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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: sun-tzu who wrote (145764)	1/23/2002 10:44:21 PM
From: Earlie	Read Replies (7) of 436258

Sun: Lots of crazy things going on, indeed. Techs up, but IBM continues to slide..... this is a big one for me. I have frequently noted that large fund dough tends to migrate "from the tarnished to the un-tarnished". Looks like IBM could use some Brasso in a hurry. (g) I noted a week ago that that I was tip-toeing back into the swamp. Events of the last few days have changed my mind and I am now wading in. Why? Because the Enron fiasco is an earthquake ripping across the investment landscape. Neat coincidences are amplifying its impact. SEC's "get-tough-on-proforma-accounting" couldn't have come at a better (worse if you are long) time. The Q4 numbers have been a parade of just such slime and either the SEC blinks or the reporting issuers are forced into an orgy of near term "mia culpas". Q1 numbers are already destined to be worse than ugly, so I think the Q1 warnings period will be the worst we have seen for decades. The SEC is now in a position where it must be seen to be aggressively targeting the "pro-formers". The SEC won't blink on this one, courtesy of the Enron mess. Enron is also a political hand grenade that has every politician from the Canadian border to Mexico staring at the ceiling every night. Even the ones who are clean have to be worried that they get caught up in its trawl net. A bunch of money has been lost and the breadth of the losers is wide. Politicians will be desperate for scapegoats and the SEC is best positioned to deliver bloody carcasses. We have just endured a mad bear market rally of rather epic proportions that has been supported by nothing other than hype, hope and fervent prayers. The Fed is about out of dry powder, the all-important U.S. consumer is tapped and machine-gunned by lay-offs. The PEs are over the horizon. In aviation terms, the stall warning horn is screaming and the artificial horizon is starting to spin. Pull that yellow and black handle and "eject", my friend. Best, Earlie

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