cashed in. Now we have some more money to invest. I was afraid that he only read and listened to news and ideas that supported his own reasoning. All the conspiracy theory just sounded unbelievable. It did not make any sense to me that the central banks would want to sell gold and not to make any money. I was really worried about him too. (Does anyone remember the movie starring Harrison Ford "The Mosquito Coast" )? I thought he would lead the family to do something drastic. Now that we have children, we had to be more careful about our actions. I challenged him to read the other side of the views So he did. I played the devils advocate and asked challenging questions. He had sound answers. To our relatives and family, we are nuts. It was not easy from the start, not just now. We have seen wild, gut wrenching, swings in our portfolio � including being in the red at times. We use each other as sounding boards. I was introduced to the USA Gold forum. In fact, it has been much easier this year, because many of what we have learned has come to light, e.g. stock market correction, Enron, Worldcom, Argentina, Japan. Relatives are beginning to think we are right. We spent time to gather all the necessary reading and material and sent them to immediate family to have them read the material and make the decisions. We have persuaded my brother in law into investing in gold and silver just two weeks ago! This past week was very bad for us not because our own portfolio took a beating, but my brother in law's. We felt very bad about it. Not because we gave the advice, but we cause we are mentally prepared and they are shocked at this point. This leads to the thoughts that I want to share. My husband and I have thought hard and asked ourselves, what are the fundamentals that lead us to invest in gold and silver. Has any thing changed? In our opinion, this question should always be asked no matter the time is good or bad. We concluded at this time:

1. The world economy is still deteriorating, we can not find one healthy economy. Unemployment on the rise all around. Banks in trouble.
2. Middle East Crisis is intensifying. US and Britain are going to attack Iraq, it is just a matter of time. They are both saying it is not imminent (to me that means not today). Energy shortage still a big problem.
3. US still in recession and the government is still in denial mode. Only politicians and US economists insist that the economy is sound and recover is taking place. These are the same people who said we did not have a recession until we are way into one. The numbers they use (questionable to begin with), can only show that the rate of deterioration is slowing down if at all, but not a recovery. The systemic problems are not being addressed.
4. The US Government, corporations and the people are carrying record amounts of debt. People with debt, possibly loosing their jobs, defaulting on their mortgage, have their pension go down the drain with the stock market, are not going to jump out of bed one day and start buying everything. If they are not buying, companies are not going to produce, there are no new jobs. You get the picture.
5. The corporate scandals are not over � there are still more in the pipeline. Having the CEO sign a piece of paper is not going to fix anything. Either they will restate earnings down, lie, or not sign the results. It also does nothing to address earning enhancing techniques that are allowed within GAAP.
6. The reasons for foreigners to pull the money out of US, and dump the dollar are still there. As a matter of fact, I think, the past couple of days have shown that Asia is wising up, did not just blindly follow Dow's leaps.
7. The original "justification" for the central banks to sell gold is not there anymore. They may still want to sell, but it is going to be harder to justify it to their people.
8. Mining companies are unwinding their hedge books.
9. Our government signed a bill which confirmed that the National Defense Silver Stockpile is gone. The mint now expects to purchase 9 million oz a year on the market.

Now one can say, "All you said is true, but what if the big boys can continue to manipulate, change the rules to the game?". This is where faith comes in, but not blind faith. Unlike having faith in the stock market, which is without a sound reasoning at this point, backed only by economist and politicians� words. By comparison, gold has endured the test of time. Already the manipulation has received good exposure. To list a few: Bill Murphy's interview regarding GATA on CSPAN, Royal Bank of Canada's internal memo. We are making other progress too: The World Gold Council changed leadership. All of these support the faith in gold. I was actually excited about the drops. It means to me that the end is near. The manipulators are getting desperate, and becoming more bold in their manipulations. If anything, all evidence supports that the day that gold and silver will pop sooner rather than later. I have shared my experience to show that if you step back, look at the last 5 years, not just today, conditions are actually getting better for gold investors. So hang on, give each other support and come out winners.

misetich

(07/26/2002; 14:37:58 MDT - Msg ID: 81547)

Bond defaults hit record $52.1 bln in 2d qtr-S&P

http://www.forbes.com/markets/newswire/2002/07/26/rtr677827.htmlSnip:

NEW YORK, July 26 (Reuters) - Fifty-six companies worldwide defaulted on a record $52.1 billion of debt in the year's second quarter, Standard & Poor's said on Friday.

The credit rating agency said the quarter was the sixth in a row in which more than 50 rated companies defaulted on debt.

It said the U.S. default rate should fall from recent 10-year highs by year end, while European Union defaults should remain high this quarter and perhaps next.

Misetich

Are credit market seizing? Banks are tightning up, investors are risk aversion in bonds and stock market.
US jobless recovery is anemic- consumer confidence is DOWN -

This are the times goldbugs have been waiting - the FINAL BATTLE! of the World On Gold War edition 1996 to 2002

JPM is on the ropes! Leasing game is OVER, due to low interest rates - They have to sell gold (whatever is left) outright and publicly -

Japan recession continues, Latin America economy is heading toward a disaster, Brazil debt is mounting...

Got gold?

misetich

(07/26/2002; 14:44:41 MDT - Msg ID: 81548)

Fed's Olson says U.S. in recovery, but slow one

http://www.forbes.com/newswire/2002/07/26/rtr677796.htmlSnip:

"Business investment hasn't picked up as we have expected and that is one of the things that needs to happen" before the recovery can be complete, Olson said.

He said strength in consumer spending and confidence make it clear the recovery is under way. Olson added that he thought the rain of corporate scandals was on its way to abating, in part because of an Aug. 14 deadline set by the Securities and Exchange Commission for executives to certify their companies' financial statements are accurate.

"It's clear that we're nearing the end," he said.

Misetich

Strength in consumer spending is derived from housing bubble and refinancing - and higher auto lease loans -

Mr. Olson may be right ""It's clear that we're nearing the end," he said." but NOT the end that he's praying and hoping -

It is the end of economic maladjustments and misalignments - and the end of the OVERVALUED US $

Got gold?

Black Blade

(07/26/2002; 14:46:40 MDT - Msg ID: 81549)

Last Line of Defense by Stephen Roach (New York)

http://www.morganstanley.com/GEFdata/digests/20020726-fri.html#anchor0
Snippit:

In the end, it probably all boils down to the American consumer. Long the bedrock of the US economy -- accounting for two-thirds of America's GDP -- the US consumer has also become the world's consumer of last resort. In my view, the excesses of the American consumer will go down in history as one of the hallmarks of the 1990s. Before sustainable recoveries can be established in the US and the broader global economy, I maintain those excesses must be purged. There is good reason to believe that just such a purging may now be close at hand.

The macro model of consumer behavior is relatively straightforward: Personal consumption is driven by the combination of income and wealth effects. While empirical evidence suggests income effects outweigh wealth effects by a factor of nearly ten to one, consumers were not exactly bashful about drawing incremental support from asset appreciation during the greatest financial bubble of them all. Initially, consumers spent equity wealth effects and, more recently, they have been tapping the home equity till. Financial conditions also matter, but mainly in defining the context for consumption adjustments. On that basis, the confluence of a low saving rate, record debt loads, an aging demographic profile, and an increased incidence of defined-contribution pension plans all speak of unrelenting structural pressures bearing down on the consumption outlook.

Against that backdrop, the American consumer is about to be caught in a vice. At work, in my view, will be the combined impacts of three powerful macro forces that take dead aim on US consumers -- wealth destruction, a long overdue US current-account adjustment, and the coup de grace -- a negative income shock. With all of these forces aligned against the heretofore-resilient consumer, I believe the last line of defense against the double dip will finally be breached.

Black Blade: Roach nails it. The shake out will continue as there is no positive news in the economy. If anything it is getting worse as unbelievable as it may seem, consumer and corporate debt reaches for yet new record levels. The dam will eventually break and then the real pain will begin. Also, the Gold action over the last few days since the run to $324 (withy brief spike to $327) has been yanked back to the $303 level. The rumor is that at least one major US investment bank is in deep trouble and has been selling anything of value due to liquidity concerns and a possible rating downgrade by Moody's in coming days. The rumor is that these downgrades may include as many as three major banks and at least one major investment brokerage (Merrill Lynch?). It should be very "interesting" next week.

Off to the gym!

Aristotle

(07/26/2002; 14:55:54 MDT - Msg ID: 81550)

Gold. Who needs it?

You need Gold like you need a hole in your head.

It's called a mouth.

You need Gold in exactly the same way that you need a an aquifer even at the very instant that you've drank your fill, quenching your thirst.

You need Gold in the same way you need more food following the biggest feast you've ever had.

Are you with me?

You need Gold because it is enduring and can be counted on while everything else is fleeting. This is the wealth function that Gold serves so well -- it is some THING that you have that you can in times of need relinquish for some other valuable THING (or service) that your life might require.

You can always know that a portion of Gold you offer will be accepted for value because your counterparty also needs Gold like he needs (and has) a hole in his head.

Gold is for Life!

"I THINK, THEREFORE I AM... sure that I need Gold."

Get you some. --- Aristotle

misetich

(07/26/2002; 14:56:10 MDT - Msg ID: 81551)

Avaya to cut 2,500 jobs, take $150 mln charge

http://www.forbes.com/newswire/2002/07/26/rtr677773.htmlSnip:

BASKING RIDGE, N.J., July 26 (Reuters) - Communications equipment maker Avaya Inc. (nyse: AV - news - people) on Friday said it was cutting an additional 2,500 jobs and expected to take a $150 million charge in its fiscal fourth quarter related to job cuts, real estate consolidations and certain asset impairments.

Misetich

Yep - US economy is recovering as the Bone Pile keeps on growing!

The spinmasters will try to PLAY the same game as they played between 1997 and 2000, but it won't work.

Foreigners are tired of losing money in US markets - and US economy is dependent on imports, thus the required investments inflows will not materialize.

The "confidence set up" is August 14 at which point we will hear the NUMBERS ARE CLEAN - What a crock!

Will stock options be expensed by the majority of S&P 500 after August 14 ? No

Will pension plans be underfunded after August 14 ? Yes

Will off-balance sheet items still be used? Yes - as most of them can be done legally- "what is, is?"

Will foreigners keep on pouring good $ after bad investment $ - NO - Though Asia and Japan need US consumers and would like to keep the game going - by buying safe US $ investments (treasuries)the ratio of their holding is SKYROCKETING - Who owns whom?
Printed cheap yens are buying the US? How long can the US afford to have that going?

Got gold?

Gandalf the White

(07/26/2002; 15:01:32 MDT - Msg ID: 81552)

WELCOME Lady Sounding Board !!! GREAT first Post !

Sounding Board (07/26/02; 14:20:38MT - usagold.com msg#: 81546)
===
<;-)

misetich

(07/26/2002; 15:04:50 MDT - Msg ID: 81553)

US corp bond issuers find investors are reluctant

http://www.forbes.com/newswire/2002/07/26/rtr677772.htmlSnip:

NEW YORK, July 26 (Reuters) - Investor worries about shoddy accounting and credit risk have all but dried up demand for U.S. corporate bonds, and that is spelling big trouble for a growing number of companies trying to raise cash.

At least six corporate bond sales have been shelved this month, as investors grow ever more worried that they will be stuck holding bonds virtually impossible to trade.

"There seems to be a buyer's strike right now," said John Cassady, a portfolio manger for Fifth Third Investment Advisors in Grand Rapids, Michigan. "There are some bargains to be had, but until liquidity returns to the market, I'm probably going to just sit on the sidelines."

The latest casualty: Pepco Holdings Inc., a company being formed from the upcoming merger of Potomac Electric Power Co. (nyse: POM - news - people) and Conectiv (nyse: POM - news - people). Late on Friday, the company postponed its $1.5 billion bond sale to fund the merger because of poor market conditions, according to market sources.
................
As investors balk at buying bonds, companies have had to offer ever-higher yield premiums, or extra yields over safe U.S. Treasuries. On average, investment-grade bonds now yield 2.25 percentage points more than Treasuries, the most ever, according to Merrill Lynch & Co., up from 1.94 percentage points a week ago.

The rising yields are forcing companies to adjust their bond offerings to drum up demand.

Misetich

How can spending increase in this type of environment, if corporations cannot raise the required funds?

How can jobs be created?

Feds "advertised" low interest rates are hardly stimulative as corporations have to pay a premium?

Are local, state and federal government going to increase theri tax revenues?

Got gold?

Graefin

(07/26/2002; 15:10:35 MDT - Msg ID: 81554)

Danke sehr Sounding Board!!!!!

Danke sehr f�r deine Perspektive! It always helps to step back and take stock of what you have. The US and world is still CLOSE to the toilet and it's just a matter of time to see what tumbles in! (wink, wink, Gandalf!) October is just around the corner. As we all know October is historically the worst month for the stock market. Wonder what will happen this year. Corrections happen. Be patient! Lady Sounding Board? Welcome aboard!
As always...
Peace!
und mit freundlichen Gr��en,
Gr�fin ;-P

misetich

(07/26/2002; 15:24:17 MDT - Msg ID: 81555)

Brazil Debt - Will they default?

http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n25118804&feed=reu&date=20020725&cat=USMARKETHeadlines

Brazil currency plunge highlights debt concerns
Emerging Debt-Brazil pressured lower by poll due Thursday

"The negative feeling about Latin America is growing," he said. "Investors who have gotten hurt there are continuing to reduce their allocations."

Brazil, the biggest country in Latin America, has been a drag on the emerging debt market this year as uncertainty has increased about economic policy under the next administration.

Misetich

This TRAIL is getting hotter. Stay tuned.

Got gold?

Graefin

(07/26/2002; 15:30:27 MDT - Msg ID: 81556)

Looking at the big picture...

http://gainesvillesun.com/news/articles/10-29-99g.shtmlHey all...here's a snip from an old article written back in 1999 with similarities/differences to the GREAT crash of the stock market and the writer's present time, 1999. It's interesting to see what is transpiring today in light of what was written in 1999. Click on link for full article!

snip:

THEN

After peaking at 380 points in September 1929, the Dow Jones Industrial Average had lost about 45 percent of its value by November, falling to about 200 points. Nearly a quarter of the decline in value - 24.5 percent - occurred on Oct. 28 and 29, 1929. By March 1933, the Dow had dropped to 50 points, an 87 percent decline from its 1929 peak.

NOW

Based on the Dow's close Thursday of 10,622 points, a 24.5 percent decline in value would result in a 2,602 point drop to 8,020. An 87 percent decline (as happened between '29 and '33) would see the Dow drop from 10,622 to 1,381.

THEN

About 4 percent of households were invested in the stock market.

NOW

About 45 percent of households are invested in the market either directly or indirectly through mutual funds and retirement accounts.

end snip!
Peace!
Gr�fin

Aristotle

(07/26/2002; 15:36:25 MDT - Msg ID: 81557)

Hyperbolic Gold is financial and political dynamite

Last week before an additional spike upward Aragorn had commented on Gold's technicals in euros vs dollars -- that there was a nicely rising channel in euro denomination but that an upside blowout was the shape of things in dollar terms.

Seeing what we've subsequently seen in the past couple days, it makes perfect sense if you consider the social dynamite represented by imminent/actual hyperbolic Gold pricing in a major currency like the dollar.

Accepting the fact that our government likes to meddle and tweak economic affairs, and also accepting the fact that they are NOT all powerful (thus, tweaking techincal indicators is the best they can do to influence overall market behavior,) it stands to reason that what HAD to be done WAS done.

As a result, a sidelight is the eurolanders still do have a nicely rising Gold channel, albeit one that is flatter and thus offering certain administrative benefits at this time as they seek to dethrone the dollar with euros directly rather than Gold.

More importantly, however, is that the technicals in the dollar form of Gold have been "persuaded" out of the hyperbolic flirtations and have thus bought time as the technical traders let their actions be guided by this new "information." What a beautiful play!

As an ongoing Gold buyer (with my personal Gold Standard for savings) oh how I do love the structure of it all! The vested interests within the Old System are practically giving away Gold as it desperately tries to buy a few more moments of life. Hang in there ol' girl, I've got a footlocker I'm trying to fill!

Gold. Getting me some. --- Aristotle

misetich

(07/26/2002; 15:37:03 MDT - Msg ID: 81558)

Brazil Debt Reaches 1 Trillion Reais on Currency Fall (Update1)

Snip:

07/25 12:33
Brazil Debt Reaches 1 Trillion Reais on Currency Fall (Update1)
By Guillermo Parra-Bernal

Brasilia, July 25 (Bloomberg) -- Brazil's total debt rose to a record trillion reais ($337 billion) in June as a decline in the currency increased the cost of dollar-denominated borrowings, adding to concern that the government may default.

Federal government debt last month rose to 999.7 billion reais, or 78.1 percent of gross domestic product, from 956.1 billion reais, or 75.6 percent of GDP, in May, the central bank reported. Debt rose 22 percent from 822.5 billion reais in June 2001, the central bank said.

About 40 percent of Brazil's debt is in dollars or indexed to the dollar and the debt jumps by about $1.4 billion for each percentage point fall in the Brazilian real against the U.S. currency. The rise in debt and a slowdown in the economy have increased concern the government may default and caused the currency to fall 23 percent this year and bonds to drop by as much as 25 percent in the last four months.

``It's hard believe that debt can be sustainable when it's snowballing every time the real goes down,'' said Edgar Amador, an economist with Stone & McCarthy Research Associates in Mexico City. ``The central bank is beginning to admit that something has to be done to stop this situation.''

Decline in Currency

Altamir Lopes, the central bank's economic research director, said an 11 percent decline in the currency was the main reason behind the increase in total debt last month.

``It's worrisome but we are committed to continue managing'' the debt, Lopes said. ``The fact that we have a volatile currency makes debt grow, but it doesn't make (the debt) unmanageable.''

He added that the central bank expects the ratio of debt to Brazil's $513 billion GDP to remain little changed in July.

The real fell to a record low of 3.00 against the dollar in morning trading and lost 3.4 percent this month.

............................................

Mitesich

Fire, fire, fire everywhere - JP Morgan, Brazil, Japan, US stock market trounced- US corporate bonds volatility - spreads between US agencies and treasuries widen

Got gold?

R Powell

(07/26/2002; 15:42:56 MDT - Msg ID: 81559)

Sounding Board

I enjoyed reading your thoughts. Sometimes we look at a tree and sometimes the forest. Both views have value.

I'm glad you saw that the president signed the silver purchase bill (Mr. Blade's 81450 post). I don't believe the market saw it. There seems to be no price movement from any fundamental information or the existing facts. Oh well, this will just make the unveiling an even greater surprise.
While playing devil's advocate against investing in metals, what info, if any, did you uncover concerning existing silver supplies?
Also, please don't be alarmed at today's downturn. A silver collector named Butler went on vacation and his wife (who has complained for years that his silver has totally overwhelmed their house) sold his entire 284 million ton stash. It was a little more than the market could absorb.
Happy weekend
Rich

misetich

(07/26/2002; 15:44:26 MDT - Msg ID: 81560)

Health care costs outpace pay raises

http://www.accessatlanta.com/ajc/epaper/editions/today/business_d304ae9a30c4005d00f7.htmlSnip:

Friday, July 26, 2002

Employers are spending more on workers --- but it isn't showing up in workers' paychecks.

Soaring health care costs accounted for the greatest share of the increase in the latest Employment Cost Index. The quarterly index measures changes in wages, salaries and employer costs for benefits such as health care. Health care costs outpaced pay raises in the quarter ended June 30.

Workers in private industry saw a 1.1 percent gain in compensation while benefits costs rose 1.4 percent.

"Economists have been predicting higher health care costs for employers, but this is the first report that illustrates it pretty dramatically," said Michael Wald, Atlanta-based regional economist for the U.S. Bureau of Labor Statistics. "This shows employers are really being hit hard by health care costs increases."

Wald noted that wages and salary increases have been running between 0.8 percent and 1 percent each quarter for the past year, while benefits costs have been running between 1 percent and 1.5 percent.

The higher employment costs are likely to be a drag on the U.S. economy's overall recovery, since a large part of the recovery hinges on consumer spending.

"Part of the recovery in the economy is based on consumers being able to keep up the present level of spending," Wald said. "But employers are getting burdened by additional health care costs, so they're not able to give large pay raises. Instead, it's going to [higher] health care costs."

**********************8
Misetich

"They" can fudge CPI,productivity etc but they can't fudge reality -

Corporate earnings growth has fallen dramatically in the last couple of years ( and the reported earnings are padded to boot)

On the other hand, health care costs, energy, housing costs (property taxes) are soaring

"They" will try to keep the game going as long as they can -Will the rest of the world keep on lending without asking for a rising RISK PREMIUM?

Got gold?

Zygoat

(07/26/2002; 15:47:26 MDT - Msg ID: 81561)

Don't you dare interpret differently than W!!!!!

Could'nt beleive my eyes and ears, Maria was just on TV accusing a nice older gentleman of saying the "government was lieing" about the positive state of the economy. Why he must be out of his gourd to say that things dont look so great with the SM. He handled the awkward situation as best he could. I guess that as long as a guest says that everyting is rosey, Maria will not try to humiliate them on national TV.

misetich

(07/26/2002; 15:50:08 MDT - Msg ID: 81562)

US Economy Reality Scoreboard

For those who are interested in following the US economy jobless recovery - it suggested to bookmark the following URLS

http://www.forbes.com/home/2002/07/25/accountingtracker.html

The Corporate Scandal Sheet
Penelope Patsuris, 07.25.02, 5:30 PM ET

NEW YORK - With the avalanche of corporate accounting scandals that have rocked the markets recently, it's getting hard to keep track of all the transgressions. Our Corporate Scandal Sheet does the job, following each imbroglio as it evolves and logging each of the latest outrages to grab the limelight. With no end in sight to corporate America's mischief, keep this page bookmarked, since it will be updated often.

and Layoff Tracker Update

http://www.forbes.com/2001/01/30/layoffs.html;$sessionid$DNSW0BYAAABILQFIAGWCFFI

misetich

(07/26/2002; 16:04:53 MDT - Msg ID: 81563)

Mass Media Corporate Earnings Misinformation

Washington Post, John M. Berry, who is an alleged leak source used by the Feds has a column, July 25 where he states

"All but lost in the recent clatter of sharply falling stock prices is the substantial turnaround in U.S. corporate profits that began late last year."

Compare Mr. Berry's (Fed?) spin with First Call market comments on corporate earnings

"The story in the 2Q02 reporting season is not the 2Q02 results. As we said last week, "Do not worry about the 2Q02 earnings, and do not focus on them. They will be okay but they are not the issue".

The issue is the comments about 3Q02 and/or 2H02 that have resulted in pre-announcements turning more negative. This growing realization that 3Q02 and 4Q02 earnings estimates are likely to be cut significantly had a lot to do with spooking the market last week.

Expected 2Q02 Earnings

The 2Q02 earnings reporting season is unfolding as expected with three minor exceptions, two of which were adjustments rather than negative earnings surprises. Earnings for the S&P500, as expected will be, up slightly from those of 2Q01. The final results are likely to be up about 1%. "

Mr. Berry is a disgrace to journalism. The positive spin he reports misleads investors and causes further hardship.

It is this type of mass media misinformation that is leading the US financial titanic toward the INCOMING GOLD ICEBERG!

Got gold?

misetich

(07/26/2002; 16:13:36 MDT - Msg ID: 81564)

Insurer's Chief Sees No Relief on Premiums for Businesses

http://www.nytimes.com/2002/07/26/business/26INSU.htmlSnip:

By JOSEPH B. TREASTER

Prices for business insurance are continuing to soar in the aftermath of the Sept. 11 attacks and Maurice R. Greenberg, the chief executive of the American International Group, said yesterday that he expected no letup at least through next year.

....................

The increase in premium prices, sometimes double and triple those of last year, are affecting businesses nationwide. They are contributing to higher earnings for many big insurers. But in a time of widespread concerns for corporate stability, A.I.G., with $55 billion in capital and more than $520 billion in assets, is able to command the best prices.

*********************8

Insurance companies have been taking a licking. From the unfortunate terrorism attack to the subsequent hemorrage of stock market and bonds investments - these entities will sock it to consumers and corporations -

Add higher property taxes, due to higher real estate values, soaring medical health care costs, energy etc. and its not hard to forsee lower consumer spending - unless of course you work for the Fed in which case - you hide your head in the sand and hope you can fool everybody by depressing and manipulating the gold market at will.

Of course we know how well the Feds have done against Gold in the past, dont't we?

Got gold?

misetich

(07/26/2002; 16:25:03 MDT - Msg ID: 81565)

Merrill congressional hearing to focus on 'troubling' deals with Enron

http://www.ananova.com/business/story/sm_638036.html?menu=Snip:

A US congressional panel investigating secretive financial deals between several Wall Street banks and Enron Corp confirmed it will hold a hearing Tuesday to probe 'troubling actions' by Merrill Lynch & Co Inc that helped Enron inflate its financial position.

Merrill senior vice president and president of international private clients, Kelly Martin, and Merrill investment bankers Robert Furst and Schuyler Tilney have been invited to testify before the Senate Permanent Subcommittee on Investigations on Tuesday morning.

The panel is probing Merrill's banking relationship with Enron which it describes as "troubling actions...that have resulted in misleading accounting...(and) compromised investment ratings."

"It appears that Merrill Lynch, like other financial institutions, knowingly participated in deals that were used to make Enron's financial position appear more robust than it actually was," subcommittee member Senator Susan Collins said in a statement.

Subcommittee chairman, Carl Levin, said "without the support and assistance of major financial institutions, Enron could not have engaged in the extent of the deceptions that it did."

However, Tilney - who is married to a former Enron managing director, Elizabeth Tilney - and Furst were suspended by Merrill earlier today after they told the bank that they are not willing to testify before the panel.

Tilney's Washington lawyer could not be reached for comment at the time of reporting, but the two Merrill bankers could be subpoenaed to appear before the panel if lawmakers decide to force them to appear before Congress.

..................
Sources told AFX News earlier today that Tilney was an investor in a private placement partnership, called LJM2, that he helped oversee for Merrill on Enron's behalf.

********************

Misetich

Merrill, JP Morgan, Citigroup, Goldman Sachs, Deutche, Credit Swiss etc have allegedly DEFRAUDED investors worldwide-

Lets hope subcommittee chairman, Carl Levin, brings these alleged crooks to justice and restore confidence in our free market system

Got gold?

misetich

(07/26/2002; 16:37:55 MDT - Msg ID: 81566)

Bush to hold economic forum Aug 13 in Texas

http://www.afxpress.com/afxpress2/afx/bn211037.xml.htmlSnip:
WASHINGTON (AFX) - President George Bush will host a forum on the US economy in Texas Aug 13 to "discuss the fundamentals" of the US economy and steps to increase growth, said White House press secretary Ari Fleischer.

The forum in Waco, TX, "will bring together government policy-makers, small investors, small-business owners, industry experts, workers, business ethicists, union members, corporate executives, economists, business students and others," said Fleischer in a press briefing.

The aim is to "discuss the fundamentals in the American economy and to talk about the president's agenda to increase growth for the future," he added.

Misetich

Look at the 'timing' - August 13 with August 14 being the "kick-off or kick start" to the new and improved corporate reporting

What a farce!

Creditability has been LOST, as the money has disappeared. Do you think investors will pour in the "new and improved financial reporting scam?" As it is a scam, since little changes have been made to rectify the current reporting anomolies.

Have "pro-forma earnings" reporting been eliminated - NO!
Have changes been made to GAAP? NO!
Are options expensed - NO!

The more and more people need to be reassured that everything is OK the more suspicion will be aroused - as it is being broadcasted to WHOLE ECONOMY -

Got gold?

misetich

(07/26/2002; 17:55:01 MDT - Msg ID: 81567)

NY FX: Adjustments in Dlr, Gold Bring Memories of April Jul 26 / 15:42 EDT

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1027712520000&sn=1&banner=mainwireSnip:

By Vicki Schmelzer

NEW YORK (MktNews) - The adjustments seen this week in currency
and gold markets are bringing a sense of deja-vu and memories of April
2002.

Dollar-Canada soared this week from lows Monday near C$1.5412 to
test highs Wednesday near C$1.5958 before stabilizing near $1.5843.

The last time dollar-Canada traded on a C$1.5800 or C$1.5900 handle
was in April when the pair was on a downward trajectory from levels
above C$1.6000 en route to the June 28 lows near C$1.5032.

Traders attributed some of the loonie's weakness to position
unwinds following Standard and Poor's announcement a few weeks ago that
it would replace the seven non-U.S. companies in the S&P 500 with seven
U.S. companies after the close of trading on July 19.

The seven non-U.S. companies consist of two European and five
Canadian companies, the S&P text said.

As the Canadian dollar weakened later in the week through its
200-day moving average vs. the U.S. dollar at C$1.5730/35, black-box
type and hedge fund accounts triggered stop-loss dollar-Canada buy
orders which catapulted dollar-Canada to the week's highs.

Gold also took a pounding this week as longer term players
continued to bail out of the precious metal.

Ken Landon, senior currency strategist at Deutsche Bank in Tokyo,
said one positive sign for the dollar in recent sessions has been the
large drop in the price of gold, which fell from around $324.00 on
Monday to lows just over $300.00 Friday.

"If gold continues to decline and breaks below, say, $300 per
ounce, then the dollar could see a more substantial period of
consolidation" after its recent selloff, he said.

Gold has its detractors but Landon said that gold has kept its
purchasing power over decades and centuries and also gold prices have
been soaring this year.

He said investors have been fleeing paper currencies, in particular
the dollar, and looking for an asset that does not lose its value
despite the actions of governments.

"A continued decline in gold, although not likely, would suggest
that investors are becoming less concerned with holding financial
assets, which in turn could signal a possible upturn in the battered
dollar and equities," Landon added.

Gold is presently trading at $302.50 per ounce, The precious metal
has not traded below the $300.00 level since mid-April.

The move out of commodity currencies such as Aussie and Canada, as
well as gold in recent sessions, has been attracting attention, since
the rally in both of these currency pairs anticipated the euro and yen
rallies that later followed.

As a point of comparison, the euro-dollar closed at $0.8903 and
dollar-yen at Y130.69 on April 17, a far cry from present levels at
$0.9875 and Y119.05.

Traders are reluctant to suggest that U.S. equities or the
greenback are bottoming, leaning more to the idea of a short-term
upward correction instead.

Doug York, senior vice president/co-head of trading at Campbell and
Co., in Towson, Maryland, said at the moment "risk aversion is high and
many are heading to the hills."

He expects the market to return to a lower dollar trend, once this
consolidation period is over.

"I remain medium-term dollar bearish with $1.0600-$1.1100 targets
for end of the third quarter and fourth quarter respectively," York
said.

He warned, however, that the move will be "very unsexy", with a
"slow grind vs. a massive dollar sell-off."

In the short-term, traders continue to fret over the euro's weak
tone vs the dollar, especially given a growing pile of eurozone
corporate governance woes that are coming on the radar screen.

The euro-dollar is holding at $0.9875 on Friday afternoon, just
over the lows seen on Tuesday at $0.9845/50.

A decisive break below $0.9850, is likely to trigger additional
stop-loss euro-dollar sell orders, traders said.

If the corporate client bids that have been bandied about near
$0.9800 fail to materialize, the euro-dollar may be heading for a test
of the July 5 lows near $0.9718 and below, they added.

As optimistic as some market players are beginning to sound about
the dollar and U.S. stocks, ("I think the U.S. economy is still ticking"
"People know it won't fall for ever"), the realists continue to prevail.

"The market is really fragile," one trader observed.
--Vicki Schmelzer, phone (212)669-6438;e-mail vschmelzer@marketnews.com
[TOPICS:M$$FX$,M$C$$$]

Misetich

The article is for subscribers - its being posted in its entirity for educational and discussion purposes only.

R Powell

(07/26/2002; 17:59:12 MDT - Msg ID: 81568)

Technical notes

Some technical traders say that price gaps have to be filled. Others say this is not so. Given enough time, I'd guess that nearly all of them are.

Today POG filled an old gap just above the $300 level. There is now only one gap (to the best of my limited knowledge) remaining. It is a recent gap created last Tuesday when POG gaped down so this is an overhead gap between 320 and 322.

Likewise, POS left a gap between 501 and 504 at the same time. I didn't see any below the present level. However, silver dropping below the 475-480 level was not a good sign. Because every transaction requires both a buy and a sell, in equal amounts, I've never really understood what is meant when calling a market oversold or overbought but I'll bet that someone will say that silver adjusted today from it's previous overbought posture. Are we now oversold?
With the last downside POG gap filled today, there will be "buy" recommendations from most market analysts. After this past week, we'll probably find the speculative funds have severely lowered their long position and the so-called commercials have lowered their shorts (short positions, that is). That's about all I know of technical stuff. Any other insights?
Yes, I do buy on the dips. This was a big one so I bought twice.
It's Friday!
Happy weekend
Rich

misetich

(07/26/2002; 18:14:00 MDT - Msg ID: 81569)

Reality Check: Chicago Purchasers Report Renewed Econ Jitters Jul 26 / 8:31 EDT

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1027686660000&sn=1&banner=mainwireSnip:
By Gary Rosenberger

NEW YORK, July 26 (MktNews) - Corporate chicanery and treacherous
financial markets are fueling fears of a potential reversal in Chicago's
manufacturing economy, which has struggled to rebound in recent months,
Chicago-area purchasers say.

Interviews with Chicago purchasers suggest upcoming data will
exaggerate the dropoff in business activity, skewed downward by a
surfeit of negative news coverage about the economy on top of a seasonal
slowing typical to the Midwest.

A company chief said business leaders are "freaked" by the behavior
of stock markets and are becoming less certain about a recovery in the
manufacturing economy.
...................
Michelini also noted that commodity prices are contained, with the
exception of steel. Steel prices are rising in the U.S. and Mexico, and
suppliers are having to absorb the increases, as yet unable to pass them
on to customers.
................
Joseph Romanowski, president of Machinery Systems, Inc., a machine
tool distributor in Schaumburg, Illinois, is downcast about the regional
manufacturing economy, while harboring hopes for a mild recovery ahead.

"We're seeing ever so slight hints about a recovery among export
industries," he said. "Our Wisconsin market is more of an export market
than Illinois, and we're seeing some movement there."
................
"I belong to a CEO group and almost everybody is freaked right now.
They're all wondering how many more shoes will fall on the accounting
issue."

In his last meeting of CEOs, sentiment was mainly glum. "There's
some anxiety and fear. I don't see a high level of confidence," he said.
................
Melind senses that most are not sharing his good providence at
present. "I get a lot of calls from sales reps - they're dying for work.
..................
Editor's Note: Reality Check stories survey sentiment among
business people and their trade associations. They are intended to
complement and anticipate economic data and to provide a sounding into
specific sectors of the U.S. economy.
***MARKET NEWS INTERNATIONAL NEW YORK 212 669 6430***
[TOPICS: MAURC$,M$U$$$]
....................

Misetich

It appears that the US economy jobless recovery is continuing at an anemic pace-

It is interesting to note, not withstanding the recent Euphoric outburst from Microsoft Gates on increased R&D spending and hirings, CEO's remain unconvinced of a recovery, that Greenspan, O'Neil & Bush try desperately to portray.

The dislocation of economic growth perception between government and business continues. Thus far CEO's have had the better read (no surprising). So it appears that administration is grasping at straws and pushing on a string.

Got gold?

USAGOLD

(07/26/2002; 18:33:49 MDT - Msg ID: 81570)

Discussion. . .

http://www.usagold.com/DailyQuotes.htmlI would like to emphasize these comments from our own Mr. Jon H. Warner, aka Black Blade:

"Comment: Rumors are running rampant in the gold pits today. One rumor that has gained currency is that several hedge funds are selling gold (and anything of value) to meet margin calls on short positions resulting from Wednesday's stock market run up. Another is that at least one and perhaps more major U.S. investment banks are selling bullion to shore up their books and to address liquidity concerns. One bank (JP Morgan Chase) was rumored to be in the midst of a liquidity crisis though the bank in a later press release downplayed the rumor. The recent sell off in gold does provide another opportunity to seek an entry point for accumulating physical metal as portfolio insurance. The fundamentals of the stock market still remain very negative and the bear market may be far from the so-called 'bottom.'"

MK: Ther best gold report. Period. End of story. Linked above. The one the pros read so they know what to write about.

- - - - - - - -

Let me provide some perspective. The president said that the stock market was going to go up. He was the first president in history to make so bold a prediction -- with the exception of possibly Herbert Hoover. It broke a long tradition. And when the President says the stock market is going to go up, it's going to by God go up. Wall Street players -- in a veriitable tizzy -- met with each other and the Washington crowd trying to save the financial system. The stock market one day after the round of meeting and two days after the presidential pronouncement staged a 500 point rally. In recent days the euro went below parity as the dollar clawed its way back -- a stratagem employed to draw money back into the U.S. stock market. Gold tanked. But what is really going on? Does the public really believed anything has changed after this monumental and extraordinary effort? The stock market has started to sputter again. Gold demand hasn't lessened a bit -- volumes are soaring in the United States. I don't think anyone believe that the euro downside correction is anything close to a trend. And does anyone believe that the Bush administration is truly committed to the strong dollar policy? All we've seen is a bunch of politicians and Wall Street spokesmen scurrying about obviously trying to make all of us believe that's everything is going to be OK in the morning. So, now. . . .who'd going to believe it?

Are the American people to believe that the corporate scandals have become now more or less benign? Is the dollar any sounder with the word getting out on the budget and trade deficits than the day before all this scurrying about? Do the Wall Street insiders really believe, like they did in 1929, that its all a matter of the Secretary of the Treasury putting the right spin on this mess?

Please. . . .

I view this as all temporary. The real trend is about to reassert itself with a vengeance.

- - - - - - - - - - - - - - - - - - -

On Sinclair's comments: I always read Sinclair. I too believe that its not the Fed at the center of these operations but the banks. However, we have to keep in mind that the Fed is a creature of the banks and not the other way around. I still cannot believe the awesome silence emanating from the Federal Reserve. Where's Allen? And what does he really think? My guess is that he has already bailed out Morgan Chase and maybe Citigroup with easy money at the discount window. But how much is enough? When you're dropping water one drop at a time into the inferno, can you seriously believe that its going to make a difference. Never should have put your blessing on derivatives, Allen. It's going to come back to haunt you.

- - - - - - - - - - - - - - - - -

Miner: As the price drops, the physical buyers come in. Demand in the United States is very strong and the bullion banks hammering the price is another attempt to drive the ordinary (and generally uninformed buyer) out of the market. It won't work. If our volumes at USAGOLD are any indicator, the exact opposite is occurring. The shorts know that this is a good time of year to dump the price because the monsoons kill Indian buying, Christmas jewelry manufacture doesn't kick in for another month or two and the Europeans and Americans are more interested in the beach, gold, fishing and family time, than they are the markets. The seasonal charts show a lull this time of year traditionally. So I see this all as an interlude. It just so happens that the timing was right for the paper hangers. Their markets were unravelling and gold was an easy target this July. With stocks on the ropes, they certainly don't want money going to gold that would serve a better purpose in the bond market -- especially in light of the government's $400 trillion year over year addition to the national debt. We'll see what happens as these low prices work their way into the physical market. My guess is that someone is going to have to make some heavy deliveries in the weeks to come and that will wreak havoc with the shorts. Watch for proof of this phenomena in gold interest rates. NOW IS THE TIME TO BUY!!! Gold won't be defeated here -- not in this environment. . . .you can take that to the bank.

DOWNUNDER

(07/26/2002; 18:51:07 MDT - Msg ID: 81571)

@ YGM - - RE NEWSPAPER ADS FOR GATA

A belated thank you for your reply (354) to my post(321)on 24th July re " Not much point saying the same thing over & over to the converted ---a concerted mainstream ad campaign should be initiated ASAP"

I have 2 days of reading to catch up with at USA Gold but wanted to get this reply back now to acknowledge your post.I hope to see comments from others as well re this subject as we MUST get the message out to the sheeple as an alternative investment.

I saw Bill Murphys C-SPAN interview yesterday & I must say it was excellent.He covered a lot of issues & came across much better than I would have expected.I highly recommend this to ALL- -about 1/2 hour.Link as follows -middle of page

http://www.cspan.org/journal/index.asp?Recordset17_Next=Nextℜcordset17_Action=++ℜcordset17_Position=FIL%3AORD%3AABS%3A11KEY%3APAR%3Aℜcordset17_Looper1_State=10

** re jobs --perhaps in 12 mths when we're in the middle of a full on Gold bull - - -yehaaaaaaaaaaaaa :)

Paper Avalanche

(07/26/2002; 19:05:43 MDT - Msg ID: 81572)

Trust

http://www.foxnews.com/story/0,2933,58834,00.htmlI present the following to the fine participants on this forum to let you know what is now passing as qualified financial advice on the Internet (an exceprt from the linked story):

"I've written about this before, pointing out that government leaders will move quickly to fix the crisis of confidence on Wall Street because they have to: our entire financial system is based on trust."

Trust.

Trust.

When the SHTF would you rather have trust or physical gold?

I prefer the physical in hand.

Paper Avalanche

Paper Avalanche

(07/26/2002; 19:13:06 MDT - Msg ID: 81573)

@ sector

thank you for the asia times article. I have a tremendous amount of learning to do in order to be able to properly digest the many academic / ideological / economic / historical facts and notions posited.

This dude has a keen sense of how the rest of the world views the dollar.

Thanks.

Paper Avalanche

aussie

(07/26/2002; 19:45:56 MDT - Msg ID: 81574)

(No Subject)

Cavan Man, your question no. 3 - in reference to the power of 'powers' has also bothered me. From what I have been able to fathom, the 'powers' cannot be underestimated - just like slippery poker players, just wondering what card they are going to pull out of their sleeve next.

Thanks for your post Sounding Board, I also enjoyed reading your background and best of luck with your investments. I had a phone call from a stockbroker yesterday suggesting there were some very good 'buying opportunities' to be taken advantage of, - have to say, it was a conversation I least expected in a week that has been full of doom and gloom. Goes to show that there must still be optimists out there besides those we are exposed to via the media

Just amazed Rich at how you found the information on Butler selling his stash of silver. Any clues as to why?

Cheers.

Paper Avalanche

(07/26/2002; 20:11:13 MDT - Msg ID: 81575)

Just amazed Rich at how you found the information on Butler selling his stash of silver

Just amazed Rich at how you found the information on Butler selling his stash of silver

WTF?

Have I missed something? Ted Butler has abandonded silver?

Please tell me that I have had too many beers (I won't be offended)

(please insert your own explative for the F in this acronym)

RAP

(07/26/2002; 20:33:34 MDT - Msg ID: 81576)

Gold going up on Friday night?

http://quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=s&w=5&t=l&a=2Anyone happen to notice spot has gone up $2 since the close?

aussie

(07/26/2002; 20:43:03 MDT - Msg ID: 81577)

H.D. for Mr. H.C.K. Liu & ? for Paper Avalanche

Hey there Paper Avalanche, - I found Liu's article a heavy read too, - last night I spent a good time digesting it, he has certainly done his homework,- maybe it was part of his thesis.

Am I missing something about Butler. And could you please let me in on the secret of who the heck is Ted Butler when he is home?

Cheers.

Canuck

(07/26/2002; 20:53:52 MDT - Msg ID: 81578)

What a lovely week................

if you sold on Monday and bought today, otherwise it was a full blown piece of shit.

Pretty quiet around here, you would swear gold dropped $22 for the week or shares dropped 30 or 40%. They say the leverage of stock vs. bullion is some 5:1 so -8% on bullion and -40% on shares, mathematically perfect.

So let me get this straight, hedge funds were selling anything of value, including gold to fund margin requirements due to bets gone sour from a rising stock market. That is a possibility, maybe a probability. So what happens if the SM's go back up next week?

I guess most missed my message the other night. Gold's price is dictated by 2 things and 2 things only.

1)Dollars per ounce, ie $300=1 oz. If the unit 'dollar' gets smaller it takes more of them to acquire same said ounce.
2)Demand for gold increases across the board, against all currencies. If the desire for say, tulips, increases uniformly against a basket of currencies its price will rise.

Gold was beaten for 2 reasons this week, the dollar strengthened and gold the commodity, weakened. Why?

On account 1) it is now perceived that other currencies and economies will deteriorate equally and/or perhaps faster than the US. Thus the dollar is strengthening. Short term/long term is a huge guess. On account 2) economies are shrinking, demand for gold the commodity is falling. Witness the CRB, it will tell the story.

Forget the hocus-pocus, mumbo-jumbo speculative heresay. A wise man said don't listen to what they say, watch what they do.

Carl H

(07/26/2002; 20:58:05 MDT - Msg ID: 81579)

@Paper Avalance

Yes, you've had one too many beers -- it was a joke. And a good one at that.

sector

(07/26/2002; 21:00:08 MDT - Msg ID: 81580)

JPM is Dirty...Too Close to The Federal Reserve

http://www.prudentbear.comFrom Thursday's American Banker (Rob Garver):

"...�They (J.P. Morgan Chase and Citigroup executives testifying before the Senate subcommittee on investigations) could not have done any worse,� said one Washington insider... �Their current message is totally unbelievable: �We are not accountable for the accounting treatment here, it is not our job.� That's as believable as 2 plus 2 equals 5...They have just guaranteed that they made a bad story worse. There will be more questions asked, more documents subpoenaed. It will be drip, drip, drip of information. Sound familiar? It's called �scandal� in Washington. The only way to beat it is to get out there and tell the truth.�"

"In a moment reminiscent of 1994's tobacco industry hearings, when executives were forced to swear that that they did not believe cigarettes are addictive, a trio of J.P. Morgan Chase executives told the subcommittee Tuesday that their bank had never had control of Mahonia, a controversial partnership implicated in the collapse of Enron... If the bank asked its outside attorneys to create a partnership called Mahonia; if all of Mahonia's legal fees were paid by the bank; if the partnership never did any deals that didn't involve the bank; and if bank executives discussed ways to make sure that Mahonia �seems independent,� could they reasonable claim that the bank did not control Mahonia? One by one the three Morgan Chase executives...insisted that despite its ties to J.P. Morgan, the Channel Islands-based Mahonia entered into prepaid energy contracts with Enron of its own accord, and could have declined to enter those contracts if its board of directors so chose."
[�]

Representatives from Citigroup then followed those from J.P. Morgan. "They faced equally tough questioning from Sen. Levin, who rolled out similar circumstantial evidence indicating that Delta Energy Corp., a special-purpose vehicle similar to Manhonia, was actually under Citigroup's control. In the undisputed low point of the hearing, a Citigroup executive was reduced to answering Sen. Levin's charges by claiming that whether they were correct depended on how the word �deceptive� is defined."

Independent of gold, JPM is in the crosshairs.

As for gold's current attack, we can draw a few conclusions (1) this overt manipulation was not the result of a carefully planned tactic...it was a survival lash out by a mortally wounded beast (2) the gold fuel required to trash gold in this go-round was formidable (3) the duration of this downdraft is therefore limited and (4) the overseas allies of the Fed are not under orders [No written documents] and may act in their own best interests if they sense the Fed is in trouble.

The banking industry as a whole on both sides of the Atlantic is in jeopardy because of JPM's stupendous derivative monster. [Adam Hamilton rightfully describes JPM as " A financial arms dealer in a dirty war against the American Investor"]. The counter parties to JPMs myriad derivatives cannot be sleeping soundly...they are most likely preparing to exit their contracts some no doubt will claim their contracts are null because JPM acted in a substantially fraudulent manner hiding the obvious counter party risk. Counter parties are entitled to know the heath of the issuer...JPM certainly isn't healthy.

Litigants will win against JPM and extract many tens of billions in compensation for shareholders and employees ending JPM as a financial entity as surely as Enron has ended.

This is the future of the US financial system. It is a one-way trip to financial Armageddon.

The temporary suppression of the gold price represents an opportunity...an opportunity that smart investors won't miss. Even IF the cabal has managed to secretly rescind the Washington Agreement, the already mind boggling 26,000 tonnes of BIS gold loans puts them close to being tapped out. Moreover, as the fury of the American people rises [This week is but a rustle] the cabal will surely get even more nervous and less likely to cooperate with the Fed in it's Dirty Business.

Finally, at some point running up to the election the President may have to make a painful decision...to tell the truth and hope for the best.

His ability to blame Clinton is all but squandered.

mikal

(07/26/2002; 21:02:12 MDT - Msg ID: 81581)

@RAP

Price goes up every night lately, yes. Before the Asian and Australian trading begins, you see the effects of the afterhours, electronic access trading. Somebody tell those 2 worrywarts about Rich's Butler joke before THEIR wives sell 234 tons when their back is turned...

silvester

(07/26/2002; 21:02:36 MDT - Msg ID: 81582)

Butler sellin his silver

Thought I'd become numb to shocking news with all the teaching received here over the years. Just logged on this evening and first thing I read was Butler had sold his stash. Had'nt had a beer yet but almost spewed my tea all over the screen. Not funny guys. Not funny at all.

a nation of one

(07/26/2002; 21:11:21 MDT - Msg ID: 81583)

(No Subject)

I have heard that bull markets climb a wall of worry. Bear markets, evidently, slide down a bannister of shock and glee.

sector

(07/26/2002; 21:11:37 MDT - Msg ID: 81584)

...Independent of gold...

All that follows is mine and not at Prudentbeareom

BTW:

Welcome aboard Lady SoundingBoard. I too, thoroughly enjoyed your personal anecdotes.

Being "Nuts" is a common affliction amoung gold bugs.

mikal

(07/26/2002; 21:34:15 MDT - Msg ID: 81585)

Welcome Lady Sounding Board

"...the manipulators are getting more desperate". I agree and I think most investors are not fooled. You deserve to be commended for your patience and efforts to persuade family. Looking forward to more of your insights.

Golden Bear

(07/26/2002; 21:37:57 MDT - Msg ID: 81586)

Summary of JPM's near meltdown... by Adam Hamilton.

http://www.zealllc.com/2002/jpmcrash.htmSnippit:

"....On Tuesday July 23rd, JPM?s stock plummeted by an unbelievable 18.1% in a single day!� It is hard to overestimate the magnitude of this devastating technical breakdown in the House of Morgan.� We are not talking about some fly-by-night dot-com company here, but the flagship US bank which has long been listed as a proud member of the venerable Dow 30 club.

As the graph below vividly illustrates, prior to its fleeting bear market reaction rally in the middle of the week, JPM had hemorrhaged a gut wrenching 66.8% from its all-time high only a couple years earlier!� Does anyone else find it disturbing that an elite American bank?s stock is behaving like some of the fallen NASDAQ market darlings?� What do the sellers know?...."

Gauntlet-Runner2("GR2")

(07/26/2002; 21:56:19 MDT - Msg ID: 81587)

Saddest day for goalstocks, many goalbugs wiped out

http://post.messages.yahoo.com/bbs?.mm=FN∾tion=m&board=1601028319&tid=drooy&sid=1601028319∣=45176&n=1Musical chairs for a song fit for selling. When the music stops who will have anything. We can blame the market makers but the paper goal bugs pumped the stocks up themselves. The real goldbugs had gold and lacked the paper profits. Now who is quite and who has a smile though a serious one? I call them "goalstocks" because that is all they are. You have a goal to achieve something and it is all transitory and subject to outside influences beyond our control. Physical gold on the other hand can be in your hand and has mass and weight and unlimited demand overseas where we buy most of our products from. They know what gold is, not the Joe 6 Pack who believes what he reads in the papers. There's that word again, the "P" word, (paper). Links with procrastination and pandering and pathetic portfolio of pumped up P/E ratios. Gold is insurance.

Black Blade

(07/26/2002; 22:01:13 MDT - Msg ID: 81588)

Economic Data Hint of Worries

http://www.accessatlanta.com/ajc/epaper/editions/today/business_d304ae0a30c4d15a0087.html

Snippit:

"The United States should now be prepared for one of the deepest and most intractable recessions of the post--World War II period," said economist Wynne Godley, a distinguished scholar at the Levy Institute of Bard College in Annandale-on-Hudson, N.Y. More worrisome is the drop in durable goods. That could be a one-month aberration --- even a statistical hiccup. But if it is for real, trouble will likely follow. Consumers seem stretched to the limit, so unless the government boosts spending, growth may be up to business, which was the first economic factor thrown into reverse in 2000. Cuts in company budgets mean fewer projects funded, which means less money in the economy and less hiring. Dropping demand for big-ticket items hints that the whipsaw of Wall Street stocks is having a real-world effect, Dhawan said. "It means that the crisis of confidence is beginning to impact the boardroom."

Black Blade: The system is broken. It has fallen and can't get up. Many economists are looking at Wednesday's rally on the markets as proof of a "bottom". Well guess what � the DOW only inched up about 74 points for the week. That is far from a turnaround in the stock market. The rapid drop this week in gold prices from last week's $324 (actually spiked to $327) and settled lower to currently above $304 in after hours trading was due to a liquidity crisis where every and anything that can be rapidly sold must be sold � and that includes gold. Several hedge funds and at least one major US investment bank was caught on the wrong side of some bets on the market (both stocks and currencies derivatives). The rally this week caused panic selling. Now these players are licking their wounds while at the same offering a new lower entry point for establishing new precious metals positions. A report released yesterday mentions that gold demand is still supportive of physical gold in Asia. Today gold prices are lower and it would not be unreasonable to assume that physical accumulation will increase in Asia as has been the case with price dips over the last couple of weeks. Now that the Wall Street shorts have unzipped their fly, they have to deliver results in the form of increased corporate earnings, improved economic data, and more impressive stock market rallies. That's a pretty tall order.

Black Blade

(07/26/2002; 22:19:32 MDT - Msg ID: 81589)

Weak dollar an aid to exporters

http://www.chron.com/cs/CDA/story.hts/business/1509236
Snippit:

Barton Smith, an economist who directs the University of Houston's Center for Regional Forecasting, said that while a weaker dollar does help manufacturers and exporters, he also sees the decline as necessary to help spur on the nation's economic recovery. "I have been strongly arguing that this was one of the prerequisites for the recovery to be real, that the dollar had to correct itself," Smith said. "American manufacturers can't survive a dollar that was as high as it was a few months ago." Right now, the U.S. recovery is too dependent on the consumer and real estate markets. It needs the manufacturing sector to participate, he said. Smith, the University of Houston economist, said one fundamental economic change is that the United States is becoming a deficit nation again. The Bush administration is forecasting a $150 billion deficit for the fiscal year, but Smith believes it will exceed $200 billion. "That is a lot of debt that has to be peddled, and a good part of it will be peddled abroad," he said.

Black Blade: Damn straight! The US has been posting record current account deficits and growing trade deficits. This is unsustainable and a weaker US dollar is a must or the US economy will collapse. The US must become competitive in the global economy and that is the driving force of the "Currency War". So far the US is losing because Sec. O�Neill is hell bent on a strong dollar policy implemented by the previous corrupt administration.

a nation of one

(07/26/2002; 22:34:28 MDT - Msg ID: 81590)

Mr. Morgan

The people there now talk among themselves and decide, like a committee. The old man did not do that. He worked in a trance, fathoming the depths of his soul. That is the difference between yesterday, when America was being made, and today, when it is being cut up and placed on the shelves.

Black Blade

(07/26/2002; 22:38:16 MDT - Msg ID: 81591)

Citigroup's Reputation At Risk

http://www.msnbc.com/news/785894.asp?0si
Snippit:

IT FACES probes by federal and Manhattan prosecutors as well as a civil investigation by the Securities and Exchange Commission and a slew of lawsuits over its ties to Enron Corp. Meanwhile, securities regulators are considering disciplinary action against one of its most prominent equity analysts, Jack Grubman, who is also being investigated by the New York State attorney general. And Citigroup is squaring off against the Federal Trade Commission, which alleges that its consumer-finance business � the largest in the country � has employed deceptive practices.

Another famous financier whose reputation has been nicked is Robert Rubin. He joined Citigroup in 1999 as chairman of its executive committee after stepping down as Bill Clinton's Treasury Secretary. Last November, as Citigroup was trying to stave off Enron's bankruptcy-court filing, Mr. Rubin made a controversial call to Treasury Undersecretary Peter Fisher. The call added fuel to accusations that Enron and its allies improperly wielded influence in Washington. Mr. Rubin hasn't disputed the account.

Black Blade: What reputation? I think that it is time to reconsider the repeal of the Glass-Steagall Act. Ever since the repeal of Glass-Steagall it has been a series of scandals. And how about that former Treasury Secretary Rubin � can you say Teapot Dome Scandal? I knew you could.

Horatio

(07/26/2002; 22:46:48 MDT - Msg ID: 81592)

Cash

I once had 10,000 in cash,and in the 1987 crash I had my first margin call for $250,000 and a second for an additional $150,00.I was able to forstall bankruptsy with $10,000 cash and bought enough time to get a bounce back in the market.The $10,000 enabled me to pay off $850,000 in margin debt in three months.It was nothing short of a miracle.Ever since I have always kept an amount of cash available for opportunity and unforseen events.This is good advice......
I withdrew and additional $54,000 from my account and paid off my mortgage .In short $10,000 cash enabled me to buy some time and I paid off $900,000 in debt in 3 months.I have been debt free since then.I pay cash for Gold & Silver stocks ,use no margin ,buy no options.Opportunity affords me the leverage from time to time to buy in crisis when prices decline below intrinsic values ,thats my leverage,NOT DEBT>
With options, time is always running out,with margin debt you are at the mercy of stock manipulators.I once had a friend on Wall st that told me "They are running the Turkeys to the other side of the barn yard,and then they will run them back"Don't be a Turkey(a very dumb animal)stay out of debt.!!

Carl H

(07/26/2002; 23:00:03 MDT - Msg ID: 81593)

Silver

It has been a brutal week in the silver stocks.

I would like to ask the question: Can anyone find any fundamental change to the silver market this week other than Bush signing the bill allowing the mint to buy silver?

I can't, so I think I'll go to sleep -- and I'll probably sleep better than a lot of people who hold "respected" blue chips like JPM, C, Lucent, IBM, etc, etc, so forth and so on.

Horatio

(07/26/2002; 23:02:31 MDT - Msg ID: 81594)

Freedom,Freedom,Freedom

Whats going to happin when the Dems get control of the White House and the "Homeland Security" is still in place?
Both Partys are in a scheme to get rid of the "Bill of Rights".If it were done by the Dems the Republicans would raise Holy Hell.It had to be done by the Republicans in the name of Security.A Nation that gives up its Freedom for "Security" deserves neither.
Why is it the Government needs to diminish citizens freedom in order protect the citizens?Why don't they just clamp down on the Borders and Visas the Government issues.The Government is the problem !Not the citizens freedom.Do your job Damm it!!Not find excuses to grab POWER.

Black Blade

(07/26/2002; 23:05:51 MDT - Msg ID: 81595)

Hedging hurts our share price: Barrick

http://www.nationalpost.com/financialpost/story.html?id={82A2ADC7-7860-4872-A525-7C001537F776}'Market misunderstands'

Snippit:

Barrick Gold Corp.'s chief executive admitted yesterday the miner's share price is being dragged down by its hedging program. But Randall Oliphant said the company has no plans to change its strategy and must do a better job explaining its scheme to investors. Barrick is the world's No. 2 gold miner but the biggest hedger. The company, which will sell half its production this year through its hedging scheme, has been a lightning rod for criticism from those who believe hedging has kept the price of gold artificially low.

Black Blade: And according to miningweb the hedge book is underwater: "The hedge trim is another concession to hedging antagonists and gold bulls, but the impact was concentrated in near-dated calls with very little impact on the spot-deferred programmes. That suggests there won't be any meaningful improvement in the mark-to-market value of the hedge book which has suffered a vicious $641 million swing in the last year, sinking to an unrealised negative $261 million."

Black Blade

(07/26/2002; 23:24:41 MDT - Msg ID: 81596)

Americans believe they are worse off - poll.

http://money.cnn.com/2002/07/26/pf/gallup/index.htm
Snippit:

NEW YORK (CNN/Money) - More Americans believe they are financially worse off now than they did a year ago, yet they remain hopeful about their future prospects, a new Gallup poll released Friday showed. The poll, conducted amid a slew of corporate accounting scandals, a slack economy and a tight job market, shows about 45 percent of Americans believe they are financially worse off now than they were a year ago, while 32 say their financial situation is better than a year ago. That's the lowest sentiment since February, 1992, when the country was battling a recession.

Black Blade: The Prez and Paul O�Neill say everything is hunky dory. Is it unpatriotic to not believe the government data? Hmmm�

LimitUp

(07/26/2002; 23:38:03 MDT - Msg ID: 81597)

GRATITUDE

I would like to thank the cabal for lower gold prices. I will take full advantage of this golden opportunity to make a major purchase from CPM. Thanks again, Yours truly, LimitUp

Carl H

(07/27/2002; 00:19:47 MDT - Msg ID: 81598)

SA Mining Bill Leak

http://www.businessreport.co.za/html/busrep/br_frame_decider.php?click_id=335&art_id=ct20020726204353942S315196&set_id=60New mining bill sparks selloff
Bloomberg
July 27 2002 at 01:51AM
Local shares fell for a fifth day in six, led by Anglo American, as the minerals and energy ministry said it was considering a proposal that would give black investors control of all new mines within a decade.

The FTSE/JSE Africa Top40 index
lost 151.49 points, or 1.7 percent, to 9021.51, as 23 stocks rose, 16 fell and 3 were unchanged.

The FTSE/JSE Africa all share index dropped shed 1.1 percent to 9509.60. Bullion lost 1.8 percent to $304.45 yesterday.

Anglo American, the world's second-biggest mining company, plunged R12.20, or 8.1 percent, to R139. AngloGold dropped R45.50, or 9.9 percent, to R414.50. Gold Fields plunged 10 percent, to R101.20. Harmony fell 16 percent to R109.60, while DRD shed lost R6, or 18 percent, to R27. - Bloomberg

CarlH: Anyone got more info on this? It seems that the leaked version was stronger than what anticipated.

Cor Tauri

(07/27/2002; 01:34:05 MDT - Msg ID: 81599)

re: The draft Minerals and Petroleum Resources Development Bill, 2002

http://www.polity.org.za/govdocs/bills/2002/mineral-energy.htmlHi CarlH,

I think I found it, but I don't really know what to make of it. First it is a draft not law, and also I've never looked at other nations laws regarding mining. They may all read like that for all I know.
It isn't very comforting. I think the main concern seems to be tenure of existing operations. There are two South African gold companies that I have always liked very much and have done very well for me, but it may be time for me to look for new favorites.

CarlH here at USAGold they talk alot about physical gold. This draft legislation is just one reason. Make sure you have some physical ok?

Best Regards

Old Yeller

(07/27/2002; 02:30:49 MDT - Msg ID: 81600)

Uncle Alan,bring back the bubble,please

http://www.upi.com/view.cfm?StoryID=20020726-014218-6208r
We need those capital gains to balance our books.Oh my,
all this deflation talk sweeping the markets,apparently
out of control health care costs and other goodies are not
included in this scenario

Then where will the required dollars come from?

Black Blade

(07/27/2002; 04:23:09 MDT - Msg ID: 81601)

Shrinking US capital inflows spell trouble for dollar

http://www.reuters.com/news_article.jhtml?type=search&StoryID=1254361#

Snippit:

TOKYO, July 26 (Reuters) - The current repatriation of funds by U.S. institutions may lend temporary support to the dollar but the reduction of inflows from other global operators means the dollar is still in for a hard landing, analysts said. Analysts and traders said the real test for the dollar comes when the exodus of foreign money from the U.S. market outpaces the repatriation of funds by U.S. institutions. At that point, the U.S. will not be able to secure enough dollars to meet its massive deficit financing needs. "U.S. asset prices and the dollar will then have to go through a further downward adjustment to levels that look appealing enough to lure back foreign investors," Kichikawa said. So the continuing contraction in global capital inflows into U.S. markets means the scenario of a nose diving dollar remains in place, Mizuho's Kakuta said.

Black Blade: Looks like a lot of "entertainment" in coming months.

Canuck

(07/27/2002; 04:55:35 MDT - Msg ID: 81602)

@ silvestor

Re: your msg 81582"Butler had sold his stash"

Where is this bomb?

Boilermaker

(07/27/2002; 06:59:37 MDT - Msg ID: 81603)

August 14

http://www.businessweek.com/magazine/content/02_30/b3793709.htmsnip;
Expect Surprises Long after August 14

What deadline? Companies won't be able to give their books a thorough scrubbing until next spring

"The bulls have high hopes for Aug. 14--the Securities & Exchange Commission's deadline for the top executives of nearly 1,000 publicly traded companies to start swearing that their financial reports are on the level and accurate. Between now and then, the optimists are betting, the nasty stuff festering in company books will have to come to a head. And that could spark a stock market rally, based on company numbers investors can trust, in the fall.

