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


To: elpolvo who wrote (7950)10/9/2002 2:29:37 PM
From: stockman_scott  Respond to of 89467
 
Blame it on The Street

By Charles Stein
Boston Globe Columnist
10/6/2002

I am changing my mind about the stock market bubble.

Until recently I was in the camp that said we were all to blame for the market's remarkable rise and fall. We all bought the Internet story; we were all going to be rich; we all lost sight of reality.

I still say we all have to accept our share of the blame, but I've come around to the view that some people deserve a lot more of the blame than others. I'm not referring to the criminals who set out to break the law. I'm referring to the American financial establishment, especially Wall Street.

When the revelations about Wall Street's conflicts of interest first made headlines, I wasn't impressed. Anyone who has ever spoken with Wall Street analysts knew these guys were in the tank to their firm's investment banking clients. But as more news has come out, it has become apparent that analysts weren't just conflicted. They were utterly corrupted.

Just this past week, New York Attorney General Eliot Spitzer released some private e-mails from Jack Grubman. Formerly of Salomon Smith Barney, Grubman was the king of the telecom analysts. He enthusiastically recommended the stocks of telecom firms, many of which brought their banking business to Salomon Smith Barney. But in one case, a small telecom company called Focal Communications Corp. felt Grubman wasn't bullish enough.

In his e-mail, Grubman exploded. ''If I so much as hear one more (expletive) peep out of them, we will put the proper rating on this stock, which every single smart buysider feels is going to zero,'' he told a colleague. Grubman later called Focal a pig.

If this exchange sounds vaguely familiar, that's because it should be. In the spring Spitzer released e-mails from Henry Blodget of Merrill Lynch, once the king of the Internet analysts. Blodget too felt pressured to be even more bullish about Merrill's clients. He too made a threat in an e-mail. ''We are just going to start calling the stocks like we see them, no matter what the consequences are,'' Blodget wrote. He referred to some of the stocks he was recommending as ''pieces of junk.''

Think about what this pair was saying: If you guys don't stop hassling me, I'll actually tell the world the truth - that we are touting stocks we know to be worthless.

If you don't find this shocking, you aren't just jaded. You are ready to join the cast of ''The Sopranos.''

''We had a manipulated stock market,'' said D. Quinn Mills. Mills is not a bomb thrower or a disillusioned first-time investor. He is a professor at Harvard Business School. He is also the author of a new book called, ''Buy, Lie and Sell High: How Investors Lost Out on Enron and The Internet Bubble.''

In his book, Mills takes aim at a whole range of financial actors, everyone from investment bankers to accountants to venture capitalists. ''In the modern world, a financial bubble is made by professional players who take advantage of public excitement to realize profit opportunities,'' Mills writes.

He shows clearly that everyone along the chain threw traditional standards out the window: The venture firms pushed technology start-ups to get big fast; the investment banks took companies public that had no earnings and miniscule sales; the accountants accepted dubious transactions as revenue. By breaking their own rules, says Mills, the financiers were lining their pockets at the expense of unsuspecting investors. In short, the game was rigged.

When the history of the stock market bubble gets written, others will take their lumps. Alan Greenspan was too exuberant about the new economy. Stock options created a powerful incentive to cheat. The financial press wasn't sufficiently skeptical. The stock market bubble Hall of Shame will have plenty of members. But the financiers will occupy a special place there. They should have known better. And in many cases, they did.

boston.com



To: elpolvo who wrote (7950)10/9/2002 2:53:36 PM
From: Raymond Duray  Read Replies (1) | Respond to of 89467
 
elpolvo,

In a sane society, Ari Fleisher would be immediately chastened and banned for his vile speech. But at the White House, it's anything goes.

Speaking of anything goes, here's the latest on the laughingstock the GHP** is running for Governor in California. I have to admit to really finding Bill Simon one of the most amusing jokes of this campaign season.

latimes.com

Too much GHP inbreeding has produced a really amazing campaign.

[[Note: The GOP has been renamed. It is no longer Grand and it is way too Old. Now we call it the Gross Hypocrisy Party.]]



