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To: Jim Willie CB who wrote (7665)10/1/2002 1:26:27 PM
From: Mannie  Read Replies (1) | Respond to of 89467
 
From Harry Newton this morning.....



8:30 AM Tuesday, October 1, 2002: I hate being a bear. By nature, I'm optimistic. I'm an
entrepreneur. I believe in America. I believe we'll come through this with flying colors, as we
always have. But in the meantime, it's getting worse. Far worse.

As you know, the 1990s were a corporate capital expense boom. Capex spending teetered in
2000, got worse in 2001 and collapsed in 2002. What's held up the economy since then has been
the consumer, refinancing his mortgage and wildly spending the proceeds as if there were no
tomorrow.

The consumer is now abandoning the party. This is seriously bad news. Today's Wall Street
Journal says it all, "Shoppers cut back spending at some of the nation's big retail chains in September,
heightening retailers' worries about the all-important Christmas shopping season. Fearing that months of
economic bad news and uncertainty about Iraq may finally be sinking into consumers' psyches, many big
retailers have been bracing for a chilly holiday. Now, with what may be a big holiday iceberg
heading their way, retail companies are doing their best to manage inventories -- and manage investors'
expectations.

Wal-Mart Stores Inc., the world's largest retailer, Monday said September sales would miss
expectations for the second consecutive month. Sales at stores open at least a year are expected to
move forward just 3% to 4%, not 4% to 6% as previously projected. J.C. Penney Co. estimated
September same-store sales would be down 1% to 3%, revising its earlier estimate of flat sales or even
a slight increase. Target Corp. said September sales have been "well below" its plan of a 3% to 5%
increase at its discount Target stores and slightly less than that for the total corporation. The Minneapolis
retailer slashed its estimate for the month; it now expects same-store sales to be slightly below last
year's levels.

Through months of stockmarket declines, corporate scandals and job cuts, consumer spending has held
fairly steady. No amount of bad news seemed to stop some buyers from splurging on cars, houses and
other big-ticket trophies. Still, consumers show signs of growing stingy in areas such as clothing and
gifts."

It was, of course, sheer fantasy to think that successive waves of refinancing would hold up
consumer spending. After all, $7 trillion has been wiped off the value of American shares --
equivalent to two-thirds one year's entire GDP. (Think of two-thirds of Americans out of work for a
whole year.) And at least a million people have been thrown out of work permanently (including
500,000 in telecom alone).

You simply can't keep the consumer spending when he no longer has a job, or has a new college
graduate who can't find a job (e.g. my daughter) or has a relative who's just been fired or who has
a neighbor who's been looking for a job for over a year and has given up.

If you thought the September quarter was bad, wait until you see the results of the fourth quarter
-- the one we're presently in. Tech stocks have taken the brunt of the "hit." Nasdaq lost 21.8% in
the September quarter. Now it's time for the non-techie, blue chip Dow stocks to get hit. Dow only
fell 14.2% in the September quarter.

Today's techie shorts include IBM, Cisco, Intel and Microsoft. But the biggest shorts are the "blue
chips." Proctor and Gamble, Coca-Cola, 3M, Eastman Kodak, Johnson and Johnson, Exxon, Merck,
Caterpillar, General Electric and even Tiffanys. And there are others. Pick your own.

AOL Time Warner is clearly a cockroach stock. I remember telling readers of this column to sell it
short at $50. I can now see it falling below $10. There's too much "stuff" going on that's not good
for its business. Too many fishy smelly "deals." Too little growth. Too much rancor. Read the
latest in the Ted Turner/Steve Case spat -- today's New York Times. It's fascinating. Click here.

Ditto for Marriott, another cockroach stock. Marriott hotel owners are suing the company because
it's robbing them dry. The whole thing smacks of desperation. Check out this New York Times
story. Click here.

There are increasing bargains around in private investments as we Americans continue our
entrepreneurial adventures. Thoughts from those I've seen lately:

+ Only invest in companies whose products and services can absolutely positively save their
customers BIG money now. That's all companies are interested in -- saving money.
+ Do not invest on the terms you were initially offered. You can typically negotiate some extra
warrants, options, a lower price, etc.
+ Insist on certain conditions. There are four critical areas: First, reporting. How much and often
they'll tell you what's happening to your investment. Amazingly many don't commit to quarterly
reporters. Second, negative covenants. Management can't increase its salaries without your
approval. Third, what your role, if any, will be. Will you be a board member? Will you be an
advisor? What your reward / exit strategy is likely to be. Will they pay you a dividend, if they
haven't sold the company within five years?
+ And you'd better get it all in writing. Verbal agreements stink in today's world. More and more
executives are using today's tight economic conditions as an excuse to renege on their
agreements. Sad, but true.

The end of a miserable quarter. God, am I pleased that my consistent advice this year has been
to stay out of ALL equities -- tech and non-tech. Think of how much money we've all saved. My
advice remains: Stay away from all equities. Short only with monies you can afford to blow. And
keep a tight 15% stop loss on your shorts.



To: Jim Willie CB who wrote (7665)10/1/2002 4:43:19 PM
From: Clappy  Read Replies (1) | Respond to of 89467
 
JW,

Did you start up a Golden Jackass site on IHUB yet?

Just an idea.

<Clappy can hear the sound of SOROS' finger typing like mad to get the site up and built...>

-Clappy

P.S. They might even throw you a free membership and a tee shirt or mug if you bring some business over there. <g><ng>



To: Jim Willie CB who wrote (7665)10/10/2002 8:39:29 AM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
'Bio-Armageddon' is a possibility if U.S. hits Hussein.

