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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Voltaire who wrote (56249)	11/27/2002 4:07:43 PM
From: davidcarrsmith	Read Replies (2) \| Respond to of 65232

Happy Thanksgiving, Tom. And to Glenda, too. Dave

To: Voltaire who wrote (56249)	11/27/2002 4:09:20 PM
From: stockman_scott	Respond to of 65232

Data Suggest Weak Spot May Be Ending Wednesday November 27, 1:56 pm ET By Anna Willard WASHINGTON (Reuters) - Americans returned to the shops as the job market improved and the outlook for the depressed manufacturing sector brightened, reports on Wednesday showed, suggesting an economic weak spot may be near an end. Consumer confidence rebounded in November from a nine-year low the prior month while orders for durable goods rose in October for the first time since July and last week's initial jobless claims fell to their lowest level in 21 months. A climb in a closely watched manufacturing index garnered close attention from financial markets and may lead economists to raise estimates for the key national Institute of Supply Management survey, due next week. "The key point is all the data we've seen is consistent with the idea that the economy has seen the worst part of the soft patch," said Alan Ruskin, research director at 4CAST in New York. The stock market soared on the good news, with the Dow Jones industrial average hitting a three-month high, while the dollar gained and Treasury bond prices tumbled. The stock rally rolled on even after a less upbeat report from the Federal Reserve. In its "beige book" report, an anecdotal survey of economic conditions taken in late October and early November, the U.S. central bank said the economy inched ahead in the survey period as consumers spent less on cars and manufacturers struggled, Financial markets took the most cheer from the University of Michigan's November consumer sentiment index which jumped from to 84.2 from 80.6. The number fell slightly short of expectations but broke a five-month run of declines as the recent turnaround in the stock market and a cut in already bargain-basement interest rates earlier this month from the Fed lifted consumer spirits. The number echoed the tone of a report from the private Conference Board on Tuesday that said its consumer confidence index rebounded in November from a nine-year low. Other encouraging news on the consumer front came from the Commerce Department on Wednesday. Commerce said personal spending outpaced income growth for the first time since the summer, rising 0.4 percent after a 0.4 percent drop in September. Consumer spending accounts for a whopping two-thirds of economic activity, so it is crucial to ensuring the economic recovery is a strong one. It helped buffer the effects of the business-led economic downturn last year and has played a major role in keeping the recovery going in 2002. BUSINESSES SPENDING AT LAST There were also signs that businesses may finally be starting to make investments in equipment. Fed officials and private economists see a pickup in business spending as essential for a solid and enduring recovery. Durable goods orders rose a higher-than-expected 2.8 percent in October, the Commerce Department said, boosted in part by strong demand for machinery and a 65.2 percent surge for communications equipment. And in a sign manufacturers would have to boost output to keep up with any increase in demand, inventories stayed lean, down 0.2 percent, while unfilled orders fell 0.5 percent. There was more good news for the beleaguered manufacturing sector, which fell into recession before last year's slump in the broad economy and has since struggled to return to health. The National Association of Purchasing Management's Midwest business activity index rose to 54.3 in November from 45.9 in October. A reading above 50 indicates growth. But the Fed report offered a less optimistic picture for the sector, saying manufacturing activity "remained soft" in most areas with spending on new facilities and equipment limited. JOB MARKET LOOKING UP Positive signals for the labor market were tempered by the fact that seasonal factors may have been at play. Initial claims for state unemployment insurance benefits fell by 17,000 to 364,000 in the week ended Nov. 23, the Labor Department said. That was down from a revised 381,000 the previous week, beating expectations to reach the lowest level since the Feb. 17, 2001 week. Labor cautioned that new claims are more volatile during the holiday season in November and December, noting that the Thanksgiving holiday is one week later this year. Still, economists took heart at the recent downtrend. "The Labor Department noted holidays might have played a role in the decline," said Gerald Cohen, senior economist at Merrill Lynch. "Still, the downward trend in claims suggests the labor market is stabilizing."

