Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jim Willie CB who wrote (10666)	12/19/2002 11:19:29 AM
From: stockman_scott	Respond to of 89467

Gold and oil soar on Gulf war fears news.bbc.co.uk

To: Jim Willie CB who wrote (10666)	12/19/2002 2:11:41 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Gold fever could make Bush sick Message 18355101 <<...The danger Bush faces in the gold market is this: The U.S. economy is racked by an epidemic of corporate deceit as well as intractable overcapacity in many industries. America needs risk-takers and speculators willing to bet on enterprises that produce American economic expansion and jobs. Instead, speculative instincts, embodied in sophisticated hedge funds and ordinary investors, are gravitating to gold, which produces no jobs or economic growth. Traders who love price volatility are finding the gold market a ready source of action. The stock and bond markets, by comparison, seem bland...>>

To: Jim Willie CB who wrote (10666)	12/19/2002 2:17:20 PM
From: stockman_scott	Respond to of 89467

Pension Fund Is About to Go the Way of Your 401(k) Bush administration is helping to replace nest eggs with lumps of coal. By John Balzar The Los Angeles Times December 18 2002 It's the holiday season, boom time for pickpockets. We're busy, we're distracted and we're in a mood to think about fellowship, not felonies. Everything's right for Light-Fingered Louie making his move in Washington. We barely notice until later that we've been robbed. Merry Christmas. The Bush administration and its pals in the corporate suites are pulling off just such a filch right now. In a truly mean-spirited retreat from the principles of hard work and loyalty, they're setting up a raid on middle-class pensions. "Radical. Anti-worker," fumed Rep. Bernard Sanders (I-Vt.). He calls it another assault by "Enron culture" CEOs whose campaign contributions hold sway in the administration. "It is going to cost employees dearly," warned his California Democrat colleague Rep. George Miller. Indeed, the General Accounting Office projected that workers could wind up with reductions of 20% to 50% in the monthly pensions they worked for and planned for. At stake are the futures of millions of American families and billions of dollars they thought they earned. But unless they are attentive, they might not notice what's missing for a few years. By then the perpetrators would be lounging at their private yacht clubs and island resorts. Because you can bet that executives are licking their chops this holiday for the chance to inflate their own bonuses by trimming the "expense" of retirement payments for their workforce. Business executives call their dodge the "cash-balance" pension. It works something like this: They get the cash, and we get the balance. Hundreds of companies are expected to begin converting their traditional, fixed-benefit retirement plans to these "cash-balance" alternatives as soon as the proposed regulations take effect, after a three-month comment period. A few years back, the idea of doing away with traditional retirement plans in favor of cash-balance pensions caught on in a big way, and as many as 700 companies imposed the switch on their 8 million or so workers. But they ran into trouble. Employees began to understand what was happening: Older, long-term workers realized that they were the targets. And why not? They were the ones about to retire and put a drain on company profits. They began filing lawsuits and complaints, and the Clinton administration imposed a moratorium on the swindle. Now the Bush administration has called for an end to the moratorium and, further, is offering corporations a shield against worker challenges. Proponents of the cash-balance idea would have us believe that it would modernize the pension system for the benefit of younger workers who no longer make a career at a single company. They would be allowed to carry the accumulated cash balance of their pensions from job to job. In fact, however, employees still must work at a company for five years before vesting, meaning that many highly mobile young people wouldn't receive any benefit after all. Besides, the logic of business suddenly developing a soft spot for its newest employees is transparently bogus. Why in the world would companies want to favor workers who have proved no loyalty over those who have? Simple: Promising the world to 25-year-olds defers costs into the future. Then, who cares? Someone else would have to worry about quarterly profits, bonuses and devising some new pension "reform" to renege on those obligations. Right now, it's the 40- to 55-year-old workers who companies must deal with. And cash-balance pensions as allowed by the Bush administration would do a nasty job of it. First, companies would be given wide latitude in determining the cash value of pensions earned thus far by their long-term workers. Then companies could sharply reduce gains to this value and legally claim that they are not discriminating by age -- even though the intended outcome would only be to reduce benefits for older workers. Basically, employers would not have to honor their promise to the baby boomer generation. During the switch from one type of plan to another, employers could wriggle out of their commitment to base roughly one-third of worker pensions on wages earned in the first half of employment and two-thirds earned during the second half. That was envisioned as the means to reward loyalty and service. But now at mid-career, when steadfast employees should be earning the most toward their eventual pensions, they could find themselves gaining nothing for years to come, and then no faster than the newest employee on the payroll. The net effect, depending on how hard-headed companies choose to be, could reduce a $2,000 traditional pension to $1,000 monthly, according to congressional investigators. Karen Friedman, policy director of the independent Pension Rights Center, says the effect of the regulations would be to force more businesses, even those not inclined to punish their loyal workers, into cash-balance conversions just to keep up with cutthroat competitors. "They are encouraging companies to do the wrong thing." There was a time, and it wasn't so long ago, when conservatives voiced the idea that American values meant keeping faith with those who, as Ronald Reagan put it, "worked hard and played by the rules." Makes you nostalgic, doesn't it?

