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


To: sylvester80 who wrote (4034)8/6/2002 8:20:20 PM
From: orkrious  Read Replies (1) | Respond to of 89467
 
I guess it never hurts to write off a few billion in parts. it comes in handy later.



To: sylvester80 who wrote (4034)8/7/2002 6:52:53 AM
From: stockman_scott  Respond to of 89467
 
Mister, We Could Use a Man Like J. P. Morgan Again




By Robert J. Samuelson
Columnist
The Washington Post
Wednesday, August 7, 2002

One improbable irony of this summer's financial turmoil has been the quiet rehabilitation of J. P. Morgan -- the most powerful private banker in the nation's history and, for many years, a poster boy for the dangers of concentrated wealth. But now Morgan is emerging as an emblem of something that seems too scarce in corporate America: character.

In his day, Morgan (1837-1913) was admired and reviled for his immense influence. In the 1880s and 1890s, he reorganized many railroads to restore their profitability by curbing competition. (Railroads so rearranged were said to be "Morganized.") Later, Morgan consolidated the steel industry by merging Andrew Carnegie's operations with competitors and creating U.S. Steel. In 1895, when the government's gold reserves were falling rapidly, Morgan replenished them with a $65 million loan. In 1907 he stemmed a banking and stock-market panic by marshaling loans from strong to weak banks.

At various times this man played roles now assumed by the Federal Reserve, the Securities and Exchange Commission, the Treasury and government agencies yet to be created -- because no one would empower them to reshape entire industries. But he had a saving grace, notes Jean Strouse (on whose splendid biography, "Morgan: American Financier," this column relies heavily). He exercised his power with a sense of "moral responsibility," as she wrote recently in the New York Times.

Morgan was a conduit for capital. He connected wealthy investors, American and foreign, with railroads and industrial enterprises that needed money for expansion. But once transactions were complete, Morgan did not withdraw. He saw himself as the guardian of investors' wealth. If the enterprise went bad, Morgan intervened. He installed new managers, revamped industries, had his partners sit on corporate boards. The point was to ensure that his investors got repaid. Morgan felt bound by moral obligation.

Here is the contrast with the present. In the late 1990s Wall Street's investment banks sold hundreds of billions of stocks and bonds that later became worthless, notably in dot-com and telecom companies. The same investment houses blessed dozens of mergers whose stock prices subsequently collapsed. Unlike Morgan, who regarded his investors' money as his own, Wall Street's present overlords see investors' money as a commodity to be pursued and processed -- but not necessarily protected. The bankers take their fees. Big institutional investors (mutual funds, pension funds, insurance companies) are presumed to be sufficiently sophisticated to protect themselves.

Morgan always denied that his most critical decisions were based mainly on financial calculus. In one congressional hearing, the committee's counsel asked, "Is not commercial credit based primarily upon money or property?"

"No sir," Morgan replied. "The first thing is character."

"Before money or property?" the skeptical counsel asked.

"Before money or property or anything else," Morgan said. "Money cannot buy it."

In today's climate, character seems a quaint consideration. Deals go forward if the numbers add up (and sometimes if they don't). This change may reflect greater competition. One harsh criticism of Morgan was that his bank, with a few others, controlled too much of the nation's investment capital. They were "the money trust." By contrast, businesses can now -- in good times at least -- raise money from many sources. If one seems too reserved, it might get bypassed to the point of oblivion. The custodians of capital find it harder to play gatekeepers when so many are fighting for the same business.

Present business leaders doubtlessly believe they operate by a moral code. And they do. In some ways it's stricter than in Morgan's day, because it is defined by more government regulations and laws. Moreover, Morgan's code was controversial and self-serving. He believed that access to capital was indispensable for the nation's industrial development. Therefore, it was vital to ensure that investors got a return. If this meant curbing competition, so be it. But many farmers and small businesses felt oppressed by railroad freight rates. Shippers wanted rate wars.

Similarly, Morgan thought the gold standard was essential to attracting capital. Investors wanted to be repaid in money they trusted. Here, too, there was ample opposition. Borrowers felt victimized. For them, Morgan's morality meant tight credit and falling prices.