To: Voltaire who wrote (56249)	11/27/2002 7:43:31 PM
From: Cactus Jack	Respond to of 65232

Happy Thanksgiving V. jpg

To: Voltaire who wrote (56249)	11/28/2002 9:17:07 PM
From: RR	Read Replies (1) \| Respond to of 65232

Have you not been told the world is coming to an end? Go cry in your milk. Just kidding of course. Funny isn't it. The critics and doom and gloomers have said the same thing for months and months and months. Ain't capitalism great. Got to think and plan longer than your nose. Gobble.... gobble.... So how ya been, General? RR

To: Voltaire who wrote (56249)	11/28/2002 11:02:24 PM
From: Boplicity	Respond to of 65232

he is back , odd that I have return near your return, LOL I guess we both smell money,,, <g> Happy Thanksgiving porch people.. b

To: Voltaire who wrote (56249)	12/5/2002 7:22:15 PM
From: stockman_scott	Respond to of 65232

THE TALKING CURE By James Surowiecki The New Yorker Issue of 2002-12-09 newyorker.com When you think of Wall Street, candor is probably not the first word that leaps to mind, but in the past few months the Street has been gripped by it. Merrill Lynch now warns, on the first page of each of its research reports, that it may be seeking "investment banking or other business relationships from the companies covered in this report." (That is to say, the analysis may be tainted.) The New York Stock Exchange, meanwhile, has proposed a rule that would bar a stock-market analyst from talking to newspapers that fail to disclose the analyst's conflicts of interest. Even the C.E.O. of Goldman Sachs, one of Wall Street's most discreet firms, has chimed in with a public nostra culpa on behalf of the industry, and has exhorted his peers to restore "trust in our system." This outbreak of straight talk is Wall Street's way of addressing the collapse of its credibility. Everyone agrees that conflicts of interest riddle the securities and accounting industries—research analysts touting dubious companies to win their business, auditors signing off on dubious numbers to keep it—and that something must be done, so Wall Street has decided to adopt the talking cure. The problem with the conflicts of interest, the argument goes, is that no one knows about them. Fess up, and the problem goes away. It's a nice thought, but the diagnosis is facile, and the remedy won't work. Start with the central tenet: that during the boom the conflicts of interest were kept secret. The truth is, people knew more than they like to admit. Back in 1998, a Business Week cover story called "Wall Street's Spin Game" put the matter succinctly: "The analyst today is an investment banker in sheep's clothing." When Merrill Lynch hired Henry Blodget as an Internet analyst in 1999, the media explained the decision by saying that Blodget, with his rosy predictions, would help the firm bring in more investment-banking business. Jack Grubman, the former Salomon Smith Barney analyst, bragged of his intimate relationship with the companies he was supposed to be evaluating objectively. And the problems in the accounting industry were even more obvious. Though the firms maintained their game face, it was no secret, by the late nineties, that the game itself was rigged. Most investors accepted this state of affairs with the genial tolerance of pro-wrestling fans. Why? One reason, clearly, was the boom itself—people didn't care why an analyst recommended a stock, as long as it went up. But there was something else: it turns out that people think conflicts of interest don't much matter. "If you disclose a conflict of interest, people in general don't know how to use that information," George Loewenstein, an economics professor at Carnegie Mellon, says. "And, to the extent that they do anything at all, they actually tend to underestimate the severity of these conflicts." Usually, conflicts of interest lead not to corruption but, rather, to unconscious biases. Most analysts try to do good work, but the quid-pro-quo arrangements that govern their business seep into their analyses and warp their judgments. (Warped judgments subvert the market; although even honest analysts have a hard time picking stocks, everyone benefits from the flow of sound information.) "People have a pretty good handle on overt corruption, but they don't have a handle on just how powerful these unconscious biases are," Loewenstein says. To test the idea, Loewenstein and his colleagues Don Moore and Daylian Cain devised an experiment. One group of people (estimators) were asked to look at several jars of coins from a distance and estimate the value of the coins in each jar. The more accurate their estimates, the more they were paid. Another group of people (advisers) were allowed to get closer to the jars and give the estimators advice. The advisers, however, were paid according to how high the estimators' guesses were. So the advisers had an incentive to give misleading advice. Not surprisingly, when the estimators listened to the advisers their guesses were higher. The remarkable thing was that even when the estimators were told that the advisers had a conflict of interest they didn't care. They continued to guess higher, as though the advice were honest and unbiased. Full disclosure didn't make them any more skeptical. In the course of the experiment, Loewenstein discovered something even more startling: that disclosure may actually do harm. Once the conflict of interest was disclosed, the advisers' advice got worse. "It's as if people said, 'You know the score, so now anything goes,' " Loewenstein says. Full disclosure, by itself, may have the perverse effect of making analysts and auditors more biased, not less. Obviously, we shouldn't keep conflicts of interest secret. But revealing them doesn't fix a thing. To restore honesty to analyses and audits, you need to get rid of the conflicts themselves. That means completely separating research from investment banking, as Citigroup did in October, and barring auditors from serving as consultants—and making companies bring in new auditors every few years, as regulators have proposed. It has become a truism on Wall Street that conflicts of interest are unavoidable. In fact, most of them only seem so, because avoiding them makes it harder to get rich. That's why full disclosure is suddenly so popular: it requires no substantive change. "People are grasping at the straw of disclosure because it allows them to have their cake and eat it, too," Loewenstein says. Transparency is well and good, but accuracy and objectivity are even better. Wall Street doesn't have to keep confessing its sins. It just has to stop committing them. — James Surowiecki