To: elpolvo who wrote (7950)10/9/2002 3:56:14 PM
From: abuelita  Read Replies (2) | Respond to of 89467
 
nasty???



To: elpolvo who wrote (7950)10/9/2002 4:29:27 PM
From: stockman_scott  Respond to of 89467
 
The trouble with being the world's only superpower
_____________________________________________________

OUR WAY
by FAREED ZAKARIA
The New Yorker
Issue of 2002-10-14 and 21
newyorker.com

Years from now, when historians try to explain the world of the early twenty-first century, they might mention the Parsley crisis. It took place in July, when the government of Morocco sent twelve soldiers to a tiny island called Leila, a few hundred feet off its coast, in the Strait of Gibraltar, and planted its flag there. The island is uninhabited, except for some goats, and all that thrives on it is wild parsley, hence its Spanish name, Perejil. But its sovereignty has long been contested by Morocco and Spain, and the Spanish government reacted forcefully to the Moroccan "aggression." Within a couple of weeks, seventy-five Spanish soldiers had been airlifted onto the island. They pulled down the Moroccan flag, hoisted two Spanish flags, and sent the Moroccans home. The Moroccan government denounced the "act of war" and organized rallies, where scores of young men chanted, "Our souls and our blood are sacrifices to you, Leila!" Spain kept its military helicopters hovering over the island and its warships off the coast of Morocco. Absurd as the affair was, someone was going to have to talk the two countries down.

That role fell not to the United Nations, or to the European Union, or to a friendly European country like France, which has good relations with both sides. It fell to the United States. Once it became clear that nothing else was working, Secretary of State Colin Powell began a hectic round of telephone diplomacy, placing more than a dozen calls to the Moroccan king and foreign minister. After a few days, both countries agreed to leave the island unoccupied and begin talks, in Rabat, about its future status. Both governments issued statements thanking the United States for helping to resolve the crisis.

It is a small example but a telling one. The United States has no interests in the Strait of Gibraltar. Unlike the European Union, it has no special leverage with Spain or Morocco. Unlike the United Nations, it cannot speak for the international community. But it was the only country that could resolve the dispute, for a simple, fundamental reason. In a unipolar world, it is the single superpower.

A world with just one major power is unprecedented. For several centuries before 1945, European states of roughly equivalent standing dominated global affairs in a multipolar system. Many powers jockeying for advantage meant shifting alliances and almost constant war. It fixed in people's minds the image of international politics as Realpolitik, a ruthless, ever-changing game of might. Eventually, the system tore itself apart in the two world wars of the twentieth century. Throughout the Cold War, from 1945 until 1991, the world was bipolar. Because there were only two camps, the system was less chaotic, but every confrontation got tied back to the contest between the United States and the Soviet Union. Even isolated flash points—Quemoy and Matsu, Congo, Angola, Nicaragua—quickly became tests of the two superpowers' resolve.

Most nations—including the United States—are still unsure of the character and the consequences of the unipolar world. The confusion has increased dramatically since the terrorist attacks of September 11, 2001, which for many Americans revealed the country's vulnerability: America's overwhelming military power cannot keep it safe. The attacks underscored the point that Harvard's Joseph S. Nye, Jr., made in his recent book, "The Paradox of American Power," which argues that while American power is unmatched, it has its limits in a modern, globalized age. Much of the Western world has lived for some decades with the knowledge that terrorism can plague an open society. But the September attacks were more nihilistic, more deadly than any that had come before. And they were, in a sense, a consequence of the new unipolar world. Americans like to think that this country was attacked because it is free. But so are Italy and Denmark, whose cities stand undisturbed. America was attacked because it is the master of the modern world, deploying its economic, political, and military powers across the globe. Because America is "No. 1," it is also target No. 1.

The immediate effect of the attacks, however, has been a reassertion of American dominance. As the rest of the world watched, Washington moved terror to the top of the global agenda; ousted a regime in Afghanistan, almost entirely from the air; and increased its annual defense budget by almost fifty billion dollars, which is more than the total defense spending of Great Britain. It is now maneuvering, despite initial opposition from almost every other country, to get the United Nations to force Iraq to disarm or face war.

