Subject: Stocks From: Emma To: All Date Posted: Sun, Aug 08, 2004 at 15:50:17 (EDT) Email Address: Not Provided Message: Seeing Signs of a Stock Recovery in Some Obscure Tea Leaves By CONRAD DE AENLLE STOCKS are likely to rebound, at least for a while, if one obscure indicator, reflecting the investment patterns of an important Wall Street constituency, proves as accurate a forecasting tool as it has for the last 60 years. The buy signal comes from the eight-week moving average of the weekly New York Stock Exchange specialist short-sale ratio. The ratio fell on July 23 to its lowest level, 22 percent, since at least 1943, when reliable records of the indicator were first compiled. That means specialist firms - brokers appointed by the exchange to maintain orderly markets in individual stocks, often by buying and selling shares themselves - accounted for about 22 percent of all N.Y.S.E shares sold short in the eight weeks through July 23. Selling short is a way to bet on declining prices, and the lower the ratio, the less short-selling the specialists are doing compared with other investors. The weekly ratio can be calculated from the 'round lot report,' found by entering those words in the search box of the exchange's Web site, www.nyse.com (in the search results, look for a document titled 'roundlots.html'). Divide specialist short sales (the second figure in the right column) by total short sales (the first figure in the same column) to obtain the ratio. The data issued by the exchange is usually about two weeks out of date. When the ratio has fallen below 35 percent in the years since 1943, stocks have often rallied. Analysts who closely follow the indicator argue that investors tend to be most optimistic at market tops and most pessimistic at bottoms, and that the ratio is one way to assess that mood. By contrast, specialists - aside from being regarded as astute traders - are forced to satisfy demand by selling shares in rising markets and to create demand by buying when no one else will. With the ratio at these low levels, analysts who are otherwise skeptical about the market's ability to climb much further are willing to give stocks the benefit of the doubt. 'We have growing concerns about the long-term outlook for this bull market heading into 2005,' said James B. Stack, editor of the investment newsletter InvesTech Market Analyst. But, he said, 'there remains a silver lining for 2004.' The specialist short-sale ratio 'suggests the public is heavily shorting this market, while the in-the-know pros are not,' he said. 'Key question: When has the stock market fallen sharply when this ratio has been at such low levels?' The answer is 'never,' but some analysts prefer to say 'not yet.' They say the ratio has become less reliable as an indicator, largely because investors are increasingly using derivative instruments, like stock options, that allow them to benefit from rises or falls in stocks without buying or selling shares.

Subject: Re: Stocks From: Pete Weis To: Emma Date Posted: Sun, Aug 08, 2004 at 16:11:03 (EDT) Email Address: Not Provided Message: A lot of other indicators are suggesting the opposite - 50 day moving average passing below 200 day moving average, heavier than normal insider selling, critical support levels being breached, the vix index indicating low volatility (before the last two trading days) which hints of higher volatility to come, usually in a downward direction. But most importantly, look at economic indicators - slowing consumption and poor job market performance combined with steeply rising energy costs and higher interest rates. This is not a good combination for a healthy stock market.

Subject: Re: Stocks From: Terri To: Pete Weis Date Posted: Sun, Aug 08, 2004 at 16:48:49 (EDT) Email Address: Not Provided Message: Looking at technical charts to predict market moves is a traders game. The article is interesting, but you need to be a trader follwoing a set of such gauges regularly to make use of the data. My guess is not about market direction in a near period, rather a portfolio that can be gradually built and held fairly intact for years.

Subject: Re: Stocks From: Emma To: Terri Date Posted: Sun, Aug 08, 2004 at 16:55:56 (EDT) Email Address: Not Provided Message: Long term portfolio building is all that makes sense for investors who are not professionals, and most professionals would do better planning long as well. The more you trade, the more complex the instruments of trading, the higher your costs and the harder it is to beat an index fund.

Subject: ETF Reits from Vanguard From: Johnny5 To: All Date Posted: Sun, Aug 08, 2004 at 15:29:36 (EDT) Email Address: Not Provided Message: http://www.marhedge.com/news/Cover.ETFR.asp?s=ETFRH-2004-08-08-12-25-56p1.htm Aug-8-2004 - Vanguard Group filed for registration with the US Securities and Exchange Commission of its first real estate investment trust-based ETF on July 30. The ETF will be launched as a separate share class of the existing Vanguard REIT Index Fund. The total expense ratio will be 0.18%, six basis points lower than that of the existing mutual fund, but there will be a $50 fee for converting clients' holdings to ETF shares Still I think all you people in real estate are about to get your ass handed to you over the next few years. http://www.swissamerica.com/article.php?=SID&art=11-2003/200311050758f.txt The message of this table (see below) is extraordinary. . .It is the performance of various selected investment classes from 1968-1979, out of the book A Random Walk Down Wall Street. The time frame is significant... 1968 was the very end of the last great stock market bubble. . .which is in third place in the history of modern U.S. stock market bubbles, behind the bubble of 1929 and that of 2000. Annual Gain of Various Investments 1968-1979 19.4% Gold 18.9% Stamps 15.7% Rare books 13.7% Silver 12.7% Rare coins 12.5% Old masters' paintings 11.8% Diamonds 11.3% Farmland 9.6% Single-family house 6.5% U.S. CPI (Inflation) 6.4% Foreign currencies 5.8% High-grade corporate bonds 3.1% Common stocks Real Estate was NOT the best investment, unhedged GOLD was.

Subject: Re: ETF Reits from Vanguard From: Terri To: Johnny5 Date Posted: Sun, Aug 08, 2004 at 15:58:06 (EDT) Email Address: Not Provided Message: Notice the rate of inflation in the 1970s was 6.5%. We are not likely to see such inflation, and gold is not likely to go to 800 dollars an once. Real estate, by the way, can be a fine hedge against inflation, and you will notice that homes increased nicely in value through the 1970s. 'Random Walk' is well done.

Subject: Re: ETF Reits from Vanguard From: Pete Weis To: Terri Date Posted: Sun, Aug 08, 2004 at 16:48:57 (EDT) Email Address: Not Provided Message: Agree with you Terri that real estate did quite well in the 70's. But these are very different times. We live in a highly leveraged economy, and when compared to the 70's real estate today is leveraged in the extreme. Bull asset markets, whether they are stocks or real estate, tend to overshoot on the way up and overshoot on the way down. But to understand what direction real estate is headed from here, you have to understand why it has had such a surge over the last 5 years. Then you must ask yourself whether the conditions that caused it to surge are still in effect and if not, are those conditions actually headed in reverse? Remember that even in a good economic climate any asset that increases for a period at a record rate will likely have a correction coming. But in a situation where conditions are additionally going against the asset (higher interest rates, poor job market, etc) the asset will likely drop at a steep rate and for, perhaps, a prolonged period. With regard to gold, I think it will likely benefit from a falling dollar just because it's viewed as a safe haven by some investors and it has such a tiny total market cap when compared to the stock and bond markets. If only 5% of the world's investment left stocks and bonds to go into silver and gold markets it would have a huge upward effect on those markets. However, this would tend to be somewhat of a pyramid situation with many getting in late just before the collapse, which is what happened in 82'. Gold could actually go much higher than $800, but it will be a wild and very volatile ride. Johnny5 could make a lot of money in gold (and silver)but it's risky and he would have to know when to get out. Buffet has done quite well in the siver market. He had a funny thing to say about gold - 'If Martians could observe humans going to great lengths digging this yellow substance from deep in the ground, and then spend an incredible effort refining it, and then put it back in the ground in vaults, they would be scratching their antennas wondering why.' Still, almost every civilization on Earth has treated gold with an importance which is difficult to comprehend and central banks around the world still keep large quantities in their vaults even though it no longer backs currencies. Go figure.

Subject: Precious Metals From: Terri To: Pete Weis Date Posted: Sun, Aug 08, 2004 at 17:06:12 (EDT) Email Address: Not Provided Message: Rather than buy gold or a gold fund, I would hedge and buy a precious metals fund. But, my guess is that we are betting on an increase in inflation or a financial market run if we take such a position. Difficult to time.

Subject: The Dollar From: Pete Weis To: All Date Posted: Sun, Aug 08, 2004 at 14:30:38 (EDT) Email Address: Not Provided Message: Since we've had a fiat currency system there has not been a real threat to the dollar.... until now. My concern here, is not whether or not we should or shouldn't have a fiat system - I know that there are those who push for a gold backed dollar. I really don't have a strong opinion one way or the other with regard to that - I haven't given it much research or thought. But here's the problem with the dollar in my view: (1)We've been running a very large current account deficit for some time now and we have been borrowing heavily from the countries who are in a surplus trade relationship with us to keep up our consumption. This has, over time, created a massive worldwide supply of US dollars and US dollar denominated assets held by foreign central banks and foreign investors. (2) Foreign central banks have been willing to lend us back there surplus dollars for only one reason - to keep the American consumer purchasing there products and keep their workers gaining an ever larger share of the world's labor markets. (3)Most of the massive debt (in the trillions) built up due to the current account deficit is born by the American taxpayer (interest on US treasuries owed to foreign central banks, etc) and US consumers (in the form of credit card, auto loan and mortgage debt, etc). (4)This debt, along with higher energy costs, general inflation, and a poor job market are begining to make a dent in US consumer spending. Now remember number (2) - if the US consumer begins to pack it in, the reason for foreign central banks to buy into US treasuries (where they get such poor returns) begins to disappear, especially if the US consumer begins to refuse the bait (decides he has had enough of additional debt). Paul Krugman, Bill Gross, and Warren Buffet have all suggested at some point this refusal to fund our debt by foreign central banks will happen. (5)Ordinarily, less foreign central bank investment in the US would reduce our money supply and cause interest rates to go much higher - creating support for the dollar. But our Federal Reserve can not allow this, since it would collapse an overvalued housing market, threaten GSE's, and possibly send our economy into a deflationary situation. Once consumers begin refusing more debt the Federal Reserve will find itself 'pushing on a string'. But it will probably push anyway - it will have its central banks begin buying the US treasuries that foreign banks no longer want in a desperate attempt to keep interest rates low. In essence, we as a nation, will be borrowing from ourselves and printing money to cover the demands of a growing budget deficit (growing larger, by the way, because with a bad economy, tax revenues will drop as they did between 2000 and 2002). There's a lot more to this but I can't cover it in one post.

Subject: Re: The Dollar From: El Gringo To: Pete Weis Date Posted: Sun, Aug 08, 2004 at 18:34:13 (EDT) Email Address: nma@hotmail.com Message: Excellent Pete, but (1) (2) (3) (4) (5) = why?

Subject: Re: The Dollar From: Terri To: Pete Weis Date Posted: Sun, Aug 08, 2004 at 14:35:08 (EDT) Email Address: Not Provided Message: My guess too is the dollar drifts lower, but drifts not falls sharply. Other countries are not going to be willing to allow a major decline in the dollar, trade is too important. The value of the dollar is the value of American consumption to the rest of the world, and this is most important. We save too little and I expect the dollar to drift lower as a result, but only to drift down. A run to sell dollar assets would depress the value of the assets, depress American consumption, and make American production more valuable. Not likely.

Subject: Re: The Dollar From: Johnny5 To: Terri Date Posted: Sun, Aug 08, 2004 at 15:27:10 (EDT) Email Address: Not Provided Message: I just saw a special on the collapse of britains domestic economy back in the 30's. Their workers were losing jobs, but they were very strong in international trade. Sounds like here, our dollar is is/was strong, but our workers are losing jobs by the boatload. Did you study history - do you rememeber Britains Solution back then?

Subject: Re: The Dollar From: Terri To: Johnny5 Date Posted: Sun, Aug 08, 2004 at 15:46:53 (EDT) Email Address: Not Provided Message: There is happily no comparison. The severity of the economic declines in the 1930s was extreme. We are not in a recession, jobs are being created, we have more knowledge of fiscal and monetary tools to use to stimulate the economy.

Subject: Krugman Oreilly Interview From: Chris P To: All Date Posted: Sun, Aug 08, 2004 at 12:30:24 (EDT) Email Address: killedahorse@yahoo.com Message: Hello everyone. I was confused and thought the interview was going to be on Sunday on 'Meet The Press'. Does anyone have a link to a transcript of the interview? I can't even seem to find the website for the 'The Tim Russert Show'...Thanks in advance.

Subject: Krugman Oreilly Interview From: Chris P To: All Date Posted: Sun, Aug 08, 2004 at 12:30:00 (EDT) Email Address: killedahorse@yahoo.com Message: Hello everyone. I was confused and thought the interview was going to be on Sunday on 'Meet The Press'. Does anyone have a link to a transcript of the interview? I can't even seem to find the website for the 'The Tim Russert Show'...Thanks in advance.

Subject: Planet of the Apes From: Pete Weis To: All Date Posted: Sun, Aug 08, 2004 at 11:15:16 (EDT) Email Address: Not Provided Message: I'm beginning to appreciate the brilliance of that film.

Subject: This guy has a fan page? From: Krugman? To: All Date Posted: Sun, Aug 08, 2004 at 10:08:02 (EDT) Email Address: kerryismymanforever@hotmail.com Message: My oh my, this web site is pathetic. A bunch of pandering, sniveling little dinks kissing their man's rear. Krugman is a little coward. Did anyone else notice his hands trembling on Russert's show? Krugman is one of the worst pundits in this country.

Subject: Re: This guy has a fan page? From: Chiato To: Krugman? Date Posted: Sun, Aug 08, 2004 at 16:25:22 (EDT) Email Address: chiato@hotmail.com Message: WEll I think a man like O' Reilly who I have to say you cannot have a functional conversation with would make me nervous as well. Could you imagine being personally attacked on national TV and ridiculed for your opinion. I am sure that you would be a bit nervous as well. And first off, I question if you have truly read his book or column. If you had a basic understanding of economics you would value the empirical data that he presented which clearly shows that the US is on the brink of economic collapse. Oh but maybe you just have not noticed. However, I think it is apparent by your iconoclastic comments. Before you respond make sure you do your homework!!!!

Subject: Krugman Was Wrong Again From: Freeusa To: All Date Posted: Sun, Aug 08, 2004 at 10:06:59 (EDT) Email Address: Not Provided Message: A comprehensive study of the 2000 presidential election in Florida suggests that if the U.S. Supreme Court had allowed a statewide vote recount to proceed, Republican candidate George W. Bush would still have been elected president. The National Opinion Research Center (NORC) at the University of Chicago conducted the six-month study for a consortium of eight news media companies, including CNN. www.cnn.com/SPECIALS/2001/florida.ballots/stories/main.html

Subject: Re: Krugman Was Wrong Again From: Paul G. Brown To: Freeusa Date Posted: Sun, Aug 08, 2004 at 15:38:07 (EDT) Email Address: Not Provided Message: Dude - have you actually read that report. I have. According to the news reports, the study looked at Undervotes, not Overvotes, and noted that; 'Had many of these voters not marked a minor candidate in the second column [an overvote], Gore would have netted thousands of additional votes as compared with Bush.' And if you read the words of the study's author. 'One could never know from this study alone who won the election,' he [Kirk Wolter of the National Opinion Research Center] told the Tribune and other publications.' So we're left with: i. Al Gore about 500,000 votes ahead of George Bush. ii. 57,700 votes in Florida (ignored by the Chicago Recount, whose legal status was never tested) were discarded as the voters were incorrectly identified as felons. Had the supreme court not intervened to halt the counting, and had the process been allowed to continue, these rejected votes--many of which were cast as provisional ballots--would have found their way back into the mix, giving Gore the state by a wide margin, and the election. iii. 'being elected President', as we know from any tin-pot third world dictatorship, doesn't mean the same thing as 'won the election'. The complaint is not that 'George W. Bush was never elected President.', because he plainly was. The complaint is that George W. Bush didn't win the election. At the very least, the study yu cite, but its own admission, does not show that 'George W. Bush would have been elected president. It shows that under the most narrow reading of the law, it was close. Things started badly end worse. Every US President elected under similarly questionable circumstances has served a single term and was ignominiously defeated.

Subject: Krugman Was Right From: Ari To: Paul G. Brown Date Posted: Sun, Aug 08, 2004 at 16:50:53 (EDT) Email Address: Not Provided Message: Right as usual Paul!

Subject: ignorance is bliss From: allen To: Freeusa Date Posted: Sun, Aug 08, 2004 at 15:33:49 (EDT) Email Address: aconrt@siue.edu Message: all i can say is, my friend ignorance is bliss, and you can wallow in it for as long as you wish!!

Subject: Why he is dangerous From: FReeusa To: All Date Posted: Sun, Aug 08, 2004 at 09:43:37 (EDT) Email Address: Not Provided Message: When Tim RUssert asked Krugamn this question, 'So you think we are undertaxed?' Krugman answered 'Yes.' UNDERTAXED? OH PLEASE! People like Krugman will never be happy until thye have made this country a 3rd world country.

Subject: Re: Why he is dangerous From: Paul G. Brown To: FReeusa Date Posted: Sun, Aug 08, 2004 at 15:00:51 (EDT) Email Address: Not Provided Message: I am wondering what you mean by 'undertaxed'? How do you measure it? In PK land, when we say 'undertaxed', we mean 'we don't pay enough tax revenue to cover the cost of the government services we use'. This is simply a matter of accounting, not politics. Governments running deficits--which is what happens with 'undertaxation'--constrains economic growth because the government must borrow money. Now, what do you do about 'undertaxation'? You can either increases tax revenues, decrease spending, or some mix of the two. But being 'undertaxed' is a bad thing, wouldn't you agree?

Subject: Re: Why he is dangerous From: freeusa To: Paul G. Brown Date Posted: Sun, Aug 08, 2004 at 17:29:10 (EDT) Email Address: Not Provided Message: Undertaxed means get rid of a large number of the entitlement programs that are not working. I believe I am already overtaxed and I directly blame the so called social programs that are setup that keep people poor and dependent on big government.

Subject: Re: Why he is dangerous From: Johnny5 To: Paul G. Brown Date Posted: Sun, Aug 08, 2004 at 15:22:32 (EDT) Email Address: Not Provided Message: http://www.cato.org/pubs/journal/cjv14n2-7.html Excessive Gubbment killed Rome, less gubbment, less taxes makes J6P happy.

Subject: Make O'Reilly crazy From: Erica To: All Date Posted: Sun, Aug 08, 2004 at 08:14:54 (EDT) Email Address: Not Provided Message: I think one good thing happened when PK debated O'Reilly: More people saw the brillance of PK. Never a bad thing!! Make O'Reilly lose it: Go to Media Matters for America.org, David Brock's website, the website PK mentioned that made O'Reilly yell, find stuff on there about O'Reilly's lies (there is numerous stuff on there, copy it and then paste it into an email, add a pithy comment about what a liar O'Reilly is, or how he loves to spin, etc. etc. etc. and email it off to O'Reilly. Make sure you attribute the comments you copied to Media Matters for America. It drives O'Reilly insane. I do it all the time. In additon, David Brock has two books out, Blinded by the Right and The Republican Noise Machine. Good reads. And Brock has offered numerous times to appear on O'Reilly's show to debunk the right wing smears, but O'Reilly has never responded back to David Brock because O'Reilly is a coward and the thought of taking on Brock, who could so clearly call him to the mat for his lies, scares the hell out of him. Anyway, check out the site and send some mail, it's fun!

Subject: Krugman on Meat the Press From: Dursun To: All Date Posted: Sun, Aug 08, 2004 at 00:54:26 (EDT) Email Address: dsakarya@juno.com Message: I don't have a TV, but everyone's talking about how Paul bitch slapped O'Rielly.

Subject: Re: Krugman on Meat the Press From: freeusa To: Dursun Date Posted: Sun, Aug 08, 2004 at 09:15:58 (EDT) Email Address: Not Provided Message: Are you kidding, Krugman looked like a deer caught in the headlights of a Mack truck bout to be splattered across the highway.

Subject: Re: Krugman on Meat the Press From: ben To: Dursun Date Posted: Sun, Aug 08, 2004 at 02:16:57 (EDT) Email Address: jcbimmer@yahoo.com Message: i saw the show and that's exactly right, Paul was very calm and composed and argued like a professional. o'really was being such a bully and as much as he tried to bait Paul into off topic arguements when he feels cornered with facts, Paul really held his own. It was funny watching o'really get ticked off and not be in control. hats off to Paul, very well done!

Subject: Re: Krugman on Meet the Press From: Gary To: ben Date Posted: Sun, Aug 08, 2004 at 08:16:32 (EDT) Email Address: gboat@socal.rr.com Message: O'Reilly was even more unhinged than usual. He accused Paul of being a liar, a propagandist and a cheap shot artist. I wasn't sure if he was addressing Paul or looking in a mirror. O'Reilly resorted to character assasination and Paul just kept bringing the discussion back to rational arguments. In O'Reilly's No Spin Zone his arguments are rational and yours are rationalizations. He is an 'analyst' and you are opinionated. His funniest line was when he stated that Brit Hume was a moderate. No spin there Bill. National Review and The Weekly Standard are probably middle of the road. War is peace. Ignorance is strength. Slavery is freedom.

Subject: Re: Krugman on Meat the Press From: Erica To: ben Date Posted: Sun, Aug 08, 2004 at 08:06:12 (EDT) Email Address: Not Provided Message: It was not Meet the Press, it was The Tim Russert Show on CNBC. But I would agree that Paul won, especially when he mentioned Media Matters for America, David Brock's website, which has been ruthless in debunking every lie O'Reilly tells. When Paul mentioned it, O'Reilly went ballistic!!! One of my favorite pleasures is to go to Media Matters, find something that they have written about O'REilly, copy it and then paste it into an email to O'Reilly, (oreilly@foxnews.com) saying according to Media Matters for America: Of course, I add a pithy comment. You all should try it. It really gives a warm fuzzy feeling inside. Make sure you give attribution to Media Matters. It's not fun if you don't. Also, Media Matters is just a great site. It's great in debunking all kinds of Republican spin and echo chamber lies. But, what I loved most about the debate is Paul's expression whenever O'Reilly was bloviating his crap. You could tell whenever O'Reilly said something that was a lie or false, because Paul would get a really funny look on his face. O'Reilly would say something really mean about Paul, call him a name, and then when Paul would say something, O'Reilly would declare 'That's a cheap shot.' I just wish Paul would have said cheap shot whenever O'REilly issued one, which was 10 times more than PK. I might try to find the transcript and count all of O'Reilly's cheap shots. BUt PK did well. HE held his own with a serial bully, which is all you can hope for. And let's be clear here, O'Reilly is a serial bully, a sociopath with a personality disorder. He possesses all observable characteristics of a serial bully. They are difficult people to win an argument with because they don't see themselves as others do. In fact, O'Reilly told his viewers to tune in to the show. Why would he do that when he looked like a lunatic??? My guess is that he will say that he won that argument. Even though, people who watched it knows he didn't.

Subject: Re: Krugman on Meat the Press From: Gary To: Erica Date Posted: Sun, Aug 08, 2004 at 08:42:20 (EDT) Email Address: Not Provided Message: My cable guide lists Russert's show as Meet the Press every week. I can't explain why, but that's the source of confusion. Artful editing is the reason O'Reilly wants people to watch his version of the debate. Check out this link: http://www.commondreams.org/views04/0714-12.htm

Subject: Bless you! From: Kathy Schmidt To: All Date Posted: Sat, Aug 07, 2004 at 23:07:05 (EDT) Email Address: kastex305@aol.com Message: You are Brilliant! I heard you on NPR, read your book (library...sorry)and just saw you on Tim Russert w/IDIOT OF THE UNIVERSE, Bill O'Reilly. Why would you submit yourself to such abuse? You deserve better. Keep up the good fight. We must conquer this radical conservative establishment.

Subject: Re: Bless you! From: freeusa To: Kathy Schmidt Date Posted: Sun, Aug 08, 2004 at 09:21:37 (EDT) Email Address: Not Provided Message: Bt the great part is America is now seeing how hateful and dishonest the left is. WIth the propganda master Heir Mike Moore to unbalanced leftwing nutballs like Krugman AMerica is waking up and rejecting the hate of the Democrats and hatemongers like George Soros

Subject: Re: Bless you! From: Erica To: Kathy Schmidt Date Posted: Sun, Aug 08, 2004 at 08:07:40 (EDT) Email Address: Not Provided Message: Another member of the Army of Paul Krugman. Welcome!

Subject: Re: Bless you! From: John Carps To: Kathy Schmidt Date Posted: Sat, Aug 07, 2004 at 23:20:55 (EDT) Email Address: dumdrum13@sbcglobal.net Message: I just watched the Russert interview with O'Reilly. I'm still shaking with anger. I never in my life thought I'd get to the point where such things would make me have an actual physical reaction...but wow...I'm so mad and so scared for our country. Mr.Kugman never called O'Reilly a single name, and yet he was repetedly hammered with slanderous epithets by O'Reilly....how can anyone take that guy seriously? What the fuck is wrong with this country when, given the chioce to take either a Krugman or an O'Reilly seriously, a lot of people choose the name calling hack over the intellectual? O'Reilly was so crazy and belligerant and it was hard to watch a rather mild mannered and reasonable guy like Krugman sit there and have to provide the contrasting personna. I wanted someone to just slap O'Reilly....or laugh at him....or for Krugman to return the insults or just walk off....I still so angered by the whole thing. I don't exactly know what to make of it. It was a circus.

Subject: Re: Bless you! From: freeusa To: John Carps Date Posted: Sun, Aug 08, 2004 at 09:25:05 (EDT) Email Address: Not Provided Message: I agree I was stunned that Krugman would even get air time. I am scared for this country if people like Krugman and his socialist lifestyle ever gets any kind of seriuos consideration.

Subject: Re: Bless you! From: Vic To: John Carps Date Posted: Sat, Aug 07, 2004 at 23:29:14 (EDT) Email Address: vrtrop@yahoo.com Message: I have a hard time watching O'really and today he was at his absolute worst. He was so angry it was unbelieveable. I though he was going to hit Krugman. There were many instances where I thought Paul was going to walk off the set. The thing I don't like is that O'really is a big guy and I think his physical presence intimidates people. Paul seemed a little unnerved during the whole thing. I just don't understand where O'really is coming from with his libs are communists or nazis junk. The whole thing was frustrating to watch.

Subject: Re: Bless you! From: Andrew To: Vic Date Posted: Sun, Aug 08, 2004 at 02:04:18 (EDT) Email Address: shadyacresdog@hotmail.com Message: I've just seen the same show and I just wanted to thank Paul for standing his ground through what looked like a pretty unpleasant ordeal and offer my support.

Subject: PK live interivew, Tuesday From: KPFK To: All Date Posted: Sat, Aug 07, 2004 at 18:59:32 (EDT) Email Address: Not Provided Message: 90.7 FM KPFK Los Angeles A live in-studio interview with Paul Krugman Tuesday, August 10th, 8-9am on 'Uprising' Outside of Southern California, listen here: KPFK Live www.kpfk.org/listenlive.html

Subject: Jobs Problem From: Emma To: All Date Posted: Sat, Aug 07, 2004 at 16:47:00 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/08/07/business/07econ.html In Blow to Bush, Only 32,000 Jobs Created in July By DAVID LEONHARDT Job growth ground nearly to a halt last month, the Labor Department reported yesterday, raising new concerns about the economy's strength and reshaping the political debate over its performance less than three months before election day. Employers added just 32,000 jobs in July, a small fraction of what forecasters had expected and far below the robust gains in employment earlier this year. The government also announced that job growth in May and June was less than initially estimated. 'The economy is spinning its wheels again,' said Richard Yamarone, chief economist at Argus Research in New York. 'Corporate America is reluctant to hire anyone above the bare minimum.' The unemployment rate fell slightly last month, to 5.5 percent, but it is based on a smaller survey than the job growth numbers, which are widely considered the more reliable gauge of employment. [Page C1.] The disappointing numbers are likely to rekindle fears that the relationship between economic growth and job creation has changed in important ways. With technology allowing companies to produce more goods without adding workers and some jobs moving to lower-wage countries, there are about a million fewer jobs today than there were in early 2001 even though the economy emerged from recession later that year and has been growing since then. For President Bush, the new evidence creates a nettlesome political situation, making it harder for him to cite strong job gains as proof that the tax cuts he championed at the start of his term were the best cure for the economy's problems. The weak increases of the last two months now mean that Mr. Bush is highly likely to stand for re-election with an employment level lower than it was on his Inauguration Day. That would be the first time that has happened since 1932, when the country was mired in the Depression and enduring far worse job losses than any it has experienced recently.

Subject: Mankiw vs. PK. From: El Gringo To: All Date Posted: Fri, Aug 06, 2004 at 20:40:54 (EDT) Email Address: nma@hotmail.com Message: Who will be the winner?

Subject: Re: Mankiw vs. PK. From: Jennifer To: El Gringo Date Posted: Fri, Aug 06, 2004 at 20:44:05 (EDT) Email Address: Not Provided Message: PK is so much the better economist!

Subject: Re: Mankiw vs. PK. From: Faust's soul To: Jennifer Date Posted: Sat, Aug 07, 2004 at 12:46:02 (EDT) Email Address: nma@hotmail.com Message: 'Mr. Mankiw was offered a $1.4 million advance for his textbook from Harcourt Brace in 1995 — a princely sum compared with a professor's salary, even one at Harvard.' http://myweb.liu.edu/~uroy/Mankiw/Mankiw-CEA.htm

Subject: About a Famous MBA - Harvard Crimson From: David E... To: All Date Posted: Fri, Aug 06, 2004 at 14:52:18 (EDT) Email Address: Not Provided Message: 'Tsurumi said he particularly recalls Bush’s right-wing extremism at the time, which he said was reflected in off-hand comments equating the New Deal of the 1930s with socialism and the corporation-regulating Securities and Exchange Commission with “an enemy of capitalism.” “I vividly remember that he made a comment saying that people are poor because they’re lazy,” Tsurumi said.' link- http://www.thecrimson.com/article.aspx?ref=503181

Subject: The Economy and Markets From: Terri To: All Date Posted: Fri, Aug 06, 2004 at 14:50:18 (EDT) Email Address: Not Provided Message: So, we have weak employment data and falling stock and bond prices. Where are we? The stock and bond markets are telling the Federal Reserve the economy is weak, the Fed has already begun to raist interest rates. Quite a conflict. Does the Fed continue to raise rates and risk further economic and market weakness? Since the effects of the tax cuts are in, where is an economic stimulus to come from?

Subject: Value Indexes From: Terri To: Terri Date Posted: Fri, Aug 06, 2004 at 18:55:30 (EDT) Email Address: Not Provided Message: Pete, Notice how nicely the value indexes are holding, along with bonds, and real estate investment trusts. So far, so good.

Subject: Re: Value Indexes From: Pete Weis To: Terri Date Posted: Fri, Aug 06, 2004 at 20:01:42 (EDT) Email Address: Not Provided Message: Terri. Stocks were down broadly the last two days - not sure which value funds you are talking about. In broad market downturns good value stocks go down with the bad as investors begin exiting the markets in large numbers. IMO, it all comes down to the consumer. You ask a good question - what will now provide stimulus for the economy? Consumers are in a lot of debt, wages are rising slower than inflation, and new, good paying jobs are missing. Your investments in the markets will depend on consumption holding at reasonable levels - if not, profits will suffer and jobs will be lost. I think that's were things are headed. As 401ks diminish, consumption will drop further (reverse wealth effect). Higher interest rates combined with a poor job market will turn real estate prices in reverse - this is where the real threat to our economy exists.

Subject: Investing From: Terri To: Pete Weis Date Posted: Sat, Aug 07, 2004 at 10:02:35 (EDT) Email Address: Not Provided Message: The large cap and small cap value indexes at Vanguard are still positive for the year. Growth indexes are negative. The Real Estate Investment Trust Index is having a fine year in spite of the Federal Reserve interest rate increase. The REIT Index may hold up even if rates continue to climb, and the Fed may well decide to keep rates where they are for a while. Notice how well the REIT Index has fared since 1973. REITs have held nicely in periods of rising and falling interest rates. The REIT Index may be more defensive than is supposed.

Subject: Re: Investing History From: Terri To: Terri Date Posted: Sat, Aug 07, 2004 at 10:08:28 (EDT) Email Address: Not Provided Message: http://www.russell.com/us/search/default.asp Go to this russell address then type 'single asset' in the search and open the single asset versus multi asset screen. A fine information screen for investors. Notice the REIT history from 1973 - 1974. Single-Asset vs. Multi-Asset Portfolios

Subject: Real Estate Investment Trusts From: Terri To: Terri Date Posted: Sat, Aug 07, 2004 at 11:19:57 (EDT) Email Address: Not Provided Message: There is no evidence from 1974 till now, that Real Estate Investment Trusts are adversely affected by interest rate increases. Remember, we are not talking about private homes but commercial real estate.

Subject: Re: Real Estate Investment Trusts From: Pete Weis To: Terri Date Posted: Sat, Aug 07, 2004 at 12:43:07 (EDT) Email Address: Not Provided Message: Actually, there have been some bad years for REITS. A brief search on the performance of REITS over the years reveals that they have been a good long term investment with some short periods where they haven't fared so well. They generally pay high dividends which is why they are popular with retirees. They have taken some hits this last spring with upward movements in interest rates. Certainly the last 20 years have been, perhaps, some of the greatest years in real estate investment. Many of us have done very well buying and selling homes over the last couple of decades. As a sideline, I've been a licensed real estate agent part time (my wife is a full time real estate agent). We've bought and sold many properties - usually at very good gains. About a year-and-a-half ago we sold a condo near the base of Whistler-Blackomb (a ski area in British-Columbia). At the time, there were relatively few properties for sale at Whistler and we got multiple offers. Some guy from Redmond Washington (suspect he was from Microsoft) bid way above our asking price and I'm sure he thought he had nailed it down. But a couple from Vancouver came in with a slightly higher bid and we accepted their offer. I never want to be in the position of bidding on any asset during a buying frenzy like that. For me it's a sure sign that at some point there will be a selling frenzy. Today, there are hundreds of listings at Whistler and going up. The last three years have seen a big jump (especially in urban areas and vacation properties) in real estate. It has occured despite a poor job market. It has occured almost entirely due to dropping interest rates and cheerleading by so called real estate experts. I often hear them say - 'real estate will always go higher because land is a fixed quantity and populations are constantly rising'. But if population density is a factor, then why is it that sparsely populated portions of Northern California have real estate valuations that far exceed more densely populated regions in China, India, Africa and Central and South America? The answer - it requires good paying jobs to drive up real estate prices. Additionally interest rates unquestionably effect the affordability of homes. Doesn't common sense tell us that after the biggest and longest run-up in real estate brought about by the longest and greatest decline in mortgage rates (15% in the early 80's to 5% in 2003) and the hightech job boom of the 80's and 90's, we could see one of the largest declines in real estate with a period of poor job markets and higher interest rates? Sure ARM's and reverse mortgages will keep the craze going a little longer. Most booms (as with the case in the stock markets) seem to have their steepest rise (as we've had in real estate during the last 3 years) at the very end of the boom (irrational exuberance) followed by a steep decline. There are many types of REIT's and some invest in rental properties -they may fare better since the home/ownership vs rental/apartment choice may reverse course. But, IMO, it's not a good idea to invest in REIT's which invest in vacation rentals for more than the reasons I listed above. Good luck Terri. I believe very low risk securities which atleast partly hedge against a falling dollar are the best way to weather the next couple of years. I know, this would be difficult for most retirees - unfortunately these low rates are forcing retirees to make risky choices. That's why it's so important to get rid of debt at this time.