To: Jim Willie CB who wrote (10666)	12/19/2002 3:03:22 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Gauge Points to 2003 Economic Revival Thursday December 19, 2:18 pm ET By Melissa Bland WASHINGTON (Reuters) - A key U.S. economic forecasting gauge issued on Thursday pointed to an accelerating recovery by next spring, a ray of hope as fresh government figures on unemployment claims confirmed a weak job market. The New York-based Conference Board said its index of leading indicators, designed to predict economic performance three to six months ahead, jumped 0.7 percent in November. That was its biggest gain since a 1.1 percent jump in December 2001, helped by higher stock prices and stronger consumer confidence. Revised figures showed that in October it barely edged up by 0.1 percent, rather than being flat. Analysts said the surprising surge in leading indicators was encouraging, especially in the face of new data from the Labor Department showing new weekly claims for jobless pay still at a lofty level. The department said first-time jobless claims during the week ended Dec. 14 totaled 433,000. While that was down 11,000 from the prior week, it handily topped Wall Street economists' forecasts for 408,000 claims and remained above the 400,000 level that economists say signals stalled job prospects. MODEST REVIVAL SEEN The data fit a general pattern of sluggish expansion currently but with reason to hope for a modest revival by the middle of next year. Last week, the closely watched Blue Chip economic forecasting survey said its members anticipated a gradual pickup in activity during 2003 to an annual growth rate around 3.7 percent by year-end. But the Blue Chip forecast was for anemic 1.4 percent growth in the fourth quarter this year. The Federal Reserve, which has cut U.S. interest rates to their lowest level in four decades, characterizes the current period as a "soft spot" that the economy must work through. The November leading indicators report was taken as a sign of creeping progress, at a minimum reinforcing hope that the economy will avoid slipping back into a recession like the mild one that lasted through the first nine months of 2001. "The rebound in the index is a clear sign that we are basically in no more than a soft patch. The economy is not headed anywhere down the path of anything resembling a double dip," Anthony Chan, chief economist at Banc One Investment Advisors in Columbus, Ohio, said. "These numbers do in fact confirm ... that we are headed in the right direction, although we are moving at a snail's pace in that direction," Chan added. The data failed to cheer financial markets, still weighed down by concerns over possible war with Iraq. Stock prices were lower while bonds moved up, with investors seeking safety while they awaited news on the Bush administration's response to Iraq's 12,000-page arms disclosure. The Conference Board's chief economist, Ken Goldstein, suggested a few more positive factors were kicking in to give the expansion a late-year lift. FINANCE SECTOR BRIGHTENS "Only consumption consistently fueled the recovery throughout 2002. Meanwhile, the financial market slump seems to be lifting a little this autumn," Goldstein said, noting there were no signs that consumers were retrenching. "Recent consumer buying figures have somewhat allayed fears about a weak holiday season and consumer attitudes have also improved," he noted. A separate report from the Federal Reserve Bank of Chicago offered a mixed signal -- it remained in negative territory for a fourth straight month during November but was not in as steep a decline as it was during October. The Chicago Fed said its national activity index, a three-month moving average of a basket of indicators, was adversely affected by a rise in the national unemployment rate to six percent last month. Job weakness may persist for some time, even if the economy rebounds modestly as predicted. The Labor Department report on jobless claims showed the four-week moving average of claims -- a more reliable indicator of job market conditions since it smooths out weekly volatility -- rose by 12,750 to 400,750 last week. "It's still a very soft labor market," Standard & Poor's Chief Economist David Wyss said. "I think flat is probably a better description than deteriorating, but it certainly is in line with what we've seen in the (monthly) employment report where payrolls have been flat for the whole year." On Wednesday, the president of the Richmond Federal Reserve Bank, Alfred Broaddus, suggested companies may try to delay hiring as long as possible while they seek increased rates of productivity by boosting output with existing labor forces.

To: Jim Willie CB who wrote (10666)	12/19/2002 5:04:17 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Refinancing Put $132 Billion Into Economy Thursday December 19, 4:38 pm ET By Mark Felsenthal WASHINGTON (Reuters) - U.S. homeowners took advantage of falling interest rates and rising home values to extract $131.6 billion via mortgage refinancings in 2001 and early 2002, a study by Federal Reserve economists said on Thursday. While consumers spent some of the money, they saved or invested more of it, according to a study published in the Federal Reserve Bulletin. Homeowners spent an estimated $20.7 billion of the cash for personal items such as cars, vacations or medical services, the study said. They plowed an estimated $46.3 billion back into their homes for additions, new kitchens or items such as carpets or drapes, it said. Refinancers used about $28.1 billion to pay down non-mortgage debt and $5.8 billion to pay off second mortgages, the Fed study said. Around $27.5 billion in refinancing proceeds was invested in financial assets, real estate or businesses, it added. The interest rate for the popular 30-year fixed-rate mortgage has scraped lows not seen since the mid-1960s as the Federal Reserve has lowered short-term interest rates to spur the struggling U.S. economy. Interest rates for the long-term home loan have remained low because of uncertainty about the U.S. economic future and the possibility of war against Iraq. Interest for the 30-year mortgage averaged 6.03 percent this week, mortgage financier Freddie Mac (NYSE:FRE - News) reported on Thursday, down from 7.14 percent at the beginning of the year. Home sales are at record levels and housing starts are also vigorous. The strength of housing activity has helped keep the U.S. economic downturn relatively mild, economists have said. A study commissioned by a housing industry trade association released this week said spending from refinancing has contributed one-fifth of U.S. economic growth since 2000. Nearly 40 percent of homeowners who extracted equity in 2001 and the first half of 2002 each took out more than $25,000, the Fed said. The median amount was $18,500. In 1999, the median amount taken out of a refinancing was $10,000, the Fed added. Mortgage originations were expected to hit a record $2.52 trillion in 2002 on the strength of the refinancing boom, Freddie Mac's mortgage finance sibling, Fannie Mae (NYSE:FNM - News), said on Wednesday. Although refinancing has been projected to slow as the economy recovers, a trade industry gauge of refinancing rose last week.