America's relative position in the world has no real historical precedent. Imperial Britain, which at its peak reigned over a quarter of the world's population, is the closest analogy to the United States today, but it is still an inadequate one. To take an example, the symbol of Britain's supremacy was its Navy, which—at great cost to the British treasury—was kept larger than the next two largest navies combined. The United States military today is bigger, in dollars spent on it, than the militaries of the next largest fifteen countries combined—and those expenditures amount to only about four per cent of the country's gross domestic product.

America's dominance now seems self-evident, but most policy experts were slow to see it. In 1990, as the Soviet Union was collapsing, Margaret Thatcher expressed a commonly held view that the world was moving toward three regional groups, "one based on the dollar, one based on the yen, one on the Deutsche mark." The Gulf War changed the atmosphere, but only momentarily. Beset by a recession and mounting deficits, President George H. W. Bush sent his Secretary of State, James Baker, to raise funds from the allies to pay for the war. American economic troubles played a part—"We have more will than wallet," Bush had declared in his Inaugural address—but mostly everyone assumed that unipolarity was a passing phase.

Talk of America's weakness dominated the 1992 Presidential election. "The Cold War is over: Japan and Germany won," the late Paul Tsongas said throughout his campaign for the Democratic nomination. Henry Kissinger, in his 1994 book, "Diplomacy," predicted the emergence of a new multipolar world, as did most scholars. Foreigners concurred: Europeans believed that they were on the path to unity and world power, and Asians spoke confidently of the rise of "the Pacific Century."

Despite these claims, however, foreign problems, no matter how distant, seemed to end up in Washington's lap. When the crisis in the Balkans began, in 1991, the President of the European Council, Jacques Poos, of Luxembourg, declared, "This is the hour of Europe. If one problem can be solved by the Europeans it is the Yugoslav problem. This is a European country and it is not up to the Americans." It was not an unusual or an anti-American view. Most European leaders, including Thatcher and Helmut Kohl, shared it. But several bloody years later it was left to America to stop the fighting. By the time Kosovo erupted, Europe let Washington take the lead. During the East Asian economic crisis, East Timor's struggle for independence, successive Middle East conflicts, and Latin-American defaults, the same pattern emerged. In many cases, other countries were part of the solution, but unless America intervened the crisis persisted. During the nineteen-nineties, American action, with all its flaws, proved a better course than inaction. In the same period, the American economy went into its longest postwar boom and, in the process, reversed a decades-old and seemingly normal relative decline. In 1960, the United States' share of world output was thirty per cent; by 1980 it had dropped to twenty-three per cent; today it is twenty-nine per cent. The American economy is now larger than the next three largest economies—those of Japan, Germany, and Great Britain—combined.

American Presidents, however, were slow to embrace their imperial destiny. Bill Clinton came into office promising to stop worrying about foreign policy and to focus "like a laser beam" on the economy. But the pull of unipolarity is strong. By his second term, he had become a foreign-policy President. George W. Bush, in his campaign, reacting to what he saw as a pattern of overinvolvement in international affairs—from economic bailouts to nation-building—promised to scale back America's commitments. Today, the President who urged that America be "a humble nation" issues diktats to the world community, supports nation-building and bailouts, and is increasing America's foreign-aid budget by fifty per cent. The shift was made complete last month, with the publication of the White House's "National Security Strategy," an unapologetic acceptance of American hegemony.

As America's power became more apparent, foreign governments voiced their growing distaste for it. Clinton's chief economic advisers, Robert Rubin and Lawrence Summers, and their de-facto subordinates at the International Monetary Fund were frequently accused of arrogance as they travelled in developing nations. Diplomats like Madeleine Albright and Richard Holbrooke were disparaged in Europe for acting as if America were, in Albright's phrase, the "indispensable nation." The French foreign minister, Hubert Vedrine, devised the term "hyperpower" to describe Bill Clinton's America.