A Virus-Fed Doomsday
By SCOTT P. LAYNE and MICHAEL H. SOMMER
COMMENTARY
The Los Angeles Times
October 10, 2002

The debate among the nation's politicians and the advice they're receiving from intelligence experts should not focus exclusively on diplomacy versus preemptive military action against Saddam Hussein. Instead, there is one nightmarish outcome--the so-called bio-Armageddon scenario--that is of immediate concern.

It goes like this: We go in to take out Hussein, and his obedient henchmen pull a "doomsday" switch, releasing contagious biological agents for which there is no vaccine and no cure. Not only are hundreds of thousands of American troops wiped out but, if Hussein wishes to die a martyr's death, the virulent agents are released to spread around the world and wipe out half of mankind.

Even mentioning this subject may seem like scaremongering, but it's not. In today's dicey world, this horrific possibility is a biological, military and political fact of life--or death--that cannot be dismissed out of hand.

How seriously has the bio-Armageddon scenario been weighed in councils of war? An Oct. 7 letter from CIA Director George Tenet to Sen. Bob Graham (D-Fla.), chairman of the Intelligence Committee, stated that a cornered Hussein might use "his last chance to exact vengeance by taking a large number of victims with him."

It costs about $1 million to kill one person with a nuclear weapon, about $1,000 to kill one person with a chemical weapon and about $1 to kill one person with a biological weapon. Low cost alone may dictate that current and future terrorists will opt for the $1 biological killers.

Last year, a bombshell of a scientific paper, published in the Journal of Virology, revealed that a bioengineered form of mousepox--a close cousin of smallpox--was vaccine-resistant and 100% lethal. It showed that simply inserting one immune-inhibiting gene into mousepox was all it took.

Is it conceivable that Hussein's well-trained scientists, who crave to please their boss at any cost, have not read this paper and applied its findings to smallpox?

This year, another stunning paper in the research journal Science described the complete synthesis of the poliovirus genome in the test tube. This feat of bioengineering pointed out that deadly viruses, such as smallpox, can be resurrected in the test tube. No seed germs are required, as previously thought, just genetic sequences, training in molecular biology at the master's-in-science level and a few years of laboratory work.

It's hard to underestimate or sugarcoat these scientific papers. They offer a blueprint for creating vaccine-resistant and highly lethal viruses that could, for example, render the current smallpox vaccine stockpile and the U.S. government's emergency vaccination program absolutely useless. This biological genie may pose a far greater threat than 1,000 atomic bombs.

It's no longer hypothetical to bioengineer such an agent. And less than $1 million would be required to create deadly and contagious agents.

In the wrong hands, a bioengineered virus could be bottled and used as an insurance policy against invasion and overthrow. And, if unleashed, it could change the very fabric of remaining modern civilization. At a minimum, too many people might be stricken to continue to operate oil refineries, power plants, airlines and communications.

A completely new appraisal and posture are needed to deal with these threats.

First, the U.S. needs to train and place more intelligence agents knowledgeable in this type of warfare throughout the world, because the work taking place in a secret offensive biological weapons program cannot be monitored from airplanes or satellites. It must be spied on firsthand.

Building our biological human intelligence capabilities will take years. It will require the scientific, law enforcement and national security communities to finally work together, which they have shown little inclination to do.

Second, we need to build a high-speed/high-volume infectious disease laboratory and information processing system that links the molecular fingerprints of biological agents to their sources worldwide.

Such a system would provide comprehensive and rapid analyses of biological agents and, when every moment counts, it could help to save countless lives after an attack--both at home and abroad.

If we had such a laboratory and biological sample collection program working, we could test for the combined signatures of pox viruses and virus-altering proteins. If, for example, the two were found to reside in the wrong hands or places, we could take preemptive actions.

Here's the bottom line: Bio-Armageddon and biological blackmail cannot continue to remain as realistic options for terrorists.
_______________________________________________

Scott P. Layne is an associate professor of epidemiology at the UCLA School of Public Health. Michael H. Sommer is a visiting scholar at the Institute of Governmental Studies, UC Berkeley.

latimes.com



To: Jim Willie CB who wrote (7665)10/10/2002 10:58:28 AM
From: stockman_scott  Respond to of 89467
 
MORGAN WOES WIDEN

By JESSICA SOMMAR
The New York Post

October 10, 2002 -- Another setback for J.P. Morgan Chairman and CEO William Harrison could send the former high-scoring banking head honcho to the showers, for good.
Moody's slapped down the bank's credit a notch yesterday because analysts felt the bank couldn't "maintain acceptable profitability."

And while the nation's second-largest bank plans to take another swing at slashing staffers to slow the hemorrhaging profits - there just might be a pink slip with Harrison's name on it this time around, analysts said.

"Something has to be done to shore up confidence. I don't know if it's getting rid of him or finding some other way to improve results," said Craig Woker, securities analyst at independent researchers Morningstar, Inc. "But just when things can't get any worse, they seem to find a way to dig the hole even deeper."

The Street's been following Harrison's moves closely as the bank faces regulatory probes and a plummeting stock price.

The scathing criticism of Harrison has even prompted J.P. Morgan stars to circle the wagons in support of their embattled leader.

"The board's very happy with Harrison, even though the papers might lead you to think something else," said Larry Bossidy, an influential director of J.P. Morgan Chase, in the Financial Times yesterday.

"Nobody's come to the conclusion that it [the strategy] needs to be changed," Bossidy said.

But experts say the bank's board is in denial, and that yesterday's downgrade is further evidence of Harrison's failure since merging the banking giants two years ago.

In fact, analysts note that the current value of J.P. Morgan is now below what Harrison paid for Chase - $32 billion - when the merger was heralded two years ago.

"J.P. Morgan Chase is valued at $30.8 billion today. This would have to rank up there as one of the worst mergers of all time," Woker said. "It's becoming more a crisis of confidence in this firm."

"So much of the value of a bank is derived from its upper management that, if the market starts to lose faith something has to happen to restore it."

