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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (6102)	5/15/2002 11:05:17 PM
From: Raymond Duray	Respond to of 33421

Mike, Re: by accident or design ( IMO) the public has been misled It is unquestionably by design. This nation is suffering a spate of high toned and fancy crooks-in-charge not seen since the late 1920's. Re: It took the SEC too long to follow NY State AG Spitzer in his push to enlighten the public. If you examine the work effort of Harvey "the snake" Pitt more closely, you'll see that his latest self-regulatory scheme isn't following Spitzer's lead but doing everything possible to confound Spitzer's basic instinct toward honesty. The Wall Street Journal and the Financial Times, both bastions of Leftist propaganda as you well know, have both demanded the removal of Pitt from office. Here's an opinion that says it better than I can, though I will say that I have a thorough revulsion at the absolute disregard for honesty and ethical behavior being demonstrated by the present mal-Administration: ariannaonline.com Snip: Surveying the view from his No. 2 perch on the Forbes 400, Warren Buffett, the Grand Pooh-bah of American Capitalism, opened fire with both barrels this month when he told an audience of over 10,000 Berkshire Hathaway shareholders that Wall Street loves a crook, investment bankers don't care about investors, stock-option-engorged CEOs are shameless, and American business is teeming with fraud. Come on, Warren, tell us how you really feel. Cheerio!

To: Mike M2 who wrote (6102)	5/16/2002 8:52:05 PM
From: Logain Ablar	Respond to of 33421

Mike: I agree with you on the public being misled but the public and the press has to share much of the blame (should we bring in the government as well). FASB only recognizes GAAP earnings, not pro forma. The companies started proforma, wasn't it yahoo (although the cable guy's started ebitda)? and didn't analyst and then first call follow. FASB and the SEC have not followed. Wasn't it our government who started this options parade by changing the tax law on deductibility of salaries over $1M unless you could tie it to performance. Lets not forget this move with its "unintended" consequences. This law change coincided with the option explosion of the 90's. As for the S&P wanting to include options as an expense in earnings IMO its a mistake. The day the company gives the grant is the day the options go into the fully diluted outstanding shares in the earnings per share (provided they are in the money). The S&P is now going to put in a later charge when the shares are exercised to match the tax treatment. Isn't this a double economic impact for the same item. I'm not saying the current FASB treatment is right (some compromise between all the parties with a stake) but I do feel the S&P's is wrong. The problem is on day one you grant the option @ the days market price. If the stock drops the employee is out, of course not in todays environment where options are reissued or additional new ones at lower prices, like JNPR, BRCD, TYC to name a few. As for AG Spitzer going after ML you mean its wrong for an investment house to pump a stock as its dumping it out of its funds and own accounts. They've been doing this for years, not just the bubble years. Greed has gotten out of hand. Look @ the accounting scandals where companies didn't follow GAAP. Of course the investment community falls into the same boat. There is no way they did not cross lines as well. OK so part of the gov't role is to enforce the laws and protect the people. Where have they been for the past 10 years. Budgets go to social programs where there are votes (how about the farm bill) not for what the original intention of gov't was / is. The Boeing story in last weeks BW is typical of what goes on in business, not just in the last few years but the last few years became excessive. Tim