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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (27092)	1/7/2003 11:35:42 PM
From: energyplay	Read Replies (1) \| Respond to of 74559

T.J. got a bad deal from his Venture Captialists, and ended up with only about 2% of Cypress. It's reasonalble for him to have some options - especailly if he has to put up with Pierre Lamond on his board. T.J. is also know as a jerk / joke in the Valley...

To: Raymond Duray who wrote (27092)	1/8/2003 1:53:07 AM
From: portage	Read Replies (3) \| Respond to of 74559

Well Raymond, there's always dividend derivatives when the options game goes stale........ prudentbear.com King Report Stocks rallied and bonds fell on Bush's reported fiscal initiatives. The $600B stimulation package is abhorrent to bonds. Whether it will meaningfully benefit the economy or stocks is moot in the short term because declining bonds produce a Pavlovian response to buy stocks by operators. Yesterday's $ decline suggests the long-term implications of W's plan are not favorable. There is still too much capacity, too much debt, and an over-consumption hangover. How is more intoxication and stimulation beneficial? Will buggy whip or optic fiber manufacturing increase?..Bush said he wants to encourage investment. The problem is over-investment and over-capacity. Then W said it's not the role of government to manage the economy – a big lie. The people that dominate stock activity are not dividend conscious. The market has been bereft of fundamentals for years; speculation and professional trading is de rigueur. Anyone buying LU or Tyco is not interested in 5% tax free…Stocks need to fall precipitously for dividends to be salient. Investment grade buyers will appear when after tax valuations make sense. Repealing the dividend tax will not provide much economic or market impact (Where did the significant market gains come from the past two decades?), but it will stimulate wise guys to employ tax arbitrage techniques that will turn short-term capital gains and interest into tax-free dividends. Anyone paying a short-term capital gain tax or interest income tax, unless restricted by law, would be a sap. Here's how it works, and it's been going on for years: Buy a basket of high paying dividend stocks concurrently with a derivative that hedges market risk. Derivatives adjust for dividends and interest so the derivative on dividends will produce a capital gain to compensate for the dividend that would be lost to the holder of the underlying vehicle. So, the entity that owns the basket of dividend paying stocks with a derivate that hedges against market risk would receive the dividends and a commensurate capital gain loss, adjusted for the prevailing short-term interest rate. The short-term capital loss offsets short-term capital gains. If one has a $5m short-term capital gain to be taxed at 38%, it could be turned into $5m of dividend income at no tax – the capital gain and loss offset, the commission is the cost for saving $1.9m in taxes. A similar strategy could morph interest income into dividends. As we have stated, derivatives allow short term to become long term, capital gains can become dividends or interest and vice versa…Wall Street will create vehicles for investors and corporations that will exploit the probable tax-free dividend loophole. It's tax-arb time for The Street, and anytime tax arbitrage becomes pre-eminent, the economy stagnates or suffers. You can look it up. This is all so ‘70ish. Tax-free dividends will foster great revenue lose for the US Treasury as Wall Street creates various derivatives that convert income and capital gains to dividends. For instance tech companies gave stock options in lieu of cash, now tech companies or any corporations will structure compensation so that key execs get high-paying dividend stock. Let's say MSFT or Bill Gates wants to increase remuneration for him or key execs. In the past, they got stock and options and then the company would boost share prices via repurchases. Gates should declare a huge dividend so he and other MSFT holders would get the benefit tax-free…Dividends must be paid in real cash not pro forma crap…Why would a company repurchase shares if dividends were tax free?…Multiple classes of stock could appear, which would de-democratize investors…Creative corporate financiers and tax attorneys should be ecstatic.

To: Raymond Duray who wrote (27092)	1/8/2003 9:33:01 AM
From: AC Flyer	Read Replies (1) \| Respond to of 74559

>>T.J. Rogers .....one hardened thief. Absolutely certain of the righteousness of his role in ripping off the retail "investor".<< Are you ever going to quit whining about the big boys who ripped you off? Try a little self-reliance for a change, Ray. It's the American way.

