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

To: Jim Willie CB who wrote (7418)	9/26/2002 12:09:46 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Government Stands By as Economic Muscle Withers By James J. Cramer 09/25/2002 11:41 AM EDT Oblivious. That's the only way to describe this administration's reaction to the incredible collapse that is happening right now, in slow motion, in the U.S. stock market. The president, his advisers, and the secretary of the Treasury seem to have no idea how things are deteriorating domestically. Oddly, the Democrats don't seem to recognize it either; they keep focusing on the coming deficits as if those were the real problem with the economy. We have lots of problems, but, strangely, the deficit isn't one of them, if you judge by the only standard that matters: the bond market. And the bond market is signaling that we are, if anything, too prudent with federal spending, as bizarre as that sounds. The president and his advisors look at aggregate figures, and the aggregate figures chiefly reflect the incredibly low rates that caused the consumer to be giddy enough to keep spending. But the aggregate figures lie. Let me tick off the real problems: 1. The telecommunications system in our country is probably 18 months away from going belly up because the government refuses to recognize that it can't allow players to lie, cheat and steal, then file bankruptcy and come out smelling like a rose. Under that scenario, which is happening with WorldCom (WCOEQ:OTC - news - commentary - research - analysis), I can't see AT&T (T:NYSE - news - commentary - research - analysis) staying alive. I can't see how SBC (SBC:NYSE - news - commentary - research - analysis), Verizon (VZ:NYSE - news - commentary - research - analysis) and BellSouth (BLS:NYSE - news - commentary - research - analysis) can maintain their dividends. And it isn't just me; the market's saying the same thing. But the Federal Communications Commission is oblivious. The idea that we could allow this incredibly important industry to fail like this because the ne'er-do-wells aren't shut down is beyond me. In 1990 the government took drastic action before we let the ne'er-do-wells wreck the banking system. Now it's doing nothing. 2. Asbestos claims are sinking major companies left and right. Honeywell (HON:NYSE - news - commentary - research - analysis), Dow (DOW:NYSE - news - commentary - research - analysis), Ford (F:NYSE - news - commentary - research - analysis), General Motors (GM:NYSE - news - commentary - research - analysis), Georgia-Pacific (GP:NYSE - news - commentary - research - analysis) and Halliburton (HAL:NYSE - news - commentary - research - analysis) all have so much exposure to asbestos that I could argue their securities are on the verge of becoming uninvestible. But asbestos plaintiffs' lawyers seem bent on bankrupting everyone in their paths, and the political system has resisted reforming things so they can't. There is no court relief, no congressional relief and no presidential relief. It seems just inevitable at this point that the plaintiffs' lawyers will wind up helping to destroy these companies. 3. The airline industry is about to disappear. Sure, if we all flew JetBlue (JBLU:Nasdaq - news - commentary - research - analysis) that would be fine. But this whole industry is about to go out of business. Look at those stocks -- they're just screaming "we're about to go down." In whose interest is that? 4. The financial services industry abetted so much fraud and is so deep into the problems of the power merchants and the telecommunications industries that it is reasonable to think there's a chance that either Merrill Lynch (MER:NYSE - news - commentary - research - analysis) or J.P. Morgan (JPM:NYSE - news - commentary - research - analysis) won't make it. That's right, won't make it. The liabilities are just too great. 5. Less than one month after we certified the financials of U.S. companies, EDS (EDS:NYSE - news - commentary - research - analysis), one of our largest companies, said it didn't need to disclose a put liability that was just gigantic. So much for that attempt at getting corporate America to disclose all its nasty surprises. 6. Oil is at $31 a barrel and we have no plan or contingency to lessen our dependence on oil. None. We are more hostage to this price than any time in our history. 7. This was the worst back-to-school season for retailers I have ever seen. 8. We have too much capacity in virtually every single technology sector and nobody even seems to care. 9. We can't afford to prosecute the directors of Enron (ENRNQ:OTC - news - commentary - research - analysis) because the Securities and Exchange Commission is too stretched, but the SEC didn't even ask for a appreciably more money at budget time. 10. This big old great economy can't support a single initial public offering, not one. We can't raise a dime's worth of capital in this country for a young business. Not a dime. And we wonder why the market's going down? I think if it weren't for the shorts and the curbs, we should be taking out 6800 on the Dow right now. I think we are lucky that the Nazz is hanging around here, lucky that there are hedge fund shorts that keep propping things up. But nothing happens. Nothing gets debated. No one in the administration acts as if we were in crisis. Everyone is distracted, yet every one of these problems could be fixed by the government either through some sort of recognition and indemnity, or some change in policy or enforcement. It is beyond me that years of economic strength are being frittered away right before our eyes. But it is happening. And the secretary of the Treasury says all is well and the president acts as if things couldn't be better because housing's holding up. Of course, that's only because we have a government-mandated bubble developing. It is enough to make you ill. It is more than enough to get you to be as defensive as possible with your investments. That's the only way you possibly can stay the course until the people at the top recognize how darned precarious everything has become. It has been my nature to be bullish and I have firmly believed that in the last 20 years things do tend to work out in the end. I don't feel that way now. There is too much at risk and too few important people in this nation focused on that risk. That's why we have to continue to use any strength to get even more defensive than we have been until the people in power come to their senses and make changes that can benefit the shareholder class in this great nation.

To: Jim Willie CB who wrote (7418)	9/26/2002 12:51:10 PM
From: thames_sider	Read Replies (3) \| Respond to of 89467

Well, if you think it's right to invade and colonise any country with unpleasant dictators and nukes... why not China, Russia - or indeed Israel and Pakistan, after all the last two have both broken UN resolutions. And we know they've both got WMD, missiles, etc... what's the difference? If it's right, it's right... Seriously, there was nothing new in the dossier, as far as I could read. Saddam's way off getting anything dangerous, still less making it into a usable form. Plus he's not bothered with terrorism before to any great extent - less than most anyone else in the ME, anyhow (not saying much). Plus he's surely rational enough not to even think about using a WMD when he knows the whole country would receive immediate nuclear disinfection - unless he's facing death anyhow... Basically if that's the best that intel could come up with, huh. But given these guys missed the collapse of the Soviet Union when they were actually looking for it, not to mention the original invasion of Kuwait, I don't expect much. If they are good, then there's nothing to find: if not, we shouldn't rely on them. And whatever, some dossier shouldn't be used as a specious excuse. Cheney, Rumsfeld & Wolfowitz have unfinished business and no other ideas. Bush hasn't a clue on the economy and thinks a quick victory (even in a completely irrelevant, unnecessary and future-imperilling war) will boost GOP votes. Plus his oil buddies like the idea of all those reserves. What of the 'War on terrorism' - remember that? "they can't hide, they won't escape"... LOL. Wrong. Fixed Afghanistan? - I don't think so. Opium production up 1400%, warlords rule and the Kabul puppet is seen as a sick joke. So, why this new war? That this path is the epitome of the most blatant imperialism, a la Nazi - invade with blitzkrieg, massacring the population, steal the minerals and f*ck the consequences - doesn't seem to occur to them. TB seems to be fairly busy impregnating Cherie, BTW... she miscarried (at ?47) earlier this year after an unexpected baby last year. I think he's too pious to put it about much. Honorable? personally yes, but he turns a lot of blind eyes in exchange for co-operation from some very sleazy business types. Competent? undoubtedly a very skilled politician, but not a visionary. A manager, not a leader. Considerable personal charm, apparently. Strong? no - vacillates far too much. With the biggest majority in a generation he's accomplished nothing of note, and he's far too influenced by newspaper opinions, especially if they're critical.