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To: Jim Willie CB who wrote (2518)	1/8/2003 9:20:54 PM
From: 4figureau	Read Replies (1) \| Respond to of 5423

AOL-TW May Write Down Billions Again Reuters Wednesday, January 8, 2003; 6:29 PM By Reshma Kapadia NEW YORK (Reuters) - AOL Time Warner Inc. is expected to write off several billion dollars -- on top of the record $54 billion charge it took last year -- increasing the strain on its balance sheet, analysts and investors say. The world's largest media company said in October it was probable it would take a "substantial" noncash goodwill impairment charge in the fourth quarter to reflect the reduced value of its America Online unit since its 2001 merger with Time Warner. While AOL Time Warner executives have said debt covenants would not be affected by the noncash charge, accounting experts say such charges can hurt a company's debt rating as well as its ability to borrow. Large charges "could very well have material impact on debt covenants because it erodes net worth and net worth has some meaning in the world of debt covenants," said Robert Willens, an accounting specialist at Lehman Bros. "It reduces shareholder equity." Media veterans said the looming charge was a reminder that merging America Online and Time Warner was a bad idea. The stock price is down 70 percent since the deal was completed. The AOL unit, once called the crown jewel of the combined company, has struggled with a sharp slowdown in advertising spending and subscriber growth. A new management team cut financial targets again last month. Chief Financial Officer Wayne Pace told analysts in October that any charges taken in the fourth quarter would not affect compliance with debt covenants or liquidity. Many investors and analysts said the charge may further constrain AOL Time Warner's financial flexibility. Chief Executive Richard Parsons has said paying off some of the company's approximate $26 billion debt is a top priority. The company last year posted a record $54 billion charge, leading to the largest ever corporate quarterly loss. The charge was taken amid new accounting rules for goodwill and amortization and to reflect the decline in the value of the company since AOL bought Time Warner for $106.2 billion. Financial consultant Peter Cohan said AOL Time Warner has to maintain about $50 million shareholder equity for its debt covenants, and would have to take a charge of nearly $50 billion to be in violation -- something widely unexpected. Some investors and analysts said company executives have suggested the charge could be among the top five thus far but much smaller than the record one it took last year. A company spokesman declined to comment on the size of the charge. Other companies that have taken massive charges include JDS Uniphase Corp., which took a $50 billion write-down in 2001 and a $5.6 billion goodwill and intangible asset write-down last year. Nortel Networks had a $14 billion write-down of acquisitions in the second quarter of 2001. washingtonpost.com

To: Jim Willie CB who wrote (2518)	1/9/2003 9:13:42 AM
From: 4figureau	Read Replies (2) \| Respond to of 5423

Repeat -- take a position in gold Richard Russell Dow Theory Letters 9 January, 2003 >>But the Russell view is different -- the Russell view is that gold is in a major bull market. Furthermore, gold is in the early or accumulation phase of this bull market. Further still, since this is a bull market in gold, I believe gold will go vastly higher. Remember, I go by price action, and I don't give one damn in hell what any other analysts say. I go by what the markets tells me, and what my brain (what little brain I have left) tells me -- and they tell me that gold is in a bull market and that it is heading higher.<< Gold -- I want to say a bit more about gold. I've beseeched my subscribers to take a position in gold and gold shares. Repeat -- take a position in gold, and if you haven't done so, take a position NOW. I'm very much afraid that the US is going into a state of deflation. The bonds are telling me that... The economic statistics are telling me that... My "insides" are telling me that... The US has accumulated too much debt. The US has accumulated more debt than it can handle. The situation looks increasingly as though the debt mountain is about to fall over. If it does, we will have deflation. If we are going into deflation, then investors are going to turn to items and assets that will stand up and remain solvent under severe deflationary conditions -- under bankruptcy condition. There's a "safety pyramid." At the base of the pyramid is gold. Gold is pure intrinsic money, gold is nobody's debt as is the junk we call "dollars" that are churned out by the Federal Reserve. [Purple cardboard]. Therefore, knowledgeable investors who want to protect themselves against deflation will "go for the gold." Gold under deflationary conditions represents ultimate safety. This is the basic reason for the move that we're seeing now as the price of gold rises higher and higher. I heard some fool on CNBC today denigrating gold. He said that gold only goes up in the face of some news emergency such as an attack on Iraq. Pure bull shit. Gold is rising because it senses deflation and a debt collapse. Gold is going up because big money - sophisticated money - smart money - is moving to protect itself against a potential deflationary collapse. Note -- Subscriber are writing telling me that some analysts are saying that gold is topping out and that gold is "blowing off" and that gold will shortly cave in. They may be right, anything can happen to anything in any market. But the Russell view is different -- the Russell view is that gold is in a major bull market. Furthermore, gold is in the early or accumulation phase of this bull market. Further still, since this is a bull market in gold, I believe gold will go vastly higher. Remember, I go by price action, and I don't give one damn in hell what any other analysts say. I go by what the markets tells me, and what my brain (what little brain I have left) tells me -- and they tell me that gold is in a bull market and that it is heading higher. Incidentally, the Commercials (gold banks, hedged mines) currently have a huge short position in gold of 143,000 contracts. And they keep adding to their short position. Ordinarily, the Commercials will prevail. But this time the Commercial shorts are aligned against the primary trend of gold. The Commercials are being squeezed. They need a big break in gold to make money or even to get out of their positions. And so far, they are not getting that big break. How much longer will the Commercials continue to build up their short positions? I don't know. But once a position is taken, it has no further abililty to weaken the market. Only additional new short positions can weaken the market, since new shorts represent further supply. 321gold.com