Dream on. Aug. 14 is just the start of months of accounting revelations that are likely to feel more like extended root-canal work than a quick extraction. Experts estimate that companies in the Standard & Poor's 500-stock index overstated their earnings by upwards of 10% to 15% in most recent years, largely because they didn't count the cost of employee stock options and made over-optimistic assumptions about their pension plans. Once other sources of puffed-up earnings--as well as outright fraud--come out, the reduction in earnings could be much worse, especially in the technology, cable, and telecom industries, which stretched their accounting the furthest."

Comment;
Looks like August 14 is not the end date for financial confessions but only the beginning. Investors (sheeple) are being conditioned to think that the water will be safe after 8/14. 1000 CEO's will buy as much time as possible before "signing" their freedom away. There will be a lynch mob waiting for revenge. Government is offering a one-time stay-out-of-jail card and those CEOs are going to be extremely careful.

misetich

(07/27/2002; 07:12:55 MDT - Msg ID: 81604)

JP Morgan - Citi- Lawsuits, Mounting Losses

http://www.businessweek.com/bwdaily/dnflash/jul2002/nf20020726_3789.htmSnip:

Equally threatening to Citi is a torrent of litigation. Bondholders who bought more than $11 billion in WorldCom debt last May are suing underwriters Citigroup and J.P. Morgan for lack of due diligence. WorldCom said in June that it had found a $3.8 billion accounting fraud. Both banks say their underwriting was proper. But plaintiffs' lawyers may have a case. In a 1968 ruling, Escott v. BarChris Construction Corp., a judge said that bond underwriters should have known BarChris was faking some numbers because internal documents showed the company was having trouble getting customers to pay on time. Citi is already named in Enron-related suits brought by pension holders. They could be followed by insurers, which bought securities designed by Citi, to hedge $1.4 billion of its Enron exposure.
.......................

Misetich

JP Morgan has been downgraded by Moody - with negative implications - is a first of many "downgrades" to come, if some if not most of the pending lawsuits, investigations materialize, loan provisions etc.

The losses suffered by pension plans, insurers, investors that relied on "honorable" institutions such as Citi and JP Morgan are not going to take it lying down -

and lets not forget the EXPOSURE that these two banks have in Brazil ..more on that later

Got gold?

Blackjack

(07/27/2002; 07:13:17 MDT - Msg ID: 81605)

Hard to believe this is happening in this day and age

http://www.nypost.com/news/regionalnews/19723.htmJuly 27, 2002 -- Wall Street veteran Edwin Crooks Jr. yesterday jumped to his death from the sixth-floor window of his deluxe Rector Place apartment after struggling with someone who was trying to stop him.

Crooks, 60, a senior vice president at trading experts Spear, Leeds & Kellogg and a board of governors member at the American Stock Exchange, may have been suffering from depression, sources said.

Crooks was found dead in front of his Battery Park City address at 8 a.m., and cops are calling the death an apparent suicide.

Friends told The Post that it was unlikely that the recent stock-market slide had caused Crooks to take his life.

"This [the market slump] is nothing compared to 1987," said one close friend. "[He's] a veteran broker who can handle the ups and downs of the market."

The dramatic struggle to save Crooks' life was witnessed by a janitor at the tony 333 Rector Place address.

The janitor told The Post he saw a man fighting to hold Crooks from throwing himself out the open window of the 10-story building.

But the unidentified person's brave attempt failed when Crooks wrenched free and leapt out of the window, the janitor said.

Stunned friends and colleagues at the American Stock Exchange, where Crooks had worked for 36 years, said they noticed "Crooksy" - as he was known - had been getting "progressively more thin and gaunt" over the last several months, one person said.

"He was at our board meeting [this week] and looked awful," said an Amex source who attended the meeting.

Crooks leaves a wife, Brook, and two sons, Edwin, who works at Susquehanna Investment Group, and William, who works for the National Association of Securities Dealers.

The family declined to comment.

Crooks had a farm in Middle Brook, Va., where he raised horses and visited every weekend, said Anthony Boglioli, vice chairman at the American Stock Exchange.

"He was the most honest, upstanding, hard-working guy you'd ever want to meet," Boglioli added.

"We mourn his loss, and our thoughts and prayers are with his family during this especially difficult time," the Amex said in a statement yesterday.

A memorial service is being planned at Wall Street's Trinity Church, across the street from the Amex, for next Thursday, a spokesman at the exchange said.

"This is an awful tragedy, and we are terribly saddened by his death," said a spokeswoman for Goldman Sachs, the parent company to Spear, Leeds & Kellogg.

misetich

(07/27/2002; 07:30:57 MDT - Msg ID: 81606)

Barclays warns of continued volatility

http://www.euromoney.com/index.htmlSnip:

Jenkins says the worst outcome, which he estimates has about a 30% chance of happening, is that the credit squeeze that is now being felt by certain sectors, such as telecoms, will deepen into a full-blown credit crunch at exactly the time companies are facing falling margins. This would badly hurt chances for a quick turnaround in corporate profitability and hence for economic recovery. Equity markets are still relatively over-valued in terms of P/E ratios - the historical average is about 15%, while the S&P 500 now stands at about 25%. And equity volatility, whether positive or negative, is usually an unsettling sign for credit markets.

Conversely, the best that can be hoped for, with only an estimated 15% probability, is that corporate profitability will start to improve very quickly, leading to improving credit quality. But confidence is still quite low, as equity market chaos infects nervous bond markets and credit rating downgrades continue vastly to outnumber upgrades. "Credit quality is a bit like an oil tanker," Jenkins observes. "It takes a very long time to turn around, but it can sink pretty quickly."

Companies' reduced ability to use accounting trickery to boost apparent profitability is also likely to hinder a corporate-led recovery. Jenkins points out that, after the Wall Street Crash in 1929, the Dow Jones did not bottom until 1932, and that the intervening years had many false rallies. "You get up days and down days," argues Jim Reid, credit strategist at Barclays Capital, "but the overall trend is still downward." He added that, on a technical level, the S&P 500 has just fallen through a support level that has sustained it for the last 20 years.

Most likely is that neither of these possibilities will be realized. Corporate earnings are unlikely to stabilize enough to improve the credit market's state in the short term, but most companies will still be able to fund themselves at a cost. "It's going to be a very tough second half," says Jenkins. "But the credit markets are still likely to outperform equities by a lot, and government bonds slightly."

In the mean time, investors should avoid trying to catch falling knives. A few years ago, spread widening was typically considered a buy signal. But consistently throughout this year, widening spreads have carried on widening, meaning investors would consistently have been better off selling the 20 worst-performing credits in their portfolio rather than waiting for things to improve. Investors who did this at the end of January would have made a negative return of 2%. If, instead, they held on to these underperformers, they would have lost about 9% by now. "We expect this trend to continue over the coming months, since credit quality has probably now bottomed yet," argues Reid.

Misetich

CREDIT SQUEEZE - Banks are reluctant to lend - and have tightened considerably - Corporate bond issues have found little interest and are required to pay a higher risk premium -
Defaults are still rising -even though - US jobless recovery is supposedly in its 7th month uptrend- after all didn't they report a growth of GDP in the 1st Qtr 02 of 5.8% or thereabout?

How is it possible for the US government to report this type of growth and corporate defaults, earnings, spending, government tax revenues all point in a totally different direction?

Something is wrong - very wrong - and investors are continually being mislead by the mass psycologists - we're doing good.. economy is strong...etc. and maybe sublimally have been told "don't open your mutual fund statements" have hyptonyzed investors -

Some investors (redemptions) have woken from the hyptonyzed session and found their financial house was sacked! Their previously perceived wealth almost totally wiped out!

The positive spinners are doing additional damage - as the patient is very ill, very very ill

Got gold?

misetich

(07/27/2002; 07:45:03 MDT - Msg ID: 81607)

Inside the Telecom Game -How a small group of insiders made billions as the industry collapsed

http://www.businessweek.com/magazine/content/02_31/b3794001.htmSnip:

Grubman's influence stretched far beyond the three companies that have collapsed in scandal in recent months. According to Thomson Financial Securities Data, Salomon helped 81 telecom companies raise $190 billion in debt and equity since 1996, the year the Telecommunications Act was passed to deregulate the telephone industry. In return, Salomon, part of Citigroup (C ), received hundreds of millions in underwriting fees and tens of millions more for advising its stable of telecom players on mergers and acquisitions. Grubman himself was paid about $20 million a year.
Individual investors may have jumped at Grubman's picks because they thought he was doling out impartial advice on his favorite stocks--the traditional job of Wall Street analysts. But Grubman's interests were deeply conflicted, and he came to personify the blurred lines between research and investment banking in the boom. More than any other telecom analyst, he was actively involved with the companies he covered. Many critics felt that made it impossible for him to be objective about those companies' prospects. For example, he helped Anschutz recruit Nacchio as Qwest's chief executive in 1997, and he aided Global Crossing's Winnick in his $11 billion acquisition of Frontier Communications in 1999. Could Grubman then step back and make critical assessments about Qwest and Global Crossing for investors?

In the wake of the telecom meltdown, Grubman is facing more intense scrutiny than ever before. As the telecom bubble began deflating in 2000 and 2001 and other analysts began to warn that the industry was straining under the weight of excess capacity and enormous debt, he continued urging investors to load up on shares of Qwest, Global Crossing, WorldCom, and others. In March, 2001, Grubman issued a "State of the Union" report in which he wrote: "We believe that the underlying demand for network-based services remains strong. In fact, we believe that telecom services, as a percentage of [gross domestic product], will double within the next seven or eight years." Now, investors are questioning whether Grubman was motivated by his true opinions--or by the millions of dollars he received from supporting his telecom clique.
...............

While Grubman and his allies encouraged investors to cough up the billions of dollars needed to make huge new capital investments in fiber-optic networks and broadband connections, it's now clear that that vision of the future was wildly hyped. Billions in investments are going to waste, as little as 3% of new long-distance networks are being used, and investors are fleeing the sector. Even once-stable players are suffering. On July 23, local-phone giant BellSouth said WorldCom owes the company $75 million to $160 million, contributing to a 15% drop in BellSouth's stock price that day.
................

Already, the fallout is brutal. The $2 trillion in losses that telecom investors have suffered is twice the damage caused by the bursting of the Internet bubble and on a par with the savings- and-loan crisis of the late 1980s. Bank exposure to the telecom mess is tens of billions of dollars. Worse, the investigations into WorldCom, Global Crossing, and Qwest, layered on top of the Enron scandal, are dealing a huge blow to investor confidence. They've led the entire stock market down as the Standard & Poor's 500-stock index has tumbled 29% drop so far this year.
...............

With investors losing trillions of dollars and dozens of telecom players in bankruptcy, there are growing calls for tough action against those responsible. Grubman, certainly, will face more scrutiny. New York Attorney General Spitzer has subpoenaed his research records, e-mail, and other documents. If Spitzer finds wrongdoing, Salomon may have to pay a fine or even discipline Grubman. The U.S. Attorney's investigation could even result in criminal charges.

Misetich

Wow investors have been ROBBED of trillions of dollars and the penalty ???? ********If Spitzer finds wrongdoing, Salomon may have to pay a fine or even discipline Grubman. The U.S. Attorney's investigation could even result in criminal charges.
****************

That should instill investor CONfidence!

Got gold?

Gauntlet-Runner2("GR2")

(07/27/2002; 08:23:49 MDT - Msg ID: 81608)

Accounting Methods Reform :Reality Check could be in the mail.

http://post.messages.yahoo.com/bbs?.mm=FN∾tion=m&board=7078940&tid=bgo&sid=7078940∣=34509&n=1Should occur naturally as the prices of equities falls and confidence must be restored one corporation at a time. The process is a double-edged sword to generate trust so the "flippers go back to being buy and hold guys" they must go beyond EBITA and use trustworthy equity based accounting methods. That shift reveals true earnings which are nill. So their stock will fall to below book when the shift occurs then they can re-organize and banks will loan them money at the government freebie rates. Low interest rates cannot help boost the economy when banks are too scared to make new loans with fuzzy facts accounting methods still in practice. Cash flow based accounting is in serious trouble without a steady stream of cash to turn the financial waterwheel. The real estate bubble is regional in nature and rural real estate is booming as the masses who can get away from the cities as the welfare state crumbles into a riotous chaos with falling tax revenues. They will be taking the candy away from the spoiled brats so don't expect them to sit quiet in the back seat.

"People of color" in the USA have almost no political representation since they walked out of the Democratic convention a few years ago. If they are Republicans or Democrats with sound ideas, they get rejected by the inner-city folks. The inner city folks need jobs and lack the social infrastructure necessary to escape from inner-city ghetto culture. So to avoid rambling off any further.

The beginning of inner-city renewal is an economic thrust to promote small business of which everyone with a computer can now participate, and it's financing begins with honest accounting methods to get away from "command credit" accounting oriented methods that worked fine while in expansion but fail miserably when applied to the present contraction phase of the post bubble era. I see crows and seagulls eating the same food and they aren't fighting or upset that they don't look like the other one. All these white people laying out in sun's UV light trying to achieve a darker skin color are risking skin cancer. The whole tanning salon business is a waste.

Can't we all just get along and live out the commandments #1 and #2. All hope rests in our openness to the Spirit of Truth who can give understanding far beyond what the books of man never came close to. Think for yourself and be your own guru too. Don't tell anyone your stupid ideas until after you get them fixed. Or else you'll be attacked for trying to pick up the cracker in a circle of clueless pidgeons.

slingshot

(07/27/2002; 08:27:32 MDT - Msg ID: 81609)

Seige Engine

Gold above $300.00The sky lighten as the storm moved away. Rays of the morning sun shown through the last of the remaining dark clouds, to reveal a slightly altered landscape.Looking from afar the castle ressembled an anthill that was stepped upon by a GIANT. Figures moved about rapidly to repair the damage.
The morning sun climbed into the sky and the weather cleared. An emerald field stretched out before them and one would be lost in the days beauty as the sun warmed their chilled bodies.
Then there was the sound of trumpets on the wind. It was the arrivial of Sir Howe's Army. Again there were cheers as the horsemen rode to the edge of the field. The Goldbugs gather around them, you could here the names wispered.
Sirs Howe,Powell,Murphy,MK,Randy, Douglas, Belgian, Sector,Mr.Gresham, Black Blade and more. They had all come and they have brought with them a multitude willing to fight. Their message had been heard thoughout the land and many listen and followed.
Off to the side covered by he shade of the trees stood three horsemen by themselves drawing no attention. They were
Another and FOA, assisted by a wise wizard Gandalf the White.
Their attention focused on the downed tower and the ramp
it created into the heart of the castle. Time was critical for the enemy was in a hurried state to prepare a defense.
Then like a plague of black locust the reinforcements from the King with No Name rounded the Castle and come to a halt. Both armies surprized at each others presence. The Dark Army advanced again to a position in front of the fallen tower which lay across the moat. Others went inside the castle and manned the ramparts.
A mighty battle was in the making.

sector

(07/27/2002; 08:58:24 MDT - Msg ID: 81610)

@CarlH SA Mining Proposal...all black new mine ownership

theminingwebThe SA mining officials touched the third rail with a leaked proposal that suggested future mines be all-black owned. Anglogold flatly rejected the idea.

I am not placing any weight to this rather clumsey leak. Like many moves by governments, this one went a shaft too far.

So if you own Harmony or GFI I'd say wait for stability next week and buy some discounted paper...or some metallic assets.

R Powell

(07/27/2002; 09:05:23 MDT - Msg ID: 81611)

Canuck and all // Just a joke

I guess I'd better clear the air right away.
Yesterday, in post 81559 I was being very facetious when I explained silver's big downturn as the result of Ted Butler's wife cleaning the house (selling 284 million tons of Ted's silver stash) while he was not at home.
Apparently, probably by skimming through the day's offerings as we sometimes do, the joke took on a semblanse of reality.

I keep up with Mr. Butler's opinions and his research and can definitely state that he is as bullish on silver now as he has ever been. While I don't agree with everything he has to say, I can find no fault with his fundamental outlook. Believe me, I have looked high and low to find something he has overlooked. For those not familar with him, he is one of leading silver market analysts of today. As to his selling silver, it was an attempt at humor. Sorry if I shocked anyone. Hell has not frozen over and Mr. Butler has not sold his stash that I know of.
Happy weekend!
Rich

Gauntlet-Runner2("GR2")

(07/27/2002; 09:08:11 MDT - Msg ID: 81612)

Fire-Ants are now inside the two-year pan formation.....................

I saw a pile of ants in a frenzy on my walkway and being bored that day I decided to do an experiment to see how fast those ants could wipe out four small pieces of bread with some placed away from the main area. Hours later I saw half the bread was eaten away and the little ants were carrying the other dead ants bodies back into the hive where the "winners" lived. They basically ignored the bread until they won the battle because a war was going on between two ant colonies. The winners took all and the loosers became food.
Exactly the same in financial warfare between market participants. Longs and shorts battle it out and the manipulators may find themselves surrounded by a swarm of goldbugs hitting all at once like the way fire-ants strike. Who wrote that old article about the fire-ants was that Quicksilver, where did he go? ,GR2

Gauntlet-Runner2("GR2")

(07/27/2002; 09:26:14 MDT - Msg ID: 81613)

A Far Out Theory

That the strength and health of a city can be measured by an satellite photo of that city's illumination level at night. As the companies earnings dim so will they the lights. From month to month we can watch the donuts forming, with nothing in the center. Monthly time lapse would be needed but this should be relevant as electricity is expensive and that would be relative in the business equation. As the suburbs expand to get away from the coming chaos the outer edge of the donut takes shape. What used to be Krispy Creme is eventually going to look like a pretzel. Sometimes the slow creeping trends are what can give you the creeps. Of course owning physical gold can allow for rapid movement of wealth that is not hampered by the wait of a real estate sale.

USAGOLD / Centennial Precious Metals, Inc.

(07/27/2002; 10:58:07 MDT - Msg ID: 81614)

In bookstores for $14.95 (plus tax). Get it here for ONLY $5.95 ($3 postage)

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

"Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

Gandalf the White

(07/27/2002; 11:30:41 MDT - Msg ID: 81615)

WOWSERS SIR Slingshot ! You have my FULL attention NOW !

slingshot (7/27/02; 08:27:32MT - usagold.com msg#: 81609)
Seige Engine
===
The PROMO check is "in the mail" !
WOW, WHAT an Agent !!
<;-)

Mr Gresham

(07/27/2002; 11:41:16 MDT - Msg ID: 81616)

"Who ARE these guys?"

You are an _amazing_ bunch!

One of my "life mysteries" has been trying to figure out if humans overall are smart, or stupid (self-destructive). I mean, the behaviors go both ways, don't they?

Like I've said before, if you are "average" human citizens posting here, then my hope for renewal after the shakeout may just survive long enough to see it.

I should be working -- to rescue my remaining ass-ets out of the Fiat Fire -- but I can't resist reading every single word you write.

My thought on this week? When this thing goes where it is going, no one will be able to say we haven't paid our dues getting there...

nickel62

(07/27/2002; 12:23:51 MDT - Msg ID: 81618)

Remember who really got us into this mess, and even if the sheepel can't figure it out we ought to remember who he is>>>>>>

/26 Andrew Sullivan - The Dog That Didn't Bark � Just Where Is Bob Rubin These Days?

The New York Sun
EDITORIALS & OPINION

The Dog That Didn't Bark � Just Where Is Bob Rubin These Days?

Andrew Sullivan Wonders Why Questions Aren't Being Asked of Clinton's Treasury Guru - Where's Rubin?

You might think that the Treasury secretary who presided over the now-bursting bubble might be a logical subject for some of the discussion out there right now. But: Nuh-huh. Like Waldo in a cartoon, Robert Rubin is somewhat invisible these days, lost in the lazy media impulse to blame whoever's in power now. But think about it for a minute. Here's a guy who poured cold water on Alan Greenspan's "irrational exuberance" comments. Along with Phil Gramm, he helped kill legislation to make derivatives more transparent � and then he went to Citigroup the same year the bank engaged in a dubious scheme to keep Enron's paper profits afloat. He's widely synonymous with the boom that just went bust in a big and very bad way. Worth a reporter's phone-call or two, wouldn't you think? Nada in the New York Times (surprise!), the Washington Post, the Wall Street Journal � or anywhere, as the story broke. Even liberals like Slate's Tim Noah picked up on this weird lacuna.

Of course, Mr. Rubin hasn't really been absent from the media these last couple of weeks. He has one of the best media rolodexes in the country and spends almost as much time as Colin Powell and Richard Holbrooke manipulating it. There was a piece in the Washington Post last Sunday on the financial crisis and its roots, but it wasn't likely to ask questions about Mr. Rubin's responsibility. Why? Because Mr. Rubin wrote it himself. I guess it saves time for financial reporters. Rather than get a reporter to translate Mr. Rubin's views into a "news" article, the Post cut out the middle-man and got Mr. Rubin to do his own spin himself.

Or take Gloria Borger's piece in U.S. News. She asked herself the good and important question: Was this Bubba's Bubble? Just because the Nasdaq went up 80% in one year on his watch, just because interest rates stayed artificially low, just because his Treasury secretary kept talking up the markets, just because staffing at the SEC in New York collapsed in those years � none of that means President Clinton had anything to do with it. How does Ms. Borger know this? Because Mr. Rubin told her! "Blaming Clinton is absolutely ridiculous," Mr. Rubin is quoted as saying in her piece. "We all have our faults, and Bill Clinton has his faults. But money and greed are not among them." This follows the Clintonian device of asserting that the only impropriety or misjudgment in Mr. Clinton's eight years was a sordid extra-marital affair. But that isn't the point, Gloria. We've just gone through a wrenching boom-and-bust. Who gets the blame for letting the boom get out of hand in 1998 and 1999? "Corporate debt was up and so was the stock market. There had to be a period of adjustment," Mr. Rubin tells Ms. Borger. "Who gets the blame? No one in particular, says Rubin." No one in particular? Hmmm. Whom could Mr. Rubin have been thinking of?

Even if you buy the notion that the bubble was something the Clinton administration could not have done much about (although Mr. Greenspan is another story), isn't the Mr. Rubin angle noteworthy? He has already conceded he placed a call to the Bush Treasury Department, floating the idea of an Enron bail-out before the company's collapse. His own bank, Citigroup, is now being investigated for constructing a phony pre-pay scheme to hide Enron's losses in 1999. He was the most senior administration official in charge of the economy when the boom reached its crazy peak. Wouldn't this disqualify him just a little bit from being regarded as neutral on these matters? Wouldn't it even require some reporters to put in a couple of qualifiers to his comments? Nope. Who do they think he is? Mr. Powell?

TownCrier

(07/27/2002; 12:45:30 MDT - Msg ID: 81619)

An update is in! -- Rocket School of Economics: "Gold Bugs Beware -- part 2."

http://www.usagold.com/gildedopinion/rocketschool/vonbraun.htmlThe Professor, back on June 10th sounding one of very few cautionary notes to be found about the vulnerability of gold stock investments in the midst of their investors' ebullience at the runup, now follows up with another caution that the worst may not yet be over for the mining sector. Again he emphasizes that in this market, gold, free of any counterparty liabilty, remains the most attractive investment vehicle going forward.

Click the URL above to review this latest commentary, with access to the previous.

Mr Gresham

(07/27/2002; 13:36:10 MDT - Msg ID: 81620)

"Can't you smell that smell?"

http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=13923Excerpt below from Doug Noland -- I read until I couldn't take it anymore. He quotes from JPM's description of its "BISTRO product". The smarmy smugness of someone sailing a homemade hydrogen balloon over New York City with 2,000 passengers onboard on a hot July afternoon oozes from it. Lawyers are gonna make a lot untangling these rats' nests. Or are they? Hydrogen blowing up produces H2O -- water vapor -- and it's hard to catch hold of that. (Yikes! I'm starting to sound like GR2 -- ;) loved your latest, man! ;)

Begging the question: "Why the complexity, if not to conceal the lack of true economic worth?"

For me, SPV also stands for "Special Purpose Vocabulary", and cons always develop an "insider" language to work their marks, and stay a step ahead of the "authorities". This one will be right there in the History of Con Games with Ponzi, chain letters, and MLMs, only bigger.

Enjoy!

Noland: JP Morgan was instrumental in developing sophisticated Credit default "structured transactions," with the development of its BISTRO product back in 1997 (convenient for the imminent telecom debt Bubble!). From JP Morgan's website: "JP Morgan's BISTRO product is a synthetic CLO [collateralized loan obligation] where risk transfer is achieved via a credit default swap on a large portfolio of reference entities rather than through a sale of the specific assets. This allows banks to buy credit protection to mimic the regulatory capital treatment of a traditional securitization while preserving its competitive funding advantage. Specifically, an originating bank buys protection from JP Morgan on a portfolio of exposures via a portfolio credit default swap and JP Morgan, in turn, purchases protection on the same portfolio from the BISTRO SPV [special purpose vehicle]. The originating bank provides credit enhancement through retention of the first loss risk. The BISTRO SPV is collateralized with government securities that it funds through the issuance of notes, whose notional is substantially smaller than the notional of the reference portfolio. The BISTRO Notes are credit-tranched and sold into the capital markets."

misetich

(07/27/2002; 13:44:51 MDT - Msg ID: 81621)

The J.P. Morgan Chase Watch

http://www.innercitypress.org/jpmchase.htmlSnip:

Update of July 22, 2002: on July 16 Morgan Chase denied rumors in European markets that it was having liquidity problems. "The rumors are untrue and irresponsible," a company spokesman said in New York. The bank's stock fell in European trade. Dealers there cited rumors of liquidity problems... Morgan Chase's operating earnings, announced on July 17, were below expectations, missing analyst estimates by 7 cents a share. Profits were hurt by its large emerging-market debt business, Dina Dublon, the chief financial officer, said in a conference call. Ol' Ms. Dublon stressed that she did not think that the bank's corporate businesses were ready to rebound. "We have not seen a turnaround yet, and we are very cautious about the outlook for market-sensitive businesses for the second half of the year," she said. The N.Y. Times opined: that response disappointed some analysts and investors who have been waiting since J. P. Morgan and Chase Manhattan merged at the end of 2000 for profits to revive in the company's investment banking and lending businesses. The Financial Times: " JP Morgan [Chase] reported operating earnings of $1.17 billion, or 58 cents a share, during the quarter - up 50 per cent from the same period a year earlier. The comparison is somewhat misleading because the bank wrote down $1 billion in losses during the second quarter last year for its massive private equity portfolio, JP Morgan Partners. JP Morgan wrote down another Dollars 125m this quarter - mostly on its private holdings." In other news for Morgan Chase, the company was named as a defendant in the lawsuit filed last week by three California pension funds against banks that underwrote corporate bonds forWorldCom. The pension funds, led by CalPERS, are seeking $318 million in damages... Until next time, for or with more information, contact us.

...................

Update of July 8, 2002: As the Enron case turns: two weeks ago Chubb filed a direct claim against Morgan Chase, stating that the bank "surreptitiously lent money to Enron, by way of Mahonia, and expected to be repaid . . . by Enron, with interest" directly or via other offshore vehicles. A bit delayed, Morgan Chase general counsel William McDavid played the populist card: "What's interesting here is that the insurance companies in this case have done what some insurance companies do all too often. They take in premiums for years, but when a claim is made, they litigate and try to fight paying the claim." Morgan Chase claims that everyone, including the insurers, "knew that the (Mahonia) deals were part of a structured financing transaction for Enron's general corporate benefit." What interests or should interest regulators, especially the Federal Reserve, at least as much as NY D.A. Morgenthau, is whether these were in reality loans that the bank did not declare. You thought banks were regulated but it may be that you were wrong, as least in this case...

....................

Update of June 24, 2002: "We've heard the deck chairs on the Titanic were comfortable -- and the management buzzwords hypnotizing" -- the executive dining suites at the top of Morgan Chase's midtown Manhattan headquarters now contain two pool tables as well as ping-pong, pinball, and foosball tables. Rather than referring to Nero, press accounts state that "it's all to entertain executives going through the company's management training course, Leadership Morgan Chase. Groups of about 100 mid- to senior-level executives attend the two-day course each month. They sit through intensive sessions, including motivational speeches by former and current business leaders" -- whether Jack Welch is now worth what Morgan Chase paid him is a question we have -- "and at the end of the day the doors are unlocked, and the session attendees are let loose in the makeshift arcade. Bill Harrison, Morgan Chase's chairman and CEO, says that he stays late and shoots pool with the gang, and that he is 'pretty good.'" We envision that Mr. Harrison will have a lot more time on his hand for pool in the near future.... More numeric: Morgan Chase has about $2.7 billion in exposure in Brazil. Argentina had hit the bank's profits by $411 million. "We're very comfortable with our levels of exposure in Brazil and we're comfortable with our business model in Brazil," said J.P. Morgan Chase spokeswoman Brooke Harlow. And the foosball players spin...

Update of June 17, 2002: Remember the Chase - Sumitomo copper trading scandal in the 90s? Earlier this year Morgan Chase settled up with Sumitomo for more than $120 million. The Financial Times of June 14 explains why: in essence, Sumitomo's Yasuo Hamanaka had only been "able to stay in business because of a secret payment made to a J.P. Morgan [Chase] banker, which has been linked to a loan that the U.S. bank advanced to the trader." We will not reiterate the FT's fine investigative article here, only the conclusion: "JP Morgan's decision to settle with Sumitomo means there is little likelihood of Winchester Commodities' unusual cash payments ever being fully investigated. Whether the Dollars 100,000 cash payment was ever connected to the arrangement of the JP Morgan loan will probably never be fully resolved. But it seems unlikely JP Morgan would have paid Sumitomo more than Dollars 120m if it had a completely clear conscience."

On more recent Morgan Chase scandals, Investment Dealers Digest of June 10 quotes a New York-based banking analyst that "a senior J.P. Morgan Chase official told him recently that the New York giant took a hit on credit derivatives related to Enron Corp. and Argentina late last year. This occurred shortly after J.P. Morgan issued its fourth-quarter call report talking about overall derivative losses for 2001, saying it had $376 million in such losses, much of it related to Enron and Argentina in the fourth quarter. The bank did not specify whether or not any of these losses were on credit derivatives... Analysts put the value of the underlying credits in J.P. Morgan's credit derivatives portfolio around $24 trillion." Ah, Morgan Chase...

.............

Update for May 13, 2002: Enron-related? Two weeks ago, Morgan Chase's "managing director of global commodities," Dinsa Mehta, abruptly left the company. Mehta was centrally involved in the Enron - Mahonia trading into which the House Committee on Energy and Commerce has been inquiring since March. In New York, Morgan Chase "global bullion risk manager" Donald Eckert said that Mehta "volunteered for retirement" after the global foreign exchange and gold trading desks were consolidated into a single department. "He was not fired at all, he chose to resign," Eckert said. The timing may be of interesting, including to the House Energy and Commerce Committee.... [See update in Report of May 20, 2002].

.............

Misetich

The J.P. Morgan Chase Watch

Got gold?

TownCrier

(07/27/2002; 13:45:37 MDT - Msg ID: 81622)

Bill for "fast track" trade authority gets set upon fast track

http://www.cbc.ca/cp/business/020727/b072704.htmlWASHINGTON (AP) - The House on Saturday narrowly endorsed a major trade bill that U.S. President George W. Bush says could be a key to American supremacy in the world economy...

The pre-dawn 215-212 vote to give the president broad trade negotiating authority came some 11 hours after Bush travelled to Capitol Hill to personally appeal to Republicans to support him.

Key elements of Trade Promotion Authority:

-Gives the president the authority to negotiate international trade agreements subject to a single yes or no vote by Congress without amendments.

-Sets overall negotiating objectives, including to reduce trade barriers...

-Makes it a goal to reduce tariffs and barriers that decrease market opportunities for U.S. companies for the service industry, intellectual property, electronic commerce and textiles.

-------(see URL for more details)-----

Gold shines better in the sun than in the rain, but come what may, it shines.

R.

TownCrier

(07/27/2002; 13:59:00 MDT - Msg ID: 81623)

Some face decisions tougher than "What's for lunch?"

http://www.zawya.com/Story.cfm?id=1027696951nL25322769&Section=Main&page=Home&channel=Features%20and%20Analysis%20&objectid=C5C3675B-FF61-11D4-867D00D0B74A0D7CHEADLINE: ANALYSIS-Iraq, euro cast cloud over Blair's holiday sun

Excerpts:

At a news conference in his Downing Street home on Thursday, Blair hoped an aide would dazzle reporters with a blizzard of graphs, showing how key public services were improving.

But nobody was interested.

Instead, Blair was barraged with questions about backing a U.S. invasion of Iraq and facing up to his key domestic poser -- whether to urge Britons to join Europe's single currency.

Blair insists he has not ruled out a referendum on euro entry. But the public likes the pound and should he stake all on the vote and lose, his political standing would be shattered.

At least that is his decision though. Possible military action against Iraq is in the lap of President George W. Bush, who has declared it part of an "axis of evil".

Blair has made a virtue of standing unwaveringly beside Bush since September 11 attacks on the United States, making it almost impossible to decouple if America did target Saddam.

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

What was your week's hardest choice? Like most, it was probably a financial one. There *may* be a point to this...

R.

aussie

(07/27/2002; 14:03:31 MDT - Msg ID: 81624)

Good One Rich!

Thanks for explaining to this novice here that Ted Butler is an analyst.

There is one thing for sure, - nobody could accuse you goldbugs of not having a sense of humour!

Cheers

Black Blade

(07/27/2002; 14:12:54 MDT - Msg ID: 81625)

WALL ST. EXEC IN SUICIDE

http://www.nypost.com/news/regionalnews/19723.htm

Snippit:

July 27, 2002 -- Wall Street veteran Edwin Crooks Jr. yesterday jumped to his death from the sixth-floor window of his deluxe Rector Place apartment after struggling with someone who was trying to stop him. "This [the market slump] is nothing compared to 1987," said one close friend. "[He's] a veteran broker who can handle the ups and downs of the market." "This is an awful tragedy, and we are terribly saddened by his death," said a spokeswoman for Goldman Sachs, the parent company to Spear, Leeds & Kellogg.

Black Blade: The beginning of a deluge of swan-diving Wall Street brokers? I think that someone had better look over the books. Hmmm�

Black Blade

(07/27/2002; 14:22:40 MDT - Msg ID: 81626)

The Glory of Gold by By Jonathan Hoenig

http://smartmoney.com/tradecraft/index.cfm?story=20020724&adv=articles&advtype=tradecraft
July 24, 2002
PERHAPS IT'S TAKEN the evaporation of trillions of dollars of stock-market wealth and several of the biggest corporate bankruptcies in history to get us thinking, finally, about the risks associated with paper assets.

While some of you might think hard assets like gold bullion are owned only by Montana Militia types, I've found owning gold to be a satisfying, prudent and (lately) profitable endeavor. And with U.S. equities and the dollar in virtual free-fall these days, my interest in the precious metals has become something of a fetish. (rest of article is for paying subscribers � no thanks).

Black Blade: Jonathan Hoenig is known as "the Capitalist Pig" and is a frequent guest on FOX's "Cashin In".

Mr Gresham

(07/27/2002; 14:39:05 MDT - Msg ID: 81627)

Bread and Derivatives

http://www.larouchepub.com/pr/site_packages/2002/june_brazil_events/adesg_speech.html"So, the United States has been living on Japan, on China, on other parts of the world, from which, under the existing monetary-financial system, an IMF system, was able to extract product, from the world, in much the same way that the Romans once, after the conclusion of the Second Punic War, relied increasingly on looting the world around them, as a way of surviving. And it was that looting of the world around the Roman Empire, which ultimately, in a long process, brought about the collapse of the Roman Empire. Because Rome destroyed its ability to survive, by depending upon the nations it was looting. And when that looting no longer was possible, then Rome itself collapsed. That is the condition of the United Kingdom, and that is the condition of the United States today.

"So, that's what the current account deficit really reflects."

(BTW, I have no knowledge as to whether LLR deserves the controversial reputation he has, but I DO love to read history, and anyone providing such an overview will get my attention. Advice: He goes in and out of long wind-ups to his intended points. Skim until you find parts that grab, or you may not survive such a long read.)

TownCrier

(07/27/2002; 14:40:03 MDT - Msg ID: 81628)

Pakistan has money to burn

http://www.dawn.com/2002/07/27/ebr1.htmHEADLINE: Govt to hire fund managers: Productive use of forex

KARACHI, July 26: The government is consulting triple 'A' rated international fund managers for the productive utilization of its foreign exchange reserves now close to 7 billion dollars.

Well placed authoritative sources say that the government has decided in principle not to place these reserves in any equity and speculative business but would invest it in fixed income fund.

[Finance Minister] Shaukat Aziz said that government's focus was on the growth and not on the revenue. "Revenue is generated by growth," he pointed out. He said that well directed policies have resulted in foreign exchange reserves going up to 7 billion dollars and a market driven foreign exchange rate.

He defended State Bank of Pakistan's intervention in the currency trading which has kept the dollar rate stable around Rs60 without which it would have come down to Rs55 and could have exposed exporters to huge losses.

------(full text at url)------

If it's growth that's wanted, Pakistan should consider growing the size of its 65 tonne gold asset base.

R.

TownCrier

(07/27/2002; 14:48:34 MDT - Msg ID: 81629)

Some more History for Mr. Gresham, everyone

http://money.telegraph.co.uk/money/main.jhtml?xml=/money/2002/07/27/ccmkts127.xml&sSheet=/money/2002/07/27/ixcoms.htmlHEADLINE: 1974? Now that was a bear market

UK Telegraph -- 27/07/2002

The very fabric of society was under threat in last slump, writes Philip Aldrick

For those with long memories and greying temples, the latest 31 months of bear market contraction scarcely warrant a damp brow. But 1974 - now that was a bear market. Stocks slumped, companies faced collapse and the very fabric of society came under threat.

"It was Armageddon," recalls Brian Winterflood, chairman of Winterflood Securities. "It was about whether communism would win, and the end of capitalism."

...Speaking at the time, Jim Slater, the founder of the boom-to-busted Slater Walker empire, summed up the nation's mood when he said people needed just three things - baked beans, Krugerrands and a gun to protect your family. ..."We were really in the doldrums. I personally had tinned food in the attic and Krugerrands buried in the garden. I'm serious."

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

Good perspective on what is, was, and may yet come to pass.

R.

TownCrier

(07/27/2002; 15:03:35 MDT - Msg ID: 81630)

Julian Baring -- again

http://www.usagold.com/Denver/19970610.htmlIn light of the very recent market activity w/r/t gold, this speech warrants a reread for all those who haven't already committed it to memory.

R.

misetich

(07/27/2002; 16:00:47 MDT - Msg ID: 81631)

Big Banks Prepaying The Piper

http://www.forbes.com/business/2002/07/24/0724topnews.htmlSnip:

At issue at the hearing were a series of

More on Enron

Tear Sheet

transactions known as prepays, in
which a commodity trader promises to deliver a commodity in the future, but gets cash in advance from a financier. Normally when the trader gets paid for the commodity--whether it's oil, or electricity or anything else--he repays the financier. If there is a legitimate commodity deal, it's a standard arrangement, the bankers say. But in this case the commodity trader was Enron, so things got hairy.

Senate investigators say the banks helped Enron fake commodity trades so they could make what would ordinarily be billions of dollars in loans to Enron in ways that would let Enron avoid disclosing the debt to investors. Had Enron accounted for the loans properly, they would have shown roughly $14 billion in debt on its balance sheet rather than $10 billion. Had investors understood the true story of Enron's finances, they would have known to pull out of Enron stock much earlier, the investigators suggest.
.................

As it happened, the two banks are now among Enron's biggest creditors and are collectively on the hook for roughly $4 billion--big money even for them. Their losses will dwarf the roughly $200 million in fees the bankers collected at a time when Enron was hailed as the seventh- largest company in America.

Meanwhile, the two big banks, along with others, are defendants in civil suits by Enron shareholders, are likely subjects of criminal probes and have seen their analysts embarrassed for their rank ignorance about what Enron was doing.
.............
For J.P. Morgan, the same issue was vetted three months ago. At that time, a U.S. district court judge, Jed Rakoff, (the same judge involved in the WorldCom (nasdaq: WCOME - news - people ) case) ruled preliminarily in a dispute between J.P. Morgan and its insurers that J.P. Morgan's transactions with Enron appeared to be fraudulent: "These arrangements now appear to be nothing but a disguised loan--or at least have sufficient indicia thereof that the court could not possibly grant judgment to the plaintiff,'' Rakoff wrote in denying a motion by the bank. (See: J.P. Morgan Loses Round One.)
...............
J.P. Morgan still says the deals were legitimate and that "We had appropriately limited our Enron exposure by mitigating our risk through surety bonds, letters of credit and collateral." The insurers, of course, have refused to pay for the bank's loss. The bank has said its total exposure to Enron is $2.6 billion and that it has already written off $500 million of that total. This exposure could, of course, grow substantially if the shareholder lawsuits are successful.

In the lawsuit between J.P. Morgan and its surety insurers, Judge Rakoff found that Enron was buying nearly the same amounts of natural gas from a company called Stoneville as it was putatively selling to another company called Mahonia. Stoneville and Mahonia appeared to be owned and operated by the same people. Therefore it appeared that the bank was giving money to Enron based on a sham natural-gas trade.

What remains unclear is who was behind Mahonia, Stoneville and the other offshore entities involved in the Citigroup deals. The banks denied yesterday that they controlled the companies.

If there is anyone out there who knows the full story, he's not talking.
***********************************************
Misetich

JP Morgan TRAIL is definetely HOT HOT HOT and getting HOTTER - Will it end up freeing gold?

Lets see JP Morgan admit Enron owes them 2.6 billion of which they have taken provision of 500 million

They thought they were 'insured' but lost round one in that case

http://view.atdmt.com/OGI/iview/frbscbro00100051ogi/direct/01?
In the ruling, U.S. District Court Judge Jed Rakoff said insurance companies could withhold, pending resolution of the dispute, $965 million in payments on surety bonds to J.P. Morgan Chase (nyse: JPM - news - people ), a top Enron (otc: ENRNQ - news - people ) creditor, because there was sufficient evidence that Enron transactions presented as oil and gas sales were actually disguised loans.
"These arrangements now appear to be

More on J.P. Morgan Chase

Tear Sheet

Forbes 500s

nothing but a disguised loan--or at
least have sufficient indicia thereof that the court could not possibly grant judgment to the plaintiff,'' Rakoff wrote in denying J.P. Morgan's summary judgment against the insurers. The case will move into its discovery phase with a trial date--if it gets that far--set for December, the one-year anniversary of Enron's bankruptcy filing.

The bonds are designed to insure against the failure of a party to pay its obligation in a commercial transaction. In this case the transaction was designed to cover six natural gas and crude oil contracts with Mahonia-- an entity organized under the laws of the Channel Islands and affiliated with J.P. Morgan Chase--between June 1998 and December 2000. The insurers, including Chubb (nyse: CB - news - people ) and CNA Financial (nyse: CNA - news - people ), claimed that the Enron-Mahonia transactions were not legitimate sales, but disguised loans by J.P. Morgan to Enron.

As a result, the judge refused to force the insurers to honor the bonds, which the bank claimed required them to pay Mahonia when Enron filed for bankruptcy and failed to comply with its obligation to deliver the oil and gas, which Mahonia had paid for already.

In denying J.P. Morgan's motion, Rakoff pointed to insurers' evidence that Enron was buying nearly the same amounts of gas at nearly the same price from another entity called Stoneville Aegean at around the same time that it was selling gas to Mahonia. Stoneville and Mahonia, it appears, were set up by the same company, have the same director and the same shareholders, the judge wrote. It seemed, therefore, that J.P. Morgan was passing cash to Enron through Mahonia. Enron was supposed to be supplying oil and gas in return, but never was. J.P. Morgan was, rather, buying that energy from itself--and using the ruse as an excuse to make apparent loans to Enron.

.............

JP Morgan exposure in Brazil is over $2.6 billion

and plenty more exposure to telecom etc

How will it end? As Jim Sinclair points out the Feds will not want to be associated with crooks that got caught

Got gold?

misetich

(07/27/2002; 16:11:01 MDT - Msg ID: 81632)

Wall Street's Worst Nightmare

http://www.forbes.com/business/forbes/2002/0812/044.html?_requestid=946Snip:

oseph Borg, a combative Alabama state securities regulator, is going after The Street. How many SECs will brokers have to answer to?

You don't mess with Joseph P. Borg. A former corporate and personal injury lawyer from Queens, N.Y. and the current Alabama state securities regulator, he hasn't lost a criminal case in five years. Since 1998 he has averaged 28 criminal convictions a year, one of the highest rates in the nation for a securities enforcer.

This might be of mild interest to non-Alabamans, except that Borg, 49, is now extending his pugnacious reach across the country--and aiming at Wall Street. If you thought New York's ambitious Attorney General Eliot Spitzer had overstepped his purview by going after Merrill Lynch, watch Borg.

Borg is the guy leading a coordinated states' investigation of wrongdoing on Wall Street--things like conflicts of interest between investment banks and analysts paid to cover their clients. His authority? He's president of the North American Securities Administrators Association, a $5 million (annual budget) nonprofit representing regulators from all the states, plus Canada, Mexico and the U.S. territories.

Already investigators from the 44 states that signed on are scouring thousands of pages of documents and e-mails from a dozen brokerages, including Goldman Sachs and U.S. Bancorp Piper Jaffray, hoping to turn up evidence that somebody violated a state securities law. Administrative or civil charges may not be enough, pronounces Borg: "If I find lying, cheating, stealing, that calls for jail time."

Wall Street, busy responding to federal investigations, is not happy with this posse of state-level enforcers. State regulators are probably best known for chasing away boiler rooms and bucket shops. But in the last few years the states have teamed up to go after microcap stock floggers, day-trading outfits and even companies like Lloyd's of London and Prudential, the latter of which paid $1.5 billion in the 1990s to resolve its limited partnership cases.
..............

Borg dismisses that scary prospect as a red herring, and so far he has faced down heavy lobbying by Wall Street to handcuff the states. In June Morgan Stanley head Philip J. Purcell went to Capitol Hill to push such legislation. In response, Borg made the rounds among legislators and held a press conference where he called Purcell's move "shameful, cynical and brazen." In the current environment, it was enough to kill the measure.

********************

Misetich

SEC, Congress, Senate, State Attorneys, investors, insurers and others going after investment banks

Got gold?

Pan

(07/27/2002; 16:13:13 MDT - Msg ID: 81633)

!!! Explosiv !!! Just a rumor, or even more ??? New goldstandard is planed!!!

http://f17.parsimony.net/forum30434/messages/134229.htmSorry, the posting is in german, on a german page, displayed today, but perhabs there is someone, who could translate it to english please.

My englisch writing knowledge is not sufficiently.

It is incredible, if this message is truth!

YGM

(07/27/2002; 16:19:47 MDT - Msg ID: 81634)

misetich, Town Crier, Black Blade.......

Man you guys are on a roll today........You've been dredging up some very serious and profound info today....Many thanks.....YGM

YGM

(07/27/2002; 16:27:27 MDT - Msg ID: 81635)

Pan

http://ets.freetranslation.com:5081/Here's a site for free translation just copy & paste...I'm still trying to make heads or tails of my translation...Free site but still not entirely understandable.....YGM

misetich

(07/27/2002; 16:27:29 MDT - Msg ID: 81636)

What earnings recovery?

http://www.forbes.com/global/2002/0708/065.htmlSnip:

And if investors buy stocks now on the strength of rapturous earnings estimates for the S&P 500 for 2002, they have an unpleasant surprise ahead. The index is trading at a projected price/earnings ratio of 21, based on analysts' estimates of operating earnings for component companies. The P/E for 2002 is 40% higher than the average multiple for the index over time and is sharply higher than the S&P's multiple in other bottoming periods. In the recession of 1990-91, the S&P 500 traded at a P/E of 14; and in the bear market of 1973-74, it was 7.

Earnings performance for 2002's first half was a sorry one. Company after company was forced to lower expectations or restate past results downward. How can the consensus justify such a healthy-looking multiple for the year as a whole? By forecasting a second-half profit boom that gushes up from nowhere: a 48% gain (from a year earlier) in the third quarter and a 45.7% one in the fourth, according to S&P analysts' forecasts. Included in the forthcoming profit explosion, as reported in First Call, are a 127% income increase in technology stocks in the third quarter and a 73% jump in the fourth and a hardly modest 19-fold rise in transportation earnings in the third quarter (mainly airlines), with an even larger gain forecast for the fourth.

It doesn't matter who is doing the forecasting--analysts who cover individual companies or market strategists who look at the economy as a whole. They're all Pollyannas. The company-by-company forecasts, assembled into a composite for the index, yield $51.15 in earnings for the S&P 500 this year. The big-picture fortune-tellers predict $45.01. These guys simply look at the operating earnings delivered last year and add a large growth factor plucked from the optimism in the air.

Optimism is almost always in the air. A study I did of estimates between 1982 and 1997 found that analysts' forecasts of earnings growth were on average triple the actual earnings growth of the S&P.

Misetich

Investors have been and more importantly are still being deceived by Wall Street analysts etc.

What is their game plan? Total wipeout of middle class savings and retirement?

It is time to get defensive and add physical gold as insurance to any portfolio

Got gold?

Horatio

(07/27/2002; 16:54:13 MDT - Msg ID: 81637)

Anglo

Looks like Anglo knew what it was doing when it hedged its gold and took the cash out of the country.That verifys what I have been saying for years.This whole hedging business was just a ploy to get wealth out of the ground before Mandela and his cronies could confiscate it.Its very simple ,borrow the gold 'sell it,take the cash out of the country and leave Mandela the communist with a mine that has a mortgage on it and a lien on the next 15 years worth of production.It was a brilliant move.
Now the confiscation comes to light and the biggest losers are the non-hedgers,because they took nothing out in advance.
I would not applaud hedgers in general ,but this move was necessary to salvage sommething.I expect S.A. mines to become unprofitable because of falling Dollar coupled with rising Rand and worker demands for more.....Gold should rise if S.A. mines become unprofitable or close.The only thing that can help S.A. now is higher prices,maybe the Cabal of Socialists had it planned this way in order to get control of the mines and then let the price rise. Then again maybe i'm too cynical....

R Powell

(07/27/2002; 17:11:29 MDT - Msg ID: 81638)

misetich

In regards to your 81632 post,
Is it really true that we have the Borg after Wall Street. Will they surrender? Resistance is futile!
Happy Saturday nite
Rich

Black Blade

(07/27/2002; 18:02:01 MDT - Msg ID: 81639)

'Stockalypse' Gives Sinking Feeling

http://biz.yahoo.com/rb/020727/column_stocks_week_2.html

Snippit:

NEW YORK (Reuters) - It's a betting game that the entire world is watching, as Wall Street investors could determine the course of the economy in the United States and abroad. Do they have the nerve to drive stocks up? The stock market's plunge has flushed out more than $7 trillion in wealth since the bubble burst in 2000 and people who got filthy rich during the Great Bull Market of the 1990s are suddenly feeling poor. Fair to wonder what impact this reverse wealth effect will have on consumer spending.

If the rope around people's necks winds tighter and they see more of their wealth go up in smoke, the risk is that consumers may tighten their purse strings, thereby shutting down the main engine driving the world's biggest economy and adding to Wall Street's woes. Indeed, people are getting tired of losing their shirts. Their 401(k) retirement plans have been turned into 911 emergency basket cases. The market is on course to post a third straight yearly decline. The last time that occurred was 1938 when investors were still reeling from the nasty memories of the Great Depression. The numbers speak for themselves. The Dow is down about 32 percent from its peak, the technology-laced Nasdaq composite has fallen an eye-popping 75 percent and the Standard & Poor's 500 is down 45 percent.

Black Blade: Wall Street and Washington had based their hopes on hordes of retiring baby-boomers spending big in their retirement years to keep the economy humming along. Unfortunately they have instead watched their retirements vanish into thin air as over $7 Trillion went away to "money heaven", never to be seen again. Now we have daily "Perp Walks" as CEO's are led away in handcuffs before the cameras all in order to deflect attention away from the bigger problems and most culpable scoundrels. Herbert Hoover Jr. continues to talk tough, yet he has done very little (not that he can do much anyway).

Black Blade

(07/27/2002; 18:08:16 MDT - Msg ID: 81640)

Got Bear Market Depressive Syndrome?

http://money.cnn.com/2002/07/26/pf/investing/q_bmds/index.htm
One shrink is seeing lots of it these days.

Snippit:

NEW YORK (CNN/Money) - Can't think clearly? Feeling out of control? Weighed down by guilt? And all because you checked your anemic 401(k) balance? If an overwhelming sense of inadequacy, shame and regret wells up every time you see the Dow trend down, you may be suffering from Bear Market Depressive Syndrome (BMDS). So says Dr. John W. Schott, a portfolio manager for Steinberg Global Asset Management and chairman of the Department of Psychiatry at MetroWest Hospital in Natick, Mass. The author of the book "Mind Over Money," Schott says he's seeing a lot of cases of BMDS these days. Some of the telltale signs include feeling more worthless than a share of Worldcom and hopeless about your financial future.

Black Blade: So it's a syndrome now is it?

Gandalf the White

(07/27/2002; 18:23:07 MDT - Msg ID: 81641)

Thanks Sir Pan ---- IT looks INTERESTING !

http://f17.parsimony.net/forum30434/messages/134229.htmPan (7/27/02; 16:13:13MT - usagold.com msg#: 81633)
Babblefish.com translates the Title as:
New gold standard in view? Over a confused (?) G8-Paper
===
WHERE are you Contessa, when one need you ?
<;-)

Black Blade

(07/27/2002; 18:26:43 MDT - Msg ID: 81642)

Testing The Rebound

http://money.cnn.com/2002/07/26/markets/sun_lookahead/index.htm
Snippit:

The other big economic reports of the week are of less interest to economists than they may be to traders. Economists won't pay much attention to the second-quarter gross domestic product report on Wednesday. (They call it a rear-view number, telling us what things used to be like rather than what they are like now.) But it may still jolt the market. While economists think GDP grew 2.3 percent, their estimates could be wildly off this time around. The Bureau of Economic Analysis is revising past GDP reports, and without knowing what those revisions will look like it's hard for economists to calculate second-quarter GDP. Furthermore, points out James Padinha, economist at Arnhold and S. Bleichroeder, this first take of GDP relies on assumptions about how the economy acted in the final month of the quarter. We all know what can happen when you assume.

Black Blade: The Wall Street crowd is hedging its bet now with such dismissals as this being a rear-view number. They have a good deal of fear about revisions to past data. On Wednesday we will see how well this data is assimilated.

Black Blade

(07/27/2002; 18:43:08 MDT - Msg ID: 81643)

Aug. 14 certification deadline looms for CEOs

http://cbs.marketwatch.com/news/story.asp?siteid=mktw&dist=mktwmore&guid=%7BF81AD3F3%2D71AB%2D4C40%2DB10D%2D716F728DF384%7D3 problem areas for disclosures

Snippit:

WASHINGTON (CBS.MW) -- August 14 could be the day of reckoning for some companies, as the deadline for CEO-certified financial statements draws near. In a move aimed at bolstering investor confidence in the market, the SEC issued an order last month requiring the top executives of companies that have more than $1.2 billion in annual revenue, to personally swear by their numbers. But some people are worried that the effort will spark a wave of restatements, flooding the market with more bad news and dampening the confidence of scandal-weary investors even further.

Black Blade: "Restatement Season" on Aug. 14th. The "entertainment" is about to begin.

Mr Gresham

(07/27/2002; 18:53:19 MDT - Msg ID: 81644)

Dollar Hegemony, Henry Liu, & ORO

http://www.atimes.com/atimes/China/DG23Ad04.htmlWas the Henry Liu link from here? If so, I'm repeating it. Encouraging China to make its monetary move. US has taught them well; too well, perhaps. Machiavelli would be proud.

Wish we could have Oro here with us to add his extra dimension of insight to these moves, as he has done with Europe. I still don't know enough to refute or agree with his conclusions, but they always moved me off the comfortable middleground. By now, we all know enough of our own and others' personality traits to allow for them, and still effectively share this learning experience together.

And I still think we need an ORO archive. Time, events, and our own further educations might allow us to use such a resource as we use the Gold Trail. We recognize quality here, and so the recognition should follow.

Mr Gresham

(07/27/2002; 19:15:08 MDT - Msg ID: 81645)

FOA and Mentoring

Thought while walking back from coffee through an alleyway:

How many of us men have a generation-older man to give us his wise insight on the world we both inhabit, and a perspective similar to the one that we may hold 20-25 years hence?

Not the data or opinions given, or the correctness of them in some profit motive, but the opportunity to spend time in the presence of someone with worldwide experience, seasoned and broadened by time, as I now realize I have somewhat been, and hope more to be. I felt my viewpoint expanding as I read FOA, and I know others did, too.

Not even necessarily to come to the same conclusions, but to go through a SIMILAR process. A process of coming to know onesself, and accept one's place in the world. (Yeah, I know -- just in time to be leaving it ;(...Hey -- I'm looking for the POSITIVES in aging, lately ;) )

Most older men with that wisdom will not spend the time with us. Or we do not have ways established to make contact. (OK, maybe I need to spend less time on the Internet, and take up golf? ;)

And, most older people with less experience and power are marginalized by society, and ignored, having little faith perhaps in their own wisdom to be offered. So we are deprived, largely, of those experiences.

FOA was confident and humble in the right balance, exploratory as he has probably been throughout his several careers, active still and perhaps even more in world affairs, and now, willing to reach back to others who could not possibly pay him for his efforts.

Yet the joy of Mentoring surely had to be at the core of his prodigious work here and in the early postings with Another. It is a role that goes largely unutilized, unappreciated, and unrewarded in our "modern world" today, and so we probably do not learn how to respond to it, either.

Hopefully, FOA found the "ancient" satisfaction it must give as generation learns from generation, and misses us as much as we miss him.

Black Blade

(07/27/2002; 19:15:40 MDT - Msg ID: 81646)

Gold plunges as U.S. dollar regains favour

http://www.nationalpost.com/financialpost/story.html?id={F1DDAA2C-481F-4755-891F-77065E026621}

Snippit:

The latest market meltdown also took down the shares of gold companies, which have been a leading indicator for the price of the metal, said Doug Pollitt, an analyst with Pollitt & Co. Inc., a boutique Toronto brokerage. "People started getting their quarterly statements and said, 'Everything's down, gold is up -- sell the gold,'" said Mr. Pollitt. "This Chinese water torture [in equities] gets to people, and if they see something that's up, they want to monetize it. They started to look at gold stocks as being less gold and more stock." The elimination of Barrick Gold Corp. and Placer Dome Inc. from the Standard & Poor's 500 index has also fuelled the decline in gold stocks, Mr. Pollitt said.

But some people who have been bullish on gold see nothing in the latest decline to make them change their minds. "The factors that propelled gold to US$330 an ounce are still in place," said Mr. Ing. Some gold producers are starting to reduce their hedging programs, reducing the amount of gold for sale in the market, he said. (Randall Oliphant, Barrick's chief executive, admitted this week the mining company's extensive hedging policy is hurting its share price.) In addition, major gold miners are producing less of it, even though demand remains strong. And even if it goes back to where it was in June, that won't be enough to encourage them to pull more gold out of the ground, said Mr. Pollitt. Finally, despite its recent strength, all signs still point to a drop in the U.S. dollar, said Mr. Ing, who predicts gold will hit US$375 by the end of the year.

Black Blade: The reasons for gold investment remain intact. The excessive expansion in credit and the extreme accumulation in government, corporate, and consumer debt will destroy and pretense of the US dollar as a perceived safe haven. Also, starting in 2004 there will be a precipitous decline in world gold production as exploration activity is severely limited and older mines are played out. Even as demand for gold remains strong, there will be little chance of brining on any significant new gold production for several years, perhaps decades.

White Rose

(07/27/2002; 19:31:29 MDT - Msg ID: 81647)

Machine translation of message from #81633

Written of DOT gates on 27 July 2002 21:50:10:

Rear one,

it circulates a PAPER, which andenkt the possibilities of a new gs. The source is from the G8-Zirkel. The Konfident is the language, in that the PAPER it is present (which I could not rauskriegen) only causes powerfully, the paper however definitely on american quarto written, how was expressly confirmed on demand.

Starting point the usual. Confidence crisis etc.. Then a confrontation of the notes in the euro-area and the USA with approx. takes place. 1.3 bio for new covering are added the reciprocal "national" gold reserves, approx.. 13,000 tons. The USA want to hold last reserve and become the gold reserves given at IMF, so far recognizably, not included.

Roughly counted with a gold/euro-parity one proceeded and thus in the long run from a parity to gold from 10: 1 g, only to pending notes referred. Enormous and errechnungen...

In order to start the thing, are approx. in each case. 10 and 5 g (fine) heavy "starting coins" to be coined/shaped. The "goldmark" the Buba godfather obviously stood, only that at that time 1 Mark stood drauf. Now 100 became and/or. 50 drauf stands. Thus quasi an anchorage in the market via market price.

Coins only to small extent pronouncedly, as it were as signal. Remainder of the gold as covering and against notes over parity callably.

Covering is amusing-proves however only 10 % to be, which would create an enormous potential for further gold delivery. Those is to happen in the usual procedure (open market business). As is to be out-swung that, I could not solve.

Old coins are explained again as kursant, thus 20-$-Eagle again as 20 $. which thereby to imagine, white I not. Franc or markstuecke from old time to euro-parity converted.

Lower line is gold in accordance with condition of the attitude of the 10%-Deckung to be also purchased, into specie. So that there is no "cut" of the private gold owners, sufficient gold is present in the pool, in order to press the price in such a way that no sales takes place. Thus a split market develops in the first phase.

There is a passage, where the pool gold is confronted to the actually available private gold, the latter without decoration gold, from which one assumes that its market infiltration costs are too high, in order to let it melt.

The price for private gold in $ or is obviously to be pressed by continuing physical deliveries from the pool in each case, so that it finally settles down in such a way that with the 1/10-Deckung can be durably worked. Covering is played to the end in various variants.

Mines will have, cannot Andienungszwang at pool thus no more than offerers on free gold market into action go. Individual mines long and broadly specified.

London obviously opposes vehement. Should however before the alternative be posed to step either euro/dollar or to lose the Londoner gold market.

On the other hand regular driving of gold production down, with deactivation premium and a sealing premium, stands so that these can open again, as soon as the action is final and the productivity increases turn into with the point mines in the spill more over also on the other mines, which received in addition then again capital investment grants. For South Africa compensations are intended in hard currency $ and .

As time frameworks are 20/25 year in the discussion.

If ich's sum up correctly, in the long term De facto Facto-Paritaet of 85 would come: 1 out, if 15 % of the pool gold first one coined/shaped. Which should then finally fix the gold price in a "control LED down move" on 45 $//oz.. This probably, in order to suffocate inflation expectations.

The issuing banks are split opinion, there some it gold to the current rate balance (France), others (FRG) a balance post formed, which they could take immediately again from the balance. A reconciliation over the EZB is to be examined, quasi a vertical financial adjustment.

There is also conversions with the public loans in the eye calm, from which one expects that they receive as "gold covered" a clear interest anticipated payment, which would bring in response the national households in the long term to relieve and/or to a reconciliation. Circulating loans should, as soon as itself no more Zinsspread between $ - and -area (on disappearing the Zinsspreads with public ones there expressly taken off) shows by emitter notice to be converted.

At a round parity to the Yen still one files. Japan appears probably expressly as low interest ideal, anyhow, which concerns the public loans.

Not to get to know more at present, also not whether it is only a Working PAPER of any Sub Comittees or Think tank or more.

Anyhow it seems to be a matter only of a banknoten-Deckung into gold, which quasi automatically the state reorganization is to follow. Probably the whole is so confused and complicated that Insider, which have of it wind can make themselves also no clear Reim drauf. Whether the current nearly drophatchet-like development could be brought with gold and mines with it in connection, which would not be illogical, I do not know.

Greeting!

Mr Gresham

(07/27/2002; 19:58:43 MDT - Msg ID: 81648)

White Rose, Liu vs Roach

White Rose: Wow! Are you sure someone wasn't hustled away by the SA, as were Hans, Sophie, and Christoph, after they threw the (truth-telling) anti-Nazi leaflets from the student union balcony in Munich? Maybe FOA is over in Deutschland, digging through Welteke's office dumpster for unshredded memos?

Liu seems to have an answer for Roach's concerns about US consumer plunge throwing Asia into recession again. "SO WHAT!" Why worry about the small cyclical consequences within Dollar Hegemony, when it costs them so much overall. Now would be the time to break free, it's happening anyway, so make the best use to restructure their internal economy.

Of course, the kleptocracies within each country will fear to lose the easy tap they have into cash flows from exporting (Why pile up more devaluing Dollars?), if the benefits of change flow generally to the population at large. Well -- they'll just have to put on their thinking caps and come up with something new, won't they?

sector

(07/27/2002; 20:13:52 MDT - Msg ID: 81649)

@Sir. Gresham It was I that posted the Liu, Asia Times Piece

after a heads up from Maddog form G-E......who often delivers gems from across the pond.