Subject: Re: Real Estate Investment Trusts From: Terri To: Pete Weis Date Posted: Sat, Aug 07, 2004 at 13:13:25 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsSnapshot?FundId=0123&FundIntExt=INT Excellent response Pete: Remember, I am referring to the REIT Index not an individual REIT. The Vanguard index is superb for diversfying and so reducing risk. I too am wary of REITs because of the increase in price since 2000, but REITs are not out of line with the S&P. We are talking of the entire index of commercial REITs in the Vanguard index. What are low risk securities that hedge against the dollar? Johnson and Johnson? Pfizer? Exxon?

Subject: Re: Real Estate Investment Trusts From: Pete Weis To: Terri Date Posted: Sat, Aug 07, 2004 at 14:56:16 (EDT) Email Address: Not Provided Message: Terri. Certainly oil companies provide a certain amount of hedge against a falling dollar. There is a possible scandle brewing regarding reported proven oil reserves (Royal Dutch Shell, maybe Texaco-Chevron, maybe others)- some risk there, but probably only short term. Guess you are thinking pharmaceuticals because they sell so much overseas. Remember though that they face price controls outside the US. I'll make two comments here about drug companies - one will tend to suite most posters on this board the other may not. (1) I believe Kerry will win in November and the biggest factor will be the economy; (2) This is bad for drug companies since investors may worry about price controls down the road and is generally bad for the markets since Kerry talks about repealing taxes that favor the rich (capital gains). I'm with Mik on the blame or praise for a bad economy vs a good economy issue when it comes to Presidents. I believe Presidents get more praise than they deserve for good economies and more blame than they should for bad economies. If you understand the fundamental problems with this economy, you realize that it didn't happen in just the last four years of the Bush administration. During the last election, a friend and myself described the Gore-Bush battle for the White House as a bitter struggle for the booby prize, because there would likely be drop from the heady days of the 90's. At the time I didn't have the very bearish views that I now hold, but I suspected the good times would not go on. I think the best that the next President (and next Fed chairman) can do is limit the damage. AS to your question - Prudent Bear Global Index fund (PSAFX) goes up when the dollar falls and American Century has similar funds.

Subject: Market Value From: Terri To: Pete Weis Date Posted: Sat, Aug 07, 2004 at 15:09:42 (EDT) Email Address: Not Provided Message: There are essentially price controls on drugs in every developed country country other than the United States. Novartis and Roche do well in Europe and Canada and Japan, despite limits on prices. Also, John Kerry will have a Republican Congress to contend with. My guess too is the dollar drifts lower, but drifts not falls sharply. Other countries are not going to be willing to allow a major decline in the dollar, trade is too important. I would rather hold the Europe value index as a hedge. Value stocks are far superior to growth in foreign markets, so I opt for Europe value index. Vanguard has a fine conservative health care fund.

Subject: Re: Market Value From: Pete Weis To: Terri Date Posted: Sun, Aug 08, 2004 at 00:01:24 (EDT) Email Address: Not Provided Message: Terri. I fervently hope you are right about no 'major decline in the dollar'. Since we've had a fiat currency system there has not been a real threat to the dollar.... until now. My concern here, is not whether or not we should or shouldn't have a fiat system - I know that there are those who push for a gold backed dollar. I really don't have a strong opinion one way or the other with regard to that - I haven't given it much research or thought. But here's the problem with the dollar in my view: (1)We've been running a very large current account deficit for some time now and we have been borrowing heavily from the countries who are in a surplus trade relationship with us to keep up our consumption. This has, over time, created a massive worldwide supply of US dollars and US dollar denominated assets held by foreign central banks and foreign investors. (2) Foreign central banks have been willing to lend us back there surplus dollars for only one reason - to keep the American consumer purchasing there products and keep their workers gaining an ever larger share of the world's labor markets. (3)Most of the massive debt (in the trillions) built up due to the current account deficit is born by the American taxpayer (interest on US treasuries owed to foreign central banks, etc) and US consumers (in the form of credit card, auto loan and mortgage debt, etc). (4)This debt, along with higher energy costs, general inflation, and a poor job market are begining to make a dent in US consumer spending. Now remember number (2) - if the US consumer begins to pack it in, the reason for foreign central banks to buy into US treasuries (where they get such poor returns) begins to disappear, especially if the US consumer begins to refuse the bait (decides he has had enough of additional debt). Paul Krugman, Bill Gross, and Warren Buffet have all suggested at some point this refusal to fund our debt by foreign central banks will happen. (5)Ordinarily, less foreign central bank investment in the US would reduce our money supply and cause interest rates to go much higher - creating support for the dollar. But our Federal Reserve can not allow this, since it would collapse an overvalued housing market, threaten GSE's, and possibly send our economy into a deflationary situation. Once consumers begin refusing more debt the Federal Reserve will find itself 'pushing on a string'. But it will probably push anyway - it will have its central banks begin buying the US treasuries that foreign banks no longer want in a desperate attempt to keep interest rates low. In essence, we as a nation, will be borrowing from ourselves and printing money to cover the demands of a growing budget deficit (growing larger, by the way, because with a bad economy, tax revenues will drop as they did between 2000 and 2002). There's a lot more to this but I can't cover it in one post.

Subject: Market Data From: Terri To: Terri Date Posted: Sat, Aug 07, 2004 at 15:14:06 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Market Data

Subject: Private REITs From: Terri To: Terri Date Posted: Sat, Aug 07, 2004 at 15:12:03 (EDT) Email Address: Not Provided Message: Have a look, though I much prefer the Vanguard public REIT Index: http://www.nytimes.com/2004/08/04/business/04prop.html Rise of a New Type of REIT By TERRY PRISTIN Since 1998, CNL Hospitality Properties of Orlando, Fla., has bought $5.6 billion worth of hotels - spending more than any other hotel buyer - and now owns many of the most prestigious resorts in the nation, including the Arizona Biltmore in Phoenix and the Grand Wailea Resort Hotel and Spa in Maui. CNL, the owner of 130 hotels under 19 different brands, is a so-called private real estate investment trust, as opposed to the more familiar REIT's, which are traded on stock exchanges. These funds have markedly increased the amount of money they have raised from investors in recent years, and other kinds of competitors have become more vocal in their criticism. CNL is not the only private REIT that has been a prominent property buyer. In the retail sector, for example, two private REIT's affiliated with the Inland Real Estate Group of Companies of Oak Brook, Ill., have been the second-largest buyer, adding more than $2 billion worth of strip centers to their portfolios this year alone, according to Real Capital Analytics, a New York research company that tracks sales of $5 million or more. And Wells Real Estate Funds of Norcross, Ga., has bought nearly $892 million worth of buildings, making it one of the largest acquirers of office space. Private REIT's have been heavily criticized by real estate specialists, including executives of their publicly traded rivals, who say that these companies could tarnish their industry because investors pay high fees to own these securities. Investors receive regular dividends, the critics charge, but these are not necessarily paid out of cash flow and may be financed through borrowing. Another complaint is that the organizers of private REIT's generally invest little of their own money in them. Executives of the private REIT's, who prefer to call their companies 'unlisted public REIT's,' say that their investors do very well without subjecting themselves to the volatility of the stock market. The shares are not traded on any exchange, but the REIT's are required to file reports regularly with the Securities and Exchange Commission, just like public companies.

Subject: PK interviewed by Buzzflash From: Erica To: All Date Posted: Fri, Aug 06, 2004 at 09:50:10 (EDT) Email Address: Not Provided Message: I just read an interview PK did for Buzzflash.com. For anyone not familiar with Buzzflash, it's an excellent site. The interview is recent and a good one. (It corresponds to The Great Unraveling coming out in paperback.) PK, like many of us, grapples with the fact that many people are still so ignorant about Bush. Everyday, as I listen to people call in to C-span, proclaiming their undying support for their President(note: I will not call him my President, as he doesn't give a rat's ass about me), I am utterly astounded. Are these people living under a rock or watching Fox News??? I just don't know. But I know that I can't be the only one wondering how the American people can be so patriotic and stupid at the same time.

Subject: Re: PK interviewed by Buzzflash From: Mik To: Erica Date Posted: Fri, Aug 06, 2004 at 14:34:05 (EDT) Email Address: Not Provided Message: Erica, Those are some very harsh words. If I can place a little view point here (and this is purely my opinion): There is the concept of 'paradigm' and for some reason there appears to be two main 'pardigms'. These paradigms seem to be reflected quite clearly between the Republican and Democrat parties. I have often seen and heard statements from both sides that are hopelessly flawed and full of rhetoric. For some reason prominent people within the specifc paradigms don't stand up and correct the statements, instead they tend to allow the statements to flow as it suits the paradigm. Those that do stand up for pure honesty (no matter who it suits) are the ones worth respecting the most. So let's give examples - has PK ever tried to give an evaluation on Kerry's economic plans, keeping in mind that Kerry intends to cut taxes to the middle class and that PK appears to be against any tax cuts. PK and Kerry are in the same paradigm and I haven't seen any articles from PK on this matter. Now to finally answer your question - many, many people out there have certain values that place them in the Republican conservative paradigm. They may be so afraid of Gay marriage, removal of Christian religion from the courts, etc, etc that they may see the Republicans as the only way forward. These people may well be more conducive towards agreeing with anything that the Republicans put up and treating the Democrat opinions with comtempt (this is where I actually see value in Michael Moore's efforts). This has a lot to do with our conversation on journalism by the way (see the other posts). I hope you will also begin to see that there are many people who simply follow the Democrat rhetoric even when they don't understand it. As an example, there is that one black democrat that was running to head the democrat bid for president (his name escapes me). He was making statements about how the Republicans tax cuts only help the rich. When questioned about it, he looked like a fool as he had no idea what he was talking about - he was merely following the rhetoric. So all said and done - if you are going to throw insults (and it is alright to insult) I just ask that you be prepared to insult the stupidity that comes out of the 'other' camp too.

Subject: Re: PK interviewed by Buzzflash From: Erica To: Mik Date Posted: Sun, Aug 08, 2004 at 08:18:20 (EDT) Email Address: Not Provided Message: Harsh words or not, they're my words and until Bush changes the law, I can still say them. In addition, I didn't read your post reply to me because nothing you could possibly say would change the facts. And the facts are that Bush is the worst President in the history of the US and if he's given another four years, the damage may be irrepairable. How is that for harsh words?????

Subject: Well, well.... From: Econochick To: Erica Date Posted: Fri, Aug 06, 2004 at 12:33:49 (EDT) Email Address: Not Provided Message: So let me get this straight...you're the only giant of intelligence surrounded by a sea of stupidity? So you have the monopoly on insight absolute truth? Perhaps the American people you speak of are just turned off to your cause because you call them 'stupid' when they their opinions differ from yours. That attitude is less 'liberal' and more 'fascist', Erica.

Subject: Re: Well, well.... From: Erica To: Econochick Date Posted: Sun, Aug 08, 2004 at 08:19:17 (EDT) Email Address: Not Provided Message: Please read my last response. It applies to you, too.

Subject: Re: Well, well.... From: Mik To: Econochick Date Posted: Fri, Aug 06, 2004 at 14:17:04 (EDT) Email Address: Not Provided Message: Harsh words their Econochick. Please let's not fight fire with fire. A little diplomacy or this board will become a screaming and shouting match.

Subject: Being Civil From: Ari To: Mik Date Posted: Fri, Aug 06, 2004 at 14:58:59 (EDT) Email Address: Not Provided Message: Think Econo could learn to be civil? The idea seems to be to insult anyone who is not as conservative as Econo.

Subject: Another one.. From: Econochick To: Ari Date Posted: Fri, Aug 06, 2004 at 15:39:41 (EDT) Email Address: Not Provided Message: Let me get this straight, Ari. My calling a position which derides all who don't agree with a particular way of thinking what it is - fascist - and I'm 'uncivil' and 'conservative'. However, derision is to be protected as a free and liberal thinking? Huh? I'm assuming that you once again read your own stuff into my post and didn't notice that I did not attack Erica (whom I neither know nor wish any harm) but her STATEMENT??? No, of course not. You did the same to one of my previous posts. Only in the previous post you pinned a position on me that I did not hold and didn't SAY I hold. So, here's a truly 'uncivil' piece of advice from me to you: perhaps you should get some help with readig comprehension skills. Good luck.

Subject: Re: Another one.. From: Ari To: Econochick Date Posted: Fri, Aug 06, 2004 at 17:18:17 (EDT) Email Address: Not Provided Message: Econo, Then I will assume good intent from here and read carefully.

Subject: Re: Well, well.... From: Econochick To: Mik Date Posted: Fri, Aug 06, 2004 at 14:45:42 (EDT) Email Address: Not Provided Message: Miki! You're back. Listen, if the truth hurts it hurts. Erica's position attitude in her post is abnoxious and fascist. She should be called on that. Have a good one!

Subject: Re: Well.... From: El Gringo To: Econochick Date Posted: Fri, Aug 06, 2004 at 20:02:50 (EDT) Email Address: nma@hotmail.com Message: Dear Econochick, you're angry, terribly angry, you want it all and you want it 'now'...

Subject: PK to debate O'Reilly From: Erica To: All Date Posted: Fri, Aug 06, 2004 at 09:00:38 (EDT) Email Address: Not Provided Message: Paul Krugman will debate O'Reilly on The Tim Russert Show. I think it runs on CNBC. Anyone know anything about this segment? I saw the clip O'Reilly played on his show on Thursday night. I have little hope that this will turn out well for PK. He's great on paper but in an argument with O'Reilly, the serial bully, I am afraid for him. O'Reilly only debates people he thinks he can take. David Brock has offered to appear on O'Reilly, but O'Reilly is a coward and hiding under his desk. Some great new websites for those of you interested in media reform. David Brock's mediamattersforamerica.org and the new site spawned from OUTFOXED, newshounds.com

Subject: Re: PK to debate O'Reilly From: FreeUSA To: Erica Date Posted: Sat, Aug 07, 2004 at 22:58:34 (EDT) Email Address: freeusa@new.rr.com Message: Man what a little weasel this Paul Krugman is! I had to laugh at the hour show, man he is so far leftwing that he makes Kerry look republican. I am glad I recorded this episode its going to be good for laughs for a long time

Subject: Re: PK to debate O'Reilly From: Erica To: FreeUSA Date Posted: Sun, Aug 08, 2004 at 08:32:24 (EDT) Email Address: Not Provided Message: Acutally FREEUSA, Krugman is a Centrist, but O'Reilly is a fascist, so anything O'Reilly says would make Paul look really far to the left. And O'Reilly's defense of Fox News was the part that got me laughing. HUME A MODERATE!! That is just hysterical, as was O'Reilly when Paul mentioned Media Matters for America.

Subject: Re: PK to debate O'Reilly From: Freeusa To: Erica Date Posted: Sun, Aug 08, 2004 at 09:14:20 (EDT) Email Address: Not Provided Message: Media Matters is a left controlled site that has no credability.

Subject: Re: PK to debate O'Reilly From: Graham Carter To: FreeUSA Date Posted: Sun, Aug 08, 2004 at 00:34:54 (EDT) Email Address: graham.carter@prurealty.com Message: Man what a little weasel this Paul Krugman is! I had to laugh at the hour show, man he is so far leftwing that he makes Kerry look republican. I am glad I recorded this episode its going to be good for laughs for a long time --- What a sorry little man (Bill O'Reilly0. Fox will soon have to put Bill of to pasture - he is a liability to 'fair and balanced'.

Subject: Re: PK to debate O'Reilly From: Joan Mabry To: Erica Date Posted: Fri, Aug 06, 2004 at 09:23:07 (EDT) Email Address: dandelo47@yahoo.com Message: Paul Krugman will debate O'Reilly on The Tim Russert Show. I think it runs on CNBC. Anyone know anything about this segment? I saw the clip O'Reilly played on his show on Thursday night. I have little hope that this will turn out well for PK. He's great on paper but in an argument with O'Reilly, the serial bully, I am afraid for him. O'Reilly only debates people he thinks he can take. David Brock has offered to appear on O'Reilly, but O'Reilly is a coward and hiding under his desk. Some great new websites for those of you interested in media reform. David Brock's mediamattersforamerica.org and the new site spawned from OUTFOXED, newshounds.com --- Thanks for mentioning this debate. I've been looking for info on it for hours (seems like hours!) O'Reilly can be brutal. I hope Mr. K will prevail, truth against spin.

Subject: Re: PK to debate O'Reilly From: Erica To: Joan Mabry Date Posted: Fri, Aug 06, 2004 at 09:40:42 (EDT) Email Address: Not Provided Message: Hey Joan, I just found out on CNBC site for you, Tim Russert Show airs on Saturday, 7 p.m. ET and is rerun again at 10 p.m. ET. Hope that helps everyone. Has anyone heard any gossip about how Krugman faired about O'Lielly?

Subject: Re: PK to debate O'Reilly From: Ken To: Erica Date Posted: Fri, Aug 06, 2004 at 11:31:05 (EDT) Email Address: kendoran@execpc.com Message: A pre-write from the WP. Sounds highly entertaining. http://www.washingtonpost.com/wp-dyn/articles/A44149-2004Aug5.html

Subject: Stocks Back to Zero From: Terri To: All Date Posted: Thurs, Aug 05, 2004 at 18:16:51 (EDT) Email Address: Not Provided Message: Well, we are in August and the S&P is still at zero for the year. Tomorrow we have an employment report, which may shake up things, and oil prices are a damper, but it looks as though the prospect of higher interest rates has been the central problem.

Subject: Re: Stocks Back to Zero From: Jennifer To: Terri Date Posted: Thurs, Aug 05, 2004 at 18:42:46 (EDT) Email Address: Not Provided Message: Terri, Do you still like you value index orientation? Mid cap value especially stands out on the Barra return chart.

Subject: Arguing With Pete From: Jennifer To: Jennifer Date Posted: Thurs, Aug 05, 2004 at 18:44:28 (EDT) Email Address: Not Provided Message: Pete, Please continue the argument. I am learning all sorts of things from you.

Subject: Re: Arguing With Pete From: Pete Weis To: Jennifer Date Posted: Thurs, Aug 05, 2004 at 23:44:11 (EDT) Email Address: Not Provided Message: Jennifer. The majority have a great deal of difficulty tolerating bearish views on the economy or the stock market. Someone once noted - if you attend a cocktail party and start making 'negative' comments about the economy and markets, people will put as much distance between themselves and you as they can - they simply don't want to hear it. I read comments by investment gurus who used to appear on CNBC (Richard Russell among them) who are no longer invited to express their views because 'viewers wrote so many angry e-mails' when their outlooks were viewed as 'negative'. Bill Fleckenstein (Contrarian Chronicles) who has appeared on CNBC in the past (but not lately) was one of the very few in early 2000 to predict the markets would go down. He predicted a drop of about 10%, and in his review of 2002 (in January 2003), he mentioned that his prediction was actually 'optimistic' when compared to the actual market performance of 2002. Yet he said many subscribers reacted vehemently, sometimes with angry epithets, toward himself when he made his bearish projections for the 2002 markets. My point - the very heavy bias is toward the bullish side because that is what sells. If I'm a long time real estate agent and selling homes in Southern California and have seen the ups and downs of the market, I may think buying a home there is a very bad investment at the extraodinarily high prices being asked. I might think it prudent for a prospective buyer to rent for awhile and wait for the market to drop before buying. But I have a family to think about and mouths to feed. Even if I have a bearish attitude toward the Southern California real estate market, I'm not going to tell my clients that - or I better being looking for another line of work. The same goes for stock brokers, most investing publications, television investment commentaters, etc. Start telling your clients to get into a cash position (short term fixed investments) and out of bond funds and the stock markets and watch your clients go elsewhere. Look at what happened to fund managers in the late 90's who refused to get on the extremely overvalued hightech bandwagon - they quickly lost investors in droves. It took the reputation of a Buffet to keep investors in the fold. If you are in the business and want to do well you are pressured to give the public what it wants, even if what it wants is lunacy. I realize that some (not many) investment advisors do promote less risky investments when economic conditions warrant it, but it's difficult for them to be really bearish if they want to make a living. So we are all inundated with bullish economic and market views. Many of us don't believe that since it is a relative matter. For instance, the US has become much more conservative in the last 20-25 years. Our news media is generally thought of as 'liberally biased' by most Americans - even many of the 'liberals' themselves. Yet if you would compare the US media with the media of other English speaking countries around the world, the American news media comes up more conservative in comparison. This is even more true if you compare American news media with that of non-english speaking, western nations. Among western nations we are quite conservative. In a sense, many of us who do not see ourselves as conservative may look at someone who is actually conservative when compared to a broader world view and consider them to be liberal. It's a matter of relativity. In the same way, we have been so saturated with bullish commentary that when someone says - 'I don't think there is a good case for bullishness and that there are some very serious problems' - they often are labeled 'doom-and-gloomers'. That's why the dissenting voices to the chorus of 'economic recovery' are very few.

Subject: Now, Pete.... From: Econochick To: Pete Weis Date Posted: Fri, Aug 06, 2004 at 13:02:38 (EDT) Email Address: Not Provided Message: ....you know the economy goes in cycles. So, I am generally bullish - even if it's not a good time now, it'll be followed by better later and then another trough, etc. I make my money on both bull and bear markets - I'm completely direction indifferent. So, clarify please...are you talking long or short term?

Subject: Re: Now, Pete.... From: Pete Weis To: Econochick Date Posted: Fri, Aug 06, 2004 at 15:20:17 (EDT) Email Address: Not Provided Message: Econochick. I take it you are not a proponent of super cycles. And you see our present situation as just another fairly ordinary cycle (if there is such a thing). I see it as very different, with some very serious problems we have never faced - going from a period of cheap energy to a period of very expensive energy with no new sources as we had in the the late 70's thru the early 80's to relieve the shortages within, say, the next 10-20 years. The accumulation of debt is very similar to the 1920's and this puts our banking system at risk, IMO. I agree with Stephen Roach that we have a problem with asset inflation especially in the housing markets. I think the current account deficit will inevitably continue to force the dollar downward and increasingly add to the costs of raw materials for US manufacturers even as it makes US labor cheaper. The problem here - the cheapening of US labor has a long way to go to compete with continuely emerging labor markets around the world. Interest rates are going from a very low level to higher levels in the coming months and years. The US consumer now represents more than 2/3's of the US economy as well as a very important part of of the world economy (representing roughly 30% of total world consumption). All the above factors are weighing on the US consumer and consumption is dropping and will continue to drop. This along with offshoring will continue to depress employment. We live in economic times that almost none of us have ever experienced. I think the problems are long term - more than a decade out. However, when the markets and real estate bottom in the not too distant future there will be some very good investment opportunities for those with the cash.

Subject: Labor Costs From: Terri To: Pete Weis Date Posted: Fri, Aug 06, 2004 at 19:00:14 (EDT) Email Address: Not Provided Message: Labor costs are the key industry costs, not the prices of raw materials. If labor costs are constrained [I wish they were not], then there would be an inflation problem. But, labor costs are all too constrained.

Subject: Ok From: Econochick To: Pete Weis Date Posted: Fri, Aug 06, 2004 at 15:22:07 (EDT) Email Address: Not Provided Message: So, you're more long term. Gotcha.

Subject: Bull and Bear Markets From: Terri To: Econochick Date Posted: Fri, Aug 06, 2004 at 15:04:40 (EDT) Email Address: Not Provided Message: Unless you are employed on Wall Street, how do you make money in bull as well as bear market periods? Do you time the cycles. Stock people struggle with bear markets and bond people struggle. Real estate people struggle. How do you avoid this?

Subject: EASY!! From: Econochick To: Terri Date Posted: Fri, Aug 06, 2004 at 15:28:36 (EDT) Email Address: Not Provided Message: How do I do this? Arbitrage. But you're right, Terri, arbitrage is not really possible unless that's your profession. But you can reduce the volatility in your personal portfolio by buying uncorrelated or negatively correlated assets. That way, when one goes down, the other won't necessarily (uncorrelated) or will go up (negatively correlated, offseting the loss. Reducing the volatility of course means that you won't get rich quick - but you won't get poor quick either. Timing cycles means you think you can see the future - which I can't, so I don't do that.

Subject: Excellent From: Terri To: Econochick Date Posted: Fri, Aug 06, 2004 at 17:14:34 (EDT) Email Address: Not Provided Message: Ah ha. An interesting and excellent answer. You are quite right, a portfolio can be well hedged by holding different asset classes that are somewhat driven in different ways. Stocks and bonds and real estate will do the trick. Then again, as I have argued, stock market indexing over extended periods has been sharply effective. There seems every reason to believe indexing will continue to be an effective wealth builder, though almost certainly not to the extent of the period from 1980 to 2000.

Subject: Thanks All From: Jennifer To: Terri Date Posted: Fri, Aug 06, 2004 at 19:01:06 (EDT) Email Address: Not Provided Message: Nice posts!

Subject: Re: Arguing With Pete From: setanta To: Pete Weis Date Posted: Fri, Aug 06, 2004 at 05:19:18 (EDT) Email Address: Not Provided Message: as one of the 'dismal scientists' i applaud your post!!!

Subject: US is caught in Hands of Islamic Nation From: EUPHORIA To: Pete Weis Date Posted: Fri, Aug 06, 2004 at 01:26:54 (EDT) Email Address: Not Provided Message: i was wondering this ... what will happen to US when the crude oil keep on rising like no body business. If OPEC comes up with the solution to keep the OIL supply low enough , will this will give a huge pressure on the US Economy and Military. Do you guys know that most of the Islamic Country is agains US ?? What would happen to US if the Islamic Country decided to stick with the low supply in Oil just to hike up the price. Do you think the US Economy and Military will be affected by the decision made in OPEC meeting. NEW WAY OF COLONISATION

Subject: Re: Huh EUPHORIA, relax From: El Gringo To: EUPHORIA Date Posted: Fri, Aug 06, 2004 at 20:10:30 (EDT) Email Address: nma@hotmail.com Message: ' Do you guys know that most of the Islamic Country is agains US ??' Tell me why?

Subject: Emerging Markets From: Econochick To: EUPHORIA Date Posted: Fri, Aug 06, 2004 at 12:58:21 (EDT) Email Address: Not Provided Message: High oil prices will damage all economies in the world as it is a key commodity for all developed and developing economies. The most damaged will be emerging economies as they have less development to begin with. As demand from now poorer developed economies pulls back, investment in emerging markets will cease and they will suffer a huge setback. The US economy is the largest in the world, twice as large as the second largest (Japan). Thus, it produces much of world demand. For example, the US ranks as the number one purchaser of Saudi Arabia's and Egypt's exports (an oil producing and a NON-oil producing nation in the Middle East). Also, because oil makes up 98% of Saudi Arabia's GDP and accounts for the entire national budget, a price so high that it significantly brings down world demand (through substitution and economic slowdown) would bankrupt Saudi Arabia. This economic model is true for most of OPEC. In other words, it is not to OPEC's interest to jack up oil prices high enough to cause economic slowdown in oil consuming nations.

Subject: Re: US is caught in Hands of Islamic Nation From: Pete Weis To: EUPHORIA Date Posted: Fri, Aug 06, 2004 at 09:07:50 (EDT) Email Address: Not Provided Message: You need to extend your 'wondering'. What will happen to the world economy when crude oil keeps on rising. What kind of political and military outfall will accrue - let's hope we have world leaders who keep their heads screwed on straight (including here in the US). The good - there will be a massive world effort to develop alternative energy sources - there are already promising alternative energy sources now coming online. Immediate energy policy in the US will focus on conservation (probably with a different administration) - because we now have none, this can deliver big results right away. The world as a whole and especially the US must drop its oil demand steeply.

Subject: Paul G Brown - Media Betrayal From: Mik To: All Date Posted: Thurs, Aug 05, 2004 at 18:00:11 (EDT) Email Address: Not Provided Message: Paul, I see you made an interesting post and we will lose the entire thread, so I decided to copy and paste your post below. I want to raise an issue in retort to your article. Although media companies are exactly that - companies with shareholders, etc, journalism is a profession. And like many 'respectable' professions, there are guidelines to what makes a good upstanding profession. In the same way there are guidelines in the medical industry. In many cases, doctors are required to act like businessmen, but also respect their professional standing. Hence to throw the argument that simply because we live in a capitalist society one shouldn't be surprised when professional standards are compromised is a bit weak.... in my opinion.

Subject: Re: Paul G Brown - Media Betrayal From: Paul G. Brown To: Mik Date Posted: Thurs, Aug 05, 2004 at 19:40:59 (EDT) Email Address: Not Provided Message: I'm not saying it's a good thing. I'm just sayin' that it's apparently so. You might say that the meaning of the word 'Journalism' just changed, only we haven't got the memo yet. It used to stand for the kinds of things you so eloquently laid out, Mik, only now it means something else. Don't know what, though. Maybe 'journalism' will blend with 'reality TV'. I think Marshal McLuhan predicted that something like that would happen. Or you might also say that what we're obliged to put up with is just 'shitty journalism'. OK, sure, but why? Why now? And what can we do about it? If my hypothesis is correct--capitalism and a truthful fifth estate are incompatible--then the way to fix it is to make 'journalism' unprofitable. I dunno. No data. Cannot compute. BTW: Wasn't George Shultz's lil' dispatch in the Times a gas? Try using the first derivative of a variable in any context except the NYT editorial pages and you'll be handed back a great big red 'F'. Crew: 'Captain! We're holed below the waterline! Three feet in the bilge, Sir, and gaining?' Capt: 'How fast?' Crew: 'About a two feet an hour!' Capt: 'Well, plug the holes damnit!' some time later * Crew: 'Captain! Six foot in the bilge!' Capt: 'How fast is it gaining?' Crew: 'Well, we plugged one hole! Only one foot an hour!' Capt George Shulz: 'Well, that's all right then! So much better - must be my dynamic leadership. I'm going to take a nap now. Call me if you need anything.'

Subject: On the Media From: Paul G Brown To: Mik Date Posted: Thurs, Aug 05, 2004 at 18:13:04 (EDT) Email Address: Not Provided Message: There being no numbers at issue, discussions of 'the Media' and all its faults and failings is not really my bailiwick. But I might make one small point . . . . Why is everyone so shocked (Shocked!) that 'the Media' prioritizes entertainment over education? In a capitalist system, Media Companies exist because they offer a certain rate of return on the capital invested in them. Higher returns mean higher valuations mean richer shareholders (and richer managers too, but that's another story). Even PK's column today misses the point, really. These 'scripts' that the 'Media' follow really are 'the story'. They are pleasing narratives, designed to beguile audiences, to excite their emotions, and thereby make them more susceptible to the advertising messages. Television is just a long freeway without exist ramps, and lines of billboards along either side. Free thinkers (of any stripe) are a bad media market. They're psychologicallly prone to skepticism so they resist these 'scripts', and they can spot emotional manipulation a mile away. So the race to the bottom in TV journalism. TV is not designed to tell 'the truth'. It tells stories. There can be a truth in these stories, but it is often an ironic, indirect truth: a truth only apparent in hindsight. Future historians will look back at Fox et al. and will be able to deconstruct the truths Fox is telling us. But I doubt these truths will have much correspondence to the truths being told.

Subject: Thank Mik and Paul From: Terri To: Paul G Brown Date Posted: Thurs, Aug 05, 2004 at 18:14:12 (EDT) Email Address: Not Provided Message: A post worth reading again!

Subject: On the media From: RL To: Terri Date Posted: Fri, Aug 06, 2004 at 06:24:03 (EDT) Email Address: rafaelloring@yahoo.es Message: It is at least nice to hear you express some doubt on that. As you say in a capitalist world we produce things that offer a rate of return on the capital invested on it. If it doesn't, it is either not produced or lays in the hand of the government. I don't think you are for one these options regarding the press. There is not only media but many other fields in which market appears to produce sub optimal results. But there are many ways to combat this, and in fact many are in place already ( I mention on of this mechanism in my last post). We will all agree that trivial news are a sign of poor journalism, but it is false?. The audience may seem like a bad criteria to drive journalism and we should complement it with some supervision and codes of conduct but what other criteria do you suggest? and at the end how can anybody objectively establish that is bad journalism? I don't agree either with the idea that free thinkers are bad market product, Krugman is an example but there are many good “free thinkers” with success. The fact that they are scarce in comparison I believe is partly the consequence of the dynamics I tried to explain earlier. Is also false that free thinkers ( may be we should use independent thinkers) don't use emotional manipulation. Michael Moore is great example. Here is my last post I’ve made reference to: Very interesting points. I have some ideas to share regarding this problem. People want to have serious reporting and be entertained at the same time but the trade off between this two 'goods' in not equal. People will not read boring but precise reporting, but often read entertaining trivial ones. At the same time (and this is the crucial issue) the cost of serious and accurate reporting for a journalist is much higher than the time saving trivial news. The late are also innocuous, they don't have direct political consequences, so the journalist won't face unpleasant attacks from political partisans, that possibility also lets the journalist do his work with less fact checking, something that the other kind of journalism has to spend a lot of time doing if it doesn't want to be publicly caught in a mistake. One of the mechanisms that makes a journalist keep doing the hard work is the opinion other journalists have of him. When most of the profession has already taken the easy direction this mechanism is weakened. RL

Subject: Re: On the media From: RL To: RL Date Posted: Fri, Aug 06, 2004 at 06:27:17 (EDT) Email Address: rafaelloring@yahoo.es Message: sorru I forgot to put this up Paul G.:'Or you might also say that what we're obliged to put up with is just 'shitty journalism'. OK, sure, but why? Why now? And what can we do about it? If my hypothesis is correct--capitalism and a truthful fifth estate are incompatible--then the way to fix it is to make 'journalism' unprofitable. I dunno. No data. Cannot compute. ' It is at least nice to hear you express some doubt on that. As you say in a capitalist world we produce things that offer a rate of return on the capital invested on it. If it doesn't, it is either not produced or lays in the hand of the government. I don't think you are for one these options regarding the press. There is not only media but many other fields in which market appears to produce sub optimal results. But there are many ways to combat this, and in fact many are in place already ( I mention on of this mechanism in my last post). We will all agree that trivial news are a sign of poor journalism, but it is false?. The audience may seem like a bad criteria to drive journalism and we should complement it with some supervision and codes of conduct but what other criteria do you suggest? and at the end how can anybody objectively establish that is bad journalism? I don't agree either with the idea that free thinkers are bad market product, Krugman is an example but there are many good “free thinkers” with success. The fact that they are scarce in comparison I believe is partly the consequence of the dynamics I tried to explain earlier. Is also false that free thinkers ( may be we should use independent thinkers) don't use emotional manipulation. Michael Moore is great example. Here is my last post I’ve made reference to: Very interesting points. I have some ideas to share regarding this problem. People want to have serious reporting and be entertained at the same time but the trade off between this two 'goods' in not equal. People will not read boring but precise reporting, but often read entertaining trivial ones. At the same time (and this is the crucial issue) the cost of serious and accurate reporting for a journalist is much higher than the time saving trivial news. The late are also innocuous, they don't have direct political consequences, so the journalist won't face unpleasant attacks from political partisans, that possibility also lets the journalist do his work with less fact checking, something that the other kind of journalism has to spend a lot of time doing if it doesn't want to be publicly caught in a mistake. One of the mechanisms that makes a journalist keep doing the hard work is the opinion other journalists have of him. When most of the profession has already taken the easy direction this mechanism is weakened. RL

Subject: as a repeat From: Mik To: RL Date Posted: Fri, Aug 06, 2004 at 14:14:19 (EDT) Email Address: Not Provided Message: And as a repeat to a previous post I made - Thanks for those thoughts RL. They gave me a different perspective on the issues faced by the journalists. I think at the end of the day - journalists a people too, who want to go home to their kids and have a normal healthy life. And not be faced with death threats by people who don't like their reporting. This is a tough one - but an interesting discussion.