The complaints have risen to a clamor during the current Bush Administration, which has shown a disdain for allies, treaties, and international organizations. In its first two years it has reneged on more international treaties than any previous Administration. Often its actions seem gratuitous. The Kyoto treaty on global warming, for example, was moribund before the Administration loudly pronounced it dead. (Few European countries are close to meeting their goals, and by leaving out China and India the treaty forfeited the possibility of having any real effect.) But by withdrawing in such confrontational tones the Administration sent a signal that the world's largest consumer of energy was unconcerned about the environment. American allies—even, on occasion, Great Britain—complain that they are informed of, rather than consulted about, American policy. Even when the Administration has ended up pursuing policies multilaterally it has done so muttering and grumbling—as it has in taking its case against Iraq to the United Nations—so that much of the good will it might have generated has been lost.

Some neoconservative writers assert that such rancor is an unavoidable by-product of hegemony. In an influential article published this summer in the journal Policy Review, Robert Kagan argues that European and American differences over multilateral coöperation are a result of their relative strengths. When Europe's big countries were the world's great powers, they cared little for international coöperation, and celebrated Realpolitik. Europe is now weak, he writes, so it favors rules and restraints. America, for its part, wants complete freedom of action: "Now that the United States is powerful, it behaves as powerful nations do." But this view misinterprets history and misunderstands the unique place that America occupied in twentieth-century diplomacy. America was the most powerful country in the world when it proposed the creation of an international organization, the League of Nations, to manage international relations after the First World War. It was the dominant power at the end of the Second World War, when it founded the United Nations, created the Bretton Woods system of international economic coöperation, and launched most of the world's key international organizations. For much of the twentieth century, America embraced international coöperation not out of fear and vulnerability but from a position of confidence and strength. If the Bush Administration rejects this approach, it is indeed, as Richard Holbrooke has charged, making "a radical break with fifty-five years of a bipartisan tradition that sought international agreements and regimes of benefit to us."

But unilateralism is also a reversion to an older American reflex. It is, perhaps, the most venerable tradition in American foreign policy, rooted in the belief that the United States is an exceptional country, set apart from the scheming nations of the Old World. Most American statesmen agreed with Thomas Jefferson when he warned against "entangling alliances." The fear was, quite simply, that associating with European powers would be morally corrupting. John Quincy Adams, in his famous July 4th speech of 1821, declared, "America does not go abroad in search of monsters to destroy." He then explained why: "She well knows that by once enlisting under other banners than her own . . . she would involve herself . . . in all the wars of interest and intrigue, of individual avarice, envy, and ambition. . . . She might become the dictatress of the world: she would be no longer the ruler of her own spirit." Unilateralism did not mean isolationism. America started as thirteen colonies nestled east of the Allegheny Mountains and became a vast continental empire through aggressive diplomacy, financial deals, and, on several occasions, war. Foreign policy has always been worthwhile when the goal was transformation—in this case, the Americanization of new lands. But diplomacy as usual was to be shunned. International politics was to be transcended, not engaged in.

Unilateralism still has a popular appeal, especially in the South, which is now the base of the Republican Party. But it cannot be an organizing principle of foreign policy. It is a disposition, or, at most, a means. The fundamental questions about America's approach to the world are about ends. The Bush Administration has often used America's extraordinary power effectively, getting its way on a host of specific issues, from the A.B.M. treaty to Iraq's weapons production. But what do these issues add up to more broadly? What are the purposes of American hegemony?

The historical answer to that question is to be found in the British missionary movement of the nineteenth century, whose stated aims—to civilize developing countries, abolish the slave trade, act against human-rights abuses, and ostracize despotic governments—were adopted by the liberals, most prominently William Gladstone. In modern times, this Anglo-American vision of an idealistic foreign policy is most closely associated with President Woodrow Wilson.

Wilson was, in many ways, a failure as a politician. A stern man with few skills at negotiation or mediation, he was unable to get his own country to accept his most important project, the League of Nations. The Senate killed it, unwilling to commit America to the defense of something as vast and as vague as world order. But, for all his practical failings, his ideas have endured, indeed triumphed. Today, when someone argues in favor of human rights and democracy, advocates self-determination for minority populations or the dismantling of colonial empires, criticizes secret and duplicitous diplomacy, or supports international law and organizations, he is rightly called Wilsonian. And while the particular mixture of ingredients has varied, almost every American President in the past half century has been, at least rhetorically, a Wilsonian.

