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

To: surfbaron who wrote (3411)	7/29/2002 10:59:26 AM
From: stockman_scott	Read Replies (2) \| Respond to of 89467

Here's the scoop complements of The Daily Enron... GOP Feels Heat - Changes Spots thedailyenron.com "We get it," said Rep. Richard H. Baker (R-La.), chairman of the House Financial Services Committee's subcommittee yesterday after House passage of strong corporate responsibility legislation. After months of fighting strong reforms, House Republicans tripped over themselves this week to vote in favor of them. But, despite what they'd have voters believe, for House Republicans this was more of a painful exorcism than an honest conversion. The House approved the measure 423 to 3, and the Senate 99 to 0. The flurry of action brushed aside a weak House measure passed in the spring by House Republicans. That measure was widely criticized as a sham; an industry-backed attempt to sabotage stronger legislation being proposed in the Democrat-controlled Senate. And it might have worked, had it not been for two unexpected factors: that Enron's bankruptcy was the beginning - not the end - of an emerging corporate crisis and, that Senator Paul Sarbanes (D-MD) would refuse to rollover and play dead. Instead, Sarbanes, chairman of the Senate Banking Committee, pressed forward with his legislation to reign in corporate scofflaws and tighten oversight of the accounting profession. Business leaders and the accounting industry fiercely opposed the Senate bill. But, as one corporate domino after another tumbled and investors deserted the stock market in droves, House Republicans suddenly found themselves caught between the devil and a sea of angry constituents. That's when they realized that, despite all he had done for them, they could no longer afford to hang out with the devil. And, suddenly everyone was in favor of long prison sentences for wayward CEOs and stronger oversight of accountants. Had someone suggested GPS ankle bracelets for all accountants it probably would have passed as well. Rep. Baker said he and his fellow Republicans had became more willing to accept a stricter bill now because "market conditions deteriorated beyond anyone's worst predictions." There were three holdouts. The only "no" votes in the House came from Mac Collins (R-GA), Ron Paul (R-TX), and Jeff Flake (R-AZ). "I just have principles that I stand on and this [bill] went against my principles," Collins said. "I did not see the need to go so far as we did with this bill." Republican representatives facing re-election this November hope their vote on the this measure will buy them some goodwill with voters back home, many of whom are fuming over losses in their retirement and 401(k) plans. But, recent polls of likely voters indicate that they continue to associate Republicans with big business. -------------------------------------------------------- New Harken Docs Shed Light on Bush Role In an interview upon leaving office, Reagan administration Secretary of State George Shultz offered a piece of advice every Washington politician should tattoo on the back of their hand: "Anyone who believes they can keep something secret in this town should have their head examined." Nevertheless, every President seems determined to learn that truth the hard way, and President Bush appears no exception. Even though he has refused to authorize the release of Harken Energy documents from the company or the SEC, they are beginning to show up anyway. Yesterday additional documents surfaced that directly contradict President Bush's earlier portrayal of himself as "out of the loop" during times when Harken's board approved questionable transactions. According to a June 15, 1989 letter from Harken President Mikel Faulkner, obtained by the nonpartisan Center for Public Integrity, Bush frequently advised Harken management on "organizational and strategic matters." In the letter, Faulkner pointedly praised Bush for "the positive image you have helped create regarding Harken Energy Corporation, the intuitive analysis you have provided on our various acquisitions, operating decisions at the board level and the personal suggestions and ideas you have shared with me over the past two years on a CEO to CEO basis. I consider the role which you play at Harken Energy Corporation to be a very meaningful and significant role and look forward to a continuing relationship." Bush has denied any wrongdoing on either his well-timed stock sale or what the SEC later ruled was a sham sale of a Harken subsidiary designed to hide company losses. "There was an honest difference of opinion as to how to account for a complicated transaction," Bush said earlier this month. "All I can tell you is, that in the corporate world, sometimes things aren't exactly black and white when it comes to accounting procedures. There was no malfeasance, no attempt to hide anything. It was just an accounting firm making a decision, along with the corporate officers, as to how to account for a complex transaction." Bush has also defended his vice president, Dick Cheney, who served as chief executive of Halliburton from 1995-2000. The Securities and Exchange Commission is investigating how the company accounted for cost overruns. -------------------------------------------------------- Congress Reins in the Little Guy Even as corporate America crumbled around them, Congress found the time this week to pass legislation that will protect large consumer credit companies by making it harder for consumers to discharge unsecured debt through bankruptcy. The tough legislation will reverse current laws that allow credit-burdened consumers to discharge much of their unsecured debt by filing for personal bankruptcy. Reforming that law has been a top priority of credit card companies for over a decade. President Bush supports the change. The administration has close personal ties to the credit industry. Deputy Attorney General Larry Thompson served as a top executive of Providian Financial before joining the administration. Providian is the nation's largest provider of "sub-prime" credit. The company aggressively targets the poor and those with bad credit histories. The company charges interest rates as high as 21%. Providian has been charged with misleading advertising and charged with burdening already pressed borrowers with additional undisclosed and illegal fees and charges. The company settled the charges by paying fines in excess of $400 million. Under the new law, borrowers will be unable to dispose of debt to companies like Providian, but rather will be forced to repay the money over a number of years. Meanwhile, shareholders and other creditors of failed companies like Enron, Worldcom and Adelphia have no such law to protect them. Shielded by the corporate veil, the executives who looted those companies cannot be required to repay creditors and shareholders out of their future income. Maybe Congress might find the time to work on that little wrinkle. --------------------------------------------------- Quote of The Day: "A pattern emerges: When a Bush is in power, Bush's business associates benefit." -R.G. Ratcliffe, from a 1998 article in the Houston Chronicle