The downgrade could represent an additional $1.5 million in annual interest expense per $1 billion borrowed, according to Bloomberg data.

J.P. Morgan's stock is down more than 57 percent this year and closed at 15.45 yesterday.

Moody's cited drooping lending revenues, falling stock markets and bad loans to notorious companies such as Enron Corp. in lowering J.P. Morgan Chase's debt rating from Aa3 to A1 - the fifth-highest rating. Standard & Poor's lowered the bank's rating last month.

nypost.com



To: Jim Willie CB who wrote (7665)10/10/2002 11:08:37 AM
From: stockman_scott  Respond to of 89467
 
US dollar to undergo adjustment phase

By JAGDEV SINGH SIDHU
Thursday, October 10, 2002
biz.thestar.com.my

MAJOR currencies in the world are expected to strengthen against the US dollar next year as the American economy undergoes an adjustment phase to correct excesses and weaknesses, according to visiting Standard Chartered Bank chief economist and group head of global research Dr Gerard Lyons.

He said the ringgit peg was ex-pected to be maintained on account of its sustainability and because it was forcing local companies to be competitive.

“I think it is a more difficult environment now and the dollar needs to adjust lower. The US economy is softening,’’ Lyons told Star Business during an interview in Kuala Lum-pur yesterday.

He said there was thought that the dollar was overvalued by be-tween 10% and 25% on a trade-weighted basis and that the euro and the yen could appreciate against the greenback by the second half of the year.

“The euro will strengthen by default, not because the euro zone is a strong growth area but because European investors would be wary about investing in American assets,’’ he said.

“Europeans have kept more of their money at home this year. They have not sold US assets but they have been deterred from putting more money in the US,’’ he said.

Lyons expects strong growth in the US in the third quarter of this year, and said that the growth would supported by continued consumer spending in the final quarter.

He said that should a war in Iraq be swift and the price of oil fall, sentiment on the US dollar would be stimulated in the 1st quarter of next year.

“It is always possible that the dollar would hold on quite strongly against the euro until we move into next year, but then any problem would be reflected in the gradual strengthening of the euro as the US stock market is overvalued,’’ he said.

According to Lyons, the situation with the yen is far more complicated as the Japanese authorities have to grapple with the country’s anaemic banking sector.

“The market would be prepared to test a weaker yen in the near term. In the next few months you could also see the dollar holding on to its strong position against the yen,’’ he said. “But likewise, the yen will hold up and strengthen next year.’’

Lyons sees the dollar trading be-tween 1.05 and 1.08 against the euro in the second half of next year and the yen appreciating to 115 against the greenback in about nine months.

According to Lyons, the ringgit peg “is fairly protected at the mo-ment’’ and, barring any major weakness in the yen and a revaluation of the Chinese currency, he does not foresee any change with the peg.

“It is almost like a stability-overrides-everything policy when it comes to pegs in Asia, in terms of China and Malaysia,’’ he said. “The benefit of the peg at the moment is that it forces Malaysian industry to become competitive.’’

Lyons believes that the US government would be less tolerant of the continued build-up of dollar reserves by Asian countries as it deals with its economic weaknesses.

“Asian central banks have accumulated reserves in recent years as the 1997 crisis showed that some countries were solvent but not liquid. To prevent that recurring, Asian central banks have accumulated dollar reserves,’’ he said. “The US was previously tolerant of that as it served its best interests. It prevented any crisis in Asia and it made it easier for the US to finance its trade deficit.’’

He said, however, that the situation had changed and the US might now want to see a weaker currency as it deals with sputtering economic growth.

“Therefore, I think the US authorities will be less keen on Asian central banks keeping their currencies competitive. I think there will be a lot of international pressure, particularly if Asian growth next year is healthy,’’ Lyons said.



To: Jim Willie CB who wrote (7665)10/10/2002 3:04:21 PM
From: stockman_scott  Respond to of 89467
 
Elephants in the Room: J.P. Morgan and Ford

By James J. Cramer
TheStreet.com
10/10/2002 09:59 AM EDT

What if J.P. Morgan Chase (JPM:NYSE - news - commentary - research - analysis) has a funding problem? Are we even allowed to think that? Are we allowed to whisper that? Or shout it? Does anyone in government even know about it? Do we have a contingency plan?

What if Ford Motor (F:NYSE - news - commentary - research - analysis) has a funding problem? Are we even allowed to think that? Are we allowed to whisper that? Or shout it? Does anyone in government even know about it? Do we have a contingency plan?

No, you did not read that wrong. Both are in trouble. We can deny it, but both companies have elephants in the room -- their bond and stock prices. And those elephants are trumpeting to us that we should begin accepting the fact that these companies may not make it in their current form.

Fortunately, J.P. Morgan is not so huge that if push comes to shove, someone can buy it, probably for the price that Chase paid for just J.P. Morgan alone. Ford, however, is too big to be bought. It will have to be bailed out if its financing woes get much worse. Despite the protestations, Ford's too big to be allowed to fail.

We all know these things. We just don't want to talk about them. They are too frightening. But I want them on the agenda so the policymakers can be ready. Because both will require the help of the government if they go down.

And this government, in the form of its Treasury Department, should be versed in these things, But it has no idea what these companies do, let alone the trouble they are in. Memo to the Treasury: The symbols are JPM and F. Get a Bloomberg. Look at the structures. Learn them.

Yeah, maybe they don't have funding problems. Maybe they have hidden assets that aren't being valued correctly. Maybe they have things on the books that are worth more than we think.

But if the prelude is any judge, they have hidden liabilities that aren't valued correctly. And their books are worth a lot less than we think they are.

Sobering times.



To: Jim Willie CB who wrote (7665)10/11/2002 6:26:28 AM
From: stockman_scott  Respond to of 89467
 
An analysis of the increasing U.S. dependence on imported oil
------------------------------------------

Would it be feasible for Canada, Mexico, Saudi Arabia and Venezuela to supply imports to the U.S. of about 10 MMbpd?