Of course, like every powerful nation, the United States has pursued its own interests, often harshly—for instance, in Central America. And when the Cold War seemed most threatening—during the Vietnam War and amid rising Soviet expansion in the Third World—Americans turned to calculation and Realpolitik, carried out most intensively by Henry Kissinger. This raison d'état is still evident in our support of dictatorships from Saudi Arabia to Turkmenistan. But when the United States' position in the world has felt secure its goals have been the broad, idealistic ones that Wilson embodied. "We have it in our power," Ronald Reagan often used to say, quoting Thomas Paine, "to begin the world over again." George H. W. Bush is often seen as a narrow-minded realist, and he would certainly not accept the label "Wilsonian." Yet, when searching for a way to describe his hopes for the world after the Cold War and the Gulf War, he grasped for one of Wilson's most famous ideas. "What is at stake," Bush said, "is a big idea—a new world order, where diverse nations are drawn together in common cause to achieve the universal aspirations of mankind: peace and security, freedom, and the rule of law." A few weeks later, in a speech to a joint session of Congress, Bush evoked "a world where the United Nations, freed from Cold War stalemate, is poised to fulfill the historic vision of its founders. A world in which freedom and respect for human rights find a home among all nations."

George W. Bush, in the first months of his term, did not speak much about the broad goals toward which his Administration's foreign policy was aimed. Some of his pre-September 11th obsessions—particularly missile defense—suggested a notion of national security geared toward staying safe and aloof from the world (though missile defense is ineffective against terrorism). But in what was billed as an important speech, delivered in June at the West Point commencement, Bush began to outline a world view. He described the dangers of the new era and then asserted that "America has, and intends to keep, military strengths beyond challenge, thereby making the destabilizing arms races of other eras pointless, and limiting rivalries to trade and other pursuits of peace." It is a breathtaking statement, promising that American power will transform international politics itself, making the millennia-old struggle over national security obsolete. In some ways, it is the most Wilsonian statement any President has made since Wilson himself, echoing his pledge to use American power to create a "universal dominion of right." This claim is at the center of Bush's new National Security Strategy document, which says on its first page, "Today, the United States enjoys a position of unparalleled military strength and great economic and political influence. In keeping with our heritage and principles, we do not use our strength to press for unilateral advantage. We seek instead to create a balance of power that favors human freedom."

Many of Bush's recent proclamations are Wilsonian. He advocates democracy in Palestine and wants to build a modern, democratic state in Iraq as part of a wider effort to democratize the Arab world. Last month, at the United Nations, in explaining why Iraq was a threat to world peace, he said that "open societies do not threaten the world with mass murder." But while he adopts some of Wilson's loftiest ideals, Bush is also following some of his most fatal practices. Wilson's means were often highly unilateral. When he took the United States into the war, in 1917, he insisted that although it fought alongside France and England, it was not an ally but an "associated power." His entire approach to the war and its aftermath was to dissociate the United States from the sordid desires of its allies. Impatient with other countries' cultures and uninterested in their views, Wilson tended to issue declarations for the whole world. He believed strongly in the righteousness of his cause, and that was enough to allay any concerns he might have had about the reaction of foreign countries. In fact, he thought, their hostility was often proof of the revolutionary nature of his ideas. Some of this may have been true—just as some of Bush's frustration with European and United Nations diplomacy is understandable—but it insured that Wilson was a practical failure. Bush's high-handedness also promises to make his policies ineffective. Yet there is a way to conduct a robust and visionary foreign policy without triggering an avalanche of anti-Americanism around the world. It's called diplomacy.