To: Raymond Duray who wrote (27092)	1/8/2003 9:40:45 AM
From: AC Flyer	Read Replies (1) \| Respond to of 74559

>>More like Thieves are the White House.....<< George W. is looking more like Robin Hood right now, giving back to the taxpayer what was stolen from the taxpayer by the Sheriff of Washington, Bill Clinton. siliconinvestor.com AP Finance News Bush Pushes $674B Economic Stimulus Plan By MARTIN CRUTSINGER 01/08/2003 07:07:08 EST President Bush, who stunned his critics in 2001 by winning passage of the biggest tax cut since Ronald Reagan, is hoping to repeat history with a bolder-than-expected $674 billion stimulus plan. But whether he wins or loses in Congress, his strategy is almost certainly aimed at avoiding another bit of history - his father's costly political mistake of appearing to ignore the pain inflicted by the nation's last jobless recovery. "Too many of our citizens who want to work cannot find a job and many employers lack the confidence to invest and create new jobs," Bush said Tuesday in Chicago, where he unveiled his new package of tax cuts, saying they were needed to bolster a sputtering recovery. Indeed, the last year's performance bears many similarities to the period when Bush's father was in the White House and the economy was coming out of the 1990-91 recession with economic growth so weak that the unemployment rate kept rising. The jobless rate returned to an eight-year high of 6 percent in November. Analysts are predicting the rate will head even higher in coming months, probably topping out at 6.5 percent in early summer, before stronger growth starts to convince businesses they can hire back laid-off workers. Bush doesn't want his 2004 Democratic opponent to enjoy the kind of success Bill Clinton had in 1992 by using a rising jobless rate to convince voters to reject an incumbent president. Both the size of Bush's new stimulus package - at $674 billion, more than double what the White House just a week ago had been indicating would be offered - and its component parts, which are weighted heavily toward tax relief for the wealthiest Americans, demonstrate that Bush is not afraid to be bold in pushing his economic agenda. Bush, who complained last week that critics were using "class warfare" arguments, rejected the advice of some of his advisers to tone down the tax breaks for the wealthy to blunt such criticism. Instead, he proposed accelerating all the rate cuts scheduled for 2004 and 2006, including those for the top bracket of wealthy taxpayers, and proposed eliminating the tax on corporate dividend payments, not just cutting it in half as contemplated. The elimination of federal taxes on the dividends corporations pay investors will cost $364 billion, more than half of Bush's $674 billion total package. The joint Urban Institute-Brookings Institution Tax Policy Center estimated that 42 percent of these tax savings would go to wealthiest 1 percent of taxpayers. Many economists were perplexed by the plan's heavy reliance on the dividend tax elimination in a package that is supposed to jump-start a sputtering economy, given that taxpayers won't even see this relief until next year when they file their 2003 tax returns. The administration, however, is counting on the tax dividend proposal to lift spirits on Wall Street, where investors have been battered by a $7 trillion drop in stock valuations over the past three years. Some advisers estimate that stock prices could rise by 10 percent with an elimination of the dividend tax. Of course, Bush may also be using the size of his package as a bargaining ploy, intending to trade away some elements later for items more favored by Democrats. There are already competing Democratic proposals in both the Senate and House that have far smaller price tags and offer much more relief to lower-income workers and cash-strapped states. Two potential Democratic presidential rivals, Sens. Joseph Lieberman and John Kerry, blasted Bush's package on Tuesday as a giveaway to the wealthy at the expense of middle-class workers. Bush's plan would provide middle-class tax relief in the form of a $400 increase in the current $600-per-child tax credit and acceleration of relief from the so-called marriage penalty that hits two-earner couples. While economists generally applauded those provisions as more effective stimulus measures, they questioned why Bush had earmarked only a token $3.6 billion to states. Mark Zandi, chief economist of Economy.com, said Bush's package will probably boost economic growth by 0.7 percentage point this year. But he said the spending cuts and tax increases states are being forced to enact to balance their budgets will probably trim 0.5 percentage point from growth, leaving a tiny 0.2 percentage point improvement for the economy as a whole from government actions. Other analysts worried that Bush's plan might provide a short-term boost for the economy this year but turn into a long-term drag over the next decade by causing budget deficits to explode and send interest rates soaring. "I am worried that we are giving away so much in tax cuts, that we will never get back to a budget balance," said David Wyss, chief economist at Standard & Poor's in New York.