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

To: H James Morris who wrote (8312)	10/23/2002 12:28:49 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Pitt doesn't have what SEC needs By HELEN THOMAS HEARST NEWSPAPERS Wednesday, October 23, 2002 WASHINGTON -- Harvey Pitt, chairman of the Securities and Exchange Commission, may soon return to his lucrative law practice where he specialized in representing large Wall Street accounting firms. That would be reassuring to the millions of investors who have watched their savings and retirement plans go up in smoke amid the explosion of corporate and accounting corruption. The boss of the SEC is supposed to be the federal cop who enforces laws governing corporations, accounting policies and investment rules. That cop should be a person whose integrity is impeccable and who reassures investors and the business community that financial reporting rules are being rigorously enforced. It looks to me as if Pitt is not the right person to be the cop. Early on in his stint as President Bush's nominee to head the SEC, Pitt appeared clueless about issues of public confidence and integrity. The man responsible for assuring truthful disclosures by public companies and their auditing firms got off on the wrong foot. On Oct. 22, 2001 -- a month after he was sworn in as SEC chairman -- Pitt told the American Institute of Certified Public Accountants that he felt their pain about the SEC, saying the commission "has not, of late, always been a kinder and gentler place for accountants." He promised a new era of cooperation. Then came the collapse of Enron, Tyco International, WorldCom, Global Crossing and Arthur Andersen. The financial turmoil surrounding those companies called for a tough SEC chairman. Pitt's tin ear about integrity and the need to avoid conflicts of interest soon came into focus when he was caught meeting privately with officers of accounting firms and Wall Street investment houses that he used to represent, at a time when the SEC was investigating those same companies. In April Pitt raised eyebrows on Capitol Hill when he met with executives of KPMG, an accounting firm and former Pitt client, while the SEC was investigating its role as auditor for Xerox. Pitt still denies any impropriety even though he has been warned that such contacts are verboten. Republican Rep. W. J. "Billy" Tauzin of Louisiana, chairman of the House Energy and Commerce Committee, who had been one of Pitt's biggest defenders, gave up on him after revelations of his meetings with former clients. In a letter Tauzin asked Pitt, "What in the hell are you doing?" Pitt's troubles mounted when he met last month with Henry M. Paulson, CEO of Goldman Sachs, the Wall Street giant under investigation for alleged favoritism in distributing hot new stocks. Again, Pitt claimed that he did nothing wrong. Well, at least he's consistent. Now he must meet an Oct. 28 congressional deadline for selection of a new five-member accounting oversight board that will be a watchdog over leading accounting firms. His handling of that key responsibility hasn't helped his reputation. First, he reportedly told John H. Biggs, former head of a large retirement fund, that he would get the job. The investment community cheered because of the respect that the reform-minded Biggs commands in supervising teachers' pension funds. But wait! Pitt switched signals and let it be known that Biggs probably wasn't going to get the job after all. The audit lobby and its good friend in Congress, Rep. Michael G. Oxley, R-Ohio, weren't pleased with Biggs. He might be too tough. An Oxley spokesman said the congressman, who chairs the House Financial Services Committee, was "interested in a more moderate person, someone not pro-industry or anti-industry." Even The Wall Street Journal editorial page, a regular cheerleader for the Bush administration, took a swipe at Pitt for rescinding his support of Biggs, who the Journal said "has the credibility that markets now need." House Democratic leader Dick Gephardt and Senate Majority Leader Tom Daschle have called on Bush to replace Pitt. So has Sen. John McCain, R-Ariz., saying Pitt should step down because of his continuing ties to the accounting industry. Daschle said the beleaguered SEC chairman appeared to be giving the industry "a veto over who will head the board." The chairman, ever blind to questions of conflicts of interest, claimed his continued contacts with former clients were necessary to help him understand the industry's problems. Later he relented, saying he would stop having such meetings "because what we are doing is too important to risk having people focus on irrelevant issues." White House press secretary Ari Fleischer called the criticism of Pitt "a political charge that has no merit." But clearly the White House is worried. Bush himself has come to the rescue of his hapless SEC chairman, dispatching presidential aide Anne Womack to help him with his public relations. Pitt explained that Womack, 26, who has no experience in the securities industry, will "advise me on making sure the messages I want to communicate to our constituencies are in fact articulated as well as I can do so." I see Womack's job as an emergency rescue mission that will fail because the patient is too far gone to be resuscitated. In the middle of his own political self-destruction, Pitt proposed that his agency be raised to Cabinet level. You have to admire his chutzpah. A lot more is at stake here than Pitt's job. Public confidence in Wall Street and the securities business is at risk --as well as the nation's economy. It's time for Pitt to return to lobbying for Wall Street. Some critics say he never actually left. Helen Thomas is a columnist for Hearst Newspapers. E-mail: helent@hearstdc.com. Copyright 2002 Hearst Newspapers. seattlepi.nwsource.com