To: Voltaire who wrote (56249)	12/12/2002 5:13:58 PM
From: stockman_scott	Respond to of 65232

The Legg Mason manager stands by Tyco, and is eyeing Tenet, Home Depot, and other troubled stocks. Bill Miller's latest bets By Paul R. La Monica, CNN/Money Staff Writer December 11, 2002: 3:55 PM EST NEW YORK (CNN/Money) - Bill Miller is continuing to gamble. At a Legg Mason year-end luncheon in New York on Wednesday, Miller talked about his latest stock purchases. And some aren't for the faint of heart. Miller, whose Legg Mason Value Trust has beaten the S&P 500 11 years in a row and is on pace for a 12th, said he recently bought shares of Tenet Healthcare, the troubled hospital operator. Tenet has come under fire of late for aggressive Medicare billing practices as well as allegations that doctors at a California hospital owned by Tenet performed unnecessary surgeries. Recent buys by Miller Stock Price % off high Comcast $23.46 42% General Electric $26.05 38% Home Depot $26.61 49% Tenet Healthcare $17.06 68% In response to these problems, Tenet unveiled more conservative pricing policies last week. By doing so, the company had to lower its earnings outlook for 2003 and 2004. But Miller says the stock's drop, from $50 in October to about $17, is overdone. He thinks the stock is worth about $30. Another risky bet for Miller is Comcast, which recently completed the acquisition of AT&T's cable business. The company is now the largest cable company in the U.S. but Comcast's debt load has ballooned to $30 billion as a result of the deal. Still, Miller thinks Comcast's stock will double within the next three years. Miller also has recently purchased stakes in two blue chips that have had a rough year: General Electric and Home Depot. Miller described both companies as being above average quality at below average multiples. GE's stock has tumbled more than 34 percent this year as the company's earnings outlook has weakened. But Miller likes GE's 2.8 percent dividend yield and its history of dividend increases. Home Depot has plunged nearly 50 percent this year on concerns about its valuation and increased competition from rival Lowe's. Miller says he's encouraged by the company's strong balance sheet ($4 billion in cash and $1.3 billion in long-term debt). Miller said that he bought these four stocks in the third and fourth quarter of this year but declined to be more specific. He also discussed some of his longer-term holdings. He's still very bullish on Tyco, which he said is now the fund's largest holding. Miller says he thinks the stock is worth twice its current market value. And Miller says he's still a fan of Eastman Kodak, which had been struggling to adapt as digital cameras have gained popularity. Kodak recently hit a new 52-week high and has a dividend yield of 4.9 percent. money.cnn.com