To: Jim Willie CB who wrote (2518)	1/9/2003 9:37:50 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

U.S. Deficit May Reach $300 Bln in '03, Merrill Says By Vivianne Rodrigues New York, Jan. 8 (Bloomberg) -- President George W. Bush's plan to cut taxes over the next decade combined with a war in Iraq would cause the budget deficit to balloon to a record $300 billion this year, Merrill Lynch & Co. economists said. Merrill, the U.S. biggest securities firm by capital, raised its budget deficit estimate from $225 billion after Bush yesterday proposed a $670 billion plan to boost the economy by cutting personal taxes, giving businesses more incentive to invest, and eliminating taxes on stock dividends. The U.S. recorded a budget deficit of $290 billion in 1992. ``With the increased spending and with the economy growing below potential the deficit will soar,'' said Kathleen Bostjancic, senior economist at Merrill Lynch. Bush announced his plan after the U.S. economy slowed during the fourth quarter. The U.S. expanded at an average 1.5 percent annualized rate in last three months of the year, according to a Bloomberg News survey of economists. Third quarter U.S. growth was 4 percent, the government reported. The economy will probably expand at a 2.7 percent pace this year and at a 3.6 percent rate in 2004, when the budget deficit should fall to $250 billion, Bostjancic said. ``Increase spending particularly on defense and homeland security, additional fiscal stimulus and still weak revenues will lift the deficit,'' Bostjancic said. Merrill estimated the cost of war at about $50 billion. The Congressional Budget Office, which uses actual spending approved by Congress, in August forecast a $145 billion deficit for the current year, which began Oct. 1. Last year, the U.S. posted a $159 billion deficit. Moody's Investors Service previously forecast the deficit at about $300 billion, and Barclay's Capital Inc. yesterday said the shortfall may reach $350 billion. Morgan Stanley Chief U.S. Economist Richard Berner forecast the deficit will rise to $275 billion this fiscal year, $350 billion in 2004 and $275 billion in fiscal 2005. Those projections account for the costs of a ``brief war'' with Iraq, Berner said today on a conference call with other economists. ``Even those numbers compared to the rest of the economy are not as big as what we had at the peak of the budget deficits several years ago,'' Berner said. ``But nonetheless, they do raise the question of fiscal sustainability.'' Bear, Stearns & Co. economists including John Ryding said in a report today they are ``growing increasingly positive'' on the outlook for this year based on early economic data for December, gold and dollar prices, and the tax-cut plan. ``It is simply bad economics, in our opinion, to demonize the Bush tax-cut plan on the grounds that it will grow the deficit,'' they wrote. Merrill is a passive, minority investor in Bloomberg LP, the parent of Bloomberg News. quote.bloomberg.com

To: Jim Willie CB who wrote (2518)	1/9/2003 9:45:50 AM
From: 4figureau	Read Replies (1) \| Respond to of 5423

Bear Roundup: US military budget could increase by $100bn - FT (1/9/2003 6:56 AM) news.ft.com German joblessness hits four-year high - BBC (1/9/2003 6:16 AM news.bbc.co.uk Venezuela warned it may default on debts - FT (1/9/2003 7:13 AM) news.ft.com UN trims world growth forecast - Forbes (1/9/2003 7:26 AM) forbes.com

To: Jim Willie CB who wrote (2518)	1/11/2003 11:23:19 AM
From: 4figureau	Read Replies (2) \| Respond to of 5423