Cavan Man

(07/27/2002; 20:15:06 MDT - Msg ID: 81650)

US Corporate Profits

07/27 10:16
Worsening Profit Outlook Threatens Gains: U.S. Stocks Outlook
By Robert Dieterich

New York, July 27 (Bloomberg) -- Don't count on corporate profit growth to spark further gains in U.S. stocks.

While analysts surveyed by Thomson First Call expect earnings for Standard & Poor's 500 Index members to rise 14 percent in the third quarter, the estimate ``keeps getting ratcheted down,'' said Don Ross, chief investment officer at National City Investment Management Co., which oversees $28 billion in Cleveland.

``And we think it's still too high,'' he said.

Investors are watching for reports from companies including Verizon Communications Inc., the largest local phone service provider, which reports next week. Rivals BellSouth Corp. and SBC Communications Inc. this week lowered their 2002 earnings forecasts.

In a week that began with investors concerned about a possible crash the S&P 500 and Dow Jones Industrial Average rose. Each had its biggest rally in almost 15 years on Wednesday and extended those gains. That followed the steepest two-week drop since the crash in October 1987.

``At the beginning of the week, we thought the world was coming to an end,'' said Kathy Cole Dodd, who manages value style funds at Bank One Investment Advisors, which oversees $148 billion in Columbus, Ohio. ``It's not a new bull market, it's not euphoria, but it's nice to see the market stop going down.''

Third Losing Year

Without improving profits, this week may only be a bounce in a bear market, some investors said. Benchmark indexes are down for a third year, and the S&P 500 fell to its lowest level in more than five years on Tuesday.

``The earnings really have to start coming through in the second half of the year,'' Ross said.

And the outlook is deteriorating. At the beginning of July, analyst forecasts called for an average 17 percent rise in third- quarter profits, according to First Call. On April 1, the estimate was 22 percent. Fourth-quarter profit forecasts are also slipping, to 25 percent growth today from 32 percent on April 1.

Second-quarter profits for S&P 500 companies grew an average 1 percent from a year earlier, after falling for five quarters, according to First Call. The tally uses results from the 75 percent of members that have reported and analyst forecasts for the rest.

``Clearly, companies are having trouble making money these days,'' said Jon Burnham, manager of the $140 million Burnham Fund. He recently sold the last of his shares of Siebel Systems Inc., which has also cut its second-half profit forecast.

Companies from software maker Microsoft Corp. to Caterpillar Inc., the biggest maker of earthmoving equipment, have lowered profit forecasts.

Concerns Peak

Investor unease, as measured by the Chicago Board Options Exchange Volatility Index, jumped Tuesday and Wednesday to levels not seen since previous market bottoms. The index topped 50 for only the sixth time in the 16 years since it was created. Prior peaks came during the market plunge following the Sept. 11 terrorist attacks and the 1987 stock-market crash.

The index, known as the VIX, measures what traders pay for stock-index options that protect against further market declines.

``There's no question that when you have the VIX spiking up like that, you're due for a change in trend,'' said Tim Heekin, head of trading at Thomas Weisel Partners in San Francisco.

Fears were stoked by the appearance of Citigroup Inc. and J.P. Morgan Chase & Co. executives before Congress to answer questions about the banks' involvement in the financing that led to Enron Corp.'s collapse.

Though indexes recovered in Wednesday's big advance, shares of the two biggest U.S. banks didn't come all the way back. Citigroup slid 15 percent this week and was the biggest drag on the S&P 500. J.P. Morgan shares fell 15 percent.

For the week, the Dow rose 3.1 percent, the S&P 500 added 0.6 percent and the Nasdaq Composite Index declined 4.3 percent.

Semiconductors

The extent of the decline and the pessimistic investor sentiment leading up to Wednesday's rally were taken as a positive by some investors because they suggested that those who were inclined to sell had already done so. Still, others harbor doubts about earnings and the economy.

``Ultimately, the economy drives stock prices,'' said Joe Stocke, who helps manage $800 million at StoneRidge Investment Partners in Malvern, Pennsylvania.

Computer-related stocks sank the Nasdaq. Taiwan Semiconductor Manufacturing Co. said it will cut its expenditures because the recovery in the chip industry is stalling.

Applied Materials Inc., the biggest maker of chip equipment, lost 15 percent, extending this year's slide to 29 percent. Teradyne Inc. fell 17 percent and Novellus Systems Inc. slid 17 percent.

The University of Michigan's sentiment survey was better than expected this week, though it still fell from last month. Investors are concerned that U.S. consumers may rein in spending as the stock market's declines cut into their wealth and the slowing of the economic recovery makes jobs less secure.

The government provides its first assessment of the pace of second quarter economic growth on Wednesday. Economists estimate that the economy grew at a 2.3 percent annual pace, down from 6.1 percent in the first quarter as the economic recovery slowed.

Also next week, investors get the latest read on consumer sentiment from the Conference Board. The research group's index is expected to fall to 101.5 in July from 106.4 in June, according to analyst forecasts.

Cavan Man

(07/27/2002; 20:16:01 MDT - Msg ID: 81651)

@USAGOLD

Mike, Your forum is better than it ever has been.

Cavan Man

(07/27/2002; 20:16:58 MDT - Msg ID: 81652)

Mr. Gresham

Regarding FOA; well said and, you're doubly right!

Cavan Man

(07/27/2002; 20:18:14 MDT - Msg ID: 81653)

sector

Hope you weren't offended by my line of questioning the other day. You are one of my favorites.

BILLYG

(07/27/2002; 20:23:23 MDT - Msg ID: 81654)

Charting Gold Stocks

After spending many days a year ago I was very bullish on gold stocks. Looking at them now I see more selling. The MACD line on the charts look like they have a long way to go on the down side. Check them out on a 4 or 5 year chart. Even the 20 day charts very few look like a bounce here. Never in my wildest dreams would I beleive gold stocks would crash 25 to 50 percent in just 5 days. I have to wonder what its telling us. Is the Bull Market in Gold over for the next 4 to 6 years again? We are just 6 1/2 points above the November 19 2001 low. Looks like we will take that out and maybe much more.

Max Rabbitz

(07/27/2002; 20:24:42 MDT - Msg ID: 81655)

Bush and the Economy

I think George W. Bush has one chance for avoiding what I thought since day one was the inevitable tag of Herbert Hoover Jr. Use the power of the FBI and Justice Department to investigate, charge, and attempt to convict those responsible for the mess, or at least those most recently responsible. The FBI and IRS no longer work for the Clintons and their friends. The media will be forced to cover the investigations/trials. Senators Corzine and Daschle need to be asked questions about Wall Street. Also, Robert Rubin, Larry Summers, and Terry McAuliffe. Exactly what did this "strong dollar policy" entail and who benefited? What political money was donated by JPM and Citibank? Senator Daschle, did your wife's employment have anything to do with your dislike for accounting for stock options? Mr. Greenspan, do you know who it was that approved the leasing of America's gold reserves? Bush has got to use the resources he has, just like the slick one. It's either that or it's history.

In the meantime, I am thankfull PM prices continue to provide a good buying opportunity. I stopped putting money in my tax deferred annuity earlier this year and am instead putting everything available directly into physical PMs. The tax deferral for annuities (403b's for me) seems more like just another paper con job. The words of our Trail Guide are growing clearer.

Mr Gresham

(07/27/2002; 20:26:29 MDT - Msg ID: 81656)

Henry Liu

http://www.atimes.com/atimes/China/DG23Ad04.htmlDo NOT miss this link. Took me awhile to get through it, but I think you will be seeing the shape of things to come. (What is it, 40+% of world's population in and around China?)

It seems that whenever politics goes off in a new economic direction, it latches on to an organizing ideology to refer its everyday decisionmaking to (or justify what it already wants to do.) Looks to me like Henry Liu is trying to be that man for Asia, with a grasp of history East and West, and with some ethical regard for what happens to the common man. (We can only hope that is taken into regard as well.)

Sir sector: Thanks again, then, for bringing this one in.

Sir Cavan Man: Thanks for making it that way.

Shermag

(07/27/2002; 20:33:30 MDT - Msg ID: 81657)

Sector, you got my curiosity two weeks ago

Hey Sector. On July 14 you posted:

"This Week Could see More Bad News for the Cabal and their US Officials
from several unexpected sources.
Can't be specific yet, but those who value the truth and wish the inappropriate market manipulation to stop have reason for hope this week.

The heat on the cabal is definitly going UP. The corruptors of free marrkets who live and work by stealth, in addition, are facing light like they never expected."

Can you be specific now? Has something slipped by us in all the turmoil of the past few weeks? Were you refering to some well known recent event? I am curious to know what specifically was on your mind when you posted this.

Mr Gresham

(07/27/2002; 21:19:40 MDT - Msg ID: 81658)

OK, one more and then I'll go home...

Truly demented indeed, apologies in advance, but how seriously can you take all this foolishness that goes on?

From my previous post: "Maybe FOA is over in Deutschland, digging through Welteke's office dumpster for unshredded memos?"

Leads to --> (I'm really gonna hate myself after I click this one in) da da! --> Bad joke o' th' day (for gold advocates only):::

What do you get when you go through Welteke's dumpster?

Euro trash.

Blackjack

(07/27/2002; 22:28:35 MDT - Msg ID: 81659)

Saudi Arabia teetering on the brink of collapse?

http://www.observer.co.uk/international/story/0,6903,764578,00.htmlSaudi Arabia is teetering on the brink of collapse, fuelling Foreign Office fears of an extremist takeover of one of the West's key allies in the war on terror.

Anti-government demonstrations have swept the desert kingdom in the past months in protest at the pro-American stance of the de facto ruler, Prince Abdullah.

At the same time, Whitehall officials are concerned that Abdullah could face a palace coup from elements within the royal family sympathetic to al-Qaeda.

Saudi sources said the Pentagon had recently sponsored a secret conference to look at options if the royal family fell.

Demonstrations across the kingdom broke out in March, triggered by a fire in a girls' school in which 14 pupils died after the religious police stopped them escaping.

Unrest in the east of the country rapidly escalated into nationwide protests against the royal family that were brutally suppressed by the police. The Observer has obtained secret video footage of the protests smuggled out of the country last week that shows hundreds of Saudis, including women, demonstrating in support of the Palestinians and opposition to the regime.

The Foreign Office believes that the failure of Abdullah's recent Middle East peace plan could have terminally undermined his position.

The Crown Prince's main rival, Prince Sultan, the Defence Minister, has been vocal in his opposition to Abdullah's pro-Western policy. His brother Prince Naif, head of the Interior Ministry, has led a crackdown on the Saudi media in the wake of the demonstrations to stop any word of them leaking out.

Abdullah has even sent his own representative to Washington to counter the influence of the ambassador, Prince Bandar, a son of Prince Sultan.

Anti-Abdullah elements within the Saudi government are also thought to have colluded in a wave of bomb attacks on Western targets by Islamic terrorists.

The authorities have blamed the attacks on an alleged 'turf war' between Westerners involved in the bootleg alcohol trade and have jailed five Britons, a Canadian and a Belgian for the bombings. But British intelligence sources have confirmed that the attacks were carried out by Islamists linked to al-Qaeda.

Earlier this year, the accused men were handed sentences ranging from execution to long prison terms. But lawyers acting for the Britons have told The Observer that they could soon be free.

The tensions between the royal factions will intensify with the death of King Fahd. The condition of the king, in hospital in Switzerland, is 'unstable', doctors said.

British-based Saudi dissident Dr Saad al-Fagih said: 'There is now an undeclared war between the factions in the Saudi royal family.'
________
This is a British newspaper story......nothing about this matter
in the US media.

TownCrier

(07/27/2002; 22:45:47 MDT - Msg ID: 81660)

Friday's gold price -- did you look a gift horse in the mouth?

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Stories%20World&tp=ad_uknews&T=news_storypage99.ht&ad=worldtop&s=APUKnlhR4RG9sbGFyThis one is a must read.

HEADLINE: Dollar May Decline on U.S. Growth Doubts: Currency Outlook

New York, July 27 (Bloomberg) -- The dollar may decline against the euro as statistics next week will probably show the U.S. economic rebound is losing steam.

``The message that continues to come through will be slowing growth'' and a struggling stock market, said David Durrant, a currency strategist at Bank Julius Baer. Foreigners will be reluctant to invest in the U.S. and ``that's bad for the dollar,'' he said.

Next week, the dollar, which reached a 2 1/2-year low of $1.0212 per euro on July 19, will probably cheapen again past the $1 level, Durrant said.

``This is just a little bit of a reprieve for the dollar before you get another leg down,'' said Paresh Upadhyaya, a currency analyst at Putnam Investments in Boston, with $313 billion in assets.

Concern that that growing shortfall [in the U.S. current account] will erode the dollar's value will also make investors who do keep funds in the U.S. more likely to hedge those holdings, effectively by selling dollars, he said.

[eventually] speculation about a [Fed] rate boost will spark selling of Treasuries and dollars, he said.

While investors such as Upadhyaya expect the possibility of a rate increase to hurt the dollar, other investors say that skimpy U.S. rates aren't helping either, because they don't give enough incentive to park money in the U.S.

-------(click url for more than these excerpts)-------

One sure way to avoid the "could-a would-a should-a" syndrome is to DO.

Centennial stands at the ready to broker your personal gold deal. Go on... be a high roller and own the wealth of kings.

R.

Black Blade

(07/27/2002; 23:01:03 MDT - Msg ID: 81661)

Saudi's Sudairi Seven Gearing Up for Power Play?

http://www.freerepublic.com/focus/news/722927/posts
Summary

An odd series of visits to Saudi Arabian King Fahd in Geneva could be an indication of the initial stages of a plan to shift power away from Crown Prince Abdullah. Though still embryonic, such a plan -- even if it fails -- would reverberate throughout the Middle East.

Analysis

Saudi Arabia's Prince Salman and Prince Abdul Rahman, both full brothers of King Fahd, left Riyadh today to travel to Geneva to meet with the aged king, the official Saudi Press Agency reported.

The visits of two of Fahd's full brothers came immediately following two private visits to the king by Egyptian President Hosni Mubarak and Jordanian King Abdullah II. The diplomatic and royal traffic to Geneva is highly unusual, given that King Fahd no longer runs Saudi Arabia's day-to-day affairs. It may suggest the very earliest stages of a plan by America and its closest Arab allies to encourage the Sudairi Seven, a powerful faction of senior princes, to make a play for power against de facto ruler Crown Prince Abdullah.

Though still king, Fahd has been marginalized since he suffered a stroke in 1995. In his place, Crown Prince Abdullah has become de facto ruler of Saudi Arabia. Abdullah, however, is perceived by the United States as a less reliable ally than members of the Sudairi Seven, a powerful bloc of full brother senior princes. King Fahd, Prince Salman, Prince Abdul Rahman, Prince Turki, Defense Minister Prince Sultan, Interior Minister Prince Nayef and Prince Ahmed all are members.

Given Fahd's limited power now, the visits by Egypt's Mubarak and Jordan's Abdullah seem slightly out of place. Jordan's monarch traveled to Jeddah, Saudi Arabia in early June to meet with Crown Prince Abdullah, but Mubarak has not met with Saudi's de facto leader since February 2000. Neither King Abdullah nor Mubarak attended the Arab League Summit in Beirut in March where Saudi Crown Prince Abdullah proposed his Arab peace plan.

According to reports about the meetings, the king discussed the Israeli-Palestinian conflict with both Arab leaders. But the King is hardly in good enough health to mediate in the Israeli-Palestinian conflict. Nor has he shown any interest in doing so.

Compounding the mystery are the immediate follow-on visits by a contingent of the Sudairi Seven from Riyadh. The king's brothers may want to simply reassure themselves of the king's good health following Fahd's reported cataract surgery this week. Though any medical procedure at his advanced age -- Fahd is in his late 70s -- can be dangerous, eye surgery is hardly life threatening. Moreover, the King has already had the surgery (which was reported a success) and is scheduled to travel to Spain, Reuters reported July 25.

The combination of all of the unusual traffic may point to another, more clandestine agenda. Fahd is still the leader of the Sudairi Seven and his approval would be needed before any coherent plan could emerge for his full brothers to challenge half-brother Saudi Crown Prince Abdullah.

If, for instance, the United States has grown leery of dealing with Crown Prince Abdullah and is looking for alternate allies among the royal family, Washington could hardly approach those princes directly. Instead, it would look for emissaries -- and who better than two key Arab leaders who are also close Washington allies?

At the same time, neither Mubarak nor Jordan's King Abdullah would approach Salman or Sultan before first getting King Fahd, the head of their faction, on board. Perhaps Salman's purpose in going to Geneva is to have relayed to him the messages delivered by Mubarak and King Abdullah and King Fahd's reaction to the ideas.

There is no direct evidence that such a plan exists or that the United States is actively seeking alternate allies in Riyadh. A series of strange coincidences in the context of rapidly deteriorating relations between the United States and Saudi Arabia, however, makes such political maneuverings and intrigue possible. While nothing is certain yet, the consequences of such a scheme could shatter what remains of the U.S.-Saudi alliance and reconfigure the entire U.S. position in the Middle East.

Black Blade: If there were to be a power play and those with close ties to the Wahhabi clerics or aligned with anti-western royals took over, then petroleum and precious metals prices would go through the roof. Of course the US would likely launch a series of attack from Prince Sultan Air Base in support of the Sudairi Seven or any pro-western faction. There simply would be no choice. The US would use military force to secure oil as it is hydrocarbon energy that determines the fate of the global economy. Oil and gas are the blood that keeps this patient (the economy) alive. After all we went to war against Iraq over oil and we would be under much more pressure if the world's largest producer were to fall into unfriendly hands.

Carl H

(07/28/2002; 01:09:22 MDT - Msg ID: 81662)

@Sector Post 78057

Sector:

You wrote:

"The Central Fund's $50 million new issue is hot news in so far as the COMEX ain't got enough juice."...

How did this finally resolve itself?

Thanks!

mas

(07/28/2002; 02:42:17 MDT - Msg ID: 81663)

14th of August

So we have your president doing the sales "pitch" on the US economy while he's on "vacation". The day after we have FOMC meeting. All the money "brought" back from overseas is supposed to last at least 2 weeks while the politicians work out what happens next.
Looks like we are in real trouble. Since March the world has lost 20 trillion. And Gold went down 20 $. Yeah right. We figure there should be some news from the Euro sector on what they want to do between now and the 14th. I think they are cheesed off to the extreme..
Goodluck guys it's gonna get ugly from here on out.

DOWNUNDER

(07/28/2002; 03:42:21 MDT - Msg ID: 81664)

@HORATIO - - - ON SPREADING MANURE

Horatio I would like you to back up your post below because this is an OLD issue that has been covered & discussed over a month ago. To drag this chestnut out of the fire during the current world wide drop in gold & gold shares is ludicrous UNLESS you have something NEW to add.---?

Horatio (7/27/02; 16:54:13MT - usagold.com msg#: 81637)
Anglo
Looks like Anglo knew what it was doing when it hedged its gold and took the cash out of the country.That verifys what I have been saying for years.This whole hedging business was just a ploy to get wealth out of the ground before Mandela and his cronies could confiscate it.Its very simple ,borrow the gold 'sell it,take the cash out of the country and leave Mandela the communist with a mine that has a mortgage on it and a lien on the next 15 years worth of production.It was a brilliant move.
Now the confiscation comes to light and the biggest losers are the non-hedgers,because they took nothing out in advance.
I would not applaud hedgers in general ,but this move was necessary to salvage sommething.I expect S.A. mines to become unprofitable because of falling Dollar coupled with rising Rand and worker demands for more.....Gold should rise if S.A. mines become unprofitable or close.The only thing that can help S.A. now is higher prices,maybe the Cabal of Socialists had it planned this way in order to get control of the mines and then let the price rise. Then again maybe i'm too cynical....
-----------------------------------------------------------
Clif Droke wrote his take on this on June 27th in an article "The Effects Of The New S. African Mining Law" posted @

SNIP- -
"The legislation brings South Africa's mining industry in line with the laws of other major mining nations such as Australia and Canada, and therefore is not the big earth-shattering developing that some investors think it is."
----------------------------
If anything, this new law merely strengthens the monopoly of a few mining concerns and keeps out unwanted competition in the form of start-up ventures since prospective mining companies must now seek government permission to mine in South Africa.
---------------------------------
The bottom line is that the passage of the mineral rights bill is nothing for investors in S.A. gold mining shares to be alarmed over. If it were, the market would have blown the whistle long before its passage."

------------------------------------------------------------
Downunder
I don't know if you have an agenda or not but I think it is dangerous to make illfounded assumptions--some investors may bail out of S.African shares based on your post.That may or may not be a wise move.However from what I've seen US gold stocks have plunged with the rest world wide.

For what its worth I don't see a major problem for those that believe that the POG is still in a major up trend.Physical has not dropped by anywhere near the same % as the gold stocks BUT new supplies have to come from the miners. The relatively unhedged mining shares WILL come back with a vengeance --- sometime hopefully soon.

Another thing I've noticed is that the selling volumes have been very low & not many are buying either so the price drops rapidly. When gold takes off again the share prices will jump rapidly. If you don't believe in this then you shouldn'd be invested in Gold or their shares as both will be heading into oblivion! AND I DON'T BELIEVE THAT.

Blackjack

(07/28/2002; 05:51:25 MDT - Msg ID: 81665)

US Silver Stockpile GONE! Bush signs Bill to buy more.....

http://www.spokesmanreview.com/news-story.asp?date=072402&ID=s1187087&cat=section.nationalPresident Bush signed legislation Tuesday to create a new market for domestic silver in government-minted coins in what could be a boon to North Idaho silver producers.

Sponsored by Idaho's two senators and U.S. Rep. Butch Otter along with members of two other silver-producing state congressional delegations, the law enables the federal government to become a net silver buyer for the first time in four decades.

It permits continued production of the American Eagle Silver Bullion Coin and the preservation of dozens of jobs in the Panhandle.

The initiative was prompted by news that the government's 730-million-ounce strategic stockpile of silver -- accumulated in the years immediately following WW II -- will be depleted this summer.

Since 1986, about 10 million troy ounces a year have been taken from the stockpile, stamped into rounds by Sunshine Minting Co. in Coeur d'Alene and then struck by the U.S. Mint into 1-ounce investment coins.

The mint is expected to buy up to 9 million ounces of silver each year to continue production.
______
Buffet probably has more Silver right now than the Feds....
what a joke. The 9 million ounces have to be from DOMESTIC
producers. The Bill mentions that the sales of Silver Eagles (the most popular coin minted) helps to reduce the deficit. Lets all
buy a few more Silver Eagles.....and help reduce the deficit :-)

Gauntlet-Runner2("GR2")

(07/28/2002; 08:57:47 MDT - Msg ID: 81666)

Interview transcript from a great gold guru

http://www.financialsense.com/transcriptions/Sinclair.htmThis guy James Sinclair is said to have been the manager of the Hunt Brothers Estate. He knows gold, has the big picture well framed. He also predicted the 1980 gold bull run and basically hit the price right on the nose. He said $900. Why speak when it pays to listen?

goldquest

(07/28/2002; 09:08:27 MDT - Msg ID: 81667)

Just watched

O'Neill on Meet The Press. If this guy was paraded out to instill confidence in the American economy, IMO, it was a complete failure! If O'Neill is still The Secretary of the Treasury a month from now, I will be suprised. Gold should have a good day tomorrow!

Knallgold

(07/28/2002; 09:36:35 MDT - Msg ID: 81668)

SA mining bill

On a GE post awhile ago someone described that pattern: always when the SA mining shares have tumbled heavy for some time,a specific story about the political unstability arises in the media and tries to scare out investors.

Question remains,which country do you expect to nationalize Goldmines first?We have a statement in that regard from a "secure and free US" representative...

USAGOLD / Centennial Precious Metals, Inc.

(07/28/2002; 10:35:26 MDT - Msg ID: 81669)

Learn the fundamentals for $5.95 -- more about gold investing than your financial advisor will ever know

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

Mr Gresham

(07/28/2002; 10:48:32 MDT - Msg ID: 81670)

Blackjack & Black Blade

Thanks for the heads up on SA. Of course, the two articles have CP Abdullah positioned oppositely: in one he's "too pro-American", in the other, he's being challenged by a more "pro-American" group of princes. Classic disinfo in the sense of painting the one you're about to topple as a "valued ally" so it won't look like it came from you? (Think Diem 1963?)

Anyway, for anyone who wondered where the "peace dividend" went after 1989, the question was answered a year later in Iraq. You don't spend 300+ BD a year without expecting a ROI. (Of course, it hardly pays for itself via cheaper oil, but those pocketing their own dividends from the contracts aren't complaining about that bit of economic illogic.)

My understanding is that the SA oilfields and refineries (if any) are far from the population centers, is that right? It's always seemed to me to be a resource that is not too much under threat of takeover by the "locals". So all we have been about all these years is adjusting the mask of perception about "home rule" by the monarchs, disposable in reality at any time, but only as useful as they make themselves in the interim.

That must lead to some interesting family discussions.

Of course, the US must be vigilant to even the tiniest beginning of a trend against its interests. Especially ones it can't bribe to go away.

Very very far from even the usual operations of international trade, and international law, so that the "special relationship" really defines colonial resource extraction, toward which US military power has been directed since 1942, and for which nearly all the other interventions were merely practice scenarios.

cyberbat

(07/28/2002; 11:04:05 MDT - Msg ID: 81671)

@ downunder

With respect to your last post, you need to understand one thing. People can express their opinions on this page and if that affects the shares of SA gold mines so be it. I don't know if you have freedoom of expression where you come from or not but I'll be D---- if I would take anything for granted or otherwise from 2 countries like Austrailia and Canada that were so bold as to pass laws seperating their firearms from innocent people. We in America are just about toast as far as morals are concerned, but we still have our freedom of expression and a firearm by our bedside.
Cyberbat

timbervision

(07/28/2002; 11:24:17 MDT - Msg ID: 81672)

cyberbat

http://usgovinfo.about.com/library/weekly/aa030500a.htmI'm not a gun owner in Canada, but our laws require registration not confiscation. As a Canadian I never understood, what I think I now understand, that the main reason behind gun ownership in the US was to provide a warning to would-be-kings (politicians and bankers today) to beware of the people's power. I somehow don't think that the average American understands that right now.

TownCrier

(07/28/2002; 11:50:25 MDT - Msg ID: 81673)

Dividends come back into focus

http://www.cleveland.com/business/plaindealer/index.ssf?/xml/story.ssf/html_standard.xsl?/base/business/1027770951299740.xmlIt seems that investor psychology is getting back to the fundamentals of gambling, investments, and the meaning of security and wealth. How much longer until gold is rediscovered on Main St., U.S.A.?

HEADLINE: Playing it safe in bear market

Here are some excerpts:

07/28/02 (Associated Press) New York - When Carol Levey got married, her father gave her some investment advice: Buy stock in safe, dependable companies - the kind that pay dividends.

Nearly eight years later, Levey wishes she had listened. Her portfolio, which contained mostly riskier tech shares, has crumbled as the market plunged over the past two years. Now Levey and her husband own Exxon Mobil, IBM, McDonald's and Pfizer, all of which pay dividends to shareholders.

... with a grueling bear market sending stocks to their lowest levels in years, the dividend is back in vogue, touted for giving investors a dependable source of income.

With the market having lost about a quarter of its value over the past nine weeks, a 92-cent-per-share annual dividend from Exxon Mobil looks pretty good

[Now here comes the reality check from this same article...]

So far this year, the 350 dividend-paying stocks in the S&P 500 have declined about 11 percent, less painful than the 29 percent drop among those that don't pay dividends.

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

Does a 92 cent annual dividend really take the sting out of a semi-annual eleven percent capital forfeiture?

I calculate not.

R.

TownCrier

(07/28/2002; 12:16:02 MDT - Msg ID: 81674)

Price discovery, from Bloomberg

Notable excerpts, presented in a way that might help you see this clearer:

New York, July 28 (Bloomberg) --

...gold had its worst week in 2 1/2 years...

Prices rose this year as investors fled [the] stock market....

The rally was fueled by hedge funds and other speculators, whose ownership of New York futures contracts reached a nine-year high in May, according to the Commodity Futures Trading Commission. Those ``long'' positions have since fallen by about a third.

[Contracts] for August delivery last week fell $20.60, or 6.4 percent, to $303.30 an ounce on the Comex division of the New York Mercantile Exchange. It was the biggest weekly decline since December 1999 and the lowest closing price since April 19.

[So much for investor interest (faith?) in these gold derivatives, the primary determinant in spot metal pricing. Now for a look at investor sentiment in mining shares.]

Gold stocks in the Standard & Poor's 500 Index have gone from being the best performing industry group, gaining as much as 49 percent this year as of May, to just another of the groups in the index that are showing losses for the year. The S&P Gold Index now is down 3.8 percent since the end of December.

-----------

Fancy that. A 3.8% decline in the shares since the new year began. Meanwhile, the metal itself is up $20, representing right now an annual pace of 12% gains.

Investors who can't see this very simple thing to justify ANY ownership of metal are apparently seeking too hard for things that aren't really there and can't be had.

R.

TownCrier

(07/28/2002; 12:22:45 MDT - Msg ID: 81675)

Casting a wider net

http://www.ananova.com/business/story/sm_638653.html?menu=HEADLINE: Italian could replace Duisenberg at ECB if Trichet drops out - junior minister

excerpt:
...[Economics undersecretary Vito] Tanzi went on to say that for the moment Trichet is "the only candidate" to succeed Duisenberg next July, the newspaper said, noting that up to now the only other candidates have been French.

---(see url)----

TownCrier

(07/28/2002; 12:28:41 MDT - Msg ID: 81676)

And now we know...

http://www.bloomberg.com/emu/emu_news1.html?s=APUQUBBUTTGluZHNlExcerpts:

Washington, July 28 (Bloomberg) -- The U.S. is ``all for a strong dollar'' and will pursue a policy to make it an ``attractive currency,'' White House chief economic adviser Lawrence Lindsey said.

Speaking on the ABC News program ``This Week,'' Lindsey said the markets set the value of the dollar and added the Bush administration is pursuing policies to keep the dollar strong.

---------------

And yet, no sooner is that said, then the article goes promptly onward to report the following matter of factly:

"The dollar may decline against the euro as statistics this week will probably show the U.S. economic rebound is losing steam."

At these gold prices, don't look a gift horse in the mouth.

R.

TownCrier

(07/28/2002; 12:46:58 MDT - Msg ID: 81677)

NEWSWIRE HEADLINE: Asia could have one currency in 15 years

http://www.nationmultimedia.com/page.news.php3?clid=6&id=2831&usrsess=1Excerpts:

Can the "Chiang Mai Initiative", signed by 13 Asian countries in May 2000, lead to a single currency in the next 15-20 years?

...Asean-Plus-Three comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Japan, South Korea and China.

Once that is done [the final signing of bilateral currency swap agreements], Asia could have a currency unity scheme worth an estimated $65 billion that could serve as a solid defence of each member country's national currency during critical times.

The scheme could also serve as the foundation for monetary union in the future in a fashion similar to the European Monetary Union, the precursor of the euro.

The euro ...is a product of more than 40 years of regional cooperation.

...today's euro ... is a by-product of that political motivation, ...On the other hand, Asia is driven by economic reas ons toward closer currency cooperation.

The most recent trigger was the 1997 Asian financial crisis ...contagious effects of that event spilled over rapidly into other Asian economies...

...Shortly after the 1997 crisis broke out, Japan unveiled its Asian version of the IMF, called the Asian Monetary Fund, but the proposal did not receive enough support from fellow Asian countries and was opposed by Washington, which feared it would undermine the IMF's global role.

-----(see url for more)-------

As demonstrated by the euro project, an Asian currency union would be a huge undertaking, but in any event, I can't conceive any way that efforts toward this end could be seen as a net positve for the current U.S. dollar.

The final note from the article is worthy of your deeper consideration:

"The pace of change in today's economy is much faster than in earlier decades." -- Dr Olarn Chaipravat, a senior Finance Ministry adviser

R.

(07/28/2002; 12:56:06 MDT - Msg ID: 81678)

DIVIDEND YIELDS SHARPEN UP FOR MAJOR GOLD STOCKS

7-28-02

Because of the sudden plunge in the price of gold and the

price gold stocks this week, the dividend yields for

major gold producers have increased.

DIVIDEND YIELDS FOR MAJOR GOLD PRODUCERS IN ALPH. ORDER

AS OF 7-26-02:

GOLD STOCK //// DIVIDEND YIELD %

American Barrick /////// 1.50 % (AOL Quote)

Anglo Gold /////// 4.34 % (Sharenet)

Gold Fields ////// 1.28% (Sharenet)

Harmony ////// 1.32 % (Sharenet)

Newmont ////// .50 % (Aol Quote)

Placer Dome ////// 1.20 % (Aol Quote)

Sierra Madre

(07/28/2002; 12:56:18 MDT - Msg ID: 81679)

Has anything important changed?

Hi folks! I've been away for some time. So, I find gold has been knocked down to $302 something.

Gold is finished? Time to sell out? Forget the yellow metal?
The world has changed and gold is out of the picture and will remain so forever?

Some questions...

1. The US trade deficit was climbing up past $450 bill a year when I last looked. This has been taken care of? Foreigners will accept this flood of dollars forever and continue to buy US stocks and bonds forever?

2. The US fiscal deficit is not something to worry about? There is a perpetual war going on, Homeland Security expenses, spending like there is no tomorrow. Yet, tax revenues from corporations and individuals are likely to be very greatly reduced, in the present economic climate. The deficit in Washington D.C., which we will hear about a little later on, is going to be horrendous. This is not something to think about?

3. Stocks are back in fashion, or the media are trying desperately to make John Q. Public think so. Is it so easy to bring back irrational exhuberance? The public is going to buy, buy, buy stocks and these are heading up to their previous highs? Foreigners are pouring in to buy US stocks again?

4. The consumer has fixed up his finances? No more problems with debt? Everything is OK for the American consumer, he is going to go on buying with his credit card, with re-fi money from his house?

5. Corporate earnings are going up, across the board, and the future looks rosy for American coporations? Corporate spending is booming, jobs are abundant and layoffs a thing of the past?

6. The Price/Earnings ratio of all the indexes is way, way down - down to 8 times on the SnP? We can believe the projections for earnings by those who have been caught lying just recently? NO sense to hold gold in any amount, if earnings are booming and shares are cheap by historic measures. Is that the case?

7. The enormous debts incurred in the 90's and 2000 and 2001 have been greatly reduced? Corporate balance sheets are healthy and companies are looking to expand by acquiring more debt? Defaults are not going to continue; everything that was going to go under, has gone under and is behind us?

8. The banks are in excellent shape, no problems with bad debts? They are eager to lend?

9. No Mutual Fund redemptions are going to take place? In any case, the Fed can and will buy anything that the public discards, and that presents no problem whatsoever.

10. Everything for sale in this world goes up, and up, and up, except - gold and silver. This will continue to be the case for the foreseeable future, yes?

I guess my reasons for holding gold are irrational. Maybe it's because I haven't heard all the good news. Will someone please tell me about those old bugaboos I just mentioned, tell me they have all gone away and there is
NOTHING TO WORRY ABOUT!

Sierra.

misetich

(07/28/2002; 12:56:46 MDT - Msg ID: 81680)

Banks Are Havens (And Other Myths)

http://www.nytimes.com/2002/07/28/business/yourmoney/28BANK.htmlSnip:
By GRETCHEN MORGENSON

But a risk that the banks cannot expunge is the fear taking hold among investors that the nation's largest financial institutions were central to the financing of the stock market bubble that has burst so spectacularly. That perception is not only punishing bank stocks, which were not long ago seen as a haven for investors, but it is also casting a pall over the entire market, fund managers say. If banks are found to have facilitated corporate misdeeds � such as hiding losses at Enron, as has been alleged in Congress � severe damage will be done to already battered investor confidence in the entire financial system.

................
Some of the nation's biggest and most trusted banks are in this fix at least partly because of their increased reach in all areas of financial services in recent years. The Financial Modernization Act in 1999 eliminated most of the barriers to certain business set up for banks under Glass-Steagall, the legislation that came out of the Great Depression. This allowed commercial banks to compete with investment banks for the right to sell securities to investors. And the larger banks approached the business aggressively.

For example, in May 2001, WorldCom raised almost $12 billion in a bond offering managed by Citigroup. The offering came when WorldCom's was still a high-grade name in the credit markets, and was presented to investors as an issue against which other investment-grade bonds would be judged, known as a benchmark.

Because the WorldCom deal was a benchmark bond, any portfolio manager running a bond mutual fund had to own the security. So when WorldCom began its free fall earlier this year, a throng of bondholders were holding the bag. The bond sale allowed WorldCom to clear out a lot of its bank lines of credit and push back the maturity dates on the loans.

Now, with WorldCom filing bankruptcy a little more than a year after the bonds were sold, investors are questioning how much due diligence was conducted by the banks that sold the securities.

Adding to bondholders' doubts about whether this bond deal should have been done is the growing awareness of just how close Jack B. Grubman, the telecommunications analyst at Salomon Smith Barney, a Citigroup unit, was to WorldCom. Mr. Grubman has said that he attended board meetings at WorldCom. His relentlessly upbeat pronouncements on the company helped the $12 billion bond deal get done.

...............
The work that J. P. Morgan Chase did for Enron, and which is now being examined by regulators, was plain-vanilla stuff, according to its executives. "They are a normal financing arrangement," William B. Harrison Jr., the bank's chief executive, said during a conference call last week. After Enron's failure, normal financing arrangements like these have become questionable.
..................
"A stubbornly high pace of defaults, assisted by the spectacular number and size of failures in the telecommunications sector globally and by other issuers based outside the United States, made the second quarter 2002 one of the most severe periods of credit stress since the Depression of the 1930's," said David T. Hamilton, who wrote the study.

MOODY'S said it expects the junk-bond default rate to hit 8.8 percent by year-end, down from the 10.7 percent peak reached in January, but still high. If the economy slips back into recession, banks could really be hurt.

"There are still big issues out there," Mr. Hendler at CreditSights said. "The C.E.O. sign-off date comes in a couple of weeks and there could be more of a shake-out from that," he said, referring to the new rule by the S.E.C. that chief executives must personally certify their company's financial statements.

"Banks still have venture capital issues, where valuations could go down," Mr. Hendler said. "And on the consumer side, some banks gave a good outlook for second half, but there's not enough evidence that the consumer is fine. All this weighs heavily on the banks."

*************************
Misetich

Greenspan defined it as infectious greed, did he mean BANKERS?
The most troubling aspect - is that bankers deny any wrongdoing - "They are a normal financing arrangement," they testified. Enron balance sheet was ponzi scheme, a shell, built by these type of financing arrangement and collapsed.
If Banks/Enron transactions reflected "normal financing arrangement the US and world financial systems are at HIGH RISK.

Got gold?

TownCrier

(07/28/2002; 13:00:24 MDT - Msg ID: 81681)

A current crisis and lessons learned -- even hedge funds are toying with less leverage

http://www.forbes.com/technology/newswire/2002/07/28/rtr678223.htmlBOSTON, July 28 (Reuters) - For hedge fund investors, the summer of 2002 is bringing back some ugly memories.

With stocks swirling lower with every stir of martinis at beach side resorts, investors remember the summer of 1998 and the spectacular collapse of Long Term Capital Management, wondering if another hedge fund disaster looms.

"There are certainly similarities," said Carrie McCabe, who directs hedge fund investments for pension funds at McCabe Advisors in New York. She said the violent market swings four years ago feel a lot like this summer's nerve-racking declines, which have contributed to the worst markets in 30 years.

But there are also plenty of differences: hedge funds are smaller now, investing with less leverage.

...Industry icons like George Soros and Julian Robertson, for example, who each managed over $20 billion during their heyday, reorganized after suffering heavy losses a few years ago.

Now managers often cap funds near $1 billion and use less borrowed money, or leverage, that can make gains or losses add up very quickly.

"There just isn't the amount of leverage in the system anymore," McCabe said, noting that funds might have had debt-to-capital ratios of 20-to-1 four years ago, but have now pared that back to 7-to-1.

Leverage was the key to disaster at LTCM and helped wipe out 90 percent of the firm's $4 billion in capital in a few weeks. What started out with Russia's debt default quickly turned into a liquidity crisis that engulfed emerging markets.

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

Did you know we are currently in a "CRISIS"? Check out this additional excerpt from the article:

----------...the roots of the current crisis are different. While the 1998 debacle started halfway around the world when Russia ran out of money to pay its debts, this time the crisis began when investors began to wonder how honest U.S. corporations are. "Last time we had an emerging market crisis that rolled into a credit crunch. This time the crisis is related more to the equity markets and is home-grown," McCabe said.-------

Those who are financially strong during a crisis tend to buy more gold, while those who are strapped and suffering are often forced to sell what they have to survive another day. On which side of the equation are you?

R.

misetich

(07/28/2002; 13:08:48 MDT - Msg ID: 81682)

Trust Shattered, Wall Street Can't Afford Coincidences

http://www.nytimes.com/2002/07/28/business/yourmoney/28WATC.htmlSnip:
By GRETCHEN MORGENSON

all Street analysts are definitely under the microscope these days. Which makes a sequence of events of last Thursday and Friday involving Goldman Sachs' semiconductor stock analyst very intriguing.

Semiconductor stocks were crushed on Thursday when the Taiwan Semiconductor Manufacturing Company announced that it was sharply cutting its capital expenditures because of nonexistent demand for chips. Investors in chip stocks ran for the exits, correctly assuming that if such a big maker in Taiwan saw no demand, neither would the rest of the producers.

Shares of big-name United States producers like Intel and Applied Materials sank on the news. The Philadelphia Stock Exchange Semiconductor Index � known affectionately as the Sox � tumbled. And the action took down the Nasdaq as well.

Although the Sox closed down 10 percent on Thursday, the index had been far lower earlier in the day; it recovered on significant buying. One especially large trade in the afternoon came from Goldman Sachs: the purchase of 10,000 call options on an exchanged-traded fund � called Semiconductor HOLDRs Trust � that is a basket of large semiconductor stocks.

The options are traded on the Chicago Board Options Exchange, and an order to buy 10,000 is unusually large. The open interest on these options � similar to the freely trading shares, or float, on a common stock � was around 1,400 before the order came in.

Any investor buying call options is betting that the stock underlying them is going to rise significantly. Given the excessive volatility in the market as a whole and the wide swings characteristic of semiconductor stocks in particular, it would take a person of great confidence to make such a trade.

Now for the intriguing part. On Friday morning, two hours before the market opened, James Covello, the semiconductor analyst at Goldman, upgraded the semiconductor equipment sector to overweight from market weight. Mr. Covello's reasoning? The big selloff in the sector was overdone.

"While fundamentals are not likely to improve in the near term, we believe that funds flow and seasonality may drive a meaningful move in the stock," he wrote. Mr. Covello added that his call on the group would be appropriate for shorter-term investors "who can be nimble enough to take advantage of a funds flow-driven rally and/or seasonality in the electronics supply chain." In other words, his recommendation was a trading buy.

When asked about these events, Katherine Baum, a spokeswoman at Goldman Sachs, said: "There is absolutely no connection between any of Goldman Sachs' trading activities and its investment research. And given the current environment it's outrageous to suggest that there is." She added that Goldman has strict guidelines on how much an analyst can communicate around an upgrade or downgrade. She declined to comment on whether the purchase was made by the firm for one of its customers or for the firm's own trading book.

Maybe it was just a giant coincidence that a Goldman Sachs trader put in an order to buy almost seven times the open interest in call options on the Semiconductor HOLDRs half a day before the firm advised its clients to buy into the sector. Although the shares in the exchange-traded fund closed on Friday roughly where they had wound up the previous day, they rose 3 percent early in the day as news of Goldman's upgrade spread. It is unclear whether the call options were sold.

In life, things happen by accident and they happen by design. It is not always possible to know which force is at work in each situation. But this much is known: Wall Street firms thrived during the late 1990's in part because investors were willing to suspend their disbelief. Those days are over. And Wall Street firms had better get used to the scrutiny.

Misetich

More and more moves by these alleged market manipulators, such as Goldman Sachs are being scrutinized - it will proved more difficult for them to repeat the scams of the past - though they will try -
Market manipulations are being questioned, Dow same day reversal of 400 points, followed by ANOTHER uptick of 500 points a few day later. It all adds up to loss of investor confidence. Will parked cash return to stock market under these conditions? Doubt it - as investors have been fleeced - by these scams over and over again-

Got gold?

Ten Bears

(07/28/2002; 13:54:34 MDT - Msg ID: 81683)

What does this have to do with Gold???

"Moral relativism;" "Situational ethics"; "Greed is good";
"Don't judge, everything you do is ok"; "If it feels good, do it".
These ideas were planted in the last few decades; society is now reaping the harvest. The savings of millions have been decimated by those who embraced the "everything is grey" philosophy, and by the enablers who pump the money supply.
What does this have to do with gold? The paper gold prices and gold share prices are controlled by the same sort. It seems to this casual observer that extreme caution is warranted when playing in this rigged game.I realize I may be preaching to the choir, but a 5 to 20% physical gold position IMHO may provide a measure of insurance in these troubled times.

misetich

(07/28/2002; 13:55:26 MDT - Msg ID: 81684)

Handicapping the (Once Almighty) Dollar

http://www.nytimes.com/2002/07/28/business/yourmoney/28DOLL.htmlSnip:

By CONRAD DE AENLLE

The weakness of the dollar has left investors divided over the currency's direction, especially against the euro.

Some analysts expect the euro, now trading at 99 cents after stumbling last week, to climb toward $1.20. That would be above its original trading level of $1.17 at the beginning of 1999.
.................
A survey this month of global fund managers by Merrill Lynch shows a strong majority, 68 percent, naming the euro as their favorite currency over the next 12 months, with 13 percent favoring the dollar, 6 percent the Japanese yen and the rest stating no preference. The survey has found a tilt toward the euro for many months, even when it was falling against the dollar.

.............
John Beck, chief investment officer at the Fiduciary Trust Company International in London, is more bearish on the dollar. The United States buys more goods and services than it sells, producing a net outflow of dollars, so it needs foreigners to bring those dollars back through investment, he said.

With stocks faring poorly, demand for American assets has fallen, taking the dollar along with it. That situation is unlikely to change soon, Mr. Beck said.

The United States current-account deficit � a measure of the net exchange in goods, services and gifts among countries � is approaching 5 percent of annual economic output, he said, and the government's budget surplus has vanished. "That cannot be constructive for the dollar on a medium-term basis," he said, adding that it was "most unlikely" that the dollar would "continue to be the superstrong currency it was."

Mr. Beck expects the euro to rise to $1.17, its original level. He predicted that the yen would rise, too, though much more modestly.

................

GABRIEL STEIN, an international economist at Lombard Street Research in London, said that based on current economic conditions, it would be reasonable for the euro to climb as high as $1.10 or fall as low as 95 cents.

"If you want to do a traditional manufacturing-cost comparison, the right cost is $1.10," he explained, "But I doubt it is likely to go as far as that. More likely, looking at overall fundamentals in the United States and Europe, the right rate is slightly below parity, between 95 cents and $1."

The dollar is bound to recover over the long haul, he said, because the structure of the American economy is sounder than those of Europe and Japan.

**********************
Misetich

Wonder if these "experts" have factored in the initial market share loss of the US $ as a reserve currency? In the "long haul" as the EU expands one would expect its currency - Euro - to get stronger rather than weaker.

Most of these "experts" expect a US recovery - but then most of these "experts" did not see a bubble, did not predict a recession and have been projecting an earning recovery for the last 2 years.

The bubble burst has not completed its course - Lets wait patiently and see it unfold shall we.

Most want to see a slow US $ landing. Will it happen? Or will market dynamics will slam it down forcefully as in past history?

Got gold?

Black Blade

(07/28/2002; 14:01:01 MDT - Msg ID: 81685)

Saudis Turn On The West

http://www.guardian.co.uk/saudi/story/0,11599,764580,00.html

Snippit:

If Prince Abdullah is moving against the extremists it may be too late. The terrorists are organised loosely in cells and are hard to infiltrate. Many weapons, including more rockets, have been smuggled across the long and porous border with Yemen. Sympathy for al-Qaeda also extends far beyond the streets and into government. There are concerns that some officials in the Interior Ministry run by Prince Naif are sympathetic to their aims. It is feared that the anti-Western bombing campaign has been sanctioned by Islamic factions in government plot ting to take power and break ties with the West. That, some observers say, is why the bombings have been blamed on Westerners. The real bombers have protection from some very high places.

The death of Fahd could provide the trigger for a power struggle in the palaces of Riyadh which could ripple out and rock the whole world. Fahd was last week admitted to the Swiss hospital. Official Saudi sources quote the medical team as saying his condition is 'unstable'. As the king's death grows closer by the day, the rift between hardline Princes Sultan and Naif and the moderate Prince Abdullah widens. The prize they are fighting for is the oil-rich Saudi state. But the stakes are higher and the result will send shock waves around the world - whoever wins.

Black Blade: The world oil supply is in danger and the west is ill-prepared to meet the challenge short of war. If unfriendly factions such as the Wahabbists or those sympathetic to Al-Qaeda come to power in Saudi Arabia which is quite possible, then we will go to war to secure oil � there's absolutely no doubt about it. No one will sit back and let another oil shortage pass like in 1973. The US economy would collapse as we are ever more dependent on oil now than in the past. We do live in "Interesting Times".

mikal

(07/28/2002; 14:14:43 MDT - Msg ID: 81686)

@TownCrier

"The dollar may decline..." Thanks for many great clips and comments. It's getting to the point where I ask, what major newswire and financial press outlet, e.g. Bloomberg, Business Week, AP, UPI, etc., is NOT looking at more US$ weakness straight ahead. Some of them give a cursory admission of a HUGE paradox- The FED can't lower OR raise interest rates! Not without irreversible damage, soured sentiment and panic out of the greenback and it's proxies like US and agency bonds, stocks, and real estate.

mikal

(07/28/2002; 15:03:24 MDT - Msg ID: 81687)

As the dollar goes, so goes the FED?

We know there are mounting concerns about the consequences of a FED rate hike OR reduction. The effects of a HIKE are variously either feared or championed: 1) reduce liquidity, credit availability, and inflation or inflation risks 2) increase corporate and consumer borrowing costs & slow the economy 3) increase flow of investment funds into higher-returning US Securities, bonds, money market accounts and thus dollars 4) Raise investor fears that all is not well in the US economy 5) Assist equities and US T-bills by appearing to be fiscally responsible and committed to balancing the budget. Pros and cons also arise from the rate reduction outcomes: 1) perk up liquidity, money supply, credit, inflation 2) lower borrowing costs, stimulate more spending and investment-corporate and consumer, assist debt-burdened local governments 3) decrease investment flows from overseas, increase foreign fund withdrawals and repatriation by reducing competitive rate advantage, etc... a small sampling that have at the least one common thread- they are trends already played out for the most part or are effects common to EITHER a rate or a boost, or at this stage, NO FED action. Lately the FED sees "risks balanced" lol, between a rock and a hard place. Not between "inflationary trends" or "deflationary outcomes", "growth and contraction" or other artificial Fedspeak. When the economy has less regulation, fiat, taxes, constraints, and overseas and domestic predators, it will thrive, prosper, and grow naturally. Investment decisions can only then, be planned casually, knowing savings and capital are BOTH solid short and long-term homes for money.

mikal

(07/28/2002; 16:09:50 MDT - Msg ID: 81688)

Military stance on Iraq offers hope for peaceful resolution

http://www.msnbc.com/news/786544.asp?pne=msntv
Iraqi President Saddam Hussein marked the 34th anniversary of his seizure of power on July 17.
�
Some military brass favor no Iraq attack
Containment seen as less risky
By Thomas E. Ricks
THE WASHINGTON POST
WASHINGTON, July 28 � �Despite President Bush's repeated bellicose statements about Iraq, many senior U.S. military officers contend that President Saddam Hussein poses no immediate threat and that the United States should continue its policy of containment rather than invade Iraq to force a change of leadership in Baghdad.
..... The military's support of containment, and its concern about the possible negative consequences of attacking Iraq, are shared by senior officials at the State Department and the CIA, according to people familiar with interagency discussions.
.....Officials said the officers contend that continuing a containment policy is preferable to invading an Iraq that possesses an arsenal of biological and chemical weapons. Another concern is that Iraq could split up under a U.S. attack, potentially leading to chaos and the creation of new anti-American regimes and terrorist sanctuaries in the region.
� � � �Active-duty members of the military have not publicly questioned the direction of Bush's Iraq policy, but in private some are very doubtful about it.
� � � �"In my assessment, the whole containment-and-sanctions policy has worked better than it's given credit for," said one defense official sympathetic to the military argument. He noted that since the Gulf War ended in 1991, Hussein has obtained some spare military parts but has been unable to import new tanks, aircraft or missiles.
� � � .....�Retired officers and experts who stay in touch with the top brass, and are free to say what those on active duty cannot, are more outspoken in supporting the containment policy and questioning the administration's apparent determination to abandon it.
� � � �"I'd argue that containment is certainly a better approach than either marching on Baghdad or destabilizing the Iraqi government by killing Saddam," said retired Col. Richard Dunn III, a former Army strategist. "It only has to work until something happens to him � he's either killed or dies."
.....To fulfill U.S. promises to Turkey and Arab states that Iraq would remain whole, a defense official said, "I think it is almost a certainty that we'd wind up doing a campaign against the Kurds and Shiites." That would represent a striking reversal of administration policy of supporting the Kurds against Baghdad.
� � � �Also, officials worry, a large U.S. presence might antagonize Arab public opinion as well as impose heavy financial and human costs on the U.S. military, which already feels stretched by the war on terrorism and peacekeeping commitments in the Balkans.
organizations, he said.....
...click link for more

LeSin

(07/28/2002; 16:19:24 MDT - Msg ID: 81689)

An Iraqi & M/East Perspective

http://www.canoe.ca/Columnists/margolis_jul21.html
July 21, 2002
Saddam fights back!
How the Iraqi leader might reply to President George Bush's sabre-rattling
By ERIC MARGOLIS -- Contributing Foreign Editor
American President George Bush has been demanding a "regime change" in "evil" Iraq, which he plans to invade. Saddam Hussein's possible reply, from Baghdad:

"My fellow Iraqis, it's time for a 'regime change' in the United States. President George W. Bush must go!

"Bush is a danger to Americans, and to the whole globe. America has become a 'rogue state' that threatens world peace and stability. Oh, my brothers, America is the nexus of evil!

"I have just ordered our intelligence services to help Americans overthrow Bush and his evil clique. We are giving military training and cash to the Hells Angels, Louis Farrakhan's Nation of Islam, and the Michigan Militia. I've ordered our fearless agents to kidnap Bush and bring him to Baghdad. If he resists, they are authorized to shoot - in 'self-defense.'

"Defectors from America report the U.S. is the grandfather of weapons of mass destruction: over 8,000 nuclear weapons, 31,200 tons of chemical weapons, and enough biological warfare agents such as anthrax, botulism, plague, Q-fever, and rap music to wipe out the globe twice. The U.S. is the only nation to actually have used atomic weapons, killing 240,000 civilians, and it is thinking about using them again.

"Israel, which keeps threatening nuclear attacks on us and our Iranian brothers, developed its secret nuclear and biowarfare programs with covert American aid. So did Britain, France and India. America is a major proliferator of nuclear technology. Back in the 1980s, when we were still America's ally, the U.S. supplied us with the very chemical weapons and germ warfare stocks it howls about today.

"Speaking of biowarfare, we all know how in 1991 the U.S. destroyed our dams, reservoirs, water pumping stations, filtration plants and sewage systems in the Mother of all Battles. After the war, the U.S. refused to allow us to import materials to repair our destroyed sanitary systems - even banning chlorine to purify our water. The ensuing epidemics killed a million of our children.

"The U.S. refuses to allow inspection of its nuclear, chemical, or biological warfare arsenals, or to destroy the nuclear warheads it now possesses. Without inspection and destruction of America's weapons of mass destruction, the world cannot be safe. Who knows, the U.S. might strike at any nation that displeases it!

"Just last week, U.S. Secretary of State Colin Powell warned Washington 'reserves the right' to overthrow all regimes it considers a danger. The U.S. is developing new 'mini-nukes' called 'Arab busters' for use against Third World nations. Who's next?

"As for terrorism, we suspect the United States had links to Osama bin Laden and his terrorists. After all, didn't the U.S. finance most of the militant Islamic groups? The U.S. has sponsored terrorist groups here in Iraq and in Iran, Libya, Cuba, El Salvador, Congo, Nicaragua, Angola, Sudan and Indonesia. The U.S. tried to assassinate Egypt's president, Gamal Abdel Nasser, Iran's Islamic leadership, that crazy Khadafy in Libya, Gen. Adid in Somalia and, last, but not least, my humble self. Our prisons are full of U.S.-sponsored terrorists who sought to overthrow our glorious revolutionary regime and murder its heroic leaders.

"Now, a crazy cabal of petro-imperialists, Israeli agents of influence, fanatical Christian fundamentalists, Pentagon warmongers and Bush's pit bull poodle, Tony Blair, are plotting to invade beautiful Iraq. Then they plan to take their anti-Muslim crusade to Iran, Syria, Yemen, Libya, Lebanon - and any other nations that refuse to kiss America's feet. Bush's Texas imperialists are determined to turn the world into a U.S. version of the British Empire.

"The people in the Pentagon pulling Bush's strings know our beloved Iraq has the Mideast's second largest oil reserves after Saudi Arabia - perhaps the biggest, only Allah knows. Oil will soon be in very short supply worldwide. Even George Bush Jr., of Texas baseball, can understand this. America wants our oil. Watch out, Canada - your water may be next.

"I'm also deeply concerned about the welfare of America's suffering people. Their stock markets, accountant firms, brokerage houses and investment banks were run by super-crooks who make Ali Baba's 40 thieves look like simple melon merchants. Some of Bush's pals defrauded America's workers of their life savings, stole their pensions, and may yet cause a world financial crisis. In Iraq, such criminals would be shot and their families billed for the bullets.

'The Mother of all Lies'

"Now, after wrecking America's economy, the war party in Washington is whipping up hysteria by fabricating tales claiming we intend to attack America with all sorts of nefarious weapons. This is the Mother of all Lies. We were proctologically inspected for seven years by an army of UN 'experts,' many of whom turned out to be spies. All - well, most, anyway - of our chemicals and germs supplied by the U.S. and Britain are either destroyed or have become inert.

"President Bush is up to his ears in business scandals. November elections are approaching. Remember that naughty girl, Monica Lewinsky, who fired Bill Clinton's Scud missile? Clinton diverted attention by bombing us. The Bush White House is trying the same old trick, but on a grand scale.

"My heroic, democratic and peace-loving Iraqi brothers - it's time for a 'regime change' in Washington!"

--------------------------------------------------------------------------------

mikal

(07/28/2002; 17:00:02 MDT - Msg ID: 81690)

@LeSin

Thanks for that great piece! It's good to see it's in the Toronto Sun. LOL!

Carl H

(07/28/2002; 17:38:14 MDT - Msg ID: 81691)

@Sierra Madre: Post 81679

Welcome Back.

Bravo. Well Said.

misetich

(07/28/2002; 17:40:04 MDT - Msg ID: 81692)

High anxiety, no panic over US recovery prospects

http://www.forbes.com/newswire/2002/07/28/rtr678195.htmlSnip:
Treasury Secretary Paul O'Neill, who struck the theme by saying on Thursday there was a "disconnect" between a fundamentally healthy economy and gyrating stock prices and was set to blitz weekend talk shows with assurances a mild expansion was intact.

"The reality is that our economy remains solid and our recovery is well under way," O'Neill told the National Association of Manufacturers. His words were echoed on Friday by Federal Reserve Governor Mark Olson in a speech to a service club in Minnesota: "Its clear we're in a recovery period. It is clear that it will be slow."
..................
"We believe that the stock market decline is hurting business and consumer confidence, increasing investors' anxiety about corporate leverage, and will lead to a slowdown in consumer spending as households react by raising their savings rates," Goldman Sachs advised its clients on Friday.
...............
In fact, economist John Youngdahl cautioned, there was a danger "of losing the forward momentum gained from the inventory swing and fiscal policy stimulus" that helped boost growth at the beginning of the year.
..................
"The economy is more at risk than it was a month ago but we expect the recovery will continue because of a number of positive dynamics," said economist Patrick Fearon of A.G. Edwards and Sons Inc. in St. Louis, Mo. "Principally ... incomes are rising faster than inflation because of strong productivity gains, so consumers have more purchasing power and all this is being super-charged by irresistibly low interest rates."

Cheaper credit has made it possible for Americans to bolster their finances by refinancing homes at lower mortgage rates and to carry debt for less cost. At the same time, other assets like real estate and homes have kept appreciating.

"For perspective, household real estate assets probably appreciated about $600 billion in the first half of the year, providing at least a modest counterweight to the $3.9 trillion of equity wealth destroyed," economist James Glassman of J.P. Morgan Securities Inc. calculated.

That helps to make the Bush administration's case that there are grounds for moving forward to put corporate scandals behind and focus on the future -- a position the administration badly wants to advance ahead of November elections for fear it could be painted as mishandling the economy.

****************
Misetich

Guess everything adds up for O'Neil and the Bush administration
You wipe out $3.9 trillions of equity wealth and you increase 600 billions in real estate perceived wealth and you get the sound base for a FURTHER ECONOMIC RECOVERY.

Would you want O'Neil as your Treasurer?

Got gold?

Black Blade

(07/28/2002; 17:56:01 MDT - Msg ID: 81693)

'Dr Doom' sees more market pain

http://news.bbc.co.uk/1/hi/business/2154737.stm
Snippit:

Tony Dye - formerly boss of the Philips and Drew Fund management group, has always maintained that the share price euphoria of the late 1990s was simply hot air. In the year 2000 he was driven out of his job because his fund - which avoided most telecoms and tech stocks - performed less well than funds run by rival managers. "These episodes are very important, because they actually change people's behaviour. Financial markets go to levels which are unprecedented and unsustainable," he said. Companies and individuals tend to borrow more, because they believe that the good times are going to roll forever and they will get rich. "From my analysis, the bubble started some time back in 1994-95. It was at that point that the Dow went well beyond its long-term valuations and continued to do so throughout the rest of the '90s", he said. "If the market were today to be back to its long-term average value, it would still have to fall by 20-odd per cent." The market could achieve fair value through ten years of gradual erosion, or it could return to its long-term trend by means of a quicker, but more painful, readjustment.

President Bush has said that those who buy stocks now are likely to be rewarded. "He's maintaining confidence, which is their role - because their role is to try and prevent a sharp stock market decline turning into a complete rout," Mr Dye said. Asked whether a panic could set in, Mr Dye said, "There's always that risk in financial markets because there tends to be trend-adaptive behaviour by the participants - which means that we actually act like animals in herds." So who was to blame for creating this bubble? "You've got to come back to the financial authorities - the Treasury Secretary and the Chairman of the Federal Reserve Board - as being the most responsible," he said. "I think the financial authorities in America - and Greenspan was the foremost among them - made some very serious mistakes." "When the history books are written, Greenspan's reputation will be somewhat less than a maestro."

Black Blade: I think that he's right. Greenspan, Rubin, and O�Neill will go down in history as architects of this disaster so a large degree and sock puppets Clinton and Bush will also pay a price � so much for legacies. Meanwhile Herbert Hoover Jr. is still spouting off about how wonderful the economy is and that stocks are the place to be just like the elder Herbert Hoover did at the start of the Great Depression. I look forward to the "entertainment" that these buffoons can provide as they sail this ship into the rocks..

misetich

(07/28/2002; 18:08:00 MDT - Msg ID: 81694)

Why the negative SPIN on gold by Bloomberg News?

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∣dle=ad_frame2_topfin&s=APUP9wROhR29sZCdzNew York, July 28 (Bloomberg) -- This year's gold rally may finally be over.
...............
Gold's Seven-Month Rally May Be at End After It Plunges on Stronger Dollar
...............
Now, many gold investors agree that the metal is too costly.

``We started putting some of our funds in cash about a week ago, just in case,'' said Jean-Marie Eveillard, who manages $2.5 billion in First Eagle SoGen funds. The funds own shares of Denver-based Newmont Mining Corp., the world's biggest gold producer, and Toronto-based Barrick Gold Corp., the second- largest.

``The market was starting to look cold, and when you invest you have to look at the short-term horizon,'' Eveillard said. ``Gold and the gold stocks were just looking very expensive.''

..............
Weaker Demand

Gold's problems aren't just with speculators.

Demand from jewelers, the biggest users of the metal, fell 3.6 percent last year to 3,006 metric tons, the lowest level since 1996, the London-based Gold Fields Mineral Services said in a report in April. At the same time, mine production grew 0.8 percent to a record 2,604 tons.

