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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: SliderOnTheBlack who wrote (24005)	12/20/2002 9:08:11 PM
From: isopatch	Respond to of 36161

Slider. Think it's important to make the points, among others, about the variety of style, analysis and psychology that can all produce excellent results in trading. Although you and I have probably discussed the ins and outs of those considerations more than most threadsters, it's been awhile since they've been posted. Come to think of it? With the many new folks who've joined us in the past few months, it's probably a good time to bring up those issues. Glad you did. Whatever happened to Bullski? Have you head from him? Mot seen a post from him anywhere in a long long time. Wonder if he's still active in the markets. Cheers, Isopatch

To: SliderOnTheBlack who wrote (24005)	12/21/2002 12:52:04 PM
From: NOW	Respond to of 36161

great post. it seems in the back of our minds we all remember that one equity that either got away on its way to meteoric rise (owning MSFT in early 80's and selling early on) or didnt get away (sometimes a more powerful reinforcement). I for one owe a significant portion of my small wealth to one equity which i steadfastly held on to through thick and thin as it rose and split many times. I will likely never have the luck to do that again, but in the back of my mind the thought of it lurks....

To: SliderOnTheBlack who wrote (24005)	1/9/2003 9:42:08 PM
From: pogbull	Respond to of 36161

The Banks That Robbed the World Thursday 9 January 2003 bbc.co.uk They were once celebrated as two of the world’s most successful companies. But in 2002 Enron and WorldCom were exposed as corrupt organisations, run by fraudsters who had lined their pockets with tens of millions of dollars and destroyed $240bn worth of investors’ money. America’s biggest banks helped them at every stage. The moneymen devised one trick after another to conceal the true state of the companies’ finances. In return, these Wall Street firms earned hundreds of millions in fees and loan interest. Ken Lay and Bernie Ebbers are under investigation for the two biggest financial scandals ever, but until last year they were business heroes. How it began In the mid 1980s they were corporate small fry, but over the next fifteen years they would build the companies which created the frauds that shook the world. Ebbers and Lay were first tempted to bend the rules by a desire to boost the value of their own share options in Worldcom and Enron. Bosses only had to make their companies appear more profitable for their options to soar in value. This gave Ebbers and Lay plenty of incentive to cook the books. It was Lay’s Enron that started first, with the help of Citibank. In 1993 Citibank funnelled $125m dollars into a secret offshore company that pretended to buy gas from Enron, which then logged this ‘cash’ as income on its accounts. No gas ever changed hands and later another fake deal was set up so that Citibank would get all its money back – plus interest. Over the years, Citibank would secretly lend almost $5bn, with other banks like JP Morgan lending another $4bn. Enron’s share price rose as investors were duped, and Ken’s options were rising in value. Scam after scam At around the same time, WorldCom’s Ebbers was working with Citibank subsidiary, Salomon, on another scam. Eager to grab lucrative work on WorldCom’s aggressive strategy of takeovers, Salomon was giving Ebbers a parcel of shares in many of the new share flotations or ‘initial public offerings’ (IPOs) that it was organising. The shares soared giving Ebbers instant profits. And within a year, Salomon was asked to handle WorldCom’s record-breaking $37bn takeover of MCI, earning $33m for this job alone. The next big scam was for the banks to employ ‘star’ analysts - meant to write unbiased research to help investors decide what shares to buy – to help boost the WorldCom share price. Salomon’s star telecoms analyst, Jack Grubman was unusually close to Ebbers – he spent weekends on his yacht, went to his wedding and attended WorldCom board meetings. Helped by his relentlessly optimistic reviews, WorldCom’s share price quadrupled in three years. The end is nigh The banks also loved Enron, but by early 1999, its chief financial officer, Andrew Fastow was desperate to conceal the company’s debts and pump up its profits. Merrill Lynch helped him set up a dizzyingly complex network of companies which would prop up Enron a while longer. Merrill Lynch got the lucrative job of raising the finance for LJM2, one of the shell companies designed to cover up Enron’s debts. Wall Street investors were offered fabulous rates of return for investing. Because of the scam, Enron was able to claim profits of $1bn in 2000. In fact it had none. In March 2000 the stock market collapsed and things were getting bad for WorldCom, where costs were rocketing out of control. To cover it up, Scott Sullivan, the company’s chief financial officer, began the world’s biggest fraud. WorldCom executives began to record the spiralling day-to-day costs as spending on assets. This meant that they could account for them over the long term and so boost short-term profits. Nine billion dollars would be mis-stated in this way. Back at Enron, Citibank was persuading outside punters to invest in a new shell company – Yosemite, which would lend cash to Enron. This time, when Enron got the cash it paid off its previous loans from Citibank. So now if Enron collapsed, Citibank would be alright but the Yosemite investors would lose everything. The collapse Enron was living by the pen, and would die by the pen. Auditors Arthur Andersen discovered an accounting error that led to a huge reduction in stockholder equity. This was the first step in an avalanche that led to the investigations, the stock price collapse and finally the bankruptcy. Enron’s collapse opened the floodgates and the markets went into a tailspin as a rash of new scandals was exposed, the last of which was at WorldCom. Executives at both WorldCom and Enron are due to be tried later this year and the authorities in the US are still trying to build a case against Ebbers and Lay. But what about the bankers who made it all possible? Analyst Jack Grubman was sacked, but got a payoff of over $30m. Merrill Lynch has been fined $100m and CSFB $150m. The biggest fine, $300m, was levied on Citigroup. But it can afford it, with estimated profits of $16bn this year. The people who can least afford to lose money have collectively lost billions of dollars out of their paycheques and pensions because of the greed of corrupt executives and the Wall Street bankers who helped to make the frauds possible.