John R. Moroney, Texas A&M University, College Station, Texas

The United States now harbors 5% of the world's population, but consumes 26% of the world's petroleum. The reasons why it consumes so much are straightforward. First, petroleum products are less expensive in the U.S. than elsewhere. Second, U.S. per-capita income is the highest in the world - about five times the world average. With current technology, a wealthy nation requires a great deal of petroleum for manufacturing, for producing electricity and, particularly, for transportation.

Since 1975, the U.S. has consumed far more petroleum than it produced. The gap between domestic consumption and production must, of course, be filled by imports. Crude oil accounts for about 80% of all imported petroleum. The remaining 20% comprises distillate fuel oil, jet fuel, liquefied petroleum gases, gasoline and gasoline blending compounds, residual fuel oil and other products.

Increasing import dependency. Total U.S. petroleum consumption and imports, 1975 to 2000, are shown in the accompanying figure. Apart from a decline between 1977 and 1982, attributable to sharply rising oil prices, both follow a steady upward path. And both will continue to increase for at least the next 20 or 30 years. The important point is that the U.S. will depend increasingly on imported petroleum. Is this increasing dependence on imports inevitable? And, if so, where will the imports come from?

The U.S. must rely increasingly on imports because its domestic reserves are too small to support its high rates of consumption. In fact, only about 2% of the world's known crude oil reserves are in the U.S. and its offshore waters. It is economically efficient for the U.S. to import larger volumes because petroleum is cheaper to produce abroad and import than to produce domestically.

The major, integrated U.S. energy firms that produce within the country and abroad reported that average costs of finding and producing a barrel of oil, 1996 to 1998, were $6.47 in the U.S.; $2.71 in the Middle East; and $2.34 in the Western Hemisphere, outside the U.S. and Canada. For this reason, it makes sense for U.S. firms to increase exploration and production abroad.

U.S. petroleum consumption and imports, MMbpd.

"Reliable" importing countries. In 2000, the U.S. consumed 19.7 MMbpd of petroleum and petroleum products. Of this total, 10.42 MMbpd were imported. From the viewpoint of national security, it makes sense to ensure that these imports are from reliable sources. In 2000, the U.S. imported 1.37 MMbpd from Mexico, 1.81 MMbpd from Canada, 1.57 MMbpd from Saudi Arabia and 1.55 MMbpd from Venezuela, or 6.30 MMbpd from the four.

Canada and Mexico are politically and geographically reliable sources of imports. Barring major political turmoil in Venezuela and the Middle East, both Venezuela and Saudi Arabia seem to be reasonably reliable. So would it be feasible for Canada, Mexico, Saudi Arabia and Venezuela to supply imports to the U.S. of about 10 MMbpd?

Probably not, unless production in Canada, Mexico and Venezuela were to substantially increase. Canada's current production of 2.15 MMbopd is unlikely to expand much in the next few years. Mexico is a different story. According to Pemex estimates, Mexico's crude oil reserves exceed those in the U.S. If Pemex were to enter joint ventures with foreign firms to expand production, Mexico's production and exports could probably be increased promptly by 2 MMbopd. And if production quotas were lifted by OPEC, Venezuela might be able to expand production to 3.8 or 4.0 MMbopd, from 2.6 MMbopd. To import 10 MMbopd is an economically efficient, but politically risky business.

To conclude: The U.S. will continue to rely heavily on imported crude oil and petroleum products. The nation's long-run economic and political interests are best served if these imports are reasonably secure. Political stability in the Middle East and Latin America are essential to this security. The Middle East is now a political powder keg.

The author

John R. Moroney is Professor of Economics at Texas A&M University, College Station, Texas, and Schmidt International Professor in the A.B. Freeman Business School, Tulane University. He recently served as Professor of Econometrics at Instituto Technologico y De Estudios Superiores De Monterrey (ITESM). Contact information: jmoroney@econ.tamu.edu; Tel: +1 (979) 845-1363.

worldoil.com



To: Jim Willie CB who wrote (7665)10/11/2002 8:12:39 AM
From: stockman_scott  Respond to of 89467
 
Another Hurdle That's Tripping Up Business

With pricing power weak, borrowing is just too costly

NEWS: ANALYSIS & COMMENTARY
BusinessWeek Online
OCTOBER 21, 2002


On the face of it, the cost of borrowing for corporations is dirt cheap. Interest rates for corporate bonds have fallen to their lowest level since 1968. The most creditworthy companies paid an average of 6.3% on their bonds in the third quarter of 2002, according to the Federal Reserve, down from 7.1% in the first quarter of 2001.

But even as rates have fallen, corporate pricing power has deteriorated even faster. As a result, even low interest rates can be onerous, since companies have to make their debt payments from a flat, or even falling, stream of revenue. For corporations, therein lies one of the biggest dangers of a near-deflationary economy.

In fact, after adjusting for the lack of pricing power, the true cost of borrowing for companies has risen by almost a full percentage point since early 2001. That's a key reason why U.S. businesses have been unwilling to invest, despite Federal Reserve Chairman Alan Greenspan's 11 rate cuts since then.

Hard to believe? Traditionally, so-called real interest rates are defined as market interest rates minus core consumer inflation, which excludes volatile food and energy prices. By this measure, borrowing for companies has become cheaper.

But the traditional measure is misleading. When it comes to assessing the actual burden of corporate borrowing, it's more relevant to look at how fast companies can raise their own prices. And so-called corporate inflation has fallen much more steeply than consumer inflation, which has been boosted by such noncorporate items as housing.