To: Voltaire who wrote (56249)	12/20/2002 1:28:03 PM
From: stockman_scott	Respond to of 65232

Settling on Wall Street 20-Dec-02 12:25 ET [BRIEFING.COM - Patrick J. O'Hare] At Briefing.com, we endeavor to provide real-time analysis of just about anything, ranging from earnings announcements to political happenings, that will have an impact on individual stocks or the broader market. Every now and then, though, we feel compelled to editorialize. This is one of those times. Smiles All around-- Well, Almost Later this afternoon, a news conference is going to be held to announce a landmark settlement between regulators and Wall Street firms that is intended to rectify the conflicts of interest in Wall Street's research practices. As most investors know by now, those conflicts of interest came to a head with the popping of the Internet bubble, the fall of Enron, and the Worldcom bankruptcy. The conflicts of interest were really driven home, however, when an investigation by the New York State Attorney General uncovered a number of scandalous e-mails from analysts. In those e-mails, it was apparent that analysts, in a bid to win, or to retain, investment banking business for their firms, were praising companies in the public spotlight with BUY and STRONG BUY recommendations while denigrating them in private with scurrilous claims to colleagues. To say such behavior was an injustice to the individual investor is an understatement as billions upon billions of dollars of capital were invested by hard-working men and women, and retirees, on good faith that the analysis provided by Wall Street was forthright, honest, intelligent, and a true representation of the analyst's view of the companies they were following. To be fair, most analysts adhered to that expected framework, but clearly, not everyone did as their pursuit of profits got in the way of the pursuit of virtue. Pay the Piper Now, the time of reckoning is at hand for the securities industry. Reportedly, the industry will be hit with $1.0 bln in fines and be on the hook for contributing an additional $500 mln to finance the distribution of independent research to small investors. Citigroup (C), allegedly, will pay $325 mln of the $1.0 bln fine, followed by Credit Suisse First Boston, which will pay $150 mln, and a host of other firms, including Goldman Sachs (GS) and Morgan Stanley (MWD), which will pay $50 mln, respectively. While speculation at this point, the settlement is expected to require, among other things, the separation of investment banking and research units, and a ban on the practice of spinning where shares of hot IPOs are granted to executives of companies who either gave underwriting business to Wall Street firms or who were being pursued as investment banking clients. It has also been suggested that analysts won't be allowed to accompany bankers when investment banking pitches are being made. Additionally, there has been talk that a database will be set up so that brokerage analysts' latest calls will be clearly known to the public. All of that is in the best interest of the individual investor. The market seems to think the impending settlement is also in the best interest of Wall Street as the brokerage stocks are trading higher across-the-board today. Briefing.com would concur with the market's assessment as the settlement will remove a dark cloud that has been hanging over the industry all year, and hopefully, help restore its credibility. Okay, the analysis, while brief, is done. It's time for more editorializing. Brother, Can You Spare a Dime The $1.5 bln settlement is considered historic for its size, but truth be told, it is a slap in the face to individual investors who have lost exponentially more as a result of Wall Street's greed. To that end, the laughable part of the settlement is that, supposedly, some of the $1.0 bln will go to a restitution fund for investors. Sure, $1.0 bln sounds like a lot, but put in perspective, it is a drop in the bucket for these firms. Citigroup, for instance, reported net income last year of $14.1 bln on $112 bln in revenue. Yeah, that $325 mln fine, which will of course be written off as a one-time charge, will really hit Citigroup where it hurts. And Morgan Stanley, which reported net income last year of $3.6 bln on revenue of $35.4 bln, must be arranging an extra line of credit now. The bottom-line is that this historic settlement will be embarrassing for the industry, but it won't be costly. No, the real cost was born by the individual investor. If regulators really wanted to teach Wall Street a lesson in terms of accountability, and the premium it must place on ethical behavior, there would be a few more zeros between the one and the decimal point. After all, the only thing Wall Street cares about more than money is losing money. -- Patrick J. O'Hare, Briefing.com

To: Voltaire who wrote (56249)	1/17/2003 12:35:33 AM
From: stockman_scott	Respond to of 65232

