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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (149498)	2/6/2002 5:58:49 PM
From: yard_man	Read Replies (1) \| Respond to of 436258

man, that was the shortest friggin rally I've ever seen -- LOL

To: Earlie who wrote (149498)	2/6/2002 6:33:12 PM
From: Earlie	Read Replies (4) \| Respond to of 436258

Earlie from Earlie: A little "heads-up" on one of my fav. targets, IBM. Old Earlie and his band of spies have been hard at work. A few items worth noting. - Will IBM's new CEO just move into the corner office and quietly absorb the heat coming over the horizon as a result of Louis' years of accounting slime? Not likely I am told. Nor do I blame him. It makes plenty of sense for the new guy to both distance himself from Louis' mess as well as lay the blame where it belongs. It also gives him a chance to clean house (always a good idea when one moves into a sloppy scene). I suspect it is just a question of how and when this will occur. - Semi sales suck. More non-announced lay-offs to follow? Sure smells like it. And software sales aren't much better. Mainframe game?..... nasty. PC arena? Yuk. Rev. decline likely?..... Nope, it's assured. - The "Services" business, IBM's much touted route out of the supposed swamp, is starting to be recognized for what it is,..... a brutally competitive game where it is tough to make consequential profit. "Bodies times hours" says it all as far as the cost line is concerned and if the contract bidding wasn't realistic, then follow-on problems pop up like dandelions in spring. Let's say that a big government situation isn't going well. Everybody is "POed" and a large number of bodies and dollars have to be tossed at the problem because the customer is big and tough! Doesn't take long for the expected income to simply get eaten up. And that oh-so-nasty question..... has IBM been taking unseemly percentages of those multi-year contracts up front?...... just won't go away. - Several newspaper reporters are (finally) starting to become real interested in understanding at least some of IBM's accounting chicanery. As more articles come out, more and more bits of the puzzle become public. Pretty soon, even Joe Five-pack sees the neon signs on the wall. In the current environment, this could cause serious problems for IBM's bloated stock price. For years, the company has spent every dime that it has "earned" (the term being applied rather loosely here) on buying back its own stock. Worse, many company assets have also been sold and the resulting cash squandered in this same silly exercise. This process has "hollowed-out" the company's balance sheet to the point where it has to be raising rating agency eyebrows. As revenues and (actual) earnings continue to deteriorate, sooner or later some of the looney institutional investors hiding out in this derelict shack are going to decide to sneak out the back door before the place burns down (I get a peak at this as a result of discrete institutional calls). Another question that is (finally) being asked......How does IBM intend to service its debt load as its revs and profits continue to falter? Quirky accounting can keep the sheep in the dark, but bankers are not so easily misled and are more inclined to "pass questionable (debt) paper back into the market". I could go on and on. Suffice to say that I expect to see IBM come under selling pressure in the near term as the investment world, already gored by the likes of Enron, come to see that Louis has been selling them similar snake oil. Best, Earlie