Subject: Re: On the media From: RL To: RL Date Posted: Fri, Aug 06, 2004 at 07:35:05 (EDT) Email Address: rafaelloring@yahoo.es Message: nice artcle on the subject http://www.poynter.org/column.asp?id=36&aid=69305

Subject: Trading Australia From: Emma To: All Date Posted: Thurs, Aug 05, 2004 at 16:28:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/08/05/business/worldbusiness/05oz.html? August 5, 2004 Free Trade Debate in Australia By JAMES BROOKE SYDNEY, Australia - In 1992, President Bush, the father, offered Australia a free trade pact. Prime Minister Paul Keating, a Labor Party leader, rejected the offer. On Tuesday, President Bush, the son, signed a free trade pact with Australia, saying at a White House ceremony: 'The United States and Australia have never been closer.' On Wednesday, Mark Latham, the Labor Party's current leader, vowed to block Australian Senate approval of the pact, threatening: 'I'm not interested in political compromise.' This may look like a free-trade version of the film '50 First Dates,' but Australia and America are not acting out a rerun of a frustrated courtship. With parliamentary elections expected this fall, Australia's Labor Party, now in opposition, is trying to sell itself as the best party to carry out the free trade pact, which is to go into effect Jan. 1. With an eye to the polls and to his left-wing base, Mr. Latham is demanding two amendments. 'Despite several flaws in the agreement, it has net economic benefits for Australia, and on this basis, should be supported,' Mr. Latham said on Tuesday, giving his overall approval to the 1,100-page document. In recent years, Australia has shifted from the provincial and inward-looking nation of 'Crocodile Dundee' movies to the globally competitive nation of the Sydney 2000 Olympics. Over the last two decades, Australia's exports have doubled. Today, one in five jobs and 20 percent of the economy depend on exports. To expand overseas markets, Australia is the most aggressive negotiator of free trade agreements in the Asia Pacific region. Last year, Australia signed a free trade pact with Singapore. Last month, it signed one with Thailand. Last week, it started work on a pact with Malaysia. Next November, Australia is to start talks on a trade pact with the Association of South East Asian Nations. Next March, Chinese and Australian officials are to complete a preliminary study on a bilateral trade agreement. With Australia's trade with China jumping by about 50 percent in the first four months of the year, China is expected to become Australia's biggest export market in five years.

Subject: Bobby? From: Kevin Deenihan To: All Date Posted: Thurs, Aug 05, 2004 at 15:40:40 (EDT) Email Address: kdeenihan@gmail.com Message: Hi Bobby. It's Kevin Deenihan. I lost your e-mail address when I moved. I needed to talk to you about website stuff. E-mail me at kdeenihan@gmail.com

Subject: Clintonomics From: jack To: All Date Posted: Wed, Aug 04, 2004 at 16:18:50 (EDT) Email Address: jjlwmd@yahoo.com Message: I just read an op-ed in today's new york times by George Schultz titled 'A Record of Recovery.' The basic claim of the article is that Clinton inherited a booming economy and left an economy in recession. George Bush, however, inherited a recessionary economy and has now given us recovery. The implication of course is that the democrats' claim to a superior economic record and better policies is a myth. The article is actually not much longer than what I just wrote, but there is a chart involved. What do you guys think? Would the term 'sick joke' be inappropriate in descrbing this op-ed? Thanks, Jack

Subject: Re: Clintonomics From: El Gringo To: jack Date Posted: Wed, Aug 04, 2004 at 16:56:23 (EDT) Email Address: nma@hotmail.com Message: Bingo David!

Subject: Re: Clintonomics From: David E... To: jack Date Posted: Wed, Aug 04, 2004 at 16:33:42 (EDT) Email Address: Not Provided Message: Brad DeLong had fun with this one. http://www.j-bradford-delong.net/movable_type/ Search on Shultz or Schultz

Subject: Re: Clintonomics From: Mik To: David E... Date Posted: Wed, Aug 04, 2004 at 17:05:42 (EDT) Email Address: Not Provided Message: If one was to say that Clinton may have been in the right place at the right time - I think there may be a subjective argument related to the IT boom. But I do think it is a subjective argument. Saying that Bush inherited an economy that was on a downward trend may have some merit but may well be subjective. But to say that Bush has turned the economy around and got it on an upward trend is out right weird. I don't think you need a university degree to understand that the US gov has borrowed outrageous amounts of money, has little capacity to pay back that money and continues to borrow more. Is this not considered as being reckless? I think it is a priceless argument to say, 'We are doing good because the deficit has not increased more than we had budgeted.' What has me confused is how Greenspan can sit quiet at this moment. Granted he may be focused on monetary issues and not fiscal issues, but surely the fiscal stupidity is also making Greenspan's life difficult?

Subject: Amazon Berries From: Emma To: All Date Posted: Wed, Aug 04, 2004 at 13:07:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/08/04/business/worldbusiness/04acai.html?pagewanted=all&position= Berry Sales to U.S. Offer Security to Amazon Farmers By TODD BENSON IGARAPÉ-MIRI, Brazil - For more than 30 years, Raimundo Juliăo da Costa has eked out a living by selling a dazzling array of wild tropical fruits that grow naturally on his land in the lush floodplains of the Amazon rainforest. His biggest seller has always been açaí (pronounced ah-sigh-EE) - a dark purple berry rich in nutrients that sprouts atop the millions of palm trees lining the riverbanks in the Brazilian jungle. But like thousands of other poor farmers, until recently Mr. da Costa found himself at the mercy of middlemen who have had a strong hold on the local fruit market for generations. That started to change two years ago, when a few environmentally conscious surfers from a small California company called Sambazon offered to buy Mr. da Costa's açaí harvest at a 25 percent premium over the market price. The only catch - he had to designate a piece of his land as an ecological reserve and carefully manage the rest of his terrain to protect the biodiversity of the rainforest. 'It's worth the extra effort,' said Mr. da Costa, 74, who is better known by his nickname, Seu Ediquínio. 'I used to sell my fruit on the edge of the river to the middlemen, but they always pay the lowest price possible,' he said. 'Now I have a lot more security because I know what price I'm going to get ahead of time.' Mr. da Costa's American buyers may be relative newcomers, but they are already helping change the face of the tropical fruit trade in this part of the Brazilian Amazon. Because Sambazon offers guaranteed contracts, hundreds of peasant families are able, for the first time, to lock in a price for the bulk of their crop before the harvest. And as their sales become more lucrative, people have an incentive to preserve their habitat instead of abandoning it in search of work in nearby cities like Belém, where many former river dwellers live in poverty in crime-ridden shantytowns. 'The idea is to show the locals that it can pay off to become stewards of the forest,' said Ryan Black, chief executive and a founder of Sambazon in San Clemente, Calif. While those may sound like the words of a seasoned environmental advocate, it was Mr. Black's nose for business that drew him into the conservationist movement. He and a friend, Ed Nichols, came up with the idea for importing tropical fruit after tasting açaí during a surfing trip to northeastern Brazil in 1999. A few months later, they founded Sambazon, short for Saving and Managing the Brazilian Amazon. Rich in antioxidants and amino acids, açaí is thought to be one of the most nutritional fruits of the Amazon basin. So Mr. Black and Mr. Nichols first went after the health-conscious, processing the fruit into packs of frozen pulp mixed with guaraná, another berry from the Amazon that contains natural stimulants. Then they started distributing it to juice bars and fitness clubs throughout Southern California, where açaí smoothies soon began supplanting wheatgrass protein shakes as the drink of choice among athletes and body builders. Sambazon açaí is now carried by thousands of juice bars and grocery stores across the country, including such retail chains as the Whole Foods Market, Wild Oats and Trader Joe's. Chefs are also beginning to experiment with the fruit, whose taste has been likened to blueberry with a hint of chocolate. The Blue Door restaurant at the Delano Hotel in Miami Beach serves it with dinner entrees like veal tenderloin. In most Brazilian cities, açaí is also a recent phenomenon, even though it has been a staple for indigenous communities in the Amazon for centuries. Now, in most parts of the country açaí is typically served as an ice-cold slush in a bowl, topped with granola and sliced bananas.

Subject: Canada and ... From: El Gringo To: All Date Posted: Tues, Aug 03, 2004 at 20:51:22 (EDT) Email Address: nma@hotmail.com Message: http://www.bcpolitics.ca/int_collapse.htm

Subject: P.S. & N.B.: If a nation... From: El Gringo To: El Gringo Date Posted: Wed, Aug 04, 2004 at 18:23:13 (EDT) Email Address: nma@hotmail.com Message: http://www.bcpolitics.ca/int_euro.htm

Subject: Campaign Media Coverage From: aden To: All Date Posted: Tues, Aug 03, 2004 at 05:33:57 (EDT) Email Address: aden@interchange.ubc.ca Message: It occured to me on Thursday when alternating between pbs and cnn coverage of the democratic convention that we have at least two VASTLY different views from which the media is reporting national events. How can two audiences watching the same event get two different accounts of what was said only because they were watching different channels? Information is no longer an unbiased statement of fact but a substance that must be shaped by analysts (who nearly always have personal political convictions) to 'fit in' with what the public already knows. Naturally, the powerful position analysts hold, like all positions dealing with information, is prone to abuse. However, the only alternative to preconditioned analysis of the facts is to basically watch c-span all day and judge for yourself. This is an unlikely choice for a majority of american voters. So I really wanted to make public one prayer for the future of democracy and civil society everywhere: We need a truly balanced media enterprise which will present a FAIR ASSESMENT of events without any underlying ideological leaning and allow individuals to decide for themselves. Alas, I fear we may have to wait far into the future before this is accomplished.

Subject: Re: Campaign Media Coverage From: Econochick To: aden Date Posted: Tues, Aug 03, 2004 at 10:57:34 (EDT) Email Address: Not Provided Message: Yep! C-Span is the way to go. I can't imagine unbiased coverage anyway. I mean, as long as human beings are doing the covering, it's bound to be biased one way or the other. And it's usually subtle. A pro-Kerry journalist covering Kerry's speech at the DNC said that he 'didn't mention' his voting record on the war while an anti-Kerry journalist wrote '...ignoring his own voting record on the war,....'. Subtle bias but bias just the same. I'm goin' with C-SPAN!!!

Subject: Re: Campaign Media Coverage From: Erica To: Econochick Date Posted: Fri, Aug 06, 2004 at 09:04:10 (EDT) Email Address: Not Provided Message: It certainly doesn't help coverage when, immediately following John Kerry's speech, when one network turns to radical conservative Ralph Reed to provide feedback. I am wondering if CNN will turn to Terry McCaulife for coverage after Bush's speech. We will have to wait and see but I won't hold my breath.

Subject: Re: Campaign Media Coverage From: Econochick To: Erica Date Posted: Fri, Aug 06, 2004 at 11:52:08 (EDT) Email Address: Not Provided Message: I think the point is that you don't want to 'help' anyhthing if you're the straight news. The media is, by their own admission, is quite liberal in this country. I'm sure they'll have Michael Moore as a political analyst on at least one of these networks to thrash Bush after his speech. I'm sure there's no need to hold your breath :-)

Subject: Watch CBC From: Mik To: aden Date Posted: Tues, Aug 03, 2004 at 10:30:37 (EDT) Email Address: Not Provided Message: Can I suggest you watch the CBC - Canadian Broadcasting Corporation. This is a government owned broadcaster that has even been known to have a good go at their own bosses. CBC offers, in my mind, balanced reporting with no opinions. No interviews with specialist analysts, friends of family, pet dogs etc. Just cold reporting. However, alas - I do find it boring.

Subject: Re: Watch CBC From: Econchick To: Mik Date Posted: Tues, Aug 03, 2004 at 10:59:40 (EDT) Email Address: Not Provided Message: As far as I know, we only get CBC near the Canadian border, Mik. I've only ever been able to pick it up in New Hampshire and Burlington, Vermont. It doesn't even make it as far south as NYC. I think maybe the news market is too saturated in the US?

Subject: Bigger Bunny Ears? From: Mik To: Econchick Date Posted: Tues, Aug 03, 2004 at 14:26:07 (EDT) Email Address: Not Provided Message: Yeah I know. In fact, even people close to the Canadian border don't appear to get CBC. It is not offered as part of the standard cable package (even though it is freely transmitted). The interesting part is that Canadians get exposed to their local news and to the US News. The difference is stark. As an irony, back in the dark days of orange alerts, Saddam-Al Queda propaganda and 'Imminent' terror alerts - the Canadian government, through CBC issued a warning to Canadians not to watch too much US news. Now how is that for amazing? They asked that Canadians restrict their US TV news intake to no more than 30 minutes a day and for children not to watch more than 15 minutes per day. They also asked parents to speak with their children and advise the children that the world is not about to implode.... and that we are safe (here in Canada).

Subject: Bunnies in NYC??? From: Econochick To: Mik Date Posted: Tues, Aug 03, 2004 at 18:32:43 (EDT) Email Address: Not Provided Message: We didn't feel safe. As I turned to look South from East 93rd street on September 11th (after walking home from Midtown and my husband from the WTC), I saw a column of smoke. We were terrified in NYC long before we turned on the television that day. We also know that we are still a prime target with or without the Bush administration or the US news.

Subject: Re: Bunnies in NYC??? From: setanta To: Econochick Date Posted: Thurs, Aug 05, 2004 at 09:40:07 (EDT) Email Address: Not Provided Message: econochick, terrorism, unfortunately is a fact of life. it has existed long before 911 and will be around long after. the important thing is not to give in to the terrorists by succuming to fear and not acting rationally afterward. was it not your own benjamin franklin who said that those who give up liberty in the pursuit of security deserve neither liberty nor security? we in ireland have endured terrorism for a long time, thankfully the most recent, lasting from 1972 to 1999, seems to be over for good. fear is natural, but the response to terrorism is to show that all their bombs will not change how the people live. media generated hysteria and frequent 'orange alerts' by the administration is counterproductive by making the threat seem larger than it actually is in addition to giving prime time exposure to a handful of genocidal maniacs with a 'cause' as an excuse to slaughter the innocent.

Subject: Re: droopy ears From: Econochick To: setanta Date Posted: Thurs, Aug 05, 2004 at 14:41:48 (EDT) Email Address: Not Provided Message: Setanta, That's one take on the situation. I personally find the terror alerts helpful. Besides, NYC has been code orange since 9/11 - our alert level never changes. And because people have become more vigilant, two guys trying to buy shoulder-fired missles were caught in New York State today. The original tip came from regular citizens. I would be worried all the time with or without the codes - especially without the codes. It's easy to say that you 'shouldn't' worry because it means that the terrorists are winning. But it's also important to remember that everyone's psyche handles this sort of trauma differently. We all got over it here in NYC to varying degrees - but not completely. I would also remind you that no attack even near this size was ever pulled off in Ireland. And I especially love it when people who are in places that terrorists have never even heard of telling New Yorkers to 'get over it'. So, I appreciate your response to me but I'm afraid all the logic in the world can't cope with emotion - and fear and uncertainty are normal reactions to what happened.

Subject: Re: droopy ears From: setanta To: Econochick Date Posted: Fri, Aug 06, 2004 at 05:12:18 (EDT) Email Address: Not Provided Message: i agree, i believe in the slogan (apparently on ellis island) 'see something, say something!' that the police caught 2 people trying to buy (stinger?) shoulder fired missiles was news to me. however, i'm not too sure how good a terrorist they were if they were seeking a weapon like that in the US given the nervousness of the US today, and how the ordinary citizens, who reported them, found out. most serious terrorists tend to be supplied with state of the art equipment from rogue states. our home grown variety (IRA, INLA)were adequatly supplied with missiles and anti aircraft guns courtesty of the libyans while the unionist variety (UDA,UFF,UVF) had no shortage of british weapons. furthermore, while 911 was spectacular and had a massive impact on the world, more people died in the little province of Ulster as a result of the troubles, albeit over a 25 year period. what the death toll does not show is the tens of thousands of wounded people who survived assination, bomb blasts, punishment beatings (with both arms and legs broken with baseball bats) and punishment shootings (having their kneecaps and wrists shot out) also the countless 'missing' people whom the police on both sides of the border refuse to include in the assassinated. however, i'm not trying to take away from the horror every american felt on Sept 11, nor that there are terrorists out there itching to launch another attack on the US. terrorism everywhere has to be stamped out. my point is twofold: do not cry wolf too many times or like the boy found out, when there is a real and imminent danger, people will not respond to it. try not to forget that the chance of being killed by a terrorist is tiny. i'd be more concerned with crossing the road safely and stepping out of the bath onto the towel. inflating the threat that terrorists actually pose just plays into the hands of them. remember, this guy who is scaring the hell out of the US is probably living in a cave in a remote mountain and hasn't seen soap in months.

Subject: Re: droopy ears From: Econochick To: setanta Date Posted: Fri, Aug 06, 2004 at 12:24:03 (EDT) Email Address: Not Provided Message: Oh, hey, Setanta, I don't mean to play 'who's got it worse'. My high school boyfriend was from Northern Ireland and his family left to escape all that. Northern Ireland was a nightmare, no question. Over time more people died than in 9/11. My point was that the psyche reacts differently to a loss over a quarter century and a single catastrophe of huge magnitude. First of all, the sight of the aftermath almost made me faint (and I NEVER faint). Secondly, it changed the way we live in very practical ways. Stores closed, commuters had to be rerouted, a gazillion square feet of office space had to be found elsewhere, etc. My colleagues in the buildings next door saw (and heard) people holding hands and jumping from the buildings. It took a long time to happen, unlike a single bomb. Many of the same people lived through the first WTC bombing and were unaffected by it later. It's just a (hopefully!) unique experience. You bring up a great point that the probability of getting killed in a terrorist attack - even in high risk places like NYC - is tiny. The risk to life is MUCH greater driving and riding in cars (I wish people around here would remember that they are navigating a potential death on wheels!). However, the psyche doesn't deal well with chaos. We know that there is a chance we will die in a car accident, get run over or have a heart attack. Those are implied probabilities whenever you drive, walk or eat steak. However, one doesn't expect to be blown up sitting in a park, for example. That's too random to be 'acceptable' for our brains. As for crying wolf, that's just a bad argument. The alert isn't a bomb siren! It doesn't mean that the Luftwaffe is on the way and will commence bombing shortly. It's just insurance and a reminder to be vigilant - people aren't really ment to actively respond to alerts. It also says that to the terrorists 'we're on to you, so maybe you'd better rethink your plans'. Saying that alerts are stupid because they are not followed by explosions is like buying fire insurance and then being upset that your house didn't burn down. Unfortunately the head jackass is probably sitting in a cave with no soap (I wonder what excuse the French use?) but the rest of them are busy trying to unleash hell on earth. I agree with you that the guys in NY were and are stupid. But I'll go further - I think they're sociopaths. What sort of a 'normal' person would murder people in pursuit of a fascist Islamist state? That's not a typo - there's nothing 'Islamic' in their desires. Hey, are you in Northern Ireland then? How are things there now? Are the walls around some Catholic neighbourhoods still up and is there any talk of tearing them down?

Subject: Re: Bigger Bunny Ears? From: Jennifer To: Mik Date Posted: Tues, Aug 03, 2004 at 14:53:09 (EDT) Email Address: Not Provided Message: Mik, our television media can not seem to stop playing on fear at every turn. Yuch.

Subject: Re: Bigger Bunny Ears? From: Mik To: Jennifer Date Posted: Tues, Aug 03, 2004 at 15:02:11 (EDT) Email Address: Not Provided Message: ...Can't stop playing on fear at 'every turn'? But Bush reckons you guys are about 'turn the corner'.

Subject: hehehe!! From: Econochick To: Mik Date Posted: Tues, Aug 03, 2004 at 18:37:48 (EDT) Email Address: Not Provided Message: ...to cross one of those 'bridges' Clinton was building during his time so we can get into the 'lock box' away from the terrorists!!

Subject: Indian Textiles From: Emma To: All Date Posted: Mon, Aug 02, 2004 at 19:21:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/30/business/worldbusiness/30india.html?pagewanted=all&position= India Hopes for Growth in Textile Exports By SARITHA RAI BANGALORE, India - Business is good for Dinesh J. Hinduja. In the last three months, he has added four garment units, for a total of 41 factories. And in the next few months, he says, he will add another three. But at a recent interview in his downtown office, surrounded by designs, swaths of fabric and clothing, Mr. Hinduja was anxious. Despite the expansion frenzy, Mr. Hinduja, the director of marketing and production for the family-owned Gokaldas Exports and two sister companies - India's top garment exporters - cannot cope with the escalating demand. 'My buyers are pushing me like crazy to grow, grow, grow,' he said, 'but I have to draw the line somewhere, or my business will go totally out of control.' Mr. Hinduja's Bangalore-based company, which runs dedicated units for major American customers like the Gap Inc. and Tommy Hilfiger, is one of dozens of textile and garment exporters racing to prepare for the end of the global textile and apparel quota system on Dec. 31. The quota system, whose ending was devised nearly a decade ago by the World Trade Organization's predecessor, has protected the textile and garment industry in the United States and Europe by limiting imports from low-cost manufacturing countries like India. Under the Agreement on Textiles and Clothing, the restrictions were subject to elimination in several stages over the 10-year period but the biggest impact has been left for last, and the impending end has unleashed great expectations on both sides of the Atlantic. 'Many U.S. companies had to move production away from India due to quota restrictions, despite strong relations with some Indian firms,'' said Marshal Cohen, chief garment and footwear industry analyst at the NPD Group, a market research company in Port Washington, N.Y. 'The end of the quota system will create an unlimited relationship.' The United States and the European Union have officially notified the W.T.O. that they are moving ahead with the final phase-out by the end of this year, and a coalition of American and European Union retailers has campaigned enthusiastically for the scheduled ending. It continues, however, to be opposed by some powerful groups. The Bush administration just rejected a petition signed by more than 100 Republican and Democratic members of Congress, including John F. Kerry, the Democratic presidential nominee, asking that the phase-out be delayed. An end to the quotas, they said, would be disastrous for the textile and apparel industry in the United States, one of the country's largest manufacturing industries, employing 702,000 people.Though Indian garment and textile makers are crossing their fingers for all to go as planned, recognition of the stiff competition from China and the fragmented state of India's textile and garment industry is tempering the optimism a bit. Still, it is hard for Indians not to hope too much when the prospects seem so grand.

Subject: Re: Indian Textiles From: El Gringo To: Emma Date Posted: Mon, Aug 02, 2004 at 19:35:08 (EDT) Email Address: nma@hotmail.com Message: Dear Emma: http://www.encyclopedia.com/html/section/textiles_History.asp 'Yarn, fabrics, and tools for spinning and weaving have been found among the earliest relics of human habitations. Linen fabrics dating from 5000 BC have been discovered in Egypt. Woolen textiles from the early Bronze Age in Scandinavia and Switzerland have also been found. Cotton has been spun and woven in India since 3000 BC, and silk has been woven in China since at least 1000 BC About the 4th cent. AD, Constantinople began to weave the raw silk imported from China. A century later silk culture spread to the Western countries, and textile making developed rapidly. By the 14th cent. splendid fabrics were being woven on the hand looms of the Mediterranean countries in practically all the basic structures known to modern artisans, and there has been no change in fundamental processes since that time, although methods and equipment have been radically altered.'

Subject: Protectionism? From: El Gringo To: All Date Posted: Mon, Aug 02, 2004 at 18:13:55 (EDT) Email Address: nma@hotmail.com Message: http://news.ft.com/cms/s/7c143272-e3ee-11d8-9f08-00000e2511c8.html The US must think beyond protectionism By Eric Rauchway and Peter Lindert Published: August 1 2004 19:43 | Last updated: August 1 2004 19:43 The tariff-happy administration of George W. Bush makes John Kerry look like a perfect free-trader. Last week the administration proposed a tariff on shrimp, adding it to steel, televisions, beds and bras on the list of imports Mr Bush has constrained. By contrast,Mr Kerry as a senator voted consistently for free trade. Although the anti-outsourcing rhetoric of John Edwards, his running mate, suggests a protectionist streak, the greater threat to globalisation comes not from the Democrats' policies but from the possibility that they will not be adopted. Globalisation generates long-term benefits but also short-term dislocations that, unsalved, fester and foster political pressure to close open markets. The Democrat platform proposes subsidies to education and healthcare and requires increasing taxation of companies and the top 2 per cent of earners. Emphasising education, income tax and healthcare builds on past successes and redresses one major failure in America's past accommodation of international market pressures. Mass immigration fuelled the first modern globalisation a century ago. Millions of migrants went to the US, where they accepted lower wages than native-born Americans. Job-outsourcing happened at home: instead of factories migrating to other countries, immigrants took jobs in American factories. The Republican party, which dominated national government, generally favoured this globalisation of labour, while promoting tariff protection for American companies. The result was cheaper labour, lower costs of production (http://www.aboutmytalk.com/t116424/s&.html & http://www.j-bradford-delong.net/movable_type/2004_archives/001212.html) and the shielding of managements against foreign (Competitiveness: A Dangerous Obsession?) competition.(http://www.bea.gov/bea/ai1.htm) Cheaper labour helped the economy grow faster. But immigration also crowded native-born workers out of jobs, creating political problems as American labourers saw their richer, better-protected countrymen enjoying unprecedented prosperity. Rising inequality increased support for socialist politicians and anti-globalisation policies. But instead of taking a radical turn, Americans adopted policies to ease labour mobility. Instead of creating welfare-state doles and public housing to keep workers in place, Americans invested in education. The US of the early 20th century thus became a world leader in public secondary education. Education suited a mobile labour market: better schooling attracted workers. And it proved good policy for global competition, as nothing does more than education to raise per capita productivity or reduce income inequality. At the same time, Americans rejected tariffs that taxed consumers while subsidising industrialists. Voters turned increasingly to Democrats, electing them to Congressional majorities and to the presidency in 1912, despite Republican accusations that Democrats supported a radically confiscatory income tax. Indeed, as enacted in 1913, the income tax afflicted companies and 3 per cent of Americans, taking 2 to 7 per cent of their income. But this measure also promoted open markets: income tax revenue could replace tariff revenue. This was why Republicans such as Nelson Aldrich (who was colloquially known as the “senator from Standard Oil”) opposed the income tax: he feared it would allow Democrats to “destroy the protective system”. He was partly right: the Democrats did reduce tariffs. Yet, despite America's extraordinary economic growth, income tax and education alone were not enough to give workers satisfactory security from market disruption. Globalisation begot its own downfall, generating the politics of insecurity that killed it. The US shut down open markets with new laws restricting immigration and trade. The world wars and the Depression kept globalisation at bay, and it did not return until the cold war thawed. Now, as then, failure to heal the short-run ills of globalisation threatens to rob us of its long-run benefits. Mr Edwards' tub-thumping speeches denouncing outsourcing elicit roars from supporters who fear the insecurity that accompanies job loss. Only greater security in a fluid market can prevent this from becoming support for outright protectionism. Restoring historic strengths in education would help provide that security. So would improving the historic American weakness of linking health coverage to employment. The system is a botch. Depending on private enterprise to provide a public good, Americans pay more for an insurance-industry bureaucracy that exists to limit coverage than other countries spend on government bureaucracies that provide it. And it is a drag on job mobility. Venturing on to the American job market - whether you jump, fall or are pushed - means risking both life and livelihood as you abandon health coverage. This omnipresent insecurity promotes the fearful politics that undermines open markets. The Democrats could scarcely prove more protectionist than the present administration. The party platform promises far better management of the throes of globalisation. If that security costs Americans increased tax on the top 2 per cent of earners, it is a cheaper price than a return to the politics of autarky. Eric Rauchway is associate professor of history and Peter Lindert is professor of economics at the University of California, Davis

Subject: Re: Protectionism? From: Jennifer To: El Gringo Date Posted: Mon, Aug 02, 2004 at 20:05:48 (EDT) Email Address: Not Provided Message: Nice post.

Subject: Re: Protectionism? From: El Gringo To: El Gringo Date Posted: Mon, Aug 02, 2004 at 19:04:42 (EDT) Email Address: nma@hotmail.com Message: http://www.bea.gov/bea/ai1.htm Foreign Direct Investment in the United States: New Investment in 2003 | SCB, June 2004 |

Subject: Value in Indexing From: Emma To: All Date Posted: Sun, Aug 01, 2004 at 13:48:53 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/08/01/business/yourmoney/01fund.html?pagewanted=all&position= Think It's the Valuations Hurting Your Returns? Look Closer By PAUL J. LIM MUTUAL funds are supposed to thrive in go-nowhere, directionless markets like this one. In theory, at least, in a so-called stock picker's market, professionally managed equity funds should be able to move into stocks and sectors that seem promising while avoiding those that are drifting lower. Yet that hasn't been the case so far this year. And the reason may have less to do with stock valuations than with the costs associated with investing in funds themselves. According to a study of fund performance in the first half of the year, a majority of actively managed equity funds underperformed the stock indexes they are supposed to beat. Standard & Poor's, which conducted the study, found that only 37 percent of actively managed large-cap funds beat the Standard & Poor's 500-stock index of large stocks through June. Fewer than 43 percent of midcap funds beat the S.& P. 400 midcap index. And only 10 percent of small-cap funds beat the S.& P. 600 index of small stocks. To be sure, these are relatively broad stock indexes; many mutual funds actually invest in much more focused ways. For example, many portfolios are bound by prospectus to invest primarily in growth or value stocks of a particular size. Yet, according to the S.& P., even when compared to smaller slices of the stock market, the majority of actively managed funds are trailing their benchmark indexes in all nine major domestic stock fund categories: large growth, large value, large blend, midcap growth, midcap value, midcap blend, small growth, small value and small blend. It has been pretty much the same story over the past five years - a majority of actively managed funds in eight of these nine categories have been beaten by their indexes. S.& P.'s index strategist, Srikant Dash, says that while it is legitimate to question the competence of fund managers - he argues that 'successful managers are famous because there are so few of them' - that is only one part of the story. He notes that the typical fees, or expense ratio, on an actively managed large-cap fund might be a little more than 1 percent of assets. By contrast, the average expense ratio of a large-cap index fund - which simply buys and holds all the stocks that compose a market index like the S.& P. 500 - is only around 20 basis points, or 0.20 of a percentage point. 'That's like an 80 basis-point drag that the manager has to overcome year after year,' Mr. Dash says. And history shows that over long periods of time, as the fee effect compounds, it becomes harder and harder to do that. Indeed, a separate S.& P. study on fees in mutual funds found that funds with below-average expense ratios (relative to their category averages) consistently outperformed funds with above-average expense ratios over the past decade. S.& P. broke the stock fund universe into the nine categories and found that in eight of the nine, low-cost funds beat high-cost funds in annual returns. The outperformance was particularly pronounced among small-cap funds. The average low-cost small growth fund, for example, returned 10.3 percent over the past decade through May 31, compared with 6.5 percent for the typical high-cost small growth fund. The gap among large-cap funds was narrower. Low-cost large growth funds returned 8.9 percent annually, while their high-cost counterparts returned around 7.2 percent. Part of the explanation, says Philip Edwards, managing director for S.& P.'s investment services, is that small-cap funds tend to charge higher fees than large-caps. According to Morningstar, a mutual fund research firm, the average expense ratio of an actively managed small-cap fund is 1.72 percent, versus 1.48 percent for large-cap funds. Going forward, 'expenses are going to be more critical than ever,' says James D. Peterson, vice president of the Schwab Center for Investment Research, especially if predictions of single-digit returns in the equity markets come true.

Subject: Re: Value in Indexing From: Pete Weis To: Emma Date Posted: Sun, Aug 01, 2004 at 16:29:01 (EDT) Email Address: Not Provided Message: Good article Emma. Another reason for the poor performance of managed funds is the pressure on fund managers to follow the crowd. Hightech once again led the charge in the most recent rally and the crowd once again jumped on the band wagon of high priced hightech stocks as they 'chased the ticker'. Fund managers who don't follow the crowd lose investors. We entered 2004 with managed funds invested heavily in overpriced chase-the-ticker type stocks. Very reminiscent of the late 90's. I remember Buffet taking heat for not jumping on the hightech bandwagon in the late 90's. He has taken some criticism recently for staying out of our present market.

Subject: index annuities From: byron To: All Date Posted: Sat, Jul 31, 2004 at 22:16:39 (EDT) Email Address: bconstl@juno.com Message: What is ya'ls take on index annuities, are they any good? They have their down sides but when the market is up you make money and when it is down you don't lose any money. You keep what you gained. I used to be with Morgan Stanley and left after losing half of my retirement savings. Had i not got out when i did i would have lost nearly all of it. I have put most pf what was left in index annuities and have actually made money last year about 12% on my investment.

Subject: Re: index annuities From: Pete Weis To: byron Date Posted: Sun, Aug 01, 2004 at 11:44:50 (EDT) Email Address: Not Provided Message: Others on this board (Emma) can give you more details. But there are a number of things to consider. Index equity annuities usually have a cap on the upside - in other words if the indexes to which they are linked go up by an amount above the cap, the difference is pocketed by the provider of the innuity. Also they don't include the gains in dividends. Another thing to consider - although you made a good gain over the previous year (2003) which included a very nice rally in the markets, if 2004 turns out to be a loser like 2000-2002, then you won't lose any of what you have in the annuity but you also will have a zero gain since there are no interest earnings. Lastly, very large fees are generally charged to hedge their downside risk with put options.

Subject: S&P Index Annuity From: Emma To: Pete Weis Date Posted: Sun, Aug 01, 2004 at 13:16:52 (EDT) Email Address: Not Provided Message: Vanguard has a fine set of annuities. The variable annuities are insured, so that you are guaranteed at least the principal with which you began. An S&P Index annuity from Vanguard will never be worth less than you began with. There are no withdrawal penalties, and the cost for the fund and the insurance is relatively low. Dividends are credited to your account, but dividends these days are low and eaten up by costs. If you are most risk averse, then an annuity makes sense. But, long term indexing is less costly and about as safe. Also, with an annuity you pay taxes at withdrawal at your regular income tax bracket rather than the 15% bracket that applies to capital gains and dividends in the regular index fund.