The American who best understood how to balance idealism and power was Franklin Delano Roosevelt. Roosevelt adopted so many stances during his tenure—from isolationism in the early nineteen-thirties to bargains with Stalin in the nineteen-forties—that he could just as easily be termed a realist, an idealist, a pacifist, and an opportunist. But at the end of the Second World War he faced a challenge unlike any faced by a world leader before. Chief among the victors, presiding over a world in ruins, he had to decide what the postwar world should look like. He set in motion a series of international organizations—dealing with international security, trade, economic policy, food and agriculture, civil aviation—that had Wilsonian goals. Unlike Wilson's projects, however, the most important ones were to be run not as democracies but, rather, by the countries that had real power. That gave them a reason to support the system. The United Nations was to be run by those who had won the war—the United States, the Soviet Union, France, Britain, and China. The Bretton Woods system—the I.M.F. and the World Bank—was to be run by the country providing most of the cash, which was America. Thus, when America was even more powerful than it is today—by some measures it had fifty per cent of world output—it put into place a series of measures designed to rebuild its adversaries, institutionalize international coöperation on dozens of global issues, and alleviate poverty. No other nation would have done this: Churchill and Stalin were busy carving out spheres of influence. And few Presidents other than F.D.R. could have done it successfully.

It is difficult to recall today how expansive the American vision was. Roosevelt's successor, Harry Truman, has a reputation as a combative cold warrior; he is the man who founded NATO and launched America into the Korean War. But, from the time he was in high school until the day he died, Truman carried in his wallet lines from Tennyson's "Locksley Hall," which read, in part, "In the Parliament of man, the Federation of the world. / There the common sense of most shall hold a fretful realm in awe, / And the kindly earth shall slumber, lapped in universal law." Roosevelt and Truman knew that to transform the world one had to engage in it. Roosevelt thought poorly of many of his wartime allies and their goals—he despised French and British colonialism, for example—but he understood that those countries had to be accommodated. Truman understood that the United States could best combat Soviet Communism by creating permanent, entangling alliances with other countries. As a result, these two Presidents and their successors created the conditions for the triumph of a world quite different from any that existed in the past. Today, there is an international consensus in favor of democracy, some version of open markets and capitalism, and some international norms, rules, and restraints. This has happened because of the inherent strength of these ideas but also because they have been hitched to American power.

Perhaps most important, Roosevelt and Truman, having lived through the nineteen-thirties, knew how fragile the international system was and believed that it needed support. Having reaped the fruits of this system—upheld by all successive Presidents of both parties—we have come to believe that stability is natural. But the world order put into place by the United States in the past half century—an order based on alliances, organizations, and norms—functions largely because of the respect paid to it by its superpower creator. Without that support, it will crumble into chaos.

America can uphold the international system by itself. That would certainly give it the most freedom of action. But America is not an imperial power. A country that will not provide security fifty miles outside Kabul—one year after September 11th—is not going to take on the burdens of intervention, occupation, and nation-building in crisis after crisis around the world. And why should it, when there is another way? So far, we have handed these "imperial" missions over to the very allies and organizations—the international community—of which we are often so skeptical. Today, there are roughly as many non-American as American troops in Afghanistan, and most of the costs of Balkan reconstruction have been borne by the European Union. In the past five years, the United Nations has engaged in nation-building in Bosnia, Kosovo, East Timor, Cambodia, and parts of Africa, and has done better than anyone might have expected. When the international system is given help from America—most crucially, in the establishment of peace and order—it can work surprisingly well. The Bush Administration is right to recognize that consensus is not an end in itself. And some American concerns about international organizations are valid. Within these organizations, America faces a special challenge: the United States has only one vote in most international organizations, and when other countries want to gang up on it they use these organizations to do so. But these are the kinds of problems that skillful diplomacy can resolve.

Working to a greater extent through allies and organizations would also make the United States more secure. This week we may snub Germany, but next week we will need its help in arresting suspects and shutting down bank accounts. We will need information from foreign governments on goods shipped from all over the world to insure that something dangerous—say, enriched uranium—does not sail into New York Harbor. In fact, the only sustained protection against the threat of terrorism will come from a new global process of customs and immigration controls which checks people and cargo around the world, using the same standards and sharing databases—in other words, a new international organization. Otherwise, America's borders will become the choke point of global traffic—something that would be bad for the economy as well as for the society. As important, American hegemony would gain the legitimacy that comes from operating through an international consensus.

