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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (66777)	7/24/2006 12:25:33 PM
From: shades	Respond to of 110194

Companies to end earnings guidance msnbc.msn.com (holy smokes batman - this just hit CNBC - talk about transparency bernanke - Kessler talking about putting out MORE info to the masses to trade on - not less - GO BUSH - M3 - COT - Guidance - damn it all to hell - hehe!! Fox meet henhouse) US companies seek end to earnings guidance By Francesco Guerrera in New York Financial Times Updated: 12:40 a.m. ET July 24, 2006 Large US companies, analysts and fund managers will today call for the end of quarterly earnings guidance, arguing that chief executives' obsession with meeting their own profit forecast damages shareholders and corporate governance. The move by an influential slice of corporate America will increase pressure on US-listed groups to follow companies such as Pfizer, Intel and Motorola, and stop focusing on short-term, self-imposed targets. A widespread rejection of earnings guidance would mark a major shift in the US companies' relationship with Wall Street and could change the way chief executives and fund managers are assessed and rewarded. The call to end a practice that sets the US apart from the rest of the world will come in a report to be released on Monday by the Business Roundtable Institute for Corporate Ethics - part of an organisation made up of 160 leading US chief executives - and the CFA Institute, which groups more than 80,000 analysts and fund managers. "The obsession with short-term results... leads to the unintended consequences of destroying long-term value, decreasing market efficiency, reducing investment returns, and impeding efforts to strenghten corporate governance," it says. The report says that scrapping guidance should be accompanied by changes in the way company executives and fund managers are paid, arguing that their compensation is over-reliant on short-term yardsticks. The new research - based on 10 months of discussions with companies, investors, analysts and regulators - will bolster opponents of earnings guidance, which include investor Warren Buffett, the US Chamber of Commerce and parts of Congress. Chief executives argue that they are forced to provide forecasts because analysts and fund managers demand them, and fear that breaking with tradition would lead to sharp falls in their share prices. A recent survey by the National Investor Relations Institute found that just over half of US-listed companies offer earnings guidance every quarter, down from 75 per cent three years ago. Some hedge funds like earnings guidance as it enables them to profit from the discrepancies between forecast and actual earnings. Analysts also tend to favour company guidance as it makes forecasting easier and minimises the risks of mistakes. However, the Business Roundtable/CFA Institute report argues that rolling three-month forecasts prevent management from focusing on the long-term health of the business for fear of missing quarterly targets. "Once a company puts a number out there, everybody within the business is focused on hitting the guidance rather than doing what is best for the company," Steve Odland, chief executive of the retailer Office Depot and head of the Business Roundtable corporate governance task force, told the FT. Other executives said the desire to hit quarterly targets prompts managers to cut back on important investments such as research and development and might persuade some of them to use questionable accounting practices. John Castellani, Business Roundtable president said that, although the 160 chief executives that make up his organisation had not yet officially adopted the report's recommendations, it was clear that companies' focus on the short-term "negatively affects behaviour and shareholder value".

To: mishedlo who wrote (66777)	7/24/2006 2:58:35 PM
From: jim black	Respond to of 110194

Actually the one definition of money that seems to elicit the least testosterone is this: money is a medium of exchange for goods and services, this from Griffin in his opus, Creature From Jekyll Island. To be fair, I suspect we must place the blame for loss of medium of exchange value of gold after 1980 for so many years may be that central banks, U.K. at top of list were disgorging their tons into open market. Even Switzerland sold, but not the Germans, maybe they remember Weimar Republik days. It is funny now that after all this Sturm und Drang about quo vadis gold, Russia, China and even Argentina have announced they are or will be buying gold to shore up reserves, ha, in lieu of the dollar! The arguments by Jefferson and Madison against a central bank modeled after the Bank of England ring loud these days. Jim Black

To: mishedlo who wrote (66777)	7/25/2006 9:12:39 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

To me, money is legal tender that is widely accepted for the purchase of goods and services. There is no definition anywhere (that I accept) that says money must be a store of value. Let's take your assumption that money does not have to be a store of wealth, that it only is a medium of exchange. However, when money is used as a medium of exchange, there is not only the aspect of exchanging the money for goods and services but there also is a measurement aspect involved. And the value of the medium used for this measurement must be constant. If this value is not constant, then the exchange process is compromised, somebody is going to be ripped off. If i cannot hold the medium of exchange because it loses value rapidly and must exchange it into something if i want to avoid a loss, how good is that medium ? One should be able to hold the medium of exchange without fear of losing purchasing power, because there is excess amount of that medium being produced. Something that does not hold its value cannot be an efficient medium of exchange in the long run. So it really turns out that true money should be a store of value to be an efficient medium of exchange.

To: mishedlo who wrote (66777)	7/25/2006 9:32:24 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

You are being really selective with your time frames. Yes , gold did collapse from 800 to 250, but that was a correction of the previous advance from 50 to 800. And your observation that gold lost tremendous purchasing power since 1980 is correct. An Ounce of gold probably lost 90% of purchasing power between the top in 1980 and 1999. One must remember however that gold only traded above 800 for a couple of days, and it was less than a month that it traded above 550, it was a blowoff. And unbelievable amounts of gold being dumped by CB's, hedgers and speculators in the 90's, could not drop gold back down to $50 ! Gold must really rise to north of $2000 to make up for lost ground and catch up with inflation. If we take 70's as a guide a tenfold advance would be a reasonable expectation in a gold bull market, which would project around $3000. If it is still around $600, 5 years from now, in the face of 10% annual inflation, then i will admit that gold will have failed as a store of value.