Subject: China's Great Divide From: Emma To: All Date Posted: Sat, Jul 31, 2004 at 15:17:32 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/08/01/international/01CHIN.html?hp=&pagewanted=all&position= Amid China's Boom, No Helping Hand for Young Qingming By JOSEPH KAHN and JIM YARDLEY PUJIA, China — His dying debt was $80. Had he been among China's urban elite, Zheng Qingming would have spent more on a trendy cellphone. But he was one of the hundreds of millions of peasants far removed from the country's new wealth. His public high school tuition alone consumed most of his family's income for a year. He wanted to attend college. But to do so meant taking the annual college entrance examination. On the humid morning of June 4, three days before the exam, Qingming's teacher repeated a common refrain: he had to pay his last $80 in fees or he would not be allowed to take the test. Qingming stood before his classmates, his shame overtaken by anger. 'I do not have the money,' he said slowly, according to several teachers who described the events that morning. But his teacher — and the system — would not budge. A few hours later, Qingming, 18 years old, stepped in front of an approaching locomotive. The train, like China's roaring economy, was an express. If his gruesome death was shocking, the life of this peasant boy in the rolling hills of northern Sichuan Province is repeated a millionfold across the Chinese countryside. Peasants like Qingming were once the core constituency of the Communist Party. Now, they are being left behind in the money-centered, cutthroat society that has replaced socialist China. China has the world's fastest-growing economy but is one of its most unequal societies. The benefits of growth have been bestowed mainly on urban residents and government and party officials. In the past five years, the income divide between the urban rich and the rural poor has widened so sharply that some studies now compare China's social cleavage unfavorably with Africa's poorest nations. For the Communist leaders whose main claim to legitimacy is creating prosperity, the skewed distribution of wealth has already begun to alienate the country's 750 million peasants, historically a bellwether of stability. The countryside simmers with unrest. Farmers flock to the cities to find work. The poor demand social, economic and political benefits that the Communist Party has been reluctant to deliver. To its credit, the Chinese government invigorated the economy and lifted hundreds of millions of people out of abject poverty over the past quarter century. Few would argue that Chinese lived better when officials still adhered to a rigid idea of socialist equality.

Subject: Index Funds From: Terri To: All Date Posted: Sat, Jul 31, 2004 at 14:53:51 (EDT) Email Address: Not Provided Message: http://www.j-bradford-delong.net/movable_type/2004_archives/001251.html Index Funds. Low-Fee Index Funds Paul Kedrosky writes: Fund Managers Under-performance: You would expect that, on average, the fund industry would underperform the market roughly by the amount of their administration fees. They do that - and more, according to a new report cited in the Telegraph: An astonishing 94 per cent of equity fund managers have failed to deliver above-average returns in each of the past five years, according to shocking new figures. Figures calculated for the Telegraph by Citywire, the financial analyst, show that only 11 of the 175 fund managers with a track record of at least five years have beaten the average performance in their sector over the period. Index funds. Unless you are *certain* that your fund manager is close enough to the center of the information flow and smart enough to process it, put your money into low-fee index funds. (Or else choose a dart-throwing chimpanzee to pick your (properly diversified) stock portfolio: chimpanzees are much cheaper to feed and house than are active mutual fund portfolio managers.)

Subject: Re: Index Funds From: Pete Weis To: Terri Date Posted: Sat, Jul 31, 2004 at 15:03:21 (EDT) Email Address: Not Provided Message: Chimps have done well, at times, picking stocks.

Subject: Re: Index Funds From: Terri To: Pete Weis Date Posted: Sat, Jul 31, 2004 at 15:07:07 (EDT) Email Address: Not Provided Message: The need for us Dear Pete is to put together a mix of index funds that will see us through difficult markets and fine markets. The mix can be changed as the times change, but not investing for an indefinite time is too hazardous unless you are talking of a modest cash reserve. Warren Buffett does hold cash but never that much in relation to Berkshire Hathaway's size.

Subject: Re: Index Funds From: Pete Weis To: Terri Date Posted: Sat, Jul 31, 2004 at 22:13:14 (EDT) Email Address: Not Provided Message: Terri. I have this simple investment philosophy - I invest based on economic conditions. I don't invest, given these conditions, in investments which I believe are likely to go down in value and I invest in investments which I believe are likely to go up in value. If I lose money then, hey, it's my fault. Under certain conditions index stock funds and bond funds can lose a lot of hard earned money. Certainly oil companies and certain energy funds are a good bet at the present time. Real estate including REITS is an extremely bad bet at the present time unless you are selling. Clearly, the best time to invest in real estate is when interest rates are at their very highest (early 80's) and ready to turn downward and the absolute worst time to invest in real estate is when interest rates are at their lowest and heading upward (now). Yet most of the public hasn't a clue and the banking execs don't seem to care as long as they can keep cashing in the options until the gravy train finally ends. The end for the real estate boom will be very, very nasty indeed for both homeowners and banks.

Subject: Real Estate Trusts From: Terri To: Pete Weis Date Posted: Sun, Aug 01, 2004 at 13:24:05 (EDT) Email Address: Not Provided Message: Pete, I too would hold off on a real estate investment trust index until we have a sense where interest rates will go. But, I am impressed with the history of the REIT Index from 1973. The index has been more stable than might be supposed during periods when interest rates have risen. The REIT Index has beaten the S&P over the past 30 years.

Subject: REIT History From: Terri To: Terri Date Posted: Sun, Aug 01, 2004 at 13:51:31 (EDT) Email Address: Not Provided Message: http://www.russell.com/us/search/default.asp Go to this russell address then type 'single asset' in the search and open the single asset versus multi asset screen. A fine information screen for investors. Notice the REIT history from 1974. Single-Asset vs. Multi-Asset Portfolios

Subject: Re: REIT History From: Pete Weis To: Terri Date Posted: Sun, Aug 01, 2004 at 16:03:02 (EDT) Email Address: Not Provided Message: Terri. Why does the 'Single-Asset vs Multi-Asset' chart start in 1974. This was the very bottom of the 1966 thru 70's bear market. From this lowest point the market although erratic made some pretty good gains. As I pointed out previously, if you had invested at the bottom in '74 at an S&P PE of around 6 you would certainly have done very well, even thru 1982 (the point at which the market really started to take off). Richard Russell (Dow Theory Letters and no connection to Russell.com) who Barrons refers to as perhaps the most accurate (when picking turning points in the markets) analyst since the 60's, picked the '74 bottom as a point to buy back into stocks when many other investment advisors were still pushing conservative portfolio's to a snake bitten investment public. Today Richard Russell is the bearest of the bears as he has proclaimed the recent 2003 rally over and a return to a bear market which he believes will see a much lower bottom. We can disagree with Russell's warnings about the present markets but if we do we're going up against an extremely impressive and very long track record. He picked the market tops in 1966 and March of 2000. I believe there has been little done so far to correct faulty earnings reports. An August 1 (2004), AP article in the Chicago Sun Times entitled 'Billions in added debt lurking off balance sheets' states the following: 'Among 120 of the major companies in the S&P 500 idex, long term debt rose by a median of about 30 percent when operating leases and other financing arrangements were added to the balance sheet, according to a study of annual reports by Ratefinancials.INC.' The article sites FEDEX Corp. as an example - 'the company's actual liabilities may be more than double the amount which appears on the balance sheet.' FEDEX reports 11 billion in debt but the article states their actual debt is 'between 11 to 14 billion more (22-26 billion).' Many companies are still not reporting trailing earnings based on GAAP accounting - they are using Proforma accounting to report earnings which deletes many important expenses. Many companies are still not expensing stock options or they're not expensing them fully. Much of the so called economic recovery has been based on so called 'improved earnings'. But with these new methods of accounting, how do they really compare with the 60's and 70's? I can point to many articles which go into detail about the legal but faulty earnings reports which continue. Much of it started in the 80's with relaxed accounting standards. As for real estate - we're coming off the biggest housing boom in history and into a poor economy with rising interest rates and rising energy costs and poor job market. I especially wouldn't go near vacation property investments. As personal budgets get tighter and rates go higher, the first to go will be vacation properties since they are more of a luxury than a necessity. Additionally, many vacation property owners depend on rental income to help them deal with the expenses - in an economy with tightening budgets, fewer vacationers will be renting those condo's in Hawaii or at their favorite ski areas. Just a 10% drop in rentals on a vacation condo or lakefront cottage really puts pressure on the owners to sell. And with a flood of sellers and not many buyers you know what happens to prices. I know we are talking about investments here. But these kinds of discussions really point to serious problems with the economy as a whole and the difficulty our next administration will have dealing with them.

Subject: Response From: Terri To: Pete Weis Date Posted: Sun, Aug 01, 2004 at 17:14:40 (EDT) Email Address: Not Provided Message: The Russell market history goes back 30 years. Last year, it began in 1973. Now, 1974. Remember that the REIT Index is not local or regional but national and includes classes of real estate from hotels to commercial properties to residences. The broad scale of the index provides some support, but real estate can be tricky in a rising interest rate environment. Valuation is important. Remember Google is coming on at 150 times earnings. I love Google, but really. Many companies still do not value options expenses, so they may have higher price earnings ratios than is evident. Your bearish arguments are increasingly compelling. I will read Richard Russell if you tell me where. Google does not give the reference. So, we are left with defensive issues or a large company value index along with short term bonds. Also, an international value index appeals to me.

Subject: Re: Response From: Pete Weis To: Terri Date Posted: Mon, Aug 02, 2004 at 00:57:30 (EDT) Email Address: Not Provided Message: Terri. Richard Russell has a subscriber site and you must be a subscriber to get his most recent 'letters', although they often show up on other sites. The site is called Dow Theory Letters and if you type that in google, his site will show up. You can read his 'Popular Articles' if you scroll down a bit. Peter Brimelow of CBS Market Watch just wrote an article about him entitled 'Happy 80th, Richard Russell' which is worth reading.

Subject: Thanks From: Terri To: Pete Weis Date Posted: Mon, Aug 02, 2004 at 15:42:59 (EDT) Email Address: Not Provided Message: Pete, when you can please post the web address since it makes looking far far easier. Just cut and paste the address line in your message. Thanks always for the ideas.

Subject: Re: Thanks From: Pete Weis To: Terri Date Posted: Mon, Aug 02, 2004 at 23:18:19 (EDT) Email Address: Not Provided Message: Sorry Terri. I'll try and do that in the future.

Subject: Market History Search From: Terri To: Terri Date Posted: Sun, Aug 01, 2004 at 14:45:44 (EDT) Email Address: Not Provided Message: http://www.russell.com/us/search/default.asp Note: Go to this russell address then type 'single asset' in the search and open the single asset versus multi asset screen. A fine information screen for investors. Notice the REIT history from 1974. Single-Asset vs. Multi-Asset Portfolios

Subject: Re: Index Funds From: Pete To: Terri Date Posted: Sat, Jul 31, 2004 at 15:24:19 (EDT) Email Address: Not Provided Message: No matter how bearish, the only sensible protection is some allocation in defensive stocks and bonds and hopefully real estate. There are all sorts of fine defensive indexes to use.

Subject: Re: Index Funds From: Jennifer To: Pete Date Posted: Sat, Jul 31, 2004 at 16:12:23 (EDT) Email Address: Not Provided Message: Terri, What about the use of sector funds? Index fund cover most of the market. Suppose you wish to add just health care or energy? Would you use a managed fund? How do you choose a manager? Jennifer

Subject: journalistic betrayal From: Mik To: All Date Posted: Fri, Jul 30, 2004 at 10:39:28 (EDT) Email Address: Not Provided Message: Krugman's latest story (although not economic related... again) has introduced an interesting concept of 'journalistic betrayal'. Sitting in Canada, we get to see the US channels and then we get to see our own channels - on a daily basis. There is a stark difference in the presentation of stories. It almost seems like there is a serious code of conduct in journalistic ethics among the Canadians that I don't see within the US. Having said that, I also find the Canadians reporting on some very trivial issues. So now on the one side, I find Canadian news accurate but boring. Could it be that the US news are just the opposite? Are Americans a nation of people that need to be entertained even when getting their news? Are Americans more interested in the hair cuts and wealth of their leaders than the actual specifics of their policies? Comments.... ?

Subject: Re: journalistic betrayal From: Joe Savitsky To: Mik Date Posted: Fri, Jul 30, 2004 at 16:59:58 (EDT) Email Address: joesavitsky@hotmail.com Message: In a word, YES! Far too many Americans accept as journalism the slanted, trashy 'infotainment' that now permeates our media.

Subject: Re: journalistic betrayal From: Jennifer To: Mik Date Posted: Fri, Jul 30, 2004 at 15:14:56 (EDT) Email Address: Not Provided Message: Excellent column, as usual. What I do not understand is why serious reporting should be 'boring.' In depth and accurate reporting is important to us, and should have a ready audience as Paul Krugman has.

Subject: Re: journalistic betrayal From: RL To: Jennifer Date Posted: Tues, Aug 03, 2004 at 08:58:48 (EDT) Email Address: rafaelloring@yahoo.es Message: Very intresting points. I have some ideas to share regarding this problem. People want to have serouis reporting and be entretained at the same time but the trade off between this two 'goods' in not equal. People will not read boring but precise reporting, but often read entretaining trivial ones. At the same time (and this is the crucial issue) the cost of seriuos and accurate reporting for a jounalist is much higher than the time saving trivial news. The late are also inocous, they don't have direct political consequeces, so the journalist won't face unpleasant attacks from political partisans, that posibilty also lets the jounalist do his work with less fact checking, something that the other kind of yournalism has to spend a lot of time doing if it doesn't want to be publicly caught in a mistake. One of the mecanisms that makes a jounalist keep doing the hard work is the opinion other jounalist have of him. When most of the profesion has already taken the easy direction this mecanism is weakened. RL RL

Subject: Re: journalistic betrayal From: Joe Savitsky To: RL Date Posted: Tues, Aug 03, 2004 at 12:04:45 (EDT) Email Address: joesavitsky@hotmail.com Message: I disagree that there is, in general, a tradeoff between entertainment and journalism. However, there is such a tradeoff if the audience is too ignorant or stupid to understand true news. Unfortunately, I think many Americans now look at public figures as nothing more than celebrities and for these people, the 'news' consists of information/gossip about public figures' personal lives, etc. So it is more important to many Americans to know that George W. Bush is religious, has twin daughters and is married to a former teacher than it is to know that his 'Healthy Forests' initiative promotes clear-cutting, that his 'Clear Skies' initiative promotes pollution, that his 'Jobs and Growth Tax Relief' initiative does nothing to promote jobs or growth, etc. Similarly, 'facts' (e.g. Bush is a straight shooter, Kerry is a flip-flopper, Bush makes America safer, Bush is a fiscal conservative whereas Kerry is a tax-and-spend liberal, Bush is 'likeable,' etc.) for too many Americans today are anything but facts.

Subject: Re: journalistic betrayal From: Paul G. Brown To: Joe Savitsky Date Posted: Tues, Aug 03, 2004 at 16:16:18 (EDT) Email Address: Not Provided Message: There being no numbers at issue, discussions of 'the Media' and all its faults and failings is not really my bailiwick. But I might make one small point . . . . Why is everyone so shocked (Shocked!) that 'the Media' prioritizes entertainment over education? In a capitalist system, Media Companies exist because they offer a certain rate of return on the capital invested in them. Higher returns mean higher valuations mean richer shareholders (and richer managers too, but that's another story). Even PK's column today misses the point, really. These 'scripts' that the 'Media' follow really are 'the story'. They are pleasing narratives, designed to beguile audiences, to excite their emotions, and thereby make them more susceptible to the advertising messages. Television is just a long freeway without exist ramps, and lines of billboards along either side. Free thinkers (of any stripe) are a bad media market. They're psychologicallly prone to skepticism so they resist these 'scripts', and they can spot emotional manipulation a mile away. So the race to the bottom in TV journalism. TV is not designed to tell 'the truth'. It tells stories. There can be a truth in these stories, but it is often an ironic, indirect truth: a truth only apparent in hindsight. Future historians will look back at Fox et al. and will be able to deconstruct the truths Fox is telling us. But I doubt these truths will have much correspondence to the truths being told.

Subject: Excellent From: Terri To: Paul G. Brown Date Posted: Tues, Aug 03, 2004 at 19:19:48 (EDT) Email Address: Not Provided Message: Paul, you are excellent!

Subject: Re: journalistic betrayal From: Mik To: Joe Savitsky Date Posted: Tues, Aug 03, 2004 at 14:39:41 (EDT) Email Address: Not Provided Message: Ahhh you have just introduced the concept of 'to lead or be led'. There is an appeal to many for entertainment and gossip. After all how does Jerry Springer make his money? Good jounralism may not necessarily appeal to that group, so the trade-off does exist. Whether this is a statement 'in general' or not is perhaps the issue for discussion. I believe you have identified this. Flying logos and topics with buzz words such as'THE WAR ON TERROR' are all part of an entertainment show. A show that happens to be what we are suppose to call the news? Even Canadians are guilty of this. The CBC for all its journalistic integrity is borring. They have been trying to win viewership, especially from those Canadians tuning into US news. So the CBC also introduced the 'flying logos' and buzz words. So far they have only been met with angry viewership and stopped it. These are all tacit entertainment concepts that slowly lure us into bigger, brighter and more dazzling images. And it all becomes a race to the bottom. Should TV News lead the way to good journalistic integirty or be led into an entertainment field that is in essence nothing more than a daily reality show?

Subject: Thanks RL From: Mike To: RL Date Posted: Tues, Aug 03, 2004 at 10:25:33 (EDT) Email Address: Not Provided Message: Thanks RL. That is a very good perspective on the issue. I never realised that reporters have also become weary of what they write. At the end of the day - they too just want to do a job and come home to a family. By writing controversial articles, their personal lives may become compromised. This now makes me see the good writers in a whole new light.

Subject: Give us a SHOW!! From: Econochick To: Mik Date Posted: Fri, Jul 30, 2004 at 11:20:20 (EDT) Email Address: Not Provided Message: YES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Example: I have a great friend who is a far left liberal and believes deeply in gay marriage. In fact, she believes it ought to be CALLED 'marriage' - no substitutions. She is an ardent supporter of Kerry and hates Bush because he is against gay marriage. BUT she had NO idea that Kerry does NOT support gay marriage either. You would think that she would know a candidate's stance on an issue so neer and dear to her heart. AND, Mik, she has an enormous IQ and is an avid reader. We're all about tap-dancing and which celebrity is on the Atkins diet on the news around here!!

Subject: Gay Marriage From: Ari To: Econochick Date Posted: Fri, Jul 30, 2004 at 15:56:35 (EDT) Email Address: Not Provided Message: Your friend is intelligant and informed, for John Kerry is vastly more tolerant than George Bush. George Bush is supporting a Constitutional Amendment banning gay marriage, John Kerry is not. The difference between the candidates on social issues is vast, as your friend obviously understands.

Subject: Re: Gay Marriage From: Econochick To: Ari Date Posted: Fri, Jul 30, 2004 at 18:08:29 (EDT) Email Address: Not Provided Message: Great. Yet another mini diatribe on this board. Thank you for informing me about my friend...since you know her so well. In fact, she thought Kerry is FOR gay marriage.

Subject: Re: Gay Marriage From: Ari To: Econochick Date Posted: Fri, Jul 30, 2004 at 18:59:14 (EDT) Email Address: Not Provided Message: Apparently it is George Bush and you who oppose gay marriage.

Subject: Re: Gay Marriage From: Econochick To: Ari Date Posted: Fri, Jul 30, 2004 at 20:24:29 (EDT) Email Address: Not Provided Message: I appose stupidity.

Subject: Tolerance From: Ari To: Econochick Date Posted: Sat, Jul 31, 2004 at 13:31:08 (EDT) Email Address: Not Provided Message: Tolerance of others who mean well is what I care most about.

Subject: Re: Tolerance From: Paul G. Brown To: Ari Date Posted: Sun, Aug 01, 2004 at 02:27:51 (EDT) Email Address: Not Provided Message: As I understand it: 1. George W. Bush supports, and is actively campaigning for, a constitutional amendment that reads as follows: 'Marriage in the United States shall consist only of the union of a man and a woman. Neither this Constitution or the constitution of any State, nor state or federal law, shall be construed to require that marital status or the legal incidents thereof be conferred upon unmarried couples or groups.' 2. John Kerry said he would have voted against the amendment. 3. Kerry voted against the Defense of Marriage act in 1996. Both guys have been pretty consistent. Bush just gets the heebee-jeebies at the thought of two beards kissin'. Whatever Kerry feels about it, he doesn't think that his feelings should over-ride good public policy (legally sanctioned, socially supported, partnering relationships are a net benefit). Kerry's position is about as far out on the issue as he can be and still have a shot as getting elected.

Subject: Re: Tolerance From: Pete Weis To: Paul G. Brown Date Posted: Sun, Aug 01, 2004 at 16:10:57 (EDT) Email Address: Not Provided Message: This is an honest, 'no bull' synopsis of the issue.

Subject: Re: Tolerance From: Ari To: Paul G. Brown Date Posted: Sun, Aug 01, 2004 at 13:05:43 (EDT) Email Address: Not Provided Message: Paul Brown, Fine response. Tolerance is what we have struggled for through America's history.

Subject: To Econochick From: Mik To: All Date Posted: Fri, Jul 30, 2004 at 10:24:21 (EDT) Email Address: Not Provided Message: Just a note to say sorry for the confrontation. I respect your feelings and hold a deep respect for your knowledge.

Subject: To Mik From: Econochick To: Mik Date Posted: Fri, Jul 30, 2004 at 11:15:05 (EDT) Email Address: Not Provided Message: No worries, Mik. I'm sorry I didn't answer your last post but I'm working a lot right now and I only sporadically get small chunks of time. It's really hard to get in depth at present. Have a great weekend!

Subject: Bolivia's Natural Gas From: Emma To: All Date Posted: Thurs, Jul 29, 2004 at 17:49:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/29/business/worldbusiness/29bolivia.html?pagewanted=all&position= After Years of Growth, Bolivia's Gas Industry Faces Hurdles By JUAN FORERO SANTA CRUZ, Bolivia - A one-time cabbie and restaurant worker in Washington, Fernando Virreira returned to his native Bolivia in the 1970's and, with seven siblings, helped to build an oil and gas service company just as the energy industry in this booming eastern city was taking off. The company, Serpetbol, short for Servicios Petroleros Bolivianos, grew rapidly - from $200,000 in assets and 30 employees in the 1970's, to a $7 million outfit today. Depending on the scope and size of its contracts, Serpetbol can easily employ 1,000 workers to build roads and platforms for companies like Petrobras of Brazil, Total of France and other multinationals that have made Bolivia a potential force in natural gas production. But now, after two years of protests by Bolivia's indigenous groups that drove one president from office and forced another to hold a referendum asking Bolivians what to do with their gas, the industry has hit a wall of uncertainty. Companies are holding back on investments, and Serpetbol's permanent and part-time work force has dropped to 400, from 1,200 in early 2003. 'Investment has been practically zero this year,' said Mr. Virreira, 58, who joined the company in 1975 overseeing construction projects and is now its chief executive. 'We're very worried because we are totally Bolivian,' he said. 'We have no foreign capital. We have nowhere else to go.' The turmoil in this isolated, landlocked country in the center of South America has been quickly snuffing a nascent gas industry that seven years ago appeared to have no limits. The protests have already sunk one project that, at its inception, was being called the largest energy infrastructure development in Latin America: a plan by Repsol-YPF of Spain and British Gas to build a $5 billion pipeline to Chile's coast, and a gas-to-liquids plant so the gas could be exported to Mexico and California. But angry that the plan would have benefited Chile, a historic enemy that snatched Bolivia's coastline in a war 121 years ago, protesters rose up against President Gonzalo Sánchez de Lozada, forcing his resignation in October after protests killed about 60 people. Other projects, meanwhile, have shriveled. Investment in the oil and gas industry has fallen from $680 million in 1998 to $160 million last year and is expected to be lower still this year, said Carlos Alberto López, a former vice minister of energy and now a lobbyist for foreign energy companies. 'There's total uncertainty regarding the legal, regulatory, political and social framework,' Mr. López said. 'This is a sector that, having discovered the reserves, should be investing substantial amounts to develop the fields,' he said. 'Instead, it is an industry preparing for the worst.' The current president, Carlos Mesa, has heralded the future in the days since his July 18 referendum, saying he has a framework for a gas policy that will benefit both Bolivians and investors. Though the five questions of the referendum passed, including a crucial one asking Bolivians if gas should be exported, energy companies here are not celebrating. The 1996 law that opened the gas sector to private companies will be repealed and new legislation will soon follow. And the new law, which still needs congressional approval, will raise taxes and royalties to as much as 50 percent, up from a scale ranging from 18 to 38 percent, and will give the government more say in how gas is sold. The centerpiece of Bolivia's new energy policy is an $800 million plan to revive Yacimientos Petrolíferos Fiscales Bolivianos, or YPFB, a notoriously inefficient and corrupt government-run company that was largely privatized in the mid-1990's. Companies like Petrobras, Repsol-YPF, Perez Companc of Argentina and British Petroleum bought up YPFB's exploration and refining operations, leaving a sliver of a state company to simply administer contracts.

Subject: South African Sadness From: Emma To: All Date Posted: Thurs, Jul 29, 2004 at 17:46:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/29/international/africa/29durb.html?pagewanted=all&position= South Africa 'Recycles' Graves for AIDS Victims By MICHAEL WINES DURBAN, South Africa - At S Cemetery in Umlazi Township, Innocent Gasa's handiwork is everywhere: endless mounds of fresh red earth topped with headstones, unpainted wooden crosses, or, for the most miserable, bricks bearing a painted identifying number. Mr. Gasa has dug graves on this lumpy, unkempt, Halloween-spooky hilltop for two years now, five holes a week, 52 weeks a year, well over 500 holes in all. Which may seem peculiar, seeing as S Cemetery exhausted its last space for new graves five years ago. City records sum up its status succinctly, even dismissively: 'Full.' But in Durban, 'full'' is a term of art. This city is being battered by an AIDS pandemic so sweeping that people are dying faster than the city can find space to bury them. And so gravediggers like Mr. Gasa are reopening existing graves - the city calls it 'recycling'' - and interring fresh bones atop the old ones. The job gives Mr. Gasa nightmares. 'I think it is not a good thing, to take out the bones'' for reburial, he said during a break in his spadework. 'But we have no choice.' Every time southern Africa's AIDS epidemic threatens to exhaust its store of superlatives, some new, sobering extreme rises to the fore. The latest is Durban, where 51 of the 53 municipal cemeteries are officially filled to capacity, and a surging death rate threatens to overwhelm the remaining two within a couple of years. 'Five years ago, we used to have about 120 funerals a weekend, but this number has now jumped to 600,' Thembinkosi Ngcobo, who heads the municipal department of parks and cemeteries, said in an interview this week. 'In order to cope with the current rate of mortality - we hope it is not going to increase - we will need to have 12.1 hectares every year of new gravesites.' That is nearly 30 acres. 'That would obviously turn Durban and the whole country into one big graveyard if we continue,' he said. The statistics offer little encouragement. Roughly one in eight South Africans is H.I.V.-positive, and in Durban, South Africa's third-largest city with about 3.5 million people, a survey two years ago of women at pregnancy clinics found about 35 percent were infected with H.I.V. The city held a conference on the cemetery problem this month and discovered that a host of other South African graveyards - in Cape Town, Bloemfontein, Pretoria, Port Elizabeth - are also filling up at alarming rates. Durban's space crunch, says Mr. Ngcobo, defies a quick or simple solution. Cremation, cheaper and space-saving, is an obvious option - and an untenable one for many of the ethnic Zulus who make up seven in 10 Durbanites. 'It is not good to burn the bones in Zulu culture,' Mr. Gasa, the gravedigger, explained. 'Your ancestors are unhappy.'

Subject: Re: South African Sadness From: Jennifer To: Emma Date Posted: Fri, Jul 30, 2004 at 19:20:07 (EDT) Email Address: Not Provided Message: Emma, this is a devastating article. Thanks for the post.

Subject: Real Wage by Income Level (Time Series) From: Joe Savitsky To: All Date Posted: Thurs, Jul 29, 2004 at 13:43:42 (EDT) Email Address: joesavitsky@hotmail.com Message: We often hear people saying that growth in the real wage or real income per capita (or per household) has been very small over the past 20-30 years for those at the lower end of the income scale and that most of the gains in real wage/income during that time period have gone almost entirely to the top quintile. Can anyone point me to where I can find statistics to back this claim? Thanks in advance!

Subject: Re: Real Wage by Income Level (Time Series) From: Pete Weis To: Joe Savitsky Date Posted: Thurs, Jul 29, 2004 at 21:49:19 (EDT) Email Address: Not Provided Message: A varitable storehouse of information and articles on this subject can be found at responsiblewealth.org. Click on the pressroom link on the left for numerous articles and the links offered on this site also provide much additional info. I've made this site a favorite. If you come across an even better site than this one please let me know. Thanks, also in advance.

Subject: Re: Real Wage by Income Level (Time Series) From: Joe Savitsky To: Pete Weis Date Posted: Fri, Jul 30, 2004 at 16:55:01 (EDT) Email Address: joesavitsky@hotmail.com Message: I found a couple of additional sources that I think are interesting: http://www.cbpp.org/9-23-03tax-pr.htm and http://faireconomy.org/

Subject: Re: Real Wage by Income Level (Time Series) From: Pete Weis To: Joe Savitsky Date Posted: Fri, Jul 30, 2004 at 20:41:04 (EDT) Email Address: Not Provided Message: Joe. The faireconomy.org site is an excellent one! Thanks!

Subject: Re: Real Wage by Income Level (Time Series) From: Emma To: Joe Savitsky Date Posted: Thurs, Jul 29, 2004 at 20:11:47 (EDT) Email Address: Not Provided Message: Type in 'Real Wage by Income Level' in this site's search, and look to Paul Krugman's articles for sources.

Subject: Re: Real Wage by Income Level (Time Series) From: El Gringo To: Joe Savitsky Date Posted: Thurs, Jul 29, 2004 at 18:58:57 (EDT) Email Address: nma@hotmail.com Message: Dear Joe, you can find one here: http://www.calpundit.com/archives/001493.html

Subject: Re: Real Wage by Income Level (Time Series) From: Paul G. Brown To: El Gringo Date Posted: Fri, Jul 30, 2004 at 12:21:04 (EDT) Email Address: Not Provided Message: The comments on that post are also worth reading. (Except the last, which seems to be a curious kind of google-spin.)

Subject: Re: Real Wage by Income Level (Time Series) From: Joe Savitsky To: El Gringo Date Posted: Fri, Jul 30, 2004 at 09:11:29 (EDT) Email Address: joesavitsky@hotmail.com Message: Awesome! Thanks so much, everyone!

Subject: American's Income From: Emma To: All Date Posted: Thurs, Jul 29, 2004 at 12:05:29 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/29/business/29tax.html I.R.S. Says Americans' Income Shrank for 2 Consecutive Years By DAVID CAY JOHNSTON The overall income Americans reported to the government shrank for two consecutive years after the Internet stock market bubble burst in 2000, the first time that has effectively happened since the modern tax system was introduced during World War II, newly disclosed information from the Internal Revenue Service shows. The total adjusted gross income on tax returns fell 5.1 percent, to just over $6 trillion in 2002, the most recent year for which data is available, from $6.35 trillion in 2000. Because of population growth, average incomes declined even more, by 5.7 percent. Adjusted for inflation, the income of all Americans fell 9.2 percent from 2000 to 2002, according to the new I.R.S. data. While the recession that hit the economy in 2001 in the wake of the market plunge was considered relatively mild, the new information shows that its effect on Americans' incomes, particularly those at the upper end of the spectrum, was much more severe. Earlier government economic statistics provided general evidence that incomes suffered in the first years of the decade, but the full impact of the blow and what groups it fell hardest on were not known until the I.R.S. made available on its Web site the detailed information from tax returns. The unprecedented back-to-back declines in reported incomes was caused primarily by the combination of the big fall in the stock market and the erosion of jobs and wages in well-paying industries in the early years of the decade. In the past, overall personal income rose from one year to the next with relentless monotony, the growth rate changing in response to fluctuations in economic activity but almost never falling. But now, with many more ordinary employees joining high-level executives in having part of their compensation dependent on stock options and bonus plans, a volatile and relatively unpredictable new element has been introduced to the incomes of millions of workers. 'Risks used to be confined largely to executives and business owners with large incomes,'' said Edward N. Wolff, an economist at New York University who studies wealth and income. 'But now for many people with more modest incomes their earnings are more volatile,'' Mr. Wolff added, leaving them more vulnerable to losing pay they count on to meet regular expenses like mortgage payments, car loans and day-to-day living costs. The new data also helps explain why personal income taxes, the government's most important source of revenue, are subject to much greater fluctuations than in the past. It may help analysts do a better job in predicting changes in government receipts and provide businesses with clues to help anticipate bigger ups-and-downs in spending for their goods and services. Before the recent drop, the last time reported incomes fell for even one year was in 1953. The only other time since World War II that the I.R.S. reported an interruption in income gains was from 1947 to 1949, but that was because of changes in the tax law at the time that affected how income was reported rather than an actual fall. From 2000 to 2002, individual income taxes fell 18.8 percent, more than three times the decline in adjusted gross incomes, the I.R.S.'s latest statistical reports show. (Adjusted gross income is the broadest category of income taxpayers report to the government, excluding only a small portion of income in other forms, notably interest on tax-free bonds.)

Subject: Re: American's Income From: Pete Weis To: Emma Date Posted: Thurs, Jul 29, 2004 at 15:20:09 (EDT) Email Address: Not Provided Message: It's interesting that during this overall drop in wages and job losses we experienced some of the greatest residential real estate gains in history with banks providing trillions more in loans than during years in the nineties when we had good job growth.

Subject: Re: American's Income From: Terri To: Pete Weis Date Posted: Fri, Jul 30, 2004 at 16:18:03 (EDT) Email Address: Not Provided Message: Notice that because of stock options more and more Americans have incomes that are in part tied to the stock market. This can be quiet dangerous when a market decline is long lived.

Subject: Re: American's Income From: Emma To: Pete Weis Date Posted: Thurs, Jul 29, 2004 at 17:27:15 (EDT) Email Address: Not Provided Message: We are living increasingly on wealth accumulation.

Subject: Re: American's Income From: Pete Weis To: Emma Date Posted: Thurs, Jul 29, 2004 at 21:37:09 (EDT) Email Address: Not Provided Message: Emma. You are definitely the glass-is-half-full type. I would have called it living off debt accumulation and on borrowed time. It didn't seem that long ago when wealth accumulation for the average wage earner meant salting away, say 10%, of each paycheck and investing it in a 'balanced portfolio' back in the days when we didn't have such a leveraged economy. Now it seems to have morphed into borrowing a lot of money (lately at variable rates) to fund our high-off-the-hog lifestyles or to pump it into an asset (such as a house) which we often believe will continue to appreciate by leaps-and-bounds ad infinitum. Oh well, thought it was ironic - lower wages and lost jobs leads to much higher housing prices.

Subject: Living Off Wealth From: Emma To: Pete Weis Date Posted: Fri, Jul 30, 2004 at 12:54:26 (EDT) Email Address: Not Provided Message: Living off wealth is a serious retirement for American households. While the low private saving level means that foreign investors are financing our consumption and will reap the extra income from these investment in future years. Yes, we have a problem in the offing.