In the first quarter of 2001, the typical business was able to boost its prices at a 2% rate, according to the Bureau of Labor Statistics. Subtracting that from the average 7% bond rate means that the "real" interest rate faced by businesses was about 5%. Since then, the interest rate for corporations has dropped by almost a percentage point. But businesses are now able to raise their prices only at a 0.4% rate. The result: Real interest rates for the most creditworthy of corporate borrowers have risen to 5.9%--a higher rate than they paid on average during the boom years of the 1990s.

By contrast, consumers have seen their real interest rates on home loans edge down over the same period. That's true when measured in the usual way--by subtracting the rate of core consumer inflation from the actual interest rates paid. But it's also true when the nominal rates are adjusted to reflect the rate at which wages are rising. Since the beginning of the recession in early 2001, both measures show that inflation has come down by 0.5 percentage points, while average 30-year fixed mortgage rates have declined by 0.7 percentage points. So real mortgage rates have fallen from 3.3% to 3.1%.

As a result, the gap between the cost of capital for companies and consumers has grown to about three percentage points, the widest it has been in the past two decades. That large gap goes a long way toward explaining why consumers have been so much more free-spending than corporations.

By Michael J. Mandel in New York

businessweek.com@@3dVuGGUQtNPsCw4A/premium/content/02_42/b3804041.htm



To: Jim Willie CB who wrote (7665)10/13/2002 12:22:23 AM
From: stockman_scott  Respond to of 89467
 
Officials See Signs of a Revived Al Qaeda

By DON VAN NATTA Jr. and DAVID JOHNSTON
The New York Times
Sunday Oct. 13, 2002

WASHINGTON — American officials say they fear that terrorist attacks in the past week and taped messages from leaders of Al Qaeda signal the beginning of a new wave of terrorist activity and possibly a large-scale attack.

Senior government officials also say that an attack that crippled a French oil tanker near Yemen and another that killed a United States marine in Kuwait showed that the terror network had reconstituted itself, with smaller groups prompted to begin new attacks by inflammatory new messages from Qaeda leaders.

Kuwait's interior minister said today that a statement from the gunmen's leader suggested a link to Al Qaeda and that the group had planned other attacks. [Page 17.] But other officials said it was not known whether the attackers were operating under direct orders from Al Qaeda's senior leaders.

The group's latest round of attacks may be a response to the Bush administration's Iraq policy, the officials said. An audiotape of Osama bin Laden's closest lieutenant, Ayman al-Zawahiri, threatened continued attacks on "America and its allies," and denounced American plans to attack Iraq.

"The campaign against Iraq has an objective that is far beyond Iraq to reach the Arab and Islamic world," Mr. Zawahiri said on the tape. United States officials said his message appeared to be an attempt to justify and incite renewed violence against American targets.

Another audiotape, which officials say is of Mr. bin Laden, repeated Al Qaeda's threats against the United States. Both tapes were broadcast in the past week by Al Jazeera, the satellite channel based in Qatar, and one American official said the two messages might have been intended to be a green light for Al Qaeda to initiate large-scale attacks.

Officials said that in the past week intelligence analysts had received reports of a spike in reported threats against the United States and American interests abroad.

"I'm afraid you'll see a lot more of this," said Senator Richard C. Shelby, an Alabama Republican. "We always warned that there would be more attacks because we have not finished off the Al Qaeda group. We've disrupted it. We've had them on the run, but they are still around."

The government's latest intelligence analysis is based in part on the tanker explosion off Yemen a week ago, and on the shooting of two American marines on an island off Kuwait on Tuesday, an attack that killed one and wounded the other.

"The marines in Kuwait and the ship off Yemen — those could be precursors of more to come," one senior administration official said. "We believe this is a serious development."

So far, the government's response to the two attacks has remained deliberately low key. On Wednesday, the Bush administration discussed whether to raise the color-coded threat alert warning level from yellow to orange. But after a White House meeting, officials decided the threat was not yet specific enough.

Instead, the Federal Bureau of Investigation and the Office of Homeland Security issued a threat alert to the country's 14,000 state and local police agencies, saying the recent messages showed that "Al Qaeda continues to plan major attacks against U.S. interests."

"The statements suggest that an attack may have been approved," the alert said, "while the specific timing is left to operatives in the field."

The threat warning said Al Qaeda had issued similar messages before the bombing of two American embassies in East Africa in August 1998. "The content of the statements and the context surrounding these threats reinforces our view that they may signal an attack," the message said. "One senior detainee maintains that Al Qaeda would only release such a statement after approving a specific plan for an attack."

Officials are also concerned that another large-scale attack, perhaps in the United States, could be imminent because it usually takes at least one year for Al Qaeda to organize an ambitious attack. Nearly a year separated the attack on the American destroyer Cole in a port in Yemen in October 2000 and the Sept. 11, 2001, attacks against the World Trade Center and the Pentagon.

(Page 2 of 2)

The latest wave may be linked to earlier attacks this year. In June, a suicide bomber blew up a truck outside the American Consulate in Karachi, Pakistan, killing 14 Pakistanis. Since then, the authorities have linked Al Qaeda to at least five attacks or thwarted attacks, though none in the United States.

Even if terror groups do not initiate another large and concerted strike, officials say, the concern is about small groups of Qaeda members carrying out attacks in the United States that are similar to the recent ones in Kuwait and Yemen.

"There are remnants that are still out there somewhere, and they still have all that training," one senior government official said.

For months, senior officials have feared that Al Qaeda would emerge after its members' escape from Afghanistan as a more dispersed but deadly network that would be far more difficult to contain. They worried that the network's old hierarchy, led by Mr. bin Laden, had been replaced by tactical operatives with makeshift alliances to militant groups in countries like Pakistan, Egypt, Algeria and Yemen.

