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.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: tekboy who wrote (52178)	7/18/2002 10:05:43 AM
From: mmbw	Respond to of 54805

I understand now the rather vague reference. Thank you for pointing out the Greenspan connection. Definitely over my head. Were there stock markets in 1397? Or just commodity markets?

To: tekboy who wrote (52178)	7/18/2002 10:09:21 AM
From: stockman_scott	Respond to of 54805

Call it the summer of capitulation ------------------------------------------------- To capitulate, click here Commentary: Summer's here and the time's right for.... By David Callaway, CBS.MarketWatch.com Last Update: 12:03 AM ET July 18, 2002 SAN FRANCISCO (CBS.MW) - Call it the summer of capitulation. Defined by Webster's as "to give up or surrender conditionally," the five-syllable tongue-teaser is the main topic of conversation among the monied classes this season, from cable shows to cocktail parties, with everybody speculating both when and how the last act will play out in this 28-month bear market. Despite the loss of more than $7 trillion in stockholder wealth in the past two years, with the Nasdaq ($COMPQ: news, chart, profile) down more than 70 percent from its highs and the broader S&P 500 ($SPX: news, chart, profile) down more than 40 percent, the bears remain on the rampage. The last bull market holdouts -- staked out in the Dow Jones average ($INDU: news, chart, profile) -- stubbornly refuse to capitulate. With all due respect for the gains in stocks Wednesday -- the first in eight days -- the groundwork for a mass panic in the market later this summer or early this fall is already being laid. The market has effectively uncoupled from the reality of an improving economy in the last several days, and while early signs are that second quarter earnings will be better than expected, the fear of more accounting scandals, terrorist attacks, or both, is taking precedence. While no one knows for sure what will trigger it, everybody has a theory. My own particular doomsday scenario is that one morning we will wake up to news that one of the money center banks, such as JP Morgan Chase (JPM: news, chart, profile) or Citibank (C: news, chart, profile) -- or even FleetBoston Financial (FBF: news, chart, profile) -- will have cracked, applying to the Federal Reserve for an emergency bailout. Such a disaster will take us well beyond the bursting of the telecom, energy and Internet bubbles and into the realm of a systemic threat to the world's financial system. Thankfully, no evidence exists -- at least in public -- that this is about to happen. So my theory, for now, remains just a bad dream. Other theories involve a Washington-based scenario, such as an overreaction by Congress to the Wall Street problems with excessive legislation, or a surprise revelation that leads to a dramatic shakeup in the Bush government and rocks American and international confidence in the president's ability to maintain power. I wrote seven months ago that the Enron scandal would be President Bush's Whitewater, and worse, arguing that it would expose in a series of bombshells how the Texas business elite work together to secretly rig the game against small investors and average employees to increase their own power and profits. But while the Whitewater scandal was never more than a sideshow for the Clinton team, the corporate calamity and ensuring plunge in confidence that has resulted from the Enron scandal is now the major issue of the Bush presidency, overshadowing even the war on terrorism and threatening the Republican's grip on the House in November. Hearings on Vice President Cheney's role with Halliburton (HAL: news, chart, profile) and continued shockers about Bush's role with Harken are the last thing this market needs right now. I know. I know. It was all Clinton's fault. Spare me the e-mails. The fact is that whoever's fault it was, Bush remains unable to fix it. His tax cut was a disaster, enriching a few and giving the rest of us just enough to take a family of four to a baseball game (if they're not on strike). But it was no help to the economy at all. And while he's gotten real good with the harsh rhetoric since Sept. 11, like a boss who screams one too many times, the effect of his words has now worn off. So I guess we'll just have to bring Clinton back, or a reasonable facsimile thereof . Or, Bush could restore Wall Street confidence, boost his flagging approval ratings and defeat the Democrats in November by taking decisive action. First, fire Harvey Pitt. The head of the Securities and Exchange Commission has become a liability, no matter how hard he is working. Then, fire Army Secretary Tom White, clearing out any scent of scandal from Enron. Then, he should silence Cheney -- or put him back in a bunker or something -- and follow his own gut about how to clean up corporate America. Make it clear that it he, not the vice president, is running this show. And finally, clean up the government's own accounting mess. The government's books -- and this is everybody's fault -- are run in a way that makes WorldCom look like a corner lemonade stand. "Congrats, son. You just made $3.47 selling lemonade (and it only cost me $17 to buy the materials). That's just how they do it in the real business world." The accounting shuffle to make Washington work has always been awe inspiring in its complexity and deception. No wonder corporate America's best and brightest are seeking to emulate it. No wonder the dollar is in such trouble as international confidence evaporates. So as we hold our collective breaths for somebody to take the lead in this mess, the clock in the markets continues to tick toward the final panic. Program trading has reared its ugly head again, sending the Dow up or down hundreds of points in minutes, just like before the 1987 crash. The wheels are about to come off. Capitulation? It will happen when the last shred of confidence in business and government is gone. It will happen when a whole generation simultaneously walks out on the stock market for the last time, like in 1973 and 1974. It will happen soon. And it will be a great buying opportunity. __________________________________________ David Callaway is executive editor of CBS.MarketWatch.com.