Subject: Europe's Leisure From: Emma To: Emma Date Posted: Thurs, Jul 29, 2004 at 15:06:35 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/29/international/europe/29euro.html?pagewanted=all&position= Love of Leisure, and Europe's Reasons By KATRIN BENNHOLD, International Herald Tribune COPENHAGEN - Between mountains of suitcases and children racing each other with luggage trolleys at the airport of this Scandinavian capital, Maibritt Ditlev, husband, Anders, and daughter, Lotte, in tow, remarked that her whole country seemed to be going on vacation. 'In Europe we like our summer holidays,'' she said, emphasizing that even a lot of cash would not tempt her to give up her two-week trip to Iceland. In fact, she works part time because she treasures time off. 'We have a nice house and can afford to go on two family holidays a year - what would we need more money for?'' This image of a casual Western European work ethic tends to be viewed with just short of scorn by the world's other wealthy economies. As Europeans like the Ditlevs happily continue to trade income for a slice of leisure time that would be unthinkable in the United States or Asia, the gloomy headlines about Europe's economic future multiply. Europe, the standard criticism goes, has not matched the American expansion for most of the last decade and has even fallen behind Japan in recent quarters. Its citizens are on average almost 30 percent poorer than their counterparts on the other side of the Atlantic, according to the Organization for Economic Cooperation and Development, a group of 30 countries committed to democracy and the market economy. Potential growth in the next decade risks being stuck at 2 percent - one percentage point below that of the United States. Is Europe, with the shortest workweeks and longest holidays in the world, doomed to lag behind, a victim of its penchant for more leisure and a too generous welfare state? One response: If the answer is yes, then so what? Some economists and European officials argue that, rather than reflecting a failure to catch up with its more industrious competitors because of faltering productivity growth, Europe's more modest income level mainly reflects policy choices that have tended to put a premium on leisure and equality at the expense of greater wealth. Over the last half century, Western Europeans have gradually opted to work less and take longer vacations. They have put in place varying national versions of public universal health care, education and retirement benefits. They have set up a complex web of minimum income legislation, including unemployment subsidies and disability benefits, and basic social welfare, in an effort to limit the risk of destitution. 'The welfare state is an efficiency device against market failure,'' said Nicholas Barr, a professor of public economics at the London School of Economics. 'It's a perfectly rational policy to accept lower output for higher welfare.'' Or as Joaquín Almunia, European commissioner for economic and monetary affairs, put it, for Europeans, economic growth is a tool, not an end in itself. 'We are not in a race with the U.S.,'' he said. 'Our goal is not to grow as fast as the U.S. or anybody else, but to do what we need to protect our economic and social model.''

Subject: Re: Europe's Leisure From: Pete Weis To: Emma Date Posted: Fri, Jul 30, 2004 at 09:53:47 (EDT) Email Address: Not Provided Message: Interesting post Emma. There's a lot to reflect on here.

Subject: Interesting Post From: Terri To: Pete Weis Date Posted: Fri, Jul 30, 2004 at 13:46:20 (EDT) Email Address: Not Provided Message: Thanks Emma Perhaps Americans ought to look to Europe and ask why we are being pushed to work so hard and lond. There's an awful lot of fun to be had out there.

Subject: Running out of oil From: Pete Weis To: All Date Posted: Thurs, Jul 29, 2004 at 09:46:31 (EDT) Email Address: Not Provided Message: We've been discussing investment strategies. Here's a suggestion. Type 'running out of oil' in google's search field and begin reading. We should all study and think about the implications if we care about our retirements and our jobs for that matter. One recent article written by Jon D. Markman on MSN Money and reprinted in TheStreet.com entitled 'Is Saudi Arabia Running Out of Oil?' introduces the subject with the following: 'When oil prices have doubled to $80 and a second Great Depression threatens global political stability, our President will assemble a 9/11 style commission to explain the intelligence and policy failures that led to the crisis. The verdict will be familiar - the stunning blow to the world economy brought about by the sudden, unexpected depletion of fossil fuel should have been anticipated and prevented.' Think this is alarmist? Then start reading the many other recent articles written in mainline publications by people close to the energy industry and it's issues as well as academics and geophysicists who study the problem. This will truely have a huge impact on world economies and markets. The next great technological wave which brings world economies back from hard times, I'm betting, will revolve around new energy sources. I've said this before - our government needs to treat this like a war - where we put the maximum effort into developing new technologies to find new energy sources.

Subject: Re: Running out of oil From: SK To: Pete Weis Date Posted: Fri, Jul 30, 2004 at 02:18:39 (EDT) Email Address: Not Provided Message: Could you post a link to the MSN article. Thanks.

Subject: Re: Running out of oil From: Pete Weis To: SK Date Posted: Fri, Jul 30, 2004 at 09:49:35 (EDT) Email Address: Not Provided Message: Sorry SK. I have not yet learned to post links on these boards. However, just type - Saudi Arabia Running Out of Oil? - in the search field at Google and the MSN article should be the first result.

Subject: Re: Running out of oil From: Terri To: Pete Weis Date Posted: Fri, Jul 30, 2004 at 15:49:19 (EDT) Email Address: Not Provided Message: Pete - Just right-click and copy the address line. Then, paste.

Subject: Re: Running out of oil From: Terri To: Pete Weis Date Posted: Thurs, Jul 29, 2004 at 12:27:47 (EDT) Email Address: Not Provided Message: All the reason to own a conservative energy fund. The problem of high energy prices is real and likely will persist, but it need not be crippling. From America to China, there are energy reserves that can be afforded but are more costly than we would prefer. I agree, we had better have a decent energy and conservation policy. Now, we have neither.

Subject: Re: Running out of oil From: Peter Weis To: Terri Date Posted: Thurs, Jul 29, 2004 at 15:12:18 (EDT) Email Address: Not Provided Message: Terri. Agree with the comment about owning an energy fund. Definitely not as sanguine as you are about rising oil prices not having a 'crippling' effect. It will, IMO, have a crippling effect on the US auto industry which represents a very big portion of what remains of our industrial base. Consider the number of jobs supported directly or indirectly by the US auto industry. Additionaly, higher oil and by extension higher energy costs are are as pervasive as broad tax increases at a time when our economy needs additional economic stimulus. I think we get to see the effects of higher oil pretty soon with trouble in the auto industry as their production and material costs rise and a public which begins to realize it doesn't want to buy their gas guzzlers. All of this is against a backdrop of rising interest rates with a consumer who has the highest level of debt in history and much of it on variable rates (ARM's, credit cards, and equity home loans). And we're not talking about small, gradual increases in oil prices over decades - if you do that search in google it's hard not to realize that this will be a steep, rapid rise in energy costs over the next few years and continuing for some time after until viable alternatives show up.

Subject: Re: Running out of oil From: Terri To: Peter Weis Date Posted: Thurs, Jul 29, 2004 at 17:30:53 (EDT) Email Address: Not Provided Message: Warrner Buffett was buying oil several years ago. Also, Buffett bought a stake in China's largest oil company which is partly state owned. Buffett owns considerable power generation capacity in America.

Subject: Bobby, thank you! From: El Gringo To: All Date Posted: Wed, Jul 28, 2004 at 20:03:32 (EDT) Email Address: nma@hotmail.com Message: Thank's Bobby!

Subject: Yes From: Ari To: El Gringo Date Posted: Wed, Jul 28, 2004 at 20:35:21 (EDT) Email Address: Not Provided Message:

Subject: China's Boom Towns From: Emma To: All Date Posted: Wed, Jul 28, 2004 at 12:01:53 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/28/international/asia/28china.html?hp=&pagewanted=all&position= July 28, 2004 New Boomtowns Change Path of China's Growth By HOWARD W. FRENCH DONGGUAN, China - The cranes peek out from behind skyscrapers in every direction, wheeling and nodding in a slow-motion ballet as crews work around the clock to fill in an already crowded skyline. Newly planted palms line the sides of broad, newly traced avenues where the traffic lights have not been turned on yet. Dongguan has exploded from a mere town to a city of seven million in a little over 20 years. But the city officials are not content with a 23 percent annual economic growth rate. They are putting the finishing touches on a vast, entirely new annex city that they hope will draw 300,000 engineers and researchers, the vanguard of a new China. 'We are the first in China to pursue this kind of vision,'' said Wang Jianya, deputy director of the development, called Songshan Lake Pioneer Park. 'We're not trying to be the biggest, only the best.'' Dongguan is one of a score of Chinese megacities whose extraordinary growth reflects China's boom and its challenge. The country's rapid urbanization is helping to lift hundreds of millions of rural Chinese out of poverty. But at the same time, these new second-tier cities are locked in a ferocious competition, spawning ambitious development plans that escape the control of the central government in Beijing. Economists like Tang Wing-shing, a specialist in urban development at Baptist University in Hong Kong, worry about the consequences: waste of resources, loss of arable land, fiscal crises, corruption and pollution. 'Every city wants to develop into a world city, and every one wants to have an international airport, six-lane highways and export zones, rather than integrated growth,'' Professor Tang said. 'This is what we are observing in China today. All of the cities have been turned into vast construction zones, and the government has not contemplated the consequences of this yet.'' China has 166 cities with populations over one million, compared with nine in the United States. China's urban population is growing at 2.5 percent a year, among the fastest rate in the world, according to the United Nations Population Division. That compares with 0.8 percent in India, another large, fast-developing nation. In fact, Beijing has found its powers to slow runaway growth to be surprisingly limited, in part because provinces and cities resist efforts to rein in their investments. Although the central government allots money to pet development projects, provinces raise money for their own projects by selling rights to develop real estate. In many cases, local officials are judged in part by economic measures - how many jobs they create, how many big buildings spring up. That means that many provincial officials are trying the same formula: manufacturing and export zones, research parks and self-styled Silicon Valleys like Pioneer Park in Dongguan. Dongguan's officials, in fact, have even bigger plans. 'In the future our goal is 10 million people,' Dongguan's deputy mayor, Zhang Shenguang, said almost nonchalantly. 'Beyond that, we may have problems with electricity and water.'

Subject: Investing History From: Terri To: All Date Posted: Tues, Jul 27, 2004 at 14:35:39 (EDT) Email Address: Not Provided Message: http://www.russell.com/us/search/default.asp Go to this russell address then type 'single asset' in the search and open the single asset versus multi asset screen. A fine information screen for investors. Single-Asset vs. Multi-Asset Portfolios

Subject: Stock and Bond Charts From: Terri To: Terri Date Posted: Wed, Jul 28, 2004 at 11:28:55 (EDT) Email Address: Not Provided Message: The charts above cover investment from 1974 to 2003. 1973 was the only other negative year for stocks and bonds in the 1970s. What helped stock returns through the 1970s and 1980s were ample dividend payments. Dividends today are more than 50% lower. So, we are more dependent on capital gains.

Subject: Energy Stocks From: Terri To: Terri Date Posted: Wed, Jul 28, 2004 at 18:28:21 (EDT) Email Address: Not Provided Message: Why not hold a basket of fund of energy stocks as a hedge against a generally weak stock market? Vanguard Energy Fund is a conservative sector fund. Buying Schlumberger, ExxonMobil and Total gives you a powerful energy portfolio.

Subject: Technocapitalism... From: El Gringo To: All Date Posted: Tues, Jul 27, 2004 at 11:25:21 (EDT) Email Address: nma@hotmail.com Message: 'Technocapitalism is a new form of market capitalism that is rooted in technological invention and innovation. It can be considered an emerging era, now in its early stage, that is supported by such intangibles as creativity and knowledge....' http://www.technocapitalism.com

Subject: Re: Technocapitalism... From: Terri To: El Gringo Date Posted: Wed, Jul 28, 2004 at 20:10:25 (EDT) Email Address: Not Provided Message: Please explain the importance of this web-site. It seems to be simply an introduction to the topic.

Subject: Re: Technocapitalism... From: El Gringo To: Terri Date Posted: Fri, Jul 30, 2004 at 18:40:41 (EDT) Email Address: nma@hotmail.com Message: 'The idea of comparative advantage -- with its implication that trade between two nations normally raises the real incomes of both -- is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of international trade beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed. I am not talking here about the problem of communicating the case for free trade to crudely anti-intellectual opponents, people who simply dislike the idea of ideas. The persistence of that sort of opposition, like the persistence of creationism, is a different sort of question, and requires a different sort of discussion. What I am concerned with here are the views of intellectuals, people who do value ideas, but somehow find this particular idea impossible to grasp.'

Subject: Investing Question From: Jennifer To: All Date Posted: Mon, Jul 26, 2004 at 17:04:06 (EDT) Email Address: Not Provided Message: There has been a running argument about investment prospects on the site. Some are quite bearish, some mildly bullish. What I would like to ask is for specific thoughts on how to allocate an investment portfolio so that you do not have to guess at stock or bond market direction. Can you maintain a steady allocation in these times?

Subject: Thank You From: Jennifer To: Jennifer Date Posted: Tues, Jul 27, 2004 at 17:14:12 (EDT) Email Address: Not Provided Message: The ideas are wonderful.

Subject: Re: Investing Question From: Pete Weis To: Jennifer Date Posted: Mon, Jul 26, 2004 at 23:42:50 (EDT) Email Address: Not Provided Message: It's certainly no secret that I'm very bearish at this time. But I have a question for anyone who is giving carefull consideration to where they should invest their retirement savings - is there anyone you would prefer to Warren Buffet to provide you with investment advice? If he prefers to hold onto cash at this time rather than risk it in the market, why would you? He's also expressed some regret at owning many of the stocks Berkshire-Hathaway now holds, but as he explained: 'I sit on the boards of many of these companies and I have a responsibility to their shareholders.' In other words, if Warren Buffet were to start dumping all of Berkshire-Hathaway equity holdings at this time, you can bet it would be major news and would start a stampede for the exits. However, he has hedged with investments that basically benefit from a falling dollar and is holding onto approximately 40 billion in 'cash' (low risk liquid assets) which he will use to buy back into this stock market when he feels there are finally some stocks 'at a value worth buying'. He says it 'feels strange but it's better than doing something stupid'. Michael Belkin, who has a considerable reputation as a savy investment advisor in the Seattle area, and who charges his large investor clients $35,000 per annum, told his clients to exit the markets this last Fall. Here's another suggestion - go back in time to a period which had similar economic conditions to our present time. Take for instance the early 70's. In the early 70's we had the beginings of higher oil prices which contributed to reducing corporate profits, increasing inflation and eventually higher interest rates. Japanese companies such as Toyota, Honda, Datsun, Suburu, Sony, etc began to give severe competition to US companies - today we have growing competition from emerging counties like China. There are certainly differences - today we have a large, ongoing budget deficit and rather huge current account deficit which weren't part of the scene in the early 70's. Our present time was preceded by the biggest bull stockmarket in history where PE ratio's reached levels well beyond any other time in history and still are running at fairly high levels. The 70's were preceded by a bull market that was rather mild in comparison. The differences, IMO, between now and the 70's do not point to our present time as being a better investing environment. Nevertheless, I think it's usefull to take a look at investment strategies and how they would survive the early 70's. Consider the so called 'balanced portfolio' no matter what your 'time horizon'. How would a portfolio with 50-60% in stock index funds, and the rest in bond funds and some in fixed securities have done during this period. Change it around and make it more conservative - say 33% in stock index funds, 33% in bond funds, and 33% in fixed income securities. In fact major brokerages have changed little in this approach. But most investors became quite unhappy with these investment pie charts and the damage it did to their portfolio's back in the 70's. If someone thinks this is a better time to invest in the stock markets and bond markets than what we had in the 70's, I would like to know why. There definitely will be a good time in the future to get back into bonds and stocks, especially if you have the cash to invest. Right now, however, there is simply little upside potential and lots of downside potential - look back in time to get a better picture of our present investment environment.

Subject: Stocks From: Terri To: Pete Weis Date Posted: Tues, Jul 27, 2004 at 16:26:31 (EDT) Email Address: Not Provided Message: Remember Pete, you are setting yourself up against the Federal Reserve. Betting against the Fed, has usually been a mistake. The better bet is there will be moderate stock market growth for some time. Productivity is fine, and the Fed will raise interest rates with caution.

Subject: Re: Stocks From: Pete Weis To: Terri Date Posted: Tues, Jul 27, 2004 at 21:46:14 (EDT) Email Address: Not Provided Message: Don't think the Fed can do anything more to juice the economy. Greenspan pretty much went for broke with 13 rate drops in 30 months. Unfortunately it came with a heavy price - a lot of debt which will be subtracted out of paychecks for years to come. I liken it to a golfer who hits his tee shot into the woods. Instead of taking his lumps and using his wedge to hit the prudent shot laterally back onto the fairway, Greenspan went for that risky narrow gap between the trees.

Subject: Re: Stocks From: Jennifer To: Pete Weis Date Posted: Wed, Jul 28, 2004 at 12:05:07 (EDT) Email Address: Not Provided Message: Pete There is reason to be bearish, but we still need specific investment stratagies to weather such markets. Timing will be too hard, so I am looking for a conservative mix.

Subject: Re: Stocks From: Pete Weis To: Jennifer Date Posted: Wed, Jul 28, 2004 at 23:41:19 (EDT) Email Address: Not Provided Message: Jennifer. I know some people think I'm some sought of 'market timer'. It's a very vague term - I'm not sure what the term really means. Michael Belkin has been riding the ups and downs of the last four years based on a number of factors, including the amount of liquidity the Fed has been pumping into the economy - a percentage of which he says inevitably finds its way into the stock markets. I suppose this is a type of market timing. While I admire his success, I've choosen to mostly stay out of the stock markets since the start of the bear market. I say mostly, since I have invested in companies which produce commodities and have benefited by strong demand and a falling dollar. It's my personal belief that we are still in the early stages of a large, long term bear market. I also believe this is one of those unusual times when bond funds will fall together with stocks. At some point, and I would not predict the timing of that point, the US consumer will begin to tighten his/her belt. The accumulation of debt will begin to inhibit spending. Higher and higher energy costs in the coming months and years will reduce the spending capacity of paychecks and will cut into profits of US businesses. Increasing personal bankruptcies and risky real estate loans (revealed by higher interest rates) will bring about a tightening of credit. With rising demand and dropping world oil reserves, in the not too distant future we will remember fondly the days of $2-$3/gal gasoline. Rising oil prices, alone, will put a very heavy tax on economies around the world. If by some stroke of magic we get a prolonged and strong job market with rising wages to go along with it, I would change my view. But given all the other problems I don't expect it to happen any time soon. So I see little to no upside for the markets until they have reached a fairly low bottom as they have in the past following major bull markets. So, IMO, there is potential for a considerable drop and so I believe stock index funds are very risky at this time. The general investing public is very complacent and, IMO, in denial about the obvious problems facing our economy and the impact they will have on profits and hence the markets. Anyway, it's just one bear's (who once was a bull) opinion.

Subject: Portfolio Allocation From: Terri To: Pete Weis Date Posted: Thurs, Jul 29, 2004 at 11:37:55 (EDT) Email Address: Not Provided Message: Pete, you make point after fine point but why not a 50% stock 50% bond mix? If you are right you are well protected, if wrong you will participate in the gains.

Subject: Balanced Funds From: Terri To: Pete Weis Date Posted: Tues, Jul 27, 2004 at 13:51:07 (EDT) Email Address: Not Provided Message: A 60% stock index and 40% bond index balanced fund in the 1970's would have faired moderately well. There were only 3 down years for the stock market and 2 for the bond market. Looking at the 1970's shows me the need for caution, and so a mix of stocks and bonds, but also the need to stay invested.

Subject: Re: Balanced Funds From: Pete Weis To: Terri Date Posted: Tues, Jul 27, 2004 at 15:22:02 (EDT) Email Address: Not Provided Message: Actually it depends greatly on what particular time periods within the 70's you are talking about. The Dow had almost no gain between 1970 and 1980. Many investors use an S&P index fund (especially in their 401K's). The S&P index stood at 108.37 in December of 1968 at approx 18x earnings and at 100.55 in early 1980 at under 10x earnings (a good time to buy). If you bought at the bottom in 1974 at about 6-7x earnings the S&P was at 62.34 and you would have had a good gain by 1980. What I'm getting at - with PE's at present levels you are likely to loose money or see almost no gain in stocks in general over the next 10 or so years (especially with oil heading higher).

Subject: Re: Balanced Funds From: Terri To: Pete Weis Date Posted: Tues, Jul 27, 2004 at 15:31:52 (EDT) Email Address: Not Provided Message: What you are leaveing out are dividends. There were fine dividends paid by the S&P through the 1970s. The point you make about high price earning ratios now is a concern, but given the fine earnings stocks can not be more than 10% to 20% too pricey. I can easily whether such a decline, and see no reason to bet on such a decline by leaving the market. Notice the returns chart I recommended above.

Subject: Re: Balanced Funds From: Pete Weis To: Terri Date Posted: Tues, Jul 27, 2004 at 18:27:34 (EDT) Email Address: Not Provided Message: Terri. Thanks for the tip on the stock charts - I'll definitely spend some time with them. Let's hope that those of us who are so bearish (perhaps I'm the most) turn out to be wrong. It's an interesting subject and an important one to all of us.

Subject: Investment Portfolios From: Terri To: Terri Date Posted: Tues, Jul 27, 2004 at 13:56:47 (EDT) Email Address: Not Provided Message: Single-Asset vs. Multi-Asset Portfolios For a 30 years look at investment portfolios go to: http://www.russell.com/US/default.asp and type in single asset in the search.

Subject: Re: Investment Portfolios From: Pete To: Terri Date Posted: Tues, Jul 27, 2004 at 14:25:11 (EDT) Email Address: Not Provided Message: Pete These arguments are an important help, because they are firming up my portfolio allocation. But, you are convincing me that I must have a consistent investment position at this time. A 60% stock index 40% bond index allocation seems most conservative.

Subject: Re: Investing Question From: David E... To: Jennifer Date Posted: Mon, Jul 26, 2004 at 18:47:19 (EDT) Email Address: Not Provided Message: It all depends on how much research and learning you want to invest. For the minimum investment of time there is Scott Burn's couch potato investing plan -http://www.dallasnews.com/s/dws/bus/scottburns/couchpotato/reports.html For information on how to use modern portfolio theory read 'The Informed Investor' by Frank Armstrong and William Bernstein's 'The Four Pillars of Investing'. Modern Portfolio Theory uses an asset class's return, risk(standard deviation), and correlation to assemble a portfolio. Using uncorrelated asset classes yields a portfolio that has less risk for the same return, or (this is almost a free lunch) the same risk, more return.

Subject: Re: Investing Question From: Econochick To: Jennifer Date Posted: Mon, Jul 26, 2004 at 17:46:16 (EDT) Email Address: Not Provided Message: Yes. Your allocation should always be based on your personal portfolio needs and will be heavily influenced by your time horizon - not by timing the market.

Subject: Re: Investing Question From: Terri To: Econochick Date Posted: Mon, Jul 26, 2004 at 20:10:04 (EDT) Email Address: Not Provided Message: With the Vanguard Balanced Fund you have a 60% share in the Total American Stock Market Index and 40% in the Total Bond Market Index. There is balance for you. Then, you could always add an International Stock Market Index for even more diversity. Also, there is a Real Estate Investment Trust Index.

Subject: Barro's instinct From: Yann To: All Date Posted: Mon, Jul 26, 2004 at 07:26:24 (EDT) Email Address: Not Provided Message: http://post.economics.harvard.edu/faculty/barro/bw/bw04_0726.pdf “Although I am instinctively appreciative of findings that irritate French public officials”... Fortunately, Paul Krugman goes away on holiday in France!

Subject: Barro!! From: Econochick To: Yann Date Posted: Mon, Jul 26, 2004 at 16:18:13 (EDT) Email Address: Not Provided Message: I quote his textbook all the time!! No message - just needed a break from work...............

Subject: Re: Barro!! From: Mik To: Econochick Date Posted: Mon, Jul 26, 2004 at 17:08:52 (EDT) Email Address: Not Provided Message: I'm sorry - but that story appears to a be a load of poo. Connecting legal systems to the need for a draft? I come from a country that has the English System and switched in the 90's from the draft to the volunteer system AND they implemented a double system. Meaning they could drat certain people even though the system was now different. Both legal systems equally allow for the draft vs volunteer. I'm amazed that he is only making the connection to the French legal system where in actual fact the legal principles applied by the French are much the same as those applied by the Portuguese, Spanish, Italians, etc. But then again, let's not criticise the French. After all when the US presented its case to the UN that WMD existed, the French countered the argument with their own intelligence information. Today we see very clearly, the French were 100% right and the US was 100% wrong. So let's give them some respect.

Subject: Re: Barro!! From: Econochick To: Mik Date Posted: Mon, Jul 26, 2004 at 17:44:10 (EDT) Email Address: Not Provided Message: You're wrong about the French, Mik. Their 'intelligence' also thought Iraq had WMDs but France didn't want to go to war anyway. Why would they? Iraq was a great French ally!

Subject: Re: Barro!! From: El Gringo To: Econochick Date Posted: Mon, Jul 26, 2004 at 18:02:52 (EDT) Email Address: nma@hotmail.com Message: Econochick, I'm sorry, but I do absolutely not share the same opinion.

Subject: oh well... From: Econochick To: El Gringo Date Posted: Mon, Jul 26, 2004 at 20:54:49 (EDT) Email Address: Not Provided Message: We can't all always agree on everything. C'est la vie!

Subject: Re: Barro!! From: Ari To: El Gringo Date Posted: Mon, Jul 26, 2004 at 18:12:20 (EDT) Email Address: Not Provided Message: The French were entirely right. Iraq was contained, and no treat to the United States or neighboring countries, there was no need to go to war. Weapons inspectors could find no WMDs, because there evidently were none.

Subject: Re: Barro!! From: Mik To: Ari Date Posted: Mon, Jul 26, 2004 at 18:37:09 (EDT) Email Address: Not Provided Message: What I distinctly remember was the French disputing the intelligence provided by Colin Powel. The French went to great lengths to show that they had for some time been doing their homework and what they had was very different to the US info. In stark contrast in fact. Now the UN and France did believe that Iraq had some form of WMD, or more importantly Chemical and Biological weapons. Although everyone knows this stuff degrades rapidly. No one knew if the stuff had passed its sell-by date. But no one could prove Iraq got the WMD program up and running. If anything the French showed that Iraq had not (and they were right). The final test was in the info disclosed by Iraq that was simply not liked by the US and a verification by the UN needed more time. In a final plea, Canada asked for a mere two more weeks but all was ignored. Now you have leaped into stating that the French (via the UN) were in total kahoots with the Iraqis. Well if you read Krugman's latest article you will see that there are way too many holes in this supposed story that the French were in Kahoots with the Iraqis in the Oil for food program. But it may be true. I just need to see other proof of it. After all I have seen to date comes from the same source that still calls the attacks on the USS Cole 'terrorist attacks'. If they can't spot the difference, then they are hardly worth being regarded a reliable source. Lastly - I want to point out something that is a very serious issue. In the state of the union speech by Bush - he made reference to Iraq's attempt to buy Urnaium in Africa. And he was making direct reference to Niger. Besides the fact that this story was just so hopelessly flawed, it was also an insult to the French. You see, France is in charge of the Uranium mining in Niger and takes all responsibility for the safety and security of the Uranium. So to say that Iraq was purchasing the Uranium from Niger is a direct insult to the French. But CNN won't tell you that story now will it? All said and done - we have to admit, 'The French were right and the US was wrong.'

Subject: Mais Non!! From: Econcochick To: Mik Date Posted: Mon, Jul 26, 2004 at 21:07:13 (EDT) Email Address: Not Provided Message: 'If anything the French showed that Iraq had not (and they were right). The final test was in the info disclosed by Iraq that was simply not liked by the US and a verification by the UN needed more time. In a final plea, Canada asked for a mere two more weeks but all was ignored.' I watched most of this crap go down on C-SPAN (I live such an exciting life!) and I remember the French showing nothing of the kind. The Iraqi report had enormous holes in it. When a country disarms, it rolls out all of its missles and such for the inspectors to see - ala Brazil and Libya. There's no cat and mouse game. Now, you may disagree. The French may have convinced you. The did not convince me but you and I aren't going to convince each other, so we'll leave it as a point of disagreement between us. If the USS Cole attack was not a terrorist attack in your opinion, then you and I have different definitions of terrorism. Also, It's pretty clear from the investigation that France was selling contraban and abusing the food-for-oil program. The question is to what extent. At the end of the day, I'm not surprised that the sleazy French have been such great 'allies' to the US. It's one thing to disagree with the US and not want to participate. It's another to reject a proposal by Britain and the US to Saddam BEFORE Saddam gets a chance to reject it. That sounds an awful lot like an ally of Saddam. I've made no secret of my deep personal dislike of France (but not necessarily of French individuals - can't paint everyone with the same brush). My dislike of France is decades old and my reasons go back to at least WWI. Lots of people don't share my view and that's just fine with me. Have a good one, Mik. Always a pleasure!

Subject: Re: Mais Non!! From: El Gringo To: Econcochick Date Posted: Wed, Jul 28, 2004 at 19:52:25 (EDT) Email Address: nma@hotmail.com Message: Dear Emma: 'The limits of my language means the limits of my world!'

Subject: Re: Mais Non!! From: El Gringo To: El Gringo Date Posted: Wed, Jul 28, 2004 at 20:22:53 (EDT) Email Address: nma@hotmail.com Message: Sorry, that was meant for Econochick!

Subject: Re: Mais Non!! From: Mik To: Econcochick Date Posted: Wed, Jul 28, 2004 at 14:48:48 (EDT) Email Address: Not Provided Message: Okay so we agree to disagree. It is definately nice debating with you.... BUT.... (there is always a 'but' isn't there?) Okay defintion of terrorism has not recieved any final decision by the UN. Since 9/11 and the US wanting to review their position in the development of an anti-terrorism treaty, the entire treaty has been shelved. However, among the many definitions and the un-disputed defintions, terrorism is meant to be an attack on civilians designed to terrorise. Any attack on any military installation is not meant to be seen as terrorism. This particular definition (as far as I know) did not have any dispute with any government. Disputes were around issuses such as the South African government pushing the defintion to make allowance for freedom fighters and just causes being allowed to bomb innocent civilians. This has to do with the fact that Nelson Mandela was once a terrorist (under the definition). The US want to change the definition about what it means for a government to back a terrorist group, etc, etc. So in essence, the attack on the USS Cole was an attack on a military installation. In the same way the attack on Pearl Harbour was an attack on a military installation. Now you talk about Brazil and Libya. Uhhmm I'm not sure what you mean there. To the best of my knowledge, Brazil did not lose any war (maybe that was a mistype). Libya is a very interesting scenario that has unfortunately been mis-translated to the advantage of the current US government. Libya had for a long time been trying to open itself up but with agreement that various countries (including the US) would drop all sanctions and infact invest into Libya. This all links back to Lockerby. The Libyans paid damages for Lockerby and the US bulked on their promise to drop sanctions. The US moved the goal posts and now wanted other concessions (like giving back rights to their old oil facilties). Libya said 'No'. Then Libya turned to the EU. But France jumped in wanting pay back for a downed French airliner. After Libya paid that, the French did the same trick as the US and bulked on their agreement making Libya also stop and say 'No'. By this time the US had approached Libya with a new easy deal, including 'disarming'. Libya has never been seen as a huge WMD threat and did not even make Bush's axis of evil list. Which makes me ask if the disarming ploy was not a propaganda campaign. But that is now becoming too conspiracy theorist. Hhmm intereting that France was playing the same game as the US. Ironically I don't like France. I nearly died in France, thanks to their incompetence. However, I do recognise bull from a mile away, and the US appraoched the UN with a big pile of it. And the French who are probaby masters of bull recognised it too and... well the rest is history. The French government may not be good and caring, but their record looks a whole lot better than the US. The point is that on this particular matter, you seem to have bought into the idea that France was in it only for their own good, which is difficult to explain why Germany took the exact same position as France. Whether you see it as France wanting to look after their own needs or not - what is obvious is that the US went into war by lieing to its people. And at the end of the day, when picking between evils, the French position on this issue was far more just than the US.

Subject: Re: Mais Non!! From: Econochick To: Mik Date Posted: Wed, Jul 28, 2004 at 15:40:02 (EDT) Email Address: Not Provided Message: Okay Mik, this is going to have to be quick so, I'm gonna cut and paste from your email with with direct replies from me. 'Okay defintion of terrorism has not recieved any final decision by the UN. Since 9/11 and the US wanting to review their position in the development of an anti-terrorism treaty, the entire treaty has been shelved. However, among the many definitions and the un-disputed defintions, terrorism is meant to be an attack on civilians designed to terrorise. Any attack on any military installation is not meant to be seen as terrorism. This particular definition (as far as I know) did not have any dispute with any government.' Response: Call it what you want, the attacked must retaliate or it is open to furhter attacks. Our pull out from Somalia caused the 'paper tiger' comment from Bin Laden. 'Disputes were around issuses such as the South African government pushing the defintion to make allowance for freedom fighters and just causes being allowed to bomb innocent civilians. This has to do with the fact that Nelson Mandela was once a terrorist (under the definition). The US want to change the definition about what it means for a government to back a terrorist group, etc, etc. So in essence, the attack on the USS Cole was an attack on a military installation. In the same way the attack on Pearl Harbour was an attack on a military installation.' Response: Big difference, Mik. The issue is South Africa was a turf war where the indigenous population was fighting for human rights from an occupying force. The USS Cole was there by arrangement with the local governments and we were not an occupying force. 'Now you talk about Brazil and Libya. Uhhmm I'm not sure what you mean there. To the best of my knowledge, Brazil did not lose any war (maybe that was a mistype). Libya is a very interesting scenario that has unfortunately been mis-translated to the advantage of the current US government. Libya had for a long time been trying to open itself up but with agreement that various countries (including the US) would drop all sanctions and infact invest into Libya. This all links back to Lockerby. The Libyans paid damages for Lockerby and the US bulked on their promise to drop sanctions. The US moved the goal posts and now wanted other concessions (like giving back rights to their old oil facilties). Libya said 'No'. Then Libya turned to the EU. But France jumped in wanting pay back for a downed French airliner. After Libya paid that, the French did the same trick as the US and bulked on their agreement making Libya also stop and say 'No'. By this time the US had approached Libya with a new easy deal, including 'disarming'. Libya has never been seen as a huge WMD threat and did not even make Bush's axis of evil list. Which makes me ask if the disarming ploy was not a propaganda campaign. But that is now becoming too conspiracy theorist.' Response: You missed the point entirely on Libya and Brazil. Both countries decided to disarm (WMDs). In doing so, they rolled out all of their weapons openly and willing and the inspectors didn't have to look under any beds. I don't care WHY they decided to do it. The contrast was Saddam's cat and mouse games with the inspectors and Libya and Brazil opening the gates and rolling it all out. The inspectors didn't have to go looking for anything. Whether one bomb or a hundred, they all came out. 'The French government may not be good and caring, but their record looks a whole lot better than the US. The point is that on this particular matter, you seem to have bought into the idea that France was in it only for their own good, which is difficult to explain why Germany took the exact same position as France.' Response: The French and the Germans have never quite gotten over their loss of total control of the world. By the way, take a good look at history and find how many people Germany was responsible for killing in recent history. You needn't go further back than the Franco-Prussian war to be horrified. The French were among the most brutal colonial powers in the world. It is one of the most racist countries on earth and the most hypocritical. My dislike of the French does not begin and end with Iraq. You'll have to look up the history yourself, Mik. The US didn't lie to its people. Even France's 'intelligence' (if there is such a thing) thought he had WMD's. The 9/11 commission found the president was repeatedly given wrong information about that from the Russians, Britain and the CIA. It is not a lie if you do not know that the information is not the truth. Having said that, my husband (an Arab) and I were always for the war because we knew enough Iraqis to know that anything is better than Saddam. In terms of the world, we believed that the costs of NOT going to war were higher than going to war. Disagree with us? Fine. We're not omnipotent. We do not have a monopoly on truth and we can't see into the future. This is what we believed and still believe based on the information. Cheers, Mik! How's that business going? Did you end up hedging your FX risk?