``The big picture, as you would expect with higher prices, is not particularly exciting at the moment,'' said Philip Klapwijk, managing director of Gold Fields, a precious-metals research firm in London. ``I would be very surprised if we find out that gold jewelry demand globally was not down in the first half of the year.''

Investors last year sold more gold than they bought to take advantage of a rebound in prices from close to a 22-year low, Gold Fields said.

................
Central Bank Sales

Central banks last year sold a net 504 tons of bullion reserves, up 3.1 percent from 2000 and the most since 1992, the company said. Earnings from the sales were often used to buy interest-bearing government bonds.

``It's only gold,'' said Andy Smith, an analyst at Mitsui & Co. in London. ``The problem for gold is that it needs more speculators to run with the bull market, and it just isn't getting that.''

A sustained rally in gold would also need participation by private investors, traders said. Individuals seeking to protect their money from the damage inflation did to fixed-income securities, such as government bonds, helped send gold above $800 an ounce in 1980.

``Most of the buying we've been seeing is by the professionals, not individuals,'' said Tony Roggina, a gold trader at VIT Trading Inc. in New York. ``You need the public to keep the rally going.''

***********************
Misetich

The "boys and girls" appear to be at it again! Talking up the US economy (O'Neil, Lindsay)-
"planting" negative spin on gold market - (never mention producers buy-backs, increase investment demand from Japan etc in 2002- rather cite GFMS 2001 investment demand stats)

No mention that producers hedging dwindled due to low interest rates!

No mention of the Washington agreement!

No mention that gold production is forecasted on being lower for years to come!

If the US economy is REALLY recovering at 3.5 to 4% as O'Neil is forecasting for the year WHY are Feds interest rates so low?

The CB sales "scam" is getting tiresome- check out the stats-

http://www.gold.org/value/official/Gios/20/GOS_20.pdf

What we do know is:

Stress in financial system - as stock values tumbled
Stress in financial stystem- JP Morgan and Citi
Stress in financial system - Insurers
Stress in financial system - Brazil
Stress in financial system - Argentina
Stress in financial system - Turkey

or is the whole story this one

Indeed, worries about credit quality at some major banks swirled in markets this past week, reaching their apex on Wednesday as investors around the world piled into short-dated Treasuries, drying up liquidity in other fixed income markets.

"It's like walking through a landmine," said Jim Claire, director of fixed-income sales and trading at Evergreen Institutional Investment Management in Charlotte, North Carolina, describing conditions in the corporate bond market.

While few corporate borrowers have the stomach to tap the debt markets, the Treasury is expected to announce on Wednesday it will sell $22 billion of new five-year paper and $15 billion of benchmark 10 year notes the following week, according to Wrightson Associates.

http://www.forbes.com/newswire/2002/07/28/rtr678279.html

The gold VOLCANO is heating up!

Got gold?

Black Blade

(07/28/2002; 18:25:37 MDT - Msg ID: 81695)

How Wall Street could impoverish us all

http://news.independent.co.uk/business/news_analysis/story.jsp?story=319014
Snippit:

Top of the list: the chief executives of nearly a thousand of America's largest public companies are under orders from the Securities and Exchange Commission personally to certify that their financial results are accurate before a 14 August deadline. It is an exercise that is meant to restore investor confidence. It could have the opposite effect. Second, talk has turned to investigating the banks. And, finally, there was that Robert Rubin telephone call.

No one can miss the stench coming from the rot in corporate America. The roster of companies and their executives accused or charged with criminally deceiving investors gets longer by the day. Enron, Tyco, Global Crossing, Martha Stewart and ImClone, AOL Time Warner, and on it goes. The day we discover that even Mr Rubin succumbed to greed would indeed be a telling one. Secretary of the Treasury for Bill Clinton for four years, he has stood as a symbol of sober and erudite correctness. That day has not arrived, quite. But we do know that one day last autumn, Rubin placed a call to Peter Fisher, the Treasury undersecretary, with a disturbing plea. Enron was on the brink of extinction and Rubin asked for help in pressuring the rating agencies from downgrading its stock. There is sense in this, but it is sleazy. Rubin was by then a director of the Citicorp financial conglomerate and Enron was one of its biggest clients.

For Citicorp itself, trouble may be much closer at hand. With JP Morgan Chase, it was accused during hearings on Capitol Hill last week of helping Enron, the failed energy trader, to set up a network of hidden partnerships and misleading cash-flow transactions that directly helped it to conceal its mountain of debt from the markets. History tells us that when the banks stumble, the whole system fractures. The investigation into their role in the Enron debacle will take months. "It's a pretty sad story, in my judgement, but we haven't heard the end of it," noted the investigating committee chairman, Senator Carl Levin. The SEC's insistence that chief executives certify their financial statements by the middle of next month is part of an effort that is under way in all quarters � on Capitol Hill, in the White House (a little belatedly) and even among some parts of business itself � to answer public disgust with corporate America and eradicate the sickness.

Black Blade: The July 31st deadline should not go unnoticed either. We may find out that the past several years were all a lie as well.

Cavan Man

(07/28/2002; 18:39:28 MDT - Msg ID: 81696)

The stronger dollar?

Financial press spin?For those of us paying close attention; do you remember when the USD index was over 120? In fact, it might have been closer to 122?? Today, it is 106 and change. So, it's up what, 2.0 plus/minus. That's a "stronger dollar"?
Are you paying attention? You'd better (you bet). Currency wars heating up.

misetich

(07/28/2002; 18:39:41 MDT - Msg ID: 81697)

Debt fuels US gas and power bankruptcy fears

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1027694123937&p=1012571727108Snip:

US and European banks and bondholders lent an estimated $500bn to the crippled US gas and power sector, new research commissioned by the Financial Times reveals. The figure raises fears that a further string of corporate failures in the wake of the Enron scandal would expose lenders to heavy losses.

Dynegy and Williams, which have combined debts of more than $20bn, are among those that could be forced into bankruptcy following the collapse of their energy trading markets and a crisis of investor confidence.

Although the energy trading companies are under the most immediate pressure, the fall in electricity prices is hitting the finances of the entire US gas and power sector which SNL Financial, an independent research firm, estimates had total debts of $450bn at the end of last year.

Karl Miller, who set up Enron's European trading business and is now a consultant to distressed energy companies, claims these figures underestimate the total exposure because of large amounts of undisclosed, off- balance sheet debt.

"Managements continue to hide the ball from the capital markets. Managements have signed off on overly aggressive, fraudulent transactions and they have not been willing to take these big writedowns."

Some industry insiders believe the write-offs faced by banks and bondholders could exceed the losses caused by the collapse of WorldCom and Global Crossing. The two US telecommunications companies filed for bankruptcy with combined debts of $44bn.

"We are past the point of no return on significant levels of debt default in the energy industry, which will dwarf WorldCom and Global Crossing," said Mr Miller. "There is no doubt we will see multiple bankruptcies shortly."

US energy companies borrowed heavily in the late 1990s to take advantage of deregulation, investing in infrastructure and building up trading operations.

The debt of the top eight energy traders soared by 200 per cent to $115bn in the three years to May 2002, according to SNL Financial. Lenders were attracted by the strong earnings growth shown by the companies based on optimistic forecasts of future US power prices.

Following the fall in power prices, the companies - including Calpine, Reliant, Mirant, Aquila, El Paso, Duke and AES - are now struggling to support their borrowings as cash flow dries up and other sources of credit are closed off.

The banks most active in arranging finance to the sector include Citigroup and JP Morgan Chase - both under scrutiny over their role in the funding of Enron - and Bank of America.

It is unclear how much energy company debt these banks have retained and how much they have passed on to other lenders. In the case of failed telecoms companies, much of the debt was sold by banks to other investors.

***************

Lets repeat that again -The banks most active in arranging finance to the sector include Citigroup and JP Morgan Chase

This TRAIL is getting hotter!

Got gold?

Paper Avalanche

(07/28/2002; 18:43:58 MDT - Msg ID: 81698)

@ Black Blade

Greetings sir BB! Thank you for your tireless efforts to bring valuable and timely news to this forum (and I really like your comments).

What event will occur on 7/31 that you cited as being another possible trigger to a big implosion in the markets?

Thanks.

Paper Avalanche

Cavan Man

(07/28/2002; 18:44:17 MDT - Msg ID: 81699)

"The current gold market.......

......will fail going straight up or straight down...."

FOA

Canuck

(07/28/2002; 18:54:23 MDT - Msg ID: 81700)

@ Cavan Man

I've been lurking for a few days. Where does your last statement come from? Most interesting.

Worried about being in too deep.

Black Blade

(07/28/2002; 18:55:22 MDT - Msg ID: 81701)

Dollar higher against yen in Tokyo

TOKYO (AP) -- The U.S. dollar was trading at 118.84 yen on the Tokyo foreign exchange market at 9 a.m. (0000 GMT) Monday, up 1.47 yen from late Friday.

Black Blade: The US dollar is rocketing much higher tonight against the world's toilet currencies. Unknown yet is how much is due to MOF and BOJ yen selling and USD buying. The Nikkei is charging higher as expected. Japan is nothing more than a factory on a couple of islands assembling trinkets for export. They must have the weaker currency for survival. Looks like a lot of "entertainment" is in store for the US tomorrow.

Canuck

(07/28/2002; 18:58:11 MDT - Msg ID: 81702)

@ Paper

Just in case BB is tied up and I stand to be corrected but re-statement of last 3 years of GDP occurs on July 31st.

Speculation is that it has been overstated. Alot of speculation lately, yes?

Black Blade

(07/28/2002; 19:00:10 MDT - Msg ID: 81703)

Re: Paper Avalanche - GDP Restatements

On July 31st the US restates the GDP data for the last couple of years and it could be a negative surprise according to Morgan-Stanley's Stephen Roach and several others. Some state that it is a rear-veiw look at the economy, however, any serious revisions could mean that the strong economy was nothing but an illusion and that could set up another round of stock market losses. Could be fun! Cheers!

- Black Blade

Canuck

(07/28/2002; 19:01:33 MDT - Msg ID: 81704)

@ Cavan Man, All

If gold breaches 300 this week I will post my finale.

Black Blade

(07/28/2002; 19:16:06 MDT - Msg ID: 81705)

Worsening Profit Outlook Threatens Gains: U.S. Stocks Outlook

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Stock%20Market%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_stocks&s=APUQXVhY.V29yc2Vu
Snippit:

New York, July 28 (Bloomberg) -- Don't count on corporate profit growth to spark further gains in U.S. stocks. While analysts surveyed by Thomson First Call expect earnings for Standard & Poor's 500 Index members to rise 14 percent in the third quarter, the estimate ``keeps getting ratcheted down,'' said Don Ross, chief investment officer at National City Investment Management Co., which oversees $28 billion in Cleveland. ``And we think it's still too high,'' he said.

Black Blade: Exactly! The earnings estimates continue to be revised lower so that the companies can meet or beat the number. Just how far can the bar be lowered and the bogus accounting (ex. Pro Forma, Synthetic Leasing, Operating Earnings, etc.) continue until someone finally says the patient is terminal?

Canuck

(07/28/2002; 19:17:12 MDT - Msg ID: 81706)

@ LeSin

Awesome post.

A matter of perspective isn't it!! Editorials in Canadian newspapers have discussed the need for oil. Some articles are very opinionated indeed.

Difficult to know the truth, yes?

USAGOLD

(07/28/2002; 19:18:20 MDT - Msg ID: 81707)

You know what, Black Blade. . . .All . . .

I do not think it is succumbing to Greed. . . It was succumbing to Fear. . . . .Fear that the trading schemes would unwind. Now its fear they'll be discovered. In the story of Genesis, when Adam and Eve are found out, the most gut-wrenching discovery when their "eyes were opened" (recognition) was that they were naked. . . . . . A Sunday thought. . . .And why is it again that Rubin made that phone call??

mikal

(07/28/2002; 19:29:34 MDT - Msg ID: 81708)

@Canuck

Hang in there! Like Cavan Man qouted FOA:" The current gold market ...will fail going straight up or straight down." Which is to say, in the very unlikely event she pierces $290US, she won't stay there for long enough to register with the sheeple. The paper game folds. Better for them to keep it above $300, which is most probable short-term!

Canuck

(07/28/2002; 19:32:56 MDT - Msg ID: 81709)

@ Sierra Madre , All; msg 81679

For anyone missing Mr. Madre's post today this is a must read. It explains ALL the reasons to be a gold bull; excellent review.

Mr. Madre,

In your opinion, why did gold suffer it's losses this week?
What do you see short, intermediate and long term for gold and gold stocks?

TIA,

Canuck.

USAGOLD

(07/28/2002; 19:34:02 MDT - Msg ID: 81710)

All . . .

I hope my last post doesn't encourage a bunch of Biblical references, etc. . . . .In this case, I thought the allusion appropriate. The allegory, I thought, fit the situation. I really don't think greed is the prime motivator at this point in corporate America and on Wall Street. I think its Fear. And Fear, as I think we all understand, is a much more dangerous and primal emotion than greed. Expect anything. These will not be normal times. I saw an 88 year old veteran Wall Streeter interviewed on CBS News tonight and he said that this would be the worst stock market since the 1930s, but that it would not bring down the economy -- like 1929 did. I agree with that. Fiat money economies tend toward inflationary destruction; gold-based economies despression. We'll see hyper-inflation in the world economy first. . . .the Depression will come later. Fear will force the Fed to print money like there's no tomorrow, and nothing or no one will prevent it. In fact, when you consider the amount of debt monetization in progress, it is apparent we've already waded into the stream. . . . .Of the $400 billion added to the national debt over the past year, how much was bought by foreigners, how much by the American public, and how much by the Fed????

If anyone has the numbers, I'd like to see them.

USAGOLD

(07/28/2002; 19:38:33 MDT - Msg ID: 81711)

All. . .

Let me rephrase that last post, what the 88 year old Wall Streeter said was that this stock market debacle would be far worse than 1929. . .I didn't quote him properly the first time around.

Cavan Man

(07/28/2002; 19:50:00 MDT - Msg ID: 81712)

Canuck

That statement comes from FOA and it is a direct quote. I have never forgotten it. What comes after the failure is freegold according to that "essayist". Frankly, I don't really know what to make of it. I only know that at this point in the cycle of life, both economic and social as well as political, I'd rather own physical gold than any other investment. Each day in fact I worry about not having enough. Read "Gold Wars". It is a roadmap (one of many) to the future. Sorry to hear about your loss of conviction.

USAGOLD

(07/28/2002; 19:50:39 MDT - Msg ID: 81713)

A quote from Lenny Bruce. . . .

Speaking of fear and desperation. . . .

Some of you will remember the brilliant and troubled coffee-house satiricist, Lenny Bruce:

"My comedy is based upon desperation, destruction and despair. Without those things I'd be standing in the bread line right behind J. Edgar Hoover.

Also, just got an important artice forwarded from fellow goldmeister, Chris Powell:

"The first "intervention" came in the last hours
of the last trading day of June, which was
mark-to-market day for the official reports of
banks and others with large gold derivative
positions. This feeds long-standing suspicions
that J.P. Morgan Chase and/or other bullion
bankers are massively short gold, as we have
explained previously, and that they must, and
are trying to, break the gold market to avoid
unmanageably large losses.

We remain agnostic as to cause, but agree
that the selling pattern is truly strange."

________

I'll let Chris fill you in, if he so wishes. The analysis simply blends with my own. . . . . the beat goes on. . ..

Black Blade

(07/28/2002; 19:51:55 MDT - Msg ID: 81714)

Re: USAGOLD � The corruption of Robert Rubin or the Ghosts of Teapot Dome?

Fear? Perhaps so. It could be a combination of both greed and fear. Though I liken former Treasury Secretary Robert Rubin to Sen. Albert B. Fall of New Mexico. In 1921, Fall became Harding's Secretary of the Interior and quickly moved to open the naval oil reserves in Elk Hills, California and Teapot Dome near Casper, Wyoming to private exploitation. Though he attempted to keep his actions secret he could not, and the Senate authorized an investigation by the committee on public lands. The Senate committee held extended hearings and soon set in motion a whole chain of occurrences. Secretary Fall, they found, had convinced Secretary of the Navy Edwin Denby and others that the administration of the reserves should be turned over to him. Fall had then leased Teapot Dome to Harry F. Sinclair's Mammoth Oil Company and the rich Elk Hills reserve in California to Edward L. Doheny's Pan-American Petroleum and Transport Company, meanwhile receiving from these oilmen gifts and "loans" amounting to some $400,000. Albert Fall was found guilty of bribery in 1929. He was fined $100,000 and sentenced to one year in prison.

In a similar vein, I see Robert Rubin's actions as equally egregious as that of Albert Fall and no less criminal. He may have given special access to Citigroup to planned government actions in areas that would affect the economy and therefore benefit Citigroup with foreknowledge. Rubin's payoff was to be rewarded with at the very least the top job at Citigroup. Now we find that he is using undue influence to continue to affect the markets, in this case the investigations into Enron and ultimately the roles of Citigroup and JP Morgan Chase in various unethical and quite possibly illegal activities. Of course due to the unwritten rules of executive privilege commonly held for former and current government officials we are not likely to see legal action taken against Robert Rubin as occurred with Albert Fall. That is unless there is a substantial amount of public outrage � that is unlikely as Americans have become immune to government corruption since the days of the Teapot Dome Scandal.

Anyway, that is my take on the whole mess.

- Black Blade

DOWNUNDER

(07/28/2002; 19:54:45 MDT - Msg ID: 81715)

AT CYBER BAT - - RE MY POST 664 to Horatio

cyberbat (7/28/02; 11:04:05MT - usagold.com msg#: 81671)
@ downunder
With respect to your last post, you need to understand one thing. People can express their opinions on this page and if that affects the shares of SA gold mines so be it. I don't know if you have freedoom of expression where you come from or not but I'll be D---- if I would take anything for granted or otherwise from 2 countries like Austrailia and Canada that were so bold as to pass laws seperating their firearms from innocent people. We in America are just about toast as far as morals are concerned, but we still have our freedom of expression and a firearm by our bedside.
Cyberbat
----------------------------------------------------------- I don't see how a "reasonable" person could interpret what I had to say as denying anyone the right to free speech.What
I did point out was that the issue of S.African Mining Laws had been discussed in detail over a month ago.I feel there should be some factual basis for comments that affect others
--- especially where investments are concerned.Try posting on this site that gold investments suck & that the POG has only one way to go & thats down! There would rightly be many screams of outrage as demands were made to back up the statement with some facts! --- thats the point that I hope you're "not as blind as - - " to see. :)

Your comments about guns was a bit obtuse but again facts should be checked or questions asked. For the record I have a 30.30 at home so I'm not unarmed! It's registered & while the gun laws here do suck it is possible to be armed.As far as freedom of expression goes apparently your mainstream papers won't print it so what to do? Long live free speech.

Chris Powell

(07/28/2002; 19:55:20 MDT - Msg ID: 81716)

Au Capital report notes Morgan Chase's desperation

http://groups.yahoo.com/group/gata/message/1194Report by Au Capital L.P. echoes GATA's observations
about Morgan Chase's desperate intervention against
the gold price:

http://groups.yahoo.com/group/gata/message/1194

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

Chris Powell

(07/28/2002; 20:01:14 MDT - Msg ID: 81717)

Full text of report citing Morgan Chase's desperation with gold

Since USAGold considers the article
below especially important, I'll post
the whole thing here and spare people
the distraction of the Internet link
and the trip outside the USAGold site.

----------------------

9:11p ET Sunday, July 27, 2002

Dear Friend of GATA and Gold:

Our friends at Au Capital in Bethesda,
Maryland, have graciously allowed us to share
with you their latest report to their
investors because it includes insights that
tend to confirm what you've been hearing from
GATA Chairman Bill Murphy and GATA's brain
trust. The Au Capital report may be most
notable for indicating that the spotlight in
the gold market is shining increasingly on
J.P. Morgan Chase, that Morgan Chase's behavior
in the market has become brazen, and that it is
being noticed.

Of course the more Morgan Chase's behavior
is noticed, the more difficulty the firm may
encounter in its manipulation of the gold
market.

The Au Capital report is appended here, minus a
chart that won't reproduce well in e-mail.

CHRIS POWELL, Secretary/Treasurer Gold Anti-
Trust Action Committee Inc.

* * *

Au Capital, LP
Bethesda, Maryland

July 27, 2002

To Our Limited Partners:

Our capital gained 27.1 percent in the second
quarter and 89.3 percent in the first half.
We beat our benchmarks rather dramatically,
even as we maintained a cash balance on the
order of 20 percent of capital. Our quarterly
and longer-term returns to June 30, 2002, are
shown below, and your individual account
statement and partnership financial
statements for the latest periods are
enclosed.

These longer-term data demonstrate three
important points.

First, you already know that we have
outperformed our peers and benchmarks
steadily and substantially over the years,
earning more on the uplegs and losing less on
the downside, but you may not know how
substantial the cumulative effect has come to
be. A $10,000 investment in Au Capital grew
to $22,393 at a rate of 8.9 percent
compounded annually from inception at the
start of 1993 to the middle of 2002. A
comparable investment in the gold-oriented
funds tracked by Lipper grew to just $13,048
at a 2.8 percent compound annual rate.

Second, we virtually matched the longer-term
return of the S&P 500 index of the largest
stocks in a period that included the greatest
equity price inflation in history and what we
believe is only the first phase of its
collapse. The difference is just $324 on a
$10,000 investment over nearly 10 years. (The
Au Capital return is net to limited partners,
of course, while the S&P index excludes
management costs, commissions, and dividends.)

Third, since the price of gold bullion
declined slightly in the period and the
leading index of gold mining shares was
unchanged, our returns clearly did not
benefit from any general revaluation of our
sector. We simply maintained our long-term
call on the price of gold as a hedge against
systemic risk to the values of financial
assets, and made some money for our trouble.
The objective of Au Capital was to maintain
the hedge at little or no cost, and we more
than met it.

Volatility within the period was substantial,
occasionally severe; our performance, as
expected, generally leaned against that of
the broader markets for financial assets,
especially in the mini-crises during which
markets actively considered systemic risk.

Volatility has increased again of late,
beginning with a $10 decline in bullion
prices on the last trading day of June. Our
portfolio has declined about 20 percent in
July to date. That single-day crack in bullion
prices has recurred twice since, bringing the
spot price back to $300 per ounce currently
and threatening to retest much of the recent
rise from the $270s.

As we wrote last time, shares had grown rich
relative to bullion, discounting $350 per
ounce, so we have been expecting a
significant decline in share prices. It has
surprised us, however, to see the metal price
itself decline severely as the broader markets
edged toward panic. Metal prices lately had
risen as stock prices weakened; with equity
markets threatening to crack during much of
July, we would have expected stronger reports
from gold bullion.

Further, the bullion-selling pattern looks in
many ways like market intervention by a large,
unidentified seller, and it is difficult to
imagine why anyone who was motivated to
accumulate a large, long gold position in the
first place would be choosing to sell
aggressively under the recently prevailing
circumstances.

The first "intervention" came in the last hours
of the last trading day of June, which was
mark-to-market day for the official reports of
banks and others with large gold derivative
positions. This feeds long-standing suspicions
that J.P. Morgan Chase and/or other bullion
bankers are massively short gold, as we have
explained previously, and that they must, and
are trying to, break the gold market to avoid
unmanageably large losses.

We remain agnostic as to cause, but agree
that the selling pattern is truly strange.

In general, although patience and a tolerance
for volatility will continue to be required,
the underlying strength in the fundamentals
of gold and the fragility of the financial
system as a whole are both conducive to our
further success over time.

With every good wish,

Hans H. Kahn and Daniel Tessler
Au Capital, L.P.
4938 Hampden Lane
Suite 337
Bethesda, Maryland 20814
301-469-8080
digitaldaniel@msn.com

Black Blade

(07/28/2002; 20:09:54 MDT - Msg ID: 81718)

Qwest says it expects to restate earnings from 1999 to 2001

http://biz.yahoo.com/ap/020728/us_qwest_3.html
Snippit:

DENVER (AP) -- Qwest Communications International Inc. said it expects to restate its earnings for 1999 to 2001 because of accounting errors related to optical capacity and equipment sales, and telephone services. "Most of these things are going to deal with timing," Qwest's chief financial officer, Oren Shaffer, said in an interview with The Associated Press Sunday night. "Should this have been in this period or in another period."

Black Blade: As we approach the August 14th deadline, it appears that the desperate scramble has begun. It looks like Qwest is leading the charge. Boy am I glad I sold this turkey.

cyberbat

(07/28/2002; 20:13:26 MDT - Msg ID: 81719)

@ downunder

I agree that we have a bought out media; Peter Jennings being one of the worst offenders, but that is on T.V., not talk radio. One small snippit, I have stated in this forum that the price of gold is being so manipulated that we will see $270.00 gold this year. So far, they haven't run me off yet.
Good to know that you still have a right to bear weapons there. One small problem I see though, is if it is registered, they now know where to go to get it. Mine are not registered and are perfectly legal.
With that thought in mind, let me give you a quote with respect to the regeistering of guns - "This year will go down in history. For the first time, a civilized nation has full gun registration. Our streets will be safer, our police more effecient, and the world will follow our lead in to the future." - Adolf Hitler 1935

Waverider

(07/28/2002; 20:15:08 MDT - Msg ID: 81720)

USAGOLD

http://www.hussman.com/hussman/html/datapage.htmMichael,
This is a good link to economic data where you'll find the Total Federal Debt, Federal Debt held by the Federal Reserve, and Federal Debt held by Foreign Investors. Interesting that data for the Federal Debt held by Foreign Investors stops at 1998, when it's around 23%. Hope that helps some. Cheers,
Waverider

USAGOLD

(07/28/2002; 20:15:33 MDT - Msg ID: 81721)

Black Blade. . .with reference to Teapot Dome:

Per you last post. Agreed. I heard another interesting quote tonight: "History does not necesarily repeat; but it rhymes." What's interesting about the Rubin situation is that it is the Democrats plowing ahead on the scandals issue and Rubin is one of theirs. Bush strategists have to be kicking themselves up and down Pennsylvania Avenue having thus far blown this issue. We advised them to take it on straightforward inauguration day, if you remember. . . . .As I recall you made more than one post alluding to the possibilities what now seems an enternity ago. . . The Republicans have thus far blown it.

(07/28/2002; 20:34:47 MDT - Msg ID: 81722)

Do Lower Gold Share Prices Present a Buying Opportunity?

7-28-02

Just as some stock market analysts state that the low

regular stock prices are a buying opportunity, it seems

that the same reasoning could apply to gold shares.

This past week there was a considerable percentage drop in

prices across the board in gold stocks.

As prices dropped, the dividend yields of the various stocks

rose in inverse proportion giving some indication of the

magnitude of the drop.

Since gold share prices are highly sensitive to the price

of gold all investors in these shares must have confidence

that the price of gold will rise again. No matter how

high these dividend yields go or how low the share prices

drop, there is no guarantee that they are a buying
opportunity at this time unless the price of gold begins

to rise again both in the near and long term.

The following repost of friday's dividend yields gives

an indication of how the gold share market has readjusted:

ax (7/28/02; 12:56:06MT - usagold.com msg#: 81678)

DIVIDEND YIELDS SHARPEN UP FOR MAJOR GOLD STOCKS

7-28-02

Because of the sudden plunge in the price of gold and the

price gold stocks this week, the dividend yields for

major gold producers have increased.

DIVIDEND YIELDS FOR MAJOR GOLD PRODUCERS IN ALPH.

ORDER

AS OF 7-26-02:

GOLD STOCK //// DIVIDEND YIELD %

American Barrick /////// 1.50 % (AOL Quote)

Anglo Gold /////// 4.34 % (Sharenet)

Gold Fields ////// 1.28% (Sharenet)

Harmony ////// 1.32 % (Sharenet)

Newmont ////// .50 % (Aol Quote)

Placer Dome ////// 1.20 % (Aol Quote)

Canuck

(07/28/2002; 20:37:11 MDT - Msg ID: 81723)

@ Cavan Man

There are a couple things I know for sure and there are umpteen thousand that I speculate about.

I speculate in gold. I have probably read a couple hundred books about investing and there is a common theme, nothing is guaranteed. There seems to be a common theme though, if one can anticipate the world's needs some 3-5 years out, one can capitalize on that.

If one had the vision to see the internet craze (build-up) in '96/'97 one could have rode the wave. Imagine getting in in at that time and having the 'where-with-all' to get out in '99/'00 before the storm. I read a newspaper article in late '99/ early /00 about 'internet use saturation'.

I wish for a moment that I could step outside of my body and kick my ass for an hour or two.

So........where are we.

Yes, the hangovers bubbles exist, some huge. Where will the fallout occur? Where will money flow? What will be the 'money-magnet' over the next couple years? Real-estate has had enormus gains in the last 3-5 years. Where was I? I had my finger up my butt, my mind in neutral and the engine stalling. Missed the boat a second time.

Several real estate agents have told me in the last couple years that when money burns it seeks safety, duh! Sierra Madre's post earlier is CLASSIC definition of gold BULL.

Here's a couple things I know now. Money will always chase highest ROI. Money in trouble will seek safety.

Here's what I see (short-term). The dollar is rising again, the famed global recovery is now not certain. It was assumed that Europe or Asia would pick up the slack in the global economic recovery and thus the weakening dollar. The dollar did slump, it did come off of it's highs but all of a sudden, and I mean ALL OF A SUDDEN, it has been realized that the economic slump will continue world-wide. The safety is still in the dollar, thus the rise in it and the free-fall of gold and gold shares.

The intermediate view?

The US has to get by the scandals, the overstatements, the lies. Let's be frank, the US has to get by the BULLSHIT. The US has to re-state it's (the country's earings) in a few days, followed by some 1000 corporations in a couple weeks and then we will see how the planet reacts. If everything has been anticipated correctly by the SM's nothing happens. So we go back to global economic activity, if the US is still the 'best bet in town' the dollar resumes the 'safety net'. If however, we get surprises and the US is skating perhaps the world will RESUME the 'dollar demise'.

"Feel lucky punk!" Place your bets.

So, Einsteins that we are, is JPM in trouble or is it not. S& P said it's 'devirative' portfolio was okay. They were downgraded on lower earnings not because it's going to flash and burn. So, at the end of the day is JPM fading or folding, not making great earnings or on fire?

So......is gold the 3-5 year play?

Gold will rise on one or both of two different counts, the dollar dies or it rises on its own merits. Gold, is it money, it is commodity? Gold the commodity died this week due to anticipated economic slumping, I think that's crystal clear. Gold the money awaits further news.

Long-term?

The planet is in trouble. Anyone not acquiring physical for 10-50 years out is brain-dead. I won't even qualify that outrageous statement.

Canuck.

USAGOLD

(07/28/2002; 20:38:26 MDT - Msg ID: 81724)

Waverider. . . .

Thanks for the reference. I've bookmarked it. The statistics run only through March, 2002, but I think we are going to find that the government has blown the lid off the national debt and with it the %-age held by the Fed. I did see a photograph one time of a single straw driven by the force of tornado into a two by four. I do not think that Japanese dollar demand aimed at the destruction of its own currency is an equivalency. Logic dictates that the Fed has stepped in, I think we'll find, and stepped in big time, but it would take a force equal to that of a straw being driven into a two by four to counter-balance the money-printing at the Fed over the last 6 months. And what's driving this unprecedented debasement? What Sierra Madre calls "a perpetual war" and the liquidity problems on Wall Street. And it doesn't end here.

Thanks for being here, Waverider -- a pillar of objectivity for us all.

Cavan Man. . .Thanks for the kind comment earlier today (yesterday?) on the forum. Who needs CNBC when you can get it all here, whenever you feel you need it? I though your reposting of the FOA comment as important a post as we've had today. In that it describes the kind of situation in which find ourselves. Either way, the paper market is going to disintegrate. That's why we keep telling people to have a good store of the physical before you play the paper game -- stocks, commodities or options.

Black Blade

(07/28/2002; 20:42:26 MDT - Msg ID: 81725)

Re: cyberbat

I wouldn't worry about being runoff. The forum is for debate and discussion (within the rule of course). If you think that the POG will tank to $270 an ounce then that's fine. I know several others believe that the POG will retest $250 an ounce. However, the only reason that the POG has fallen as it recently has is due to the apparent need to sell all liquid assets because of a short squeeze in liquid assets. At least that is what information that I have been able to extract from several sources. This is not typical market action just as Chris Powell's post describes. It has caught many people off guard as the equities markets suffer, the US dollar remains relatively weak, geopolitical tensions remain high, debt from all areas increasing to record highs, higher demand, reduction of supply, etc. Still, I concede that the POG could retrace to lower levels; however, it will not be due to natural market forces if it does. That would require a firm belief that the shorts have the stronger hand. That strength is questionable, as the demand for the physical metal remains quite strong with current demand exceeding current supply. Anyway, I see no need to be concerned with expulsion for a contrary view. Hell. I have mixed it up with several posters in the past over divergent viewpoints � but then that's what we are here for � right? Cheers!

- Black Blade

USAGOLD

(07/28/2002; 20:44:34 MDT - Msg ID: 81726)

Black Blade. . .

I just realized that I should have added something to the Teapot Dome post. I'll repost with the additions:

"Per you last post. Agreed. I heard another interesting quote tonight: "History does not necesarily repeat; but it rhymes." What's interesting about the Rubin situation is that it is the Democrats plowing ahead on the scandals issue
and Rubin is one of theirs. Bush strategists have to be kicking themselves up and down Pennsylvania Avenue having thus far blown this issue. We advised them to take it on straightforward inauguration day, if you remember.
. . . .As I recall you made more than one post alluding to the possibilities what now seems an enternity ago. . . The Republicans have thus far blown it. THIS COULD HAVE BEEN THEIR ISSUE AND THE MID-TERMS WOULD HAVE BEEN THEIR ELECTION. AS IT IS, THE DEMOCRATS ARE LITERALLY TURNING THE TABLES ON THEM."

Cavan Man

(07/28/2002; 20:46:10 MDT - Msg ID: 81727)

Canuck & USAGOLD

That quote from our friend was spoken in the context of him being asked which way the gold market was going and when. He quickly disclaimed any ability to forecast the markets and said anyone who thought he knew when, where and how gold would rise should, in his words, "run away (from me)".

Look at all the volatility in the gold market the last 90 days or so. Obviously, something is cookin'. If you're looking at the gold market today and thinking you are looking at reality, I think you're looking in the rear view mirror instead.

Cavan Man

(07/28/2002; 20:50:58 MDT - Msg ID: 81728)

Canuck

I asked Reg Howe once what could possibly break the stranglehold on the gold market. He said, "massive buying". I say, we're almost just as likely to experience "massive selling" instead. Until this once new and improved version of the London Gold Pool is broken up you'll never be satisfied with your investment in AU--never.

YGM

(07/28/2002; 20:52:24 MDT - Msg ID: 81729)

Gold "MAY" See $275-$285 Again.....

A week ago I'd have dissented with anyone who said that.....But after seeing for the 100th time the strength and ability of the "Manipulators" I must be realistic and face facts....So as I adopt a revised attitude for POG over the next "Short" while I now will look to the positive side...
-Did I have any need to sell any Gold in the near term?..NO!
-Have I lost my perspective for Gold's future..NO!
-Will the Gold Market will become a long term death..NO!
-Will the JPM's & the Goldman Sachs get their just due..YES!
-Will Gold rebound with wilder swings to upside than down..YES! (past history can attest to that)
-Have the Cabal given us yet another 'CHEAP' buying opportunity..YES!
-Should I accumulate more Yellow metal..YES! YES! YES!

Time has long been on the side of the Cabal but I fear as others that they're running out of time and so the days of cheap Gold may be numbered, contrary to the current image of the Gold Market....The next 3-4 months will be very volatile and I plan to stay totally foscused on the bigger picture.....YGM.

"GO GATA, GO GOLD & GO PHYSICAL"

Canuck

(07/28/2002; 21:01:17 MDT - Msg ID: 81730)

@ Cavan Man

"Gold Wars" is a book? By?

YGM

(07/28/2002; 21:07:25 MDT - Msg ID: 81731)

A Comment of FOA's...

I've Never Forgotten and Noone Should.....'roughly' remembered:.....

"That the explosive launching of Gold would come from a direction and at a time that one would least expect."

I firmly believe that and to me that means even now in the midst of the current attack on Gold we could see a reversal that would literally shock the investment world....48 hrs could put Gold very quickly above the $400.00 mark and the subsequent rush would make it's purchase almost unattainable for the little guy. Who can say that even this coming week is not that time. Well I've got a litlle extra $$ and I sure as hell am not taking a chance waiting on $275. POG to purchase more....FWIW....YGM

YGM

(07/28/2002; 21:09:21 MDT - Msg ID: 81732)

Canuck

Gold Wars...by Ferdinand Lipsstill waiting on my copy...YGM.

Black Blade

(07/28/2002; 21:18:43 MDT - Msg ID: 81733)

Re: USAGOLD

I find that politicians tend to be quite "entertaining" critters. I was thinking of a couple of other noteworthy Democrats. Speaker of the House Tom Daschle probably doesn't need an attack by the Republicans. All they have to de is let him talk and he does the damage on his own. It is a matter of "give em� enough rope and he'll hang himself". Then there is the senior senator West Virginian porker and Ku Klux Klansman Robert Bird. This guy is one of the more "entertaining" politicians, especially when he waxes philosophical. Sure, he is certifiably senile, but he is as fun as old Jesse Helms (aka "Foghorn Leghorn"). I don't know exactly why the Republicans don't respond to attacks by the Democrats. One of the rare occasions when I tuned into radio commentator Rush Limbaugh he did state that Democrats view politics as war and that any strategy regardless of ethics and legality was fair. Perhaps that is the difference in how the two major parties view modern politics. However, as I am neither Republican or Democrat I find the whole debate rather amusing. It is interesting that the Republicans have so much potential ammo and yet refuse to use it or are simply inept at the "art of war". With midterm elections on the horizon, they had better start using this ammo or else start to pull some rabbits out of a lot of hats if they wish to win back a majority in the senate. I too am surprised that they have not used their leverage this year. In fact some Republicans even appear completely timid. Then there are the Democrats that wear the Republican title (such as John McCain) who undermine the party's efforts much of the time. It is quite interesting. That said, I also find it quite interesting that the Democrats should be so vulnerable after several years of a corrupt and morally and ethically deficit Clinton administration, are able to carry on an attack with any degree of success. Maybe morality and ethics of the majority of people in a given region is by the people they elect to public office - and that is what is scary. "Interesting Times"

- Black Blade

Black Blade

(07/28/2002; 21:22:44 MDT - Msg ID: 81734)

The last sentence should read -

"Maybe morality and ethics of the majority of people in a given region is "defined" by the people they elect to public office."

mikal

(07/28/2002; 21:23:33 MDT - Msg ID: 81735)

@YGM

Good to hear from ya. Admittedly, I have lower expectations also. Seeing the report from Sinclair, Chapman, BlackBlade, Randy, Siochaina and many others has given me continued hope. Hoping Price of Gold (POG) will shortly, after wandering as low as $295 or so, resume another leg up, before eventually recapturing its old title- VOG, Value of Gold.

SEEKER OF THE GOLDEN GRAIL

(07/28/2002; 21:48:08 MDT - Msg ID: 81736)

Party Pooper

Hate to be one but can't we just attribute the dollar reversal, the gold reversal, gold stocks reversal, etc. to a case of moving too far too fast? It seems that with gold moving a mere 30% and gold stocks moving 100s of %, a healthy correction was in order. I don't know about you, but I took BIG profits. I started feeling GREEDY and thinking THIS TIME IS DIFFERENT and fortunately that was my cue to take profits.

The dollar is in a bear market (a high probability), but I certainly expect it to correct for possibly a month or two because it has dropped too far too fast. Then I find it quite reasonable that it will continue its bear market. Same with the stock markets, etc. Yes, it's quite plausible Central Bank, ESF or whomever interevened on Morgan-Chase's behalf because of their gold derivitve exposure, but it only worked because gold was due for a breather. I expect the next leg up comes in the fall possibly getting up to $400 before ANOTHER big correction takes place. Again I will sell when I get those GREEDY feelings and THIS TIME IS DIFFERENT. Hopefully the next leg up into 2003/2004 will take us even higher to 600.
I like investing in gold and silver stocks because they are so HIGHLY LEVERAGED against the metal and because I have made so much money! Making so much money has enabled me to continue to accumulate the physical for my (Real Money) savings account. I'm sure glad I didn't buy into the "ANOTHER" point of view that gold stocks should be avoided - they have been a tremendous tool for increasing my wealth. Please think about what I have said and get prepared for the next great leg of the bull market in gold and silver stocks. I'm sure USAGOLD will be tickled pink to have wealthy members hedging their enormous profits purchasing gold.

Trapper

(07/28/2002; 21:52:49 MDT - Msg ID: 81737)

The board

I must have fallen on my head again. My physical is under water and my stocks...just bad, very bad. I fear if we fall below support of 300.00 look out below. They used the nasdog to soak up the inflation from the last printing press race and now they are going to use the dow. They can print all they want, get the first use of the fiat, give some to joe sixpack via wages, tax the wages, and then get Joe to "invest" in the dow.Then they take the Dow down in 5 years and presto still no inflation.
I feel the only hope is silver. If the silver gets loose then maybe gold will follow. All the good, real, and right reasons for gold to go way up aren't worth squat if the big boys say...we won't let gold up till we say golds up. For all of us, have another bite of that s&%$ sandwich and shut up. Another and FOA might be wrong, or I might die of old age before they become right. Oh well live small..cause thats all the money I have left.

SEEKER OF THE GOLDEN GRAIL

(07/28/2002; 21:59:24 MDT - Msg ID: 81738)

COTs

PS - I'm waiting for evidence the small specs have sold before I take the plunge back in - these guys have historically been the dumb money that have signalled the peaks in gold over the years. Over the last decade, when they have held more than 40,000 contracts it was time to sell. As of last tuesday - they were still over 40,000. Let's wait until next week to see if they've sold yet - 30,000 or so to the 10,000 level would be nice but we may need a little more time and a little lower gold price to shake these rascals out of the tree so to speak. Good luck to all!

USAGOLD

(07/28/2002; 22:31:44 MDT - Msg ID: 81739)

Trapper. . .Some perspective

Some perspective:

Over the past 12 months, the DJIA is down 19%.

Gold is up 14%. (Even after the correction of the past few weeks).

Put another way:

$10,000 invested the DJIA 12 months ago would be valued at $8100.
$10,000 invested in gold would be valued at $14,000.
That represents a nearly $6000 swing.

The gold owner who has bought the metal as a long term hedge against stock market declines and dollar debasement is getting out of gold precisely what he or she wanted. His or her holdings have appreciated while stocks and the dollar have declined. Asset preservation has occurred.

Paupers?
No.

Home run hitters?
No.

Survivors?
Yes. (and in pretty good style)

And that might all one can ask for in this environment. At least for the time being. This is July. Gold quite often experiences cyclical lows this time of year -- a good time to add to one's holdings.

YGM

(07/28/2002; 22:34:26 MDT - Msg ID: 81740)

US Banks & Derivatives

http://www.rense.com/general27/hav.htmExcerpt:

Have The Big US Derivatives
Banks Exploded?
By John Hoefle
Executive Intelligence Review
www.larouchepub.com/eiw
7-28-2

(EIRNS) -- Indications are growing that the top three U.S. derivatives banks--J.P. Morgan Chase, Citigroup and Bank of America--have been pushed to, if not over, the brink of "technical" bankruptcy by problems in the derivatives markets. (See end section for background on what derivatives are.--Mark) We say "technical" because the top U.S. banks have long counted hundreds of billions of dollars of fictitious assets on their books, making them bankrupt in reality, and solvent only by perception.

Both Morgan Chase and Citigroup have shown up with uncanny frequency as the top lenders to the current crop of exploding corporations and are clearly facing huge losses on their loan portfolios. With corporations and individuals going bankrupt at record rates and defaults soaring, the loan problems at Morgan Chase, Citigroup and Bank of America go far beyond what has publicly surfaced, but their loan problems pale in comparison to the dangers lurking in their derivatives portfolio.

J.P. Morgan Chase, the world's largest derivatives bank, is a prime example; a loss equivalent to less than 0.2% of its $24 trillion derivatives portfolio would be enough to wipe out every last penny of the bank's equity capital. {EIR} believes that Morgan Chase actually collapsed in mid-2001, and is being secretly run by the Federal Reserve, similar to the way the Fed took over Citicorp in 1989.

Morgan Chase is the result of the acquisition of J.P. Morgan & Co. by the bigger Chase Manhattan. The deal, which closed on the last day of 2000, has been an absolute disaster as measured in ordinary--and therefore misleading--market terms. The market capitalization of the combined Morgan Chase is now less than that of Chase alone on the day before the merger, with Morgan (or at least its equivalent value) having simply vaporized. This is not surprising, as it was likely a bankruptcy at Morgan, and perhaps Chase as well, which led to the takeover of Morgan by Chase.

Citigroup may again be under Fed control as well, as rumors of major derivatives losses circulate. Citigroup is the result of the 1998 takeover of Citicorp by Travelers Insurance, creating what is now the largest bank in the U.S., with just over $1 trillion in assets and $9 trillion in derivatives. Former Treasury Secretary Robert Rubin revealed on July 15 that he was retiring from his position as vice-chairman at the bank, and three days later it was announced that Saudi Prince Alwaleed bin Talal, Citigroup's largest individual shareholder, had invested another $500 million in the bank, raising his holding to $10 billion. Alwaleed, a nephew of Saudi King Fahd, obtained his initial stake in the bank shortly after the Fed took it over in 1989 and began arranging a bailout. The latest cash infusion raises suspicion that Alwaleed is performing a similar service for Citigroup.

Not to be left out is Bank of America, whose $620 billion in assets puts it third behind Citigroup's $1 trillion and Morgan Chase's $713 billion. Bank of America's $10 trillion in derivatives puts it solidly on the hot seat in any financial crisis, and it has also loaned heavily to bankrupt companies. Rumors are flying that Bank of America has applied to the Fed for a secret bailout.

Banking sources in Europe have confirmed to {EIR} that a major derivatives crisis is underway, centered around the giant U.S. derivatives banks, Morgan Chase and Citigroup in particular. Were one of the big derivatives banks to explode, it could overwhelm the Fed's ability to cover up the losses, triggering a chain reaction which could blow out the entire global financial system.

Sierra Madre

(07/28/2002; 22:36:23 MDT - Msg ID: 81741)

Oops, slight mistake USAGOLD!

14% of $10,000 is $1,400, so that would make an investment of $10,000 grow to $11,400. Still quite acceptable, of course.

Sierra

Black Blade

(07/28/2002; 22:39:49 MDT - Msg ID: 81742)

Debt fuels US gas and power bankruptcy fears

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1027694123937&p=1012571727085

Snippit:

US and European banks and bondholders lent an estimated $500bn to the crippled US gas and power sector, new research commissioned by the Financial Times reveals. The figure raises fears that a further string of corporate failures in the wake of the Enron scandal would expose lenders to heavy losses. The banks most active in arranging finance to the sector include Citigroup and JP Morgan Chase - both under scrutiny over their role in the funding of Enron - and Bank of America.

Black Blade: Yeah, I know that this has been posted, however, I did step out to have a few cold ones and a dinner with a couple of energy sector acquaintances on Friday. We discussed these events concerning the energy sector. It does appear that the US is being set up for a severe energy crisis. Some major points are that new planned power plants have been shelved due to less lending and the current spate of scandals that include several energy companies. Also, there are problems developing in the dilapidated energy grid that have not received much press. The only reason that Ng supply appears to have been increasing is due to the deepening recession and fairly mild weather. The US is still quite vulnerable. Today there was a report on CNN "Business Unusual" that covered the likely event of another energy crisis in California. The situation has improved slightly, fortunately due to a crippling recession that has reduced energy demand. The lack of sufficient energy could cap any so-called economic recovery. Now as the building of new power plants is in doubt as energy companies fail left and right, we are looking at another developing crisis. Note that General Electric has or will lay off several thousand from the energy turbine division as orders have been cancelled or shelved.

Golden Bear

(07/28/2002; 22:50:50 MDT - Msg ID: 81743)

YGM (msg#: 81729) Gold "MAY" See $275-$285 Again.....

YGM, all,

In Gold Wars, Mr Lips makes a remark that during gold's rocket ride to $850 in 1980, it made several SEVERE retracements, before continuing to move higher...

Canuck, hang in there with your bullion...

MarkeTalk

(07/28/2002; 23:26:27 MDT - Msg ID: 81744)

Canuck, Cavan Man, YGM et al--JP Morgan Chase in trouble

http://www.zealllc.com/2002/jpmcrash.htmI don't know if anyone has posted this link, since I have been away from the site this weekend attending a high school class reunion. Tonight a friend of mine told me to go over to Jeff Rense's site and to read several articles. And I saw a reference to the aforementioned link on Rense's site.

This article makes for good reading, especially after the implosion of JPM this week. It also answers many questions which my clients asked me this week. The author makes an excellent point that the stock is down 66% from its high in early 2000. This resembles more of a high-flying tech stock than a stodgy DOW 30 member. But we all know why the pummelling took place. In a word, derivatives.

GC

Horatio

(07/28/2002; 23:31:40 MDT - Msg ID: 81745)

S.Africa

Leaked mining charter stirs up troubled market waters
Sherilee Bridge and Frank Nxumalo
July 28 2002 at 07:32AM

Johannesburg - Investors, panicked by the leaking of the government's draft empowerment charter for the mining industry, abandoned mining stocks on Friday raising fears of further carnage next week as international markets digest the plan to prevent white mine ownership of new mines.

Mine bosses called the draft empowerment charter "malicious", "unacceptable" and "effective nationalisation" and left emerging mining companies wondering where they would get the money to turn a political dream into reality.

The proposals revealed that the government's vision was to have all new mining operations in black control within a decade.

The document said mining companies must ensure that their black economic empowerment partners had at least a 51 percent equity stake in the operation before they apply for new mining licences.

Those seeking to convert existing licences to new mineral rights would have to surrender at least 30 percent of the venture's equity to a black economic empowerment partner.

"Should the applicant be unable to find a suitable partner, government should intervene through vehicles such as the Industrial Development Corporation and Development
Bank, so that such shares can be warehoused within these organisations," the draft charter read.

John Meyer, a resources analyst at SG Equities Research in London, said while there were still no details, the news was enough to send investors running for the hills.

Gold shares dived. AngloGold and Gold Fields closed 10 percent lower on the day. Harmony Gold Mining fell 16 percent and Durban Roodepoort Deep 18 percent in late Friday trade. While the lower gold price of $304.95 an ounce would have had a hand in the falls, sharper loses were recorded after 3pm when the market was abuzz with the news of the charter's contents.

The past two weeks have been marred by huge questions over the structure of black empowerment deals and the extent to which the government could standardise these deals through the charter.

The mining industry charter was expected to kick in December, when the Minerals and Petroleum Resources Development Bill is enacted.

Meyer said the bulk of the London investing community had been left wondering how long it would be until existing mining assets would have to comply with the 51 percent empowerment quota.

There was no indication of whether mining companies would receive compensation for the assets transferred to empowerment groups.

"Despite the government saying this is just the first draft, share prices will continue to fall until the South African government applies itself," Meyer said.

Junior miners agreed that the proposed minimum ownership levels had to tempered with realism.

Tiego Moseneke, the chairperson of the New Diamond Corporation (NDC), said: "We must get the buy-in of all the major players in the mining industry so that they understand the need to re-stimulate new economic activity and avoid having them obstruct the government's transformation plans."

But still some industry commentators labelled the proposal as "creeping nationalisation".

Dawie Roodt, an economist at PLJ Financial Services, said it was irresponsible of the government to prescribe these things until they were properly structured.

"This kind of thing just feeds the world's perceptions of Africa as the hopeless continent. Obviously we have to do something about the ways of the past but government must be extremely careful," cautioned Roodt.

"Soon it may not pay to be in the mining industry," said Roodt.

YGM

(07/28/2002; 23:36:27 MDT - Msg ID: 81746)

MarkeTalk

http://www.kitco.com/ind/DChapman/june132002.html Thanks, for thinkin of us...it has made the rounds, in fact I posted it and a few others to do with JPM & the Derivatives gang around the JPN and Goldman Sachs message boards last week (still ongoing actually) Does feel good to drop bombs on the enemy. Lots of doomers in their ranks and a few Gold believers...Regards (zulu_gold_wars)...YGM

YGM

(07/28/2002; 23:40:02 MDT - Msg ID: 81747)

Another JPM Bomb..I missed this in June

http://www.kitco.com/ind/DChapman/june132002.html Chapman and Hamilton will be the ruination of JPM :>}}}

"GO GATA"

Old Yeller

(07/28/2002; 23:47:10 MDT - Msg ID: 81748)

Staring into the abyss,the US economy

http://straitstimes.asia1.com.sg/analysis/story/0,1870,134432,00.html?
We've heard that one before,or have we?Hard to know anymore,
gold investors seem to reaping the whirlwind of someone else's making.

Can't print gold boys,we know you've tried and there are many innocent holders of your financial alchemy products.

USAGOLD

(07/28/2002; 23:47:21 MDT - Msg ID: 81749)

Thanks, Sierra. . .

Sorry all for the computation error. As you say still acceptable.

Old Yeller

(07/29/2002; 02:04:53 MDT - Msg ID: 81750)

"End demand implosion in the US...

http://csf.colorado.edu/mail/longwaves/2002/msg01681.html
Would spell finis to dollar decline."

Presents both the yay and the nay opinion here.

Anybody care to comment?

Black Blade

(07/29/2002; 02:36:51 MDT - Msg ID: 81751)

Qwest Says Used Improper Accounting in 1999-2001

http://biz.yahoo.com/rb/020729/telecoms_qwest_4.html

Snippit:

PHILADELPHIA (Reuters) - Qwest Communications International Inc., already under federal investigation for its accounting practices, said on Sunday it would restate its financial results because it improperly booked $1.16 billion in sales and other items in 1999 to 2001. Qwest, the dominant local telephone company in 14 states from Minnesota to Washington, also withdrew its financial forecasts for 2002, which called for it to report up to $18.4 billion in revenues. It said all areas of its business have been hurt by slack demand, stiff competition and softness in regional economy.

Black Blade: The first of a wave of restated earnings before the August 14th deadline? This should get "entertaining" and "interesting". Nearly 1,000 companies have to certify that financials are correct or the CEO faces time in the Cross Bar Hotel.

Old Yeller

(07/29/2002; 03:09:22 MDT - Msg ID: 81752)

Black Blade,cross bar hotel

How can these corporate number-fudgers be imprisoned when the President and Vice President are guilty of the same offenses?

Anybody seen Kenny Boy in an orange jumpsuit?

steady

(07/29/2002; 03:25:46 MDT - Msg ID: 81753)

a few happy thoughts

a few thoughts! gold corp holds a lil over 4 tons of gold not the 17 tons as was eroniously reported here about 4 days ago. how come there dividned wasnt included in the dividend list posted yesterday? they do pay a dividend.
Im happy this lil hobbit found this site. im happy i have put as much gold as i could according to my understanding like ANOTHER SAID TO, which happens to be a few lbs. I am hapy i have more silver than gold for ill gladly trade it in for gold latter. Im happy the discussion centers around thoghts and ideas here for thought are things .thoughts are the cause the effects are the result of our thoughts. Im happy that there are alot of open debates here as the thesis anti thesis discussons leads to the truth. I am happy because what individuals have been saying about the lying corrupt american system is seeing the light of day(thanks to internet forms like this one)and those asseratations are becoming facts not far out speculation.I am happy because there are others who are far sighted and give me hope that my analysis is correct and that my thinking about fake fiat currency is true. (brazil, 8yrs from .94 to 3.00 to the dollar as the most recent example) I am happy i can read this site as a lurker or a poster but most of all im happy to be alive, and can share my thoughts and ideas here where they are accepted, given constructive feedback or even rebuked all for the same goal to find the truth! I am happy my stickers are going to be a hit world wide!!! gold and silver honest money for honest people.

Operative

(07/29/2002; 04:09:29 MDT - Msg ID: 81754)

(No Subject)

Qoute From The Good BookA timely passage to reflect on.

Eze 28:3 Behold, thou art wiser2450 than Daniel1840; there is no secret5640 that they can hide6004 from thee:
Eze 28:4 With thy wisdom2451 and with thine understanding8394 thou hast gotten6213 thee riches2428, and hast gotten6213 gold2091 and silver3701 into thy treasures214:

Got It??
Then sit back and enjoy the ride wisdom brings.

Don't Got It??
Get you some while the prices are CHEAP. Be Wise !!

misetich

(07/29/2002; 05:17:53 MDT - Msg ID: 81755)

O'Neill, Lindsey Laud Strength Of Economy

http://www.washingtonpost.com/wp-dyn/articles/A13926-2002Jul28.htmlSnip:

And they made it clear that they oppose one of the most contentious corporate governance proposals still on the table in Washington: a plan to force companies to count as expenses the large number of stock options issued to executives and employees.

.................
"If people count as a recession one quarter of negative growth, God bless them. I don't care," he said on NBC-TV's "Meet The Press."
...............
O'Neill and Lindsey also made clear that they would take the cause of corporate governance changes only so far.
...................
O'Neill said, however, that giving an executive the option to buy stock at a set price, even if the market price is considerably higher, is not a true expense.

"I think there's a time to stand up for what's right," he said on "Fox News Sunday." "And what isn't right shouldn't go down simply because there's a barn fire and everybody's afraid to tell the truth." That position was criticized on the same show by John Bogle, founder of the Vanguard Group of mutual funds. "Absolutely, stock options ought to be expensed," Bogle said. "They are a cost."

....................

Misetich

The Bush's Team provide more laughs than Letteman - and lets not forget that Clinton accused Pitt (SEC) of leading the lobby group a few years ago - agains reforms -

O'Neil states
"If people count as a recession one quarter of negative growth, God bless them. I don't care," he said on NBC-TV's "Meet The Press."

Somebody should inform this big mouth millionaire that over 1.6 million americans have lost their jobs in the 1 1/2 years.

There is very little hope that investors will see any noticeable changes in the near future - as McCain said - the Fix is in- regarding expensing options.

These buffoons are trying to fool investors by grandstanding - and - it will not work - as the scandals will continue more than they expect

Got gold?

steady

(07/29/2002; 05:39:48 MDT - Msg ID: 81756)

silver bill. for the record

http://thomas.loc.gov/cgi-bin/query/C?c107:./temp/~c10708Wevtnotice under (c) 2 concurrent submission this tells ya where to go look in one year for the report of the effect of the govt purchaes of silver. like anyone will rember that. but its here in the archives.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Support of American Eagle Silver Bullion Program Act'.

SEC. 2. FINDINGS.

Congress finds that--

(1) the American Eagle Silver Bullion coin leads the global market, and is the largest and most popular silver coin program in the United States;

(2) established in 1986, the American Eagle Silver Bullion Program is the most successful silver bullion program in the world;

(3) from fiscal year 1995 through fiscal year 2001, the American Eagle Silver Bullion Program generated--

(A) revenues of $264,100,000; and

(B) sufficient profits to significantly reduce the national debt;

(4) with the depletion of silver reserves in the Defense Logistic Agency's Strategic and Critical Materials Stockpile, it is necessary for the Department of the Treasury to acquire silver from other sources in order to preserve the American Eagle Silver Bullion Program;

(5) with the ability to obtain silver from other sources, the United States Mint can continue the highly successful American Eagle Silver Bullion Program, exercising sound business judgment and market acquisition practices in its approach to the silver market, resulting in continuing profitability of the program;

(6) in 2001, silver was commercially produced in 12 States, including, Alaska, Arizona, California, Colorado, Idaho, Missouri, Montana, Nevada, New Mexico, South Dakota, Utah, and Washington;

(7) Nevada is the largest silver producing State in the Nation, producing--

(A) 17,500,000 ounces of silver in 2001; and

(B) 34 percent of United States silver production in 2000;

(8) the mining industry in Idaho is vital to the economy of the State, and the Silver Valley in northern Idaho leads the world in recorded silver production, with over 1,100,000,000 ounces of silver produced between 1884 and 2001;

(9) the largest, active silver producing mine in the Nation is the McCoy/Cove Mine in Nevada, which produced more than 107,000,000 ounces of silver between 1989 and 2001;

(10) the mining industry in Idaho--

(A) employs more than 3,000 people;

(B) contributes more than $900,000,000 to the Idaho economy; and

(C) produces $70,000,000 worth of silver per year;

(11) the silver mines of the Comstock lode, the premier silver producing deposit in Nevada, brought people and wealth to the region, paving the way for statehood in 1864, and giving Nevada its nickname as `the Silver State';

(12) mines in the Silver Valley--

(A) represent an important part of the mining history of Idaho and the United States; and

(B) have served in the past as key components of the United States war effort; and

(13) silver has been mined in Nevada throughout its history, with every significant metal mining camp in Nevada producing some silver.

SEC. 3. PURCHASE OF SILVER BY THE SECRETARY OF THE TREASURY.

(a) PURCHASE OF SILVER-

(1) IN GENERAL- Section 5116(b)(2) of title 31, United States Code, is amended by inserting after the second sentence the following: `At such time as the silver stockpile is depleted, the Secretary shall obtain silver as described in paragraph (1) to mint coins authorized under section 5112(e). If it is not economically feasible to obtain such silver, the Secretary may obtain silver for coins authorized under section 5112(e) from other available sources. The Secretary shall not pay more than the average world price for silver under any circumstances. As used in this paragraph, the term `average world price' means the price determined by a widely recognized commodity exchange at the time the silver is obtained by the Secretary.'.

(2) RULEMAKING AUTHORITY- The Secretary of the Treasury shall issue regulations to implement the amendments made by paragraph (1).

(b) STUDY REQUIRED-

(1) STUDY- The Secretary of the Treasury shall conduct a study of the impact on the United States silver market of the American Eagle Silver Bullion Program, established under section 5112(e) of title 31, United States Code.

(2) REPORT- Not later than 1 year after the date of enactment of this Act, the Secretary of the Treasury shall submit a report of the study conducted under paragraph (1) to the chairman and ranking minority member of--

(A) the Committee on Banking, Housing, and Urban Affairs of the Senate; and

(B) the Committee on Financial Services of the House of Representatives.

(c) ANNUAL REPORT-

(1) IN GENERAL- The Director of the United States Mint shall prepare and submit to Congress an annual report on the purchases of silver made pursuant to this Act and the amendments made by this Act.

(2) CONCURRENT SUBMISSION- The report required by paragraph (1) may be incorporated into the annual report of the Director of the United States Mint on the operations of the mint and assay offices, referred to in section 1329 of title 44, United States Code.
Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

END

steady

(07/29/2002; 05:49:26 MDT - Msg ID: 81757)

operative quotes

out of contex!

Cavan Man

(07/29/2002; 06:08:35 MDT - Msg ID: 81758)

Canuck

Ferdinand Lipps/Amazon/19.95USD

silvercollector

(07/29/2002; 07:44:18 MDT - Msg ID: 81759)

test

Sierra Madre

(07/29/2002; 09:11:32 MDT - Msg ID: 81760)

Thanks, Steady, for your message this morning!

Thanks for an inspiring message. Yes, indeed, we do need HAPPY THOUGHTS, they are so important to human life. Let us try to put more happy thoughts in circulation, today. Not to deny gloom and doom, but to orient ourselves more towards the light of wisdom rather than the darkness of fraud.

Thoughts - thoughts are the essence of action. Only that can be called action, which is the result of a thought. Movement or change without thought as its essence and cause, is simple mechanism. And here I come up with a deeper question to which I do not know the answer: is there any movement, be it of the smallest particle, that is not moving because of some Thought of the Creator, behind it? Is there any such thing as Chance? Or is Chance only something for which we cannot discover a cause?

Send us more happy vibes, Steady. Thanks for reading.

Sierra

Carl H

(07/29/2002; 09:50:22 MDT - Msg ID: 81761)

Headllines

S&P has potential to drop to 640-UBS' Kerschner
Qwest Shares Plunge on Accounting Woes
Vivendi Eyes Job Cuts - Source
Budget Group Files for Bankruptcy
Junk Bond Defaults at Record - Moody's
Wal-Mart Sales Below Its Plan
S&P has potential to drop to 640-UBS' Kerschner
Fannie Mae to sell $9 billion bills Wednesday
Qwest Says Used Improper Accounting in 1999-2001
Nokia Says to Stick with Pro Forma Accounting

CarlH: Clearly the market rally today is justified.

Got Gold?