It is hard to judge one era's behavior by another's moral standards. No one would now cede so much economic power to a private individual. Still, Morgan's conduct offers lasting lessons. One is that in business (and most activities) all the laws and regulations cannot entirely substitute for human judgment about what's right and wrong. A second is not to mistake money for character. Money measures creativity, ambition, talent, effort -- and perhaps luck, inheritance or criminality. Character, though more intangible and sometimes not easily recognized, is priceless.

© 2002 The Washington Post Company

washingtonpost.com



To: sylvester80 who wrote (4034)8/7/2002 7:51:39 AM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
* 07:35 ET Cisco Systems EPS estimates raised by most firms (CSCO) 12.05: -- Update -- Cautious revenue guidance for the Oct qtr is leading most analysts to trim revenue estimates for Cisco this morning, but better than expected gross margins are leading most firms to up their EPS estimates for Cisco's Oct quarter and new fiscal year; prior consensus estimates of $0.12 and $0.52 appear likely to go to about $0.13-0.14 and $0.58-0.59.



To: sylvester80 who wrote (4034)8/7/2002 3:50:45 PM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
NEOCONS GO FOR THE GOLD

August 7, 2002
antiwar.com

You've really got to hand it to the neocons: they sure know how to conduct a bang-up propaganda campaign. The leak of a "briefing" to the Pentagon's Defense Policy Board, which targeted the Saudis as the real locus of world terrorism, is all over the place: not only the Washington Post, but MSNBC, Fox News, the BBC, and out over the wires. The document, labeled "top secret" and "classified," according to Secretary Donald Rumsfeld, is described in the Post:

"A briefing given last month to a top Pentagon advisory board described Saudi Arabia as an enemy of the United States, and recommended that U.S. officials give it an ultimatum to stop backing terrorism or face seizure of its oil fields and its financial assets invested in the United States."

It's refreshing to see that the War Party is finally coming out of the closet, so to speak, with its real aims and ambitions. We knew that all the pious palaver about a "war on terrorism," and the export of "democracy," was just a lot of malarkey, but it's nice to have them come right out and say so. As I said all along, a war against the Saudis and the outright seizure of the Saudi oil fields is what the neocon-Big Oil-Bushian axis of aggression is really gunning for.

It's interesting to see that the conspiracy theory being pushed by the Rand Corp. briefing is quite similar to the vague mishmosh of arbitrary assertions and undocumented accusations circulating in the form of Forbidden Truth, a book by Jean-Charles Brisard and Guillaume Dasquie, and published by The Nation, which was aptly described by the Los Angeles Times as

"A dense, conspiracy-minded portrait of Saudi-dominated banks, companies and tycoons, all allegedly interconnected, that they maintain have helped fund Bin Laden's holy war."

The point of the book is that the Bush administration was supposedly appeasing the Taliban right up until the last moment: Brisard and Dasquie are essentially saying that the Bushies let 9/11 happen because of a "softness" on the Saudis. "Since the 18th century," Brisard and Dasquie aver, "Saudi Arabia, has been focused on conquering the world." The author of the controversial briefing, Laurent Murawiec, a Rand Corporation analyst, put the same thesis another way:

"'The Saudis are active at every level of the terror chain, from planners to financiers, from cadre to foot-soldier, from ideologist to cheerleader, Saudi Arabia supports our enemies and attacks our allies.' … A talking point attached to the last of 24 briefing slides went even further, describing Saudi Arabia as 'the kernel of evil, the prime mover, the most dangerous opponent' in the Middle East.'"

Remember how the Democrats went ballistic when the Saudis started raising the issue of a US military withdrawal from the Kingdom? Senator Joe Lieberman has gone so far as to declaim that a "theological iron curtain" has descended across the Middle East – and he doesn't mean Israel. The not-so-hidden subtext of all this is that the Democrats can always bring up the Bush family's links to Saudi oil interests. The killer is that the Democrats don't have to say a word….

What we're seeing, here, is a left-right squeeze play, with the Bushies in the middle. It is, in reality, a form of political blackmail, a warning shot fired over the bow – by the ostensibly Republican neocons, and not the Democrats.