Without this cloak of respectability, America will face a growing hostility around the world. During the Cold War, many nations disliked or disagreed with America—over Vietnam, for example—but they despised the Soviet Union. The enemy of their enemy was, in the end, their friend. But today, with no alternative ideology and no competitors, America stands alone in the world. Everyone else sits in its shadow. This doesn't mean that other countries will form military alliances against America; that would be pointless. But countries will obstruct American purposes whenever and in whatever way they can, and the pursuit of American interests will have to be undertaken through coercion rather than consensus. Anti-Americanism will become the global language of political protest—the default ideology of opposition—unifying the world's discontents and malcontents, some of whom, as we have discovered, can be very dangerous.

"It is better to be feared than loved," Machiavelli wrote. But he was wrong. The Soviet Union was feared by its allies; the United States was loved, or, at least, liked. Look who's still around. America has transformed the world with its power but also with its ideals. When China's pro-democracy protesters gathered in Tiananmen Square, they built a makeshift figure that suggested the Statue of Liberty, not an F-16. America remains the universal nation, the country people across the world believe should speak for universal values. Its image may not be as benign as Americans think, but it is, in the end, better than the alternatives. That is what has made America's awesome power tolerable to the world for so long. The belief that America is different is its ultimate source of strength. If we mobilize all our awesome powers and lose this one, we will have hegemony—but will it be worth having?



To: elpolvo who wrote (7950)10/9/2002 7:48:10 PM
From: Dealer  Read Replies (3) | Respond to of 89467
 
What does that have to do with the price of GOLD??

Maybe I just don't get it.

???

dealie



To: elpolvo who wrote (7950)10/9/2002 8:50:29 PM
From: SOROS  Read Replies (3) | Respond to of 89467
 
<font color=red>GOLDEN DOGHOUSE DROPPINGS</font>

"yeah, some changes in REFI trends
the paydown of debts contributes to deflation by removing money from the system
that money wont be buying VCR's, new clothes, shoes, or vacations
which is worse: REFI-based spending economy, or deflation of money supply thru retired debt ???
the latter is certainly an event closer to true economic resolution of imbalances
still some REFI cashout spending, but probably way way down

thanks, Soros, for sending Russell's full article

saw another CNBC poll that 39% of respondents SPEND MORE THAN THEIR INCOME
with the other 61% spending within their means
reasons were not a part of the questionnaire
some surely are spending despite layoff lost income
but my guess is most are just spending beyond their means in an effort TO MAINTAIN WHAT THEY BELIEVE IS JUSTIFIED TO BE THEIR STANDARD OF LIVING
translation: over their heads

watching MariaB on CNBC giving shit to some Bill Meade of RBC Capital
he said "stocks are cheap"
but Maria has a reader who sent her an email recalling that he bought Brocade upon a springtime RBC recommendation at 15, and now at 5

I love this contrary thinking employed during bear markets
such thinking works during bull markets, not bears
conditional behavior has critical requirements for learning whereby the background environment MUST BE SIMILAR
try ringing a bell in the midst of wolves, and you quickly become their lunch
but ringing that same bell in the barnyard leads to your family dog salivating <G>

so past conditioning is leading to destruction of stock accounts
by their thought pattern, the Intensive Care Unit of hospitals should produce some Olympian standouts !!!
a strong athlete resting on his back is very close to his next great race
but a guy who had triple bypass surgery, lying on his driveway might be closer to death

my list of sub-$1 stocks is growing

PeggyQ of CNBC reported from the NYSE floor that .....
"MILLIONS OF SHARES ARE UP FOR SALE ON LIMIT ORDERS AT THE NYSE,
BUT WE HAVE AN ABSENCE OF BUYERS"

Dow Utilities are now down about 55% from the peak last year !!!
Dow Tranports are down below critical support
Dow Tranny down 9.5% TODAY !!!
these two signal EXTREEEEEEME trouble ahead
Utes typically forecast the economy 6-9 months out
Tranny typically confirms the new stock lows
so I conclude much worse damage ahead, with more debt collapse

