Since I just could not go to sleep last night, I watched live Bloomberg telecast of both the Worldcom hearings as well as Mr. Bush's speech on Congress action items list. I came away with the following conclusions:
a) Worldcom executives knew a long time before the s*t hit the fan that they'll never make it. Yet, they colluded with the auditors as well as WS analysts (wow, they get paid lots don't they, for all that lying) to carry on the hype long after the beer had turned warm, and the internet lights had been switched off. I used to work for PSINet during the boom years (1998-2000) and you knew all this capacity being bought by these new emerging telcos would never be used to earn revenues. Yet, some 2 years later, they were hyping Worldcom merrily, and now, they say, they didn't see anything wrong. As for Messrs. Ebbers and Sullivan, you wonder how they go to sleep on multi-million $ stuffed mattresses knowing that so many employees (esp those poor souls from MCI), were going to lose their pensions and be jobless due to no fault of their own.
b) Mr Bush gave me the impression that he was not being entirely honest, and worse, I don't think he's got the intellectual capacity to either care that the US/world economy is in such deep trouble, or the ability to work the world to recovery again. Merrill Lynch has issued a note this morning saying that they will update a reweight of their stock/bond/cash allocation after watching Mr. Bush today, but I can advise them not to expect anything from him, as he, imho, has a lot of explaining to do on Harken energy....somehow, paradoxically, Mr Clinton was a better liar than Mr. Bush on TV. You could just 'feel' that his hands, in fact his whole body was tainted.
c) Mr Bush was very categorical about taking Saddam out, whatever it takes. This is, I am sure, not good for WS, and the rest of the capital markets.
d) Mr. Bush also strikes me as pretty much a 1 man band, not like Mr Clinton who could easily parade the likes of Robert Rubin, Al Gore, Alan Greenspan, even Madeleine Albright as a credible, winning team Cabinet before the media. The world, somehow, respected them, and better still, trusted them. I can't say the same for Mr. B and his motley crew, who all seem either disconnected, very US-centric, not focused, quite fanatical (that the US, has by definition, knows the right path to everything), warped in their thinking that arms and money can buy/solve everything, and yes, the ultimate insult, that the rest of the folks in Europe, Asia, elsewhere are all naive, stupid and fearfilled because Mr B is always right....
e) the most worrying aspect of Mr Bush's speech is that he has given Congress, before they for their August recess, a list of 'must do's' that is almost certain to be impossible to pass. In addition, almost all of the 'to do' list involves spending mega bucks, at a time when the US Government revenue streams are not looking so healthy anymore, the USD is not as invincible as before, and let's not forget, the world is still a very troubled place....quite frankly, the people I talked to in Europe (French, German, and surprisingly, even the English/Irish) don't seem so impressed about the US, and I don't have to say much for folks in Asia, especially those coming from either Muslim countries, or old world, like China and India.
Gold seems to shine a little more brightly again, and I dare say, after Mr. Bush's speech today in NY, its lustre could get a little more alluring....
What a confusing, difficult world this is turning out to be.....how nice it would be if Mr. Bush and his team could solve everything for us poor, worried souls round the world...even if it were just for the next couple of years, so people like me in their early 50s could ride out into the sunset, and sleep peacefully every night...
Selva |