YGM

(07/29/2002; 10:17:01 MDT - Msg ID: 81762)

Have Big US Banks Exploded.......A MUST READ.......

http://www.rense.com/general27/hav.htm
Excerpt:

Have The Big US Derivatives
Banks Exploded?
By John Hoefle
Executive Intelligence Review
www.larouchepub.com/eiw
7-28-2

(EIRNS) -- Indications are growing that the top three U.S. derivatives banks--J.P. Morgan Chase, Citigroup and Bank of America--have been pushed to, if not over, the brink of "technical" bankruptcy by problems in the derivatives markets. (See end section for background on what derivatives are.--Mark) We say "technical" because the top U.S. banks have long counted hundreds of billions of dollars of fictitious assets on their books, making them bankrupt in reality, and solvent only by perception.

Both Morgan Chase and Citigroup have shown up with uncanny frequency as the top lenders to the current crop of exploding corporations and are clearly facing huge losses on their loan portfolios. With corporations and individuals going bankrupt at record rates and defaults soaring, the loan problems at Morgan Chase, Citigroup and Bank of America go far beyond what has publicly surfaced, but their loan problems pale in comparison to the dangers lurking in their derivatives portfolio.

J.P. Morgan Chase, the world's largest derivatives bank, is a prime example; a loss equivalent to less than 0.2% of its $24 trillion derivatives portfolio would be enough to wipe out every last penny of the bank's equity capital. {EIR} believes that Morgan Chase actually collapsed in mid-2001, and is being secretly run by the Federal Reserve, similar to the way the Fed took over Citicorp in 1989.

Morgan Chase is the result of the acquisition of J.P. Morgan & Co. by the bigger Chase Manhattan. The deal, which closed on the last day of 2000, has been an absolute disaster as measured in ordinary--and therefore misleading--market terms. The market capitalization of the combined Morgan Chase is now less than that of Chase alone on the day before the merger, with Morgan (or at least its equivalent value) having simply vaporized. This is not surprising, as it was likely a bankruptcy at Morgan, and perhaps Chase as well, which led to the takeover of Morgan by Chase.

Citigroup may again be under Fed control as well, as rumors of major derivatives losses circulate. Citigroup is the result of the 1998 takeover of Citicorp by Travelers Insurance, creating what is now the largest bank in the U.S., with just over $1 trillion in assets and $9 trillion in derivatives. Former Treasury Secretary Robert Rubin revealed on July 15 that he was retiring from his position as vice-chairman at the bank, and three days later it was announced that Saudi Prince Alwaleed bin Talal, Citigroup's largest individual shareholder, had invested another $500 million in the bank, raising his holding to $10 billion. Alwaleed, a nephew of Saudi King Fahd, obtained his initial stake in the bank shortly after the Fed took it over in 1989 and began arranging a bailout. The latest cash infusion raises suspicion that Alwaleed is performing a similar service for Citigroup.

Not to be left out is Bank of America, whose $620 billion in assets puts it third behind Citigroup's $1 trillion and Morgan Chase's $713 billion. Bank of America's $10 trillion in derivatives puts it solidly on the hot seat in any financial crisis, and it has also loaned heavily to bankrupt companies. Rumors are flying that Bank of America has applied to the Fed for a secret bailout.

Banking sources in Europe have confirmed to {EIR} that a major derivatives crisis is underway, centered around the giant U.S. derivatives banks, Morgan Chase and Citigroup in particular. Were one of the big derivatives banks to explode, it could overwhelm the Fed's ability to cover up the losses, triggering a chain reaction which could blow out the entire global financial system. Cont'd at link...

MO VER MEG

(07/29/2002; 10:26:38 MDT - Msg ID: 81763)

(No Subject)

When I get beat up by the Cartel, that is one thing, but when my daughter's account is decimated, I become motivated beyond polite words. The launching of her dreams is my responsibility and I will do whatever possible to see that it happens.

Over the past year, I have written a file full of correspondences to the CFTC, Congress, media, you name it. I will continue this task as long as it takes.

When only a few complain, little is usually accomplished. Since most people do not have a clue what is going on, it is up to the informed person (and if you read this site you are well informed) to speak for the many. Since this is an election year, Congress members are a bit more receptive.
This Battle can be won if we pull together. Keep copies of the letters you send. Some day you will reread them and say "Ya, I made a difference". Only in large numbers can small investors be heard.

MOVERMEG

Sierra Madre

(07/29/2002; 10:37:50 MDT - Msg ID: 81764)

I ask your indulgence for posting this most important verse

William Wordsworth

The Character of the Happy Warrior

Who is the happy Warrior? Who is he
2 That every man in arms should wish to be?
3 --It is the generous Spirit, who, when brought
4 Among the tasks of real life, hath wrought
5 Upon the plan that pleased his boyish thought:
6 Whose high endeavours are an inward light
7 That makes the path before him always bright;
8 Who, with a natural instinct to discern
9 What knowledge can perform, is diligent to learn;
10 Abides by this resolve, and stops not there,
11 But makes his moral being his prime care;
12 Who, doomed to go in company with Pain,
13 And Fear, and Bloodshed, miserable train!
14 Turns his necessity to glorious gain;
15 In face of these doth exercise a power
16 Which is our human nature's highest dower:
17 Controls them and subdues, transmutes, bereaves
18 Of their bad influence, and their good receives:
19 By objects, which might force the soul to abate
20 Her feeling, rendered more compassionate;
21 Is placable--because occasions rise
22 So often that demand such sacrifice;
23 More skilful in self-knowledge, even more pure,
24 As tempted more; more able to endure,
25 As more exposed to suffering and distress;
26 Thence, also, more alive to tenderness.
27 --'Tis he whose law is reason; who depends
28 Upon that law as on the best of friends;
29 Whence, in a state where men are tempted still
30 To evil for a guard against worse ill,
31 And what in quality or act is best
32 Doth seldom on a right foundation rest,
33 He labours good on good to fix, and owes
34 To virtue every triumph that he knows:
35 --Who, if he rise to station of command,
36 Rises by open means; and there will stand
37 On honourable terms, or else retire,
38 And in himself possess his own desire;
39 Who comprehends his trust, and to the same
40 Keeps faithful with a singleness of aim;
41 And therefore does not stoop, nor lie in wait
42 For wealth, or honours, or for worldly state;
43 Whom they must follow; on whose head must fall,
44 Like showers of manna, if they come at all:
45 Whose powers shed round him in the common strife,
46 Or mild concerns of ordinary life,
47 A constant influence, a peculiar grace;
48 But who, if he be called upon to face
49 Some awful moment to which Heaven has joined
50 Great issues, good or bad for human kind,
51 Is happy as a Lover; and attired
52 With sudden brightness, like a Man inspired;
53 And, through the heat of conflict, keeps the law
54 In calmness made, and sees what he foresaw;
55 Or if an unexpected call succeed,
56 Come when it will, is equal to the need:
57 --He who, though thus endued as with a sense
58 And faculty for storm and turbulence,
59 Is yet a Soul whose master-bias leans
60 To homefelt pleasures and to gentle scenes;
61 Sweet images! which, wheresoe'er he be,
62 Are at his heart; and such fidelity
63 It is his darling passion to approve;
64 More brave for this, that he hath much to love:--
65 'Tis, finally, the Man, who, lifted high,
66 Conspicuous object in a Nation's eye,
67 Or left unthought-of in obscurity,--
68 Who, with a toward or untoward lot,
69 Prosperous or adverse, to his wish or not--
70 Plays, in the many games of life, that one
71 Where what he most doth value must be won:
72 Whom neither shape or danger can dismay,
73 Nor thought of tender happiness betray;
74 Who, not content that former worth stand fast,
75 Looks forward, persevering to the last,
76 From well to better, daily self-surpast:
77 Who, whether praise of him must walk the earth
78 For ever, and to noble deeds give birth,
79 Or he must fall, to sleep without his fame,
80 And leave a dead unprofitable name--
81 Finds comfort in himself and in his cause;
82 And, while the mortal mist is gathering, draws
83 His breath in confidence of Heaven's applause:
84 This is the happy Warrior; this is he
85 That every man in arms should wish to be.

This poem is singularly relevant to all of us at the noble Forum.

Sierra

USAGOLD / Centennial Precious Metals, Inc.

(07/29/2002; 11:06:12 MDT - Msg ID: 81765)

Another day, another dollar -- the fruit of your labor

http://www.usagold.com/ProductsPage.html

Harvest Time
Whatever it is that you may have sown,
we'll give you the power to reap GOLD.

1-800-869-5115
Centennial has three decades of field experience to assist you

a nation of one

(07/29/2002; 11:24:48 MDT - Msg ID: 81766)

a strange occurrence

This morning, while on my walk, as I passed a tree I heard a noise. Sure it was some cat counting its bird bones, or a wandering dog relaxing with a good cigar, I gave it no mind. But then there was a sigh, almost human, though extremely quiet, and so I looked. At the base of the tree, just to the other side of one of its larger roots, I could barely see two small projections sticking up like fingernail clippings. This was curious. I could not imagine what it was. So I took a step or two, to see. And there was -to my complete astonishment- a very small animal (smaller than the end of my smallest finger), brown, with hooves and a tail, and what I had thought were fingernail clippings were its horns. At first I thought it was the devil. But it was a minuscule bull. Was this an omen, I wondered. Was the spirit world trying to tell me something about my recent gold investments? It was then that I saw that it had wings. Never before in my long life had I ever come upon a fairy, and I am certain that I never shall again. But this one was just sitting there, vulnerable to the world, with its magic wand broken, trying to repair it. "What are you?" I asked, carelessly. "Can't you see, you idiot? I am the Bull Fairy! Mover of markets! And, in addition, inspirer of numerous miscellaneous ruminant large animals." Still not constrained enough, on account of my surprise, I asked, "What are you doing here?" "I am trying to fix my damned wand!" I was going to ask what had happened to it, but the Bull Fairy voluteered the answer. "I was minding my own business, making a certain market go up, when, quite unexpectedly, as I was flailing my magic wand about, it got stuck in a bevy of bears." "A bevy?" I asked. Never had I known that bears traveled in bevies. I thought they used SUVs, like everyone else. "Yes, a bevy," the Bull Fairy said. "Bears go in bevies don't you know? As far as I'm concerned they do. Anyway, there I was, flicking the market upward -gold it was, aye, it was the market for gold- and five or six of 'em, the bears I mean, singing and dancing drunkenly from wild overindulgence, gathered round me all menacingly, and the biggest one, whom the others called 'Morgan,' grabbed my wand out of my hands and broke it." "Dreadful!" I responded, "What happened then?" "Not much. The shock stole my balance, I fell over, and landed by this tree." I looked up into the branches overhead to see, but there were no bears there. "They're not up there, stupid," the Bull Fairy said. "They're dimensions away by now, probably attending a ball game or something." By then, he (or 'it' I should say perhaps) had finished repairing the wand. "What will you do now," I said. "Why, go back to work! There's so much to do, you would never believe it. First I shall gather about me all my tools, good news for gold, bad news for stocks, declining currencies, extreme public debt, precipitous financial institutions, and so forth, and get gold moving up again." "How long will it take?" "Not long. Just you watch!" It said this with intensity and conviction. Inspired once again in my feelings about the bright future for gold, I blinked, smiled very, very slightly, said goodbye, turned, and proceded on my way, which, as destiny would have it, ended here, at my desk, where I immediately reached for my PC and began entering this into it, because I thought you should know.

Gandalf the White

(07/29/2002; 11:58:55 MDT - Msg ID: 81767)

THANK YOU, Sir "Nation of One"

a nation of one (7/29/02; 11:24:48MT - usagold.com msg#: 81766)
a strange occurrence ---
===
You MADE my Day !
<;-)

TownCrier

(07/29/2002; 12:10:24 MDT - Msg ID: 81768)

Good weekly recap by WGCs Rhona O'Connell

http://www.usagold.com/wgc.htmlClick the URL to read the particulars on DOW/gold market action and price movements, with an acompanying dow/gold chart.

O'Connell makes a good summary of affairs in this one statementafter heavy DOW losses to start the week:

"On balance, then, a week in which some of those who had turned to gold as a safe haven had good cause to use it."

On another note, while reading a comment from this report, I was reminded how quickly and willingly a Congress may spring into action to pass new laws and to grow the size of government rather than to let the forces of free markets (such as we may still have) beat out their own rhythym as the very heart and center of our system of capitalism:

"...rapid passage through Congress of the legislation to tighten market regulations was, to some extent, a soothing factor (although it did little to mollify a determinedly bearish NASDAQ market). The bill will bring self-regulation in the accounting industry to an end, with the establishment of a new board with authority over the industry..."

Therefore, where gold is concerned, never be caught assuming yours is the last word. Call Centennial and ask your broker about an additional diversification means to limit potential government intrusion into the value and security of your gold holdings. (Keyword: pre-33s -- to get both value AND quantity for your buying dollar).

R.

cyberbat

(07/29/2002; 12:14:59 MDT - Msg ID: 81769)

U.S. Silver purchase

Since the U.S. will be in the silver market buying silver for its' new bullion coin, look for the spot price to be way down until they are finished buying.
Cyberbat

Gimli_

(07/29/2002; 12:34:02 MDT - Msg ID: 81770)

Spot Silver DOWN with US Gov. Purchases??

Are you saying that the US government in plain view of everyone will manipulate spot silver prices downward to get a better price even though their increased demand should raise prices??? Please explain your rationale...

TownCrier

(07/29/2002; 12:42:07 MDT - Msg ID: 81771)

cyberbat

Is it not possible that the Mint might operate along the order of an owner of a petrol station?

On top of that, the fabrication premium itself offers business viability, if, indeed, a government entity can be so motivated by such a novel incentive as turning profit.

Just food for thought, offered for balance.

R.

cyberbat

(07/29/2002; 13:21:21 MDT - Msg ID: 81772)

Silver price

The mint at Westpoint where all the gold and silver are made employs government workers so there is no profit motive there for them.
If the government will lie to you about a good economy, if the PPT will enter the market place spending millions of your tax dollars buying S&P 500 indexes, if they would steal all the funds set back for the American Indian with Robber Rubin at the head, if they would outlaw gold after it becomes too competitive against paper like they did a few decades back, do you not think they would short the silver market down almost 50 cents where they could buy low and sell high to the tune of 6 times the value of spot silver ?

TownCrier

(07/29/2002; 13:30:15 MDT - Msg ID: 81773)

"Central Bank Insider" update! Your fortnightly must-read on the deeper and lighter sides of CB news

http://www.usagold.com/centralbank/current.html
Under the heading "Caribbean Machinations" you may get a sense from the Trinidad and Tobago experience why it should seem more unlikely, despite persistent whisperings to the contrary, that former SecTreas Rubin might soon succeed Alan Greenspan as Chairman of the Federal Reserve -- politics being what they are.

Over the weekend we reported on movements toward a common Asian currency, and now, in typical CB Newsmakers fashion, we hear of yet another initiative in the single currency trend budding south of the eurozone -- the "afro"...

In similar fashion, we hear about Greenspan's staff giving credit where credit is due -- to luck.

Meanwhile, ECB head Duisenberg has his crosses to bear, and Milton "sour grapes" Friedman remains a euro skeptic.

You'll also learn of the efficacy of the new Washington mail processing techniques to eradicate any possible ill effect of anthrax or of financial journals upon anyone at their final point of delivery.

R.

Mr Gresham

(07/29/2002; 13:30:37 MDT - Msg ID: 81774)

Sierra, nation, Michael, Canuck

Canuck: passionate & eloquest yesterday -- I hope "finale" does not mean "bye-bye" from you -- let me be first to object.

nation of one -- brilliant work on the "Bull Fairy"!

Michael -- It really is a "Lenny Bruce"-type world now, isn't it? When you see it all too clearly, it's crazy-making. Knowing when to step away: now, _that's_ the art! Thanks for the healthy reminder.

Sierra -- welcome home, and now to read your Wordsworth below...

TownCrier

(07/29/2002; 13:38:38 MDT - Msg ID: 81775)

cyberbat, thanks...

...for the eye-opener.

R.

TownCrier

(07/29/2002; 14:00:37 MDT - Msg ID: 81776)

My brief view of these modern times

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12First a recall of a quote from yesterday's news seems appropriate:

"The pace of change in today's economy is much faster than in earlier decades." -- Dr Olarn Chaipravat, a senior Finance Ministry adviser

Beside me, is anyone else struck by the performance of the dollar as resembling a blast from the past?

Athough it may be too early to render a final verdict, specifically, what we have witnessed over the course of just these five recent months seems to be a condensed replay of the September 1985 Plaza agreement to address an overvalued dollar, and the February 1987 Louvre agreement to help steady it again.

A good recollection of comments by public officials during this time (and the recent revival of the "strong dollar mantra) would seem to support coordinated efforts to this effect. And honestly, have we come to expect it any other way?

But to all gold advocates I hasten to say, take heart -- soundly based on the very same principle that saw gold break free from the very concerted official designs of $35 per ounce. Thus, it will not linger at $300 for overlong. Call Centennial to make your arrangements for delivery to your door the independent wealth of kings.

R.

Cavan Man

(07/29/2002; 14:18:29 MDT - Msg ID: 81777)

Towne Crier

These presumed, coordinated machinations would appear to cast muck upon our most esteemed "essayist" (aka, FOA).

Cavan Man

(07/29/2002; 14:19:19 MDT - Msg ID: 81778)

Son of Greenspan II

MY CASINO.....HE LIVESSSSSSSSSS!!!!!!!!!!!!!!!!!!!!!!!!!!!!

misetich

(07/29/2002; 15:00:52 MDT - Msg ID: 81779)

Brazil Currency, Bonds Plunge on Concern IMF Won't Send New Aid

Cavan Man

(07/29/2002; 15:02:15 MDT - Msg ID: 81780)

@ANYBODY

Why don't the Chinese, Japanese or Europeans act and do something, anything? Especially EU; exports are approximately 13% to US. Where are their dollars going?

TownCrier

(07/29/2002; 15:04:01 MDT - Msg ID: 81781)

Cavan Man -- machinations "casting muck"

How so? Are you suggesting that FOA implied that all international monetary cooperation is a thing of a bygone (pre-euro) era? Or am I missing something?

Even rivals W/R/T the end-game may pull together at intermediate times to fend off mutually assured destruction, yes, things being that bad.

R.

misetich

(07/29/2002; 15:08:09 MDT - Msg ID: 81782)

Xcel Shares Plunge After S&P Cuts NRG Unit to Junk

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∣dle=ad_frame2_topfin&s=APUWjahPiWGNlbCBTSnip:

The company needs $1.5 billion so its NRG Energy unit can buy power plants from FirstEnergy Corp. Investors have shunned NRG's bonds amid reduced cash flow for U.S. energy traders such as Dynegy Inc., which were hurt by declines in trading and power prices. Companies are selling assets as lenders tighten credit
...............
S&P cut its rating on the senior unsecured debt of generator NRG Energy three notches to B+, the fourth-highest junk rating, from BBB-, the lowest investment grade. It said it may reduce the rating further, and may cut Xcel's corporate credit rating of BBB, two notches above junk.

Avert Default

Xcel Energy said Friday it will sell about $500 million in stock and is negotiating with lenders to avert a default by NRG. A credit downgrade would require NRG to post as much as $1.1 billion in collateral on construction loans, the company said. A default by NRG would block Xcel's access to two lines of credit worth $800 million.

...............
Misetich

Williams, Xcel , other energy corporations are in severe debt difficulties

Will they default? It is reported that JP Morgan is one of the main lenders in the energy field which included Enron.

Who are the other Enrons that JP Morgan, Citi conducted their vanilla type of transactions with?

Got gold?

misetich

(07/29/2002; 15:16:47 MDT - Msg ID: 81783)

JP Morgan says Enron-linked offshore unit independent

http://www.forbes.com/newswire/2002/07/29/rtr679500.htmlSnip:

NEW YORK, July 29 (Reuters) - J.P. Morgan Chase & Co. Inc. (nyse: JPM - news - people) said on Monday an offshore unit at the center of a U.S. Senate probe into the bank's Enron ties was legally independent and that Enron misled J.P. Morgan about its finances.

The bank's response follows letters the Senate Permanent Subcommittee on Investigations sent to J.P. Morgan and Citigroup Inc. (nyse: C - news - people) about their relationships to offshore units Delta Energy and Mahonia, which were allegedly used by bankupt energy trader Enron Corp. to disguise debt.

Mahonia, established at J.P. Morgan's request in December 1992, is a legally independent entity controlled by a charitable trust, not J.P. Morgan Chase, the bank said. Mahonia also was involved in other legal and appropriate transactions with other clients, the bank said in a statement.

Copyright 2002, Reuters News Service
...............

Misetich

From Forbes

For J.P. Morgan, the same issue was vetted three months ago. At that time, a U.S. district court judge, Jed Rakoff, (the same judge involved in the WorldCom (nasdaq: WCOME - news - people ) case) ruled preliminarily in a dispute between J.P. Morgan and its insurers that J.P. Morgan's transactions with Enron appeared to be fraudulent: "These arrangements now appear to be nothing but a disguised loan--or at least have sufficient indicia thereof that the court could not possibly grant judgment to the plaintiff,'' Rakoff wrote in denying a motion by the bank. (See: J.P. Morgan Loses Round One.)

http://www.forbes.com/business/2002/07/24/0724topnews.html

Lets stay on this hot TRAIL shall we.

Got gold?

cyberbat

(07/29/2002; 15:18:10 MDT - Msg ID: 81784)

Will wonders never cease!!

After investors lost trillions in the latest stock sham, everyone went out borrowed money and ran back in to the market today. Hmmmm. You don't think uncle sammy was sneaking back in to the markets today thru the S&P 500 back door do you?

Cavan Man

(07/29/2002; 15:26:39 MDT - Msg ID: 81785)

No, Towne Crier.......

I'm simply wondering why there isn't more "official" visible progress to an alternative.

misetich

(07/29/2002; 15:26:52 MDT - Msg ID: 81786)

U.S. junk bonds likely to post worst year ever

http://www.forbes.com/newswire/2002/07/29/rtr679474.htmlSnip:

"There hasn't been fundamental news in the economy or in financial markets to justify the rebound in stocks, and without that there is no particular reason for high-yield to do better," said Martin Fridson, chief high-yield strategist at Merrill Lynch & Co.

That's bad news for junk bond investors worried about a possible credit crunch as corporate accounting runs amok, bond sales get canceled and investor cash drains away.

Many have lost money since 1997. In 2002, the junk bond market absorbed about $60 billion of debt from formerly investment-grade "fallen angels" such as phone companies Qwest Communications International Inc. (nyse: Q - news - people) and WorldCom Inc. (nasdaq: Q - news - people) and energy traders Dynegy Inc. (nyse: Q - news - people) and Williams Cos. (nyse: Q - news - people)
..............
RECORD DECLINES

Merrill Lynch's main junk bond index has fallen 9.09 percent this year, lagging every other bond index by at least 11 percentage points. Its worst full-year drop is 5.12 percent, suffered in 2000. An investor who put $1,000 in junk bonds in December 1997 has only $961 left now.

"The only comparable extended downturn I've seen was in 1989 and 1990," said Fridson, an 18-year high-yield bond veteran, referring to when Michael Milken's Drexel Burnham Lambert junk bond kingdom collapsed. "I don't think people are taking an apocalyptic view of the current market, though they could expect several more months of tough sledding."

Junk bond mutual funds are down an average 6.89 percent, fund information service Morningstar Inc. said.

The decline is less than the index because many funds never bought Qwest or WorldCom bonds on the way down.
...............
Investors have drained cash from junk bond mutual funds for seven weeks, AMG Data Services said, leaving Wall Street bond dealers unwilling to commit capital. "Risk managers will not permit traders to sit with stale inventory," Fridson said.
.............
Yet the prospect of more defaults may cap overall gains.

Moody's Investors Service on Monday reported a record $42.6 billion of junk bond defaults in the second quarter and forecast an 8.8 percent year-end junk bond default rate. That is down from 10.3 percent now, but Moody's had been forecasting a 7 percent rate, and it said the rate might rise anew in 2003.

"The painfully slow decline in high-yield defaults may keep a lid on high-yield total returns for some time," said David Hamilton, Moody's director of default research.

Fridson had also been expecting a bigger drop in the default rate. "If you knock out that last leg, it does present a rather bleak picture for the remainder of 2002 and perhaps the first half of 2003."

Copyright 2002, Reuters News Service
*******************8

Misetich

As can be attested from Moody's poor forecast - on expected bond default rate - most economists and market experts have understated the bubble burst - not surprising since most did not acknowledge a bubble in the first place and missed the US recession (1.6 million laid off workers)

What are the effects of these "experts" poor forecasting?

Got gold?

Cavan Man

(07/29/2002; 15:28:58 MDT - Msg ID: 81787)

pardon moi TC

Haste makes (among other things) poor grammar. Should read, "...towards and alternative".

Operative

(07/29/2002; 15:40:05 MDT - Msg ID: 81788)

@ steady - out of context

I thought about the context issue when I posted earlier this morning. You are right of course. I trust you are refering to the total message of Exezkiel as related in chapter 28 and not to the posting of such on this forum. Afterall, this forum is in pursuit of wisdom and knowledge as it relates to gold/silver amongst other worthwhile ideas from time to time. Some seek answers in the stars, the mention of tea leaves does come up, and there is often talk of modern day prophets who have voiced thier "opinions" on directions of markets or PM's as well. I thought the venerated prophet of Exeziel might have slipped in a litte insight for us Goldbugs as well.

Chapter 28, verses 3 & 4 is out of context in that it is describing a "Prince of Tyrus" who through his wisdom and understanding did acquire riches, and Gold/Silver. One can build a case that there was some question as to how he built his riches as it appears it was in markets/trading of that time. Who is to say, the guy may have been on the up and up,
we are told through wisdom and understanding he acquired his gold. This is the relavant idea I hoped to put forth here this morning. It is the understanding of many here that the fiat system is not the way to go and that it's future outlook indeed appears bleak. It at one time might ( doubt it) but might have been a good concept, but the creators of the paper have pushed it way beyond the envelope and is headed to the great paper shredder in the sky so to speak. Abused and misused and yet continued to be propped up.

Back to the Prince. In the verses following 3&4 God is going to deal extremely harshly because of his pride. It seems he had allowed his riches to send him on a head trip thinking he was some kind of god. Pride led to the fall of satan, and was used against Eve in the garden. His sales pitch to her was first meant to question God. "Surely you won't die.."
Then he offered her to "be like God". A heady trip when you think about it. I too would have probably bought into the offer, but it was a lie. This was the downfall too of the Prince mentioned here, the sin of pride. Not that he was rich, had wisdom, understanding, or accumlated Gold/Silver.

A lesson to be learned from as it in my opinion, is probably at the heart of so many of the problems today. It does appear that many of the CEO's have let the richness of the day go to thier head. Thinking they were above true accounting of thier behaviour in the boardroom. Thinking they too were at least little gods and could hide or coverup thier actions. Perhaps that is what has permitted the derivatives imbalances now coming to light with the major banks. They bought into thier own greatness, the ability to manipulate like a god the markets, dollar, and even the price of gold. Could it be that this is the results we today are viewing? Is it an old story from long ago being repeated? Enron, Worldcom, and the many yet be made known, is this what is happening? Are the little gods falling from thier concrete and glass towers because of pride? They felt above it all, above the accountants, above the law. And like little gods often think, they were in control. I guess we watch and wait how the mighty fair in the coming months. But they may want to check in on how the Prince of Tyrus gets recompensed in the end.

As for us little folks, let us continue to seek wisdom where she may be found. Thankfully, a lot of the posters here do a great service in providing a truly more rare commodity than gold itself, wisdom. Let us seek understanding amongst the headlines and inbetween the lines. Understanding of fiat money systems, understanding of true value and wealth. Let us seek the understanding and wisdom of those gone before us both in bible times and our founding fathers.

And then, having found these things, let us act accordingly to protect our families, ourselves, our freedoms.

misetich

(07/29/2002; 15:40:17 MDT - Msg ID: 81789)

Citi, Morgan discuss Enron entities

http://money.cnn.com/2002/07/29/news/citi_delta.reut/index.htmSnip:

NEW YORK (Reuters) - Citigroup Inc. Chairman and Chief Executive Sanford "Sandy" Weill Monday denied knowledge of an offshore entity central to a U.S. Senate probe into the bank's ties to the bankrupt energy trader Enron.
..............
Weill referred Senate questions about Delta Energy to Barbara Yastine, the chief financial officer of Citigroup's corporate and investment bank. Yastine said in a separate affidavit Citibank asked a Cayman Islands law firm to incorporate Delta Energy in 1993 to be a counterparty in prepaid commodities forward transactions involving oil company Amerada Hess Corp. (AHC: Research, Estimates).

"Citigroup does not control Delta," Yastine said. "Delta was established at Citibank's request in 1993 as a special purpose entity with the express intention of making it independent of, and unaffiliated with, Citibank under relevant legal and regulatory standpoints."

..................
Delta Energy was formed as a counterparty at the time because regulations limited Citibank's ability to receive delivery of physical commodities like oil and natural gas, Yastine said. Delta is owned by Grand Commodities Corp., whose sole shareholder is Givens Hall Bank and Trust, she said.

Citibank paid fees to Givens Hall for some administration costs like registration fees, related to Delta, and Citibank also paid some transaction expenses in certain prepaid transactions it structured, Yastine said.

*************************
Misetich

"Delta was established at Citibank's request in 1993"

"called Mahonia, that was set up by J.P. Morgan Chase "

It'll be very interesting to follow this one- sounds like ANOTHER "what is, is" -

Got gold?

YGM

(07/29/2002; 15:47:12 MDT - Msg ID: 81790)

Gold That barbarous Relic Sold fpr $8565.00 P/OZ ...Historical Reminders Section

http://www.321gold.com/mustread/eureka/eureka.htmlExcerpt....

Gold @ $8565 an ounce!
SS Central America treasure 'Eureka' gold bar sells
for a cool eight million dollars
Barb Moriarty
November 10, 2001

A Barbaric Relic for a Billionaire
A Kellogg and Humbert California Gold Rush bar that had spent virtually all of its life at the bottom of the ocean with the wreck of SS Central America was sold privately last week (Nov 2001) for 8 million dollars. The awesome 'gold brick' was purchased by a "Forbes 400 business executive,'' according to Michael Carabini, president of Monaco Financial, who handled the incredible sale.

The Gold Brick
Known as Eureka, it is the largest-known gold bar to come out of the California Gold Rush and at 933.94oz is the size of a loaf of bread. The value in 1857 was $17,433.57, and as with most ingots of that era the dollar value is stamped on the bar. It would have taken six miners a whole year of 12-hour day's hard sweat and toil to produce the gold for that bar.

Eureka holds two records; the highest weight and highest stamped value, and it is so large that it required two hallmark stamps of the assayer. Many refer to the ingot as The Crown Jewel from the Ship of Gold,

*Cont'd @ link.......Old story but one to brighten any Gold lovers day....YGM

misetich

(07/29/2002; 15:57:32 MDT - Msg ID: 81791)

Bank economists see credit tightening but no crunch

http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n29157369&feed=reu&date=20020729&cat=USMARKETSnip:

WASHINGTON, July 29 (Reuters) - U.S. banks have begun to restrict credit in the face of increased business risks, but there is no credit crunch looming, bank economists said on Monday.

Financial services banks are looking harder at quality in lending after recent high-profile bankruptcies, economists representing the American Bankers Association said in a conference call with reporters.

The shift has primarily affected commercial and industrial loans, bank economists said.

"We're not having a credit crunch but we are having some impedement of credit flows, and that is part and parcel of being in a business recession," said Fred Breimyer, chief economist for State Street Corp.
**********************
Misetich

Bond investors and banks are getting RISK AVERSE - Lets wait patiently on the results of this actions in months to come
Will it increase corporate spending?
Will it increase jobs?
Will it increase earnings?
Will it increase government tax revenues?

Got gold?

YGM

(07/29/2002; 16:03:50 MDT - Msg ID: 81792)

Must be a few closet Gold-Bugs @ Yahoo JPM Message Board

Note 9 Recomendations and no detractors comments yet...AhHa!!Next I'll direct them over here to get an education....YGM

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Recommend this Post - This post has 9 recommendations Ignore this User | Report Abuse

Gold Bugs in retreat....Ha, What a joke

by: zulu_gold_wars (53/M)
JPM..Long-Term Sentiment: Strong Smell 07/29/02 04:08 pm
Msg: 27162 of 27189

Yup, they made 80% on Gold stocks on the way up, made a bundle shorting Dow, made good on todays PPT manipulation on Dow spike today sold and now loaded up on CHEAP Gold stocks again. That's the sorry life of Gold Bugs..PM stocks are trading at POG levels of $275/$285. so there's the value...When the next shoe falls for the scandal of the day club PM's will shine again. And so the story goes....JP Morgan and Goldman Sachs deserve a Strong Smell recomendation...Also the Gold Manipulation Cabal deserves a thank you for being so predictable....EASY MONEY DAYS ARE HERE!
"GO GOLD & GO GATA"

YGM

(07/29/2002; 16:46:44 MDT - Msg ID: 81793)

EXCELLENT Site.....

http://www.GoldmanSuchs.comEXCERPT:

Listening to GS "Wealth Managers" Can Be Very Costly

When I turned over my holdings to Goldman "wealth managers," they told me my stock was worth $35 million. They said, "You're a busy executive; let us manage your holdings. We're experts in single stock risk management." The plan they gave me was flawed, and totally unsuited to my concentrated position or retirement plans. My neophyte "wealth manager" failed to recommend hedging, instead encouraging me to exercise and hold, and borrow on margin. When they finished with me a year and a half later, following Goldman's plan, I lost everything I owned. Goldman left me in financial ruin. Now I have an NASD complaint pending against Bradley DeFoor, James Milligan and Daniel Stanton, of Goldman's Private Client Services group. HB -- San Francisco

"Investors are expected to file a record number of complaints against their brokers this year, and they are so far winning record awards, according to new data from NASD Dispute Resolution. The NASDAQ subsidiary, which handles more than 90 per cent of claims against brokers and brokerage firms, logged 2,475 new cases to the end of April, a 16 per cent increase over last year." Source: "Record complaints against brokers this year," by Alison Beard, Financial Times, May 28, 2002.

Investigations Up, Profits Down

Goldman Sachs is being investigated by the SEC, NASD, NYSE and regulators from every State in the nation for a variety of violations, including conflicts of interest, "laddering", insider bond trading, cross-marketing abuses, and the Enron debacle. Most regulatory agencies don't comment on investigations, but everything in this site has been reported, confirmed or documented.

"...with the Securities and Exchange Commission and other state securities regulators now jumping into the fray, it's clear that "Analyst-Gate" is going to be a headache for the entire industry for quite sometime. ... For now, the safest course of action for individual investors might be to stay away from the companies that have the most to lose in the various investigations and lawsuits - stocks like Merrill, Goldman, Morgan Stanley, J.P. Morgan Chase and Citigroup." Source: "Going Broke With Brokerage Stocks," by Matthew Goldstein, SmartMoney.com, May 10, 2002.

[The] states have joined a nationwide task force investigating alleged conflicts of interest among Wall Street stock analysts in a probe that some say could turn up worse behavior than what Merrill Lynch & Co. was accused of. ... The state probes are starting with volumes of material obtained by investigators for New York Atty. Gen. Eliot Spitzer, who alleged that Merrill analysts issued false and misleading stock reports to help the firm win lucrative business handling stocks, bonds and mergers for companies they covered. One source said the investigations may turn up worse conflicts of interest than those exposed at Merrill, where investigators dug up e-mails that revealed Internet analysts privately describing their choice stock picks as "junk." ... Merrill "was clearly not the worst offender," said a source close to Spitzer, predicting the attorney general and other securities regulators would publicly disclose additional incriminating evidence against other firms. [Note: Since this story appeared, regulators from every State in the nation have joined this task force.] Source: "Inquiry: Securities regulators will investigate alleged conflicts of interest..." by Scott Reckard, LA Times, May 24 2002.
Cont'd @ Link......YGM.

Waverider

(07/29/2002; 17:01:05 MDT - Msg ID: 81794)

Estimated U.S. borrowing need in July-Sept raised

http://biz.yahoo.com/rf/020729/economy_treasury_borrowing_3.htmlSnip:
"The U.S. Treasury on Monday said it would need to borrow more in the July-September quarter than it previously thought, reflecting a weaker federal budget outlook. In its quarterly borrowing estimate, Treasury said it expected to borrow $76 billion in the final quarter of the government's fiscal year, which ends in September. In late April, the Treasury had estimated the amount it would need to borrow at only $55 billion.

In the recently completed April-June quarter, when the government has traditionally paid down debt with a flood of individual income tax receipts, the Treasury actually borrowed $15 billion, higher than the $1 billion in borrowing it estimated it would need in April. Treasury's preliminary forecast also calls for more borrowing in the October-December quarter, to the tune of about $71 billion. The speed and the severity of the budget crunch, coming after many analysts in 2001 had been predicting the United States could even pay off its multi-trillion dollar national debt, has taken many by surprise."

Waverider: Of course we heard it here first yesterday evening from Michael..."I think we are going to find that the government has blown the lid off the national debt and with it the %-age held by the Fed."

Michael ~ thank you for your kind words.

steady

(07/29/2002; 17:07:10 MDT - Msg ID: 81795)

HaVe We HaD tHe ScAnDlE Of ThE dAy YeT

http://biz.yahoo.com/prnews/020729/lam106_1.htmlRiverstone Networks Charged With Securities Fraud in Class Action Filed by Weiss & Yourman
LOS ANGELES, July 29 /PRNewswire/ -- A class action lawsuit has been filed in the United States District Court for the Northern District of California, on behalf of purchasers of Riverstone Networks, Inc. (Nasdaq: RSTN - News) securities between August 20, 2001 and June 5, 2002, inclusive (the "Class Period"). Riverstone designs, manufactures and markets Internet infrastructure equipment to telecommunications service providers.

The Complaint alleges that throughout the Class Period, Riverside and certain of its senior officers deceived the investing public through a series of press releases and statements to the media which falsely represented the Company's financial condition and prospects and, specifically, the true effect that the downturn in telecom spending had upon the Company.

However, gradually the truth emerged. On February 28, 2002, the Company announced that revenues for the fourth quarter would be $50-$54 million, instead of the originally projected $65 million, that the Company would at best break even on a pro forma basis,

sO oN & sO fOrTh YaLl KnOw ThE rEsT oF tHe StOrY w/Out LoOkEn

Sierra Madre

(07/29/2002; 17:34:01 MDT - Msg ID: 81796)

For your information...

Rumors are circulating in Argentina, that a couple of provinces of the country are to be handed over to creditors in payment of debts.

Question: could it be that the Argentinians have been left twisting in the wind, precisely in order to produce this result?

The Argentinians are so demoralized, that the rumors have failed to galvanize any reaction in protest. The people just don't seem to care what happens to their country anymore.

What has hit Argentinians stongly, has been the sight of their young ones leaving the country for opportunity elsewhere.

A pity, for Argentina is blessed with great resources that make emigration completely needless.

Sierra

misetich

(07/29/2002; 17:45:47 MDT - Msg ID: 81797)

Brazil requests U.S. retraction of O'Neill remarks

http://www.forbes.com/newswire/2002/07/29/rtr679753.htmlSnip:

BRASILIA, Brazil, July 29 (Reuters) - Brazilian President Fernando Henrique Cardoso on Monday requested a retraction of disparaging remarks made by U.S. Treasury Secretary Paul O'Neill who implied that international aid to the country could end up in Swiss bank accounts.

"President Cardoso gave instructions for the Ambassador to be called for a retraction," Supreme Court President Marco Aurelio Mello told reporters after meeting with Cardoso, the court's press office said.

O'Neill, who will be traveling to Brazil, Argentina and Uruguay next week, said on Sunday he would not bring the economically troubled countries any offers of aid on his trip. He added that the countries needed to enact sound policies so that "(aid) does some good and it doesn't just go out of the country to Swiss bank accounts."

Misetich

O'Neil telling it like is - Does he have to do it publicly?

This man is walking time bomb!

Got gold?

Paper Avalanche

(07/29/2002; 17:53:52 MDT - Msg ID: 81798)

HUI up 7.7% today

Close: 102.38
Change: 7.38

The paper price of gold pretty much flatlined for the day, but the HUI shot up 7.7%.

Methinks that someone recognizes such blatant POG manipulation to be temporary at best.

Peace out.

Paper Avalanche

R Powell

(07/29/2002; 18:05:53 MDT - Msg ID: 81799)

Seeker of the Golden Grail

I saw your comment (81736) wondering about the change in the COT numbers after Friday's big downturn. When I saw the POS numbers Friday I too thought that the large specs had sold bigtime. Whether the market was pushed down to hit their stops or just drifted down hitting the stops, that it did hit them is evident.
I quess the question is, as you said, how much of their long position was liquidated. If they're now near to neutral, will the market wander and begin to trade higher on fundamentals?

Will we once more see commercial selling into spec buying as POS heads higher as is the usual case? The day will come when something (eventually physical shortage if nothing before then) will set off this often explosive silver market and the commercials will be the only source of selling even though they will be operating on tight supply. The confirmation, last week, by presidential signature, of government silver buying didn't move the market at all. This convinces me more than ever that the supply/demand fundamentals have been forgotten by market players. It's sort of like the bubblonians disregarding P/E ratios in favor of "momentum buying". I've never seen a market reach a year in which all available supply is consumed by demand but if silver continues at its present deficit, my quess would be year 2004 when year end stocks will be listed as "down to seeds and stems again blues" as we used to say in the hippie days of yore. That's zilch for those not fluent in 1960s lingo.
Thanks for mentioning the COT and please share whatever information you find. Is there truth to the idea that each time the market washes out the weak hands, those remaining are stronger? As you mentioned in 81738, the markets will retract often even when the overall move is much higher. My strategy is simple, take some profits when they appear and buy the dips while holding a core position and physical metal. Even if correct in prediction, making a profit from trading is not easy. Congrats on recognising old man greed when he tried to befuddle your better judgement.
Rich

misetich

(07/29/2002; 18:06:18 MDT - Msg ID: 81800)

Enron's SPEs: Can Banks Have It Both Ways?

http://www.cfo.com/Article?article=7487Snip:
According to court records, JP MorganChase was apparently skilled at having its cake and eating it too�that is, keeping special purpose entities independent, yet exercising control.

Tim Reason, CFO Magazine
July 25, 2002
..............
At the heart of the recent storm over allegations that Citigroup and JP MorganChase extended off-balance sheet loans to Enron by disguising them as gas trades are Yosemite and Mahonia�the special purpose entities used as middlemen in the transactions.

Enron, of course, made SPEs infamous with its earlier Chewco, which under accounting rules should have been consolidated on Enron's books because that SPE did not have the requisite 3 percent outside ownership to be considered independent of Enron.

The banks, however, were apparently far more skilled at having it both ways: that is, keeping the SPEs technically independent, yet still exercising effective control.

Take JP MorganChase and Mahonia. According to court records and JP MorganChase's testimony before the Senate on Tuesday, the bank appears to have tapped into a sort of pool of SPEs available in Jersey, in the Channel Islands.

Mahonia, in fact, is owned by a charitable trust. According to Senate testimony by JP MorganChase managing director Jeffrey Dellapina, "neither Chase nor Enron has any ownership interest in Mahonia."

He added that Mahonia's officers are not appointed nor controlled by Chase or Enron. However, JP MorganChase spokesman Adam Castellani says the funds that Mahonia was using to pay Enron came from JP MorganChase and were recorded on JP MorganChase's balance sheet -- apparently as financing -- under "Other Assets."

Despite these arrangements, JP MorganChase has consistently maintained that Mahonia -- and another SPE conveniently named Mahonia Natural Gas -- were totally independent.

Back in February, that arrangement puzzled the judge in the pending case between JP MorganChase and 11 insurance companies that have refused to pay the bank for surety bonds that backed the gas trades between Enron and Mahonia. His effort to get JP MorganChase attorneys to explain who owns Mahonia sounds something like an Abbott and Costello routine:

SOUTHERN DISTRICT OF NEW YORK COURT JUDGE JED S. RAKOFF: I couldn't tell from the record, and I don't know if it's part of the record how Mahonia came to you?

JP MORGANCHASE ATTORNEY JOHN M. CALLAGY: How it came to me, your Honor?

JUDGE Yes.

JP MORGANCHASE: Mahonia is an entity under Jersey law in the Channel Islands.

JUDGE: Who set it up?

JP MORGANCHASE: It was set up by the law firm of Morant & Co. which is a Jersey law firm.

JUDGE: At whose request?

JP MORGANCHASE: I believe it was set up at the request of East Laws Trust, which actually owns the shares in Mahonia, [which] are owned beneficially by a company called East Laws Trust, which is a charitable trust. I think this law firm sets up companies like Mahonia as special purpose entities.

JUDGE: What I'm trying to get at is: Was it set up for the purpose of these particular transactions [with Enron]?

JP MORGANCHASE: I believe it was set up in 1992 for the purposes of these particular transactions, yes.

JUDGE: Was that at the behest of Chase Bank?

JP MORGANCHASE: No, your Honor. As I said, they contacted the Morant -- I believe that they contacted Morant & Co. and asked for�because they've used special purpose vehicles before, in other transactions.

The judge apparently accepted the argument that because it used a Jersey law firm as an intermediary, JP MorganChase did not "set up" Mahonia itself. But his next question also drew a surprising answer:

JUDGE: Does the Plaintiff have any interest, direct or indirect in Mahonia?

JP MORGANCHASE: None, your Honor, and nor does Enron for that matter.

That's an assertion that can only be maintained within the narrowest confines of corporate law. While JP MorganChase claims it doesn't have an ownership interest in Mahonia, it certainly has direct financial interest.

In fact, it is Mahonia, not JP MorganChase, that is the obligee on the $956 million in unpaid surety bonds. Yet that money -- if it's ever recovered -- will go to JP MorganChase. And it is JP MorganChase's high-priced attorneys who are pursuing it.

Indeed, the plaintiff in the case is officially listed as "JP Morgan Chase Bank, for itself and for and on behalf of Mahonia Limited and Mahonia Natural Gas Limited." Not counting the attorneys from JP MorganChase, no attorneys from East Law Trust or Mahonia were present at the hearing.

Misetich

Will Citi and JP Morgan get away with this?

A court case scheduled to begin in December will determine whether Morgan Chase will suffer an additional $1 billion blow from Enron meltdown. The bank has sued 11 insurance companies for refusing to pay off on $956 million in surety bonds -- bonds that Morgan Chase took out as protection in case the gas trades with Enron went south.

http://www.cfo.com/Article?article=7485
Hendricks went on to intimate that Citigroup bankers had been taken in by the accounting at Enron. "It appears that the audited financial statements, upon which we relied, were not accurate and did not fairly present Enron's financial condition," she told lawmakers.

But some observers found that comment puzzling. As Roach noted, in 2000 (the last year Enron submitted a 10-K to the SEC), the Houston-based trading company's numbers would have looked substantially worse -- without help from the transactions set up by Salomon Smith Barney, Citigroup, and JP MorganChase.

"If Enron had properly accounted for these transactions," Roach testified, "its total debt would have increased by about 40 percent to about $14 billion, and its funds flow from operations would have dropped by almost 50 percent, to about $1.7 billion." He added: "These are dramatic changes."

http://www.cfo.com/article/1,5309,7485|15|||,00.html

The stakes are high- this issue goes well beyond Enron - as these type of transactions are recognized by bankers as legitimate -

Enron employees, shareholders, bondholders - got stuck big -

Lets stay on this hot TRAIL

Got gold?

Paper Avalanche

(07/29/2002; 18:24:46 MDT - Msg ID: 81801)

Sometimes the best entertainment is free

http://www.sec.gov/rules/extra/ceocfo.htmThis should be the hottest website for the next two weeks.

Have fun.

Paper Avalanche

YGM

(07/29/2002; 18:28:22 MDT - Msg ID: 81802)

Congress, Merrill Lynch and Enron.....

http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020729/ap_wo_en_po/us_business_scandals_2Just watch and see how wide the net is cast before this crap is over....Merrill is just as bad as JPM & GS....Piper Jaffray is another in the loop....All the Brokerage Houses, big or small must be sweating bullets right about now....
2002 will go down as the largest swarm of Class Action lawsuits against brokerage houses in History....YGM

Paper Avalanche

(07/29/2002; 18:31:07 MDT - Msg ID: 81803)

A note about our host

Today I received a recent purchase from the fine folks at CPM and was very, very pleased with the quality of the product that I purchased.

I now sleep better with pre-1933 gold vs. bullion. It took me two years to take this leap, but Marie Ballard made it too easy.

Thanks.

Paper Avalanche

shades

(07/29/2002; 18:45:15 MDT - Msg ID: 81804)

govermint shorting silver?

I say let the govermint short silver down to whatever they want it will just provide me the opportunity to buy more. the fundamentals have not changed one iota this will just speed up the time frame for the inevitable supply/demand crunch I own both stocks and physical and try as they might they are not going to shake this long from the tree.

slingshot

(07/29/2002; 19:17:14 MDT - Msg ID: 81805)

POS

**************************POS going down. Payday Friday. Going to get me some.
Ha, Cha Cha Cha.

Great posts tonight! Gold hanging in there.
Stems and seeds? Bummer, Man.
Slingshot-------------------<>

Black Blade

(07/29/2002; 19:38:32 MDT - Msg ID: 81806)

Wall Street gets a bull stampede

http://cbs.marketwatch.com/news/story.asp?guid=%7BB16CE21A%2DE009%2D47E7%2DA6A7%2D391B5AAC0609%7D&siteid=mktw

Snippit:

"These have been impressive days. Perhaps it's late recognition that second-quarter earnings-per-share will be positive and that the earnings recession is [thus] over. But I'm still leery on betting the ranch on this rally's sustainability. Companies' third- and fourth-quarter outlooks have been pretty downbeat," said Joe Liro, equity strategist at Stone & McCarthy Research Associates. "

We had a very powerful day. Psychology is starting to turn [as] strength is no longer being sold into," said Peter Cardillo, chief investment strategist with Global Partner Securities. "The market is coming off of extremely oversold conditions. But if follow-through buying persists and volume remains heavy, it'll be safe to say that last Wednesday represented a short-term low for stocks. This week will be crucial for stocks with all the economic data to sort through," Cardillo said.

But Merrill Lynch's chief U.S. strategist Richard Bernstein contends that the equity market does not appear overwhelmingly undervalued, even when taking into account the market's recent poor performance and current inflation and interest rate levels. "The predictability of earnings is the lowest in more than 60 years. We continue to believe that the variability -- unpredictability -- of earnings is more important when determining the current market's valuation than are interest rates and inflation," the strategist told clients. Bruce Steinberg, Merrill's chief economist, lowered second-half GDP growth forecasts to 3.5 percent from 4.5 percent and expects no Fed tightenings until 2003. He feels recent declines in equities will feed back into the real economy and expects both consumer and business spending to be negatively affected.

Black Blade: This is a curious market and the trading is far from normal. When even companies such as Qwest and AOL Time Warner can move higher on news that they lied in their corporate financial statements, you just have to wonder how reliable this stock market rally is. Stocks went higher in all sectors including the gold sector where concerns have emerged concerning the SA mineral bill draft. It appears that cash came out of every nook and cranny for this rally. The question of course is whether this is another drunken spending spree until the hangover of earnings, growth, and debt are accounted for. So far it has been quite "entertaining". In fact I even closed out a couple of positions and took profits for now. I remain positioned defensively until some real bargains emerge. So far bargains are nearly nonexistent except in physical assets such as precious metals, and perhaps a smattering of a very few issues. I think that a lot of people can be hurt if the economic data this week and through August 14th are proven to be disappointing. Still, it does provide some "entertainment".

USAGOLD

(07/29/2002; 19:46:01 MDT - Msg ID: 81807)

Paper Avalanche. . . .

Thanks for the kind words. MB is four nines and a five .....knows the business and how to get things done. I do not match posting names to client files, so I don't know who you are. I could tell long ago though that you were a cut above. . . Thanks for doing business with us. We need clients like you. . . .It is your purchase from USAGOLD ~ Centennial Precious Metals that has nourished these pages.

Black Blade

(07/29/2002; 20:01:03 MDT - Msg ID: 81808)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
The Real Numbers

Snippit:

This is going to keep a cap on stock prices for a long, long time. The only way a new bull market in stocks will begin is when stock prices become a bargain. For the S&P 500 to trade at its historical P/E of 12-14, the index would have to fall back to the 200-400 level. That assumes current earnings were to hold up -- which is rather doubtful at this point. Companies aren't going to attempt to cook their books like they did during the 90's to meet analysts� estimates. If they do, the company CEO and top management will be exchanging their pin stripes for orange stripes and spending time in the pokey. They will think twice about what goes into the annual report when they have to certify the numbers. The top brass are now liable for those numbers, which means the numbers should become more meaningful. Many companies are starting to come clean as Qwest did today by announcing the company will have to restate their financial results for years 1999-2001.

This is just the beginning. Many companies will be unwilling to certify their statements by August 14th because it isn't enough time for companies to really audit their numbers. This process will go beyond August 14th. Since the new rules were made public back in June, honest executives haven't had enough time to find the toxic waste in their financial numbers and clean them up. The first real certification of the numbers may not take place until next spring when most companies file their annual reports.

Because of the pressure being put on CEOs to come up with verifiable numbers, the earnings game is coming to an end. In addition to better numbers, several sources of inflating earnings are drying up. One source of puffing up the bottom line has been inflated pension assumptions. By inflating pension assumptions on returns on investments, companies have been able to reduce pension contributions -- even though they have been actually losing money. Accounting for stock options may be another source of overstating payroll expense. By not including the cost of stock option expense, it is estimated that S&P 500 earnings are overstated by as much as 15%. The easy days of making the numbers are over. This is why companies and analysts still use the deceptive practice of referring to pro forma numbers or any version thereof that paints the company in a favorable way. We are still playing the GAAP vs. CRAP game. The companies, the analysts, and the anchors still report pro forma earnings. The bottom line according to GAAP � earnings according to generally accepted accounting principles � is still ignored by everyone in the financial food chain from companies to analysts to anchors.

Black Blade: The real question in this market rally is how many of these stocks are "dead cats" and how high can a "dead cat bounce"? This is a most odd market rally. Even some real dogs climbed. The rally was across the board and not anywhere based on the most rudimentary fundamentals. This suggests either some broad based intervention or the start of another speculative mania. The economic data has not been all that inspiring and the GDP revisions due out on Wednesday could be bad and the August 14th deadline looms as for now we only have a trickle of companies like Qwest asking for more time as they scramble to restate earnings for the last three years. This trickle will soon cascade into a flood as the deadline approaches. Corporate CEOs and other executives might be looking for excuses to delay reporting (that would be devastating if several companies miss the deadline). It should definitely lead up to an "interesting" climax in the next couple of weeks.

Paper Avalanche

(07/29/2002; 20:12:06 MDT - Msg ID: 81809)

Setting the starting point

@Black Blade

Indeed, that which has yet to be digested by the market will make itself apparent in the coming weeks. I believe that the current bouyancy in the equity markets is an effort to provide an artificial staring point for the big spike into the ground. Tis better to loose 3,000 on the DOW from 9,000 than 7,000. It keeps the peasants from becoming restless.

The most entertaining days lay just before us. I pray that you and all who patronize this site are well taken care of as these events unfold.

Paper Avalanche

Cavan Man

(07/29/2002; 20:16:13 MDT - Msg ID: 81810)

Black Blade

I recognize a speculative mania when I see one. If you recall, we had a lot of ups and downs like this between DOW 10,000 and 10,750. Anybody remember those days? I do. I could re-tell a lot of anecdotes but will spare the audience at large.

Keep your own counsel. Think "contrarian"; because no one else will and, buy gold metal not proxy.

Black Blade

(07/29/2002; 20:17:36 MDT - Msg ID: 81811)

Budget Car Rental Files for Bankruptcy

http://www.reuters.com/news_article.jhtml;jsessionid=AQAVZDRFTNYKOCRBAEOCFEY?type=businessnews&StoryID=1264217

Snippit:

NEW YORK (Reuters) - Car-rental company Budget Group Inc. BDGPA.OB filed for bankruptcy protection on Monday, as expected, and said it secured $750 million of loans to pay for new cars and $100 million of additional funding to keep the company running as it reorganizes. Budget, facing billions of dollars of debt amid a slump in travel following the Sept. 11 attacks on the United States, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware. The company listed $4.05 billion of assets and $4.33 billion of liabilities.

Black Blade: Another one bites the dust. This dead cat couldn't bounce.

silvercollector

(07/29/2002; 20:23:22 MDT - Msg ID: 81812)

Currency Wars

Please check G-E at 21:03 and if need be my ensuing post at 22:21.

Black Blade

(07/29/2002; 20:29:27 MDT - Msg ID: 81813)

Negotiators Agree on Bill to Rewrite Bankruptcy Laws

http://news.yahoo.com/news?tmpl=story2&ncid=716&e=5&u=/nyt/20020726/ts_nyt/negotiators_agree_on_bill_to_rewrite_bankruptcy_laws

Snippit:

WASHINGTON, July 25 Congressional negotiators announced today that they had reached agreement on a bill that would rewrite the bankruptcy laws, making it much harder for people to escape their debts when they declare bankruptcy. The bill approved by the conference committee would end the ability of millions of Americans to use the bankruptcy system to wipe out credit card bills and other loans that are not secured by homes or other assets. Many of those debts would instead have to be paid back over time. Credit card companies and other lenders have contended that they are being unfairly penalized as a result of the growing rate of bankruptcy filings. There were 1.45 million filings last year, a record, up 19 percent from 2000. The timing of a final agreement was intriguing, given that it is a clear victory for the interests of corporate America over consumers at a moment when large corporations are otherwise under siege on Capitol Hill because of recent scandals, many of them involving accounting abuses.

Black Blade: There could be a rush to the courts before the law is signed. Also, those that are trapped will be cutting back on spending as they struggle with debt. As always, get out of debt and stay out of debt, stash cash for several months expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

goldquest

(07/29/2002; 20:33:19 MDT - Msg ID: 81814)

Budget Car Rental

To bad they couldn't get a secret emergency meeting with the Fed. They could have had a bungee cord tied on to their dead cat like JPM and C! Good for a couple of more bounces, but at the end? Still a dead cat!

misetich

(07/29/2002; 20:43:47 MDT - Msg ID: 81815)

S&P Forecast Summary: Lazy-Hazy-Crazy Days of Summer

http://www1.standardandpoors.com/NewsBriefs/Articles/fs0702.htmlSnip:

The economy has slowed sharply after a quick first-quarter start. The inventory rebound has run most of its course, and consumer spending has caught up with income.
..............
Certainly there has been no cutback in consumer borrowing. Consumer installment debt jumped another $9.5 billion in May, breaking the record set the previous month. Since the end of zero-rate financing for cars, the debt is shifting toward credit cards and away from auto loans.

Consumer interest rates have risen over the last quarter, reflecting the end of zero-rate financing. Credit card interest rates, which never fell much as the Fed cut, have pushed even higher. Credit card defaults are soaring, hitting a record 7.6% in April before moderating slightly in May, to 7.4%. In 2000, the credit card charge-off rate averaged 5.6%. The jump shows that some consumers are in over their heads, but banks are still willing to send out applications because of the drop in the cost of funding credit cards. Interest rates paid by banks have dropped more than the losses have risen, and the rate charged by banks has come down only slightly. The result is that the spread above financing costs and losses widened to 7.0% in the first quarter from 5.8% a year earlier and an average 4.8% since 1990

...............
Working Less and Spending More

Can consumers continue to spend? With the unemployment rate likely to continue to rise through June, confidence becomes a key question. So far, however, fear does not seem to deter consumers. Disposable income is stronger than expected, in part because of the weaker tax revenues. The saving rate has edged higher, but only to 2.2% in March. The high levels of debt seem to bother economists much more than consumers. Consumer confidence edged lower in April, but the level remains high.

.................

Misetich

The fearless consumer-" jump shows that some consumers are in over their heads, but banks are still willing to send out applications"

Consumers debts are soaring, corporate earnings are dwindling - housing markets are set to cool off - auto loans are soaring - can they keep this up?

Got gold?

misetich

(07/29/2002; 20:59:04 MDT - Msg ID: 81816)

Strength of the insurers sapped

http://www.guardian.co.uk/business/story/0,3604,765435,00.htmlSnip:

Jill Treanor
Tuesday July 30, 2002
The Guardian

The financial strength of insurance companies had more than halved in two years even before the dramatic falls in the stock markets this year, according to the latest report on the hard-pressed sector.
...........
According to the analysis by accountants Ernst & Young, the excess assets of insurance companies have fallen from �80bn in 1999 to �34bn in 2001.

This means that free asset ratios, which measure the excess assets insurers have above their liabilities, have also fallen sharply - from 18% in 1999 to 7% in 2001.

Misetich

The UK report is emblematic of the insurance industry worldwide as a whole - With trillions of stock and bond market value disappearing, financial deterioration must have accelarated - it is doubtful that these corporations will play the stock and bond market as aggressive as they once did.

ANOTHER big player going the conservative route.

Got gold?

mikal

(07/29/2002; 21:01:16 MDT - Msg ID: 81817)

US markets stage another suckers rally

A few causes of the latest Wall St. drama: Corporate repatriation of overseas assets into dollar denominated stocks and stock repurchasing, helping the buck index rise also. End of month, investment fund purchasing by managers "window dressing". Euphoria at remarks by O'Neill and Bush and major changes to short-selling laws. Speculative positions following bull market moves above, and the artificially induced PPT trends.

misetich

(07/29/2002; 21:04:32 MDT - Msg ID: 81818)

The New Pinch from Pensions -Companies must pour billions into retiree plans after betting on stocks

http://www.businessweek.com/magazine/content/02_31/b3794070.htmSnip:

Amid the wreckage of the worst bear market in at least three decades, hemorrhaging corporate pension plans are rapidly becoming Wall Street's biggest new worry. They have lost hundreds of billions of dollars, and now companies face the end of their long-running holiday from writing checks to the plans. Over the next 18 months or so, companies ranging from General Motors to United Technologies face having to pump billions into their plans to comply with federal laws to protect pensioners.

Even if plan investments somehow manage to eke out 5% returns this year, companies in Standard & Poor's 500-stock index will be $40 billion short of their projected pension obligations, according to Morgan Stanley estimates. If plans lose 5%, they'll be $150 billion in the hole. Either way, it is a world away from 1999 when the plans had a $292 billion surplus and a 30% cushion over their commitments. "The squeeze on U.S. pension funds has the potential to be the defining U.S. financial crisis of the 2000s, like the savings and loan squeeze of the 1980s," says Bob Prince, director of research and trading at money manager Bridgewater Associates.

The economic consequences of the squeeze could extend far and wide. Cash that companies earmarked for buying new equipment, expanding markets, hiring employees, buying back stock, or repaying debt will have to be used to shore up pension plans. The shift will be another downer for stock prices, cutting out spending that used to boost growth in earnings per share. And the impact will soon be felt.

Under government rules, some companies must start making up for 2001 shortfalls by the end of this year. For others, the bites will start in 2003 or 2004. "Some companies are going to be contributing for the first time in 10 years," says John Ehrhardt, a principal and consulting actuary at Milliman USA Inc. "In thinking about capital expenditures, there is a new party at the table, the pension plan."
...................
Worries about pension plans sucking cash out of companies are increasingly catching Wall Street's attention. They were a factor in the downgrade of GM's credit rating last fall by Standard & Poor's, and they are in part to blame for its stock falling 34% since mid-May. GM's forecasted $9 billion in makeup payments through 2007 compare with $3.6 billion in cash flow the company is expected to generate this year after dividends, interest, and capital expenditures. To help fund a $2.2 billion payment this year, the company sold convertible debt in April. GM may have to repeat that operation in the future. "We're going to have to put in more cash than we planned," says Vice-Chairman and Chief Financial Officer John M. Devine.

"All companies are going to have to look at their pension plans," warns Patrick D. Campbell, CFO of 3M. His company hasn't decided yet how much cash to pony up, but he doesn't quarrel with Harris' estimates that $378 million will be needed in 2003 if investments lose 5% this year. The company's U.S. and foreign plan assets were 11% short of projected obligations at the end of 2001, according to the company's annual report. And since then, U.S. stocks have fallen another 27%. "Obviously, we're going to have to think this through," says Campbell.

Misetich

The house of cards is tumbling -
Got gold?

misetich

(07/29/2002; 21:15:40 MDT - Msg ID: 81819)

Fitch: US energy trading sector faces period of 'extreme stress'

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=GenIn&ARTICLE_ID=150469Snip:

Steven Poruban
Senior Staff Writer

HOUSTON, July 29 -- The US natural gas and wholesale power trading sector, along with the power-generating sector, is presently facing a period of "extreme stress," according to Richard Hunter, managing director, global power group, for New York-based Fitch Ratings.

And the energy trading sector's response to this stress is affecting the scope of activity within the energy commodities markets.