State funds firing Wall St. managers Asset managers getting booted for poor public pension fund performance. January 15, 2003: 6:37 AM EST NEW YORK (Reuters) - U.S. state pension fund managers have decided to cut their ties with Wall Street asset managers whom they blame for allowing already-bad stock market losses to grow even bigger. State employee retirement funds lost more than $150 billion in the fiscal year ending June 30, 2002, according to Federal Reserve data, and many outside fund managers are paying the price. Led by California's behemoth $133 billion CalPERS state employee pension fund -- which let go of Merrill Lynch and Credit Suisse and cut the assets managed by Goldman Sachs in 2002 -- states around the country are firing asset managers left and right. While state pension fund managers decide how much of their assets to invest in stocks versus bonds, asset managers are responsible for choosing the specific securities to buy. Gail Stone, executive director of the $3.4 billion Arkansas Public Employees Retirement System, put several managers on watch last year. Stone, whose fund's assets dropped 15.8 percent in the last fiscal year -- the worst showing of states surveyed by Reuters -- said the message to them all was: "I'm watching you and if you don't straighten up, I'm going to fire you." A Reuters survey of the biggest public pension funds, which includes plans for everyone from state employees, teachers, and judges to police officers and firefighters in each of 39 states -- found an aggregate loss of about $90 billion. Every one of them dropped in total assets. The 11 remaining states either did not return calls for comment or do not have public pensions. Credit Suisse and Merrill Lynch declined to comment, and Goldman Sachs noted that it continues to manage CalPERS assets, though $60 million less than it did previously. A slumping stock market, coupled with the fact that many funds paid out more in retirement benefits than contributions collected over the last three years, stung most major public pension funds. Thinking the salad days of the late 1990s -- when stocks looked unstoppable -- would never end, public pension funds made the mistake of reducing employee contributions. Most public pension funds are now increasing the amount of money employers pay into the pension funds to replace assets lost in the stock market. Frustrated by heavy market losses, Maryland released six portfolio managers, the Illinois' teachers fund let go of four and Massachusetts showed one outside investment adviser the door. Given the poor returns, "there is less tolerance for underperformance," said Kevin Leonard, an investment consultant with Seagal Advisors in Boston. Shape up or ship out The stakes are high because investment companies, which pull in fees equal to 0.5 percent of assets under their management annually, oversee as much as several billion dollars in a public employee retirement fund. Underperformers who have escaped the ax have been told to shape up. Arkansas pension chief Stone said regular reviews of money managers' performance are a necessity because "It telegraphs to the membership that we are taking this seriously and we are watching it." Leonard, who advises public pensions on the hiring and firing of outside managers, said he has never seen so many changes in portfolio managers in his 10-year career. "When the market is down 29 percent and you are down 30 percent, there is a lot less understanding," he said. To compensate for losses, some public retirement systems brought in new managers who specialized in alternative, and sometimes riskier, investments such as hedge funds, private equity, venture capital and distressed debt, according to Portland, Oregon-based investment consultant Jerry Davies, at R.V. Kuhns & Associates. For example, Oregon, a long-time private equity investor, upped the portion of its $40 billion public pension that can be invested in that sector to 17 percent from 15 percent. Despite the huge stock market losses, public pensions are not flooding into safer bond investments because the returns are just too low, several state officials said. Most states need an 8 percent annual return to keep up with the growing number of retirees. Go alone? Some states, like Alabama and New Jersey, eschew Wall Street counsel and oversee all public pension funds internally, with mixed results. For the Garden State, the tactic proved very successful throughout the tech bubble of the late 1990s. But after that, the pension's many Internet company investments crashed, and in part led to a drop of more than $25 billion in assets in the last two and a half years. The state is now revamping its investment policy and considering hiring outside managers. Alabama's acting chief investment officer, Darren Schulz, said internal management allows for more nimble investing, with the ability to make quick shifts in asset allocation when needed. -------------------------------------------------------------------------------- Copyright 2003 Reuters All rights reserved.