The issue of whether Mr. Zawahiri survived the war in Afghanistan seemed to be settled by the release of the recording with references to recent events, like the Iraq debate. But the absence of video images of Mr. Zawahiri suggested to some analysts that he had been injured or had somehow changed his appearance to elude capture.

In the taped message, Mr. Zawahiri also takes credit for several recent terrorist attacks, including several against German and French targets in the Middle East. One goal of American policy, he said, was to make Israel the dominant power in the region. Another objective, he said, was to divide Saudi Arabia into four regions, with its oil fields under the direct control of the United States.

Intelligence officials said they thought that the voices on the audiotapes were those of Mr. bin Laden and Mr. Zawahiri. But they said that only the Zawahiri tape appeared to be recent, possibly recorded within the past month and no later than last summer, officials said.

Greater skepticism surrounds the bin Laden tape, released on Oct. 6 by Al Jazeera. In it, he refers to the Sept. 11 attacks as having already occurred but does not cite any other specific events that could be used to date the recording.

Mr. Zawahiri said in his tape that Mr. bin Laden and Mullah Muhammad Omar, the Taliban leader, had survived the war. But the tape provided no evidence to support that claim, and officials remain divided over whether Mr. bin Laden is alive. But they say that Mullah Omar survived the war and is in hiding.

The tape thought to be of Mr. bin Laden contained an anti-American message that is familiar from his previous video and audio messages. "Let America increase the pace of this course of conflict or decrease it," it says, "we will retaliate in kind, God willing, and, God is our witness, that the men of Islam are preparing for you what would fill your hearts with terror, and they will target the hinges of your economy until you stop your injustice and aggression or either one of us dies first."

nytimes.com



To: Jim Willie CB who wrote (7665)10/15/2002 4:29:59 PM
From: stockman_scott  Respond to of 89467
 
we are all just actors in greenspan's world...

csmonitor.com



To: Jim Willie CB who wrote (7665)10/16/2002 8:49:52 AM
From: stockman_scott  Respond to of 89467
 
Congress To Urge DOJ, SEC To Investigate Banks

Penelope Patsuris
Forbes.com
10.15.02, 6:47 PM ET

NEW YORK - Possibly as early as Wednesday morning, the Department of Justice and the Securities and Exchange Commission will receive letters from Congress formerly recommending that the two regulatory bodies investigate the roles that Citigroup, Merrill Lynch and J.P. Morgan Chase played in the demise of Enron.

All three investment banks are suspected of helping Enron (otc: ENRNQ - news - people ) conceal the heavy debt that helped destroy the energy outfit and its investors, by helping to craft $8 billion worth of sham transactions that made Enron look cash-rich instead of over-leveraged.

The Senate's bipartisan Permanent Subcommittee on Investigations (PSI) has been investigating the matter since January 2002 and has determined that "violations of United States law may have occurred," according to a source close to the subcommittee. Investigators believe Citigroup (nyse: C - news - people ), Merrill Lynch (nyse: MER - news - people ) and J.P. Morgan Chase (nyse: JPM - news - people ) helped Enron hide $4 billion in debt and inflate cash flow by almost $2 billion. The subcommittee, which has been around since the 1950's, is an investigative body without any legislative jurisdiction, so it must now hand off the case.

The PSI held two hearings in July on the role played by financial institutions in the Enron debacle, with representatives of all three banks in attendance. "Despite their testimony," says the source, "it was clear that the banks were knowing partners in these transactions with Enron. The documents indicated that they knew what Enron's motivations were in engaging in these transactions."

During the hearings, emails were produced that were sent between bank employees which explicitly discussed "how Enron loved these deals because it helped them hide their debt."

All three banks are already in plenty of hot water thanks to issues spanning from allegedly corrupt stock research to "spinning" hot initial public offering shares to investment banking clients in a quid pro quo to land more business from them. It seems doubtful therefore that closer government scrutiny into their business practices will do much to improve their already-sticky circumstances.

forbes.com



To: Jim Willie CB who wrote (7665)10/16/2002 8:55:20 AM
From: stockman_scott  Respond to of 89467
 
10/16 07:39 J.P. Morgan 3rd-Qtr Profit Falls 91% on Bad Loans (Update2)

By Michael Nol

New York, Oct. 16 (Bloomberg) -- J.P. Morgan Chase & Co.'s third-quarter net income plunged 91 percent as the second-largest U.S. bank wrote off more loans to telecommunications companies and lost money on trading securities.

Net income fell to $40 million, or 1 cent a share, from $449 million, or 22 cents, in the same period last year. J.P. Morgan will cut more than 2,000 investment banking jobs in a bid to cut annual costs by $700 million, the bank said.

Chief Executive Officer William Harrison has overseen only one quarter of profit growth since he formed the bank through a merger two years ago. The world's biggest arranger of syndicated loans has been hit by Enron Corp.'s collapse, Argentina's debt default and the collapse of telecommunications and cable companies. Investment banking revenue also has dropped amid a global decline in initial share sales and mergers business.

''For this bank to prosper, it needs either a massive restructuring or improvement in the capital markets and in the part of the economy driven by corporate spending,'' said Tim Ghriskey, president of Ghriskey Capital Partners LLC, which sold all of its J.P. Morgan shares a year ago.

The bank wrote off $834 million of bad loans to companies in the third quarter, more than quadruple the amount of a year ago.

J.P. Morgan said in a statement that the jobs cuts and other moves to reduce expenses in its investment bank will cost it about $300 million in the fourth quarter and a further $150 million after that.

J.P. Morgan Chase's investment bank lost $256 million as trading revenue plunged 68 percent from a year earlier to $365 million. Some of J.P. Morgan's rivals, such as Goldman Sachs Group Inc. and Citigroup Inc.'s Salomon Smith Barney unit, benefited from gains in fixed-income and bond trading in their third quarters.