Subject: Re: Mais Non!! From: Econochick To: Mik Date Posted: Wed, Jul 28, 2004 at 15:36:43 (EDT) Email Address: Not Provided Message: Okay Mik, this is going to have to be quick so, I'm gonna cut and paste from your email with with direct replies from me. 'Okay defintion of terrorism has not recieved any final decision by the UN. Since 9/11 and the US wanting to review their position in the development of an anti-terrorism treaty, the entire treaty has been shelved. However, among the many definitions and the un-disputed defintions, terrorism is meant to be an attack on civilians designed to terrorise. Any attack on any military installation is not meant to be seen as terrorism. This particular definition (as far as I know) did not have any dispute with any government.' Response: Call it what you want, the attacked must retaliate or it is open to furhter attacks. Our pull out from Somalia caused the 'paper tiger' comment from Bin Laden. 'Disputes were around issuses such as the South African government pushing the defintion to make allowance for freedom fighters and just causes being allowed to bomb innocent civilians. This has to do with the fact that Nelson Mandela was once a terrorist (under the definition). The US want to change the definition about what it means for a government to back a terrorist group, etc, etc. So in essence, the attack on the USS Cole was an attack on a military installation. In the same way the attack on Pearl Harbour was an attack on a military installation.' Response: Big difference, Mik. The issue is South Africa was a turf war where the indigenous population was fighting for human rights from an occupying force. The USS Cole was there by arrangement with the local governments and we were not an occupying force. 'Now you talk about Brazil and Libya. Uhhmm I'm not sure what you mean there. To the best of my knowledge, Brazil did not lose any war (maybe that was a mistype). Libya is a very interesting scenario that has unfortunately been mis-translated to the advantage of the current US government. Libya had for a long time been trying to open itself up but with agreement that various countries (including the US) would drop all sanctions and infact invest into Libya. This all links back to Lockerby. The Libyans paid damages for Lockerby and the US bulked on their promise to drop sanctions. The US moved the goal posts and now wanted other concessions (like giving back rights to their old oil facilties). Libya said 'No'. Then Libya turned to the EU. But France jumped in wanting pay back for a downed French airliner. After Libya paid that, the French did the same trick as the US and bulked on their agreement making Libya also stop and say 'No'. By this time the US had approached Libya with a new easy deal, including 'disarming'. Libya has never been seen as a huge WMD threat and did not even make Bush's axis of evil list. Which makes me ask if the disarming ploy was not a propaganda campaign. But that is now becoming too conspiracy theorist.' Response: You missed the point entirely on Libya and Brazil. Both countries decided to disarm (WMDs). In doing so, they rolled out all of their weapons openly and willing and the inspectors didn't have to look under any beds. I don't care WHY they decided to do it. The contrast was Saddam's cat and mouse games with the inspectors and Libya and Brazil opening the gates and rolling it all out. The inspectors didn't have to go looking for anything. Whether one bomb or a hundred, they all came out. 'The French government may not be good and caring, but their record looks a whole lot better than the US. The point is that on this particular matter, you seem to have bought into the idea that France was in it only for their own good, which is difficult to explain why Germany took the exact same position as France.' Response: The French and the Germans have never quite gotten over their loss of total control of the world. By the way, take a good look at history and find how many people Germany was responsible for killing in recent history. You needn't go further back than the Franco-Prussian war to be horrified. The French were among the most brutal colonial powers in the world. It is one of the most racist countries on earth and the most hypocritical. My dislike of the French does not begin and end with Iraq. You'll have to look up the history yourself, Mik. The US didn't lie to its people. Even France's 'intelligence' (if there is such a thing) thought he had WMD's. The 9/11 commission found the president was repeatedly given wrong information about that from the Russians, Britain and the CIA. It is not a lie if you do not know that the information is not the truth. Having said that, my husband (an Arab) and I were always for the war because we knew enough Iraqis to know that anything is better than Saddam. In terms of the world, we believed that the costs of NOT going to war were higher than going to war. Disagree with us? Fine. We're not omnipotent. We do not have a monopoly on truth and we can't see into the future. This is what we believed and still believe based on the information. Cheers, Mik! How's that business going? Did you end up hedging your FX risk?

Subject: Re: Mais Non!! From: Mik To: Econochick Date Posted: Wed, Jul 28, 2004 at 17:23:16 (EDT) Email Address: Not Provided Message: Okay this may be getting ugly. Quick notes of clarity. South Africa was not in a turf war and there was no occupying force. Make that clear please I will not bother going further on this and let you rather read the history. The issue is that the ANC party were bombing innocent civilians. That is terrorism in its classic definition. Attacking a military installation is purely an attack - not a 'terrorist attack'. There is a significant difference. One may be elligible for crimes against humanity and one may not. So to relate 'terrorism' and the attacks on the USS Cole is a serious flaw that show very little understanding. Interesting, when last was the US inspected for WMD? Or better yet, when last was South Africa inspected for WMD? Both countries have them. So introducing Brazil and Libya is all about playing politics 'They have finally let out the truth.' Let's not mention the fact that the US is a signatory to the international treaty banning biological weapons. A treaty the US is still in controvention. Yes France and Germany have tainted histories. So does Portugal, Spain and the US. Who has the most tainted history? - depends on how far back you want to go. You have decided to go back to a history of Prussia when the US was not in existance. However, if we come into more 'modern' times you may note that the US has been guilty of genocide in Cambodia fighting an illegal war. As for lieing, I was not simply referring to the WMD issue. Don't forget the state of the union address where Bush spoke of Iraq trying to buy nuclear material from Africa. That was not a CIA mistake. That was a blatent lie. Let's not forget the lie about the link between Al Queda and Iraq. This is very clear. You have interestingly skipped the position of Germany on the Iraq scenario and rather jumped to their dirty history. France and Germany were not the only ones disputing the US position from the start. MOST nations on earth were disputing the position (including Canada). France and Germany were simply the most vocal. Interesting statement you made, 'is not a lie if you do not know that the information is not the truth.' Methinks you need to do some of your own history research. preferrably about the Cuban Missile crisis and Kennedy's management of some very dubious information. Then compare it to the current administration. Then I raise the issue to you again. Why was the US government not willing to wait another mere 2 weeks (as per the Canadian proposal) for UN inspectors to do more verification? The rush to go to war goes far beyond dubious CIA information.

Subject: The French Were Right From: Jennifer To: Econochick Date Posted: Wed, Jul 28, 2004 at 16:34:45 (EDT) Email Address: Not Provided Message: From Juan Cole - 7/28/04 Reuters reports, 'Cheney said Americans were safer and he stood by prewar characterizations of Iraq as a threat despite the failure to find weapons of mass destruction and new warnings by Cheney and other administration officials that another major terrorist attack may be coming.' Iraq was not a threat to the United States. Period. Let me repeat the statistics as of the late 1990s: US population: 295 million Iraq population: 24 million US per capita annual income: $37,600 Iraq per capita annual income: $700 US nuclear warheads: 10,455 Iraq nuclear warheads: 0 US tons of lethal chemical weapons (1997): 31,496 Iraq tons of lethal chemical weapons (1997): 0 While a small terrorist organization could hit the US because it has no return address, a major state could not hope to avoid retribution and therefore would be deterred. Cheney knows that Baathist Iraq posed no threat to the US. He is simply lying. I was always careful not to accuse him of lying before the war because who knows what is in someone else's mind? Maybe he believed his own bullshit. But there is no longer any doubt that Iraq had no weapons of mass destruction, no active nuclear weapons program, no ability to deliver anything lethal to the US homeland, and no operational cooperation with al-Qaeda. These things are not matters of opinion. They are indisputable. Ipso facto, if an intelligent person continues to allege them, he is prevaricating.

Subject: Re: History will teach us nothing... From: El Gringo To: Mik Date Posted: Mon, Jul 26, 2004 at 19:00:00 (EDT) Email Address: nma@hotmail.com Message: 'Not only did trade not benefit much, France's positive relations with the Muslim world also has failed to protect it from Islamic terrorism, rather the opposite is true. France is one of the West's most frequent targets of Islamic terrorism. Throughout the period since de Gaulle left power there have been a number of attacks. There have been hijackings, such as those of an Air France plane to Uganda in 1976, and one to perhaps be crashed into the Eiffel tower in 1994. Another plane was blown up over the Sahara in 1989, killing many French citizens. There have also been bombings in France such as those in 1986 or that against a Paris restaurant in 1982. Attacks have also occurred against representatives of the United Arab Emirates and Saudi Arabia in France. The close relations between the French government and the governments of a number of Arab states have not done anything to reduce attacks on French citizens. French relations with the secular regimes of the Middle East has even encouraged terrorism, as supporters of these governments have often been targeted by religious extremists.' The whole (hi-)story is here (Middle East):http://www.fact-index.com/f/fo/foreign_relations_of_france.html

Subject: France From: Ari To: El Gringo Date Posted: Mon, Jul 26, 2004 at 19:30:20 (EDT) Email Address: Not Provided Message: France was supportive of the effort to remove the terrorist supporting government in Afghanistan, but Iraq was another matter. Iraq was contained and we could have pressured to keep inspectors in the country and simply waited as the regime weakened. There was no need to rush to war.

Subject: Re: France From: El Gringo To: Ari Date Posted: Mon, Jul 26, 2004 at 19:39:28 (EDT) Email Address: nma@hotmail.com Message: Recalling an old italian proverb:'- Chi va piano va sano e lontano.' '- Who moves slowly goes healthy and far.'

Subject: oil and currency From: aden To: All Date Posted: Sun, Jul 25, 2004 at 21:25:37 (EDT) Email Address: aden@interchange.ubc.ca Message: is the euro really a threat to the dollar? fiesta www.feasta.org/documents/papers/oil1.htm

Subject: Re: oil and currency From: Terri To: aden Date Posted: Mon, Jul 26, 2004 at 12:49:58 (EDT) Email Address: Not Provided Message: No. The Euro is no threat to the dollar, as Europe is not threat to America. The dollar may rise in value or fall in value, but as long as international traders care to sell to us the dollar will be just fine even if it loses some value. The British pound has been losing value for 50 years, and all is well.

Subject: Re:Terri From: El Gringo To: Terri Date Posted: Mon, Jul 26, 2004 at 22:16:23 (EDT) Email Address: nma@hotmail.com Message: Terri:http://www.pslc.ws/macrog/exp/rubber/synth/prices.htm What exactly happened in 1931?

Subject: Re: Re:Terri From: johnny5 To: El Gringo Date Posted: Tues, Jul 27, 2004 at 04:38:09 (EDT) Email Address: Not Provided Message: Ok so if deflation is coming and all commodity prices will fall with the stocks - where does one store thier wealth? Obviously Natural Rubber was a poor place to put the money before the air let out of the bubble back then, where to go?

Subject: Re: Re:Terri From: El Gringo To: johnny5 Date Posted: Tues, Jul 27, 2004 at 09:05:52 (EDT) Email Address: nma@hotmail.com Message: 'During World War I, Germany made a synthetic rubber, but it was too expensive for peacetime use. In 1927 a less costly variety was invented, and in 1931 neoprene was made, both in the United States.' Ok, now, imagine 'Rubber' = $ and 'in 1931 neoprene was made' = OPEC's virtual switch from $ to euros or,accepting both currencies and assume the fact that 'deflation' = depreciation.

Subject: Diversity in France From: Emma To: All Date Posted: Sun, Jul 25, 2004 at 18:50:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/24/arts/design/24RIDI.html?pagewanted=all&position= French Strive to Be Diverse Without Being Less French By ALAN RIDING PARIS — After 15 years of soul-searching, France has decided to create a Museum of Immigration. Why now? For generations, France successfully absorbed waves of Poles, Russians, Italians, Spaniards and Portuguese — and remained French. Then over the past 30 years millions of migrants flooded in from the third world, and it was France that changed. A Museum of Immigration is a fairly typical French response, one financed by the government and intended by politicians and bureaucrats to address a social problem through culture. Yet while willing to open a museum, France's cultural elite continue to resist embracing the creative energy represented by French artists, writers and performers of African, Arab and Asian descent. The energy is certainly there — in stand-up comedians and above all in pop music, the art form where performers and public can most readily connect without the mediation of cultural institutions. But in theater, movies, television and the visual arts, this 'other France' is far less visible. Will a Museum of Immigration change this? The museum is to open in 2007, but its purpose is still not clear. Will it simply demonstrate that millions of the French have foreign roots or will it acknowledge that, by becoming French, immigrants actually change and enrich French culture and society? That said, France is hardly alone in confronting what is a relatively new dilemma: whether to resist outside cultures or to incorporate them? The United States has struggled with the same question, as new issues of bilingualism and multiculturalism, brought on by large Hispanic immigration, have come up. By contrast, Britain, Germany and the Netherlands had little experience of immigration, except for Jews from Eastern Europe and Russia, until after World War II. And countries like Spain, Italy, Portugal and Ireland, long 'exporters' of people, have begun to receive third world immigrants only in the past decade and still view them as potential menaces to national identities. Yet the evidence suggests there are few better tools of integration than culture: it empowers minorities and immigrants and helps persuade nationals that ethnic diversity is a good thing. The Irish and Jewish input in American literature, for instance, has been no less crucial than the Afro-American contribution in music and dance. And while Hispanic influence is new, it has accelerated erosion of Protestant Anglo culture as the dominant American model. The very process of immigration creates new generations who carry two or more cultures, say, Algerian and French, Turkish and German or Indian and British. And this hybrid is a powerful tonic.

Subject: Re: Diversity in France From: Yann To: Emma Date Posted: Mon, Jul 26, 2004 at 04:04:48 (EDT) Email Address: Not Provided Message: As a French person, reading an article about these subjects written by an American journalist is always interesting. I wonder what is the exact message he wants to send to his readers. And, of course, talking about the “creative energy represented by French artists, writers and performers of African, Arab and Asian descent” is a matter of taste. But, de gustibus et coloribus non disputandum.

Subject: Noway's Workers From: Emma To: All Date Posted: Sun, Jul 25, 2004 at 13:57:49 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/25/international/europe/25oslo.html?pagewanted=all&position= Norway Looks for Ways to Keep Its Workers on the Job By LIZETTE ALVAREZ OSLO - Before the oil boom, when Norway was mostly poor and largely isolated, the country survived on its hard work and self-reliance, two stalwart Scandinavian virtues. Now, with the country still bulging from three decades of oil money, Norway is discovering that sudden wealth does not come without complications: The country's bedrock work ethic is caving in. Like the overindulged children of newly minted millionaires, Norwegians now stay home from work at a rate that is the highest in Europe, outdoing even the former titleholder, Sweden. 'We have become a nation of whiners,' said Finn Bergesen Jr., director general of the Confederation of Norwegian Business and Industry, Norway's largest business trade organization. 'Everything is wrong, yet we are living in the best country in the world. People complain and complain - because we have everything.' On an average day, about 25 percent of Norway's workers are absent from work, either because they have called in sick, are undergoing rehabilitation or are on long-term disability. The rate is especially high among government employees, who account for half the work force. The average amount of time people were absent from work in Norway in 2002, not including vacations, was 4.8 weeks. Sweden, its closest competitor, totaled 4.2 weeks, while Italy came in at 1.8 weeks and Portugal at 1.5 weeks, according to the Organization for Economic Cooperation and Development. Throw in vacation time (five weeks for most people), national paid holidays (11 per year) and weekends, and Norwegians take off nearly half the calendar year, about 170 days, a figure that does not include time off for disability and rehabilitation, according to Bergens Tidende, the newspaper that made the calculations. Long-term disability leave, up 20 percent since 1990, is growing at an even faster rate than sick leave. There are few penalties for chronic absenteeism. Most people who take sick leave receive 100 percent of their pay for a year, though the level dips to 60 percent in the second year under a job rehabilitation program. Few employees get fired, but, if they do, unemployment benefits are generous. The most common complaints - other than colds and flu - are skeletal and muscle problems, including repetitive stress injuries. Paradoxically, when they are at work, Norwegians are highly productive; the country's economy was ranked by the World Economic Forum as the ninth most competitive in 2003, ahead of Japan, Britain and Canada. But getting them to work consistently is proving difficult. 'Twenty to 25 percent of the potential work force are not at work,' said Arild Sundberg, director general of the National Insurance Administration, which disburses the benefits. 'That is a huge sum.' It is also a sum that costs the government dearly in benefits: $12.3 billion a year for 2003. Such levels of absenteeism have started a national debate about how to tackle the problem and what is causing it. The government set up a voluntary three-way agreement with employers and unions to decrease the rate in 2001, but to the embarrassment of all involved it was widely ignored and the problem grew worse.

Subject: Housing Bust From: Emma To: All Date Posted: Sun, Jul 25, 2004 at 13:55:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/25/business/yourmoney/25watch.html GRETCHEN MORGENSON Housing Bust: It Won't Be Pretty LET the stock market slide. Let the bond market sink. As long as home prices keep rocking, it's easy for Americans to feel fat and happy. But what happens when the run-up in housing prices loses steam, or worse? The implications are sobering, not only for homeowners but also for the economy as a whole. With the growth rate for home prices starting to slow, now may be the time to ponder what a bear market in real estate may bring. A recent study by two economists at Goldman Sachs provides some answers. For now, prices are still climbing over all. The average home price in the nation rose 7.71 percent in the 12 months ended in March. But the first three months of this year showed far slower growth than previous periods. Prices rose only 0.96 percent, according to the Office of Federal Housing Enterprise Oversight, which keeps an eye on Fannie Mae and Freddie Mac. The last time housing prices grew by less than 1 percent in a quarter was in the spring of 1998. More ominous, six states showed declines in housing prices in the first quarter: Vermont, Alaska, North Dakota, South Dakota, Iowa and Nebraska. No state had price declines in the previous quarter. To be sure, home values are still hot in many spots. In the most recent 12 months, prices have jumped by more than 15 percent in Hawaii and Nevada, by 14 percent in California, 11 percent in New Jersey and 10 percent in New York. In nominal terms, United States home prices are up 60 percent since 1995; in real terms, adjusted for inflation, they are up 37 percent. Viewed historically, home prices are up twice as much now as they were in the bullish real estate markets of both the mid-1970's and the 1980's. As a percentage of disposable income, home prices are more than 18 percent above the long-term average. Prices exceeded that average by only 4 percent in the 1970's and 8.5 percent in the 1980's boom. Michael Buchanan, a senior global economist at Goldman Sachs, and Themistoklis Fiotakis, a research assistant there, reckon that at current interest rates, home prices are now overvalued by 10 percent, on average. Because this figure spans the entire nation, the hottest markets - California and New York - are obviously more overpriced. The economists compute fair value in home prices by using a variety of measures, including interest rates, population and demographic data, and the overall health of the economy. If interest rates increased by one percentage point, the economists said, home prices in the United States would be overvalued by 15 percent. None of this would be worrisome if homeowners had not turned the paper profits in their properties into cold, spendable cash. But withdrawals from home equities have recently totaled 6.3 percent of household disposable income, according to the Goldman study. In the late 1980's, equity withdrawals reached only 2.5 percent of disposable income. Federal Reserve studies indicate that as much as half of the equity withdrawals went into personal consumption and home improvements. As a result, the Goldman economists estimate that equity cash-outs added 1.75 percent to the growth in the gross domestic product in 2003. That is a significant increase from the 1.25 percent kick that equity withdrawals added in 2002. Consumption would slip 1 percent, Goldman estimated, if housing prices fell by 10 percent, to the fair value level. But if prices decline to well below that, as often happens when overheated markets go cold, consumption may fall by 2.4 percent, Goldman reckoned. Such a housing crash took place in Britain in the early 1990's. At the market's low, home prices had fallen by 27 percent, 5 percent below Goldman's estimate of fair value at the time.

Subject: Re: Housing Bust From: Terri To: Emma Date Posted: Sun, Jul 25, 2004 at 16:18:47 (EDT) Email Address: Not Provided Message: So, it may be that even stable housing prices could slow economic growth since we have used home equity increases to fuel consumption. Now, this could be worrisome.

Subject: Re: Housing Bust From: yaw_keanhuat To: Emma Date Posted: Sun, Jul 25, 2004 at 16:05:28 (EDT) Email Address: Not Provided Message: I think the housing price is fairly value now due to slow economy growth.

Subject: Re: Housing Bust From: Jennifer To: yaw_keanhuat Date Posted: Sun, Jul 25, 2004 at 18:47:58 (EDT) Email Address: Not Provided Message: Yaw If housing prices are too high, a slwoing economy could begin to force them down. Jenn

Subject: Re: Housing Bust From: yaw_keanhuat To: Jennifer Date Posted: Mon, Jul 26, 2004 at 03:57:05 (EDT) Email Address: Not Provided Message: Yeah...that is what i was saying... the economy is not doing really well . That is why the price of the house will not appreciate in a quntum paste.

Subject: Indians Go Home From: Emma To: All Date Posted: Sat, Jul 24, 2004 at 14:40:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/24/international/asia/24indi.html?pagewanted=all&position= Indians Go Home, but Don't Leave U.S. Behind By AMY WALDMAN BANGALORE, India - Snigdha Dhar sat in the echoing emptiness of her new home, her husband off at work, her 7-year-old son prattling on about Pizza Hut. The weather outside was California balmy. Children rode bicycles on wide smooth streets. Construction workers toiled on more villas like hers - white paint, red roofs, green lawns - and the community center's three pools. Six years ago, Mrs. Dhar and her husband, Subhash, a vice president at Infosys Technologies, the Indian software giant, migrated like thousands of Indians before them, to America's Silicon Valley and its suburban good life. But Silicon Valley is not where their gated housing colony, Palm Meadows, sits. Like growing numbers of professional Indians who once saw their only hope for good jobs and good lives in the West, the Dhars have returned home to India. Drawn by a booming economy, in which outsourcing is playing a crucial role, and the money to buy the lifestyle they had in America, Indians are returning in large numbers, many to this high-technology hub. What began as a trickle in the late 1990's is now substantial enough to be talked about as a 'reverse brain drain.'' By one estimate, there are 35,000 'returned nonresident Indians'' in Bangalore, with many more scattered across India. For this still developing country, the implications of the reverse migration are potentially vast. For decades, it has watched many of its best-educated move abroad, never to come back. Now a small portion of that talent is returning, their influence amplified beyond their numbers by their high-level skills and education, new cultural perspective and, in many cases, ample wealth. They are both staffing and starting companies, 110 of which set up shop in Bangalore in just the year that ended in March. In some cases, they are seeking to refashion India implicitly in America's image. It takes leaving and returning, said Arjun Kalyanpur, a radiologist who returned in 1999, to ask, 'Why should my country be any less than the country I was in?'' This impulse is not universally welcomed by some Indians who never left and who see a globalized elite - many of whom now carry American passports, not Indian - importing a Western culture as distorting in its way as British colonialism. Still, returned reformers are already sparking change.

Subject: Oil, Venezuela's Lifeblood From: Emma To: Emma Date Posted: Sat, Jul 24, 2004 at 15:32:07 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/24/business/worldbusiness/24venez.html?pagewanted=all&position= Oil, Venezuela's Lifeblood, Is Now Its Social Currency, Too By JUAN FORERO CARACAS, Venezuela - Seventeen months after an antigovernment strike crippled production, Venezuela's state oil company, Petróleos de Venezuela, has made what analysts call a Herculean return. Though energy experts say production remains below prestrike levels, the oil-and-gas monolith is, once again, one of the world's great producers of crude. Its giant refining arm is talking of adding two refineries to the three already operating in the United States. The company says it is embarking on a strategy, heavily dependent on foreign oil companies, to nearly double production by 2009. All this is part of a grand design made possible largely by sky-high oil prices, which have nearly doubled the expected revenue of Pdvsa (pronounced peh-deh-VEH-sah), as the company is known. But while Pdvsa's talk of foreign investment and ramped-up production is welcome in the boardrooms of the world's biggest oil companies, in recent months much of the new earnings have been siphoned from exploration and production projects that some energy analysts say Pdvsa needs to recover fully from the strike. Instead, the windfall is financing a social revolution long promised by President Hugo Chávez's 5˝-year-old government to extricate the country from its malaise and ease life for the poor, an effort that had been hobbled by the strike and a 2002 coup that temporarily ousted the firebrand leader. And with the Aug. 15 recall referendum that could end Mr. Chávez's presidency drawing ever nearer, the spending spree - on everything from housing to railroads, health clinics and literacy programs - is an increasingly important, and successful, tool for solidifying support for Mr. Chávez. Recent polls show he could squeak to victory. Pdvsa's new role has raised eyebrows among oil executives and in Washington, which has long counted on Venezuela as one of the four big exporters of oil to the United States and which has been hoping Pdvsa will help curtail the reliance on Middle Eastern crude. The company that has emerged from the ashes of the strike that ended in February 2003 is nothing like the button-down, corporate-style company that in the 1990's was often the No. 1 provider of foreign oil to the United States.

Subject: At a crossroad From: Pete Weis To: All Date Posted: Sat, Jul 24, 2004 at 12:22:18 (EDT) Email Address: Not Provided Message: The period from late 2000 to June of 2003 saw an unprecedented 13 rate drops in 30 months by the Fed. Two-thousand-three was the economic stimulus goliath of the millenia - 3.9 trillion (when aprox. 1 trillion per annum had been the average of the late 90's) in mortgage originations to go along with a large tax cut package. Now that the tax cuts are history (rebates have been spent) and mortgage originations (while still at historical highs) have dropped significantly from 2003 and are trending downward, is the hoped for pick-up in capital spending materializing? If not, where are we headed from here? Auto sales have recently dropped significantly and retail in general flagged in June. Second quarter earnings have been generally disappointing and 2nd half guidance has been less than inspiring. Technical support levels for the 3 major indices are being or have been breached with 50 day moving averages having crossed below the 200 day moving averages. We've seen triple tops in all 3 indices with each succeeding top lower than the previous one. We've had higher volumes with decaying stock prices in the preceding 5 months which seems to be selling distribution by major stockholders (insiders, etc) - the market rally of 2003 saw an average 1.0-1.5b SPX volume per day vs 1.5-2.0b per day since the market peaks of February 2004. Small investors are encouraged to remain in the markets - being told the economy is 'booming' or we have a 'strong economy' with optimistic proclamations by our Fed Chairman. Some of us have posted about our concerns, to varying degrees, with regard to asset inflation - brought about by Fed actions. What would be the outcome to our fragile 'recovery' if both the stock markets together with the housing markets (especially where they have risen so steeply on the 2 coasts) begin to head downward? How would this impact consumption? In summary - is our record personal debt to go along with inflated assets about to grab us from behind or are we headed into a brighter economic future?

Subject: Stock Market Valuations From: Terri To: Pete Weis Date Posted: Sun, Jul 25, 2004 at 17:26:21 (EDT) Email Address: Not Provided Message: Why is it that after 3 awful stock market years, followed by a single good year, and 6 months of flatness, the S&P still have such a high price earning ration. Earnings are fine, but the price earnings ratio was about 20 on June 30. This puzzles me. Was the market so vastly over-priced as 2000 began, that in August 2004 the market can still seem pricy? Was this partly hidden by the use of options? Is the market fairly priced even now? Certainly we are nowhere near historical price-earning rations.

Subject: Re: Stock Market Valuations From: Pete Weis To: Terri Date Posted: Sun, Jul 25, 2004 at 21:24:26 (EDT) Email Address: Not Provided Message: The market PE still remains high because reported earnings have fallen along with stock prices. Much of the reported earnings of the late 90's thru 2000 turned out to be bogus. The question - how valid are today's earnings reports? Hopefully, at least more accurate to some degree than the were in 2000.

Subject: Re: Stock Market Valuations From: Terri To: Pete Weis Date Posted: Mon, Jul 26, 2004 at 13:23:09 (EDT) Email Address: Not Provided Message: I think you are right. Paul Krugman complained several times about the quality of earnings reports in the late 1990s. Price earning ratios were higher than we understood.

Subject: Profits and Stock Prices From: Terri To: Terri Date Posted: Sun, Jul 25, 2004 at 17:43:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/25/business/yourmoney/25port.html Companies' Profits Are Surging. Why Isn't the Market? By JONATHAN FUERBRINGER WHAT'S wrong with earnings growth of more than 20 percent? Apparently quite a lot. At the end of last week, profits for the companies in the Standard & Poor's 500-stock index were on course to turn in one of their best quarters in more than a decade. 'This is the best economy we've seen in years,'' said Jeffrey R. Immelt, chairman of General Electric, when the company reported strong earnings on July 9. A profits barometer watched by the Leuthold Group, a money management and research firm in Minneapolis, shows that second-quarter earnings for the companies that have reported so far are better than they have been since 1983. Despite all the good news, the stock market is near its low for the year. And it has been in a holding pattern - rising and falling in a tight range - since Feb. 12. As of Friday, the S.& P. 500 was 6.2 percent below its 2004 peak, and just 0.2 percent from its low. If earnings are so good, why has the market been stalled so long? Part of the answer is that the market has already built expectations of strong earnings into current prices. And history shows that even when earnings are strong, they don't necessarily translate into higher prices. That is especially true when investors have other things to worry them, as they do now - including rising inflation, high oil prices, terrorism and the presidential election. One example was in 1994, when the S.& P. declined 1.54 percent despite an increase in operating earnings for its 500 companies of 16.4 percent. In February that year, Federal Reserve policy makers began a series of rate increases that doubled their benchmark interest rate, to 6 percent. Of course, just last month, the Fed began what is expected to be a cycle of interest rate increases. Rising rates, in themselves, trouble the market, but the state of the economy is also worrisome. Economic data show that the economy and job creation slowed last month. And although Alan Greenspan, the Fed chairman, said last week that this slowdown should be short-lived, many investors may wait and see until the outlook is clear. Then there are the earnings numbers. A closer look shows why the market hasn't been all that impressed. So far, 260 companies in the S.& P. 500 have reported earnings for the second quarter. Based on those reports and on forecasts for the remainder, profits for all companies in the index are expected to be up 24 percent, compared with the second quarter a year ago, according to Thomson First Call. But companies are no longer beating expectations the way they have since the beginning of 2003. Over the last 10 years, the average earnings surprise for the S.& P. 500 companies - the amount by which actual earnings exceed or trail the consensus forecast on Wall Street - has been a positive 3 percent. So far in the second quarter, profits are doing better than that, with an average surprise of 4.1 percent. Yet that is well below the 7.9 percent average surprise of the first quarter, and lower than in all four quarters of 2003. What's worse, corporate expectations for future earnings are not as positive as they have been in the past. Over the 50 days through Thursday, the number of companies giving positive guidance to analysts about future earnings was down to a net of 19, according to Biriyni Associates, a research firm in Westport, Conn. That compares with a net of 77 in the middle of May. Microsoft, which surprised investors with its one-time $3-a-share dividend on Tuesday, disappointed them Thursday with a cautious view of future sales, saying growth could be 5 percent or less over the next year. Although Microsoft is known for overly cautious forecasts, its stock plunged 3.3 percent on Friday, wiping out the gains from the dividend announcement.

Subject: Re: At a crossroad From: yaw_keanhuat To: Pete Weis Date Posted: Sat, Jul 24, 2004 at 13:18:04 (EDT) Email Address: yaw_keanhuat@yahoo.com Message: Economic BOOMING ..... ??? This is basically not true, economy is not really moving in a quantum paste as been posted by Fed Chairman. Basically when we view the economy of a country we have to look at the fundamentals and not by technical reviews. TEchnical reviews are more toward speculation and public perception. Most of the investors prefer to look at technical point of view and this have led to a fague belive that our so called economy is BOOMING . Alan Greenspan has to say the ECONOMY IS MOVING foward since he is responsible to lead American Economy into recovery. But looking into the disappointing 2 Quater or the year , it clearly shown to us that we are not moving into the direction where we ought to move. Somethimes it is pretty hard, to maneuvered the economy . With the paste of economic Development in ASIA and other parts of the world , No wonder American economy is not doing quite well . It all proven to us that American economy could not be able to sustain itself .

Subject: Re: At a crossroad From: yaw_keanhuat To: Pete Weis Date Posted: Sat, Jul 24, 2004 at 13:18:04 (EDT) Email Address: yaw_keanhuat@yahoo.com Message: Economic BOOMING ..... ??? This is basically not true, economy is not really moving in a quantum paste as been posted by Fed Chairman. Basically when we view the economy of a country we have to look at the fundamentals and not by technical reviews. TEchnical reviews are more toward speculation and public perception. Most of the investors prefer to look at technical point of view and this have led to a fague belive that our so called economy is BOOMING . Alan Greenspan has to say the ECONOMY IS MOVING foward since he is responsible to lead American Economy into recovery. But looking into the disappointing 2 Quater or the year , it clearly shown to us that we are not moving into the direction where we ought to move. Somethimes it is pretty hard, to maneuvered the economy . With the paste of economic Development in ASIA and other parts of the world , No wonder American economy is not doing quite well . It all proven to us that American economy could not be able to sustain itself .

Subject: Wandering a Path From: Terri To: yaw_keanhuat Date Posted: Sat, Jul 24, 2004 at 13:54:14 (EDT) Email Address: Not Provided Message: There is no reason to believe the American economy is at a crossroad. We are 290 million and rich in productivity and human and other basic resources. We have immense reserves. The American economy changes but in subtle ways, not in spurts and terrible reversals. Though I agree the economy could be far stronger, problems will emerge slowly and there is much time to correct them.

Subject: Re: Wandering a Path From: Pete Weis To: Terri Date Posted: Sat, Jul 24, 2004 at 16:50:21 (EDT) Email Address: Not Provided Message: Terri. Our past doesn't really reflect an economy which changes in 'subtle ways' does it? What was subtle about the 1930's and 1970's? What was subtle about the booms and busts of the 1800's (the world depressions of the 1820's and 1870's). And how much of our 'wealth' is built on debt? Our productivity doesn't measure up very well when compared to our debt. Didn't we have much greater natural resources in the early 30's (large productive oil reserves and the world's best steel production) and much less competition from foreign human resources in the 30's on a wage based comparison than we have now? Yet all that didn't help us avoid the very 'unsubtle' business/economic cycle which brought on the Great Depression. Without fail whenever we get these cyclical booms we get the equal bust that inevitably follows - Buffet said a year or two ago, 'unfortunately the bust will be equivalent to the boom'. The major question here - why would this time be any different than the past? The standard answer seems to be that this time will be different because world governments and central banks will take effective steps to prevent a repete of the past. But have they and will they? We haven't been able to stop armed conflict around the world - have we really learned to stop economic crisis? Aren't they both a problem of reigning in destructive human behavior - the kind of behavior which results in corporate and financial leaders making illegal to unethical to imprudent decisions and entices consumers into taking on much more debt than they are able to handle? Why is this time different?

Subject: Re: Wandering a Path From: Terri To: Pete Weis Date Posted: Sun, Jul 25, 2004 at 14:14:20 (EDT) Email Address: Not Provided Message: Debt, both governmental and private, is a problem. What I do not see is a shapr break in international investors willingness to hold American debt or in a jump in saving by America's households. The baby boomers have a ways to go to retirement. There is time, and there is no special level of debt that is impossible. We have time, and resources in policy to begin to correct the debt accumulation.

Subject: Re: Wandering a Path From: Terri To: Terri Date Posted: Sun, Jul 25, 2004 at 14:53:34 (EDT) Email Address: Not Provided Message: Using macro-economic data to determine whether to buy or sell stocks, is using far too blunt a tool.

Subject: Stock Markets From: Terri To: Terri Date Posted: Sat, Jul 24, 2004 at 16:46:19 (EDT) Email Address: Not Provided Message: Most of the major world stock market indexes are close to zero for the year, but that means the market has grown cheaper in 8 months. I think value stock indexes are a decent asset to hold at such times. Bonds are expensive, growth stocks are proportionately expensive, real estate is expensive. So a conservative stock portfolio makes sense to me.