To: surfbaron who wrote (3411)	7/29/2002 11:03:53 AM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Dollar Rises After U.S. Stock Rebound Spurs Talk Slump Is Over By David Wigan London, July 29 (Bloomberg) -- The dollar rose to a three- week high against the yen amid expectations rising U.S. stocks will boost demand for the currency needed to buy them. ``We are seeing the dollar rebound out of relief that the equity market seems to be stabilizing,'' said Steven Saywell, a currency strategist at Citigroup Inc. ``We doubt the rally will last against the euro; U.S. interest rates are still relatively very low and corporate bond issuance is dwindling.'' The U.S. currency rose to 119.13 against the yen, the strongest since July 8, compared with 118.89. Against the euro it traded at 98.64 U.S. cents from 98.71. The dollar rose more than 2 percent against the yen and euro last week as some U.S. stocks performed better than their Japanese and European counterparts. U.S. stock futures climbed, after the Dow Jones Industrial Average added 3.06 percent in the past week, its biggest weekly gain since May. Japan's Nikkei 225 index added 0.8 percent today, paring its decline in the past week to 5.1 percent. The dollar has moved in the same direction as U.S. stocks on nine out of 10 days in the past six months. The gain in the U.S. currency pared a 9.5 percent decline against the yen this year, as demand for dollar-denominated assets waned. The Standard & Poor's 500 Index fell 25.7 percent, while corporate bond issuance dropped as companies backed away from taking on more debt amid concern over the pace of economic growth. Total dollar-denominated investment grade debt sold in the first half was $279 billion, compared with $318 billion in the same period last year, according to Bloomberg indexes. GDP and Employment The extra interest investors demand to buy investment-grade dollar-denominated corporate bonds has risen to 2.18 percentage points over government debt of similar maturities, up from 1.55 at the beginning of June, according to Goldman Sachs indexes. That suggests demand for corporate bonds is also falling. Interest-rate futures traders pushed the yield on the August federal funds futures contract down half a basis point to 1.695 percent Friday. The yield suggests they see more than a 35 percent chance the Fed will cut its 1.75 percent overnight interbank lending target by a quarter point at next month's policy meeting. The European Central Bank has left its key lending rate at 3.25 percent since November. The Commerce Department will on Wednesday report on second quarter gross domestic product and Friday on personal incomes and spending. The Labor Department will publish figures for June employment Friday. The U.S. government will say on Wednesday that the world's biggest economy grew 2.3 percent in the second quarter, down from a 6.1 percent rate in the first, according to a Bloomberg News survey of economists. An index of Chicago manufacturing compiled by the Purchasing Managers Association of Chicago will likely show a decline in activity, economists said. In other trading, the dollar changed hands at 1.4697 Swiss francs, compared with from 1.4645. Against the British pound, it was at $1.60 from $1.5650.

To: surfbaron who wrote (3411)	7/29/2002 12:06:40 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

CNBC interview of Goldman Sachs economist Dudley (typical) he represents mainstream financially biased economists he says correctly that we have seen nothing like this economy in the post-war period (translation: not a typical cycle, more like structural correction as in 1930) he believes the decline in stocks will affect negatively business confidence, hiring, and capex spending will affect state & local govts with revenue shortfall, tax increases, and spending declines he seemed to think low inventory levels are important (even though inventory ratios are unchanged since 2000) in structural corrections, inventory levels are a curveball nonissue he believes monetary and fiscal policy are favorable i.e. the Fed low rates, and Govt spending he therefore does not believe we will see a Double Dip recession he doesnt believe the Fed will cut rates not unless we have "a lockup in the financial markets" like in 1998 with LTCM right now the Fed expects +3% GDP in Q3, Q4 sounds like the Wall Street party line no mention of rising consumer debt levels, USdollar decline effects, historically high stock valuations, new trend unfolding to expense options and relax pension assumptions, accelerating bankruptcies, flattening money supply, and general deflationary forces, etc etc and my favorite, no mention of the clear DoubleDip in first time unemployment claims (first time ever since WW2) and also, no mention of the massive breakdown in S&P Head & Shoulder bear pattern !!! maybe he is unaware of the H&S breakdown ???? nahh more eloquent but questionable and self-serving economic research / jim