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To: Les H who wrote (5594)	2/9/2003 1:05:31 PM
From: marginmike	Respond to of 29600

funny the Afghan resistence guy got killed right before 9-11?? wonder if its a signal of the next attack?

To: Les H who wrote (5594)	2/9/2003 2:33:13 PM
From: Chris McConnel	Respond to of 29600

Weekend Reading By Paul Kedrosky Special to RealMoney.com Editor's note: To access some of these stories, registration or a subscription may be required. Please check the individual links for the site's policy. Good Sunday morning. I'm traveling again this week, and so live-ish from frigid <http://weather.yahoo.com/forecast/CAXX0504_f.html?force_units=1> Toronto, Canada, rather than sunny San Diego, here are articles and papers that caught my attention over the last seven days. For better or worse, the war rally is top of the news. The discussion centers on whether the upcoming war will play out in the capital markets similarly to how its predecessor did in 1991. Before jumping to the meta-conclusion, a quick refresher <http://story.news.yahoo.com/news?tmpl=story2&cid=580&u=/nm/20030209/bs_nm/markets_iraq_relief_dc&printer=1> -- last time around the market fell a little more than 18% after Iraq invaded Kuwait. It rose fitfully as the coalition coalesced, and then fell again as troops set up tents in theSaudi desert. But when the war started the Dow Jones Industrial Average launched. The index gained 115 points -- 4.6% at the time -- and kept going. The Dow soared through the preinvasion level, and finished 1991 up 20%, or 9% above where it was before the war started. Commodities did tricks too, with oil dropping from $40 a barrel to $30. And gold, that war-time haven, fell from $400 an ounce to $380. Whether that will happen this time, is this week's debate <http://online.wsj.com/article/0,,SB1044639557880656880,00.html?mod=home_whats_news_us>. Seems certain that it won't. This time is different from last time, because it won't be as surgical, the end won't be as tidy (at least from a U.S. perspective), and the coalition isn't as cohesive. At least as importantly, the economy was in better shape then than it is now. At the same time, too many people are geared up for a post-war bounce. They remember, at least anecdotally, 1991, and they don't want to miss out on the market fireworks. So the war-means-certain-rally crew are in for a disappointment. I don't think that we'll sell off on the news, but I think what we'll see instead is a compressedacceleration of the 1991 cycle -- a short, steep rally that will be sold. That said, consider the consequences of the war. Even if markets handle war efficiently <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=6977>, looming danger has an unusual effect <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=226895> on savings. Arguably, the current worries over terrorism have some similarities to the Cold War fear of nuclear war -- it's the same fog and ever-present worry. People save less when in that sort of world, which is exactly the sort of news a savings-deficit U.S. doesn't need. In other reading, the takedown (sort of) of Frank Quattrone <http://nytimes.com/2003/02/09/business/yourmoney/09WATC.html> got less interest this week than it would have a year or so ago. The Credit Suisse First Boston banker-cum-analyst was, I think, more a symptom than a cause. He stands a better-than-even chance of being a lower-rent, hirsute <http://dictionary.reference.com/search?q=hirsute&r=67> version of Michael Milken <http://www.milkeninstitute.org/> -- an easy target who confounds critics by resuscitating himself and coming out the other side with accolades. Some quick hits: OECD's leading indicators <http://www.oecd.org/pdf/M00038000/M00038774.pdf> show a fumbling stab at economic recovery. The bond bomb <http://www.telegraph.co.uk/money/main.jhtml;$sessionid$LX44YFOW02B2XQFIQMFCFFOAVCBQYIV0?xml=/money/2003/02/09/ccscandl09.xml&sSheet=/money/2003/02/09/ixcoms.html> in the U.K. Stop applauding companies that cease giving guidance. <http://www.boston.com/dailyglobe2/040/business/Misguided_reform+.shtml> Tom Friedman wants to vote France off the island. <http://nytimes.com/2003/02/09/opinion/09FRIE.html> Economist RFID piece <http://www.economist.com/printedition/displayStory.cfm?Story_ID=1563928> smuggles in a four-letter Anglo-Saxon epithet toward the end. Why we all get sucked in by so many market cliches: We're in rent-a-language <http://www.boston.com/globe/magazine/2003/0209/currents.htm> mode. Crushing downturn <http://www.economist.com/printedition/displayStory.cfm?Story_ID=1565559> in the City of London. Was the Asian financial crisis <http://www.economist.com/printedition/displayStory.cfm?Story_ID=1559654>really the best thing that could have happened? Ten emerging technologies <http://www.technologyreview.com/articles/print_version/emerging0203.asp> that will change the world; And one that won't <http://nytimes.com/2003/02/09/business/yourmoney/09VENT.html?pagewanted=print&position=top>, at least if dot-com-ers have anything to do with it. Markets with restricted short-selling <http://papers.nber.org/papers/W9466> swap fewer extreme events for increased volatility. Many of the statistically significant relationships in well-known finance papers are spurious. <http://www.afajof.org/Pdf/forthcoming/Ferson.pdf> Finally, it seems Enron's Ken Lay <http://nytimes.com/2003/02/09/business/yourmoney/09LAYY.html?pagewanted=print&position=top> was simply incompetent. Paul Kedrosky advises various hedge funds and private equity firms in the U.S. and Europe and serves as an adjunct professor at the University of California in San Diego. Formerly a high-ranked sell-side technology equity analyst, Kedrosky has also started various technology companies and worked in product management at Digital Equipment Corp. At time of publication, Kedrosky held no positions in any of the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Kedrosky cannot provide investment advice or recommendations, he welcomes your feedback <mailto:pkedrosky@realmoney.com>.