MariaB is now asking "ARE THE BANKS GOING BANKRUPT ?" with incredulity and sassy tone
my answer: "A FEW WILL"
credit to Tyler Matheson, who responded
"I GUARANTEE YOU THAT IF SPITZER HAD CHARGED MERRILL LYNCH WITH A FELONY, THEY WOULD BE OUT OF BUSINESS RIGHT NOW, JUST LIKE ANDERSON"
that shut up MariaB

the worst Dow performers in 2002 are:
JPMORGAN, INTEL, IBM, HOMODEPO, ALCOA

a bruising week to follow a few recent bruising weeks
I maintain the bear market will be over when CNBC is off the air"

AND:

"I am deeply disappointed by gold lately
not enough to back out
the paper-addicted investment world is totally totally totally hooked on paper securities
and right now, TREASURY BONDS AND NOTES ARE WORKING FOR THEM

Soros sent me the Russell article to my office email
thanks though, if already on SI PM, then fine, thanks

it took me a few weeks to get the 4figure AU also
I felt dense too
he made some vague reference to his nifty moniker
only then did I figure it out
I have recommended that he change it, several times,
to 4figureAU
the difference between us is that you are not dense
BUT I STILL AM

investors didnt learn about the overvalued stocks until it blew up in their (our) faces
same story must occur with bonds in the Treasury market
right now, even the corporate bond holders are moving into Trez bonds
even FannyMae is hedging with Trez bonds
the USGovt is reluctantly encouraging Trez bonds
the whole world is buying US Trez bonds

NOT UNTIL TREZ BONDS LEAD TO LOSSES WILL GOLD TAKE OFF !!!
AND THEIR INITIAL MOVE WILL BE BACK INTO STOCKS
WHERE THEIR LOSSES WILL MOUNT HIGHER, ON FALSE RALLY
it is as simple as that, since learning is too difficult
even Sinclair is getting pissed off, unimpressed

gold will build pressure in the #315-325 range for a while
like a volcano
the paper machier of short gold futures and Trez bonds will end up all over investors and bankers faces

USdollar fell badly today, but it all occurred within its recent range
as long as US$ remains within 105 to 108, gold is stuck
Sinclair cites 104.5 as the critical support break level
makes perfect sense, even a T/A amateur can see that

US investors only know one way: PUMP IT UP UNTIL IT KILLS
just like obesity
American investors are not very intelligent, never were
why expect them to get smart now?
they are pursuing real estate with bond hands
remember: this is an economically and financially illiterate nation

their discovery of GOLD will not come easily
they will have to get in line BEHIND THE ASIANS
Americans will jump on the Golden Wagon only after #400"

AND:

"USdollar is very close to breaking its bear pennant flag
I refer to the support line in this flag pause pattern clearly evident in July, August, September, and into Ocotober

stockcharts.com[h,a]daclyyay[dc][pb50!d20,2!f][vc60][iUb14!Uh15,....

check the line support connecting the following points:
(main price chart)
103.5 in mid-July
105.4 in early Sept
106.5 and 106.95 in early October

while a move below 105.5 would not mean a break below the critical July lows, it WOULD mean a nearterm breakdown in the pause pennant pattern
pause pennants allow a market to take some time, reflect, examine the fundamentals (all worsening), and then to resume after the oversold condition is resolved
the USdollar oversold condition is long gone

two other fine points to mention:
the Relative Strenk is weakening, now below midrange 50
no evident gain of strenk for the buck since July
that is in the top cycle chart

the Daily Stochastix is showing a Bearish Divergence
notice in mid-August and early-Sept the big black wavey line shows a downtrend pattern
from 85 top to 70 top, now turning down at 50
that identifies a Bearish Divergence, whereby the dollar is rising in a weak upward pennant, but the downtrend DStoch is a sign of weakness
now in early-Oct, we have the potential for that DStoch downtrend to have a third top to occur, as it is turning down now

I have personally seen dozens of such patterns
Bear Divergences and Bull Divergences are very reliable
when the nearterm support breaks, things start to unravel
we will see very soon
October is such a deadly month, as is September

GOLD will go nowhere unless/until USdollar breaks down
or until TrezBonds reverse toward higher rates
or BOTH, probably BOTH, since investors as so stupid"