Factors contributing to this strain have been industry's desire to reduce its exposure to energy trading operations, continuing regulatory investigations into financial reporting practices, and an onslaught of litigation, Hunter said at a Fitch-hosted teleconference Friday. At the same time, energy traders are reassessing their portfolios for possible asset sales to raise cash flow and lower debt profiles.

These factors, he said, have all played their part in creating a negative outlook for the sector.

Meanwhile, analysts continue to downgrade companies involved in energy trading and power-generation. Fitch, which tracks downgrade-to-upgrade ratios, said that among all US corporations in Fitch's universe of companies�including financial institutions�the downgrade-to-upgrade ratio was 4:1 for the first half of 2002. Removing financial corporations, Hunter said that the ratio changes to "a rather heady 14 downgrades to 1 upgrade" for the same period. During the first 6 months of this year, the ratio within the global power group's universe of companies is 18:1, vs. a ratio of 6:1 for the first half of 2001.

For the first half of this year, Fitch estimated that total defaults among corporations worldwide amounted to $50 billion, Hunter said. "That compares to a record year of 2001 with $78 billion (in defaults) for the whole year, which itself beat the prior record year of 2000 with some $28 billion." Hunter said that defaults worldwide typically run well below $10 billion/year.

Risk exposure
Gas and power marketers and traders wanting to minimize their risk exposure are shying away from trading operations and concentrating efforts on firming up their physical assets. Such moves are amounting to fewer counterparties to trade with, which in turn is resulting in less trading activity and less volatility in the market, said Ellen Lapson, Fitch global power group analyst. But these same energy marketers and traders are currently in the best position to deal with any systemic risk, such as being exposed to a counterparty that defaults on a contract, Lapson noted.

"I'm confident that the marketers and traders have been reducing their exposure to those of their counterparties that they lack confindence in," Lapson said.

Misetich

Who's the next Enron?

Got gold?

misetich

(07/29/2002; 21:19:49 MDT - Msg ID: 81820)

Bush, Cheney: Cheshire cats of reform -As private citizens, did they do what they now disavow?

http://www.sfgate.com/cgi-bin/article.cgi?f=/chronicle/a/2002/07/28/MN32571.DTLSnip:

The irony, of course, is that the corporate-reform bill President Bush will sign into law this week would have made his own actions as a businessman a criminal offense.

This is but the latest "Alice in Wonderland" aspect of the scandals rocking the business world, which have made the stock market an earthquake zone of late and have caused millions of people to rethink their retirement plans.

Bush, who is now set to begin a monthlong vacation -- we could all use one at this point -- has cast himself as cheerleader-in-chief for overhauling corporate conduct.

But a pungent whiff of misbehavior lingers as the president and Vice President Dick Cheney keep trying to distance themselves from their own track records as executives.

And more than a few observers are asking, not unfairly, whether genuine reform is possible when it is being spearheaded by two men so unwilling to address their own corporate baggage.

"There's a certain through-the-looking-glass quality to this," said Tom Schlesinger, executive director of the Financial Markets Center, a Virginia research facility.

"But in a perverse way, this could have the effect of pushing the White House to overcompensate on reform for perceived or real disadvantages in this area," he said.

That remains to be seen. For the moment, investors, voters and other interested parties have little choice but to sit back and watch the spectacle unfold.

Bush calls his tenure about a decade ago as a director of Harken Energy "ancient history." He has also repeatedly insisted that he did nothing wrong and that investigations into alleged wrongdoing left him fully vindicated.

Not exactly. Although the president has consistently refused to release documents that support his claims, papers that have slipped out via Freedom of Information Act requests appear to contradict Bush's recollections of what actually transpired.

For example, Bush maintains that he had little or nothing to do with a controversial 1989 deal in which Harken insiders borrowed money from the company to purchase a subsidiary.

The Securities and Exchange Commission ruled that the transaction was in fact nothing more than an attempt by the company to hide $10 million in losses and ordered Harken to restate its earnings for the year.

Now it appears that Bush, who sat on the board's audit committee at the time, was more deeply involved than previously acknowledged.

On June 15, 1989 -- just two weeks before the dubious sale -- Harken's chief executive, Mikel Faulkner, wrote to Bush praising him for his "intuitive analysis" of Harken's business matters.

"I consider the role you play at Harken Energy Corporation to be a very meaningful and significant role and look forward to a continuing relationship, " Faulkner wrote.

The confidential document was obtained by the Center for Public Integrity, a Washington think tank, and posted online for the first time Thursday.

Bush also has declared that he never would have proceeded with an almost $850,000 sale of Harken stock on June 22, 1990, if he had known the company would soon thereafter report a $23 million loss, causing its share price to plummet.

Bush was investigated by the SEC for possible insider trading but no charges were filed.

SEC'S TIES TO BUSH
Bush himself was never interviewed during the probe, which was overseen by then-SEC Chairman Richard Breeden, an appointee of Bush's father and former White House lawyer. The SEC's general counsel at the time was James Doty, who had represented Bush Junior when he bought the Texas Rangers.

It's unclear what Bush did or didn't know about Harken's growing financial difficulties when he sold off his shares.

But a newly unearthed memo sent by Faulkner to Bush and other board members on May 25, 1990, refers to Harken's growing liquidity problems and the need to "prepare a listing of possible assets to be sold."

Ordinary investors, needless to say, did not have access to that information.

Under the new rules approved by Congress last week, board audit committees will be held responsible for all accounting problems -- a change that would have placed Bush in the hot seat during his Harken days.

Because Bush, as a member of the audit committee, ostensibly signed off on the deal that ran afoul of the SEC, he would under the new rules face the possibility of prosecution for securities fraud.

Would he have violated another rule banning loans to corporate officers? Maybe not. Bush received two loans from Harken, but it's uncertain whether board members will be subject to the new prohibition.

ANDERSEN'S TIES TO HARKEN
Harken's accountant was Arthur Andersen, which has since gained infamy for having so badly botched the books of Enron, WorldCom and Global Crossing -- three firms whose bankruptcies have devastated countless investors.

Less well known is the fact that Harken's CEO, Faulkner, is a former Andersen employee; as is Bruce Huff, Harken's president and chief operating officer; Wayne Hennecke, Harken's chief accounting officer; and Anna Williams, Harken's chief financial officer.

Virtually the entire executive suite at Harken has a background in Andersen's energy audit division -- the same division ultimately responsible for the Enron debacle.

Vice President Cheney is himself no stranger to Andersen. In 1996, while CEO of oil-services giant Halliburton, Cheney appeared in a promotional video for the accounting firm, crediting it with providing advice "over and above . .

. the normal by-the-books audit arrangement."

Interesting choice of words, especially considering that the SEC is now investigating both Halliburton and Andersen for allegedly inflating revenues by as much as $234 million over a four-year span.

Since 1998, Halliburton has estimated how much customers owe the company for cost overruns on big projects and booked the not-yet-paid cash as revenue.

If the SEC determines that Halliburton exaggerated these numbers beyond reasonable levels to bolster its bottom line, the company could be charged with fraud.

Halliburton neglected to tell the SEC or investors about its newly aggressive accounting practice until March 2000 -- a lapse that echoes Bush's failure to inform the SEC about more than $1 million in stock trades until as much as eight months after the fact.

These issues would be serious enough under any circumstances. That they involve the president and vice president of the United States raises them to another level of importance entirely.

LESS TOLERANCE FOR SHADY DEALS
This is especially true in light of the current climate on Wall Street and in Washington, where business ethics have taken center stage and little tolerance remains for corporate shenanigans.

Joel Kornfeld, formerly the SEC's senior trial attorney and now a Los Angeles lawyer specializing in white-collar crime, said the new reform legislation will "make people think twice before committing some wrongdoing."

Yet the same was said 15 years ago when financier Ivan Boesky went to jail for insider trading, and that episode was followed by a surge in corporate naughtiness (including Bush's and Cheney's alleged misdeeds).

"People have short memories," Kornfeld acknowledged. "We'll have to wait and see what happens."

Or as the Duchess tells a bewildered Alice: "Everything's got a moral, if only you can find it."

Misetich

Got gold?

Gold Hill

(07/29/2002; 22:10:04 MDT - Msg ID: 81821)

re pOST 81810

Cavan Man
Post 81810
Well said, I'm beginning to learn that lesson.

sector

(07/29/2002; 22:16:56 MDT - Msg ID: 81822)

Guarantees cap fuels Japan funds outflow

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1027953257129&p=1012571727192

By Michiyo Nakamoto in Tokyo
Published: July 29 2002 18:40 | Last Updated: July 29 2002 20:39

Japanese banks' time deposit accounts suffered a huge outflow of funds after the government imposed a cap on guarantees in April, fuelling fears of a further financial crisis when guarantees are further limited next April.

According to figures published by the Bank of Japan, depositors shifted nearly Y42,000bn ($353bn, �358bn, �226bn) out of time deposit accounts in the year to May, one month after a Y10m cap was imposed on government guarantees, according to figures published by the Bank of Japan.

Until April, the government offered 100 per cent protection on deposits at Japanese banks; from April next year the government will cap its guarantees on ordinary bank deposits.

Some analysts have warned of a general lack of understanding of the new rules, and consequently "there could be a panic reaction", according to Katsuhito Sasajima, banking analyst at UBS Warburg in Tokyo.
++++++++++++++++++++++++++++++++
Recall that this $353 Billion outflow is only half of the story as April 2003 will surely bring the other $353 Billion to safer investments for the Japanese elders. It is heartening to see almost ALL of these soon to be totally uninsured time deposits are flying to safer heavens. A clear vote of no confidence in the Japanese government.

Just where these deposits are going is an important question. Yen, dollars, euros, insurance company annuities? Certainly not the stock market. Somewhere else?

Only 17% of the $600 Billion uninsured pool [April 2003] of these former time deposits represents over 10,000 tonnes of gold � enough to drain away the last of the US manipulation reserve stocks plus suck dry the remains of the IMF.

The rock solid facts about our current gold bug status are the un-sustainability of a manipulated market due to the sales of an exhaustible resource coupled with a geometrically expanding knowledge base about the gold market and wider corruptions.

As the elderly Japanese move their savings to safety they remain a key player in the unfolding chaos that looms ahead. This environment will get increasingly more volatile as more and more players, not necessarily speculators, learn of the inherent opportunities.

Gold can be driven up by anyone with dollars...up towards financial Armageddon.

Black Blade

(07/29/2002; 22:23:14 MDT - Msg ID: 81823)

Nasdaq says it will delist WorldCom stock Tuesday

http://www.forbes.com/technology/newswire/2002/07/29/rtr679672.html

Snippit:

WorldCom said it expects its securities to trade outside of mainstream U.S. stock markets on what is known as the "pink sheet" listings, which have minimal financial regulatory requirements. Nasdaq said it made its ruling after WorldCom failed to comply with the market's requirement that it remain current in its periodic filings with the Securities and Exchange Commission. In addition, Nasdaq said its decision was based upon concerns relating to the company's bankruptcy proceedings.

Black Blade: This dead cat didn't bounce very high. Although it did go from a low of 6 cents to a current 29 cents. Who the hell is buying it? The creditors and bond holders are first in line and this turkey isn't going to emerge from bankruptcy either.

Black Blade

(07/29/2002; 22:33:03 MDT - Msg ID: 81824)

Monkey See Monkey Do In Asia

http://quote.yahoo.com/m2?u
Asian markets are roaring higher on the back of the US markets. Looks like the Nikkei and Hang Seng could blow past 10,000.

- Black Blade

Black Blade

(07/29/2002; 23:04:08 MDT - Msg ID: 81825)

Hard times drive more Japanese to steal food

http://straitstimes.asia1.com.sg/asia/story/0,1870,134091,00.html?
One way of measuring the current depth of the slump in Japan's fortunes is to take a peek inside a shoplifter's bag

Snippit:

TOKYO - Japan's new breed of shoplifter steals food rather than branded goods these days in a sad reflection of the desperate plight of those caught long-term in the nation's economic crunch. An increasing number of Japanese workers and their dependants have resorted to shoplifting after relatively long spells of unemployment. They are shifting away from department stores where branded goods used to be their aim and turning instead to supermarkets and grocery and convenience stores, where food-related items abound. The profile of a typical shoplifter has changed too - from that of a young person stealing either for thrills or because they could not afford branded goods, to someone who is in dire economic need - hungry, in a word.

A 52-year-old woman, who was caught after slipping packets of frozen beef and chicken into her backpack, told the owner: 'My husband lost his job more than a year ago and I have not been able to afford anything nice to eat for a long time.'

Among the others were two elderly people who said their pensions were too meagre; a homeless man who said he had gone hungry for days, and two teenage brothers who said their parents were out looking for jobs and had left them without food.

Black Blade: In a word � "grim". As always one point that I stress is that everyone have several months to maybe a year's worth of food and basic necessities stored up for times like these. It is easy and cheap to buy the necessities during the bad times and rotate with fresh inventory as the goods are used. The situation in Argentina (the bread basket of South America) is even worse. They are eating pets, rats, toads, and sifting through garbage at landfills.

YGM

(07/29/2002; 23:41:25 MDT - Msg ID: 81826)

Black Blade...

Your (sensible & prudent) Food storage thread for uncertain times...If I may just add a few simple comments...First if one needs the survival food in the first place things probably could take more than a year to get even halfways back on track as far as food goes in markets...I might suggest to folks that for a little more effort than just tinned foods and rotation, which I also do from my basement pantry, they should consider acquiring a Vacuum Sealing unit ($200-300.00 Can)...Flour and other staples like Wheat (you can live healthy with NOTHING ELSE other than Wheat if need be)Sugar and ALL dried foodstuffs will deteriorate in a few months time. With a Vacuum sealer you can keep mason jars full of anything from Dried Foods to Bullets to Vegetable Seeds indefinately...Seeds usually lose mortality over one year...Vacuum sealed they last forever...If one can conceal a root-cellar under the Cabin or House or on the property then you have an ideal hidey hole and a place for summer crop storage as well as all else...Farmers still keep root cellars and even some with ice houses and nobody says they're paranoid, just good old fashioned homesteader mentality...(I seem to remember you saying you had a Mtn Retreat]...Most preparedness comes cheaply, but few dedicate the time or thought to REAL potentials in this age of complacency....YGM

YGM

(07/30/2002; 00:00:09 MDT - Msg ID: 81827)

Read on another Message Board

"Corning"... today was relegated to Junk Bond Status...by S&P and Moody's....Probably many more to follow suit...

Nomad

(07/30/2002; 00:11:29 MDT - Msg ID: 81828)

Oil Iraq War

http://www.nytimes.com/2002/07/30/international/30COST.html
Last Nov. 13, a month after the United States began bombing Afghanistan to dislodge the Taliban and Al Qaeda, the president's advisers debated whether Iraq should be the focus of phase two of the campaign against terrorism. Mr. Bush directed Energy Secretary Spencer Abraham to add more than 100 million barrels to the Strategic Petroleum Reserve.

Since Jan. 1, oil shipments into the reserve have reached record levels, about 150,000 barrels a day. One oil strategist in London noted that United States government acquisitions for the reserve were accounting for more than half of the growth in demand for oil this year.

Nomad :

I know everyone feels bad about the drop in the price in gold ... and you can include me on that list as I lost a bundle these last days. But one of the things I noted in the last few months is that, other than the one day wonder bump just before the last drop, the gold price mostly went up when war tensions were highest in India-Pak. Tensions eased, gold dropped. Now we are setting up for round 2. I would have to say I am waiting for the price to drop more. I want to get in again at a lower price because I believe that now (July/August) is just a temporary lull in the storm and that the next few months have the potential to be devastating worldwide.

I don't have a crystal ball, but it is obvious to me that Little Bush is going full speed ahead with his Saddam vendetta, in spite of most of the world telling him it's not a good idea.

I know some of you are fans of astrology, and I am too. However, I believe that it is not so useful for telling the future, but it is quite useful for determining the overall personality characterisitics of individuals. As a lark I looked up Bush in my favorite book and at the end of each of the personality outlines in this book it has 2 short lines summarizing the very Best personality characteristic and the very Worst personality characteristic of that person.

For Bush, they are BOTH the same ...

it says ' Gets His Way !'

:)

Black Blade

(07/30/2002; 00:39:11 MDT - Msg ID: 81829)

Re: YGM -- Food Storage

Actually as I am currently sitting atop the "Bone Pile", I have been living off of my food storage, fishing, trust distribution and dividend checks. Putting together a good storage program is actually kinda fun and you can always try to get a bit innovative about it too. I could sit back for a couple of years supplementing my stores with wild game. Of course I came to the conclusion that storing up for lean times after being in the "boom-bust" natural resource industry for a few years. As the energy and mining industry is likely to be shutdown more or less for a couple of years I decided to bide my time with hunting, fishing, and working out until the boom cycle begins again.

I have dry goods such as navy beans, kidney beans, and rice in large 5 gallon plastic sealable containers. There are also pasta noodles and even ramen noodles. Before you close them up you could place some dry ice on the top to help preserve and protect the product. I also have several canned goods like sweet corn, chili, tuna, salmon, stew, beef, various vegetables and fruits. I also have everything from light bulbs, candles, toiletries, soap, etc. I usually replace a little at a time as I find a case lot of a particular item on sale. Many people have access to a warehouse type store like Costco or Sam's for example.

Fortunately I have prepared financially and for the most basic necessities like food. I continually stress the importance of preparation -- therefore my constant advice to "get out of debt and stay out of debt, stash enough cash for several months expenses, to get Gold and Silver portfolio insurance, and to start a storage program for nonperishable food and basic necessities". I have no debt and plenty of cash for expenses. In spite of having no business right now -- "Life is good". It does not take much to realize that most people would not be able to last very long if they were to suddenly have no income. Most are burdened with debt, have no stores of food or basic goods, and have very limited cash reserves. They would use up whatever investments they have tucked away and then the real pain begins. It is especially disturbing when they have families to take care of. The Argentines and now Japanese are current examples of what can happen. Cheers!

- Black Blade

NEMO me impune lacessit

(07/30/2002; 02:30:30 MDT - Msg ID: 81830)

(No Subject)

3:rd Saudi-prince dead in a week.

NEMO me impune lacessit

(07/30/2002; 02:39:47 MDT - Msg ID: 81831)

Saudi-prince

Prince Fahd bin Turki bin Saud al-Kabir dead in the desert.
Died from thirst - they say.

Black Blade

(07/30/2002; 03:07:27 MDT - Msg ID: 81832)

State seeks crisis talks with mining industry stakeholders

http://www.busrep.co.za/html/busrep/br_frame_decider.php?click_id=343&art_id=ct20020730062950535P263457&set_id=60
Snippit:

Johannesburg - The government called an urgent meeting of stakeholders in the mining industry today after the leaking of its empowerment proposals - aimed at giving black business 51 percent control of all new mines - again wreaked havoc with mining stocks yesterday. Andile Mazwai, the chief executive of Mazwai Securities, said: "From what is outlined in the leaked charter document it is not unjustified to see the market fall this much. It puts forward a strong agenda on redistribution but with very little on how this will be achieved. "Investors value stocks based on their future earnings but mining companies may now have lost a degree of comfort to start new projects," Mazwai explained.

Black Blade: This is "interesting" news. Whether there is any substance to the proposal or not, the fact that it was even discussed should be of concern. The stock markets are fickle enough without ominous threats of government forcing a major change such as this. Stock markets are heavily influenced by rumor. I had sold off my Gold Fields when they applied to have the option to dilute their shares by as much as 20% (21 million shares), and I had whittled down my Harmony shares taking profits. However, on Friday I cleaned out the remaining shares. I am outta Africa, there are other companies around the world just as good where sane governments have control. Harmony is a good company with excellent management and has been very profitable to me, but I just don't need the aggravation of these latest revelations especially with the defiant "Mugabe-like" attitude of SA Mining Development Association. There are other fish to fry.

Black Blade

(07/30/2002; 03:37:43 MDT - Msg ID: 81833)

Not A Good Start - Pathetic Showing Of Confidence Of US Corporate Executives

http://www.sec.gov/rules/extra/ceocfo.htm

CEOs and CFOs of 945 major corporations are required to personally vouch for and sign off on their corporate financial statements by August 14th (see link for the list). So far only 9 have (that's less than 1%). If they are found to be lying they will be prosecuted. Yesterday Qwest said "oops! We made a clerical error -- we need more time". They overstated earnings ane will restate earnings for the last three years!!! I think that we could see more of this. Hmmm...

- Black Blade

Black Blade

(07/30/2002; 04:00:39 MDT - Msg ID: 81834)

The Barbarous Relic Files - Rumors of buried gold draw treasure hunters, even to downtown parking lots

http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020730/ap_wo_en_po/taiwan_urban_gold_rush_1
Snippit:

TAIPEI, Taiwan - Rumors die hard, especially where supposedly buried treasure is involved. In dozens of places across the island, treasure hunters are digging for gold and other booty they believe Japanese troops buried before their hurried retreat from Taiwan after World War II. One of the most unusual digs is going on in a parking lot just blocks from the Presidential Office, where a backhoe spews smoke into the night air as its claws crack through the asphalt. The dig was the idea of a mysterious and grumpy retiree who only gives his surname, Yang, and claims to be a former air force officer. After getting government approval to start prospecting for the gold, Yang attracted little attention until China Times Weekly magazine did a story recently and prompted a media frenzy. "Go away, you're disturbing us," Yang recently said as he shooed reporters from the site.

Black Blade: Sure is a lot of work to look for a "barbarous relic". Hmmm...

Black Blade

(07/30/2002; 04:21:45 MDT - Msg ID: 81835)

Breaking News

Just across the wire - another bombing in Jerusalem resulting in numerous casualties. No details yet. Earlier two Israelis were shot and killed near Nablus while delivering fuel for sale. It appears that the war is about to heat up again between the Israelis and Palestinians. Expect more counter attacks by the Israelis and more attacks by the Palestinians.

- Black Blade

Black Blade

(07/30/2002; 04:31:49 MDT - Msg ID: 81836)

Market Indicators

http://www.mrci.com/qpnight.asp
Gold is up a couple of bucks, the USD is sliding again, petroleum prices are higher, and market index futures are lower. Looks like another "entertaining" day on Wall Street. The Pimps, Trolls, Pied Pipers and other Wall Street primates will surely be out thumping their chests on CNBC, CNNfn, and Bloomberg today.

- Black Blade

Black Blade

(07/30/2002; 04:46:20 MDT - Msg ID: 81837)

"Scandal Of The Day" - Qwest Insiders Made Millions

http://biz.yahoo.com/rb/020730/tech_qwest_report_8.html
Snippit:

NEW YORK (Reuters) - Executives at Qwest Communications International (NYSE:Q - News) made about $500 million selling company stock from 1999 to 2001, as the company was releasing results it now says were exaggerated and based on improper accounting, The New York Times reported on Tuesday.

Black Blade: Now this could raise a few red flags. I smell a Congressional hearing with more CEOs and CFOs pleading the fifth.

misetich

(07/30/2002; 05:18:34 MDT - Msg ID: 81838)

Qwest Accounting Lapse May Lead to Bankruptcy, Investors Say

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∣dle=ad_frame2_topfin&s=APUZT1xXdUXdlc3QgSnip:

Chief Executive Richard Notebaert is selling the phone-book unit to cut debt and avoid violating a $3.39 billion bank loan at year-end. Accounting mistakes may slow a sale or reduce proceeds from the business, valued at as much as $10 billion, investors said. Qwest may be unable to repay debt as demand slows for the long-distance network it built with borrowed funds, they said.

...................
Misetich

Debt defaults - is it the achilli of the "new economy"?

Got gold?

misetich

(07/30/2002; 05:29:26 MDT - Msg ID: 81839)

U.K. Split-Capital Trust Investors See Their Savings Collapse

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∣dle=ad_frame2_topfin&s=APUZSuRXpVS5LLiBTSnip:

By David Clarke

London, July 30 (Bloomberg) -- British investors are reeling from holdings in funds called split-capital trusts, which attracted about 10 billion pounds ($15.6 billion) in the 1990s. Some of the trusts are now almost worthless.

Aberdeen Asset Management Plc yesterday picked receivers to close Aberdeen High Income Trust Plc, which had about 195 million pounds of assets at its peak in June 2000, because the fund can't meet bank payments. Trading in Yeoman Investment Trust Plc was suspended, the 11th fund in two months to halt operations after its stock lost 95 percent of its value over the past 12 months.

``My wife was told by an adviser these things were cheap as chips and safe as houses,'' said Nick Harvey, an information technology consultant in London. His family put about 250,000 pounds in split-capital trusts including BFS Investment Plc's Geared Income Investment Trust Plc. The investment is now worth ``next to nothing,'' he said.

Misetich

Nick Harvey and investors like him believed the cheerleading of people like Greenspan

-innocent investors who believed all the nonsense are paying the price - defrauded by crooks

Will the Nick Harveys' return to the stock market?

Got gold?

misetich

(07/30/2002; 06:08:50 MDT - Msg ID: 81840)

US Chain Stores Sales Fall

http://story.news.yahoo.com/news?tmpl=story2&cid=580&ncid=580&e=10&u=/nm/20020730/bs_nm/economy_retail_btm_dc_1Snip

NEW YORK (Reuters) - Sales at U.S. chain stores fell last week as consumers guarded their wallets, reversing the previous week's sales gains, a report on Tuesday showed.

U.S. chain store sales fell 0.4 percent in the week ended July 27 after a 0.4 percent rise in the previous week, the Bank of Tokyo-Mitsubishi and UBS Warburg reported in their Weekly Chain Store Sales Snapshot.

Those stores include J.C. Penney, Sears, Target, Kmart, Wal-Mart, Federated Department Stores Inc. and May Department Stores Co. The BTM/UBSW index measures sales growth with the year 1977 equaling 100.

Misetich

Lets stay tuned and follow the US jobless economic recovery in progress

Got gold?

misetich

(07/30/2002; 06:19:12 MDT - Msg ID: 81841)

JP Morgan Turns Bullish

http://story.news.yahoo.com/news?tmpl=story2&cid=580&ncid=580&e=18&u=/nm/20020730/bs_nm/financial_jpmorgan_dc_2Snip:

SINGAPORE (Reuters) - JP Morgan Securities has moved to an overweight position on global equities from neutral due to attractive valuations and is underweight in bonds and cash.
"Previously, equities in all global regions have been expensive.
On our earnings/bond yield models, world equity markets are now cheap," the securities house said in a July 29 strategy report from London.

"Even based on our conservative earnings expectations, we now see 15-20 percent upside to global markets to reach our end-of-year fair values."
............
"Any inflation fears have dissipated. The probability of rate cuts, rather than rate tightening is rising," it said.

Misetich

Japan's economy is in recession
US jobless recovery is anemic - earnings for 2nd Qtr are up 1% from same period a year ago
Europe consumer confidence is pointing downwards
Latin America economy is in crisis mode

Why then is JP Morgan so bullish?
" The probability of rate cuts, rather than rate tightening is rising," it said.

Eleven rate cuts, tax cuts, government spending hasn't aided corporate earnings or spending - unemployment is rising - consumer confidence is waning

Got gold?

misetich

(07/30/2002; 06:28:04 MDT - Msg ID: 81842)

Our Banana Republics

http://www.nytimes.com/2002/07/30/opinion/30KRUG.htmlSnip:

By PAUL KRUGMAN

New Jersey has always been a good state for scandals,
.............

The other -- further revelations about the way dishonest budgeting by former Gov. Christie Whitman crippled the state's finances -- has dire implications for all of the state's eight million people, who face the prospect of higher taxes on their houses, more potholes in their roads, fewer teachers in their children's classrooms and worse medical care for their parents. This story received no national coverage at all.

Experts already knew that the Whitman administration had used creative accounting to justify a series of tax cuts. Last year New Jersey Policy Perspective, a local think tank, released a study of fiscal policies in the 1990's titled "Take the Money and Run." Among other things, the state stopped contributing to its pension funds. This made the budget look a lot better, but created a financial hole. In an attempt to fill that hole Governor Whitman violated the basic principles of pension funds by having them engage in stock arbitrage, borrowing money to speculate on the market.

Now the state's taxpayers must make up for an investment loss of $22 billion, most of a year's tax receipts. But don't cry for New Jersey; Mrs. Whitman wasn't alone in her misbehavior.

As the current issue of Business Week explains, the pension time bomb involves large numbers; I'd say it's the equivalent of at least 50 WorldComs.

Furthermore, Mrs. Whitman's policies were by no means the worst among the states. That honor may fall to Tennessee, though Alabama, where a cash crunch stopped all jury trials for awhile, may run a close second.

The fact is that in recent years many states have been run like banana republics. Responsibility gave way to political opportunism, and in some cases to mob rule. When Tennessee considered a tax increase last year, legislators were intimidated by a riot stirred up by radio talk-show hosts. Only when lack of cash forced the governor to lay off half the work force did the state, which has the second-lowest per capita taxes in the country, face up to reality.

The only reason Tennessee doesn't look like Argentina right now is that it isn't a sovereign nation; since the federal budget was in good shape until recently, there's a safety net. And the federal budget was in pretty good shape because the Clinton administration, unlike state governments, behaved responsibly. Budget projections were honest -- if anything, too cautious -- and boom-year surpluses were used to reduce debt.

But the responsibility era is over. Even as state governments face up to the consequences of cooked books in the 1990's, the Bush administration is following in their footsteps.

The latest antics of the White House Office of Management and Budget have even the most hardened cynics shaking their heads. It's not just that projections for fiscal 2002 have gone from a $150 billion surplus to a $165 billion deficit in the space of a few months; it's not just that the O.M.B. projects a much smaller deficit next year, when everyone else -- including the Republican staff of the Senate Budget Committee -- says the deficit will increase. It's also the fact that O.M.B officials simply lie about what their own report says.

"The recession erased two-thirds of the projected 10-year surplus. . . . The tax cut, which economists credit for helping the economy recover, generated less than 15% of the change." So reads the agency's press release. Yet as the Center on Budget and Policy Priorities points out, the actual report attributes 40 percent of the budget deterioration to tax cuts, only 10 percent to recession. Maybe dishonesty in the defense of tax cuts is no vice.

State governments turned into banana republics in part because voters didn't realize that a charming, personable chief executive can also be an irresponsible opportunist, seeking political advantage through policies that ensure a fiscal crisis on someone else's watch. Now the same governing style has moved to Washington. And this time there's no safety net.

..............

Misetich

Lets stay tuned and wait patiently as the Bubble continues to deflate

Got gold?

Pizz

(07/30/2002; 07:05:49 MDT - Msg ID: 81843)

It's not just Public Companies

Early last year the owner, in his magnaumus wisdom, quit taking salary as his contribution to company austerity.

We then preceded to cut staff and salaries, and all the "guaranteed" year end bonuses were canceled (mine included).

Late last week I set a trap and caught him in a vendor kickback scheme.

Really great for moral when the owners are willing to pay grossly inflated vendor costs to line their own pockets tax free.

I've only got corporate cash for two months, but Im told not to worry, we're reorganizing. Right. Time to ask him what part of the word "guaranteed" he doesn't understand.

Nice thing, if you can call it that, is that in my position, I usually have notice, in one way or another of my impending addition to the bone pile.

Time to start looking for a stronger company that may need some help trying to survive the next few years. Hmm, maybe a chain of used horse lots??? (smile)

Just love anticipating a yelling and screaming boss as I give notice right before crunch time. Better to give ulcers rather than recieve them. . . . . .

Pizz

Pizz

(07/30/2002; 07:31:04 MDT - Msg ID: 81844)

PM Stocks Headded back Up?

Couple of PM stocks are up 15% in premarket.

Probably mid east tension related, going to be fun to see if they can hold gold down over the next two days. Got to keep the derivitive positions controlled for month end???

Stocks usually lead the underlying commodity - we'll see.

Pizz

The CoinGuy

(07/30/2002; 07:33:31 MDT - Msg ID: 81845)

Pizz

Goldman upgraded the sector to outperform. FWIW, we covered our shorts in this sector last week.

The CoinGuy

Cavan Man

(07/30/2002; 07:46:34 MDT - Msg ID: 81846)

Headline of the Day

Saw this on an AM run in the St. Louis Post Dispatch (aka the daily circular for the May Co.): "Markets Post Biggest Gain Since '33". That's the point "Dear Reader" as Bill Bonner is wont to say. Comprendez-vous s'il vous plait?

Pizz

(07/30/2002; 07:50:31 MDT - Msg ID: 81847)

TheCoinGuy

Thanks for the info, going to be some teed off weak holders that either sold or got stopped out.

Such is the game. . . .

Pizz

YGM

(07/30/2002; 09:02:02 MDT - Msg ID: 81848)

Black Blade (7/30/02; 00:39:11MT - usagold.com msg#: 81829)

Sounds like you're WELL prepared....and living the life of the best of both worlds...Homesteader and Modern man...Also sounds like you were prepared as I for year 2k which fizzled to naught...I am glad I went thru the Y2K thing for naught...It taught me a good lesson in awareness, plus it started a program that I'll always continue...Being prepared! BTW...as in most foothills areas from Colorado to N'rn Alta we get Deer right in the frontyard almost daily (smiles)...Cheers

YGM

(07/30/2002; 09:14:50 MDT - Msg ID: 81849)

Pizz...

Missed you around here....Looks like this is the "REAL" time of wild gyrations in markets that the older set of market players and economists speak of when markets are near a crash mode...Looks like some PM players with guts to sell near highs (Sinclairs advice) have done well cause this will could be turnaround Tues and many I know bought back into PM's last Fri...People will need strong will to weather a crash if we get one cause the PM's stocks will go under also at some point and yet will be first for major violent upswing...Now when will the next Dow -400 day come? Me I prefer to live small and just accumulate what little more Physical I can afford...Exciting times for all Gold Believers huh?....Regards...YGM

"GO GATA"

YGM

(07/30/2002; 09:21:16 MDT - Msg ID: 81850)

Even The "Enemy"....

Knows Gold was oversold....GOLDMAN UPS GOLD SECTOR WEIGHTING TO "MARKET OVERWEIGHT" FROM "MARKET
WEIGHT"

GOLDMAN UPS BARRICK GOLD RATING TO "TRADING BUY" FROM "MKT
PERFORM"

GOLDMAN UPS FREEPORT-MCMORAN TO "RECOMMEND LIST" FROM "MKT
OUTPERFORM"

Paper Avalanche

(07/30/2002; 09:47:43 MDT - Msg ID: 81851)

The daily moral dilemma

I was at the bank this morning to put my most recent PM purchase in the "safe" deposit box and was speaking with a very nice customer service person who I took the liberty to show one of my gold coins. She then wnet on to say how she has 100% of everything that she has in the stock market. I was then posed with the following internal question: Do I try to implore her to educate herself with respect to market history and suggest that she diversify her holdings to have at least something left over for her retirement years when this whole revaluation is finished? She appeared to be in her early fifties. I then found myself agreeing with her that now is a good time to buy since the markets had lost so much recently. I essentially lied to prevent myself from being seen as a kook. I have been doing that alot recently as I am in sales. I simply pacify those who want positive affirmation that the stock market will always come back and everyone will retire to a life of luxury. I hope that this doesn't get me any closer to hell, purgatory maybe. I do want to scream to the sheeple to break away from the heard, but my own experience tells me that to do so invites ridicule and rebuke. I would be curious to know what the most interesting story each poster on this board has regarding an incident where he/she tried to enlighten another person to what is going on.

Oh well. Back to trying to scrape together some more FRN's to get completely out of debt.

Paper Avalanche

White Rose

(07/30/2002; 09:56:32 MDT - Msg ID: 81852)

I do not mind being a "kook", I try to educate as many as I can

I have tried to give accurate information about the state of the economy to others. My brother hates me, and calls be obsessed. He says he will use whatever is left of his S&P index fund retirement account, so shut up. But to others, I try to explain things, often using recent news stories as a basis of explanation. The Enron affair gives a rich range of examples and mataphors.

I do not care if others know who I am, and that I advocate for gold. I have handed out lists of web site to many people. While I am aware that only a very small number may act on the information, it is important to me that many people know the basics. Otherwise, I feel that I have useful information that I am not sharing simply because I am being greedy.

USAGOLD / Centennial Precious Metals, Inc.

(07/30/2002; 10:00:47 MDT - Msg ID: 81853)

Put a Foundation Under Your Portfolio

http://www.usagold.com/ProductsPage.html

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call Centennial for Arrangements
1-800-869-5115

Gandalf the White

(07/30/2002; 10:06:01 MDT - Msg ID: 81854)

WOWSERS Sir NEMO (me impune lacessit) !!!

ARE you SURE that you do not have a Crystal Ball ?
The Hobbits are very interested in your NEWS Breaking Posts recently, BUT would like to delve into the news a little bit further. Do you have any LINKS to this Saudi news items ??? IF so, please just "Cut and Paste" into the LINK Box on this message posting page, and then the Hobbits can get all the other details also.
THANKS !
<;-)
BTW, any news of the Hobbits card$ playing bud, Saudi Prince Bader?

SWEET 16

(07/30/2002; 10:15:50 MDT - Msg ID: 81855)

Goldentrill & Gandalf

Hi Guys,

Sure is hot and dry in South Dakota. How are you doing? My car is being painted pink this week, I am so excited!

I just wrote a letter to my Senator, Mr. Tom Daschle.

tom_daschle@daschle.senate.gov

and want to share it with you. I just wish everyone would write to him and urge him to help us.

Here is my letter:

Mr. Senator Tom Daschle,

I am a 15 year old, soon to be 16, girl living in your state, South Dakota. I am presently, at Dad's persistent urging, trying to understand the markets. He says that if I become good at it, it will enable me to follow my dreams. I want to be an artist. I think he is right, but I am having a problem. You seem like a very smart man and can probably help me out.

Dad has put my savings, Dad calls it my nestegg, into silver stuff (stock and bags of round things). For several years I have been listening, trying to understand him. Lately, he has been jumping up and down angry about what some businesses (they have a bunch of letters instead of names like jpm and cftc) have been doing. Dad says they are crooks and that you are about the only one who can save us. I think he writes to you too.

Mr. Daschle, is it true? Are they crooks? Will you help me? I have lost half of my nest egg and do not know where it went. Maybe you know who is responsible and can make them give it back. It is not theirs. My nest egg started the day I was born when Dad took 18,000 pennies he was saving and started it. We have both been adding to it ever since.

Dad says that most people just won't get involved and if I want to see something happen, I need to make it so (kind of like Captain Picard of Star Trek). Can you make it so?

I have to go mowing now. Thanks for listening.

Yours Truly

Gandalf the White

(07/30/2002; 10:25:55 MDT - Msg ID: 81856)

OH MOLLY ! AKA "Miss Sweet 16"

May I suggest that you learn to be a little more INVISIBLE, like me. <;-)
Thanks for sharing your letter. (BUT perhaps TOWNIE can edit it for you !!)
Mail Boxes get enough "Junk Mail" !
<;-)

Sierra Madre

(07/30/2002; 10:34:17 MDT - Msg ID: 81857)

Pet food....

The other day I scanned a list of things one should have in preparation for a crisis. Walking shoes, among the stuff. What really caught my eye was "Pet food supply for your pet".

This is amusing. Mister, in a CRISIS, you are not going to feed the pet, you may just wind up EATING him.

A person I knew, now deceased, was a vet in Vienna, Austria, in the winter of 1948, and she used dog grease for cooking. Things were that bad.

The conceptions we have of what a crisis is, are vague. We cannot really conceive of crisis conditions, nor how we are going to handle them. All the preparation in the world, will be of relatively little use, WTSHTF. Of course, we must make preparations for difficult times, regardless.

But - food for the pet...that's one thing I'm not worrying about.

Sierra

PS Maybe a pig would make a good pet.

The CoinGuy

(07/30/2002; 10:53:21 MDT - Msg ID: 81858)

For Those Interested

CNN will have a feature on the 1933 St. Gaudens coming up for auction. It is coming up next.

The CoinGuy

sector

(07/30/2002; 10:57:03 MDT - Msg ID: 81859)

@ Molly [Sweet Sixteen] Don't Change a Word

The facts regarding precious metals manipulation......can be found at http://www.goldensextant.com

The sordid trail of official government corruption in this rig job leads all the way to Alan Greenspan, Lawrence Summers [Chancellor of Harvard University, former Treasury Secretary] President Clinton and both Presidents Bush.

The reason they rig the gold and silver price is to hide inflation and their artificial paper money's weaknesses. They do this by selling US gold bullion to crooks at JP Morgan Chase Bank [JPM]. These crooks then make paper gold and silver and sell it on the gold markets to keep gold down. The rest of the World is happy to buy this cheap gold while the US treasury is drained. Alan Greenspan says we have $11 Billion in gold...it is a lie. His own top lawyer, Mattingky admitted to swaps of gold in official transcripts at the Fed's FOMC committee meetting in Feb 1995 [Available at the link above].

The top crooks have thugs that help them. Goldman Sachs and Citi Bank to name two. Robert Rubin, also a former Secretary of the Treasury is the head of Citi Bank. He was the ring leader along with Summers and they got Clinton to buy off on the rig job. All the "Bubbles" were built upon this single rig.

The people who produce gold as their main export [Sub-Saharan Africa] have been deprived of fair prices. Their economies have been devastated and they face terrible famine and disease. They would have been much better off with fair prices for their gold exports. They would have been able to fend for themselves.

The once great United States of America has been reduced to rigging world markets in order to prosper. It is wrong. You may not appreciate it yet but your letter from your heart will hit Senator Daschele as if it were an H Bomb.

God bless you.

Pizz

(07/30/2002; 11:12:20 MDT - Msg ID: 81860)

Sierra Madre

Re: Pet Food

Made a deal with my wife, if it gets that bad, she gets to carry the cat food. Then our own food chain goes like this:

We eat the stuff I've got first, the cat second, then the cat food third (it'll keep longer than the cat.)

BTW, your right, 99.9% of the people don't know what hard times are. I'm old enough to remember farmhouses without running water, out houses, and during periods of my father's unemployment, a peanut butter sandwich was a luxury. And right now, some in Argentina would give parts of their body's for this senario.

Let's hope for the best, but as most know here, it's unraveling from the bottom up pretty fast, country by fiat country.

PM stocks and the metal look firm in here. Maybe the big boy's were able to load up enough and cover enough derivitives for the next gold level of 330 - 355. My gut tells me they have, but the PM stocks I watch usually consolidate in pennant triangles, and the ones forming right now are pretty large, so I'm expecting more volitility.

Who knows, in psycho markets like these, coin tosses work about as well as technical and fundamental analysis.

Pizz

WAC (Wide Awake Club)

(07/30/2002; 11:15:18 MDT - Msg ID: 81861)

Banking crisis grips Uruguay

http://news.bbc.co.uk/2/hi/business/2162050.stmUruguay has closed all of its banks, as the country's economic crisis tightens its stranglehold.
The Central Bank announced that it had suspended all banking operations, in an eerie echo of similar moves that took place in neighbouring Argentina.

In Argentina's case the move was seen as the only practical solution to prevent a run on the banks after consumers lost confidence.

WAC: First Argentina, now Uruguay. Who's next?

Jon

(07/30/2002; 11:17:08 MDT - Msg ID: 81862)

ATT: ARAGORN - punishment of corporate crime

That is what we are continually hearing from GMB of late. Any comments?

NEMO me impune lacessit

(07/30/2002; 12:33:51 MDT - Msg ID: 81863)

Gandalf, had my crystal ball this morning...

http://www.ask.com/main/metaAnswer.asp?t=ai&s=ai&MetaEngine=directhit&en=te&eo=4&o=0&frames=True&url=http%3A%2F%2Fask%2Edirecthit%2Ecom%2Ffcgi%2Dbin%2Fredirurl%2Efcg%3Furl%3Dhttp%3A%2F%2Fwww%2Espa%2Egov%2Esa%2F%26qry%3Dsaudi%26rnk%3D4%26cz%3Dc3884269f5a9a7d4%26src%3DDH%5FASK%5FSRCH%26uid%3D03679d669eb2d64d3%26sid%3D1ff90e669eb2d64d3%26u%3D∾=4&adcat=trvl&pt=Spa+%3F%3F%3F&dm=http%3A%2F%2Fwww%2Espa%2Egov%2Esa%2F&io=3&qid=A38045CF9EF7C64986897D81416130A3&back=ask%3Dsaudi%26o%3D3033%26x%3D13%26y%3D13&ask=saudi&dt=020730124501&amt=..... but can�t find it now.
The news was on the official Saudi newsboard (SPA- se link)
The news-bulletin it self is deleted.
The swedish news on TV-text still got it as a head line,
this evening.
Is it not puzzling- and sparks of some thoughts.
NEMO

NEMO me impune lacessit

(07/30/2002; 12:36:39 MDT - Msg ID: 81864)

(No Subject)

Ohhhhh... I love those links...

YGM

(07/30/2002; 12:59:32 MDT - Msg ID: 81865)

SWEET 16 (Molly) and "ALL"....Gold Believers................

http://www.lemetropolecafe.com/Ni2/CentralBanks.htmlWay to go Molly...Good to see you posting here...You sound more grown up & wiser than some adults I know...Here's something you can do if you wish to further your cause and maybe some others will follow suit...Send this letter to Central Banks and to Senators and Congressmen/Women also...
I salute you, wish my 19 yr old daughter showed the same interest and spunk.....Best Regards to you.....YGM

PS: the link has a list of Central Banks addresses....
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
A new letter to be sent by gold advocates to all major

Central Banks

By James Sinclair & Harry Schultz

Dear Mr.

1. Do you know that Enron has been reported to have many derivative transactions in gold?

2. Do you know that gold producers represent only 11% of the notional value of gold derivatives reported on the books of the international commercial banks by the International Monetary Fund? Therefore, approximately 89% of the ultimate beneficiaries of gold you have leased have no gold production with which to replace your gold?

3. Do you know who has been the ultimate benefactor of all the gold leases you have been party to?

4. Do you know that in time you might be revealed to have inadvertently financed corporate crimes? (a la Enron)

5. Do you realize that it is impossible at present market level for the gold that you have leased to be returned as gold?

6. Do you know that the ultimate beneficiaries of the gold you have leased are poor credit risks and getting worse?

7. Do you realize that as the investigations into the affairs of the corporate criminals progress, you may well have lost all the gold you have leased, financed crime, and failed a national trust?

It is your obligation, as head of a Central Bank, now that you are informed, to investigate the practices of gold leasing and take appropriate measures to stop financing crime.

Sincerely yours,

To contact Harry D. Schultz www.heletter.com & James Sinclair at www.tanrange.com

SWEET 16

(07/30/2002; 13:02:29 MDT - Msg ID: 81866)

gandalf and sector

Thanks y'all for the advice and encouragement. Dad told me there were good people at this site.

Since I do not know any other people to write to, could someone suggest the name and email address of anyone who might help us? I will try to do my part and write to them too.

Thanks again.

Operative

(07/30/2002; 13:04:11 MDT - Msg ID: 81867)

@ NEMO: Saudi Prince Story

http://www.hindustantimes.com/news/181_28319,0005.htmSaudi prince found dead in desert
Agence France-Presse
Riyadh, July 30

Saudi Prince Fahd bin Turki bin Saud al Kabir has been found dead in his
country's searing desert, the official SPA news agency said early on Tuesday,
adding that the prince apparently died of thirst.

The report said the 25-year-old prince had been travelling in Rimah province,
south of the town of al Ammaniya.

It gave no further details.

Prince Fahd was the third member of the extensive Saudi royal family to die in a
week.

Prince Sultan bin Faisal bin Turki al-Saud, 41, died in a road accident on July 23
as he was driving from the coastal resort of Jeddah to the capital Riyadh for the
funeral of his cousin Prince Ahmed bin Salman bin Abdul Aziz, 43, who had died
the day before of a heart attack.

SWEET 16

(07/30/2002; 13:08:37 MDT - Msg ID: 81868)

YGM

Sorry, I didn't read your message before posting. I am catching on. Thanks for helping me. I feel good just trying to help out.

Sweet 16

Tommy P

(07/30/2002; 13:15:26 MDT - Msg ID: 81869)

Saudi prince

Sounds like a conspiracy to me! Story has way to many holes to be legit. Maybe there is a cou-dayta happening in the rich oil fields, interesting mmmmmmmmmmmm.

YGM

(07/30/2002; 13:20:23 MDT - Msg ID: 81870)

SWEET 16....

GIRLS CAN KICK BUTT!!I have 2 daughters and I've taught them to believe that Girls can change the world and do anything else they put their mind to....and you're welcome to any help you need or links etc....Now watch out there may be a swarm of GoldBug Posters sons trying to take over the forum with a Sweet 16 lady aboard :>}}

jayzee

(07/30/2002; 13:24:51 MDT - Msg ID: 81871)

Tennessee - Banana Republic

Observations and opinions in response to msg.#81842 from a Tennessee resident.
Our governor was a Democrat who switched to the Republican Party in order to get elected. In his second term he showed his true colors by trying to pass a 5% income tax. This was needed to finance socialist spending such as Tenn-Care which increased 22% last year.

In the past, our state has attracted income earners (workers, professionals, corporate people, etc.) because of no income tax, but lately we have an influx of welfare people who get more benefits here than in neighboring states.

Some Dems. have stated that this 5% tax will solve all our problems and probably never be increased, but most of us did not believe this crap! I notice that California has a 9% income tax and want to increase to 11% because of a 22 billion budget shortfall. (This is from memory, and may not be accurate.)

I got a good laugh about the Clinton administration honesty and the prosperity and balanced budgets, etc. Most of us at this site know about the Ponzi type scheme (borrowed gold that must be paid back) of gold and stock market manipulations to produce the appearance of greater prosperity than normally would have occured.

Cavan Man

(07/30/2002; 13:28:24 MDT - Msg ID: 81872)

Uh Oh....This is a REAL PROBLEM. (Read on.)

These two guys are Afro-Americans who became MuslimsFeds Arrest Al Qaeda Suspects With Plans to Poison Water Supplies
Tuesday, July 30, 2002

By Carl Cameron

WASHINGTON -- Federal officials have arrested two Al Qaeda terror suspects in the U.S. with documents in their possession about how to poison the country's water supplies, Fox News has learned.

The first case involves James Ujaama, 36, who surrendered to the FBI last week in Denver. Sources say they found documents about water poisoning among several other terrorism-related documents in his Denver residence.

Sources say the government has additional evidence that prior to Sept. 11 James Ujaama acted as a courier delivering laptop computers to the Taliban. Federal agents seized two computers and two floppy disks from the house where James Ujaama had been staying when he was arrested as a material witness to terrorist activity, his brother said.

James Ujaama's brother is Mustafa Ujaama, the founder of the now-closed Dar-us-Salaam mosque in Seattle. The FBI has been investigating activities and officials from the former mosque for several months.

Investigators believe officials and members of the mosque were trying to establish a terrorist training camp in Bly, Ore., Fox News has confirmed. Investigators say there is evidence that Mustafa Ujaama visited Bly to check it out as a possible facility location.

The Ujaama brothers are also known to have helped establish several Web sites for radical Islamic clerics worldwide.

Another former member of the mosque is also now in custody and suspected of plotting terrorist attacks. His name is Semi Osman and he too is accused of having documents about poisoning water supplies in his possession when he was arrested.

Sources say the Ujaama brothers and Osman are all tied to a prominent radical Muslim cleric in London named Sheikh Abu Hamza Al-Masri. Al-Masri is a one-eyed mullah who is often seen preaching at Finsbury Park's North London Central Mosque and is wanted in Yemen on terrorism charges.

Investigators say they have evidence indicating that Al-Masri supplied the information about poisoning water supplies to both James Ujaama and Semi Osman.

Furthermore, sources say Al-Masri's Web site was designed by the Ujaama brothers.

James Ujaama was arrested Monday at his grandmother's home. Mustafa Ujaama said he did not know what was on the disks that were taken from the home. One of the computers belonged to Mustafa Ujaama and the other was his son's, he said.

FBI spokesman John Lipka confirmed that agents went to the grandmother's house but would not say why. "We are in furtherance of an active investigation," he said.

Holding a person as a material witness -- someone believed to have important information -- allows federal authorities to keep him in custody indefinitely.

Federal authorities speaking on condition of anonymity have said authorities believe James Ujaama took computer equipment to an Al Qaeda terrorist camp in Afghanistan. They said authorities also were investigating whether James Ujaama trained at the camp.

Earlier news reports said James Ujaama was taken to Virginia after his arrest, but his lawyer, Daniel J. Sears, said he was jailed in Denver. Justice officials have refused to confirm where he was being held.

Sears said James Ujaama had not been charged with any crime. He said a hearing has been scheduled to review the legality of the detention, but he could not say where or when. He said his client is outspoken and has publicly disagreed with the government on Middle East issues.

"I hope we have not advanced to the point in this country where we are jailing people because the government may disagree with their beliefs," Sears said.

Agents arrived at the home at about 5 p.m. and spent about two hours inside. Mustafa Ujaama said they had a warrant.

The brothers moved to Denver this month from Seattle. Mustafa Ujaama was detained briefly on Monday when his brother was arrested.

Their aunt, Robin Thompson, stood outside the home during the search.

"They could have done this in Seattle. We are Americans. I don't know why they're doing this," she said.

The brothers were born James Ernest Thompson and Jon Thompson and grew up in Seattle. Some community leaders there have credited them with helping to rid their poor, black neighborhood of drugs and prostitution by recruiting former gang members and others into the Dar-us-Salaam mosque.

Mr Gresham

(07/30/2002; 13:31:28 MDT - Msg ID: 81873)

Randy/TC/admin

Did you catch our Wizard's request back there?

#1 rule: The Pack protects its own...

YGM

(07/30/2002; 13:38:06 MDT - Msg ID: 81874)

Rich Powell...Here's one for you.....

http://www.silver-investor.com/SILVERSTORMINWASHINGTONDC.htmExcerpt.....
SILVER STORM IN WASHINGTON D.C.

Copyright August 2002 Charles Savoie

True to form as predicted in the previous silver essay hosted here, the informational media remains as silent as a gagged man in an undiscovered cave concerning what various of them undoubtedly know is nearing---the unavoidable cataclysm in the silver market. Naked short sellers and industrial users have had their way with silver for long years, and some of them thought it could go on forever. With the COMEX, CBOT and CFTC having the attitude towards the users and the bullion bank shorts of "do what thou wilt shall be the whole of the law" they were free to raid the candy store for a generation, with the deficit covered by the central bank leasing shenanigan. Now we tell them, keep the price suppressed, if you can, when supplies of interest rate sensitive (leasable) silver are as extinct as the passenger pigeon! This arrogant band of manipulators with their egotistical attitude like the kept press, which has covered up their termite-like activities will have to send its most glib talking representatives to Congressional hearings once the Senate and House are forced to start public investigations of the silver shortages. The struggle for honest information is soon to commence. Expect the media to edit out those parts of Congressional hearings, which would depict short sellers and the users lobby association as having created the shortage. They have inexorably done so by consistently making silver mining profitless by rigging the price at fraudulently low levels. Expect also that proposals will be entertained to force Americans to sell their bullion and coin silver at a fixed price of $5 per ounce to some Homeland Security Agency. Indeed, such a bill has probably already been drafted (in Manhattan) and ready to be launched! I propose instead, that for justice to be had, that those culpable for the shortage---naked short sellers---the CFTC and COMEX has their exact identity, and the Silver Users Association, be assessed the cost of procuring a new national strategic silver stockpile of perhaps 300 million ounces. If the price spikes to $200 an ounce, let these entities be assessed the entire $60 billion in costs and be forbidden to pass the loss along to consumers by elevated product prices.

Recall that Jerome Smith in his 1983 book, "The New Boom In Silver," predicted silver would reach $200 per ounce by 1986. What he hadn't figured on 19 years ago was, central bank "leasing," now over or very soon to be, with something on the order of 1 million silver ounces vanishing into the black hole of the deficit every three days! Silver leasing is an act whose time is OVER; so, I suggest we will see the $200 price projection fulfilled on the not too distant horizon!

Cont'd at Link....YGM. (thanks Cam)

Mr Gresham

(07/30/2002; 13:39:39 MDT - Msg ID: 81875)

Cavan Man

You're right. Before, all they really, really REALLY had to do was to locate the 200 or 300 planted operatives from ME nations, -- poorly-blended into American society -- who were waiting to create further mischief.

Now, as Malcolm said, the "chickens [of slavery] have come home to roost."

I have had this conversation before: Knowing my personality make-up, if I had grown up a Black Man in America, I would have had quite a challenge finding the inner resources to maintain my peaceful and tranquil disposition amidst all the insults around me.

We had some reaching out -- to Islamic Americans -- to do before. Now, we've really gotta go back and review some histories and meet some people we hardly even know exist.

Cavan Man

(07/30/2002; 14:13:06 MDT - Msg ID: 81876)

Mr. Gresham

My people were slaves also. We were the filth of the world washed upon upon these shores. We were ridiculed, persecuted, discriminated against, mocked and spat upon. We made it. We built a large portion of this country. We are Americans and we love this country. Our history is something to be proud of and something to abhor. Our history remains in the books and our baggage has been checked at the door. Today, upon these lands where we live, we are Americans and we stand alongside those who profess the same sentiments.

Operative

(07/30/2002; 14:30:03 MDT - Msg ID: 81877)

Big Money In Gold Stocks

http://iw.thomsonfn.com/iwatch/cgi-bin/iw_active?sec=∈d=134&mgp=134A good link to track the big bucks in the gold stocks.

Old Yeller

(07/30/2002; 14:40:45 MDT - Msg ID: 81878)

Latest on Brazil's debt woes

Black Blade

(07/30/2002; 14:50:11 MDT - Msg ID: 81879)

Gold Coin Auction

In about an hour the 1933 double eagle will be auctioned at Sotheby's. It is expected to fetch about $6 million. I don't think my bid will be accepted so I am off to the gym.

- Black Blade

NEMO me impune lacessit

(07/30/2002; 14:52:29 MDT - Msg ID: 81880)

@Operative - Thanks

Thank You for adding some substance to my foggy news.

Very best to You
Nemo

goldfool

(07/30/2002; 15:10:10 MDT - Msg ID: 81881)

Gandalf, sector, YGM

Sweet sixteen - Code name used by members of a secretive liberal swat team formed under the Clinton/Rubin administration dedicated to exposing and terminating right wing radical subversives who are trying to bring down the American banking system by spreading the truth about their evil ways and by investing in and promoting the virtues of gold. You've been duped! Just kidding, HAH!

R Powell

(07/30/2002; 15:15:39 MDT - Msg ID: 81882)

YGM // silver

Thanks for thinking of me.
It's an interesting article but I think Mr. Savoie gives the shorts too much credit for the current low appraisal of silver. Using up what the world had stockpiled over 5,000 years took some time.

Supply leased and then sold into the market or supply simply sold (without the lease) into the market both are entered as "supply" on the yearly balance sheet. The end result is the same with the only difference being that leased silver has to be "repaid" at some point. I've asked David Morgan whether leased silver must be repaid in metal. He answered that he had never seen any lease agreements and did not know for sure. If metal is not available, will fiat be accepted (at a higher price of course)?

The last 12 years supply/demand deficit has been recorded for all to see in GFMS annual Silver Surveys. Is anyone watching? If word of a big order for corn or wheat became known, the price of each would rise immediately but the passage of a government buying bill has gone unnoticed by both the market players and analysts. Leasing has certainly added to supply and has created a huge OTC short obligation but this is not well known or Comex connected. It's almost like a side bet between friends at a paramutual race track. In that it wasn't recorded, it doesn't change the odds on the tot board. What it may eventually do is greatly increase the demand for metal if leases include penalty clauses for fiat, rather than silver, settlement.

What I find most intriguing is that the deficit remains year after year with ever decreasing existing supply (as opposed to yearly production) having now reached the point where, depending on the exact size of coming deficits, it is almost assured that demand will exceed ALL available supply in the foreseeable future! This should have caused price rationing and increased production spurred on by higher prices. The market seems oblivious to this just as Nasdog investors became oblivious to the fact that they were investing in overvalued companies that held no assets, made no profits and paid no dividends. Markets are not wrong, investors often are. The markets simply reflect the players opinions.

For whatever reasons (and I have some theories on the whys) the POS is not reacting to market fundamentals, it seems to me like a good opportunity for investment. Neither Joe Kennedy nor Jessie Livermore cried out about the market mania they saw in the summer of 1929. Instead, each went about his business of shorting the Dow and each made millions. Perhaps we can make a buck or two with silver.

I intentionally avoided manipulation "supposins" here as imho when there is not enough physical silver for even industrial and photographic demand, whatever manipulation exists will become unsustainable. Indeed, it will supercharge the price explosion with some OTC borrowers trying to repay with silver. It has helped to set up what may be a once in a lifetime opportunity. As for Comex rule changes, an extremely volatile market will immediately require greater margin requirements as there will be greater risk. Other changes may occur as in the past. Hopefully, we're not too greedy as to be caught if "liguidation only" orders are instituted. Hopefully, physical will be safe and paper market players take their own risks. Nothing sure but death and taxes?
Thoughts?
Rich

misetich

(07/30/2002; 16:01:03 MDT - Msg ID: 81883)

Amid deepening economic crisis, Uruguay calls banking holiday

http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2002/07/30/financial1513EDT0187.DTL&type=businessSnip:

(07-30) 12:20 PDT MONTEVIDEO, Uruguay (AP) --

Uruguay ordered its banks closed at 1 p.m. Tuesday in an attempt to stanch the flow of capital in the midst of a growing financial crisis.

The stock market also closed early after the government earlier in the day suspended banking by Banco Montevideo and Caja Obrera for "the non-fulfillment of regulations."

The amount of capital in many banks has fallen dramatically in recent weeks, as hundreds of millions of dollars have been taken out of the financial system.

As rumors of a banking holiday spread, long lines began to form outside the capital's main banks, as people sought to take as much of their savings as possible from automatic teller machines. The government later announced that ATMs would be shut down.

Misetich

Who's next?

Got gold?

misetich

(07/30/2002; 16:22:42 MDT - Msg ID: 81884)

Amid deepening economic crisis, Uruguay calls banking holiday

http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2002/07/30/financial1513EDT0187.DTL&type=businessRAUL GARCES, Associated Press Writer Tuesday, July 30, 2002
(07-30) 12:20 PDT MONTEVIDEO, Uruguay (AP) --

Uruguay ordered its banks closed at 1 p.m. Tuesday in an attempt to stanch the flow of capital in the midst of a growing financial crisis.

The stock market also closed early after the government earlier in the day suspended banking by Banco Montevideo and Caja Obrera for "the non-fulfillment of regulations."

The amount of capital in many banks has fallen dramatically in recent weeks, as hundreds of millions of dollars have been taken out of the financial system.

As rumors of a banking holiday spread, long lines began to form outside the capital's main banks, as people sought to take as much of their savings as possible from automatic teller machines. The government later announced that ATMs would be shut down.

Meanwhile, newly appointed Economy Minister Alejandro Atchugarry met with the Central Bank president and senior bankers in an effort to work through the crisis.

Uruguay's banking system has been badly shaken by the deep economic crisis and financial system meltdown in neighboring Argentina, which has made savers jittery and made it hard for the country to raise credit. The country is also laboring through its fourth year of recession.

**************8

Misetich

Who's next?

Got gold?

Cavan Man

(07/30/2002; 16:29:15 MDT - Msg ID: 81885)

misetich

What's next? Short Chile.

misetich

(07/30/2002; 16:31:19 MDT - Msg ID: 81886)

BOND OUTLOOK -This has a familiar and Japan-like ring to it!

http://www.euromoney.com/index.htmlSnip:

Two questions are preoccupying us this week:

Will the slide in share prices have a negative impact on the real economy?
Is the economic outlook tending towards inflation or deflation?

Since the bursting of the dot.com bubble, households, rather than corporations, have kept the US economy going, at the cost of an enormous and unsustainable trade deficit. We continue to be amazed at the Americans' insouciance about spending in the face of rising unemployment and stock market losses. The Administration is playing every card to keep consumers spending. However, when "paper losses", amounting to some $2 trillion in the last fortnight alone, are seen to wash through to the real value of pension funds, then consumers are likely to start saving again. Increased saving, good, even essential, in the long run, will mean decreased demand in the coming months.

On the corporate front, few companies are investing. Greenspan states, "Evidence for a sustained recovery will include a pick-up in business investment, so far elusive". Telecom companies have massively over-invested, as have media firms. Banks and insurers are suffering directly from the market slide and the absence of M&A and underwriting business. Banks are no longer willing to lend, the commercial paper market has shrunk, and the corporate bond market is resistant to new issues. The corporate world on both sides of the Atlantic is in the paradoxical situation of suffering a credit squeeze, even though there is so much liquidity around. Those who want to borrow cannot, while those to whom the banks would like to lend do not want to borrow. This has a familiar and Japan-like ring to it! The IPO market pretty much dried up about three months ago, and rights issues are at fire-sale prices (e.g. Ericsson). Currently, therefore, corporations have very little access to debt or equity funding, and cannot even sell off their unwanted subsidiaries at a decent price (e.g. WorldCom and MCI, or SwissLife and Banca del Gottardo). There is a lot of securitised debt around plus outstanding derivatives; much of this is collapsing in value from WorldCom and knock-on effects, but it is not even clear who is exposed. There is every likelihood of class actions against banks, against which, in the current anti-bank atmosphere in the USA, the banks will not stand a chance. Rarely can the need for caution in investments have been greater.

