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

To: Mannie who wrote (1614)	7/8/2002 12:22:08 AM
From: Jim Willie CB	Read Replies (4) \| Respond to of 89467

so Reliant is the other energy firm rumored in Japan / jw

To: Mannie who wrote (1614)	7/8/2002 9:38:32 AM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

The Free Market Needs New Rules By JOHN McCAIN Editorial / Op-Ed The New York Times July 8, 2002 WASHINGTON - In a string of corporate failures and scandals from Enron to WorldCom, we have seen the first principles of free markets — transparency and trust — fall victim to corporate opportunists exploiting a climate of lax regulation. I have long opposed unnecessary regulation of business activity, mindful that the heavy hand of government can discourage innovation. But in the current climate only a restoration of the system of checks and balances that once protected the American investor — and that has seriously deteriorated over the past 10 years — can restore the confidence that makes financial markets work. Congress and the president must move quickly to frame legislation and reform corporate governance and government oversight. And I would add one more suggestion: they should ask for the resignation of Harvey Pitt, chairman of the Securities and Exchange Commission. While Mr. Pitt may be a fine man, he has appeared slow and tepid in addressing accounting abuses, and concerns remain that he has not distanced himself enough from former clients. The need for government action and oversight is clear. Corporations fabricated revenues, disguised expenses and established off-balance-sheet partnerships to mask liabilities and inflate profits. Executives maximized their compensation with stock option plans that burdened their companies with huge costs hidden from investors. Venerable accounting firms, having looked the other way as companies cooked the books, shredded documents to hide their misdeeds. Although American tax policy encouraged them to do so, corporations that move their legal headquarters offshore to avoid taxes appear conspicuously ungrateful to the country whose young men and women are risking their lives today to defend them. Reforms must ensure a complete separation of the auditing and consulting services provided by an accounting firm; a firm that audits a company must be prohibited from providing any consulting service — ever — to that company. Legislation sponsored by Senator Paul Sarbanes would create an Accounting Oversight Board to establish and enforce the standards for audits of publicly traded companies. But this oversight board should be completely independent from the industry, financed either as part of the S.E.C. or a separate agency. Stock options, while a legitimate and valuable form of employee compensation, must be identified as an operating expense in a public company's financial reports. Top executives should be precluded from selling their own holdings of company stock while serving in that company. Executives should be allowed to exercise their options, but their net gain after tax should be held in company stock until 90 days after they leave the company. Executives should be required to return all compensation directly derived from proven misconduct. Also, a corporate compensation committee should be made up of members of the board who have no material relationship with the company or personal relationship with its management. Indeed, the entire board should be similarly independent, with the exception of the chief executive. Top executives should be required to certify personally that the company's public financial reports are accurate and that all information material to the financial health of the company has been disclosed. If their certification is false, they should go to jail. Government should remove egregious conflicts of interest in "full-service" financial institutions. Investment services, including research, should be separated from lending, underwriting and securities trading. Even as we take these and other necessary measures, asking for the resignation of Mr. Pitt would help show the public our seriousness. During his first 10 months as S.E.C. chairman, he did not participate in 29 of the commission's votes, most of which involved his former clients. To address corporate misconduct, he seems to prefer industry self-policing to necessary lawmaking. Government's demands for corporate accountability are only credible if government executives are held accountable as well. What is at risk is the trust that investors, employees and all Americans have in our markets and, by extension, in the country's future. To love the free market is to loathe the scandalous behavior of those who have betrayed the values of openness that lie at the heart of a healthy and prosperous capitalist system. ____________________________ John McCain, a Republican, is a senator from Arizona. nytimes.com

To: Mannie who wrote (1614)	7/8/2002 11:33:25 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

brief note on gold demand from India & Pakistan I have a colleague at my firm from Pakistan he is very bright and aware of his and Indian culture I asked about the MONSOON season it might be closely tied to reduced Indian gold demand he said almost no weddings thru all July, and first August week he said monsoons are terrible, huge downpours day after day much worse than the worst eastern US rainstorms the world's largest gold consuming nation is India much of the purchases are linked to weddings gold is given as jewelry in dowries anyway, I asked about the timing of monsoon's end he said after first August week, things taper off that might coincide with gold picking up again or slightly earlier in anticipation but for sure, it covers the entire month of July fwiw, Jim (the Mumbai Reporter)

To: Mannie who wrote (1614)	7/8/2002 2:00:00 PM
From: Jim Willie CB	Read Replies (4) \| Respond to of 89467

friend at home has old buddy at US Federal Reserve this guy lives in my apartment complex, nice guy, bright he is well aware of the financial markets, currency, gold he told me on Friday that he has an old buddy working at the US Federal Reserve in NewYorkCity believe me when I say I perked up bigtime upon hearing that I asked what his buddy does at the Fed the guy said he works as a banker type, vague apparently the buddy in NYC Fed told this guy that the Federal Reserve has sold off over 40% of the nation's gold he knows because he sees the paperwork, he sees the trucks hauling gold around he also said that the USA is shipping gold to Germany I asked if that was for Germany to sell he said yes interesting, I was flabbergasted that just two persons away was some eyewitness account I asked if the buddy thought a gold derivative event was months away, as in a scandal the guy said his buddy doesnt see how one can be avoided wow, Jim