Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Baldur Fjvlnisson who wrote (3144)	2/27/2002 4:50:49 PM
From: Raymond Duray	Respond to of 5185

Calling Out Poor Research on Calpine The analyst community is getting grilled in front of Congress today, and they are looking sleazy. Here's an article on a similar situation on what may become the next Enron in the energy sector: thestreet.com <Copy> Calling Out Poor Research on Calpine By James J. Cramer 02/27/2002 03:29 PM EST When people talk about "bad" Wall Street research, they aren't just talking about research on Enron. One stock that has buried more of our readers than just about any other that I have come across is Calpine (CPN:NYSE - news - commentary - research - analysis). And one of the chief capital shredders is Neil Stein from Credit Suisse First Boston. I don't know Stein from Adam. He must have gotten into the business after I left, or was covering stuff I didn't care about when I was at Cramer Berkowitz. But our readers have been crushed by his calls, and I think it is important to point out that throughout this hideous downturn in Calpine, Stein has reiterated his strong buy. All the way down. Even as he has cut his target price repeatedly. When I read this horror story, I said to myself, "Bet CSFB was the underwriter." Sure enough, when I checked who did Calpine's four deals in the last six years, Credit Suisse was the underwriter for all of them. To read through a year's worth of this guy's research would make you feel like he was just completely in the pocket of management. Which brings me to the point: I can handle how wrong Stein was, even though I am surprised he hasn't been drummed out of the biz yet. What bothers me is that the most important piece of information in all of Stein's bullish missives, the single most salient point, was buried at the end of every piece in a language that was meaningless, in a typeface that is hard for this old guy's eyes to see: "Credit Suisse First Boston Corporation may have, within the last three years, served as a manager or co-manager of a public offering of securities for" Calpine. Here's a cure for all of this: You slap Stein's stuff with a big red stamp at the top that says "We are Calpine's banker." Then I would feel as if we knew what we needed to know about this unrigorous hack's work. We could make an informed judgment. And we would all do much better in the end. Even Stein! I'd be praising him for his honesty and subservience to his most important clients rather than criticizing him! Hoo-hah!

To: Baldur Fjvlnisson who wrote (3144)	2/28/2002 11:14:40 PM
From: Mephisto	Respond to of 5185

Wow! That is rare. And the former analysts worked for JP Morgan. Hmmm.... Makes you wonder.

To: Baldur Fjvlnisson who wrote (3144)	2/28/2002 11:15:07 PM
From: Mephisto	Read Replies (1) \| Respond to of 5185

Workers' two-faced friend By Leonard Steinhorn Originally published February 26, 2002 The Baltimore Sun Sunspot. Net WASHINGTON - Almost daily, newspaper readers are greeted with vivid photos of President Bush surrounded by firefighters, police officers, soldiers, young people or blue-collar workers, all of whom are beaming in the presence of a confident president who is leading us in the war to avenge Sept. 11. But I wonder if they would continue beaming if President Bush told them his economic policies are sticking them with the short end of one of the greatest transfers of wealth in American history, from working Americans to the very rich. Would these proud and loyal Americans keep smiling if they learned that only the very rich will benefit substantially from the president's tax cuts, that the money used to pay for them is coming from the Social Security trust fund and that the resulting IOUs will come due when baby boomers start to retire in about 10 years? Would they continue beaming if they learned that the only way to pay it all back is by raising their taxes, shrinking their retirement benefits or forcing them to work more years and retire later in life - a back-door tax the rich will never have to pay? Would they keep beaming if they learned that Mr. Bush's deficits may push up interest rates, which translates to higher mortgage, car loan and credit card rates that will wipe out the measly few hundred dollars that most middle Americans will receive from the Bush tax cut? So while the wealthy bathe in dollars they didn't need, the firefighters, police officers, soldiers, young people and blue-collar workers beaming with the president will be handed the bill. To be sure, the Bush White House isn't the first to make such cynical use of photo opportunities. President Bill Clinton surrounded himself with African-American women when signing a welfare reform bill that many civil rights groups opposed. President Ronald Reagan was famous for creating warm and glowing images that contradicted some of the sharper edges of his policies - such as visiting the Special Olympics after slashing programs for the disabled, or cutting the ribbon at a senior citizens' home after reducing funds for the elderly. Indeed, Mr. Bush's handlers would be remiss if they failed to create images of the president surrounded by young people and patriotic Americans. As communications experts, that's their job, and after all, the president is a politician who craves public support and wants to appear as Middle America's friend when he runs for re-election in 2004. But it's a cynicism that will haunt American politics when the good and faithful people who believed the president was on their side wake up in a decade or so and realize that the joke was on them. President Bush campaigned for president saying he would do things differently in Washington. In truth, he's simply doing them better. Leonard Steinhorn, a former political speechwriter, is an associate professor of communication at American University. Copyright © 2002, The Baltimore Sun sunspot.net sunspot.net