Subject: Re: Stock Markets From: Pete Weis To: Terri Date Posted: Sat, Jul 24, 2004 at 17:16:32 (EDT) Email Address: Not Provided Message: The markets may be 'cheaper in the last 8 months', but I gaurantee the S&P is not cheap. Terri. Here's something you should absolutely do before making your mind up about staying in this stock market. Hopefully you have already done it - it's something every investor should do - but few, if any do it. Even if you are in an index fund you should do it. Go into Yahoo finance (there are a number of sites including brokerage sites which track this). Enter the ticker symbols for each of your stocks. Click on 'insider transactions' and take a look at how much selling vs acquisition of the stock is taking place by corporate insiders and keep tracking it. Go back in time to track changes in selling vs acquisitions. If you own an S&P index fund start tracking a sampling of S&P stocks. Some will tell you that insiders are always selling stocks, but remember when insider selling really starts to ramp upward its not a good sign. Often they are selling heavily (as has been the case in the last year) even as small investors are buying heavily while hearing rosey predictions by the very same corporate execs. If corporate insiders don't believe their stock is cheap and likely going upward in the future, why should you?

Subject: Stock Markets From: Terri To: Pete Weis Date Posted: Sun, Jul 25, 2004 at 14:09:59 (EDT) Email Address: Not Provided Message: Pete I try not to think like a market timer. Timing costs money, and takes a bit of fortune telling. What I try to do is to find what is relatively cheap in the market and invest in that direction. I use indexes quite a bit, but indexes can be tailored to what is most reasonably priced. Right now I have trouble worrying about large value stocks or large drug and medical equipment company stocks. I attend to all the cautions, but I have no losses this year while the market has cheapened. I can be patient. Again, bonds offer little prospect of return.

Subject: Stocks From: Terri To: Terri Date Posted: Sun, Jul 25, 2004 at 14:50:20 (EDT) Email Address: Not Provided Message: What reasons could there be not to use a collection of large drug companies and banks to anchor a portfolio now? Suppose, just drugs? I can not believe that Vanguard health care fund will not beat bonds over the coming 5 years. The American banking industry is expressly protected by the Federal Reserve, and not likely to find itself in a 5 year decline.

Subject: Re: Stocks From: Pete Weis To: Terri Date Posted: Sun, Jul 25, 2004 at 21:10:20 (EDT) Email Address: Not Provided Message: Banks have clearly profited from the dropping Fed rate and the unprecedented borrowing that ensued. But you would expect their business and hence profits to slow in a rising interest rate environment. In addition Buffet has pointed to the mountains of interest rate derivative contracts (in the trillions) which he referred to as 'weapons of financial destruction'. When Berkshire-Hathaway purchased General RE Insurance Corp, he got a detailed look at the convoluted nature of these contracts and the vulnerability of counterparties if one major player were to fail. He stated his belief that banking execs 'didn't understand the risk involved'. Stephen Roach and others have talked about the 'moral hazard' to financial institutions if real estate were to decline since so much equity has been drained out of the market. Furthermore, if you have been following the trials and tribulations of Fannie-Mae and Freddie-Mac you are aware of the dangers presented to the economy and financial institutions (who are linked through these derivative contracts) by these two GSE's. On the surface, large drug companies would seem to be a good bet - aging population, etc. As long as Republicans have remained in control their profits have been very good since there is no pressure to put some sought of price controls on drugs. In fact recent legislation put the responsibility of covering rising drug costs on the backs of the US taxpayer - this seemed to reduce anger from senior citizens and provided a lot of comfort for the big drug companies. But if democrats win big in November, I think drug stocks will take a hit and there may be some price controls coming down the pike, especially if the budget deficit continues to balloon. And lastly but most importantly - by staying in 'value' stocks you are betting the bear market has reached a bottom. In a broad market selloff all stocks fall - the good with the bad. Major bear markets always overshoot on the way down (and never end at 20x earnings) - just as major bull markets always overshoot on the way up. If you can find one example to the contrary in the last 200 years of market history, I stand corrected. This bear market will not end until PE's are well below 10 as they were in the 30's and as they were in the 70's - at that point 80% or more of present day small investors will be out of the market and will likely never get back in and large investors like Buffet will cherry pick the bargains (profitable companies which pay high dividends). I know that very few others see it this way, but I guess I'm just one of those oddball types.

Subject: Re: Stocks From: Terri To: Pete Weis Date Posted: Mon, Jul 26, 2004 at 12:56:59 (EDT) Email Address: Not Provided Message: Counting on a bear market is an awful way to invest, for you are assuming the Federal Reserve and Treasury will lose control. I prefer to be cautious at this time, but remain fully invested. I am not the least worried about a Democratic administration having an adverse effect on health care stocks. Durgs companies do just fine in France and Sweden and Germany and Japan and Canada. The only need is to find value in stocks, not to time the market by counting on end of the world scenarios. But, this is a friendly comment for you do argue well and I always learn from you. I am happily fully invested however.

Subject: Re: Stocks From: Pete Weis To: Terri Date Posted: Mon, Jul 26, 2004 at 15:15:03 (EDT) Email Address: Not Provided Message: What 'control' has the Federal Reserve over the stock markets? For that matter, what positive influence does and will the Federal Reserve have on the economy or the markets going forward when they can no longer drop interest rates (in fact, they are likely headed higher)? The Federal Reserve's influence is now basically over. The economy must now come around on its own. Alan Greenspan's role has now been reduced to chief cheerleader.

Subject: Re: Stocks From: El Gringo To: Pete Weis Date Posted: Mon, Jul 26, 2004 at 19:23:39 (EDT) Email Address: nma@hotmail.com Message: 'Making your way in the world today takes everything you've got. Taking a break from all your worries, sure would help a lot. Wouldn't you like to get away? Sometimes you want to go, where everybody knows your name, and they're always glad you came. You wanna be where you can see, our troubles are all the same You wanna be where everybody knows your name. You wanna go where people know, people are all the same, You wanna go where everybody knows your name. You want to go where people know, people are all the same; You want to go where everybody knows your name.'

Subject: Interest Rates From: Terri To: Pete Weis Date Posted: Mon, Jul 26, 2004 at 16:29:59 (EDT) Email Address: Not Provided Message: Pete Interest rates have risen slowly since June 2003. If the economt continues to grow at a fair rate, rates will almost surely continue to climb. But, there is the 'if.' The Fed could easily quicken or slow or stop rate changes depending on economic strength. Fed influence continues as far as I can tell. Similarly there is room for Treasury action on currency should that be a concern, and the mix of fiscal policy can be adjusted.

Subject: Re: Stocks From: johnny5 To: Pete Weis Date Posted: Mon, Jul 26, 2004 at 05:31:52 (EDT) Email Address: Not Provided Message: I agree wtih you. Ok so where do we Invest? Brendan said in Ireland you can get a GAURANTEED 25% SSAI investment - how does an american get a piece of that action?

Subject: Ireland From: Terri To: johnny5 Date Posted: Mon, Jul 26, 2004 at 11:54:53 (EDT) Email Address: Not Provided Message: I would put 100% of my assets in such an investment. What an astonishing opportunity.

Subject: Re: Ireland From: johnny5 To: Terri Date Posted: Mon, Jul 26, 2004 at 16:54:31 (EDT) Email Address: Not Provided Message: Brendan did, its a few messages down on this Board, why dont' you do some research and ask some pro's about this 25% gauranteed SSAI account in Ireland and lets find out how we all can make some money.

Subject: Saving in Ireland From: Terri To: johnny5 Date Posted: Mon, Jul 26, 2004 at 17:20:37 (EDT) Email Address: Not Provided Message: http://www.oasis.gov.ie/personal_finance/government_savings_scheme.html Government Special Savings Incentive Scheme The Irish government's Special Savings Incentive Scheme commenced on 1 May 2001. To participate in the scheme, savings accounts (called 'special savings incentive accounts' or 'SSIAs') had to be opened before 30 April 2002. Under the terms of this scheme, for every amount saved in a special account, an additional 25% will be contributed by the exchequer to your savings. So, for every 4 euro you save each month, you will get 1 euro. The cash will be credited each month directly to your savings account. You can put your money into any institution approved for the purpose of the scheme such as banks, building societies, credit unions, life assurance companies etc. You must have signed up to save an amount each month and to benefit fully from the scheme you must leave your savings in the special savings account for a period of five years. The exchequer contribution of 25% applies for a period of five years. Income or gains from the savings investment will be taxed at 23% and this will be deducted by the participating financial institutions at the end of five years. Where that is the case, only the income or gains generated by the investment of moneys lodged in the account will be liable for tax at 23%. This tax will be deducted at the end of the five year period whether the funds are withdrawn from savings or not at that point. However, if there is an earlier withdrawal from an account (other than on death), the full amount withdrawn (both the savings and investment return) will suffer tax at 23%.

Subject: Re: Saving in Ireland From: Terri To: Terri Date Posted: Mon, Jul 26, 2004 at 17:23:05 (EDT) Email Address: Not Provided Message: You had to be a resident of Ireland at the beginning of the special saving program and for the 5 following years.

Subject: Re: Saving in Ireland From: johnny5 To: Terri Date Posted: Tues, Jul 27, 2004 at 04:19:50 (EDT) Email Address: Not Provided Message: Thanks for the Info, I do have some friends In ireland, if I had known about this sooner I could have given them some money to invest for me in thier name :-( Man WHAT A DEAL! How can ireland afford to do this?

Subject: Wow From: Terri To: johnny5 Date Posted: Tues, Jul 27, 2004 at 14:20:30 (EDT) Email Address: Not Provided Message: Darned if I know, how Ireland could have given such a deal. Of course, it helped keep people in Ireland and sure must have encouraged saving. Wow.

Subject: SSAI From: Terri To: johnny5 Date Posted: Mon, Jul 26, 2004 at 17:13:49 (EDT) Email Address: Not Provided Message: I simply can not find information on an SSAI Saving Plan in Ireland. Google has not led to the program.

Subject: Worried ... From: yaw_keanhuat To: Pete Weis Date Posted: Sat, Jul 24, 2004 at 19:42:14 (EDT) Email Address: Not Provided Message: It is pretty obvious that the American Economy is built on debts. If our nations do not show a positive outlook in our economy , this will surely bring a negative impression in the Dollar as well. According to Bloomberg Radio, Forex trader are selling OFF US dollar. Am i hearing this WRONG ??? can someone correct me on this issue ???

Subject: Re: Worried ... From: Terri To: yaw_keanhuat Date Posted: Sun, Jul 25, 2004 at 15:36:15 (EDT) Email Address: Not Provided Message: The dollar has declined in value slowly these last 3 years. As the dollar declines, American companies become more competitive internationally. So, it is not clear to me that an orderly decline in the value of dollar will be much of a problem. A sharp decline in the value of the dollar is not soon likely, for it would take large scale unwillingness by international traders to hold American debt. Internatianal traders will not wish to limit their largest market.

Subject: Re: Fuzzy Math? From: El Gringo To: yaw_keanhuat Date Posted: Sat, Jul 24, 2004 at 20:39:16 (EDT) Email Address: nma@hotmail.com Message: 'The usual working assumption in cost-benefit analysis is that all such redistributions taken together net out.Everyone is a producer of something and a consumer of something else, so that what one individual loses as a consumer he or she gains back as a producer (win-lose;lose-win situation in MICROeconomics);in any case income redistribution is accomplished to at least some degree by existing TAXATION and SOCial insurance policies.So, as a first approximation, it is usual to argue that the economist's job is to focus on the costs and benefits that are not pure redistributions from one group to another.In the case of a tariff, this means that the cost is measured by the net loss that results from production and consumption distorsions.One of them compares this net loss with whatever objective the tariff is supposed to serve and asks whether the benefits exceed the costs.'

Subject: Compressed Air to fix Mid East From: johnny5 To: All Date Posted: Sat, Jul 24, 2004 at 10:05:17 (EDT) Email Address: Not Provided Message: http://www.theaircar.com/ Compressed Air - is this how we fix our OIL problems in the middle east? Please comment if you know of better technologies that can be implemented as fast.

Subject: Re: A wolf in sheep's clothing From: El Gringo To: johnny5 Date Posted: Mon, Jul 26, 2004 at 08:14:06 (EDT) Email Address: nma@hotmail.com Message: http://www.vwvortex.com/artman/publish/article_319.shtml

Subject: Re: A wolf in sheep's clothing From: johnny5 To: El Gringo Date Posted: Mon, Jul 26, 2004 at 16:51:55 (EDT) Email Address: Not Provided Message: It still uses Gas doesn't it?

Subject: Re: A wolf in sheep's clothing From: El Gringo To: johnny5 Date Posted: Mon, Jul 26, 2004 at 17:58:49 (EDT) Email Address: nma@hotmail.com Message: Sure it does

Subject: How do we fix this Emma? From: johnny5 To: All Date Posted: Sat, Jul 24, 2004 at 10:00:58 (EDT) Email Address: Not Provided Message: Crime doesn't pay - except for CEOs http://www.stpetetimes.com/2004/07/24/Business/Crime_doesn_t_pay___e.shtml www.stpetetimes.com/2004/07/24/Business/Crime_doesn_t_pay___e.shtml

Subject: Independent Directors From: Emma To: johnny5 Date Posted: Sat, Jul 24, 2004 at 15:34:30 (EDT) Email Address: Not Provided Message: Get boards of directors that are more independent of management and represent shareholder interests. Tricky. Get mutual funds who are large large corporate owners to vote shares for all of us.

Subject: Re: Independent Directors From: El Gringo To: Emma Date Posted: Sat, Jul 24, 2004 at 21:58:35 (EDT) Email Address: nma@hotmail.com Message: Dear Emma, what is your definition of 'more independent'?

Subject: Re: Independent Directors From: Emma To: El Gringo Date Posted: Sun, Jul 25, 2004 at 12:31:48 (EDT) Email Address: Not Provided Message: Corporate boards need directors who are not simply nominated by management, and so beholden to management. Directors should represent shareholders, labor, the community where location is centered. But, simply representing shareholders will be a significant improvement.

Subject: European Consumers From: Emma To: All Date Posted: Fri, Jul 23, 2004 at 13:43:26 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/23/business/worldbusiness/23euro.html?pagewanted=all&position= The Struggle to Get Europeans to Do Their Duty and Spend By NICOLA CLARK COLOGNE, Germany - Anna Ficon spent a couple of hours on a recent Saturday afternoon dodging intermittent showers and trolling the stores on Cologne's busy Hohestrasse for a pair of summer shoes. There was a pair of white sandals for 50 euros, or about $60. But, even in summer sale season, they had not been marked down. So the 47-year-old preschool teacher did not buy them. Four years of sluggish growth and high unemployment in Germany, she said, had persuaded her to be more frugal. 'I rarely buy new clothes anymore,'' she said. 'And when I do, I stay away from the latest fashion and look for things that I can wear for a few years.'' Across Europe, many people share her apprehension. The feeling has crimped consumer spending and helped to hold down overall growth, even as figures suggest that other components of the region's economy - notably exports - are on the upswing. 'The thing that is most disturbing is that as the economy has started to pick up, you haven't had a similar pickup in demand,'' said Michael Hume, an economist at Lehman Brothers International in London. Marlene Kaldenbach, 52, a part-time saleswoman from Krefeld, about 30 miles north of Cologne, sees this hesitation regularly, despite longer shopping hours and other consumer incentives introduced by the German government. 'When people don't have the euros, they don't go shopping,'' she said. In the United States, and increasingly in Britain, the average shopper might pull out a Visa or MasterCard to buy the sandals. Perhaps the debt would be consolidated under a personal loan, through a mortgage - far more widespread in Britain or America than on the Continent - or any number of financing techniques that make it easier to spend more money than one has in the bank. But people like Ms. Ficon are shaped by a cultural predisposition to save, a tendency augmented in Germany by memories and stories of hyperinflation in the Weimar era between the two world wars. European savings rates are among the highest in the world. In the euro zone, made up of Germany and 11 other countries, annual household savings as a percentage of disposable income average about 12 percent, about double the rate in Britain and Japan; Americans save a little more than 2 percent. Ms. Ficon said she had never bought on credit. 'I know how much income I have, and it will be the same next month as this month,'' she said. 'If I can't afford something today, I can't see how I will later.'' Norbert Walter, chief economist at Deutsche Bank in Frankfurt, said in the United States, 'the share of people prepared to take risks is higher.'' 'There was a very specific selection of the kind of people who emigrated to America,' Mr. Walter said. 'All the risk-takers left, and the risk-averse people have stayed.''

Subject: Re: European Consumers From: yaw_keanhuat To: Emma Date Posted: Sat, Jul 24, 2004 at 12:46:19 (EDT) Email Address: yaw_keanhuat@yahoo.com Message: REgarding this post , it seems to me that Consumers do not have much confident towards the uncertain future for the economy . The question we should ask ourselves is WHY is this so ?? Basically i think , most of the consumer are very cautious with the spending these days , Although you can see some minor recovery in certain industrial sector this must not take into the account of Macroscopic view. In Asia , I can observe most ot the consumers love going shopping but we are more into WINDOW SHOPPING. We tend to have this reluctant to spend unlike the good old days. I still remember i used to one pair of shoe every two months but now it took me 1 year just to buy a pair of shoe. To me i rather save some portion of my money for rainy days. I do not think our economy is really doing well , the Earning reports for 2 Quater of the year clearly shows that there is no growth in the economy. When things are bad , employment layoff is very keen to happen and this may lead contraction in consumer spending

Subject: www.aei.org State of the Eco on C-Span From: johnny5 To: All Date Posted: Fri, Jul 23, 2004 at 11:16:50 (EDT) Email Address: Not Provided Message: http://inside.c-spanarchives.org:8080/cspan/cspan.csp?command=dprogram&record=179256744 Rational Exuberance American Enterprise Institute Washington, District of Columbia (United States) ID: 182843 - 07/23/2004 - 1:30 - No Sale Hubbard, Glenn, Professor, Columbia University, Economics Hassett, Kevin A., Director, American Enterprise Institute, Economic Policy Studies http://www.amazon.com/exec/obidos/tg/detail/-/0060580496/qid=1090590353/sr=8-1/ref=pd_ka_1/103-6115621-1851018?v=glance&s=books&n=507846 I just watched this special on CSPAN - Michael Mandel just came down HARD on Paul Krugman saying he does not understand INNOVATION economies and still lives in the old world paradigms - he claimed Paul Krugman made a quote that Air Conditionaing was more important than the Internet to our economy and this is why Paul Krugman is a fool - is this true? Did Paul make this quote?

Subject: Bashers From: Terri To: johnny5 Date Posted: Fri, Jul 23, 2004 at 12:15:54 (EDT) Email Address: Not Provided Message: Without air conditioning imagine Los Angeles or Austin or Houston or Las Vegas or Atlanta or even New York City. Bashers of Paul Krugman are soory sorts.

Subject: Re: Future Thought... From: El Gringo To: Terri Date Posted: Fri, Jul 23, 2004 at 13:57:20 (EDT) Email Address: nma@hotmail.com Message: 'By 2005...' http://www.pkarchive.org/cranks/economics.html

Subject: Re: Future Thought... From: johnny5 To: El Gringo Date Posted: Sat, Jul 24, 2004 at 00:30:35 (EDT) Email Address: Not Provided Message: Thanks, I had never clicked on the Cranks tab - very informative, I have invested in a gold stocks mutual fund - Krugman says we are going to see energy shocks in the future like the 70's, assuming this to be true, where is the best place to buy energy? Oil future's? exxon mobil stock?? Energy index? the GOld stocks mutual fund did good last year, but I have took a bad beating the past few months.

Subject: Careful From: Terri To: johnny5 Date Posted: Sat, Jul 24, 2004 at 14:03:34 (EDT) Email Address: Not Provided Message: Gold has been a timer's investment for a century. Long term it has been a terrible investment, unless you own a mine.

Subject: Re: Future Thought... From: yaw_keanhuat To: johnny5 Date Posted: Sat, Jul 24, 2004 at 07:56:15 (EDT) Email Address: yaw_keanhuat@yahoo.com Message: First of all let me make a few remark regarding Energy Stocks . From the market outlook Energy stocks is overprice now. It is not worth investing in Energy stocks seeming that you will add risk rather than value to your portfolio. Recently from statistic, Earning reports shows that small Cap stocks are better perform compared to Large Cap stocks. The half cycle for this year would be a rocky ride as most of the company reports earning which is below their Earning Expecttation. For now , i would suggest most of the investor to invest in small Cap especially consumer stocks which can bring a better prospect. DO avoid technological stocks for the time being seeming that tech stock is currently overvalue at the moment The fed has raise a quater points in order to curb inflation recently , do you think it is wise to do so ??? First of all i dont think American Industry is ready for that : my reason is , a)Unemployment rate is still very high b) World Economy is not really doing well , and by appreciating the dollar this will surely make the american industry not competitive in the world market c) too early to increase the fed rate will bring in economic downturn because Ameriacan industry especially the Technology companies are just recuperating . The growth has just began and government needs to surport them . Just look at the inventories for INTEL , it is high due to growth .

Subject: Re: Future Thought... From: johnny5 To: yaw_keanhuat Date Posted: Sat, Jul 24, 2004 at 10:00:12 (EDT) Email Address: Not Provided Message: I am not Alan Greenspan, I am invested in I Bonds and Gold Stocks Mutual Funds, so I do WANT interest rates going higher, however I agree from a macro perspective, we might need to give things a little more time to rebound. He can always raise rates later very quickly if he has too.

Subject: The Lion's Share regarding Emma's Post From: johnny5 To: All Date Posted: Thurs, Jul 22, 2004 at 21:28:07 (EDT) Email Address: johnny5@yahoo.com Message: I think Emma hit it on the head with her post about management and shareholders getting the more of the lions share with golden parachutes and stock options and shareholders with dividends - but who did the REAL lions share of the work? http://www.pacificnet.net/~johnr/cgi/aesop1.cgi?sel&TheLionsShare The Lion's Share The Lion went once a-hunting along with the Fox, the Jackal, and the Wolf. They hunted and they hunted till at last they surprised a Stag, and soon took its life. Then came the question how the spoil should be divided. 'Quarter me this Stag,' roared the Lion; so the other animals skinned it and cut it into four parts. Then the Lion took his stand in front of the carcass and pronounced judgment: The first quarter is for me in my capacity as King of Beasts; the second is mine as arbiter; another share comes to me for my part in the chase; and as for the fourth quarter, well, as for that, I should like to see which of you will dare to lay a paw upon it.' 'Humph,' grumbled the Fox as he walked away with his tail between his legs; but he spoke in a low growl. 'You may share the labours of the great, but you will not share the spoil.'

Subject: More Jobs, Worse Work From: Emma To: johnny5 Date Posted: Fri, Jul 23, 2004 at 12:41:06 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/22/opinion/22roac.html?pagewanted=all&position= July 22, 2004 More Jobs, Worse Work By STEPHEN S. ROACH he state of the American labor market remains the defining issue of the current economic debate. Through February, the United States was mired in the depths of the worst jobless recovery of the post-World War II era. Now, there are signs the magic may be back. More than a million jobs have been added to total nonfarm payrolls over the past four months, the sharpest increase since early 2000. These gains certainly compare favorably with the net loss of 594,000 jobs in the first 27 months of this recovery. But there's little cause for celebration: the increases barely make a dent in the weakest hiring cycle in modern history. From the trough of the last recession in November 2001 through last month, private sector payrolls have risen a paltry 0.2 percent. This stands in contrast to the nearly 7.5 percent increase recorded, on average, over the comparable 31-month interval of the six preceding recoveries. Nor is there much reason to celebrate the type of jobs that have been created over the past four months. In general, they have been at the lower end of the economic spectrum. By industry, the leading sources of hiring turn out to be restaurants, temporary hiring agencies and building services. These three categories, which make up only 9.7 percent of total nonfarm payrolls, accounted for 25 percent of the cumulative growth in overall hiring from March to June. Hiring has also accelerated at clothing stores, courier services, hotels, grocery stores, trucking businesses, hospitals, social work agencies, business support companies and providers of personal and laundry services. This group, which makes up 12 percent of the nonfarm work force, accounted for 19 percent of the total growth in business payrolls over the past four months. That's not to say there hasn't been any improvement at the upper end of the labor market, with the construction industry leading the way. At the same time, there has been increased hiring in several of the higher-end professions: there is more demand for lawyers, architects, engineers, computer scientists and bankers. Manufacturing, however, has continued to lag. Putting these pieces together, there can be no mistaking the unusual bifurcation of the recent improvement in the American labor market. Lower-end industries, which employ 22 percent of the work force, accounted for 44 percent of new hiring from March to June. Higher-end industries, which make up 24 percent of overall employment, accounted for 29 percent of total job growth over the past four months. In short, jobs are growing at both ends of the spectrum, but the low-paying jobs are growing much more quickly. The contribution of low-end industries to the recent pick-up in hiring has been almost double the share attributable to high-end industries. An equally dramatic picture emerges from the survey of American households. According to the Bureau of Labor Statistics, the total count of persons at work part time - both for economic and non-economic reasons - increased by 495,000 from March to June. That amounts to an astonishing 97 percent of the cumulative increase of the total growth in employment measured by the household survey over this period. By this measure, as the hiring dynamic has shifted gears in recent months, the bulk of the benefits have all but escaped America's full-time work force.

Subject: Re: The Lion's Share regarding Emma's Post From: johnny5 To: johnny5 Date Posted: Fri, Jul 23, 2004 at 05:42:29 (EDT) Email Address: Not Provided Message: Hey Emma, How bout doing some research for all us members of the group - take the dow 30 of 1970 and the dow 30 of 2004 - what was the division of income of the multicorps profit back then between worker, shareholder, and management - compared to what it is today? I want to believe that workers got more of the pie back then, and today they are getting less - but I could be wrong. The population shock of the baby boom made more workers back then than owners probably, that trend is reversing though, as the baby boomers age, they are holding more shares and working less - so in the past where there were more workers to shareholders - that is changing perhaps with the population shock of the babyboomers.

Subject: Re: The Lion's Share regarding Emma's Post From: Econochick To: johnny5 Date Posted: Fri, Jul 23, 2004 at 09:45:03 (EDT) Email Address: Not Provided Message: Johnny, I don't know the answer to your question but I would think it's just the opposite. The savings rate (read: investment rate) has been declining a lot, starting with the baby boomers. However, the number of hours we spend at work has been increasing since the 1950's. So, if we spend more time working and invest less, then that would mean that just the opposite. Also, 'labour' and 'shareholder' are not mutually exclusive. You can (and should) be both. As a very simplistic example: if you are a worker and your wage is cut to increase profit, that profit goes to the shareholders. If you, the worker, are also a shareholder of the same company, then you can pick up the loss in wages through an increase in capital gains on your stock (which is taxed at a lower rate than income anyway).

Subject: Re: The Lion's Share regarding Emma's Post From: johnny5 To: Econochick Date Posted: Fri, Jul 23, 2004 at 11:08:33 (EDT) Email Address: Not Provided Message: But when the baby boomers retire and stop buying all these new cars and biggers houses, but instead start taking the bus or walking to the senior centre from their mobile home they will be relying far more on thier stocks than on thier income right? So this population bubble we have let come through our economy is going to concentrate more power in owners when they retire, more power away from workers, and the retired babyboomers will want good managers. Now after the babyboomers die and let go of all those shares and that power, it will go back to the workers right?

Subject: Re: The Lion's Share regarding Emma's Post From: Econochick To: johnny5 Date Posted: Fri, Jul 23, 2004 at 13:04:33 (EDT) Email Address: Not Provided Message: Not necessarily, Johnny. If a company has to pay workers more wages per worker, it will compensate by hiring fewer workers and unemployment will increase. I'm not sure what you mean by the power of the workers. Wage earners are sort of always at the mercy of owners investing to create the jobs that workers take in ther first place. So, if workers demand so much that it's not worth it for the company to continue to operate, then the owners just close down the company and the workers are unemployed. Now, the reality is that most of us are not entrepeneurs, so our bread and butter is a wage. But even if we are wage earners (workers) we can invest a portion of our earnings and reap the benefits of an owner AND a wage earner. So, as I said before, I think you're trying to make the two things mutualy exclusive and they're not. If you are a wage earner and all of the baby boomers are retired, then you still have the same goals as they do (good management) because you want 1.) more jobs and 2.) your investment returns to be high.

Subject: Re: The Lion's Share regarding Emma's Post From: johnny5 To: johnny5 Date Posted: Fri, Jul 23, 2004 at 11:12:47 (EDT) Email Address: Not Provided Message: I meant to say the current workers wage income will become less and less as they retire or slow down and thier stock income more and more, and thier stock income will be all they have left - the baby boomers will have nothing else - so many more people will own stocks, the current workers replacing the baby boomers cant earn enough to buy the stocks away from the retirees - there seems to be less and less workers owning company stock than there used to be right?

Subject: Job Creation in Leeds From: Emma To: All Date Posted: Thurs, Jul 22, 2004 at 17:57:32 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/22/business/worldbusiness/22euro.html?pagewanted=all&position= Amid Aging Smokestacks, Job Creation By ERIC PFANNER LEEDS, England - Amid the idled assembly lines in gritty North England, Hydro Aluminium Motorcast's factory was one of the holdouts. But in June, Norsk Hydro of Norway, the parent company, joined the crowd and announced that this plant, too, would close - unable to compete with the cheaper costs of doing business nearly a thousand miles away, in Gyor, Hungary. In a region that has had to deal recently with the closing of the biggest remaining coal mine in England and a series of other industrial setbacks, the loss of 600 jobs at the Hydro Aluminium plant might have been expected to prompt complaints about unfair competition from the east. Such has been the case in France, Germany and elsewhere in the core of Europe, which started losing jobs to the Czech Republic, Poland and other lower-cost European economies even before they joined the European Union in 2004. But not so in Leeds, where the jobless rate has actually crept lower, to around 4 percent - the lowest in 30 years and less than half the average for the European Union. The bigger problem for Leeds these days seems to be how to find skilled workers for the research-and-development operations, new-media incubators, financial services centers and other businesses that are rising up amid the Victorian brick smokestacks. Faced with an outflow of traditional manufacturing jobs to the east, the Leeds area set out to forge innovative ways to even out the employment landscape. Instead of only complaining about unfair competition, the region moved aggressively to do something. Eventually, analysts say, Europe's larger economies may need to steer toward a similarly active approach to stay competitive. 'For families that have lost jobs - I wouldn't want to underplay that - it's a very unsettling thing,'' said Tom Riordan, director of strategy and policy at Yorkshire Forward, a regional development agency here. But, he says, retraining and other programs intended to improve skills of workers who might otherwise be jobless have helped ease the pain. In many parts of the Continent, unemployment remains chronically high, and competition from Eastern Europe is sometimes singled out as the culprit. Britain, with a flexible labor market and relatively low taxes, has had no trouble attracting foreign investment or creating jobs. Though it has lost three-quarters of a million manufacturing jobs since 1997, many of them to Eastern Europe, Britain has done better than most of its neighbors at replenishing its jobs pool. In the case of Leeds, small-focus initiatives have helped the region create 10,000 information technology jobs since the mid-1990's. Fran and Geoff Elliott of Leeds have seen the process work first-hand. In early 2003, Mr. Elliott lost his job as marketing manager at a press photography agency. Last July, as he was looking for work, Ms. Elliott was laid off. With the jobs went a combined annual income of Ł90,000, or $169,000, enough to sustain a comfortable life, and two horses for weekend rides in Yorkshire. 'It was one of those moments when you wonder what on earth you're doing,'' Ms. Elliott said. Instead of floundering, they decided to start a photo agency and digital photo library business, aided by a network of local and national support programs. They took advantage of a Ł60,000 loan guarantee from the Department of Trade and Industry. Perhaps more important, they were also able to tap financing from West Yorkshire Ventures, which paid for a strategic marketing consultant, invested Ł3,500 and helped support a student employee. The Elliott's company, Pic-Biz, opened in February and works with corporate public relations departments, among other clients. 'We've got an awful lot of risk,'' Ms. Elliott said, 'but, at the end of the day, an awful lot of support, too.'

Subject: Bond Funds From: Emma To: All Date Posted: Thurs, Jul 22, 2004 at 11:53:36 (EDT) Email Address: Not Provided Message: What is most important in a bond fund is 'duration.' Duration shows the change in price that will occur with a change in interest rates. So, a 2 year duration in a fund means a 2% change in price if rates change 1%. Vanguard has the finest bond funds, with durations that are fairly constant. An interest rate rise of 1% will lower the price of a short term Vanguard bond fund about 2%, because the durations are about 2 years. But, your interest return will climb. So, I find no danger of any significant loss in a Vanguard short term bond fund. A price decline is tax deductible, and the extra interest will quickly make up any share price loss. The funds are easily bought and sold. Short term corporate or GNMA at Vanguard are quite safe. This is not a pleasant market for bonds, but we make the best of it. GNMA has a longer duration than short term corporate but a higher interest yield.

Subject: Re: Bond Funds From: David E... To: Emma Date Posted: Thurs, Jul 22, 2004 at 15:39:08 (EDT) Email Address: Not Provided Message: Short term bonds funds are safe because you only have to hold them a short time before the principal is returned. Then the only loss suffered is the opportunity cost of lost interest. So don't use st bond funds for your car savings, if rates rise, you might not have enough money to buy the car.

Subject: Re: Bond Funds From: Terri To: David E... Date Posted: Thurs, Jul 22, 2004 at 18:43:12 (EDT) Email Address: Not Provided Message: David How do we get enough income from bonds funds with rates still so low? I can not imagine buying long term bonds.

Subject: Re: Bond Funds From: David E... To: Terri Date Posted: Fri, Jul 23, 2004 at 11:42:19 (EDT) Email Address: Not Provided Message: I use 'The informed investor' by Frank Armstrong. He recommends that individual investors stay away from intermediate and long term bonds. The reason is the interest rate risks assumed are not compensated by enough return. Maybe you should read his book and William Bernstein's 'Four Pillars of Investing'. They are easy reads and will get you on track. There actually is a body of knowledge on how to invest. And it doesnt look like what 'money' magazine and others are selling.

Subject: Re: Bond Funds From: Terri To: David E... Date Posted: Fri, Jul 23, 2004 at 12:43:18 (EDT) Email Address: Not Provided Message: Thanks David. What about a GNMA bond fund or a high yield corporate bond fund? Does the yield make up for the interest rate risk?

Subject: Re: Bond Funds From: David E... To: Terri Date Posted: Fri, Jul 23, 2004 at 14:18:28 (EDT) Email Address: Not Provided Message: No exceptions, just short term bonds. TIPS can be used, but I wouldnt buy them now because the real rate of return is small now. I am hanging out in TIPS bought at a real rate of return of 3.5% and Vanguard short term bonds. I have never analyzed intermediate and long term bonds to find out if what Armstrong says is true. Armstrong also says junk bonds return never matches the risks. Bottom line, the only choices left are foreign bonds and intermediate bonds that are almost short term bonds. To know if assets are good for your portfolio you need to calculate standard deviation (risk), return, and correlation to the rest of your portfolio. Maybe a closed end bond portfolio selling at a discount will work. I am looking, but so far it is hard.