To: tekboy who wrote (52178)	7/19/2002 12:32:22 PM
From: stockman_scott	Read Replies (3) \| Respond to of 54805

Here's an editorial to consider... Economic reality bites back By MARIANNE MEANS SYNDICATED COLUMNIST Friday, July 19, 2002 WASHINGTON -- Former House Speaker Newt Gingrich, the right-wing firebrand whose Contract With America championed the business deregulation that encouraged today's corporate corruption, later acknowledged, "It is always dangerous to try to impose your will on reality because reality has a terrible way of biting back." Indeed, as President Bush was delivering another sermon preaching economic optimism and business glory, a panicky stock market bit back. Stocks tumbled into the financial basement, from which they recovered only at the last minute, and then they fell again. Not even the choir was listening to the guy at the podium. The best that can be said about the president is that, in the corporate-sleaze crisis, he is becoming irrelevant. In truth, he is part of the problem rather than part of the solution. Things are so bad that the name of Herbert Hoover is suddenly being invoked as a Bush economic role model. Bush will sign whatever reform bill Congress sends to him, but he has not been influential in shaping it. He spends as much time promoting his increasingly outmoded agenda -- such as making his huge tax cuts permanent and curtailing government spending -- as he does addressing the real subject. That subject is how to restore public trust in what is now a corrupt business culture that rewards insiders such as the president but punishes ordinary people. What can Bush do, belatedly, to take command, enforce decent corporate ethics and rescue the national economy from this crisis of confidence? He can't change the subject, although he has tried, without doing something dangerous like starting a war with Iraq, which is not a good idea. But he can take several bold steps. He can display some repentance for his own past business dealings and order the Securities and Exchange Commission to release the full records of its investigation of his insider loans and his delay in filing stock sale documents while he was a director at the Harken Energy Corp. Telling reporters to look up company minutes, which they have been forbidden to see, is an affront, not the act of a man with nothing to hide. He should praise companies that voluntarily undertake their own financial reforms, such as Coca-Cola, which announced it would henceforth count stock options as an expense. (Disclosure: This columnist owns some Coke stock.) Bush, however, has opposed that reform, which many experts think is essential to avoid artificially elevating reported profits. The president should dump SEC Chairman Harvey Pitt, who critics claim is too close to the companies he is supposed to be monitoring. Lacking credibility at the top, the SEC can never convince the public it is serious about cleaning up corporate corruption. That is particularly important when the individuals under scrutiny are close to the White House. Bush should revise his economic approach, which is so skewed toward business interests that it favors the rich and well-connected without regard to public needs. Finally, an important step he could take to restore public confidence would be to send Vice President Dick Cheney into retirement. This would not be as politically and legally difficult as you might imagine. The man who was once regarded as the most influential figure in the Bush circle is now a liability. His advice about handling the economy has been self-serving and counterproductive. More than anyone else in the Bush inner circle, it was Cheney who insisted that it would harm the economy to seriously reform the corporate culture from which both he and the president had hugely benefited. This advice led the president to make the mistake of sticking to useless platitudes and cosmetic proposals on corporate corruption -- just as Hoover did during the Great Depression of the '30s. The SEC is investigating accounting practices related to cost overruns at Halliburton Co., the energy-services firm that Cheney headed. Unlike Bush, who can claim ignorance about financial hanky-panky as a director of Harken a decade ago, Cheney was the boss right up to his selection as Bush's running mate in 2000. With his reputation as a tough, well-informed manager, it is impossible to believe that he was not aware of the way his company handled the books or the misleading accounting changes made while he was in charge. Cheney made a profit of $18.5 million when he sold his shares to join the Bush ticket, bailing out only 60 days before the company acknowledged its heavy losses and the SEC was snooping around. In fact, the White House is already moving Cheney to the sidelines. The vice president has been silent during the debate over corporate behavior and he has been absent during several presidential appearances that he might normally have been expected to attend. Full disclosure of Cheney's role at Halliburton as the investigation continues is the only way to keep a potential scandal at bay and protect the presidency. To judge by Cheney's secrecy about the makeup of his energy task force and his ferocious pursuit of unwanted media leaks, however, he is not likely to be forthcoming. But the SEC and a private law suit alleging that investors were defrauded may force him to testify in court about the accounting questions. It is inconceivable that a vice president of the United States could take the Fifth Amendment and survive politically. This does not bode well for the Bush ticket in 2004. Cheney's health may offer a plausible way out. Although he seems fit now, he has had at least four heart attacks. A conveniently timed diplomatic ailment would permit him to step down well in advance of the race for a second term if Bush wanted to ease him out. ------------------------------------------------ Marianne Means is a Washington, D.C., columnist with Hearst Newspapers. seattlepi.nwsource.com