J.P. Morgan's investment bank, led by former BankAmerica Corp. Chief Executive David Coulter, also has suffered amid a 31 percent decline in global mergers and acquisitions this year, and the slowest U.S. IPO market in 25 years.

Investment banking fees fell 34 percent to $533 million in the quarter. The bank last month said results would fall ''well below'' the 58 cents a share in operating profit earned in the second quarter.



To: Jim Willie CB who wrote (7665)10/18/2002 2:03:59 PM
From: stockman_scott  Read Replies (2) | Respond to of 89467
 
Supplies of oil may be inexhaustible

By Bruce Bartlett

On April 16, Newsday, the Long Island newspaper, published a startling report that old oil fields in the Gulf of Mexico were somehow being refilled. That is, new oil was being discovered in fields where it previously had not existed.
Scientists, led by Mahlon Kennicutt of Texas A&M University, speculate that the new oil is surging upward from deposits well below those currently in production. "Very light oil and gas were being injected from below, even as the producing was going on," he said.
Although it is not yet known whether this is a worldwide phenomenon or commercially important, the new discovery suggests that there may be far more oil and gas within the Earth's core than previously thought.
Kennicutt is not the first to suggest that vast hydrocarbon deposits may lie well below those currently known. In 1995, the New York Times reported that geochemist Jean Whelan of the Woods Hole Oceanographic Institution in Massachusetts had also found evidence that oil was moving upward into reservoirs from somewhere far deeper.
With growing improvements in technology that are making possible oil drilling at greater and greater depths, it may soon be economically feasible to explore and produce oil from these deep deposits.
The existence of oil much farther below the surface than it was previously thought to exist raises new questions about the origins of oil and natural gas. It has commonly been thought that they are the decayed remains of long dead plants and animals. However, as hydrocarbons are found at extreme depths, this explanation becomes increasingly implausible.
Astronomer Thomas Gold of Cornell University has long been dissatisfied with the dead dinosaur theory of oil's origins. He argues that oil and gas are in fact the remains of methane left over from the Earth's origin. Methane, he points out, is one of the most common minerals in the universe. When the stars and planets were formed eons ago, it was one of the central building blocks from which matter formed.
If Gold's theory is true, then it makes sense that we would continue to find hydrocarbons everywhere within the Earth's core, and not just at the surface, where plants and animals exist. Thus the new research is at least consistent with Gold's theory, even if it remains to be proven.
The new scientific evidence that energy supplies may be vastly greater than previously imagined is only the latest blow to the doomsayers. Such people have been around for 200 years, preaching that mankind has reached the limit to growth because we have found all the oil there is to be found. For at least a century, for example, the U.S. Geological Survey has consistently reported that America had only about 10 years worth of oil left.
In defense of the Geological Survey, it was referring only to proven reserves. These are fields that have been explored, and where estimates have been made regarding their size and production potential. But of course, exploration is a continuing process, so new reserves are discovered all the time.
Economist Julian Simon long made the point that the size of proven reserves cannot be divorced from the price of oil. At current price levels, only about 40 percent of oil can be extracted from existing fields; the remaining 60 percent, which is known to exist, cannot be produced economically and is therefore not included in proven reserve estimates. However, higher prices and advanced technology can easily make it profitable to expand production in existing fields.
Higher prices also encourage exploration into areas that geologists strongly suspect to have oil, but where drilling costs are too high at present. Only a small portion of the Earth's surface has ever been explored for oil, and there is no reason to believe that there are not many large deposits yet to be discovered.
If oil were really becoming more scarce, we would expect to see prices rising over time. In fact, the real price of oil, adjusted for inflation, has been remarkably stable at around $15 per barrel. Temporary price spikes by OPEC (the Organization of Petroleum Exporting Countries) have not proved sustainable because they brought forth new supplies, encouraged substitution of oil with coal or gas, and stimulated conservation by consumers and businesses.
In short, even if the new scientific evidence about oil is wrong, one can still say the world will never run out of it. Higher prices will always bring new supplies to market. As Bjorn Lomberg points out in his new book, The Skeptical Environmentalist (Cambridge University Press), $40 per barrel oil will immediately increase world reserves from a 40 years supply to 250 years because vast known oil shale deposits will become economically viable.
Of all the things we have to worry about in this day and age, running out of oil should not be one of them.

Bruce Bartlett, a senior fellow for the National Center for Policy Analysis in Washington, D.C., writes for Creators Syndicate, 5777 W. Century, Suite 700, Los Angeles, Calif. 90045.

detnews.com



To: Jim Willie CB who wrote (7665)10/22/2002 7:23:22 PM
From: Sully-  Read Replies (3) | Respond to of 89467
 
Oh where oh where has the Wooley Bear gone?
Oh where oh where can he be?
With his posting cut short
and his SEA.v quite long
Oh where oh where can he be?
____________________________________________________________

Ground Control to Wolley Bear. Ground Control to Wolley Bear.
Take your protein pills and put your helmet on.
Ground Control to Wolley Bear, commencing countdown, computer's on.
Check your modem and may God's love be with you.

This is Ground Control to Wolley Bear, you've really made the grade
and the papers want to know whose shirts you wear.
Now it's time to leave the prison cell if you dare.

This is Wolley Bear to Ground Control, I'm stepping through the door.
And I'm floating in a most peculiar way and the stars look very different today.
For here am I sitting in the big house, far above the world.
SI Jeff is rude and there's nothing I can do.

Though I'm past one hundred thousand posts, I'm feeling very still.
And I think my keyboard knows which way to go. Tell SI Police I love them very much........... They know!

Ground Control to Wolley Bear, your circuit's dead, there's something wrong
Can you hear me, Wolley Bear? Can you hear me, Wolley Bear? Can you hear me, Wolley Bear?

Can you- Here am I floating round my lockup far above SI Admin.
SI Jeff is cruel and there's nothing I can do.