What better way to blindside the Bushies than from within their own camp – that is, from the neocons, who have no party loyalty except to the War Party. If the Democrats will provide them with a bigger, bloodier war to fight – one in which more Arabs are likely to perish than in a piddling invasion of Iraq – well, then, why not?

Neoconservative foreign policy analyst Richard Perle, the chairman of the Defense Policy Board, wears many hats: he is widely known as a foreign policy academician, he appears on TV as a "former Reagan administration official," and is often treated in the media as having quasi-official status in the present administration. In a fascinating piece in The American Prospect on Perle, the one-man war propaganda machine, and his relations with the Bushies, Joshua Micah Marshall points out the dual role played by the man they call the "Prince of Darkness":

"So how is Perle able to play both sides of the street? One prerequisite is the continued acquiescence of Rumsfeld. 'I think Rumsfeld has loved this stuff,' says one of Perle's former Reagan-administration colleagues, though whether Rumsfeld's go-ahead for these rants is explicit or implicit is anyone's guess."

Rumsfeld, however, wants us to believe that he's plenty steamed up about this leak:

"Clearly, somebody decided that it was a good idea to take something that was that potentially controversial – I almost said inflammatory – and give it to a newspaper, even though the meeting was a classified meeting and a closed meeting of the Defense Policy Board."

The leak was "clearly harmful," he complained, and doesn't really represent the majority view of the policy board. I especially liked this Associated Press report of Rummy's displeasure:

"The defense secretary's harshest comments were aimed at those responsible for leaking the report. He says this probably came from someone who wanted to appear important."

But not really important, you see – or, at least, not important enough to be tracked down by requiring all members of the Defense Policy Board to submit to a polygraph test. If they can ask it of Congress, then why not demand it of the members of what was once a bureaucratic backwater and is now, apparently, the Mordor of the War Party?

It doesn't take a Sherlock Holmes to home in on the likeliest suspect in this latest case of "leaked" classified information: none other than the chairman of this phony Defense Policy "board," a man whose appointment to a sensitive position has been confirmed by no one. Perle was essentially sneaked in the back door of this administration, and has been allowed to run rampant ever since – and he and his fellow neocons are active on more than one front....

As the radical wing of the War Party sets the Saudis in its sights, they are also taking aim at King Abdullah of Jordan, who, incredibly, stands accused by the Jerusalem Post of being little more than Saddam's sock-puppet:

"The Bush administration has acquired evidence that Jordan's King Abdullah II, once a cornerstone of US policy against Iraq, is in fact working closely with Iraqi President Saddam Hussein, according to senior political sources here."

"Working closely" – to do what? The article doesn't say, leaving the reader free to imagine the worst: poison gas? Chemical warfare? An Iraqi-Jordanian nuke?

"The sources declined to indicate the precise nature of the evidence, but they say it is damning and irrefutable."

Well, then, I guess that settles it. Who needs evidence – says the Jersusalem Post -- where Arabs are concerned? Just take our word for it.

In spite of the long history of US-Jordanian friendship, intimately bound up with the Hashemite monarchy, and loyal Jordanian cooperation with the US in rooting out Al Qaeda, not even the most pro-American ruler in the Middle East – arguably far more pro-American than Ariel Sharon – is immune to the anti-Arab smear campaign. The New York Sun dutifully ran the Jerusalem Post story verbatim on page one, and an editorial asking "Who Lost Jordan?":

"The report that the Jordanian king, Abdullah, is passing sensitive American intelligence material to Saddam Hussein, and that Abdullah recently accepted a gift of three Porsche automobiles from Saddam's son Uday, is enough to make our hair stand on end."

As we all know, that kind of hair action is caused by an excess of static electricity, and static is precisely what this kind of groundless accusation is designed to generate. While admitting that the sources were unnamed, as was the evidence, the Sun insists that we have reason to be suspicious:

"Given the history of close relations between the Hashemite Kingdom and the Central Intelligence Agency, it strikes us that some of the time the American Senate has been spending lately on devising reasons to delay liberating Iraq could be devoted more profitably to some oversight hearings on who lost Jordan."