So, yes, we do believe the current financial market crisis will have a negative impact on the real economy, although this is all part of the great disillusionment that the USA is now going through and to which the rest of the world can scarcely remain indifferent. How symbolic of the loss of confidence in US financial institutions is the fact that even J.P.Morgan and Citibank are now following Andersen along that bumpy road from pillars of the establishment to subjects of criminal investigation.

The answer to the second question follows from the first. Corporations cannot raise their prices. Imported goods to the USA will cost more, but that is part of the rebalancing of the external deficit. Although the trade gap is enormous (4.3% of GDP), as a percentage of the economy as a whole, imports are fairly small (15% of GDP) with only modest inflationary effect. In the USA therefore we expect low inflation to continue. The starting point is so low (a mere 1% per year at consumer level), that, even though import prices will push up the rate, the absolute level is likely to stay modest (e.g. 2.5%), and there will be a long delay until further tightening. In Europe the stronger euro is helping dampen inflation, while Japan still has falling prices. Between the twin risks of inflation and deflation, we see deflation as the greater and more serious.

Misetich

The bond boys and girls are sounding the alarm bell- who's listening?

Got gold?

misetich

(07/30/2002; 16:46:43 MDT - Msg ID: 81887)

Is the difference between Organized Crime and Investment Bankers?

http://www.forbes.com/newswire/2002/07/30/rtr681142.htmlSnip:

"I don't consider that to be cooperating with the subcommittee at all," said Minnesota Sen. Mark Dayton, adding that he suspected Kelly Martin -- the only witness to answer questions -- was chosen to talk because he knew so little.
...............
The subcommittee produced hundreds of documents and a video recording of Enron's former chief financial officer, Andrew Fastow, in its attempt to show that Merrill, the world's largest brokerage, helped Enron to deceive public investors.

"Merrill Lynch assisted Enron in cooking its books," said subcommittee Chairman Carl Levin, a Michigan Democrat.
.................

The former Merrill executive, Robert Furst, and a current executive, Schuyler Tilney, invoked their constitutional right against self-incrimination, refused to testify and left. Tilney was placed on leave by Merrill on Friday over his refusal.

Misetich

Organized Crime uses set up "legitimate" businesses to hide their dirty deeds - so do investment bankers and the Enron's of the world

Got gold?

misetich

(07/30/2002; 16:58:38 MDT - Msg ID: 81888)

Providian to Cut 1,300 Jobs

http://story.news.yahoo.com/news?tmpl=story2&cid=580&ncid=580&e=8&u=/nm/20020730/bs_nm/financial_providian_earns_dc_1Snip:
SAN FRANCISCO (Reuters) - Credit card issuer Providian Financial Corp. on Tuesday said it would close three facilities and cut 1,300 jobs, or about 16 percent of its work force, as it reported lower quarterly earnings.

*************

Misetich

Yep the jobless US economic recovery continues-as the Bone Pile gets bigger

Got gold?

Mr Gresham

(07/30/2002; 16:59:17 MDT - Msg ID: 81889)

Cavan Man ;)

Watch out there, bub! That's my in-laws yer talking 'bout there! ;) (And, so also, my kids.)

Actually, it's gettin' so confusing around here -- don't know whether to take 'em to synagogue, or St. Patty's Day parade, or St. Demetrios festival, or St. Anthony's, or Scottish Clans gathering, so maybe as a compromise, I've settled on Kwanzaa this year. ;)

It used to be so much simpler when it was just Thanksgiving, and Grandma's house was still just a harpoon's throw from Plymouth Rock. But, then I found the genealogy exploration gettin' to be just a little TOO easy, know whudda mean? With us all bein' cousins 'n' all. Those same four guys kept poppin' up all over the top of the charts...

New blood has been good for us, if not for the former occupants who lacked resistance to our viruses. My blood stirs too at the slaughters which decimated innocent villages, of whom my ancestors were, of course, the survivors. By Odin, I thought (when I was a kid), I'll avenge them all!

Now I know I can do my part better by just making sure my kids learn about Gandhi, Pasteur, and Margaret Sanger, and hope they take their cues from there. Peace.

misetich

(07/30/2002; 17:13:18 MDT - Msg ID: 81890)

Property bubble kept afloat by rising house prices

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1027953272652&p=1012571727304Snip:

By Alison Beard in New York
Published: July 30 2002 5:00 | Last Updated: July 30 2002 5:00

Sceptics who believe theUS housing market is a bubble waiting to burst seized on last week's news that existing home sales dropped 11.7 per cent from May to June.

But, with prices up 7.4 per cent year-on-year and new home sales set to top the 1m mark for the first time in 2002, housing bulls still have the most support.

"Declines in confidence ought to be damaging to home sales but we haven't seen that materialise," said John Lonski, chief economist at Moody's Investors Service. The new data may suggest "an impending peak" but not a bursting bubble, he said.
..............
The forces that powered housing through the stock market slump and the recession are still in evidence. The 30-year mortgage rate continues to fall, hitting a 37-year low as measured by its spread over 10-year Treasuries last week, according to Moody's. "That has helped to maintain affordability despite the run-up in prices," Mr Lonski said
............
But homebuyers should be cautious. High-flying markets are likely to see some drop-off in prices this year. "With rapid price appreciation in the last few years and lack of job creation . . . there is the potential for a bubble," Mr Lonski said.

The apartment market shows signs of weakness, and falling rents - combined with an uncertain economy - may convince potential buyers to hold off. Another recession could force highly-leveraged recent and low- income buyers into default, depressing the entire market, according to the Joint Center for Housing Studies at Harvard University.

***************
By excluding "housing" from the CPI - the manipulators can claim non-existent inflation - as a house is considered an investment

Greenspan does not recognize a housing bubble - at least publicly -

Lets stay on this TRAIL

Got gold?

Mr Gresham

(07/30/2002; 17:13:44 MDT - Msg ID: 81891)

Misetich

"Is there a difference between Organized Crime and Investment Bankers?"

I'm shocked -- SHOCKED! -- that you could even post such a blatant question on a proper forum such as this!

Now you're gonna have me going out and renting the Godfather series and Goodfellas and Sopranos for the rest of the week... ;) Complete my banking education right there, most likely.

(Actually -- while I'm probing deep ethnic gulfs tonight --didn't they both originate somewhere in the region of Machiavelli? I mean, how far IS Venice from Sicily, -- sorry, Pizz -- get your .02 in if you want -- and really, my point is not some ethnic connection, but the fact that Man has devised various systems for exploiting other Men. They ARE interesting to study, and to compare. Especially the invisible ones...)

Following up with the quote (not Will Rogers, but a California S&L commissioner) about the best way to rob a bank being to own one...

misetich

(07/30/2002; 17:29:58 MDT - Msg ID: 81892)

Global: Global Aftershocks -Stephen Roach (New York)

http://www.morganstanley.com/GEFdata/digests/20020729-mon.html#anchor0Snip:

This summer's firestorm in financial markets spells downside risks to the global economy. It's just a question of degree, in my view. Around the world, our economists are tinkering with their models, preparing for the inevitable downward revisions to their growth forecasts. In the works is the first significant recasting of our 2003 global growth outlook since we unveiled it late last year.

..............
Suffice it to say, America has sneezed. Dick Berner has now sounded a clear note of caution and is preparing to mark down his long-standing 4% growth forecast for the second half of 2002. The revisions are likely to be relatively modest -- maybe 0.5-1.0 percentage point lower -- and stop far short of the double dip that I still think is in the cards before year-end. But Dick has now made it clear that he is worried about more than just a minor hiccup on the growth front (see his most recent Forum dispatches, "Tipping Point?" of 22 July and "Hesitation Watch" of 26 July.) Recent reports of a deteriorating capital-spending picture -- as evidenced by weakening trends in nondefense capital goods orders and shipments for June -- only underscore those concerns. So, too, does the vulnerability of the American consumer that I continue to believe will make or break the case for a US double dip (see my 26 July dispatch. "Last Line of Defense"). And revisions to the US growth prognosis will undoubtedly be complicated by the upcoming statistical recasting of history about to be unveiled by Washing statisticians -- a so-called "benchmark" revision that I continue to believe will result in a significantly weaker assessment of US economic growth in 2000-01 (see my 27 June dispatch, "House of Mirrors"). Until those numbers are in hand -- they are slated for release on 31 July -- I agree with Dick that it doesn't make much sense to issue a formal revision of the US growth forecast.

...........
Our Euro team is leaning the same way. The transmission of financial market disruptions into the real side of the Euroland economy is different than it is the United States. Banks are more central to the credit intermediation process in Europe, whereas capital market intermediation now plays a disproportionate role in America. Conversely, stocks are less widely owned in Europe than in the US, suggestive of smaller equity wealth effects. Notwithstanding those contrasts, Eric Chaney, co-head of our Euro team, concluded in his 25 July dispatch ("Euroland: Bending Not Breaking") that "the slump in equity prices is unambiguously negative (for European growth prospects)."
.............
Jul 29, 2002

Global: Global Aftershocks
United States: The High Stakes of a Regulatory Backlash
United States: Review and Preview
Euroland: Bending but Not Breaking
Europe - All: Stress Points
United Kingdom: Wealth Effects -- A Shock to the System
Japan: The Fastest CRIC Cycle Yet (Part II)
Japan: Removal of Depo Guarantees, While Avoiding Bank Failures?
Switzerland: A Dire Message
Asia Pacific: Recoupling?

Global: Global Aftershocks

Stephen Roach (New York)

This summer's firestorm in financial markets spells downside risks to the global economy. It's just a question of degree, in my view. Around the world, our economists are tinkering with their models, preparing for the inevitable downward revisions to their growth forecasts. In the works is the first significant recasting of our 2003 global growth outlook since we unveiled it late last year.

Globalization has its pluses and minuses. But the cross-border connectivity of world financial markets that it has spawned is the stuff of a potentially lethal contagion. We saw that with a vengeance in 1998, and we're seeing strong hints of it again today. The impacts, of course, differ from country to country and region to region. But the combination of negative wealth effects, dislocations in credit markets, and heightened volatility and uncertainty have put deteriorating financial market conditions on a collision course with recovery in the broader global economy. Moreover, the increased linkages on the real side of the world economy -- still dominated by a striking US-centricity -- only serve to magnify the problem. Gone are the days when asynchronous business cycles in various countries provided natural offsets for the global economy at large. In an era of globalization, the world is more synchronous and, therefore, more prone to extremes. That's the stuff of both virtuous and vicious circles.

That's especially the case when the engine of the world economy -- the United States -- starts to sputter. With America continuing to play the predominant role in shaping aggregate demand for the world at large, a faltering in US growth prospects has profound global implications. In my travels around the world in the past several months, there's only one question that seems to come up in client discussions -- the outlook for the US economy. Despite all the work we have done in analyzing the macro-dynamics of Europe, Asia, Latin America, and Emerging Europe, the conversations these days always seem to start and end with an examination of US growth prognosis. With America having accounted for approximately 40% of the cumulative growth in world GDP since late 1994 -- double its share of global output -- it's not hard to figure out why. Outside of the US, the world economy is still lacking in autonomous sources of domestic demand vigor, leaving it very much dependent on the US-led external demand of the global trade cycle. And so when America sneezes, the rest of the world quickly catches that proverbial cold.

Suffice it to say, America has sneezed. Dick Berner has now sounded a clear note of caution and is preparing to mark down his long-standing 4% growth forecast for the second half of 2002. The revisions are likely to be relatively modest -- maybe 0.5-1.0 percentage point lower -- and stop far short of the double dip that I still think is in the cards before year-end. But Dick has now made it clear that he is worried about more than just a minor hiccup on the growth front (see his most recent Forum dispatches, "Tipping Point?" of 22 July and "Hesitation Watch" of 26 July.) Recent reports of a deteriorating capital-spending picture -- as evidenced by weakening trends in nondefense capital goods orders and shipments for June -- only underscore those concerns. So, too, does the vulnerability of the American consumer that I continue to believe will make or break the case for a US double dip (see my 26 July dispatch. "Last Line of Defense"). And revisions to the US growth prognosis will undoubtedly be complicated by the upcoming statistical recasting of history about to be unveiled by Washing statisticians -- a so-called "benchmark" revision that I continue to believe will result in a significantly weaker assessment of US economic growth in 2000-01 (see my 27 June dispatch, "House of Mirrors"). Until those numbers are in hand -- they are slated for release on 31 July -- I agree with Dick that it doesn't make much sense to issue a formal revision of the US growth forecast.

Our Euro team is leaning the same way. The transmission of financial market disruptions into the real side of the Euroland economy is different than it is the United States. Banks are more central to the credit intermediation process in Europe, whereas capital market intermediation now plays a disproportionate role in America. Conversely, stocks are less widely owned in Europe than in the US, suggestive of smaller equity wealth effects. Notwithstanding those contrasts, Eric Chaney, co-head of our Euro team, concluded in his 25 July dispatch ("Euroland: Bending Not Breaking") that "the slump in equity prices is unambiguously negative (for European growth prospects)." He also believes that a "soft credit crunch" could actually be starting on the Continent. Recent declines in European business confidence surveys -- especially for Italy, Belgium, and Germany -- underscore the linkage between financial market uncertainty and corporate sentiment. Reflecting these concerns, our Euro team has issued a warning that it, too, is leaning toward lowering its assessment of growth prospects for late 2002 and early 2003. The likelihood is that we'll initially slice about 0.3-0.4 percentage point off our relatively anemic baseline forecast that currently averages just 2.2% real GDP growth over this two-year interval -- short of a double dip but not leaving much of a cushion against additional shocks.

Robert Feldman is sending a similar message regarding Japan (see his 25 July dispatch, "The Fastest CRIC Cycle Yet (Part I)" and Part II in today's Forum). Post-bubble Japan, in Robert's view, has been unable to extricate itself from the vicious circle of Crisis, Response, Improvement, and Complacency. The complacency of recent months -- manifested in the form of a cyclical rebound in both the Japanese economy and its equity market -- is now coming quickly to an end, in his view. This reflects an ominous confluence of events -- a sharp recent weakening of the Japanese stock market -- with the TOPIX index falling well below previous record lows -- renewed concerns about banking reform, deepening worries about the life insurance industry, and an export-led shortfall in economic growth.
...........
Nor can any offsets be counted on in the developing world. That's certainly the case in crisis-torn South America -- especially Brazil and Argentina. But the biggest risks are probably in Asia excluding Japan -- a region that we would judge as remaining very much a levered play on US domestic demand. With the exception of Korea, there is little inherent vigor to the region's autonomous sources of domestic demand growth. Almost by default, that leaves it heavily dependent on global trade. Moreover, the Korean consumption boom now seems to have run its course, prompting Andy Xie recently to cut his 2003 growth forecast for that economy to 4.9% (from 5.5%). In addition, there are now signs that Taiwan's IT-led export boom is in trouble; at least, that's the verdict from a host of economic indicators as well as from the recent profit warning of one of its biggest technology companies, TSMC (Taiwan Semiconductor Manufacturing Company). All this is symptomatic of what could turn out to be a surprisingly vulnerable Asian economy. Under the worst-case scenario of a US double dip, Andy believes the baseline 2003 GDP growth forecast for the region would have to lowered to just 3.3% (from 5.9%); by way of comparison, that's only slightly faster than the 2.1% gain recorded in 1998, when Asia went through its worst crisis of the modern era.

On balance, there can be no mistaking our shifting assessment of global growth risks. Based on the tentative assessment of our economics team, I expect that we will shortly be cutting our 2003 estimate of world GDP growth by at least 0.3 percentage point, to 3.7% (from 4.0%). In the context of my long-standing concerns about a US double dip, I would personally place the downside to global growth for 2003 in the 3.0-3.5% range. That means that this revision to our global prognosis could well turn out to be the first of several more to come.

************

Misetich

Got gold?

Carl H

(07/30/2002; 17:30:07 MDT - Msg ID: 81893)

@misetich Organized Crime and Bankers

Yes, there are a couple differences.

1. The Organized Crime types are probably afraid of the bankers.
2. The Organized Crime types break the laws. The bankers simply pay to have them rewritten.

YGM

(07/30/2002; 17:31:24 MDT - Msg ID: 81894)

OPEN LETTER TO US SENATE SUB-COMMITTEE ON INVESTIGATIONS

http://www.lemetropolecafe.com/matisse_table.cfm?cfid=315783&cftoken=79777856πd=2391

Gold Anti-Trust Action Committee

July 30, 2002

Dear Alex,

My colleagues and I noted Chief Executive Officer William B. Harrison's response to the United State Senate's Permanent Subcommittee on Investigations. It was notable for what it did not say.

J.P. Morgan Chase and Citigroup have been unlawfully manipulating the price of gold for many years, according to the findings of The Gold Anti-Trust Action Committee, of which I am chairman. Our evidence of that manipulation may be reviewed at www.GATA.org.

Your committee might want to query Morgan and Citigroup (chairman Sandy Weill) about their gold derivative positions, as related to your investigation. According to the Comptroller of the Currency, two-thirds of the total gold derivatives at their reporting banks are concentrated at these two institutions. Significantly, the gold derivatives at Morgan and Citi jumped in the first quarter of this year in stark contrast with the other reporting banks.

J.P. Morgan Chase and Citibank:

OCC Q1 2002 Derivative report

Gold derivatives increased in Q1 2002.

Total Gold Derivatives Q4 2001 $63.413 billions
Total Gold Derivatives Q1 2002 $71.174 billions

12.24% increase in the quarter....

JPM Q4 2001 $41.049 billions
JPM Q1 2002 $45.234 billions

10.20% increase in the quarter......

Citibank Q4 2001 $7.843 billions
Citibank Q1 2002 $11.246 billions

43.39% increase in the quarter......

Other 372 banks Q4 2001 $14.521 billions
Other 372 banks Q1 2002 $14.694 billions

1.19% increase in the quarter......

These are some questions you might like to ask Mr. Harrison. He should have no problem answering them, since he stated the following in his written response to your committee: "As the largest corporate lender in the world, transparency is key to our business."

1. Has J.P. Morgan Chase, its subsidiaries, Special Purpose Entities, related companies or agents acting on its behalf conducted any gold-related transactions with the U.S. Federal Reserve, the U.S. Treasury, Exchange Stabilization Fund, or any other U.S. government entity, either directly or via an intermediary in the last 20 years?

2. If the answer to the previous question is yes, specifically what transactions did J.P. Morgan Chase conduct with either the U.S. Federal Reserve, the U.S. Treasury or the Exchange Stabilization Fund or another U.S. government entity?

3. Do such arrangements continue to exist? If so, what is their status?

4. What is the size of such transactions?

5. To the best of J.P. Morgan Chase's knowledge, what was the purpose of such transactions? Were they conducted for investment reasons, or was there a stated or implied intent to artificially depress the price of gold, either for spot or future delivery?

6. According to the Q1 2002 derivatives report from the Office of the Comptroller of the Currency, the notional value of gold derivatives on the books of J.P. Morgan Chase stood at $45.234 billion, a 12.24% increase from the Q4 2001 figure of $41.049 billion. Specifically what can account for this large increase? Is the expansion of the gold derivative book the result of increased gold borrowing/swapping from one or more central banks?

7. Does the figure of $45.234 billion effectively represent the size of J.P. Morgan Chase's gold loan book? Furthermore, does this figure represent position data indicating the size of J.P. Morgan Chase's gold loan book at a point in time, or is it transaction data representing the turnover of various gold derivatives?

8. Is J.P. Morgan Chase aware of any effort on the part of either one or more bullion banks or central banks aimed at depressing the price of gold, either for spot or future delivery?

9. Has J.P. Morgan Chase, including its predecessor, subsidiary and related companies or related entities ever engaged in a gold swap with the Federal Reserve, the U.S. Treasury, the Exchange Stabilization Fund or another government entity? If so, what was the size of such a transaction and what was its purpose? Does such an arrangement continue to exist?

10. Has any government entity, be it domestic or foreign provided a written or oral guarantee to cover losses suffered by J.P. Morgan Chase in the gold market? If so, specifically what guarantees has J.P. Morgan Chase received? Did J.P. Morgan Chase engage in any gold-related transactions with the prior knowledge that a government entity was prepared to cover any future losses incurred?

11. JP Morgan Chase maintains the largest gold derivative position of all US banks at $41 Billion. Does JPM carry those gold derivatives as balance sheet assets?

12. What entity is the original source of gold necessarily used for those derivatives? What records exist of those loans or swap transactions?

13. Was the gold purchased? If so, where, when and at what price? If the gold was borrowed how is it the JP Morgan gold derivatives are now listed as balance sheet assets?

14. Are the JP Morgan gold derivatives predominantly established to enhance the counter-party's short or long side of the commodities trade?

15. Was Enron ever a counter-party to any of the JPM precious metals derivatives?

16. Did JP Morgan's long-standing precious metals derivatives trading manager [Dinsa Mehta] recently leave his duties? Why?

17. How much in terms of troy ounces and US dollars are JP Morgan's direct, indirect and contingent liabilities to pay gold? What is the maturity of each of those liabilities?

18. Also, I believe that JP Morgan Chase is a subsidiary of the bank holding company. Therefore, you might want to expand the investigation to the non-bank parent as well as the bank subsidiary, to something like the following:

* Has J.P. Morgan Chase (to mean the holding company and banking subsidiary), its subsidiaries, Special Purpose Entities, related companies or agents acting on its behalf conducted any gold-related transactions with the U.S. Federal Reserve, the U.S. Treasury, Exchange Stabilization Fund, or any other U.S. government entity, either directly or via an intermediary in the last 20 years?

19. Was JP Morgan ever formerly implicated in inappropriate metals market trading practices? Did it pay a fine? In that inappropriate metals trading activity [Hamanaka, Sumitomo 1993 Copper Market], did JP Morgan utilize offshore accounts similar to those in the Enron operations? What was the design goal of the trades... to enhance the counter-party's short or long side of the trade? Did JPM or Sumitomo's Hamanaka first suggest the offshore account technique?

You might also like to ask Enron the following questions:

1. Did Enron possess a precious metals trading license from the London Bullion market Association? What did that license cost?

2. What was the nature (Which metal) and magnitude (Quarterly size) of the precious metals trades?

3. Were the precious metals trades integrated in any way to Enron's energy trades?

4. Were the Enron precious metals trades facilitated, in any way, by JP Morgan Chase or any its offshore affiliated entities such as Mahonia or any of the other offshore entities? Which JPM entities were involved? To what quarterly magnitude?

5. Who first suggested that Enron get involved in precious metals activities? When was this suggestion made?

6. Was Enron ever a counter-party to any of the JPM precious metals derivatives?

7. Did JP Morgan's long-standing precious metals derivatives trading manager [Dinsa Mehta] recently leave his duties? Why?

It would be my pleasure to go Washington to meet with your committee on this matter.

All the best,

Bill Murphy
Chairman
Gold Anti-Trust Action Committee

Please send this letter to the following:

http://www.senate.gov/~gov_affairs/psi_members.htm

Permanent Subcommittee on Investigations

Majority
Minority

Carl Levin, Michigan
Chairman

Daniel Akaka, Hawaii
Richard Durbin, Illinois
Robert Torricelli, New Jersey
Max Cleland, Georgia
Thomas Carper, Delaware
Jean Carnahan, Missouri
Mark Dayton, Minnesota
Susan Collins, Maine
Ranking Member

Ted Stevens, Alaska
George Voinovich, Ohio
Thad Cochran, Mississippi
Robert Bennett, Utah
Jim Bunning, Kentucky
Peter Fitzgerald, Illinois

Cavan Man

(07/30/2002; 17:56:07 MDT - Msg ID: 81895)

Mr. Gresham

Shalom to you my friend. If you are ever in Thesalonikki you can venerate the relics of St. Demetrios; they are fragrant. Yes, it's true. Best...CM

YGM

(07/30/2002; 18:10:13 MDT - Msg ID: 81896)

Rich...

You're Welcome..... Well buddy it's mostly all over my head as is eternally obvious! Sometimes I feel like a damn disc jockey who hasn't yet come out of the sixties but keeps the music going for the new generation with all that entails....But then even an ol' miner like me can see the writing on the wall and have the good sense to buy all the "Real Money" I can afford....Now back to pouring cement on the Cabal Graves huh! You can do the finishing trowel work...YGM

"GO GATA"

slingshot

(07/30/2002; 18:45:20 MDT - Msg ID: 81897)

ADMIN

ATTENTIONPlease read Gandalf the White Msg#81856 and Mr Gresham Msg# 81873 For small edit request. Slingshot-----------<>

R Powell

(07/30/2002; 19:04:23 MDT - Msg ID: 81898)

A question for Mr. Morgan

I'm guessing that both he and other silver analysts read what catches their interest here and at other metal information internet sites. I hope so, but I've also sent him this question via e-mail. If anyone else can help, please do so!

Thanks for the newsletter and hello again.
I also saw the news on the passage of the silver buying bill in which the 10 million ounce/year coin usage for the past 16 years (length of silver eagle coin program) is mentioned as having depleted the strategic stockpile of 730 million ounces. However:
10 million ounces x 16 years = 160 million ounces
730 minus 160 = 570
Where did the this other 570 million ounces go?
I'm glad to see the coin program continued and happy that the bill has finally been passed and signed even though the market seems oblivious as usual to any fundamental supply/demand silver news. But, curiousity asks, where did the government use the other 570 million ounces???
Thanks
Rich Powell

admin

(07/30/2002; 19:10:03 MDT - Msg ID: 81899)

Sweet 16. . . . .

Please note:

We cannot edit portions of a post while the forum is active. We have to eliminate the entire post in order to get rid of the partial address. Also, we have not received a request from Sweet 16 or other family member, but since we are a family oriented channel, we would comply (needless to say) with whatever the parties wanted. Thus it stands. We are happy to alter the post if that is what either Sweet 16 or the family wants. Please contact the Sitemaster for further action.

Boxman

(07/30/2002; 19:18:07 MDT - Msg ID: 81900)

Isn't she a beauty? The 1933 double gold eagle is autioned.

Kind of takes my breath away. Good artcile concerning the interesting history of this coin.

Boxman

(07/30/2002; 19:19:12 MDT - Msg ID: 81901)

Here is the link.

http://www.cnn.com/virtual/editions/europe/2000/roof/change.pop/frameset.exclude.htmlSorry about that.

Boxman

(07/30/2002; 19:24:02 MDT - Msg ID: 81902)

I am having technical difficulties.

http://www.cnn.com/2002/US/07/30/double.eagle/index.htmlSomething about the 3rd time?

Black Blade

(07/30/2002; 19:31:29 MDT - Msg ID: 81903)

Tuesday's Stock Market WrapUp

http://www.financialsense.com/Market/wrapup.htm

Spin Cycle

Snippit:

They are all turning out to be one-day wonders. The markets explode on the upside with no follow through. One day up and the next day down. The financial markets have recovered from one of the worst months for the stock market in decades. However, the recovery has been in one-day explosive spurts rather than an orderly advance. They are becoming known on the Street as intervention rallies. They are sparked by big movements in the futures markets followed by heavy buying in key selective stocks that drive up the indexes. Yesterday it was the financials and the semis that rose explosively to the upside. The move in semiconductor stocks was prompted by an upgrade of the sector by Goldman Sachs following the firm's purchase of 10,000 calls on the SOX the night before the upgrade.

Black Blade: The Goldman Sachs issue could be a blatant example of manipulation, however, as a member of the President's Working Group on Financial Markets, they are exempt from the law if working under the direction of the executive order.

Snippit:

In the same piece last night, the well-respected anchor, Lou Dobbs, said it amazed him that gold had been going up in this kind of low inflationary environment. He was flabbergasted by the fact that investors were buying gold. Dobbs doesn't understand that gold does well in either an inflationary or deflationary environment. The financial community has failed to take into recognition that gold is rising in all markets across the globe. Gold is rising against the yen, the euro, the Swiss frank and the dollar. For the first time since the 70's, investors are fleeing paper assets and heading into things, especially gold and silver. There has been a synchronized rise in gold prices against major currencies around the globe. This movement reflects an inflection point in the markets that runs counter to prevailing investment attitudes towards the markets. The rise in gold is signaling that major trouble lies ahead for the financial markets and the banking system.

Black Blade: I see this as a result of the "Currency War". As nations work hard to debase their currencies, they are attempting to devalue against each other, however, how can this be effectively done against Gold which has no allegiance to any government? The "Currency War" will work to Gold's advantage. Even President Herbert Hoover Jr. and his buddies cannot prevent the inevitable.

Cavan Man

(07/30/2002; 19:38:00 MDT - Msg ID: 81904)

sector

Wednesday, July 31, 2002 10:27 a.m. JST

Govt May Change Policy, Keep Full Protection Of Deposits

TOKYO (Nikkei)--The government will consider maintaining full protection of deposits if used exclusively for settlement purposes, creating a special exception to the end of the full guarantee on all deposits in April. _Read More...

Need subscription for full article.

Black Blade

(07/30/2002; 19:40:35 MDT - Msg ID: 81905)

History of bull markets rife with folly

http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={263184BC-93AE-458F-AA70-48D11950BB44}&siteid=mktw
Commentary: The worst of this episode isn't behind us

Snippit:

SAN FRANCISCO (CBS.MW) -- Wall Street says the worst of the stock market is behind us. The brokers' highly paid strategists, sweating bullets, are urging America to buy early and often. History will demonstrate the stock market's cheerleaders are premature. Just look at the three great bull markets of modern history. The biggest one we know all about: it ended two years ago, and its aftermath has bankrupted thousands of companies and erased $7 trillion or more of American wealth. The other two great bull markets? One was during America's roaring 1920s, when the Dow Jones Industrial Average rose more than 400 percent. "The Jazz Age was wicked and monstrous and silly. Unfortunately, I had a good time," newspaper columnist Heywood Broun once said. The dancing and drinking of those follies came to a sober end in 1929, marked in red ink by the October crash. History's other great bull market in stocks was in Tokyo during the 1980s. Japanese stocks (and real estate) pumped fresh air into the term "market bubble."

Raging bull markets, when they crash, always end lower than where they started. Yes, Wall Street most likely will enjoy the kind of snapback rallies we are seeing, when the Dow stages 400-point-plus rallies. The upside volume on the New York Stock Exchange Monday amounted to 91 percent of the total -- a testament to the power of program trading, corporate buybacks, short-covering by profitable hedge funds and individuals who pray the worst is over for their fading portfolios. America's 500 biggest stocks are selling for anywhere between 25 and 40 times one year's earnings, depending on how one accounts for nonrecurring charges. Even at the cheap end of that range, the S&P 500 is still selling for more than twice the historical average for a bear-market low.

Black Blade: The Crash of 1929 and through the Great Depression, the stock markets rallied occasionally. I wish I could post a chart for effect, however, the markets would see-saw in a general downward trend. Even with these one-day rallies and dead cat bounces, we are still well below where we started on July 1st. "Interesting Times"

Cavan Man

(07/30/2002; 19:42:23 MDT - Msg ID: 81906)

Thanks Boxman

I like the part about how hoarding gold "undermined" the nation's financial system. What a hoot!

PS: Ever seen a BHS gator?

Truthcaster

(07/30/2002; 20:01:05 MDT - Msg ID: 81907)

Historical Charts Of Interest

www.sharelynx.net/Charts/Historical.htm#USHello-
I thought you all might like to see this link.
But you all probably have been to this site.
But I thought some of you might not have.
It's really cool it shows the DJI crash of 1929
and all sorts of gold charts and bear and bull markets
in silver and gold and stocks from the 1800s to 2000
it's well worth the look. Truthcaster...

Black Blade

(07/30/2002; 20:01:35 MDT - Msg ID: 81908)

Bernie Schaeffer: Gold Still Precious in My Book

http://www.schaeffersresearch.com/sentiment/observations.asp?ID=5864

Snippit:

I turned bullish on gold on December 18, 2001 and my opinion has not changed in the wake of the recent pullback in gold and the even sharper decline in gold shares. From a fundamental perspective, I believe the case for gold remains sound. In fact, my assessment is that the financial markets do not currently assign sufficient weight to the possibility of major negative developments such as a dollar collapse, a stock market crash that takes out the recent "bottom." a U.S. debt implosion, foreign market contagion, war and terrorist attacks. A position in gold and gold shares is an intelligent hedge against such developments. My advice to those who are long gold and/or gold stocks is to hold their positions. If you have not yet made any purchases in this sector, the sharp correction off the May peaks presents a good opportunity for you to leg in.

Black Blade: I agree. The recent pull back in gold prices is an opportunity to add to your position. I am surprised at how well Gold has held up in what is usually a very slow time of the year for precious metals. Even with the equities markets moving higher (though due to intervention), Gold has been quite strong. This Fall we could see the price of Gold move much higher when the Asian Wedding Season and Holiday buying picks up.

Black Blade

(07/30/2002; 20:09:36 MDT - Msg ID: 81909)

Banking crisis grips Uruguay

http://news.bbc.co.uk/2/hi/business/2162050.stm
Snippit:

The peso's value is falling and the economy shrinking. Uruguay has closed all of its banks, as the country's economic crisis tightens its stranglehold. The Central Bank announced that it had suspended all banking operations, in an eerie echo of similar moves that took place in neighbouring Argentina.

Black Blade: Yep, and I got some of their Gold 1930 Uruguayan pesos too. Thanks USAGOLD. Paraguay is already a mess, however, Brazil is on the brink as I outlined quite some time ago, while Venezuela and Colombia are on the verge of similar problems. So far Chile and Bolivia have been fairly stable. Mexico did make some rumblings that these problems could affect their economy as a result. The dominoes could soon fall. The smart ones will find some Gold and Silver for protection.

Black Blade

(07/30/2002; 20:16:00 MDT - Msg ID: 81910)

Junk Bond Defaults at Record - Moody's

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1263898

Snippit:

NEW YORK (Reuters) - Eighty-nine companies defaulted on $64 billion of bonds in the first half of this year, including a record $42.6 billion in the second quarter, Moody's Investors Service said on Monday. The dismal second quarter led Moody's to revise its projected year-end 12-month junk bond default rate to 8.8 percent from 7 percent, largely because of defaults by telecommunications and non-U.S. companies. The rate in June held near 10.3 percent for a fourth straight month, after peaking at 10.7 percent in January. David Hamilton, Moody's director of default research, said it is not yet clear whether companies face a full-blown credit crunch. "It's a good question, one I've been asking myself," he said. "Access to risky credits is increasingly shutting down. I don't think we're in a credit crunch quite yet, but the makings of one are there."

Black Blade: And this is only the tip o' the iceberg. The pace will accelerate as standards are tightened and lenders become more concerned about recouping from investments and investors become more skittish in this uncertain economy. Just another nail in the coffin.

Black Blade

(07/30/2002; 20:21:36 MDT - Msg ID: 81911)

Vanguard Air Plans Bankruptcy as Loan Is Rejected

Cavan Man

(07/30/2002; 20:28:28 MDT - Msg ID: 81912)

If there's any truth to FOA.......

......might the gold/oil hand be forced into action?
July 31, 2002

Anti-euro mood hardens among Britons
By Lea Paterson and Gary Duncan

PUBLIC support for UK membership of the euro is ebbing even though more than a third of the population has now used the new European notes and coins.
A poll for Credit Suisse First Boston (CSFB) revealed that opposition to the single currency has risen sharply in Britain, dealing a blow to pro-euro campaigners who had hoped that familiarity with the new notes and coins would fuel enthusiasm for UK entry.

The survey of 1,000 adults, conducted for CSFB by Martin Hamblin GfK, showed that just 35 per cent now believed the UK should join the euro in the next two to three years. This was down from 42 per cent in January. The proportion opposed to entry rose from 46 per cent at the start of the year to 55 per cent, according to the poll conducted earlier this month.

The hardening attitude comes despite the fact that 35 per cent of the population have now used the new currency. Robert Barrie, chief UK economist at CSFB, said: "A further increase in (euro) use over the summer might be associated with an increase in support, but that's not been the pattern so far."

The poll comes against a backdrop of increasing antieuro sentiment on the Continent. Anger at euro-related price rises have caused resentment in Germany, where surveys suggest that more than half of the population want to switch back to the mark.

Pro-euro campaigners, however, maintained that greater exposure to the euro would change UK attitudes. Simon Buckby, campaign director of Britain in Europe, said: "When people go to the eurozone they can see that anti-European scares simply aren't true."

Pizz

(07/30/2002; 20:30:08 MDT - Msg ID: 81913)

Musings

Going to be a long cold winter. While the government tells us we're still expanding at a 3% or so clip, I don't think they're too far off base, but where the problem is right now is gross profit and cash flow. The expenses and debt service are fixed, but the profits are way down. Most leveraged corporations ( and that's a lot) are right on the edge and won't survive the winter. I've got my headhunter looking for a position more in the sticks and out of the metro area. We're so bad right now I'll probably be on the bone pile in 90 days. Without cash flow and beans to count, I'll be downsized.

My feelings are that the national economy is going to implode rather drastically for four or five months real soon. It will be something like we've never seen before. Small business is holding on by their teeth. That's why they've rushed the BK bill through, with, as I've seen posted a couple times, a netting provision for derivitives so the the BK court can't come in and clean out just the above water off - sets. Something I think history might name as the JPM provision????

Cavan Man: I'll take a Leap (put) on all of South America

Mr. Gresham:

My .02?? My Sicilian heritage was watered down by a quarter Scotch (and not the booze - at least tonite - yet - but that does sound good) a quarter Irish, and a quarter German. Makes for a real mellow temperment - right? (Course you've read a few of my rants. . . .)

Now, with regards to current corporate crooks, most aren't smart enough to carry a good Sicilian's pasta pail. . .

YGM - Haven't had time to post anything more than a couple market thoughts during the day - the economic realities of our current "recovery" are taking up the best part of my time.

Darn, out of Scotch, and the wife's cooking dinner - darn cat eats better than I do, but that's OK, she didn't read Sierra's post.

Pizz

Black Blade

(07/30/2002; 20:32:17 MDT - Msg ID: 81914)

Brazil Currency, Bonds Fall as Government Seeks New IMF Aid

Trapper

(07/30/2002; 21:16:53 MDT - Msg ID: 81915)

Jayzee

I lived in Atlanta GA for about 9 yrs, just moved back to Michigan. Too much big city and the heat was hard on a fat yankee. I say the article posted by Misetich on the Tenn. income tax. I listened to Neal Boortz expound on that last one it was great. To hear this guy in the article it seems he likes taxes, most progressives ( socialist/ communists )do. What he didn't say is the tenn goverment has tried several times and even at midnight once to get this tax passed. Hold the line for all us freedom loving people. It is hard to keep them at bay living as we do in post constitutional America. Too many people who want to pratice charity with wealth which they did not produce. Tenn-care should demonstrate to all the nation what is going to happen with the new medicare drug plan. Problem is we already have our 5% income tax. Live small.

Gandalf the White

(07/30/2002; 21:18:24 MDT - Msg ID: 81916)

The Hobbits missed the BID by that much <->

===========================================================
NEWS IN NUMISMATICS
===========================================================
-- 1933 $20 St. Gaudens Sets New World-Record
Price of $7,590,000! --
===
<;-)

Golden Bear

(07/30/2002; 22:26:51 MDT - Msg ID: 81917)

Consumers have hit the wall...

www.investech.com"...Consumer (Un)Confidence

Are we on a "Confidence" collision course? The Conference Board's Consumer Confidence release today does not bode well for Greenspan & Company. With a 9+ point drop in the Consumer Confidence Index (top graph) and an even larger drop in Future Expectations (11+ points) the question of the hour is, of course... Has the fed lost control? Future Expectations Minus Present Situation (bottom graph) turned lower which has, in the past, been a leading indicator of a recession. The unstable Consumer Confidence levels signals heavy repercussions for the Fed and their inability to soften the blow of the popped bubble...."

YGM

(07/30/2002; 22:30:48 MDT - Msg ID: 81918)

Trapper....

That's quite a line you invented.....Worth repeating.....& remembering.....Quote...."Too many people who want to pratice charity with wealth which they did not produce"....sounds like the socialist state and Canadian Politics....Good one...YGM

YGM

(07/30/2002; 22:39:37 MDT - Msg ID: 81919)

CATS....OK?

So should we short them or go long?Or maybe we should corner the antacid market....Ugggh! Now Gophers are tasty critters and all you need is a piece of string or a snare wire then a stick and a fire....Now I know I've lost it....Gonna take a week off & go back up in the hills and listen to mother nature.....YGM

soooo... "GO GOLD & GO GATA" keep the Castle tower manned Oh Wizardous one...

Golden Bear

(07/30/2002; 23:13:47 MDT - Msg ID: 81920)

Fallen idol...(not mine!)

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_PrintFriendly&c=Article&cid=1026143578795Snippit:

"...WHEN THE "greatest central banker who ever lived" coins a sound bite, count on the world to sit up and take notice. It's tough to understand this phenomenon, given that Alan Greenspan was one of the pied pipers of the New Economy, whose collapse has wiped out several trillion dollars in shareholder value. But there he was last week, accepting a hero's welcome from U.S. senators and congressmen who still revere him as a genius. And never mind that the booming economy of the 1990s, presided over by the longest-serving chairman of the U.S. Federal Reserve Board, is fast fading into memory..."

GB: When so-called heroes begin to be discredited, the end is not too far away...

steady

(07/31/2002; 00:02:26 MDT - Msg ID: 81921)

the coin that was almost mine

GANDALPH THE WHITE
9 min and 58 seconds into the auctio i though it was all mine at 7,589,999.99. thats what i get for watching my pennys aughhhhhhhhhhhhhhhhhhhhhhhhhhh.

Operative

(07/31/2002; 01:38:22 MDT - Msg ID: 81922)

A Few GOOD Men

http://www.nytimes.com/2002/07/30/national/30HIJA.html?ex=1028692800&en=5740f855b0e563f2&ei=5038∂ner=ASAHIThe past few months have brought headlines of excessive greed by American corporations and executives, aided and abetted by those in high places like JPM, Citicorp, and Chase. Questioning the government has become a daily event in watching many of our freedoms disappear in the name of a war on terrorism, war on drugs, war on protecting children, war on crime, so many wars. One of the signs of end times is there will be many rumours of wars. I think we have arrived at this signpost. What I need today, is news of a few real, true, heros. People who self sacrifice to make the world, our nation, safer or better. The attached link provided the news I needed to see/hear.
It reminded me that all is not lost, that all hope is not yet extinguished.

In the quietness of this early morning I can almost hear the battle cry, "Let's Roll!" as a group of people, unknown to each other, banded together and fought bravely, courageously, against evil.

Black Blade

(07/31/2002; 02:58:27 MDT - Msg ID: 81923)

Oil stagnates on war talk

http://www.worldoil.com/news/newsstory.asp?ref=http://62.172.78.184/feeds/worldoil/new/article_e.asp?energy24=253029

Snippit:

US oil prices stagnated Monday amid press reports that the government is planning to attack Iraq. The New York Times reported that the Bush administration is considering a pre-emptive military strike against Iraq that would start with an attack on Baghdad and one or two key command centers and weapons depots. Quoting senior administration and Pentagon officials, the newspaper said US military planners hoped the strategy would cut off Iraq's leadership and lead to quick collapse of the government. Iraq is a major source of oil, though its exports are sporadic. Theoretically, Iraq exports around 2.1 million barrels per day (bpd) under a UN-supervised oil-for-food program designed to ease the suffering of its sanctions-stricken population.

Black Blade: Are we any closer to war with Iraq? I don't know, however, my brother has just been called to active duty � he's in the Army Reserve. I heard that another acquaintance has also been ordered to report in a couple of weeks. Maybe something is up.

Black Blade

(07/31/2002; 03:15:20 MDT - Msg ID: 81924)

Gold & Silver Derivatives as Tools of Money Laundering by James Sinclair & Harry Schultz

http://www.financialsense.com/editorials/sinclair/073002.htm
Snippit:

Silver, but primarily gold, has been used for many years to effectively, secretly and safely transport money from one place to another. This same technique has also been used to drain money from one place and to lodge the same money elsewhere. It is sophisticated, secret and common to those that live in the international trading circle. It has been used to evade taxes, to commit bankruptcy fraud and to just plain steal. There is a strong possibility, bordering on a probability, that at the heart of recent corporate illegalities, amongst public companies that have trading, as one of their activities, and non-gold producers who have leased gold for cheap financing, that an ILLEGAL transport of money has occurred via gold derivatives.

Black Blade: An interesting scenario presented by Sinclair and Schultz. I have considered such schemes before. It does sound reasonable though in light of Enron, JP Morgan Chase, and Citigroup.

Black Blade

(07/31/2002; 03:26:53 MDT - Msg ID: 81925)

AOL Under DOJ Scrutiny

http://biz.yahoo.com/rb/020731/media_aol_probe_3.html
Snippit:

WASHINGTON (Reuters) - The Justice Department is investigating accounting practices at AOL Time Warner Inc, according to a report in Wednesday's USA Today. Federal prosecutors in Virginia, where the company's America Online unit is headquartered, were working in tandem with the Securities and Exchange Commission, according to the newspaper, which cited a source with knowledge of the probe. The SEC opened a fact-finding inquiry into AOL's accounting practices after a recent Washington Post article raised the possibility that AOL may have inflated revenues in 2000 and 2001.

Black Blade: Another domino to fall. Also, Qwest is rumored to be ready to file chapter 11. We shall see. So far WorldCon and Global Crossing are the two other large telecoms to bite the dust.

BTW, this morning we see the second quarter GDP and the revised data (8:30 EST). Should be fun! Of course the data will be under new rules of "rigging". The last time the government "rigged" economic data we ended up with "hedonic deflators". So who knows. I see that CNBC is already spinning stories that Wall Street has proven thta it is ready to ignore bad news. Hmmm...

Black Blade

(07/31/2002; 03:37:53 MDT - Msg ID: 81926)

AngloGold cuts hedge book in second quarter

http://biz.yahoo.com/ft/020731/1028039812622_1.html
Snippit:

AngloGold, the South Africa miner, said on Wednesday it would reduce its hedge book by 2.4m ounces to 10.5m ounces in the second quarter as it reported a 10 per cent rise in operating profit. The miner attributed the "significant reduction" in the company's hedge book to more positive medium to long-term prospects for the gold price.

Black Blade: I am becoming more impressed with AngloGold. Hopefully they will unwind that hedge book quickly then I might be interested. The sooner this hedging issue is put to rest the better. This hedging monster must be killed and a stake driven through its heart!

Black Blade

(07/31/2002; 04:42:41 MDT - Msg ID: 81927)

European Markets Rocket Higher

http://quote.yahoo.com/m2?u
The Euro markets are rocketing higher on the back of surging US market index futures this morning. Rumor has it that a major investmnet bank is making another big run on the futures ahead of the GDP data release this morning. Do they have a crystal ball or is there a mole releasing information? This is strange indeed. No such thing as market manipulation? Hmmm...

We shall see. Less than 2 hours to go.

- Black Blade

Black Blade

(07/31/2002; 04:48:06 MDT - Msg ID: 81928)

Monkey See Monkey Do In Asia

http://www.mrci.com/qpnight.asp
The Precious Metals are still holding higher, Petroleum is higher, the USD is strengthening, and US market index futures are surging (well above "fair value"). The Wall Street primates are lining up on CNBC and CNNfn to give the all clear. The sheep are being lured in for another shearing. Looks like an "entertaining" day is in store.

- Black Blade

misetich

(07/31/2002; 04:49:53 MDT - Msg ID: 81929)

Brazil's Economy Falters as Companies' Payment Arrears Grow

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∣dle=ad_frame2_topfin&s=APUdiIxVwQnJhemlsSnip:

``We're in a critical situation,'' said Tiscoski, president of Higie Bras Industria e Comercio Ltda., which sells its detergent and disinfectants to some of the nation's biggest supermarkets. ``We're not strong enough to challenge them.''

The slump in businesses such as Tiscoski's, brought on by a four-month slide in the currency and plunge in bond prices, may undo a decade of progress that helped fuel average growth for South America's largest economy of 3 percent a year and draw more than $150 billion in foreign direct investment, analysts said.
...............
Misetich

Brazil is one of the largest importers of US goods and services -

Got gold?

Black Blade

(07/31/2002; 04:51:48 MDT - Msg ID: 81930)

Correction - Market Indicators Are Stronger

All the indicators including Gold are strengthening. This is quite strange. Asia was mixed just like yesterday's US markets.

My My, look at them market futures go.

- Black Blade

Black Blade

(07/31/2002; 04:58:24 MDT - Msg ID: 81931)

Breaking News � Another Bombing

Just over the wire is yet another bombing in Jerusalem. This time the report is that casualties are mounting as a bomb exploded at Hebrew University. No details yet.

- Black Blade

misetich

(07/31/2002; 05:03:29 MDT - Msg ID: 81932)

BIS's Crockett - US deficit - an "almost unavoidable" impact on the dollar,

http://www.forbes.com/newswire/2002/07/31/rtr681636.htmlSnip:
Wall Street loses have also been accompanied by a sliding dollar, partly blamed on investors worry at the size of the United States' current account deficit.

Crockett said that it was not a question of if, but when the deficit adjusted and this would have an "almost unavoidable" impact on the dollar, which would be no bad thing.

"It would be nice to see it happen [a fall in the dollar] along with a strengthening of demand outside the US, in Europe in particular but also in other countries," he said.

Misetich

Thus far only gold and Euro have strenghened against the US $, -other meaningful export/import markets for the US have remained the same.
We wait patiently for the next leg down for the US $

Got gold?

misetich

(07/31/2002; 05:14:20 MDT - Msg ID: 81933)

Japan tax revenues sliced by recession last year

http://www.forbes.com/newswire/2002/07/31/rtr681620.htmlSnip:

TOKYO, July 31 (Reuters) - Japan's tax revenue fell short of the government's target by 1.68 trillion yen ($14 billion) in the last business year as corporate profits were pinched by recession,
...........
But the Finance Ministry is anxious to stop Japan's debt mountain -- which has prompted a series of credit downgrades by ratings agencies -- getting bigger, and wants to see any cut in its precious revenues matched by tax increases elsewhere.
..............
Japan's public debt is forecast to rise to some 693 trillion yen, or 140 percent of gross domestic product, by the end of the current fiscal year -- the biggest debt pile among industrial countries.
...............

Misetich

Japan's economic, banking, market problems are mounting -

Lets stay on this TRAIL

Got gold?

a nation of one

(07/31/2002; 05:15:55 MDT - Msg ID: 81934)

gold reserves

"The world's total recoverable gold reserve is estimated at approximately 1,000,000,000 troy ounces (31,103,000,000 grams). Of this, the gold resources in the fields of the Witwatersrand system in the Republic of South Africa are estimated at more than one half of the total, or 500,000,000 oz. The gold reserves in the Soviet Union, although not made public, are also believed to be very large. According to the Bureau of Mines, U.S. Department of the Interior, a preliminary estimate of domestic gold reserves, based on data compiled in a study of the nation's gold potential, shows a total of 20,000,000 oz. of gold, virtually all of which is recoverable under current economic and technologic conditions."

The quote is from the Encyclopaedia Britannica, 1970 edition. (According to my government pamphlet on Copyright Law, this is fair use.) The same article states: "Four countries produce a total of over 85% of the world's gold. Of the estimated 50,000,000 troy ounces produced annually, [and it goes on to say a lot of other things]."

From this, anyone can see that, since one billion divided by fifty million is 20, no gold has been produced anywhere in the world since 1990. What an elaborate conspiracy we are witnessing! Oh. Wait a minute. Darn! There's another way this information can be interpreted. Maybe the billion ounce 'estimate' was incorrect. Let's see, what does the word 'nominal' mean? I'll look it up. "nominal, ...[definition] 2: (of a price, consideration, etc.) named as a mere matter of form, being trifling in comparison with the actual value; minimal." Now we know why gold is still being sold in public markets; it's still being mined. It seems reasonable to conclude, therefore, that the one billion ounce figure was never intended to be realistic. That makes sense. If I was mining gold, say from under my front walk for instance, I wouldn't want anyone to know how much I thought was there. Besides, nobody even knows where I live. Opps! I forgot about USAGOLD! They know my street address! Well, no matter. There isn't that much gold remaining under my sidewalk, only about five or six thousand ounces at most. Really..., if that.

misetich

(07/31/2002; 05:25:29 MDT - Msg ID: 81935)

Intel sees China passing Japan in PC market in 2002

http://www.forbes.com/newswire/2002/07/31/rtr681588.htmlSnip:

KUALA LUMPUR, July 31 (Reuters) - U.S. chip behemoth Intel Corp said on Wednesday China will overtake Japan as the world's second biggest PC market this year, earlier than expected and underscoring the weak demand in Asia's most mature market.
.............
"The trend is the same worldwide, with matured markets flat or down and emerging markets still growing," Morales told a news conference in Kuala Lumpur.

"Things can only get better when companies' bottom lines get healthier. When that's going to happen ? At this point in time, that would be speculating."

Last week, Taiwan Semiconductor Manufacturing Co sparked a sell-off in global technology stocks when it reported disappointing profits and warned that the July-September quarter might get even tougher.

All of the world's top three chipmakers have cut back on their spending plans in just the past two weeks, citing softening demand for electronics in many markets.

Intel lowered capital spending plans by $200 million to $5 billion and announced another 4,000 layoffs, but said the cost-saving measures would not affect chip-making capacity plans.
...............

Misetich

US markets are expecting earnings growth in 3rd qtr in the 14% range and 25% in 4th quarter

We wait patiently for the downward revisions and market adjustments

Got gold?

misetich

(07/31/2002; 05:35:08 MDT - Msg ID: 81936)

Senator Says Merrill Lynch Helped Enron 'Cook Books'

http://www.nytimes.com/2002/07/31/business/31ENRO.htmlSnip:

By RICHARD A. OPPEL Jr.

ASHINGTON, July 30 � Using internal documents, e-mail messages and even a videotape as evidence, lawmakers on a Senate panel argued today that Merrill Lynch, one of the nation's largest and most respected brokerage firms, repeatedly cut corners and compromised its business practices to win more investment-banking fees from Enron.

.............
"Merrill Lynch helped Enron artificially and deceptively create revenue," Senator Carl Levin, the Michigan Democrat who is chairman of the panel, said today. "Enron couldn't have engaged in the deceptions it did without help from a major financial institution," he said. "Merrill Lynch assisted Enron in cooking its books."
..............

Misetich

JP Morgan, Citi, Merrill and the rest - accomplices - in investors being defrauded by the likes of Enron -

Who's is the next Enron to get caught?

Got gold?

misetich

(07/31/2002; 05:40:37 MDT - Msg ID: 81937)

MBA survey - U.S. mortgage refinancings jump in week

http://www.forbes.com/newswire/2002/07/31/rtr681690.htmlSnip:

NEW YORK, July 31 (Reuters) - The number of Americans applying for a loan to buy a home or refinance a mortgage to save on borrowing costs rose last week, even though U.S. mortgage interest rates rose slightly, industry trade group reported on Wednesday.

Refinancings have helped consumers carve away at monthly borrowing costs and this has helped support consumer spending to buttress an anemic economy. At the same time, buyers of homes are expected to be big spenders as they equip their homes with appliances and furniture.
...................
The industry group said refinancings accounted for 67.6 percent of the week's activity.

Misetich

Mortgage interest rates rose slightly and refinancing represented 67.6% of the week's activity -

A wondering mind could say those refinancing coincided with the equity markets shortfall-

Got gold?

misetich

(07/31/2002; 06:01:07 MDT - Msg ID: 81938)

The Revenge of Reality

http://www.mises.org/fullarticle.asp?control=1007&month=46&title=The+Revenge+of+Reality&id=46Snip:
by Frank Shostak
With the recent meltdown in stock prices, some economists have said that there is no need to be concerned because the stock market does not reflect what is happening to the economy. (Curiously enough, when the stock market was going up, it was held by most experts to be the leading indicator of a strong economy.)
..............
Furthermore, neither corporate scandals nor corporate failures are the main causes of the current stock market turbulence; these are just the symptoms of the disease brought about by the loose monetary policy of the central bank.

A fall in the rate of growth of money M1 adjusted for sweeps and nominal economic activity, i.e., excess money M1 points to more difficulties ahead for stocks (see chart).

...............
In this regard, history provides us with an important reminder. The excess money M1 rate of growth accurately captured the October 1929 stock market crash.

...............
It also accurately captured the October 1987 stock market crash.

.............
Whenever a central bank loosens its monetary stance, it sets in motion an economic boom by means of diverting real funding from wealth-generating activities toward various false activities that a free, unhampered market would not facilitate otherwise. When monetary pumping slows, this also slows down or puts to an end the diversion of funding toward false activities, and that, in turn, undermines their existence. In short, the trigger to boom-bust cycles is central bank monetary policies.

The severity of a recession is dictated by the intensity of the previous boom that was brought about by monetary pumping and the associated artificial lowering of interest rates--i.e., by the percentage of "false activities" relative to total activities. The larger this percentage is, the more severe the recession will be, since more liquidations will have take place.

..............
Also, the interest rate differential between the yield on the 10-year T-Bond and the yield on the three-month T-Bill narrowed to 2.7 percent, down from 3.1 percent at the end of June and 3.6 percent at the end of March. This narrowing in the differential doesn't bode well for economic activity in the months ahead (see chart).

.............
Moreover, based on a prolonged slide in the income-to-consumption ratio, we suspect that the pool of real funding could be in trouble (see chart).

...............
The June production data show that the capital goods-to-consumer goods ratio stood at 1.34 against a similar figure in May. This ratio would have to fall to around 0.8 before a sustained economic recovery could emerge (see chart).
.............
The severity of distortions in the economy is also depicted by growing debt. The outstanding consumer debt-to-GDP ratio rose to 0.753 in Q1 from 0.74 in the previous quarter and 0.71 in Q1 2001 (see chart).

...........
Also, the home mortgages-to-GDP ratio climbed to 0.53 in Q1 from 0.52 in Q4 2001 and 0.49 in Q1 2001 (see chart).

...........
Our analysis continues to indicate that the pace of economic activity is likely to decelerate sharply by the year's end--if not earlier.
.........
Also, a flattening in the yield curve points to a likely softening in economic activity in the months ahead.
...........
There is a high likelihood that the real pool of savings--the driving force of the economy--is in trouble. Without an adequate buildup in the real pool of savings, no sustainable economic recovery is possible. In short, if real savings are in trouble, then regardless of what the Fed does, economic activity will decline.

Misetich

Got gold?

misetich

(07/31/2002; 06:23:07 MDT - Msg ID: 81939)

Goldman Sachs Tells Investors to Boost Stock Holdings (Update1)

http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Stock%20Market%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_stocks&s=APUedERaQR29sZG1hSnip:

Frankfurt, July 31 (Bloomberg) -- Goldman, Sachs & Co. told clients to raise their holdings of global stocks because equities are likely to rebound from recent losses as economies and earnings recover and companies step up share buyback programs.

Investors should buy shares until they represent 65 percent of their portfolios, up from its previous recommendation of a 60 percent holding, Goldman said. The broker cut its recommended bond holdings, without giving details.
...........
``We believe global equities are very attractively valued,'' said Goldman analysts Neil Williams, Alain Kerneis and Joseph Hickey in a note to investors. Stocks may also gain given the outlook for inflation and interest rates and as U.S. pension funds switch into stocks, they said.
.............
Phone-equipment, telecommunications, computer-related and insurance stocks may be the best performers in a global stock market rebound, the U.S. bank said. Goldman prefers stocks in emerging markets, the U.S. and Japan to their European counterparts.

Misetich

Chronology of events

To July 23 - Global stock markets suffer heavy losses

Wednesday - July 24 secret meeting of Feds, O'Neil, investment bankers, brokers

Wed July 24 to July 29 - US markets make "stunning comeback" almost 1000 Dow points
Gold and gold shares take pounding

July 29 - JP Morgan recommends purchases of Global stock markets

July 31 - Goldman Sachs -recommends purchases of Global stock markets

It appears an "orchestrated' effort - Custer's last stand-

Got gold?

misetich

(07/31/2002; 06:28:24 MDT - Msg ID: 81940)

Are our investments secure?The Life Insurance industry in the UK is facing an unprecedented combination of falling stock markets and tightening margins.

http://www.creditman.biz/uk/members/news-view.asp?newsviewID=808&id=1&mylocation=News&chksrc=NNow4251Snip:

Jul 31 2002
An Ernst & Young survey into the Life Insurance market throws up some uncomfortable home truths for many of the main players.

The Life Insurance industry in the UK is facing an unprecedented combination of falling stock markets and tightening margins. Consolidation in the market place is inevitable and is likely to be welcomed by regulators.

The Ernst & Young 2001 Capital & Solvency Review of UK Life Insurance companies reveals another significant reduction in the free asset ratios of 31 of our leading with-profit offices. Excess assets have reduced from �80bn in 1999 to �55bn in 2000 and �34bn in 2001. Free asset ratios have reduced to an average of 7% of liabilities compared to 18% in 1999. Falling equity markets worldwide have driven this decline.

The decline in stock markets has encouraged companies to turn to alternative forms of capital � �13bn of it � that help mask what is in reality an even more serious decline in free assets. The FSA has launched an investigation into the reliance of Life Companies on the use of subordinated debt, contingent loans, financial reinsurance and implicit items.

What does this mean for the policyholder � are our investments secure?

***************

Misetich

Got gold?

Black Blade

(07/31/2002; 06:41:07 MDT - Msg ID: 81941)

GDP Revisions

Second quarter only 1.1% - much lower than expected. Revised for last quarter is 1% lower as well (5% vs. 6.1%). Market futures are dropping fast! The last several quarters are significantly lower showing that the recession was worse than we were told. There were three negative quarters! The Primates on Wall Street were lying to the bipedal hominids all along (gee what a surprise). They were constantly denying that there was a recession at all. This proves that the primates that were trotted out by the media Trolls were nothing but liars. Of course we here were not fooled as we contested the tripe they presented on a daily basis. Well, there it is � the market has been weaker and the economy was (and still is) in a deepening recession.

- Black Blade

misetich

(07/31/2002; 06:41:07 MDT - Msg ID: 81942)

Europe's energy firms meet as U.S. credit woes bite

http://www.forbes.com/newswire/2002/07/31/rtr681751.htmlSnip:

By Stuart Penson

LONDON, July 31 (Reuters) - Energy firms from across Europe met in London on Wednesday to swap views on proposed changes to gas and power trading terms as companies throughout the region fought to cut their exposure to crisis-hit U.S.traders.

In a move prompted by last year's collapse of Enron , traders discussed draft plans to standardise methods of calculating net trading positions between counterparties and coping with contract defaults, industry sources said.
The meeting, called by industry umbrella group the European Federation of Energy Traders (EFET), came as concerns about the stability of U.S. traders, particularly Dynegy (nyse: DYN - news - people), Williams (nyse: DYN - news - people) and Aquila (nyse: DYN - news - people) sent jitters through European gas and power markets still recovering from the demise of Enron.

"It's panic stations out there for some people," said the trading manager at a large investment bank. "
.............
Dynegy and Williams, hampered by sliding credit ratings in a crisis of confidence sparked by Enron's demise, have been forced to halt most of their European trading as counter parties scrutinize contracts and ask for extra credit guarantees.
.............
Europe's energy market descended into chaos last December after Enron's European arm defaulted on hundreds of gas and power contracts.

Confusion followed as traders argued over which method should be used to calculate their net exposure to Enron -- how much they owed Enron, and how much Enron owed them.

PricewaterhouseCoopers is in dispute with several energy companies across Europe over issues including net exposure to the bankrupt trading giant, according to industry sources.

Copyright 2002, Reuters News Service

Misetich

Who is the next Enron to get caught?

Got gold?

Graefin

(07/31/2002; 07:07:28 MDT - Msg ID: 81943)

Sweet 16...

Willkommen Molly! This little Gr�fin grew up in South Dakota (Sioux Falls and a long time ago when Senator Daschle was still wet behind the ears), but now I live in Deutschland! Welcome aboard!
Peace!
- Gr�fin

Black Blade

(07/31/2002; 07:14:52 MDT - Msg ID: 81944)

Bureau of Economic Analysis - GDP Press Release

http://www.bea.doc.gov/bea/newsrel/gdpnewsrelease.htm
The long version of the GDP data is available (see link). The percent change at an annual rate in real GDP was revised down from 1.3 percent to -0.6 percent for the first quarter of 2001, was revised down from 0.3 percent to -1.6 percent for the second quarter of 2001, and was revised up from -1.3 percent to -0.3 percent for the third quarter of 2001.

