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To: James Strauss who wrote (9084)	6/20/2001 2:38:02 PM
From: Bucky Katt	Read Replies (1) \| Respond to of 13094

Jim, yep! I remember posting somewhere here on S/I several times that when the Beanie Baby market starts to suck air, (another one of those seat-of-the-pants-things) the markets will soon follow, and I took my own advice, like when NEWP was $171.00...........and you know how I did in the indexes.....that was also around the time I started looking to go long natgas futures, and that whole sector. I'd like to find another ROYL, thought I would have it by now with some of the other ratdogs, no dice yet. I still hear some of these street analyst people saying now we will see the recovery in the 3rd & 4th quarters. I think they need to realize this year is done, and they may end up selling used Ford Explorers in the Bronx. Sure, we will get some nice tradeable spikes, and the flipside troughs, but a new bull market? They must be nuts. So, just trade what the market will give up...

To: James Strauss who wrote (9084)	6/20/2001 2:50:59 PM
From: Bucky Katt	Read Replies (1) \| Respond to of 13094

Treasury May Have to Borrow to Pay for $38 Bln Tax Cut Payment This is a joke, right? I guess not.... By Liz Goldenberg and Vivianne Rodrigues New York, June 20 (Bloomberg) -- On July 23, the U.S. government will start mailing $38 billion in rebates to taxpayers. The Treasury may have to raise the money before it writes the checks. The slowdown in the economy has resulted in a shortfall of corporate tax revenue. To finance the first installment of President George W. Bush's tax rebate, the Treasury may have to sell more debt. ``It's a double whammy,'' said Anthony Chan, chief economist at Banc One Investment Advisors Corp. in Columbus, Ohio. ``The government is being squeezed by both sides of this equation.'' The government may sell an additional $67 billion worth of Treasury bills by Sept. 30, according to Merrill Lynch economist Kathy Bostjancic. The Treasury may announce today it will also scale back planned reductions in the amount of two-year notes it will sell this month. The tax rebates, part of a $1.35 trillion tax reduction over the next nine years, were to be financed by the nation's budget surplus. The tax package was signed into law June 7. ``The government said it would use the extra funds to pay for the tax cut, but now with the weak economy, it no longer has too much of that extra money left,'' Bank One's Chan said. ``This brings financing problems in the short term.'' Corporate tax receipts that were due on June 15 have fallen 25 percent from last year's levels, according to analysts at Wrightson Associates, a research firm. Treasury Department spokesman Tony Fratto wasn't available to comment. quote.bloomberg.com

To: James Strauss who wrote (9084)	6/20/2001 2:55:00 PM
From: Bucky Katt	Read Replies (2) \| Respond to of 13094

Brazilian co's Hedge Against Declining Currency First Argentina, now Brazil, next? By Jeb Blount Rio de Janeiro, June 20 (Bloomberg) -- Paulo Roberto Ribeiro Pinto, chief financial officer of a Brazilian power utility, is in a bind over the currency. The more the real weakens, the more he has to buy dollars in the futures market for Light Servicos de Eletricidade SA to secure a price for foreign debt payments and dollar-indexed power contracts. This in turn drives up demand for dollars, causing the real to weaken even more. ``About 60 percent of our debt is in dollars and if the currency weakens we have to be protected; we have to buy dollars,'' said Ribeiro Pinto. Demand for dollars from companies such as Light has helped drive the real down 21 percent against the dollar this year. Economists and company executives expect the currency to decline further as the economy slows due to a power shortage and concerns mount that Argentina may devalue its currency. The plunging real will likely force the central bank to boost interest rates today for the fourth time this year to support the currency and stem inflation. Companies such as Light must also pay more to protect against a decline in the real. The cost of swapping for one year an interest rate in reais with a rate of interest in dollars, a common means of hedging against a weaker real, has soared to more than 16.25 percent, the highest rate since September 1999. At the beginning of this year the cost was about 7 percent. ``Those who now have dollar debts and haven't bought hedge are the ones that are desperate,'' said Pedro Thomazoni, head of proprietary trading on the treasury desk of Lloyds TSB in Sao Paulo. Locked in Price Ribeiro Pinto has already locked in prices in reais for more than $200 million of debt payments and dollar-denominated power supply contracts this year in the futures market. Light had about $2.3 billion of dollar debt and no dollar revenue at the end of March. Currency-related charges have sent losses soaring at Light and other Brazilian companies as a weaker real caused the local currency value of debt to soar. Losses since Brazil let its currency float against the dollar in January 1999 have wiped out profit earned in the previous three years by Light. Its shares have lost 41 percent this year in reais and 54 percent in dollars, compared with a decline of 26 percent in dollar terms for the benchmark index. ``We are in a vicious circle,'' said Rodrigo Wanderley, a senior trader at Safic Corretora de Mercados, a Sao Paulo brokerage. ``The more the real devalues, the more companies hedge into next year and the more the real falls.'' Argentine Concerns The real, which is little changed today at 2.48 to the dollar, has plunged 2.3 percent in the last week on concern that neighboring Argentina may default on its debt or devalue its currency. The decline in the real has gathered steam as an energy shortage has forced consumers and companies to cut power usage an average of 20 percent, further slowing growth and foreign investment. ``It's no surprise the real is weakening, the power shortages just cut the legs out from under the economy and the outlook for the future,'' said Ribeiro. Gross domestic product will grow 2.6 percent this year according to a median estimate of 20 economists polled by Bloomberg news. A month ago the estimate for growth was 4 percent. J.P. Morgan Chase & Co. cut its estimate for foreign direct investment in the country in 2001 by almost a quarter to $16 billion from $21 billion. Last year the country attracted $33 billion. With lower expected growth and investment, investors are betting on further declines in the real. Futures Contracts Contracts on the Sao Paulo BM&F futures and commodities exchange, which at the beginning of 2001 indicated the real would reach 2.10 to the dollar at year end, now indicate the real will end 2001 at about 2.62 reais to the dollar.