I'll bet Jordanian links to the CIA aren't as close as the relationship between certain American media outlets and the Mossad, but let's not go there. Let's look, instead, at the pattern that is beginning to emerge. First, it was the media campaign against the Saudis, and now this crude attempt to smear King Abdullah: what we are witnessing is the latest chapter in an ongoing attempt to effect a radical turnabout in US policy. While American generals are in open revolt against the idea of taking on the entire Arab world, and occupying not only Iraq but also much of the Middle East, the neocons are mounting a counter-attack in the form of these not-so-mysterious "leaks" that just happen to slime our most prominent Arab allies.

Note the evolution of Bush's Middle East stance, from admonishing the Israelis and telling them they'd better withdraw from the West Bank, to what often seems like unconditional support for Israel's war of conquest. But it hasn't been enough for America's Likudniks, and their nutball "Christian Zionist" allies, who will never be satisfied until US foreign policy perfectly resembles Israel's – on a much grander scale.

I would also note a similar evolution of the "war on terrorism." In the beginning, it was Colin Powell who was telling us that the whole operation was to be tightly focused on eliminating Al Qaeda – the perpetrators of the 9/11 terrorist attack. It has taken the Bush administration less than a year to go off on a complete tangent. As we approach the first anniversary of the 9/11 horror, all linkage of US war aims to Al Qaeda – and to that morning in September – has been completely abandoned.

Instead, American policy has done a 180 degree turn, from assembling a broad coalition against Bin Ladenism within the Arab world to narrowing our allies to include only Israel, Turkey, and a few of the smaller Gulf sheikdoms. We don't hear much, these days, about Osama, except vague rumors spread by government officials that he's dead. Instead, we are treated to a daily drum-roll of alleged "threats" coming out of Baghdad, all of them about as solid as the accusations against the King of Jordan – and nearly all of them emanating from the same source.

We hear endless accusations about Saddam's alleged "weapons of mass destruction," but little about the direction these weapons are likely to be pointed in. New York is not threatened by devastation from Saddam's Scuds, and neither is Riyadh or Amman, but Tel Aviv is another matter. The idea that Iraq represents a threat to the US or any of its Arab neighbors is a joke. This point has been made by Jordan's Abdullah again and again, including during his recent visit to Washington, where he met with the President – which is why the War Party has decided that he has to go.

This new turn in US policy, away from a "war on terrorism" and toward a war against the entire Arab world, benefits one and only one country in the region, and that is Israel. The Bush administration has been slowly moving in this direction, but now the War Party is demanding a pick-up in the pace. As Israel gets ready to ethnically cleanse the occupied territores, and drive the Palestinians into Jordan, Sharon requires a pretext, or enough of a diversion so that the world can avert its eyes. After all, what will the conquest of the West Bank by the IDF seem like against the backdrop of a US seizure of Iraq, the Saudi peninsula, and no doubt a few hunks of Iran?



To: sylvester80 who wrote (4034)8/10/2002 6:07:00 PM
From: Jim Willie CB  Read Replies (2) | Respond to of 89467
 
signal of imminent rise in price inflation
SylvesterMan, I thought of you when I read this article

321gold.com

we all admit to the severe shortcomings of the CPI as a measure of price inflation
it ignores the following large components:
- property tax
- homeowner, business, auto insurance
- housing property value
- stock portfolio value

so why do we appeal to it to confirm or deny the existence of inflation?
I dont
many do

what Schmidt does here is to report on an alternate price index called the "Median CPI" which is ironically put out and defended by the Cleveland Federal Reserve

he doesnt define its calculation
but he does explore the signals when the Naive CPI diverges from the Median CPI
right now the Median CPI is showing almost 4% price inflation !!!
while the Naive CPI is homing on a puney 1% !!!

he concludes the easy Fed monetary policy now is encouraging more inflation when we are already moving up from 1997-98
his main emphasis is the future of property prices
he expects the Real Estate bubble to be popped
as a faulty price inflation measure invites faulty policy

check it out
Schmidt concludes that we will get more inflation than we expect
the lower dollar will add to the effect with import prices
selling of TBonds will also add to the effect

and in time, the Fed will interrupt the inflation
by that time, the Median CPI will not be as high as the Naive CPI
thus, the Fed will probably overreact, just like in 1997-98

very very interesting
I wonder how I can find this measure on a monthly basis
/ jim