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To: rudedog who wrote (167387)	10/5/2001 2:13:13 PM
From: stockman_scott	Respond to of 176387

Want Fiscal Stimulus? Simplify Taxes Friday October 5, 8:29 am Eastern Time BusinessWeek Online Daily Briefing: SOUND MONEY By Christopher Farrell You have to hand it to Federal Reserve Board Chairman Alan Greenspan: Once again, he's showing he knows how to exercise leadership during an economic crisis. The Fed has acted decisively since September 11 by reducing its benchmark interest rate by a percentage point in two swift moves, to 2.5% -- the lowest rate since 1962. And despite criticisms that the nation's central bank is simply pushing on a string, a steady stream of rate cuts all year did keep the economy out of recession before the terrorist attacks. Low interest rates propped up the housing market, a gain that more than offset the losses many investors suffered in the stock market. Consumers also shored up their balance sheets by taking advantage of cheap rates to refinance their mortgages. FAVORED SCHEMES. However, monetary policy is no longer enough to revive an economy plunged into negative growth by terrorism. The key question now is fiscal policy. A consensus appears to be growing among policymakers that any fiscal-policy stimulus package should be more than $100 billion. Congress and the Bush Administration have already hiked government spending by some $45 billion, much of it targeted toward defense and national security. And on Oct. 4, President Bush said he would push for a stimulus plan as large as $75 billion to ``invigorate this economy.'' Now comes the difficult part. Plenty of proposals are floating around Washington, many of them favored schemes of industry and other special interests that are being dusted off in the current environment. Among the most popular proposals: A lower capital-gains tax rate, reduced corporate income taxes, a tax rebate, a temporary cut in payroll taxes, or more likely, some combination of these ideas. Each proposal may have individual merit. But taken singly or together, these maneuvers will only make a far too complicated tax code even more Byzantine. Already, it's full of credits, deductions, exemptions, and income phase-outs, especially after the passage of President's Bush's gargantuan, gimmick-laden tax bill earlier this year. For instance, new education tax breaks that take effect in 2002 expire in 2006; the estate tax is phased out until 2010 but is restored in 2011; and it takes years for families to escape the widely reviled marriage penalty. ELIMINATE INEQUITIES. Why not take the opportunity offered by the nation's need for fiscal stimulus to ditch the mess of the 2001 tax-cut law and create a far simpler tax code instead. Get rid of as many deductions, credits, and phase-outs as possible, including eliminating the distinction between taxing ordinary income and capital gains. Broadening the tax base would allow Congress to sharply reduce income tax rates and get rid of the many inequities that have crept into the code over the years. Congress could act quickly since the supporting data are available -- tax specialists such as Joel Slemrod of the University of Michigan have long studied the trade-offs inherent in populist tax simplification. A concerted push to steer Washington away from the hard-to-track tax-subsidy game would maintain fiscal discipline. Tax simplification would mark a genuine improvement in fiscal policy, and best of all, it would accomplish these goals while stimulating the economy. Go to www.businessweek.com to see all of our latest stories. ___________________ BTW, rudedog thanks for the comments on DELL and a potential acquisition.

To: rudedog who wrote (167387)	10/9/2001 2:00:52 PM
From: stockman_scott	Respond to of 176387

Inventory Reduction Myth Cramer says Demand is Down - Debunking the Inventory-Reduction Myth By James J. Cramer 10/09/2001 09:58 AM EDT Here we go again with this inventory-reduction rap. You hear it from all these tech companies that refuse to accept that there might be a secular retrenchment in tech, not an inventory reduction. We have been stuck with this thesis for some time, a belief that there is simply a big stock of tech inventory out there, and once it has been worked off, everything will be hunky-dory again. How can people still believe this Pollyanna tale? If revenues for the industry are fighting to get back to 1998 levels, how can we possibly believe the problem is one of inventory? I will tell you what the problem is: There were 14 phone companies frantically building out worldwide networks. There were 2,000 dot-com companies frantically building out their infrastructures. There were thousands of bricks-and-mortar companies building out their dot-com units. Now that's all history. Sure, we have some innate demand as an economy for information technology, but it wasn't a supply bubble that caused the problems. It was a demand bubble. The fact that we are still debating this inventory issue tells me that we can't trust this tech rally. We can only trust tech stocks that have vanquished foes -- Dell, Cisco, IBM -- and even then, the stocks may be too high.

To: rudedog who wrote (167387)	10/9/2001 3:30:43 PM
From: stockman_scott	Respond to of 176387

Intel Plans "Major Thrust" in SANs Even as doom and gloom prevail over the venture capital industry, Intel Capital says it's still ready to fund startups in the storage networking and optical networking markets. That's the word from Les Vadasz, Intel Corp. (Nasdaq: INTC - message board) executive vice president and president of Intel's investing arm, who spoke with Light Reading after a panel discussion sponsored by Silicon Valley's Churchill Club Thursday night. "We're going to make a major thrust in storage networking -- if not in storage companies, then in the electronics that make storage work," says Vadasz, whose division is a leading investor in optical and communications startups (see Intel Capital Still Looking for Deals). As for optical networking, Vadasz says there's still plenty of investment opportunity ahead, since Intel thinks optical "is still where the semiconductor business was in the 1970s." Vadasz's optimism was a departure from the mood of the rest of the panel, which seemed hell-bent on scaring everyone away from wanting to work at a high-tech startup. Setting the tone for the evening was Bill Meehan, a managing partner with consultancy McKinsey & Co., who opened the discussion with some haunting tidbits from a VC research project McKinsey recently completed. According to Meehan, there are still "thousands of overvalued" startups in VC portfolios, whose valuations "need to come down by 70 percent or more" to match similar public-company valuations. Jos Henkens, a general partner with Advanced Technology Ventures, agrees with Meehan's analysis, saying that "most [VC] firms are still in the process of taking some lumps in their portfolios." He also dashed some cold water on anyone hoping for a return to the dotcom bubble years, when companies went from inception to public offerings before they even had revenues. "The days of the quick buck are over, and they're not coming back," Henkens says. "Also, the days of the billion-dollar exits are over. Successful exit values now are going to be in the range of $200 million or $300 million or, if you're lucky, $500 million." Several panelists said that VCs are hoarding their funds' cash so that their portfolio companies are assured funding for later rounds, which aren't easy to fill in these days. Martin Gagen, CEO of the U.S.-based arm of U.K. investing firm 3i Group PLC, says the result is that "it can feel to the entrepreneurs like the [venture] checkbooks have gone away." To an almost desperate plea from one startup executive, who asked the panel "what might lead us out of this malaise," Vadasz had the most concrete response: "The performance of the Internet, especially in the last mile, is way below what is in our PCs," he said, pointing out that there could still be an entire PC-type industry explosion in Internet technologies. "But unless significant changes occur in the last mile -- and I don't mean DSL, I mean multi-megabit changes -- you won't see the [economic] landscape change." — Paul Kapustka, Editor at Large, Byte and Switch byteandswitch.com