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

To: stockman_scott who wrote (1699)	7/10/2002 2:43:22 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

wrong, many lessons to learn from stock bubble 1. strong dollar policy invites a correction, which happens after dislocations (mfg offshore, trade debt, foreign funding of fed debts)... but the correction is as vicious as the rise was virtuous... excess currency valuation invites distortions which can become engrained and lead to inefficiencies, distortions... encouraging an ultra-strong currency lays the seeds for future deep recession... ergo, keep currency at the right value, in balance 2. Y2K was a single event, with poor forecasts following it... I recall in Oct99 foreseeing a painful spring in 2000 since IT budgets would be sharply reduced, but I didnt think it would be so severe... ergo, big big single events must be forecasted properly "on the backside downside" in a reasonable fashion, EVEN IF LOW 3. valuation based on "sticky sites" and "eyeballs" is totally ludicrous, and should NEVER be condoned by the brokerage industry or investors... likewise, telecom accounting was based on equally suspicious transactions such as Indefeasible Rights Usage (IRU)... ergo, beware of valuation measures in new and high growth sectors, keep them reasonable 4. laws enabling pension 401k funds to enter the stock market is a prescription for disaster... naive, ignorant, illiterate investors only feed the hype... they represent the LAST INVESTOR IN to creat the top, and probably will be the LAST INVESTOR OUT at the bottom... this will result imho in 70% losses in pension funds eventually... ergo, dismantle the insanity whereby investment is conducted by amateurs, and instead managed by professionals 5. separate investment banking from accounting audit functions... this is such a no-brainer that Congress has a serious black eye on the matter for not passing legislation 4 years ago... yo! yo! conflict of interest... ergo, pass the laws now 6. remove from executive and legislative office all past employees from accounting firms, investment banks, stock brokerage houses, and indicted firms... incest is NOT best e.g. Robt Rubin, Sen Corzine, VP Cheney, Harvey Pitt, and that Army executive ergo, pass the law with the one from #5 7. allow ONLY shareholders to determine stock option package sizes for senior mgmt and board members... this has become a "no risk, high gain" enterprise whereby executives can take great risks, use poor judgment, and cut corners all in the name of creating "shareholder value"... except only shareholders bear the risk and pay the cost... seeing 25-30% of earnings go out for some companies to senior mgmt options is untenable... ergo, pass new SEC rules 8. use same accounting rules for IRS and SEC... what is the big deal?... as it is now, we minimize earnings for IRS so as to keep taxes low... but we maximize earnigns for SEC, so as to keep stock price high... this wide gulf must be bridged, since it INVITES corruption... ergo, pass new SEC laws 9. provide guidance on pension fund accounting... this is a timebomb... lofty rosey absurd assumptions should not be left to firms to manufacture themselves... assuming 9-10% growth in pension trusts is ridiculous... the excess can legally now be placed into standard earnings... but later the shortfall must be returned FROM EARNINGS... perhaps $50 billion too much was put into earnings streams by S&P500 in year 2001... again, not prudent... ergo, have SEC provide guidelines for pension fund assumptions in the reasonable range of 3-5% that is enough far too many lessons, too little time and these came in only 12 minutes of thought / jim