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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (22184)	10/19/2001 6:29:17 PM
From: The Freep	Respond to of 52237

<< SPX improved a little, gold a lot. NDX still stinks. <g>>> Huh. Unless I'm reading the numbers wrong. . . Commercials increased SPX long by 2000 more than they INCREASED SPX shorts. So they didn't cover, but they did get mildly longer on the index. HOWEVER, just like last week, the commercials got much shorter via the E-mini. Nearly 15,000 contracts shorter than longer. Divide by 5 (each mini is one fifth, correct?) and that's an increase of 3,000 shorts. . . meaning they got mildly shorter this week (VERY mildly) and did not cover. The flip side is that I see the non-commercials got shorter on the full contract (and less long) but longer on the E-mini. They are as conflicted as I am. Hey, wait. . . am I the non-commercials???? While the NDX numbers are still skewed short, the commercials also got longer by 400 contracts and 4000 minis. So that doesn't seem to negative for the week, at least not to me. Thanks all for great posts all week long. the freep

To: Paul Shread who wrote (22184)	10/21/2001 11:50:11 PM
From: Jacob Snyder	Respond to of 52237

October 21, 2001, NYT Time to Look at Stock Options' Real Cost By GRETCHEN MORGENSON In these times of terror, it is gratifying to see a lawmaker stand up against a force of destruction in our midst. Last week, word came that Representative Michael G. Oxley, the Ohio Republican who is chairman of the House Committee on Financial Services, had taken a stand against true evil: the International Accounting Standards Board. His act of bravery was voicing his determination to keep America safe from the proper accounting of companies' stock options. How corporations account for the stock options they bestow, mostly on top executives, may not appear crucial to a nation at war against terrorism. But Mr. Oxley seems to think that America is imperiled if its companies can no longer overstate earnings by misrepresenting their employee costs. Mr. Oxley, who did not respond to an interview request, led his charge with letters opposing an effort by the accounting board to re-examine how companies account for stock options. To Harvey L. Pitt, the chairman of the Securities and Exchange Commission, Mr. Oxley wrote that forcing companies to charge the value of options against earnings would harm American workers "in a profound way." And he urged Paul A. Volcker, chairman of the trustees who oversee the accounting board and former chairman of the Federal Reserve, to focus on other projects that are more likely to bring respect to the organization. After a bruising battle in 1993, the accounting board caved in to corporate lobbyists' demands that stock options, undeniably an employee cost, should not be deducted from revenue as other costs are. Instead, options' costs are relegated to a footnote in company financial statements. That might not be a concern if the largess was not so, well, large. Sanford C. Bernstein & Company, a brokerage firm, estimates that the value of option awards at the nation's 2,000 largest companies was $162 billion last year, up from $50 billion in 1997. Since 1993, studies from Wall Street to Washington have shown that pushing these expenses off the income statement has inflated corporate earnings and misled investors about profits, particularly at technology concerns. Options are also a titanic but stealthy transfer of wealth from shareholders to corporate management. With shares in decline, the tide may finally be turning against stock options. Two of the nation's largest accounting firms, Andersen and Deloitte & Touche, say options should be charged to a company's income statement, and many Wall Street accounting analysts agree. With their options now worthless, some workers are starting to demand cash for their labors. Still, Mr. Oxley fights on against the evil of truth in financial reporting. He appears to be carrying water for the Financial Executives Institute, a lobbying group. These people love options because they make them rich and because their companies reap enormous tax deductions when their employees exercise options. The institute argues that the board's proposal "will create a widespread burden on the business environment" and that adding the expense of stock options to a company's results "would throw off their bottom lines and cause an upheaval in the stock market." So there it is: the mantra of the bull-market-at-any-cost crowd. Telling the truth will cause upheaval in the stock market. Stock prices must be held aloft, even if by lies. Never mind that lying is what really roils stocks. Lying about earnings, costs or rosy outlooks only creates inflated expectations. And as we've learned lately, anything that's inflated tends to deflate. Sooner or later.