To: H James Morris who wrote (8312)	10/24/2002 1:29:51 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

John Myers compares 1970 gold rush to now STOP WORRYING! Bull markets, and I mean true and lengthy bull markets, must have a base from which to build. I don't care if we are talking about the S&P 500, the price of gold, or the price of silver. Consider the great bull market in equities that stretched from 1982 to 2000. I can remember the widespread worry during the first few years of that market and how many thought the Dow Jones Industrial Average's climb from 800 to 1,500 was a bear trap. Some trap! If bear markets are so sneaky that they cause the price of an investment to nearly double, tell me where I can buy into one. Bear markets just don't act like that, but it is true that bears are very clever trappers, inviting the bulls back out with a glimmer of hope only to then slam the door again. That is not what we have seen with gold, however. Look at a one-year gold chart, and you'll see the long-term trend line for gold was established in November 2000. Back in the fall of 2000 we figured that we were getting a terrific bargain on gold stocks (and other natural resource stocks). It turned out we were right. While the major stock indexes have plunged since 2000, commodity prices have risen. The last time that there was a sustained period where stock prices retreated and commodity prices rose was in the 1970s. And today there are some surprisingly similar political and economic events to the ones that drove the price of gold up by more than 2,000%. Then: The federal government was fighting off a recession, and deflation loomed across the economic landscape. The Fed slashed interest rates and the U.S. Treasury began to increase the money supply by more than 10%. Now: The #1 priority for President Bush is to stop the economy from sliding further. The Fed has slashed interest rates while the Treasury is increasing the money supply at a double-digit rate for the first time in 25 years. Then: Trouble was brewing in the Middle East as Israel and its Arab neighbors were gearing up for a war that could drag the United States into the conflict Now: Iraq is the hot spot, and the United States looks certain to enter into a land battle. Once again, Arab nations are on the other side of the fence, dead set against U.S. military involvement. Then: Gold made a long and laborious move after its price was set free. In January 1975 gold hit $100 for the first time. The party was on. Two years later gold reached $200 an ounce. Then came the consolidation. Yet by 1977 gold was down 50% from its highs. Wall Street jumped on this price collapse, saying gold was an archaic investment and not part of the modern world. Now: Gold takes the investment world by storm rising from $280 to nearly $330 -- a major reversal after a two-decade-long bear market. After hitting $330, gold begins to correct. And once again, Wall Street reminds investors that gold is an arcane investment even as Big Board stocks fall in a bloody bear market. Then: Patient investors believed that the economic and political fundamentals would result in a weaker U.S. dollar and a higher price for gold. They were richly rewarded for their persistence. Now: Patient investors believe in the fundamentals of another gold rally. My expectation is that we,too,will be richly rewarded. Bottom line: Hold your ground. The fundamentals for gold are still there... just like in the '70s and '80s. Yours for a golden future, John Myers