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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Dnorman who wrote (175)	6/7/2002 10:56:03 AM
From: Jim Willie CB	Respond to of 89467

Eric Fry in New York City on stocks, dollar, gold - After slipping backstage for a quick cigarette break, the "obvious" trades returned to center stage yesterday. The dollar and the stock market both fell, while gold rallied. - Dispiriting news from the technology sector got the stock market off on the wrong foot. Just one day after Oracle's better-than-expected-but-still-bad earnings forecast buoyed the stock market, Intel's worse-than- expected revenue forecast walloped the market. The Dow stumbled ever lower throughout the day to finish the trading session with a 172-point loss at 9,625. The Nasdaq fared even worse - dropping more than 2% to 1,555. - The negative "Intel effect" slugged the market twice yesterday - once before the start of trading and once more after the closing bell. - In the wee hours of Thursday morning, Merrill Lynch analyst, Joseph Osha, issued some downbeat remarks about Intel and several other semiconductor stocks, while slashing his rating on Intel from "strong buy" to "neutral." Osha warned, "With one month remaining and few signs of a near-term PC upgrade cycle, the prospects for sequential growth in the June quarter are quickly fading." - The Merrill analyst also pointed out that the chip stocks he researches sell for an average of 51 times this year's earnings and 32 times 2003's hoped-for earnings, which, he correctly observes, ain't cheap. Osha's downgrade of Intel apparently troubled the sorts of investors who still read Wall Street research and who still care about analyst ratings. The stock fell 4%. - Adding fuel to the fire in which semiconductor stocks were immolated yesterday was a report from the Semiconductor Industry Association predicting that sales in the chip industry would grow only 3.1% in 2002...NOT the 6% growth it had predicted in November. - After the close of trading, news from Intel HQ went from bad to worse. The company announced that its revenue in the second quarter would be $6.2 billion to $6.5 billion - a somewhat lower range than the $6.4 billion to $7 billion of sales that the company had predicted just two months ago. Making matters worse, Intel said its gross profit margin would be only about 49% - falling well short of both its 53% target and the 51.3% margin achieved in the first quarter. - "When you trade at 7.3 times revenues, you can't afford an error," Sean Corrigan, the Daily Reckoning's man-on-the-scene in London, points out. "When you are the market leader, the room for maneuver is even more limited." Intel's stock tumbled another 8% in after- hours trading. Expect the fireworks to carry over into today's trading. See: Capital Insight capital-insight.com - But while stocks were sliding yesterday, gold tacked on another $3.70 to $325.80 per ounce. This, despite the fact that a front page Wall Street Journal story raised the loaded question, "Was That the End of The Gold-Price Rally?" The thinly veiled implication was that gold had no business rallying in the first place. Maybe the Journal is right. Or maybe gold has every reason in the world to rally and just decided to take the day off. - Gold has jumped 17% year-to-date and the XAU Index of gold shares has soared 54%. So a little R&R might be in order. But even if gold naps on occasion, there is plenty of action around to rouse it from its slumber. - The dollar continues to wobble on the clay feet of a yawning trade deficit; the Middle East and the Kashmir border remain geopolitical tinderboxes and US inflation is quietly on the rise. In short, we have nearly ideal "growing conditions" for gold. - Therefore, despite gold's 22 years of heartbreaking performance - an investor might require greater courage (or ignorance of history) to proclaim the end of the gold rally, than to retain faith in its perseverance. We don't know where gold is heading. But our guess is that buying gold is a less bad idea than buying Intel. - "There's an old saying that the market sometimes climbs a wall of worry," observes Tobias Levkovich of Salomon Smith Barney, "but what we've got now is a 'cliff of concern' that's much steeper. Besides the usual concerns about market fundamentals, you've got this big intangible factor of corporate distrust and geopolitical worry." - Well said, Tobias. There is indeed a cliff of concern jutting from the financial landscape. But how do we know that Mr. Market is looking up at the cliff of concern, trying to figure out how to scale it? Just maybe, Mr. Market is standing atop this cliff, about to step off of it. -end-

To: Dnorman who wrote (175)	6/7/2002 11:02:08 AM
From: Jim Willie CB	Respond to of 89467

silver follows gold gold fights the big battles with the dollar they are titanic struggles with political, financial, and war overtones the dollar and gold are in a standoff now allow the titanic struggle to unfold in plain terms it is... gold versus the leader of world fiat currency I cannot think of a larger battle on the world stage esp since the US$ serves as 75% of the world banking reserves silver only did a minor retest of highs perhaps it MUST await the greenlight from gold watch gold, not silver really watch gold vs dollar today is friday, and I doubt much will happen they are standing off but take comfort the dollar is repeatedly closing under critical support of 111.8 day after day and pressure is building for the dollar to resume its decline the downtrend for the dollar is horrible as Eric Fry pointed out, when the dollar tumbles, it comes down fast maybe just a pause in the great gold war I must seriously emphasize that the Gold Cartel is using a powerful weapon now, saying that GOLD IS JEWELRY, IMPLYING GOLD IS NOT MONEY that is where they will be defeated it will take time / jim