We were right all along! The data paints a very ugly picture. In a word - "Grim", actually two words - "Very Grim".

- Black Blade

Rock

(07/31/2002; 07:28:00 MDT - Msg ID: 81945)

The Coin that never was mine as quoted by Steady.

That blew my mind that a single coin, just one Double Eagle gold coin could be worth 7.5 million dollars. My question is why then is it unreasonable to think that gold in general can't take a mild spike to $10,000 an ounce? Thats nothing compared to 7.5 million for 32 grms of gold or however many grams are in a troy ounce.

Meanwhile, White Rose (msg 81852) your not a kook my friend, you are trying like the rest of us here to steer those you know and care about into a truthful direction. I remember Y2K not to get mixed up with one of our notorious posters YGM, I took a verbal beating for stocking up on food, water ect for Y2K.

But my wife never questioned or doubted the decisions I made, not only concerning Y2K but also adding PM's to our porfolio which was quite costly but now that all is said and done I don't regret (nor does the wife) one decision I made because we can sleep a little easier at night knowing if we wake up one morning with a stock market crash for example or no pure water to drink because the water was poisened by some crazy terrorist that at least we can buy some time and avoid a population panic of sorts.

Serria Madre (I like that name) on a post you recently wrote a few days ago (I forgot the msg number) you were speaking pretty profoundly on the subject of life and why things happen and is "chance" involved?

You asked a hard question for some to answer and an easy one for others to answer.
For me the answer to that question comes down to your theology. "let the wise listen and add to their learning" proverbs 1:5. The answer my dear at least from my understanding of the Bible is that there is no such thing as chance because when you have a soverign God like the Bible teaches and Christians believe nothing gets by God without his divine authority meaning there is a purpose and reason for everything under the heavens even if we don't humanly understand it.

Ok enough preaching for one day. Hey all, thanks again for all the free intelligence I have gained from this fourm. I could list at least ten names or more of brilliant individuals I have learned from on this site. I don't have to list those names because everyone who reads USA Gold knows full well who the big hitters are at the round table and I'm darn glad to be able to absorb at least some of the crumbs of truth that fall into my lap.

Thanks again,

Rock

The Hoople

(07/31/2002; 07:57:07 MDT - Msg ID: 81946)

Pointers from Putin?

5 consecutive quarterly GDP's revised downward. What are the odds of that? Methinks Bush got some pointers from those meetings with Vladimir Putin on Russian style economic reporting. Maybe a little help from comrades Rubin and AG.

The Hoople

(07/31/2002; 08:20:14 MDT - Msg ID: 81947)

FCC: WorldCom might be able to unplug web

WSJ 7/31 snippit: The nation's top telecommunications regulator said the government might be unable to prevent WorldCom Inc. from abruptly terminating its Internet services, prompting calls in Congress for potentially sweeping legislation to expand the Federal Communications Commission's authority.

Hoople: Does this concern anybody else? WorldCom delivers over half of all internet trafic. What better way to silence sites such as our trusty USAGOLD ? Expanding FCC authority would be an added bonus treat to fascist thinking. This seems ominous and worth following in the days ahead. Better enjoy free thought (what's left of it) while we still have it.

Belgian

(07/31/2002; 08:24:24 MDT - Msg ID: 81948)

*** SYSTEMIC COLLAPSE *** !!!???

A dramatic title for the catastrophic situation we are living at present. Euroland's financial markets, panicked !
Banks, Insurances, Funds and major brokerage houses sounded the alarmbells. Fear for systemic collapse was expressed loud and clearly. And guess what the heads of the financial brotherhood demand ? They want the ECB to act as the FED has been doing for quite some time now ! The ECB is urged/demanded and expected to INTERVENE on a substantial scale as to avoid...the unavoidable systemic collapse.
This is another piece of (indirect) circumstantial evidence on the enormous scale of FED intervention.

In other words...Euroland can't but compromise to a certain extend on the BAD management of the dollar block, for reasons of the past deep infiltration of the dollar-currency and the cross participation (holdings) of dollar assets (financial and other). A lot of "savings" fiat is at stake. Savings = postponed consumption and not wealth storage.

At present, the $ AND � must act together (condemned to) for an orderly progression to the financial exit. Read, proper valuations of all paper and tangibles. A gigantic job, thanks to the FED's orchestrations. It was (still is) the 7 years "abnormal" and artificial decline of Interest Rates, by the FED, that were/are the main reason for the total mess w're in. The financial brotherhood used/abused the declining IRs to organize higher and higher returns on their oceans of funds. Millions of western "savers" lured into THE financial trap. Lured into their own systemic collapse.

A larger and larger part of the general public starts to smell something rotten in the financial state (not of Denmark). Denial of the fraudulent interventions, evolve to acceptance of it and POG must be knocked down to avoid capitulation on the appearance of a very visible trend of non-confidence expressed in a rising POG-trend. WHO and HOW it is effectuated doesn't matter to me anymore. I'm convinced about the WHY'S and that's more than enough wisdom for a limited amount of grey cells.

At the peak of the panic (SM-slump), Tony Blair aluded on not invading Iraq and the colluding financial media issued statements on more crude output to come before OPEC's meeting. All hens on deck ! Today the dollar-promotion-machine is back to perform in all media shows and the exchange ranges are indoctrinated, again : �/$ >>> 0,95 if FED AND ECB co-operate...or 1,20 if ECB wants to evidence that its euro-management is better (less worse) than the dollar's.

Today, I see the euro using CB's Goldreserves (POG) to indicate that the ECB's management desires to be better, despite been taken hostage by the dollar's deep infiltration. POO seems to be the euro's ally (+ 1%).
Welteke wanted to copy the FED's management. Up until now, I do believe it is not going to happen on that same monstrous scale by the ECB. Note that (covered) inflation is creeping up in Euroland. Reason the more for the euro to outperform on its dollar/euro exchange rate in lockstep with crude's price.

Can the FED and ECB organize an orderly re-balancing of their respective currency and safeguard saver's money (fiat) at the same time ? And does this go together with genuine economic-supportive management ? Hope you don't mind, me, saying : FORGET IT !!!
Thanks financial fraternity for having us robbed at the paper-gun's point. My Gold jacket is bullet free ?

Cavan Man

(07/31/2002; 09:06:23 MDT - Msg ID: 81949)

Belgian

The trump card is in their hand; or , is it?

Mr Gresham

(07/31/2002; 09:25:49 MDT - Msg ID: 81950)

Rock

Head can only take us so far. It is those who join in with heart, and feel free to speak up, who make this what it is. Thank You.

Mr Gresham

(07/31/2002; 09:43:01 MDT - Msg ID: 81951)

YGM

"Gophers are tasty critters and all you need is a piece of string..."

Now, are we going to have to ask Randy to set up a special page ("The Gopher Trail"?) for gopher recipes?

Let's see if I can remember the "4 G's". God, Gold, Guns, & Gophers?

Or was it Generators? (Should I still hang on to that unused China Diesel gathering webs out in the barn?)

I know the management here probably doesn't want this to turn into an "Emergency Preparedness" discussion board, but with Randy's editing talents, already shown elsewhere, perhaps a page of links to some of the better sites compiling --what else? -- links to valuable information on, uh, "Independent Living" would be appreciated by many stopping by...

steady

(07/31/2002; 10:27:52 MDT - Msg ID: 81952)

havent you heard this somewhere before............ umm right here!

http://www.datekrt.newsalert.com/bin/story?StoryId=CpuDGWbWbrevxmdeZEconomic Recovery is Jobless, Tenuous - Kelly Services Advance Comment On Friday's Unemployment Rate Announcement
PR Newswire - July 31, 2002 12:13

Carl Camden, president and chief operating officer of staffing provider Kelly Services and member of the Labor Advisory Committee of the Chicago Federal Reserve, offers the following advance comment on Friday's unemployment rate announcement by the U.S. Department of Labor. The current unemployment rate is 5.9 percent.
"If we are in an economic recovery, it's a jobless recovery at present. Our two prime concerns about this recovery are its fragility and the lack of strong demand for staffing services. It would not take much to stall or derail a weak recovery. It's quite possible that the recession, widely considered to be over, still has a pulse.

Belgian

(07/31/2002; 11:44:43 MDT - Msg ID: 81953)

@ Cavan Man

Yes Sir, he who has the Gold reserve, is holding the trump card. But it is an ambivalent one !
Rising or high interest rates are a contradictio in terminis with low and declining Goldprices. This globe was and still is in desperate need for very low interest rates, due to the suffocating debt load. The ECB must maneuver very carefully with its trump card. The dollar-block already lost her Gold(reserve)card (21.000 tonnes >>> 8.100 tonnes with ???) Using POG to force euro supremacy over the dollar is a two edged sword not to be played unnecessary and recklessly. Gold is the savior of last resort. Gold is easely available for all Eurolanders but this must NOT be encouraged at present. Americans must be kept off the Gold for their own (paper) sake. The colluding bankers consider their Gold/paper-management as a patriotic virtue and will certainly not understand or admit their wrongdoing.

The FED managed to get interest rates down from 17% to 4% over an extended period of more than 20 years ! All this for the general public's good. Individual Gold accumulation must be discouraged with all means as to not expose the IR falsifications, hiding the Permanent Depreciation of the reserve currency. Only those Giant Gold Gods are allowed to accumulate the Physical as they do it according to the state of the art without rocking the price into a clearly visible and INVITING (rising) trend.

Gold is by definition a "reserve" and must be used as such.
Generating wealth and preserving wealth are two different things. The dollar has most probably lost the bulk (if not all) of its (currency)reserves and is condemned to generate false wealth by printing more of the same. See the 30 year dollar/Swiss F -chart from the Aden sisters. This, while 13.000 tonnes of American Goldreserves were shipped to Euroland.

The ECB is prepared to compensate dollar loses with Goldreserves. But what with all these dollars circulating with the general public and business ? How do they have to compensate dollar loss ? How does one CB manages the correct flows into Gold and euro that wishes to expand at the appropiate rate ?

Gold-Derivatives are used to set the appropiate price of Gold for different central banks.Irregular and increasing, Physical uptake, is most disturbing in this type of price-setting (and price-timing). The Gold-Play remains a very subtle one. After the intense bullish Gold-Analyst parades on the financial media...POG was knocked down ! Do you think this was a co-incidence ? Haha...very, very subtle indeed !

Why does Gold and its derivatives "remain" so secretive ?
Is it because all central banks want to get rid of their Gold reserves as cheap as possible ? Elementary, no ?
So all those nonsense about CB sales/leases and other ranting about barbarous relic is very tiring. Central Banks fight currency wars with Gold and Interest Rates. High IR mean that your currency is increasingly depreciating, as is a rising POG, indicating that your currency is going down in purchasing power. The ECB and the FED operate through their banksters as real Godfathers do.

Gold will be allowed to be free as soon as all financial towels are thrown into the ring. When the debt-tide breaks the financial dams. When profits are an infinitesimal fraction of total debt. When the Western economies have to restart it all over. When the dollar has to give way.
So you want this to happen today ? Have you already enough Gold ? One has never enough of it as things stand today. Maniacal Paper Overvaluations ! Obscene Gold Undervaluation ! No recipe at all for an ordely exit.

USAGOLD / Centennial Precious Metals, Inc.

(07/31/2002; 11:48:04 MDT - Msg ID: 81954)

With an eye to Uruguay and the South American Contagion

http://www.usagold.com/ProductsPage.html

Empires rise and fall, as do economic freedoms,
and common fortunes fade away
like memories of common events.

Why should YOU buy gold Sovereigns today?

Because no one else will do it for you.

Centennial is here to help.
1-800-869-5115

Rock

(07/31/2002; 12:03:36 MDT - Msg ID: 81955)

Mr. G, I agree

Mr G What you stated as usual is true, knowledge is only good if you act on it. That's what separates the spectators from the movers and shakers. Have a fine day all!

Rock

Operative

(07/31/2002; 12:17:15 MDT - Msg ID: 81956)

Lieberman to subpoena Rubin ??

http://www.washtimes.com/national/20020731-980104.htmWould'nt count on it, but at least pressure is building to try and get Rubin to answer some questions. Only problem is as someone points out in the article is Rubin is very good at giving meaninless answers. Kind of reminds you of someone else so near to our pocketbooks,....uh..I mean hearts. You think Greenspan and Rubin practice on each other to invent new ways to hide the truth?

RobotGuy

(07/31/2002; 12:30:21 MDT - Msg ID: 81957)

Hello!,..?

I had guests until the wee hours of the morning, actually probably the late hours of the morning, I think the sun was coming up when I went to bed. Either way, I had way too much to drink, my eyes are still red.
RobotGuy is oficially unemployed, and I suppose there must have been reason to celebrate,.. either that or self destruction. I spent the entire day yesterday handing out resumes. Generally it isn't that difficult for someone in my trade to find work, but I think it will probabaly take a couple of weeks given market conditions. What exactly is happening??? DOW is down, U.S dollars are up, and POG took a drop?? I've got to stop sleeping in! Yes, yes,.. let's all have a pity party for RobotGuy,.. boo hoo.
Really now, what exactly is going on with the economy, I'm confused!!! Shouldn't gold be skyrocketing???
I recall seeing for the first time some positive incentive for buying gold yesterday on my national news station yesterday! They actually mentioned old yeller for the first time, and said that advisors are saying gold is going to be a shining investment over the next few quarters. So,.. my fellow canucks, what the %!*# is happening with our currency? I regret to say that I suggested buying gold a week ago, because now would be a much better time. I really hope I don't regret saying this a week from now.

Well wishes to all of the nobles here in this forum! May your investments serve you well!

RobotGuy.

RobotGuy

(07/31/2002; 12:34:18 MDT - Msg ID: 81958)

Forgive my spelling mistakes, ..

RobotGuy

(07/31/2002; 12:37:03 MDT - Msg ID: 81959)

..., and grammar

steady

(07/31/2002; 12:38:18 MDT - Msg ID: 81960)

dominoes anyone?

SANTIAGO (Dow Jones)--Chile's peso closed sharply lower Wednesday because of the financial turbulence affecting Brazil and Uruguay, traders said.
The peso swiftly fell through CLP701.50 technical support after Uruguay declared a banking holiday to stave off the collapse of its banking system and Brazil's real again fell to historic lows.
Chile's currency ended at CLP706.50, very close to the intraday low.
Tuesday, it had changed hands at CLP698.90.
Worries about the financial stability of South American countries sparked safe-haven dollar buying, traders said.
"The uncertain climate in the region is affecting the flow of hard currency to South America and, despite the stability of the Chilean economy, you can clearly see that reflected in the peso's exchange rate," a Santiago trader said.
Fresh positive news for a possible free-trade agreement between Chile and the U.S. failed to prop up the peso as it had in previous sessions.
The crises in South America's biggest economies have kept the peso's international value at relatively low levels in recent weeks.
-By Stephan Kueffner, Dow Jones Newswires; 562-460-8546;

Operative

(07/31/2002; 12:43:51 MDT - Msg ID: 81961)

U.S. considering bill to halt Saudi weapons sales

http://www.menewsline.com/stories/2002/july/07_31_2.htmlDo you think such action will help bring down the price of oil? Also just read a story where we are applying pressure on Jordan. I suppose using some strongarm tatics will aid in building a coalition. Then again, does anyone else think the world may soon tire of our antics? This "fer or agin us" may raise the stakes at the international poker table. I truly wonder if we have the strong hand in the game or is it more like the phoeny accounting reports...a lot of hot air. I have the 5 G's. Now trying to acquire patience to have the 2 W's. Watch 'n Wait.

Rock

(07/31/2002; 13:59:33 MDT - Msg ID: 81962)

Robot Guy added to bone pile.

Sorry to hear that Robot Guy. I was also added to that bone pile casualty list recently. Don't fret or fear my friend there's a reason for everything and it looks like its lifes timing for you to advance and take it to the next level.

Check this out, my wife got laid off after 18 years with the same company only two years before she would have received a pension check for life. Then the same year I was added to the bone pile after 10 years with the same company selling dental products.

My wife moved on and has been at her new carreer and job now for the past two years and as for me I said screw the sales pressure and stress and since I spend a lot of time at the healthclub like Sir Blackblade I became a personal fitness trainer at the ripe age of 47. Talk about change huh.

You know what they say, "when the going gets tough"....

Cheers anyway,

Rock

sector

(07/31/2002; 14:02:33 MDT - Msg ID: 81963)

FBI Crack Terrorist SWAT Team at Work...Again

Suspect in Sept. 11 ID Case FleesThe Associated Press
Wednesday, July 31, 2002; 1:54 PM

PATERSON, N.J. �� A man who authorities said sold fake identification to two of the Sept. 11 hijackers apparently fled to Egypt Wednesday morning, hours before authorities raided his home and businesses, officials said.

Mohamad El Atriss, who has been living in Union Township, operated businesses in Paterson and Elizabeth where he sold the IDs, said Passaic County Sheriff Jerry Speziale. Authorities raided his home and business Wednesday afternoon and were told Atriss had took a flight from Newark to Egpyt earlier that morning, Speziale said.

Atriss sold a fake identification card to Khalid Almihdhar, who was on Flight 77 as it hit the Pentagon, and to hijacker Abdul Aziz Alomari from Flight 11, which hit the World Trade Center, Speziale said.
+++++++++++++++++++++++++

Let's see...the FBI is watching a suspect with direct connections to the 9/11 terrorists, a connection closer than Moussaui and they watch him get on a plane and leave the US.

Or maybe they were busy filling out FBI and FEMA paperwork between their doughnut breaks.

Also looks like the FBI has a mole that tips off terrorists as to coming raids.

What a country!

Aquarian

(07/31/2002; 14:20:55 MDT - Msg ID: 81964)

possible trigger

i've heard rumors that the crash could come sometime before august 15th, when CEO's will be required to report adjusted earnings statements. what is everyone's take on this? is there any validity to this or could they avoid the truth just as they have before?

misetich

(07/31/2002; 14:33:41 MDT - Msg ID: 81965)

Brazil's real tumbles 5 pct, hits new trading low

http://www.forbes.com/newswire/2002/07/31/rtr682536.htmlSnip:

SAO PAULO, Brazil, July 31 (Reuters) - Brazil's embattled currency plunged to new record lows on Wednesday, battered by a cash crunch as dollars remained in tight supply.

The real sank 5 percent to end the day at 3.470 per U.S. dollar, its eighth straight record low closing price. In early-afternoon trading, the currency tumbled nearly 9 percent to an all-time low of 3.605, its weakest point since it was introduced in 1994. Its slide also hurt currencies across Latin America.
The currency market took a beating again today," said Sandra Utsumi, chief economist at BES Investimento, a research firm in Sao Paulo. "The Central Bank intervened at least twice today, but it was almost the only source of dollars in the market."

Misetich

Lets stay on this TRAIL - its getting interesting

Got gold?

Black Blade

(07/31/2002; 14:43:06 MDT - Msg ID: 81966)

GE to expense stock options

http://www.msnbc.com/news/788149.asp
Snippit:

July 31 � General Electric Corp. said Wednesday it will treat employee stock options as an expense beginning in the current quarter, as it announced several other changes in its corporate-governance practices.

Black Blade: Companies are falling over themselves to expense options (as they should!). However, some like Cisco and Microsoft won't as they would show no profit if they did, and if they also did not engage in "synthetic leasing" they would be in worse trouble. Don't expect several companies to follow up by expensing options. There would be a serious drop in earnings if they did. Hey � an amazing bit of magic on Wall Street today � they managed to pull another rabbit outta their hat.

Black Blade

(07/31/2002; 14:45:04 MDT - Msg ID: 81967)

Re: Rock and Robot Guy

Hey, when life tosses you a lemon, make lemonade (or a couple of shots of tequila). Since I have nothing better to do right now, I am just enjoying this time off to get into shape (health maintenance), get in some fishing, hopefully a lot of hunting, and possibly some skiing. Why to listen to the Trolls and Primates on CNBC we should all be working ourselves into an early grave with the "robust" economy. Anyway, I am not concerned as I always say: get out of debt while you can, stash cash for expenses, have a secure stash of precious metals for portfolio insurance, and store up nonperishable food and basic necessities. I can get by for a long time without much problem though my more extravagant lifestyle has been slightly curtailed. I could work for less if I wanted, however, I am determined to get what I am worth. Anyway, I am enjoying my time "away from the office" as I was getting burned out. Now it's time for less work and more play. I even have considered taking a few classes at the local college (mostly for fun) and possibly taking up another line of work, at least until the economy improves. I hope that all goes well for you guys. Cheers!

- Black Blade

Off to the gym!

White Rose

(07/31/2002; 14:46:55 MDT - Msg ID: 81968)

What is the trigger point?

Most players in the financial field have some idea that there is only smoke and mirrors holding up confidence. It would only take a modest event that showed that the game could not go on to really cause a reaction. This event may be significant or very minor. I suspect that it will be an event that was not forseen, that shows that there is no "insurance" against disaster. Then there is a rush to the exits.

For example, lets say that we do something major against Iraq very soon (in the next 2 weeks). This may cause a credible revolution in Saudi Arabia. If the US goes to war against Iraq and Saudi Arabia, the reaction in the Middle East and the world may not be containable. Yet Bush is stupid enough (and/or the American empire is in such dire straits) to try something like that.

My gut feeling is that when confidence fails, it will fail because of something so minor, even we will not recognize it as significant until afterwards.

misetich

(07/31/2002; 14:49:06 MDT - Msg ID: 81969)

Fed Report: Economic Growth Modest

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1276861Snip:
WASHINGTON (Reuters) - The Federal Reserve on Wednesday said the U.S. economy grew modestly in recent weeks but the job market showed relatively little improvement, underscoring the recovery's sluggishness.
...........
"District reports suggest that the economy expanded modestly in recent weeks, with an uneven performance across sectors,"
...........
"Labor markets were characterized as slack but relatively stable in most Districts ... The pace of wage increases generally remained subdued," the Fed said.

.............
Retail sales were described as "mixed," with four regions reporting weakness and five seeing strength. Overall, retailers were optimistic, however, about the near-term sales outlook.

Misetich

The euphoria expressed by O'Neil (who claimed just last week "if you want to call 1qtr of negative growth, a recession, go ahead", Greenspan, Bush ( the economy is sound) appear hot air.

The Bush Economic Team has lost all credibility. Things may get worse before they get better.

Got gold?

Aquarian

(07/31/2002; 15:08:41 MDT - Msg ID: 81970)

thanks white rose

I understand what you're saying, while i'm not a financial expert--i completely understand the game is one of smoke and mirrors (euphemistically) or more simply of lies (pejoratively). i also understand the our environment is subject to constant change and that those changes, however slight, could crash the game. however, would not a grand scale restatement of earnings by a number of companies be enough to trigger the collapse of investor confidence? i guess the question i'm really asking is this: obviously there has been speculation that the accounting irregularity problems are not just limited to the firms already outed, but should we lend credence to this speculation? does anyone know, to a reasonable degree, that the accounting problems are in fact widespread and not just limited to "bad apples"?

misetich

(07/31/2002; 15:13:59 MDT - Msg ID: 81971)

Major airlines take staggering blow to bottom line

http://www.usatoday.com/travel/news/2002/2002-07-30-big-six.htmSnip:

By Marilyn Adams, USA TODAY
While low-fare airlines keep growing, life has been brutal this year for the Big Six carriers.
............
The Big Six have laid off thousands of workers, cut flights, parked planes, halted commissions to travel agents and cut salaries. Four recent attempts to raise fares failed when at least one airline didn't match the increase.

This month, most major carriers except Southwest and Alaska posted large second-quarter losses. Revenue is off 20% from a year ago.

***************

Misetich

No economic recovery in airline industry - consumers are opting for low cost fares - business travel is down- as BB would say, the picture is "Grim"

The Bush Economic Team is losing credibility - just last week O'Neil emphasized that recession lasted 1 Qtr, Greenspan, Bush etc have stressed sound economic fundamentals - yet the US economy growth with the exception of Q1 2002 has been in negative or little growth,( on average about 2%) for the last 6-7 quarters.

How long will foreigners keep on financing the US?

Got gold?

Got gold?

misetich

(07/31/2002; 15:30:45 MDT - Msg ID: 81972)

Upturn? What Upturn? Tech execs expect their customers to keep a lid on spending until next year

http://www.businessweek.com/magazine/content/02_31/b3794080.htmSnip:

But the high-tech bounceback--which tech execs and analysts widely expected in the second half of 2002--is behind schedule. More than half of chief information officers who took part in a June Morgan Stanley survey don't see the economy improving until 2003. Only four months before, only 16% of CIOs felt that way. Moreover, more than half of corporate IT buyers say they will conserve their tech budgets for the rest of '02, according to a survey released July 11 by Goldman, Sachs & Co. And on July 23, Merrill Lynch & Co. downgraded the stocks of 11 chip companies because it felt they had been too bullish about potential orders. "The change in sentiment has been dramatic," says Michael Shulman, director of research at ChangeWave Research. "It even calls into question the kind of growth you'll get in the first half of 2003."
.............
With the economy on the mend, why the trouble in Techland? Because demand for high-tech products simply hasn't materialized as expected. The uncertain economy and continued market woes are prompting companies and consumers alike to put major buys on hold. "There is just not a lot of business being done in the IT market," says Thomas M. Siebel, CEO of Siebel Systems. "We don't see any reason why it should get better in Q3 and Q4."
.............
This all points to tech spending slightly outpacing nominal gross domestic product in 2003, according to Goldman Sachs. But hopes for a recovery any earlier than that are fading fast.

******************

Misetich

The "goal posts" are being moved once again - the recovery in tech has been post-poned once again to ANOTHER year - 2003 -

The stock markets are overvalued. ANOTHER downward re-adjustment is likely to occur.

The stock market bulls are unshaken "determined" - keeping on playing the game that worked well from 96 to 99 - incorporating rosy scenarios in stock values - the "good times" are over - yet the allure of the easy buck is powerful-
It is that attitude that makes them easy pickings for the bears as economic reality hits home

Got gold?

misetich

(07/31/2002; 15:41:42 MDT - Msg ID: 81973)

You Can't Say That!Western banks, you may, think have enough on their plates � what with nearly one in four Telecom junk bonds,

http://www.capital-insight.com/dailyExecutive.aspSnip:

Western banks, you may, think have enough on their plates � what with nearly one in four Telecom junk bonds, and one in ten of all other speculative grade securities, having exploded this year - implying who knows what, in addition, for the actual worth of the loans which supplement these.

With concerns also rising about the tottering US power sector, together with commercial real estate to worry about, not to mention airlines and the suspect condition of most of the giant car companies, adding Brazil to this Bonfire of the Vanities might seem a little superfluous therefore, but, never fear.

***************

Misetich

The US jobless recovery has "stumbled" in the 2nd qtr - and may get worse (double dip recession) going forward as the carnage of last weeks global stock market trillions trim has diminished consumer confidence -

How long can the almighty US $ holdup?

Got gold?

misetich

(07/31/2002; 15:54:22 MDT - Msg ID: 81974)

Empire State Manufacturing Survey-indicates that conditions in New York State's manufacturing sector grew worse from June to July.

http://www.ny.frb.org/rmaghome/regional/mfg_survey/index.htmlSnip:

The Empire State Manufacturing Survey indicates that conditions in New York State's manufacturing sector grew worse from June to July. The survey's main indicator, the general business conditions index, fell from 12.7 to -5.5, dropping below zero for the first time since December 2001.

*********

Misetich

The Bush Economic Team + Greenspan predicts US economy to expand 3 1/2 to 4 % in 2nd half 2002- in fairness they didn't see a recession coming in 2001 either- and just last week they were boasting that the recession lasted only one quarter

The markets must have doubts on their leadership and creditability.

Got gold?

misetich

(07/31/2002; 15:59:34 MDT - Msg ID: 81975)

Manufacturing Firms Report Marked Slowing of Growth

http://www.phil.frb.org/media/newsreleases/071802.htmlSnip:
July Survey...
Philadelphia Federal Reserve Senior Economic Analyst Mike Trebing summarized the survey:

"Results from our Business Outlook Survey this month suggest a slower pace of growth in our region's manufacturing sector than that indicated in June. Nearly all of the broad indicators remained positive, but declined from their high readings in the previous month. Employment indexes, however, remained negative. Overall expectations remain optimistic despite the reported slowing this month."

*************
Misetich

"Overall expectations remain optimistic despite the reported slowing this month."

Must be a graduate of the Walter Mitty school of economics

Got gold?

misetich

(07/31/2002; 16:07:50 MDT - Msg ID: 81976)

Japanese electronics brace for long recession

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028039815675&p=1012571727088Snip:

By Mariko Sanchanta in Tokyo
Published: July 31 2002 9:55 | Last Updated: July 31 2002 9:55

Japan's biggest consumer electronics companies reported mixed first-quarter earnings on Wednesday, although most cautioned that Japan's recovery from economic recession would be prolonged.
..............
The company, however, warned that the "employment environment and personal income situation are continuing as severe as ever" in Japan, and that the country was moving toward a "limited recovery". Sharp left its full-year forecast for the year unchanged, at Y37bn.

**************

Misetich

From one continent to ANOTHER - we find global economic growth not meeting expectations

Got gold?

Cavan Man

(07/31/2002; 16:11:49 MDT - Msg ID: 81977)

".....the foreigner must be willing to accept dollars for wahatever he is selling."

THE EUROPEANS
by Bill Bonner

Among the obscure financial reports that have more pages
than readers is one from the Bank for International
Settlements. The staff economists had toted up the
figures and found a massive black hole in the universe
of money movements. In order for one country to run a
current account deficit some other country must run a
surplus. Money flows between nations is a zero sum
business. By definition, what goes into one set of
national accounts has to come out of another.

It is impossible for the entire Earth to run a current
account deficit, just as it is impossible for everyone
to have above-average income or uncommonly smart
children. And yet, there it is, according to James
Grant, a negative $213 billion worldwide net current
account deficit, as if the money had been wired to Mars.
We draw no particular conclusion or inference from this
bizarre figure, nor do we take any offense. The missing
billions are probably in a desk drawer in the accounting
department of the BIS for all we know. Besides, $213
billion does not seem like a lot of money to lose in a
$31 trillion world economy.

More interesting in the BIS report were the relative
figures - the amounts of money changing hands from one
nation to the other owned from one nation to the next.
For there, the numbers are bigger...and likewise
preceded by minus signs. In 1997, the U.S. ran a current
account deficit of $140 billion. That is the difference
in the goods and services sold by Americans to the rest
of the world and those sold to them. By 2002, the
deficit had risen to $435 billion.

Both sides took it as a fair trade. Americans got
automobiles, champagne and geegaws. Foreigners got
dollars. But as Americans bought more and sold less, the
rest of the world accumulated dollars. By the end of
2001, foreigners had $9 trillion in U.S. dollar assets,
reports Dr. Kurt Richebacher.

Pity the poor Europeans, says Richebacher. As much as
Americans might have admired their New Economy of the
late '90s...the Europeans admired it even more. Now they
are the major holders of dollar-based assets outside of
America...and are stuck with them.

The Frenchman cannot sell dollars to Americans - for
what would Americans exchange for them; all they have is
more dollars! All the foreigners can do is trade their
greenbacks amongst themselves, like used polyester cargo
pants...and hope they don't go out of fashion.

But who knows? The Frankfurter banker...the baker in
Milan...or the fund manager in Amsterdam might begin to
favor corduroy...or maybe tweed. Why he might do so is
the subject of the rest of today's letter.

"The single worst threat not only to the U.S. economy
and its financial markets but also to the world economy,
implying to foreign investors huge currency losses on
top of their huge houses in stocks and bad loans,"
writes Richebacher, is a "looming dollar disaster."

"When the dollar's plunge develops in earnest," he
predicts, "it will...be brutal for the U.S. financial
markets, which have become hostage to massive foreign
capital inflows."

Foreign-owned assets in the U.S. rose by $895 billion in
2001 after increasing by more than $1 trillion in the
year before. Much of this money went into stocks,
providing "the single strongest support for America's
stock market during these critical years..."

The poor Europeans were clueless.

"No European would ever dream of taking equity out of
his home," says Richebacher. "And Europeans don't have
credit cards either...they just have debit cards."

Nor could the eurolander imagine what would happen to
him next. His Nasdaq stocks lost 70% of their value. His
S&P stocks fell by 40%. Even his Dow stocks dropped 30%
of their value. And on top of that, the dollar fell off
by another 15%.

He thought he had placed his money in the strongest,
most flexible, and most dynamic economy on the globe.
(The poor frog's own economy seemed as stiff as a dead
republican. It was so rigid, regulated and soooo
'80s...as G.W.B. reminded the English, he didn't even
have words in his language to describe the
entrepeneurial, laissez-faire economy of America in the
'90s).

And then he discovered that the U.S. companies he bought
had cooked their books and went bankrupt...and that the
U.S. federal budget surpluses that were supposed to reach
"as far as the eye can see" disappeared overnight...and
that G.W.B. had gone a little mad in his War Against
Terror...that the suburbs were a wasteland...the food
was inedible...the average American was too fat and too
much in debt...

...and heck, he didn't look good in cargo pants anyway!

And so, he begins to feel like "un pigeon" - a French
fool, a Danish dupe, a Czech chump, or a Polish patsy.

What will he do now?

Not only does he finance the Americans' current account
deficit - running at about $1.5 billion per day - he
also bankrolls Americans' investments abroad. Europeans
are not the only ones who may want to flee dollar
assets. But with no current account surplus, Dr.
Richebacher explains, Americans can only diversify into
foreign holdings by importing capital from foreigners.
Unless the BIS really has discovered a black hole in the
system of international capital flows, the foreigner
must be willing to accept dollars for whatever he is
selling.

"These U.S. foreign investments amounted to $439.6
billion in 2001, after $581 billion in 2000,"
Richebacher elaborates. "There results a need for
capital inflows into the U.S. between $900-$1,000
billion per year just to keep the dollar stable and the
U.S. financial system afloat.

"Our nightmare is that continuous bad news about the
U.S. economy and an associated continuous fall of the
dollar will sooner or later induce a significant part of
foreign investors and lenders to pull out of the
dollar."

Here in Paris, we Americans sleep soundly - even at our
desks. But all around us, heaving, tossing and
turning...Europeans must fear for their money.
Will they switch from polyester to tweed...if only to
sleep more soundly? We think so.

Zzzzzzzzz,

Bill Bonner

misetich

(07/31/2002; 16:18:40 MDT - Msg ID: 81978)

Summary of Commentary on Beige Book - July 2002

http://www.federalreserve.gov/FOMC/BeigeBook/2002/20020731/default.htmSnip:

Labor markets were characterized as slack but relatively stable in most Districts; New York and Kansas City indicated some softening, but Richmond noted modest improvement. The pace of wage increases generally remained subdued, but many Districts noted continued escalation of non-wage benefit costs, most notably health insurance. Prices of raw materials were generally stable, though prices of steel, plastics, and lumber have risen noticeably. Prices of finished goods and services were generally flat.
............

There were spotty reports of increased hiring in particular occupations, such as engineers, skilled nurses, skilled construction workers, and mortgage processors. While most Districts indicated little change in labor markets, New York and Kansas City reported some softening since the last Beige Book, and most contacts in the Cleveland and Minneapolis Districts indicated that they had no plans to increase hiring.
...............
However, there were widespread reports of escalating non-wage benefit costs.
..............

Prices for most goods and services were steady, with the widely noted exceptions of insurance (particularly health insurance), building materials (particularly lumber), steel, plastics and paper.
**************

Misetich

Costs are rising - inflation remains "subdued" - corporations earnings also remain "subdued"
Hirings remaain 'subdued"

It is this type of report that must make Walter Mitty's graduates - O'Neil, Greenspan, Bush, Lindsay - optimistic

Will foreingers keep on pouring funds in the US? Will they disinvest US stocks and bonds?

Got gold?

ski

(07/31/2002; 16:19:25 MDT - Msg ID: 81979)

Help please

Hello everyone, Duty calls and I have been in the wilderness for the past week and a half. I have noted that the POS has taken a severe dive in recent days. Could someone briefly tell me what happened as I am expected back and don't have time to do any digging now?? Thanks

misetich

(07/31/2002; 16:34:45 MDT - Msg ID: 81980)

Pimco giant Bill Gross sours on corporate bonds-and worries that companies' inability to affordably raise cash threatens the health of the U.S. economy.

http://biz.yahoo.com/rc/020731/financial_pimco_gross_2.htmlSnip:
By Jonathan Stempel
NEW YORK, July 31 (Reuters) - The world's most powerful bond mutual fund manager has soured on corporate bonds, and worries that companies' inability to affordably raise cash threatens the health of the U.S. economy.
Gross, a managing director at Pacific Investment Management Co. in Newport Beach, California, says he bought corporate bonds too soon, and got singed.

"We ... make mistakes -- witness our premature entry into energy and telecom bonds in order to cyclically increase our corporate debt exposure," he said in his monthly investment outlook, completed before Tuesday and posted on Pimco's Web site. "We at least have the common sense to recognize a long-term sucker's bet when we see one.

The $3.9 trillion corporate bond market, he said, "is close to full tilt, half frozen.... It's just fair warning that with a tilting corporate bond market, the economy itself may not be far behind."

................
TOO EARLY

Gross worried that corporate bond yields may need to rise because lending banks have changed from being risk takers to risk avoiders.

"The banks' retreat from the corporate lending arena has left a void that will take time and higher yields to fill," he said.

He said he still likes the investment-grade bonds of Sprint, the No. 3 U.S. long-distance phone company, though their price had fallen to 60 cents on the dollar from 95 cents. Sprint's 10-year notes rose to about 76 cents on Tuesday after the company said it obtained a $1.5 billion bank credit line.

Though "double-A" consumer products giants Gillette Co. (NYSE:G - News) and Procter & Gamble Co. (NYSE:PG - News) this week sold bonds yielding less than 4.4 percent, Gross said many lower investment-grade companies would have to shell out double-digit yields to sell bonds, while even some high-rated companies may have trouble selling.

This, he said, might sour financial markets and hurt the U.S. economy, making it harder for Federal Reserve Chairman Alan Greenspan to maneuver, with short-term interest rates already at a 40-year low.

****************

Misetich

Lets repeat that again shall we:

The $3.9 trillion corporate bond market, he said, "is close to full tilt, half frozen.... It's just fair warning that with a tilting corporate bond market, the economy itself may not be far behind."

Banks and bondinvestors have become RISK AVERSE -

How much more can the financial system take without succumbing?

Got gold?

Rock

(07/31/2002; 16:35:07 MDT - Msg ID: 81981)

Thanks for the feed-back Blade.

I know what you mean when you say you want to get paid what your worth. But like yourself I could afford to take the hit in salary to change careers at least for now. Nothing like a little extra time off however to take care of oneself. Not everyone can afford such a luxury as most Americans have to get right back into the system to keep those bills paid.

I'm by no means rich either, I'm just your average joe sixpack. I live simple like someone here at the round table once said. I learned to live within my means and the way I set up my program was to be able to operate at full capasity on either the wife or my income. That way if an accident or layoff were to occured with one of us we would be covered thus avoiding the panic button.

When my wife lost her job she bounced right back into the market like Robot Guy's intending to do. She started back looking for work immediately, even applying for positions she had never held before. She was probaby back to work within 2 weeks after she got the ax starting out part time at one company with free training then after getting experience in a new trade she went full time at another bigger company where got paid more and had gobenifits.

As for me when I was added to the bone pile 9 months ago I enjoyed some special time for myself and I still am. When George W added a three month extension to unemployment benifits I told the wife, guess what honey I got three more months of vacation!

Theres a really good book that I read quite a few years ago written by Vicky Robin and her husband and the book is called "Your Money Or Your Life." True story, Her husband was a big wall street investor and he spoke of how jumping through all the hoops wasn't worth trading off his life for. In other words he had the Mercedes Benz, he lived in an expensive high rise condo in Manhattan, you know the secinaro.

Bottom line after he added up all his expenses against his earnings and so forth and the "time" he spent to keep the ship afloat he said he averaged about $3.00 an hour. Anyway he ended up quiting his job and selling all his material wealth, got a little home and now he rides his bicycle to work down at the corner store. He echos what someone said here, "Live Simple," you'll sleep better and live a more riching an more enjoyable life.

It was really a good book the way he crunched the numbers and all but since I read that book over 7 years ago I can't remember some of the other details. What I really took from that book is to live within your means and don't keep adding to your toy pile unless you can afford to pay it up front because working as a slave to the banking system to make those credit card payments isn't worth it.

Take care,

Rock

R Powell

(07/31/2002; 17:21:42 MDT - Msg ID: 81982)

ski

Concerning POS,
Only new fundamental change is that the silver purchace bill for government buying for the coin program was signed last Tuesday. USA has become a buyer after years of supplying the mint from stores built up after WW2.

The breakdown in price is probably the trend following big speculative fund managers bailing out of what was an extremely large long position. We may see this continue until this selling is exhausted, hopefully soon.
What wilderness is entertaining you?
Watch that dome of high pressure over heartland America. Drought?
Rich

silvercollector

(07/31/2002; 17:45:15 MDT - Msg ID: 81983)

Towny

Canuck is out of town for a couple weeks, was talking to him today. He wants to know if the deal is a go?

silvercollector

sector

(07/31/2002; 18:17:09 MDT - Msg ID: 81984)

Accounting controls on EU budget 'unreliable'

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028126224771&p=1012571727085Financial Times
By George Parker and Francesco Guerrera in Brussels
Published: July 31 2002 21:56 | Last Updated: July 31 2002 21:56

Accounting controls over the European Union's � 98bn budget have been criticised as insecure and unreliable in a scathing leaked paper from the EU's court of auditors.

The paper, obtained by the Financial Times, supports claims made by Marta Andreasen (pictured), the Commission's former chief accountant who was acrimoniously removed from her post in May after four months.

++++++++++++++++++++++

The whole European Union appears to be as corrupt as Wall Street, the US Treasury and the Federal Reserve.

It should come as no surprise to anyone here.

Ms. Andreasen must have made the fatal mistake of having integrity and telling the truth...too bad for her!

misetich

(07/31/2002; 19:06:50 MDT - Msg ID: 81985)

Foreigners sell Japan stocks in July; repatriation

http://www.forbes.com/newswire/2002/07/31/rtr682968.htmlSnip:

TOKYO, Aug 1 (Reuters) - Foreign investors were net sellers
of Japanese stocks in July for the first time since February,
Ministry of Finance data showed on Thursday, as U.S. institutions
repatriated funds to make up for losses on Wall Street.

The ministry said foreign investors sold 227.3 billion yen
($1.90 billion) of Japanese shares during the week of July 22-26,
bringing their net selling so far in July to about 402 billion
yen, with three trading days remaining.

The latest weekly figure was about 10 times the net selling
in the previous week when foreign investors dumped 21.2 billion
yen ($177 million) of Japanese stocks.

"I think this shows one of the driving factors behind the
dollar's rise to 120 yen," said Soichi Okuda, senior economist at
Aozora Bank. "There is no other reason to describe the jump."

****************
Misetich

We wait patiently for the next leg down in US stocks! More ammunination is being consumed -

They are fighting the markets and economic conditions!

Got gold?

Waverider

(07/31/2002; 19:10:25 MDT - Msg ID: 81986)

Rock, RobotGuy, Black Blade

You guys are amazing, and I sense the fortitude yet the resiliency of a willow tree in all of you. Your stories today remind me of a book I recently read - "The Alchemist" by Paulo Coelho. It's a short little novel set is Spain, Tangiers and the Egyptian desert, and is about the wisdom of listening to and following our hearts and dreams, and reading the omens strewn along life's path. What does this have to do with Gold? Everything and nothing...many of the Golden Treasures in life have nothing to do with the physical... Cheers!
Waverider

Black Blade

(07/31/2002; 19:12:05 MDT - Msg ID: 81987)

Mirant Made Accounting Errors

http://www.washingtonpost.com/wp-dyn/articles/A23452-2002Jul30.html
Energy Trader Hires Law Firm to Review Bookkeeping

Snippit:

Energy producer and trader Mirant Corp. said yesterday that "mistakes" in its 2001 financial statements caused it to overstate assets and liabilities for that year by as much as $253 million. Mirant said the company may have overstated natural gas inventories and accounts receivable -- both assets -- by $85 million and $68 million, respectively, last year. It said it also may have overstated accounts payable, a liability, by $100 million. The company noted that the amounts "represent a fraction of Mirant's $22.8 billion balance sheet."

Black Blade: Another one is begging off the August 14Th deadline by restating earnings. And the big revelation � "nonexistent natural gas reserves"!!! How many other natural gas companies have done the same and leave the US exposed to a potential energy crisis late this year or early next year? Apparently Enorn also had "phantom" NG supplies as well. Let's see here, "phantom" NG supply for "Phantom" trades for "phantom" offshore companies".Hmmm�

You don't think that the Gold traders are doing the same thing do ya? Nahhh..... ;-)

misetich

(07/31/2002; 19:16:26 MDT - Msg ID: 81988)

SEC attacked anew over auditor conflicts of interest

http://www.forbes.com/newswire/2002/07/31/rtr682870.htmlSnip:

WASHINGTON, July 31 (Reuters) - Dealing another blow to the besieged U.S. Securities and Exchange Commission, Democratic Rep. Ed Markey on Wednesday branded the regulator "inconsistent" and "dead wrong" in its handling of IBM's (nyse: IBM - news - people) bid to buy PricewaterhouseCoopers Consulting.
The Massachusetts congressman said PricewaterhouseCoopers should not have been allowed to serve as the computer giant's auditor while the two companies were negotiating the purchase of PwC's consulting arm.

"This ... is contrary to the 'get tough' attitude coming out of the SEC and only deepens investors' skepticism about the integrity of the financial information they receive," Markey said in a statement.
.............
But Markey said the agency had undermined its own efforts, just one day after President George W. Bush signed into law a bill limiting the range of consulting services auditors could offer their clients.

"Today we learn the SEC allowed an auditor to offer its client an entire consulting company. The SEC's decision was dead wrong," the congressman added.
...........
In buying the consulting arm of the world's largest accounting firm for $3.5 billion in cash and stock on Tuesday, IBM made its largest ever acquisition.

But Armonk, New York-based IBM is paying only a fraction of what its competitor Hewlett-Packard Co. (nyse: HPQ - news - people) bid in 2000 for the unit -- $18 billion -- before pulling out of talks.

Markey noted that PricewaterhouseCoopers was Hewlett-Packard's accountant during the 2000 maneuverings but in that case both companies had decided the audit firm could not be considered independent.

"The SEC's recent decision is inconsistent with the position the Commission took when PwC was negotiating with ... Hewlett-Packard, which calls into question its intention to aggressively monitor accounting industry practices," he said.

*************

Misetich

The more things change the more they stay the same. Pitts will soon join the Bone Pile!

Got gold?

Black Blade

(07/31/2002; 19:32:14 MDT - Msg ID: 81989)

SMOKING MEMO

http://www.nypost.com/business/53726.htm

Snippit:

Handwritten notes revealed at a congressional hearing yesterday seem to show senior Merrill Lynch officials were aware that a deal they cut with Enron was helping the now-defunct energy trader cook its books. Merrill Lynch's senior finance chief James Brown wrote on Dec. 12, 1999 that Merrill's tentative deal with Enron to invest in the so-called Nigerian Barge power generators represented "reputational risk i.e. aid/abet Enron income stmt [sic] manipulation." The note was scrawled on a fax cover sheet by Brown, just days before the deal was inked that handed Enron a cool $12 million for their bottom line. "The document is extremely damaging. It's a memo that is potentially incriminating," said John Coffee, securities law professor at Columbia University School of Law. "The documents showing that Merrill Lynch executives foresaw the risk that could be viewed as assisting Enron's fraud could lead prosecutors to say this is a knowing violation," Coffee added.

Black Blade: There's also a video taken by Merrill Lynch of former CFO Fastow giving a presentation on how to scam the cash offshore. It looks like Merrill Lynch is dead in the water if the Governmnet wants to pursue this, however, as large contributors of bribes, �.er, I mean campaign contributions, I wouldn't expect much more than a slap on the wrist for Merrill Lynch. In fact, ML shares were up for the day. Hmmm�

steady

(07/31/2002; 19:34:10 MDT - Msg ID: 81990)

i have a question!

I have read heard, that many companies have off balace book transactions. that got me thinking, if a company does it whats to keep a government from doing it. So is it possible governments do off balance sheet transactions? now if a government does do that, what would keep it from printing money off balance sheet for financial gian or even terror. Many currencies are not strong enough to compete directly with the dollar , but some can compete/dominate/influence curencies that are weaker than there own. i guess what im getting at can a government work to attack a currency to devalue it? u know just like how the feds intervien just enough to kick start the momentum on the stock market to trigger buying, why not do the same but in the opposite way with others currency ? if so could that be what is happening in s.America some foreign entity bent on the destruction of the us dollar attacking it indirectly by causing the domino effect in south america? heck why worry about the monroe doctrin,and the roosevelt coralary to it when u dont even need to send anyone over there just have the presses runnin to provide the ammo,and enough traders to short or do whatever they do to make it the notational value of a currency fall enough to cause failure and bingo, there goes the south america, one right after the other and the props holding the imf and the fed together disapear and its exposed for what it really is a ponzi scheme Is this possible? i would think it is when u really are dealing with monopoly money! just asking. does this sorta thing happen?

PH in LA

(07/31/2002; 19:34:22 MDT - Msg ID: 81991)

Two Years Into the Worst Financial Crash in History

http://www.larouchepub.com/other/2002/2929two_yrs_crsh.html
"With the worst financial and economic collapse in history now playing out with thinly veiled hysteria in the daily media reports, it is useful to remind your neighbors that what is happening is the tragic culmination of a process�economic, political, and cultural�which has been playing out for three decades...

"We are now two years into the worst market crash in world history, with the major stock markets already down some 50% from their peaks in 2000. The markets are now back to their 1997-98 levels, but carrying half a decade's more debt, leverage, and speculation. In market terms, we have crossed the peak and are now headed down the back side of a very steep mountain. How far and how fast we fall, is largely a matter of actions taken, or not taken, on fundamental economic policy. As long as the Bush Administration and the Federal Reserve maintain their Hooveresque "the economy is fundamentally sound" stance, we can expect sharp plunges, punctuated by futile attempts to bail out fictitious and unsalvageable market values.

"...The U.S. stock market bubble was actually a global phenomenon, financed in part by huge flows of investment capital into the country. Money poured into the United States during the go-go 1980s, though that flow ebbed a bit when the U.S. banking system went under (the Fed secretly took control of Citicorp and arranged shotgun marriages for the big banks) after the real estate market collapsed. To save the day, the financiers unleashed the derivatives market, unpayable debt was rolled over, and financial deregulation escalated. Changes in the tax codes allowed money that previously would have been paid in taxes to instead be gambled in the markets, and corporations used money that should have been invested in their business activities to support their stock price. The bubble soared, but the physical economy suffered, as health care, education, transportation, goods production, and research and development were all choked back in order to feed the bubble..."

slingshot

(07/31/2002; 19:47:57 MDT - Msg ID: 81992)

Seige Engine

Gold above $300.00There was nothing more to do except retire for the day. Each side knew what tommorrow would bring.War councils would be convened, stratagies planned and orders issued for the battle. Fires burned bright into the night. Men sharpened their swords and inspected bow strings and arrows. When they were finished they gathered around the fire to tell stories and watch the embers rise into the night sky. Laying down to sleep, many would think to themselves of all the events which brought them here, wondering if is was worth the endurance of this tribulaton.

Before dawn the Goldbugs awoke. In the dark near the edge of the forest, they would wait for early light to show their presence. Battle preparations complete, all that was left to do was step into history.

The cool of the morning air was pleasant, but the heat of the day was forthcoming. Knights on horseback come from between the trees and men followed them. Banners unfolded and they waved on the breeze.
A single Horseman had come out in front of the line of men.
The rider turned. Sir Howe, stood before them. Taking a moment to look at his army, then spoke.
" We have come here today to fulfill what is in our hearts. It is that cause that binds us together and makes thirst for victory. Make no mistake, some will die, while others will live, but all of you will be remembered. We will discard the yoke of lies and broken dreams. So breathern, strike with your sword a mighty blow and may your arrow hit its mark.
For we have come to FREE GOLD!

Instantly, the battle cry , FREE GOLD, FREE GOLD, filled the air.
Sir Howe was then joined by Sir Murphy and Sir Powell. They looked into the faces before them and their mens eyes told them the men were ready for battle.

After a small conference, a messenger was dispatched to the Lord of the castle.
Under a flag of truce, the rider arrived and asked for the Lord of the Castle,
" What is you message?"asked the Lord.
Sir Howe, asks that you Free Gold from its chains and give back to the people what is rightfully theirs.

"Tell Sir Howe, my answer is still the same", Said the Lord.

The rider swung his horse to return and as he started to ride back. The Lord of the Castle said to an archer, "Kill Him"

The archers arrow took flight, hitting the unsuspecting messenger and he fell from his horse in to the emerald field.

"That should convey our answer firmly don't you think?", said the Lord of the Castle.
The riderless horse reached the lines of the Goldbugs.

A single arm was raised and with a forward motion lowered.
The first row of men stepped forward silently.
After some distance from the trees, a second row appeared and moved forward.
And again a third line appeared.

The army of Goldbugs were now crossing " The Field Of Years"
So named for the years Gold was held in chains.

Black Blade

(07/31/2002; 19:59:22 MDT - Msg ID: 81993)

Market Wrap Up - Puplava

http://www.financialsense.com/Market/wrapup.htm

Three BIG Words: Revision, Recession, and Intervention

Snippit:

Three words can best describe today's markets: revision, recession, and intervention. The morning began with the government's report on GDP for Q2 and the revisions for years 1999-2001. First a look at the Q2 numbers which show the economy has weakened considerably from the first quarter. The rate of economic growth slowed down to only 1.2% versus economists� estimates of 2.4%. In addition to the slump in economic growth, another report by the Chicago Purchasing Managers Index for July showed a sharp drop in manufacturing activity. The Chicago CPM Index fell to 51.5% from June's 58.2%. A reading below 50 indicates the economy is contracting. Like the GDP numbers, which fell short of expectations, the CPM Index came in far lower than expected.

In addition to these numbers, the Fed's periodic Beige Book report showed the economy expanding modestly and unevenly across the country. The Fed used words such as "stable," "steady," "modest," or "moderate" to describe economic conditions. Four of the Fed's districts in New York, Boston, Atlanta and Dallas show that economic activity is tapering off. Six other districts reported marginal growth; while only two regions of the country, Cleveland and St. Louis, showed signs of growth. Retail sales are mixed, and in most regions of the country there are visible signs that consumers are starting to retrench on their spending plans. Labor markets are weak and real estate was mixed.

Other snippits:

We are now in a corrective process that is taking some of the froth out of the gold markets from second quarter. Once these excesses have been taken out, and gold has been transferred from weak to stronger hands, the stage is set for the next advance of what I believe will be a decade-long bull market. At the moment, gold and silver are climbing a wall of disbelief by both bulls and bears. By fall, and finally by winter, much of this disbelief will turn to conviction. There is nothing like a strong price move to new highs to create new converts. A spike in prices is going to depend, to some extent, on what happens to the dollar and Treasuries. If they both plunge, which I suspect they will, then you are going to see some very large gaps in the price of gold and silver.

Wall Street was jubilant that the markets finished on the plus side given all of the negative news. Just a sample listing of a few of the stories: economy begins to slump, economic numbers revised lower, Adobe sales drop for the fifth straight quarter, Brazil's currency plunges on debt default concerns, Allianz abandons profit forecast for the year, Verizon loss widens, Cooper Tire sanctioned for withholding documents, AOL Time Warner hit by 2nd Federal probe, Democrats covering up for Rubin, suicide bomber kills seven in Jerusalem, and Saddam Hussein in process of acquiring nuclear bombs. Given all of this cheerful news, the markets staged one of those miraculous last hour recoveries as it went out for the day in glorious fashion on a huge number of statistically improbable up ticks. Whoever was buying didn't care about the price. They were just buying in a maniacal fashion. So we went from one up-tick to another, rising like a submarine desperate for air until the markets finally went positive.

Black Blade: Tonight's update is well worth reading for a feel of the lunacy in today's markets. The PM markets are still surprisingly strong in spite of the strength in the US dollar and the rising stock markets. However, these rising stock markets are trading in a very bizarre manner and I suspect that something is definitely not kosher here. The market trading has taken a different tone since Dubya gave his "The Markets Will Rise" speech a couple of weeks ago, and sure enough the markets rose in spite of horrific revelations of fraud, downward revised data, piss poor earnings (or even no earnings), grim corporate outlooks, scandals galore, continued geopolitical tensions and terrorist acts. I also have noted the very strange sudden upsurges in market index futures activity prior to the market opening on Wall Street. The markets are defying all the fundamentals with jerky spikes and up ticks as though one major investor was running the market action. There appears to be no pretense of these major players for covering their tracks anymore. Very bizarre indeed.

Boxman

(07/31/2002; 20:10:05 MDT - Msg ID: 81994)

AOL's second federal probe for the second time in as many weeks

http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1277805NEW YORK (Reuters) - AOL Time Warner Inc. AOL.N has been targeted in a federal probe for the second time in as many weeks, disclosing on Wednesday that the U.S. Department of Justice has started an inquiry into accounting practices at its America Online division.

It will be interesting to see the spin on this. If they are real creative, the market will move up (Not)

Waverider

(07/31/2002; 20:15:55 MDT - Msg ID: 81995)

Steady

I hope that someone with more understanding of the international markets than what I have responds to your question, but I'll just add this little tidbit from Keynes, "The Economic Consequences of the Peace" 1919

"...by a continuing process of inflation, governments can confiscate secretly and unobserved an important part of the wealth of their citizens...There is no subtler, no surer means of overthrowing the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction and does it in a manner which not one man in a million is able to diagnose".

I think your proposal has some validity...and that diagnostic ability quotient could stand some improvement - yes? Cheers,
Waverider

Boxman

(07/31/2002; 20:27:13 MDT - Msg ID: 81996)

Martha Stewart may be grilled.

http://www.nydailynews.com/news/story/7202p-6694c.htmlThe congressman leading the probe into the ImClone insider-trading scandal said yesterday he wants to grill Martha Stewart - but not at a public hearing.

Boxman- She saved herself $240,000.00 by dumping her ImClone stock, and her net worth has dropped $300 million due to her company stock being cut by more than 50% as a result of the disclosure. If it is proven that she was forewarned of ImClones problems, this may go down in history as one of the most idiotic financial and personal blunders of all time.

There are still some people that the country and even the world admire so much that they cannot afford to make even small mistakes. The big mistakes will make them irrelevent and the object of derision for the rest of their lives. Martha may just be one of those personalities.

Golden Bear

(07/31/2002; 21:08:17 MDT - Msg ID: 81997)

slingshot (msg#: 81992) Siege engine

Sir slingshot,

Simply wonderful storytelling... keep up the good work.

Cheers.

Waverider

(07/31/2002; 21:19:55 MDT - Msg ID: 81998)

If I may....Siege Engine cont...

The horse had arrived without its messenger, for he lay face down and wounded in the emerald field. Blood oozed from his wound but he was still alive...he turned his head...he saw the sun blazing down on him as he drifted in and out of consciousness. It hurt to breath but he was determined to rejoin his men..."Think...clearly...what to do?" Suddenly, from the periphery of the battle field a solitary figure on horseback flew at a full gallop towards the messenger. Her thick black hair blew in the wind and matched the grace of the horses mane. She provided support to the army, tending to the wounded and providing encouragement when circumstances seemed bleak. She couldn't stand the sight of the messenger lying helpless in the field and knew she had to assist him, being closer to him in physical proximity than anyone else. As she approached the messenger, she reined in her horse and jumped to the ground in a single, fluid action. The sudden gust of wind aroused the messenger and as he opened his eyes she was already assisting him to his feet. With a sudden surge of strength she hoisted him across the front of the saddle, being careful not to disturb the arrow lodged in his back. She positioned herself behind the messenger, knotted her reins, and secured him with only her hands. The arabian mare turned in an instant and galloped back towards the edge of the forest. They had escaped...the messenger would survive...and now she had to focus on how she would remove the arrowhead...

slingshot

(07/31/2002; 21:37:33 MDT - Msg ID: 81999)

Waverider

Siege Engine Wonderful.
What took you Ladies so long? I knew sooner or later you would chime in. Your part of the story is so fluid. Mine is kinda herky jerky. The battle has just begun and plenty of twists and turns will be involved.

Think I can make a living as a writer? :0)
Slingshot-------------------<>

Black Blade

(07/31/2002; 21:46:23 MDT - Msg ID: 82000)

Alcoa Cutting U.S. Output, Sees Charge

http://biz.yahoo.com/rb/020731/minerals_alcoa_7.html
Snippit:

NEW YORK (Reuters) - Alcoa Inc. (NYSE:AA), the world's No. 1 aluminum producer, on Wednesday said it would idle or eliminate production at three U.S. plants, cutting 377 jobs, because of high energy and labor costs.

Black Blade: Let's see, this is Paul O�Neill's old company and he is telling us that the US economy is just humming along in grand fashion. I wonder if he sold all his Alcoa shares yet. Hmmm�

Black Blade

(07/31/2002; 21:57:39 MDT - Msg ID: 82001)

Williams in talks to avert bankruptcy

http://biz.yahoo.com/ft/020731/1028126229150_2.html
Snippit:

Williams was in talks late on Wednesday with Lehman Brothers and MidAmerican Energy on ways the US energy trader could obtain secured financing to meet $800m (�510m) in debt payments this week and stave off bankruptcy, according to those close to the talks. Oklahoma-based Williams has been seeking a $1bn secured bank loan after failing last week to renew a $2.2bn bank line, leading ratings agencies to downgrade its credit to below investment grade. If Williams fails to make the payments, analysts expect it to be forced to seek bankruptcy protection from creditors.

Black Blade: Another one close to the abyss. Perhaps this one too will bite the dust. It looks a little shakey. With all these bankruptcies, earnings restatements, and scandals galore, where is the second half recovery that the primates trotted out on CNBC and CNNfn have been touting for the last three years? Perhaps the media will get silverback Abby Jo to drag her knuckles across the stage floor to an open mike at CNBC to tell us how the S&P 500 will reach 1350 by year end. Hmmm�

Black Blade

(07/31/2002; 22:31:54 MDT - Msg ID: 82002)

Colombian banks exercise dollar options

http://biz.yahoo.com/rf/020731/markets_colombia_options_1.html

Snippit:

BOGOTA, Colombia, July 31 (Reuters) - Financial institutions have exercised the remaining $63 million out of $180 million in dollar-purchase options auctioned this week by the Central Bank, the Central Bank said Wednesday, in an announcement that could herald more intervention to support the peso.

Black Blade: Another SA country on the verge of economic collapse. The FARC has the advantage in the country side, minor right-wing paramilitaries hold small pockets, and the government is confined to the cities. Looks like a country about to collapse both politically and economically.

Gandalf the White

(07/31/2002; 23:31:15 MDT - Msg ID: 82003)

The Hobbits wish to be Agents on this "Serial".

"Siege Engine" (A Serial of Many Chapters !)
NOW with both Sir Slingshot and Lady Waverider weaving the story, the Hobbits are going back and gathering ALL the prior Chapters to send copies to the Publishers for BIDS !
(ONLY FREE GOLD Bids accepted of course !)
<;-)

Belgian

(07/31/2002; 23:57:58 MDT - Msg ID: 82004)

@ Steady

Some reflections on your question :
The interventionist FED, colluding financiers, corporations AND the general public...had a fantastic joy-ride, for the past 30 years. Today, the above groups are entangled in a "struggle". An increasing confrontation and conflict of interests. And it is *only* the general public that is "victimized" and will ultimately pay for the joy-ride .
Yes, yes, yes...we definitely landed into a huge monopoly game ! The huge saturation of FALSIFICATIONS cannot be undone or unwinded into an orderly manner. More and more falsifications are needed to cover up for the existing ones.
Some falsifications are exposed but therefore not eradicated...on the contrary, they are given another life.

The general public starts to catch a glimpse of some of the large listings of falsifications. But it are only the minor ones, promoted to be the most spectacular ones. But how does one tell the general public that the biggest "systemic" falsifications are almost perfectly hidden under the one and only paper price of GOLD ? Cooking books and all other creative stuff, means *nothing* against the systemic falsification of the Permanent Currency Depreciations, proliferating relentlessly !

The inevitable attack on Iraq has to be postponed to allow the financial brotherhood to do some *repairing* work. Read cover up and restoration of confidence as to continue the monopoly game. Cynical isn't it ?

Oh yeah...The Breaking point...!? Answer : when financial "fatique" breaks the wings or tail of the joy-flier. When : as the vibrations increase in frequency and amplitude. Is happening now and another try is going on to dampen it, again. One day it want work anymore. This within your and mine lifetime.

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USAGOLD Discussion - July 2002