GOLD: Follow the Money Richard Russell Dow Theory Letters 11 January, 2003 >>History shows that gold travels in the direction of the most powerful nations. For years the US attracted the world's gold. Then gold started to leave the US during the '60s, and in 1971 President Nixon shut the gold window. Foreigners were no longer allowed to call in US gold. So who is accumulating the world's gold now? Where's the money going? The word I hear is that the money is going to China and Asia in general. Recently (coincidence?) China opened the Shanghai Gold Exchange, and it seems that China is now encouraging its 1.3 billion population to buy gold. Now why would the Chinese, who have been gold-savvy for thousands of years, do that?<< Gold -- What's the best rule in investing? Here it is dear subscribers, it's FOLLOW THE MONEY. I'll give you an example. I'm going to use gold. Around January 2001 when gold was selling at 255 there was almost no interest in gold. Then, as gold began to rise, old-timers like Richard Russell noticed the rise, noticed the moving averages looking bullish, and we advised buying gold. We were simply following the money. But Wall Street's experts talked gold down and told us that the central banks was "selling the junk" so why in the world should anyone buy it? But as gold continued to rise, gold began to elicit interest from other more-intelligent experts, and today on CNBC World I heard a ten minute serious discussion on gold. Why the discussion on gold at this time? Only one reason. The reason is that gold has been rising in price, and despite all the stupid and uneducated comments, the rising price of gold is now starting to generate serious interest. It's simply a case of FOLLOWING THE MONEY. The world is beginning to follow the path of real money. Here's another interesting example of 'follow the money.' Saudi Arabia is beefing up its forces. Newsweek reports that to strengthen its ties with the White House, the Saudis have retained the services of a high-powered law firm. Which law firm? Well, surprise, surprise, it's the law firm of former Texas GOP congressman Tom Loefler, whose firm will be paid $720,000 a year. Loefler is one of Bush's top moneymen. In fact, Loefler headed up fund-raising for Bush's first gubernatorial campaign. Loefler is also close to VP Cheney. History shows that gold travels in the direction of the most powerful nations. For years the US attracted the world's gold. Then gold started to leave the US during the '60s, and in 1971 President Nixon shut the gold window. Foreigners were no longer allowed to call in US gold. So who is accumulating the world's gold now? Where's the money going? The word I hear is that the money is going to China and Asia in general. Recently (coincidence?) China opened the Shanghai Gold Exchange, and it seems that China is now encouraging its 1.3 billion population to buy gold. Now why would the Chinese, who have been gold-savvy for thousands of years, do that? Then we hear the Gold Dinar has been instituted by Malaysia and soon all Muslim nations may be doing their transactions in gold. Hey, why would the Muslims be so interested in a gold currency. Competition for the dollar? Gosh, there's a thought. As I write this morning the dollar has fallen to a new low and gold is fluctuating around its high. But gold has a technical problem. Looking at the stochastics, I can see that gold is heavily overbought. It needs a rest. True, an item can stay overbought, particularly in a bull market. But the overbought status of gold may act as a brake on gold at the present time. Furthermore, as I have explained, the Commercials have taken a huge short position against gold. In view of the above, I would say that if gold can simply hold above 345, and in doing so work off its overbought position, it will be doing very well. I want to add a few more words about gold. I realize that most of my subscribers now hold some kind of gold, the stocks, the metal, options, futures, I can't know for certain. But here's what I want to say. Gold is in a primary bull market. Gold, real money, is a very emotional item, in that the central banks are afraid of it, the Austrian economists love gold, people who believe in the US Constitution love gold, inflationists hate gold, certain nations sell gold, other nations lust for gold, men throughout history have lived and died for gold, armies have fought for gold. The reason, gold is the only money that has held its value over the course of history. Gold represents permanent wealth. This has occurred in the face of the fact that every paper currency in history has ultimately sunk to worthlessness. In other words, gold has its detractors and its admirers, millions of them on both sides. But gold is in a very peculiar position today. The central banks of the world are frightened of gold because if gold rises, if it takes an increasing amount of the central banks' paper junk money to buy an ounce of gold, then what the hell is wrong with their fiat paper money? It's a question and a situation that scares the devil out of the central banks. So we can expect a lot of erratic action from gold as the various factions use their propaganda and their arguments for or against gold. But the Russell position is this -- Gold is real money -- while dollars and euros and yen and kronos are man-manufactured pseudo-money. If central banks can generate "money" without sweat, then we know that their money is a lie. If it takes the sweat of thousands of men and multi-millions in capital to dig gold out of the ground, we know that gold is something more than a fantasy "legal tender" item produced by the central banks. So here's what I'm getting at. Now is the time to accumulate gold and gold stocks. The hard part will be to sit with our gold and gold stocks while the great battle rages. Declines in gold will represent opportunities to accumulate more gold and gold items. Time is on the side of those of us who accumulate gold because in a bull market a given item will appreciate through time. As the Fed generates an increasing amount of credit and paper in their battle to offset the forces of world deflation, the value of gold will increase. It's simple -- central banks are generating vastly more paper than the gold mines can produce in comparable gold values. As gold climbs, be prepared to listen to the propaganda of the gold haters and those who fear gold. "It's too high," "It's being manipulated higher," "It's being bulled by war scares," "It's just a short squeeze." Get used to it -- there's a huge contingent who have a vested interest in gold going nowhere. They possess loud voices, but they're losers. They're losers because they're on the wrong side of the truth. 321gold.com