All in good fun & all that :-\



To: Jim Willie CB who wrote (7665)10/23/2002 12:03:28 PM
From: stockman_scott  Read Replies (1) | Respond to of 89467
 
FBI WARNS HOUSTON ENERGY COMPANIES ABOUT GROWING SIGNS AL QAEDA MAY BE TARGETING INDUSTRY

Federal authorities warn Houston energy officials that there are growing signs the industry may be targeted by al Qaeda. While there are no specific threats to facilities, the FBI says recent statements by al Qaeda indicate they are targeting the energy industry, the backbone of the U.S. economy. A spokesperson for ExxonMobil says the company has received the FBI warning and is taking steps to heighten security. Federal authorities are also recommending extra security at plants and refineries, and aboard barges.

10/23/2002 10:40 AM EDT energynewslive.com Customer Service 800-945-5426



To: Jim Willie CB who wrote (7665)10/23/2002 3:00:48 PM
From: stockman_scott  Respond to of 89467
 
Cash, Efficiency Are Top Tools When The Enemy Is Deflation

By Donna Howell
Investor's Business Daily
Tuesday October 22, 10:59 am ET

It used to be that deflation wasn't talked about at all. Now it's another worry on Wall Street, a potential recession gremlin.

The deflation meme in the air carries aloft some questions for American business. In a scenario where inflation drops below zero to become deflation, falling prices spell the bane of sustainable commerce. What would companies do to survive? Who could, as buying slows and the real cost of debt rises?

Some early lessons in surviving deflation can be gleaned from firms that already deal with it daily. Not those headquartered overseas, caught in Japan's deflation spiral, but American companies fighting the lowball-pricing battle largely on home soil.

Firms such as fare discounter Southwest Airlines Co. and online computer seller Dell Computer Corp. have learned a thing or two from working in sectors subject to price deflation.

These firms can watch the prices of their goods fall and manage to thrive better than their peers.

How? They stay lean, and at least relatively clean of debt.

"We're fortunate in that we're a 31-year-old company and have always operated under the premise that we need to be able to weather bad times," said Gary Kelly, Southwest's chief financial officer.

Cash Is King

The first deflation survival lesson that hardy firms teach is financial caution. In deflationary times, money in the bank is a good thing.

It's a maxim borrowed from the macroeconomic schoolroom. During inflation, people still buy goods. But in deflation they slow spending, as prices will be lower tomorrow. For companies, and thus their workers, the potential to earn drops. Existing debt becomes costlier. Dollars become dear.

"The way to get rich in deflation is to keep your money in your pocket," explained David Blitzer, chief investment strategist at Standard & Poor's.

Southwest and Dell both do. Dell, of Round Rock, Texas, ended its fiscal 2002 with $8.3 billion in cash and investments. The company's total debt is less than 4% of assets.

"When you're profitable every single quarter, it's pretty easy to keep generating returns," said Lehman Bros. analyst Daniel Niles. "Money's not an issue for these guys. It's a competitive advantage."

The same is true for Southwest. "Right now we've got about $2 billion in the bank," said Kelly. The Dallas-based airline also has about $600 million in unused credit, just in case. "That is a very good war chest in case things really got bad," Kelly said. Southwest keeps a debt level near 15% of assets.

"They have more of an ability to win in the price game because they have so little debt compared to their peers," said Jason Trennert, senior managing director at International Strategy & Investment Group Inc., in New York.

The second deflation survival lesson that both Southwest and Dell teach is efficiency, coupled with frugality.

"Southwest as an operating discipline has kept its operations extremely simple and has kept its cost structure far below that of its major airline competitors," said Lehman Bros. analyst Garrett Chase.

Southwest is the only major carrier to stay profitable since the Sept. 11 attack. The rest suffered losses totaling billions, as costs such as insurance rose while business travel demand flagged.

Air fares in September rose 0.5% year over year after months of decline, but remained 18% below September 2000 levels. As a low-fare airline, Southwest has to keep its seats cheap.

"This is not an environment where you can raise prices," said Kelly. "The way that we manage our profitability is to keep our costs low."

About a third of costs go for salaries and benefits, and another 15% for jet fuel. Southwest manages its risk in both areas.

Workers have a profit stake in the company, which helps motivate them. Southwest hedges risk its in fuel markets with derivatives that cap costs. In all, Kelly says, the airline's cost per seat-mile has fallen since the fourth quarter of 2001.

Low Inventories

Frugality is a mantra at Dell, too. Its just-in-time manufacturing style curbs costs and helps cope with the downward pricing trends that pervade its industry.

"In Q2 we were managing about four days of inventory, which is a company record," said Dell spokesman Venancio Figueroa. "We're able to pay the most up-to-date pricing on components, so if those prices are going to be decreasing we're truly able to pass those on to customers."

The prices of some components are dropping half a percent a week, Figueroa says.

Dell also keeps costs down by doing its own assembly in six locations around the world. "What we want to do with manufacturing is to be in close proximity to customers," said Figueroa. "We're saving inbound and outbound logistics costs - the time to reach the customer is collapsed."

One more tactic both Dell and Southwest use is direct communication with customers.

Southwest was the first major carrier to put up a Web site. That now accounts for nearly half of the airline's ticket sales.

"Southwest.com is the cheapest way for us to sell a seat," said Kelly. "The customer's doing the work."

Dell likes the direct route, too. It builds computers to order for customers, rather than sell through traditional channels.

By running lean and clean, Dell and Southwest have added to market share at a time when their industries are suffering overall. So one could say optimism is the third deflation survival lesson they teach.

Trennert calls Southwest, Dell and discounter Wal-Mart Stores the best at coping with price pressures and thus likely to be sturdy in deflationary times. "The whole idea is these companies won't necessarily be home runs, but will outperform their peers," he said.

biz.yahoo.com