Subject: Re: Bond Funds From: Terri To: David E... Date Posted: Fri, Jul 23, 2004 at 14:37:19 (EDT) Email Address: Not Provided Message: Well, I increasingly understand your thinking and agree. Though, the GNMA at Vanguard may be another useful answer. Stay in short term bonds till the 10 year treasury yield is at 5.5% or higher. Settle for lower returns than we wish. Look abroad for some income. I know what closed end funds are, but not how they would effect a portfolio.

Subject: Portfolio From: Terri To: Terri Date Posted: Fri, Jul 23, 2004 at 13:19:29 (EDT) Email Address: Not Provided Message: David, given a small stock position and low short term bond yields, how will your investments generate a decent return? How can you make 8% on a portfolio less than 50% in stocks and the rest in short term bonds?

Subject: Re: Bond Funds From: Emma To: David E... Date Posted: Thurs, Jul 22, 2004 at 17:23:45 (EDT) Email Address: Not Provided Message: My choice would not be a short term bond fund but intermediate corporate or tax free or GNMA or conservative high yield bond funds. But, I sure do think rates continue to rise from here for quite a while. Oh well.

Subject: Nope From: Econochick To: Emma Date Posted: Thurs, Jul 22, 2004 at 14:10:13 (EDT) Email Address: Not Provided Message: Convexity is far more important than duration. A duration calculation will be fairly accurate for an interest rate move of 100 basis points (1%) or less. However, because duration is a linear measure and bond returns are curvalinear, duration is pretty useless when interest rates change by more than 1%.

Subject: Yep From: Emma To: Econochick Date Posted: Thurs, Jul 22, 2004 at 14:20:37 (EDT) Email Address: Not Provided Message: All I am concerned with is understanding the volatility of Vanguard bond funds, and for this duration has always worked. Besides, I do not have convexity measures for the funds. But, I am content.

Subject: Convexity From: Econochick To: Emma Date Posted: Thurs, Jul 22, 2004 at 15:11:56 (EDT) Email Address: Not Provided Message: It's easy, Emma, and it gives you a much more accurate measure of vol. Here's the formula for you and anyone interested. V0 = Value of bond today V = Value of bond with a given increase in yield (in basis points) V- = Value of bond with same size decrease in yield (in basis points) all yield changes should be expressed in basis points (ex: 20 basis points is expressed as 0.002). [(V ) (V-)-(2*V0)]/[2V0*(change in yield^2)]

Subject: Re: Convexity From: Emma To: Econochick Date Posted: Thurs, Jul 22, 2004 at 15:31:35 (EDT) Email Address: Not Provided Message: Econochick Excellent for an individual bond, but how can this be used for a bond fund? This really is nice of you, but I found long ago I could not put together a set of bonds more cheaply and safely than Vanguard could. Funds are easy to sell, and I can also write checks on these bonds funds. Thank you so much.

Subject: Hmmm... From: Econochick To: Emma Date Posted: Thurs, Jul 22, 2004 at 16:15:12 (EDT) Email Address: Not Provided Message: Emma, I use duration not for volatility but for relative risk. A longer duration is generally more risky than a shorter duration. The problem with estimating the change in the price of the bond fund given a change in yield is that Duration (so, your example) only works up to 100 basis points. You're right - the calculation I gave you is for a single bond. Does Vanguard not give you the convexity of the fund? The fund would calculate it by measuring the convexity of each bond (which, of course, the managers do), and combining them in a weighted average convexity for the whole fund. You could use that number to measure the expected price change for the fund for ANY change in yield. That's the same thing they do to get the duration calculation. I wonder if they'd give you the convexity if you asked.

Subject: Re: Hmmm... From: Emma To: Econochick Date Posted: Thurs, Jul 22, 2004 at 17:06:06 (EDT) Email Address: Not Provided Message: Fine idea. You are completely right, and I will ask. This is an especially useful time to know, because we have to anticipate a bear market in bonds. This is the toughest bond market since 1982. No where down for rates, only up.

Subject: Would be nice... From: Econochick To: Emma Date Posted: Thurs, Jul 22, 2004 at 19:12:43 (EDT) Email Address: Not Provided Message: Yeah, it's a really good number to have. I bet they'll give it to you if you ask them for it - even if it's not published. Please post here if they give you the portfolio convexity.

Subject: George W Bush's cv From: setanta To: All Date Posted: Thurs, Jul 22, 2004 at 11:33:00 (EDT) Email Address: Not Provided Message: got this in an email recently, anything in there untrue? George W. Bush The White House, USA LAW ENFORCEMENT: I was arrested in Kennebunkport, Maine, in 1976 for driving under the influence of alcohol. I pled guilty, paid a fine, and had my driver's license suspended for 30 days. My Texas driving record has been 'lost' and is not available. MILITARY: I joined the Texas Air National Guard and went AWOL. I refused to take a drug test or answer any questions about my drug use. By joining the Texas Air National Guard, I was able to avoid combat duty in Vietnam. COLLEGE: I graduated from Yale University with a low C average. I was a cheerleader. PAST WORK EXPERIENCE: I ran for U.S. Congress and lost. I began my career in the oil business in Midland, Texas, in 1975. I bought an oil company, but couldn't find any oil in Texas. The company went bankrupt shortly after I sold all my stock. I bought the Texas Rangers baseball team in a sweetheart deal that took land using taxpayer money. With the help of my father and our right-wing friends in the oil industry(including Enron CEO Ken Lay), I was elected governor of Texas. ACCOMPLISHMENTS AS GOVERNOR OF TEXAS: I changed Texas pollution laws to favor power and oil companies, making Texas the most polluted state in the Union. During my tenure, Houston replaced Los Angeles as the most smog-ridden city in America. I cut taxes and bankrupted the Texas treasury to the tune of billions in borrowed money. I set the record for the most executions by any governor in American history. With the help of my brother, the governor of Florida, and my father's appointments to the Supreme Court,I became President after losing by over 500,000 votes. ACCOMPLISHMENTS AS PRESIDENT: I am the first President in U.S. history to enter office with a criminal record. I invaded and occupied two countries at a continuing cost of over one billion dollars per week. I spent the U.S. surplus and effectively bankrupted the U.S. Treasury. I shattered the record for the largest annual deficit in U.S. history. I set an economic record for most private bankruptcies filed in any 12-month period. I set the all-time record for most foreclosures in a 12-month period. I set the all-time record for the biggest drop in the history of the U.S. stock market. In my first year in office, over 2 million Americans lost their jobs and that trend continues every month. I'm proud that the members of my cabinet are the richest of any administration in U.S. history. My 'poorest millionaire,' Condoleeza Rice, has a Chevron oil tanker named after her. I set the record for most campaign fund-raising trips by a U.S. President. I am the all-time U.S. and world record-holder for receiving the most corporate campaign donations. My largest lifetime campaign contributor, and one of my best friends, Kenneth Lay, presided over the largest corporate bankruptcy fraud in U.S. History, Enron. My political party used Enron private jets and corporate attorneys to assure my success with the U.S. Supreme Court during my election decision. I have protected my friends at Enron and Halliburton against investigation or prosecution. More time and money was spent investigating the Monica Lewinsky affair than has been spent investigating one of the biggest corporate rip-offs in history. I presided over the biggest energy crisis in U.S. history and refused to intervene when corruption involving the oil industry was revealed. I presided over the highest gasoline prices in U.S. history. I changed the U.S. policy to allow convicted criminals to be awarded government contracts. I appointed more convicted criminals to admistration than any President in U.S. history. I created the Ministry of Homeland Security, the largest bureaucracy in the history of the United States government. I've broken more international treaties than any President in U.S. history. I am the first President in U.S. history to have the United Nations remove the U.S. from the Human Rights Commission. I withdrew the U.S. from the World Court of Law. I refused to allow inspectors access to U.S. 'prisoners of war' detainees and thereby have refused to abide by the Geneva Convention. I am the first President in history to refuse United Nations election inspectors (during the 2002 U.S. election). I set the record for fewest number of press conferences of any President since the advent of tlevision. I set the the all-time record for most days on vacation in any one-year period. After taking off the entire month of August, I presided over the worst security failure in U.S. history. I garnered the most sympathy for the U.S. after the World Trade Center attacks and less than a year later made the U.S. the most hated country in the world, the largest failure of diplomacy in world history. I have set the all-time record for most people worldwide to simultaneously protest me in public venues (15 million people), shattering the record for protest against any person in the history of mankind. I am the first President in U.S. history to order an unprovoked, pre-emptive attack and the military occupation of a sovereign nation. I did so against the will of the United Nations, the majority of U.S. citizens, and the world community. I have cut health care benefits for war veterans and support a cut in duty benefits for active duty troops and their families -- in war time. In my State of the Union Address, I lied about our reasons for attacking Iraq, then blamed the lies on our British friends. I am the first President in history to have a majority of Europeans (71%) view my 'presidency as the biggest threat to world peace and security.' this is an actual quote by the mayor of London, Ken Livingston. I am supporting development of a nuclear 'Tactical Bunker Buster,' a WMD. I have so far failed to fulfill my pledge to bring Osama Bin Laden to justice. RECORDS AND REFERENCES: All records of my tenure as governor of Texas are now in my father's library, sealed and unavailable for public view. All records of SEC investigations into my insider trading and my bankrupt companies are sealed in secrecy and unavailable for public view. All records or minutes from meetings that I, or my Vice-President, attended regarding public energy policy are sealed in secrecy and unavailable for public review. PLEASE CONSIDER MY EXPERIENCE WHEN VOTING IN NOVEMBER 2004.

Subject: Terrorism, Democracy and Pakistan. From: Shahid To: All Date Posted: Thurs, Jul 22, 2004 at 02:25:51 (EDT) Email Address: shahidmehmood_79@hotmail.com Message: In reply to some comments about Paul Krugman's recent article 'the Arabian candidate', some of the participants made a few remarks about Islam, Terrorism, Pakistan and democracy in Pakistan. i disagreed with those. and for explanation and discussion, we chose this forumn. hopefully, i'll help clarify a few apprehensions and misconceptions. comments and questions are welcome, as long as they don't take a personal tone. One of the friends was of the view that militant Islam is a threat to the west. now what exactly do we mean by 'militant' islam? if by militant islam we simply mean hatred against west, then there is no shortage of people here in the west that hate eastern and islamic traditions. an example is father Jerry Fallwell, who recently tried to bring a bad name to our Prophet, Muhammad. if any of you watch CBS, you would recognize that its a propaganda machine against Islam and Muslim countries in general. But nobody talks about these networks, yet almost everybody here starts jumping up and down when some anti-american comment is made in the islamic world. what if an anti-american comment is made? what if somebody burns an american flag? why care? it actually does not hurt US at all. i can understand that the site of your national flag being burned is not a pleasing one, but why care? whoever burns american flags, they are wasting their own time because it does not harm america at all. so people here should not worry too much about anti-americanism or militancy. readers might be apprehensive as to why they shouldn't worry about militancy? well, because after spending 3 years in U.S, i am aware of what the general public considers a 'militant'. normally, the image of a militant is that of a man with a long beard, marching down a road and chanting anti-american slogans, burning an american flag and then giving a thunderous speech full of anti-americanism. Being from a muslim country and having reasonable knowledge about islamic countries, i can tell you that these kind of people are nothing to be worried about. i have had the oppertunity to personally interact with them so many times, and i can safely say that their anti-americanism is only limited to words, not deeds. people here should differentiate between an extremist and a terrorist. an extremist is rarely a terrorist, because terrorism implies physical harm. extremists usually don't do that. and by the way, there are innumerable number of people here that spew hatred against islam and muslims. but i have never seen any newspaper or TV network brand them as 'extermists'! Some the comments were about Pakistan. one of the commentators commented that if free and fair elections are held today, extremists would rule that country. that's absolutely untrue! since the creation of our country (in 1947), religious leaders have been trying there utmost best to form a government. but they have failed every time. they had never won more than 10 seats in a legislature of more than 230, except for the elctions of 2002 where they won 80 seats. they won those seats riding on the wave of anti-americanism, after Mr Bush's open threats to invade Iraq. those threats spread a huge wave of anger in the islamic world, including Pakistan. this anger worked right into the hands of religious leaders. as a Pakistani, i can tell you that the general masses don't exhibit any likeness for religious leaders in our country. so the apprehensions of extremists taking over pakistan are un-founded. as for hatred against U.S, please make the distinctionthat this hatred is against U.S govermnets, not people. it includes me too. why? because every time america needed our help, we have helped america even by putting our own selves at risk. how many of you know that the american U-2 spy plane shot over Soviet union in 1962(whose pilot Francis Gary Powers was captured and put to trial in USSR) had flown from Pakistan? the Soviets were so infuriated that they had seriously contemplated bombing us. so, we put ourselves at risk to give U.S the airbases to fly their airplanes. yet what does the U.S government do? in the wars of 1965 and 1971 between Pakistan and India, the U.S government not only blocked all military aid to us, but also did not support us at the UN. this left the pakistani nation angry. again, in the 1980's, we served as a base for american activities against the Soviet's when they invaded Afghanistan. this time the Soviet's were right on our borders, but we again took the gamble of supporting U.S against all odds. so what does the U.S government do? once the soviets retreat from Afghanistan, the U.S government levies sanctions against Pakistan and closes all our aid (military and economic). so i would invite you all to think about what i have stated. would it then surprise you all that there is hatred in Pakistan for U.S governments? just take the recent example for further illustration. Pakistan has done a commendable job in helping out U.S's cause against terrorists by capturing and handing over some key Al-Qaeda suspects, by helping U.S bring down Taliban and providing U.S with military and logistic facilities in Pakistan. but what do we get in return? the U.S government won't even release our F-16 aircraft for which we had paid in 1990. so it shouldn't surprise anyone that we are no fan of U.S government. one of the other participant mentioned a pakistani journalist Ahmed Rashid as mentioning Pakistani president Musharraf supporting anti-american forces. again, this is more of a conspiracy theory rather than a fact. Musharraf has angered religious leaders in the country because he supports the U.S efforts against Al-Qaeda. for this particular support, he has survived two assasination attempts on his life by al-qaeda. Al-Qaeda is after the life of Musharraf. so whoever thinks he is supporting militants secretly is a fool. in the end, it is my request to you all not to confuse Islam with militancy or terrorism. people in the west, and specifically the U.S, tend to believe too much in what the media says. there is a difference between news and ground reality. it is important that people recognize that difference.

Subject: Re: Terrorism, Democracy and Pakistan. From: Auros To: Shahid Date Posted: Thurs, Jul 22, 2004 at 14:46:07 (EDT) Email Address: rmharman@auros.org Message: RL has already cited the worrisome issues in terms of Pakistani support of militants. You yourself have admitted that because of anti-Americanism, the amount of support for religious extremist parties has grown considerably. I've seen, but do not have handy, polling data that suggests that a coalition of conservative and religious parties probably could form a gov't if an election were held today. As for Xian extremists -- yes, I despise them, too. Falwell is a horror, and one of the many reasons I oppose the Republican party is because of their embrace of Xian extremist elements. I know a few moderate Republicans (basically libertarians -- fiscal conservatives but social liberals), and it always astonishes me that they don't see how corrupted their party has become, due to the influence of folks like Falwell, and quit voting that way. But to deny that the particularly virulent strain of anti-modernism (it's not JUST anti-Americanism, as the attacks on Saudi Arabia and Spain demonstrate) are a serious problem. They mix religious fervor with the typical anger and violence that result when you have a large group of young men who have no future -- no power in the political system, no economic prospects, not even much chance of finding a bride and raising some kids at a reasonable level of subsistence. While the Xian extremists are awful, and pose a threat to our constitutional democracy, very few of them actually engage in acts of violence. With the current batch of Islamic extremists, violence is an explicitly endorsed methodology. Sure, there are moderates out there, same as there are moderate Christians -- I rather enjoy reading Sistani's website, and one of my closest friends in college was a Moroccan Muslim. I think we need to look into techniques like the pioneering project in Yemen, where a moderate cleric provides some young budding extremists with an education on the more liberal and humanistic aspects of their religion, while the secular gov't offers job-skills training and generally tries to get them re-integrated with society.

Subject: Re: Terrorism, Democracy and Pakistan. From: WRS To: Shahid Date Posted: Thurs, Jul 22, 2004 at 13:53:27 (EDT) Email Address: Not Provided Message: Militant islam is a real problem and not a figment the media's imagination. What evidence do you need? Suicide attacks in Madrid, Saudi Arabia, Thailand, Morocco and of course the U.S. on Sept. 11, 2001. The list goes on. Of course militant islam consists of more than deeds. It is a mindset that directly threatens peace loving people around the world. If you're looking for a definition of militant Islam, I'll give it a shot. Militant islam is a well-funded and organized effort to foster hatred in young Muslims and encourage suicide attacks and the killing of non-Muslims or infidels. It would be helful if reasonable and moderate Muslims would acknowledge militant Islam and better yet condemn it. I appreciate that Pakistan and other Muslim countries have a legitimate political grievance agains the U.S., but in our interconnected world disagreements are routine matters. Disapgreements are not grounds for jihad, but among civilized people are are settled through reasonable dialogue instead of brooding hatred and terrorist attacks.

Subject: Re: Terrorism, Democracy and Pakistan. From: WRS To: Shahid Date Posted: Thurs, Jul 22, 2004 at 13:51:24 (EDT) Email Address: Not Provided Message: Militant islam is a real problem and not a figment the media's imagination. What evidence do you need? Suicide attacks in Madrid, Saudi Arabia, Thailand, Morocco and of course the U.S. on Sept. 11, 2001. The list goes on. Of course militant islam consists of more than deeds. It is a mindset that directly threatens peace loving people around the world. If you're looking for a definition of militant Islam, I'll give it a shot. Militant islam is a well-funded and organized effort to foster hatred in young Muslims and encourage suicide attacks and the killing of non-Muslims or infidels. It would be helful if reasonable and moderate Muslims would acknowledge militant Islam and better yet condemn it. I appreciate that Pakistan and other Muslim countries have a legitimate political grievance agains the U.S., but in our interconnected world disagreements are routine matters. Disapgreements are not grounds for jihad, but among civilized people are are settled through reasonable dialogue instead of brooding hatred and terrorist attacks.

Subject: Re: Terrorism, Democracy and Pakistan. From: El Gringo To: WRS Date Posted: Thurs, Jul 22, 2004 at 17:15:13 (EDT) Email Address: nma@hotmail.com Message: Very dear WRS:'Asterix and the Romans is an exhibition the whole tribe should see—before the sky comes falling down! The exhibition runs until January 2, 2005, at Musée de la civilisation in Québec City.' www.mcq.org/presse/aaasterix.html

Subject: Re: Terrorism, Democracy and Pakistan. From: RL To: Shahid Date Posted: Thurs, Jul 22, 2004 at 08:24:05 (EDT) Email Address: rafaelloring@yahoo.es Message: Maybe is terms of the discussion are not very clear: Is not that Musharraf is supportting the islamic extremists. Is that the US support of a regime highly undemocratic and corrupt helps extremism flourish, espcially worrying in a country whose arm forces are inter-related with islamic movements. You make a distinction between extremist and terrorist of course it exist but is very clear that extermism nourishes terrorism groups just as hate does with violence. Here you have an article on the assesination attemps. http://www.ahmedrashid.com/publication/pak/articles/files/killMeSaysMusharraf.doc And read here how Musharraf's Pakistan was greatly responsible for the takeover of the Taliban's in Afganistan in the 90's. http://www.ahmedrashid.com/la/5.pdf

Subject: Re: Terrorism, Democracy and Pakistan. From: El Gringo To: Shahid Date Posted: Thurs, Jul 22, 2004 at 06:29:04 (EDT) Email Address: nma@hotmail.com Message: 'for this particular support, he has survived two assasination attempts on his life by al-qaeda.Was it really al-qaeda...?

Subject: Paul Krugman From: El Gringo To: All Date Posted: Wed, Jul 21, 2004 at 21:30:30 (EDT) Email Address: nma@hotmail.com Message: 'L'auteur de 'main basse sur l'Amérique', professeur d'économie ŕ Princeton, est devenu l'éditorialiste le plus redouté du pouvoir : il a été le premier ŕ mettre en évidence la collusion entre les intéręts politiques et économiques orchestrée par le gouvernement Bush.'

Subject: East Germany Stagnates From: Emma To: All Date Posted: Wed, Jul 21, 2004 at 14:40:11 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/21/international/europe/21dres.html?pagewanted=all&position= East Germany Swallows Billions, and Still Stagnates By MARK LANDLER DRESDEN, Germany - Standing outside her freshly painted, restored apartment house here, Gabi Kaminke gazed ruefully across a parking lot at her old home, a grim six-story concrete hulk that was built during the waning days of the Communist era and now awaits the wrecking ball. 'In those days, we felt like we had won the lottery by getting an apartment here,' recalled Ms. Kaminke, a 45-year-old restaurant worker. 'Now, most people don't want to live in these buildings.' It is easy to see why. The housing project, known as Gorbitz, blights the horizon west of Dresden, its cookie- cutter blocks marching up a hillside in endless, spirit-crushing rows. People have been fleeing this place for years, leaving behind broken windows and silent playgrounds. Once one of the largest housing complexes in East Germany, Gorbitz has become a bricks-and-mortar symbol of the malaise that grips eastern Germany nearly 15 years after the fall of the Berlin Wall. Economic stagnation, chronic unemployment, and a dwindling population have turned many of the eastern neighborhoods into ghost towns. Dresden, the majestic, if faded, capital of the state of Saxony, plans to close 43 schools this summer because of a dearth of children. The problems are not new. In its zeal to put the east on an equal footing with the west as fast as possible, the German government created a society addicted to welfare and other subsidies. The private sector withered, and by the mid-1990's the gap between east and west began to widen alarmingly. Now, with the jobless rate in some cities topping 20 percent and young people continuing to leave for the west, a national debate has begun over how to heal this limping land.The urgency is being driven in part by the eastward expansion of Europe, which has brought 10 new countries into the European Union. With their energetic workers and low wage levels, Poland, the Czech Republic and Hungary could further erode eastern Germany's position. Having poured $1.5 trillion into the east since reunification in 1990, many Germans now regard this grand project as a costly failure - one that could drag down the rest of the country. 'If we do not address eastern Germany, the financial burdens on Germany will become unbearable in the next 15 years,' said Klaus von Dohnanyi, a former mayor of Hamburg. Mr. von Dohnanyi was chairman of a commission formed by the German government to draw up a blueprint for the east. The group submitted a bluntly worded report in June, recommending that the government direct the $110 billion a year it pours into eastern Germany away from public works projects like roads and bridges. Instead, the report said, it should support companies that might provide employment as well as promote research and education. 'If you want to have industry in East Germany, you must see to it that industrialists get rich in East Germany,' Mr. von Dohnanyi said. If the German government adopts the recommendations - a big if, given the vested interests that would be threatened - the consequences would be dire for rebuilding projects like the one that gave Ms. Kaminke a new home next to her old apartment in Gorbitz. The housing cooperative that owns several of the buildings here used subsidies to convert three of the huge blocks into human-scale apartments. In what amounted to a partial demolition, it lopped off the top three stories and divided them into a series of stand-alone structures.

Subject: Re: East Germany Stagnates From: RL To: Emma Date Posted: Fri, Jul 23, 2004 at 04:06:11 (EDT) Email Address: rafaelloring@yahoo.es Message: Great article. It is really a drama what is happening in Germany, yes, the medicine could be very painfull and will take long I fear. RL

Subject: Re: East Germany Stagnates From: El Gringo To: Emma Date Posted: Wed, Jul 21, 2004 at 20:18:13 (EDT) Email Address: nma@hotmail.com Message: 'The stability pact, as put forward in the mid-1990s by Theo Waigel, then German finance minister, was intended to solve the so-called free-rider problem and it was aimed at countries like Italy, which had a history of fiscal indiscipline.' Where is China?

Subject: Re: East Germany Stagnates From: Emma To: El Gringo Date Posted: Wed, Jul 21, 2004 at 20:30:03 (EDT) Email Address: Not Provided Message: Please explain the question, 'Where is China.'

Subject: Re: East Germany Stagnates From: El Gringo To: Emma Date Posted: Wed, Jul 21, 2004 at 21:08:03 (EDT) Email Address: nma@hotmail.com Message: Dear Emma, I would resume it as an 'Egocentric behaviour without taking any care of what was, economically seen, happening abroad', equals being 'short sighted'.

Subject: Please, approach... From: El Gringo To: All Date Posted: Tues, Jul 20, 2004 at 23:24:01 (EDT) Email Address: nma@hotmail.com Message: 'Stephen Roach The asset economy is a house of cards There has been an important transition in the character of the American growth dynamic.The income-driven impetus of yesteryear has given way to asset-driven wealth effects.The asset economy turns many of the old macro rules inside out and could well pose the most profound challenge to sustainable recovery in the US economy. The asset economy burst forth with a vengeance in the mid-1990s. Between 1994 and 2003, household sector assets expanded by 84 per cent more than the NDP. As a result, the ratio of US household assets to GDP exceeded 5.25 in 1999, far above historic norms. Even after the bursting of the equity bubble in 2000 household sector assets stood at 4.9 times US GDP last year, nearly 20 per cent higher than the pre-bubble norms. It did not take long for the American consumer to uncover the miracle of the asset economy.The 'wealth effect', or the the ability to monetise asset inflation and convert it into consumer purchasing (tax cuts?), quickly became the rage. In large part, that was born out of necessity. With jobs and real wages under pressure, (employment/population ratio?) there has been an unprecedented shortfall in the wages (blue collars?) and salaries component of personal income. By May this year, real wage income was only about 3 per cent higher than the dephts of the recession in November 2001 – far below the nearly 10 per cent gains of the first 30 months of preceding cyclical recoveries. This translates into $260bn of 'missing' real personal income. In such an income-deficient recovery, there is an added urgency to draw on the wealth effect as a support to spending. There have been two distinct phases of the asset economy, the first being the equity bubble in the late 1990s and the second a by-product of frothy property markets in the current decade.The impact of property wealth far exceeds the impetus provided by equity wealth.This differential is the key to what is perhaps the biggest risk of the asset economy;the property wealth effect is a far more debt-intensive phenomenon than the equity wealth effect. This shows up dramatically in the American consumer's recent debt binge (trade deficit?) Household sector debt was 85 per cent of GDP last year, up from 70 per cent in 1995.This development is widely depicted as the 'rational' response to record low interest rates and rapid house-price appreciation. Such complacency appears unjustified.Although interest rates had fallen to 40-year lows in recent years, debt service burdens remain near the upper end of historical experience, according to Federal Reserve data. It is also common to believe that rational consumers have locked in fixed-rate debt in funding their wealth effects, thereby insulating themselves from any rise in interst rates. The recent shift to variable-rate mortgages casts doubt on this assumption. Variable-rate loans rose to more than 50 per cent in May as a portion of new motgages in dollar terms, up from 20 per cent early this year. US policymakers (Bush-Greenspan-connection?) have joined in celebrating the miracles of the asset economy. The Federal Reserve has provided the rock-bottom interest rates that have pushed asset markets into uncharted territory. But this has led the ultimate moral hazard; overly exposed financial institutions, both of which are vulnerable to an overdue normalisation of monetary policy. Increasingly, asset-based saving is seen as a substitute for the income-based impetus to consumer demand. This, together with massive federal budget deficits, has resulted in an unprecedented shortfall of domestic saving(Trade deficit?).America's net national saving rate fell to less than 2 per cent of GDP last year, a record low. Lacking in domestic savings, the US has had to import them and run massive current accoount and trade deficits(?) to attract foreign capital.As a result, ever- widening twin deficits are among the greatest pitfalls of the asset economy. In the asset economy, traditional macroeconomics has been rendered all but obselete. Income-based metrics used to scale deficits, debts and savings are depicted as irrelevant. Instead, the balancing act is now evaluated relative to asset-determined wealth. I do not buy it. I am just as suspicious of this new paradigm as I was of another such scheme back in the late 1990s. As the bursting of the equity bubble should remind us, there is no guarantee of permanence to asset values and the wealth effects they spawn, particularly when assets are inflated by unsustainable low interest rates(1%?) That takes us to the weakest link in this daisy-chain; the juxtaposition of the imbalances of the income-based US economy and the purported soundness of the asset of the asset-based alternative. In a rush to embrace the new, America has pushed the concept of income-based imbalances, such as saving rates and current account deficits, into the danger zone (overheating engine?). This could not have happened were it not for the high-octane fuel of extraordinary monetary and fiscal stimulus. As those policies are now normalised(?), the asset asset economy should be subjected to its toughest test.'

Subject: Re: Please, approach... From: Pete Weis To: El Gringo Date Posted: Thurs, Jul 22, 2004 at 00:57:45 (EDT) Email Address: Not Provided Message: El Gringo. Stephen Roach. No need to mince words - Stephen Roach gets right to the heart of the matter. A healthy economy is built on a sharing of the wealth which keeps consumption sustainable. A healthy, sustainable economy is not built on asset inflation and the massive build-up of debt by the masses of consumers who did not share in the wealth accumulated through technological advance. Wage increases represent real wealth increases. Asset inflation is a game of musical chairs - whoever is left with unrealized paper assets at the end of the game finds themselves at the bottom of the pyramid and without a chair.

Subject: Re: Please, approach... From: Mik To: Pete Weis Date Posted: Thurs, Jul 22, 2004 at 11:12:21 (EDT) Email Address: Not Provided Message: Pete, Where the hell do you come up with that statement of 'musical chairs' - it is brilliant.

Subject: Re: Please, approach... From: Pete Weis To: Mik Date Posted: Thurs, Jul 22, 2004 at 15:14:57 (EDT) Email Address: Not Provided Message: Perhaps it was the 3 buck chuck.

Subject: Re: Please, approach... From: Mik To: Pete Weis Date Posted: Thurs, Jul 22, 2004 at 16:25:04 (EDT) Email Address: Not Provided Message: 3 buck chuck?.... Hhmm an Aussie with a bit of class? (you not drinking beer I see)

Subject: Re: Please, approach... From: Terri To: El Gringo Date Posted: Wed, Jul 21, 2004 at 13:18:35 (EDT) Email Address: Not Provided Message: Stephen Roach has long been complaining of our use of asset wealth for consumption. Alan Greenspan finds no problem here, and is not worried about private debt accumulation. My feeling is Greenspan has been right a lot more times than Roach. Show me more agreement among economists on this matter and I will worry.

Subject: Re: Please, approach... From: Pete Weis To: Terri Date Posted: Wed, Jul 21, 2004 at 15:02:38 (EDT) Email Address: Not Provided Message: Terri. Why would you need more agreement among economists to worry. By the time you get consensus thought among economists and it amazingly turns out to be right, it's way too late to worry.

Subject: Re: Please, approach... From: Auros To: Terri Date Posted: Wed, Jul 21, 2004 at 14:34:15 (EDT) Email Address: rmharman@auros.org Message: I dunno, Terri. Krugman has himself written about the potential problems related to Greenspan's endorsement of Adjustable Rate Mortgages right when he knows he's going to raise rates. I don't think Greenspan can really be trusted anymore. And honestly, much of the good for which he receives credit always really was the result of Volcker's policies, not Greenspan's. Greenspan wasn't nearly loud enough in warning against the 'irrational exuberance' of the '90s, and he was an outright collaborator on ShrubCo's irresponsible tax cuts.

Subject: Asset Prices From: Terri To: Auros Date Posted: Wed, Jul 21, 2004 at 15:10:47 (EDT) Email Address: Not Provided Message: Suppose I change my argument, for I am tentative about it. If I agree with Stephen Roach and Pete and Auros, I have to argue that what we have are inflated asset prices and the coming adjustment in interest rates will correspondingly lower the prices of other assets. So, bond prices fall and stocks fall and real estate prices fall. Even static prices for stocks and real estate could be a problem when we are depending on asset appreciation. OK. Now to think this scenario through as you all have.

Subject: Re: Asset Prices From: Terri To: Terri Date Posted: Wed, Jul 21, 2004 at 15:16:23 (EDT) Email Address: Not Provided Message: Suppose we can expect asset prices to be static or decline for time, how do we intelligently protect ourselves? What sort of asset mix do we opt for? I can not see cash as an option. What about a GNMA fund? Vanguard has a fine GNMA fund.

Subject: Re: Asset Prices From: Pete Weis To: Terri Date Posted: Wed, Jul 21, 2004 at 22:18:15 (EDT) Email Address: Not Provided Message: I think Auros has good advice with regard to maintaining and protecting what you have at this time. Remember Warren Buffet's recent words: 'it feels strange holding on to so much cash, but it's better than doing something stupid.' Of course Emma is right - when Buffet says he's holding on to cash he's actually invested in short term (liquid) low yielding investments. We know from his statements that he's hedging a fall in the dollar. He might be invested in Euro denominated fixed income securities for instance - they offer higher yields and get the further benefit from a falling dollar. One investment I have is the Prudent Bear Global Income Fund (PSAFX) which has done very well (minus some short lived dollar rallies) over the last 3 years (originally it was the Prudent Bear Safe Harbor fund). American Century has some similar funds. Investing (at more risk) in companies which produce commodities or funds which invest in the same can be more resistant to dollar shrinkage. Many of these companies have significantly lower PE's than the general market since their profits are so good and the public seems to be generally more enthralled with high tech. IMO, there will be some great bargain investments down the road and for the few who bide their time and have cash on hand there will be great opportunities.

Subject: Re: Asset Prices From: Auros To: Terri Date Posted: Wed, Jul 21, 2004 at 19:03:24 (EDT) Email Address: rmharman@auros.org Message: Honestly? I think the biggest thing is, if you have debt, you want to lock in its interest rate so it can't balloon over the next three or four years. In terms of getting serious money out of investments, you have to seriously consider the possibility that you just won't be able to. At all. Out of anything. Just sitting on cash is obviously only good if you start having actual deflation. But in that case, I'd have much larger worries than investment strategy. :-P As for what might perform slightly less poorly than what else... honestly, I haven't a clue. But I'm not counting on appreciation of assets to provide ANY of my income. I have a salary. Some of it goes into a retirement account, some of it goes into a savings account to cushion against a possible period of unemployment or sickness or whatever, some of it goes into an Employee Stock Purchase Program (because as long as the stock goes up AT ALL, a one-year long-term gain is pretty much inevitable, relative to the discounted purchase price), and after I pay off my debts (almost there!), I'll probably start putting some money into a semi-liquid investment like the Domini socially-conscious index fund, just because I at least expect that to be slightly better than a straight savings or money market. But my monthly-to-annual, immediate spending is all budgeted on the assumption that the only money I have coming in is what I earn from my job, minus the stuff that goes into those investments; in other words, I budget as if the investments were a black hole that was going to lose all the money. *g*

Subject: Re: Asset Prices From: Aaron To: Auros Date Posted: Wed, Jul 21, 2004 at 19:39:21 (EDT) Email Address: Not Provided Message: Since I am older the Auros seems, and I want to have income available I am using bond funds for income. I know that there will be price declines for the funds as interest rates climb, but there will be increasing interest payments that in time will make up for the price declines.

Subject: I'm late-20s, so yeah, young. *g* From: Auros To: Aaron Date Posted: Thurs, Jul 22, 2004 at 13:23:01 (EDT) Email Address: rmharman@auros.org Message: EOM.

Subject: Re: Asset Prices From: Pete Weis To: Aaron Date Posted: Wed, Jul 21, 2004 at 21:44:10 (EDT) Email Address: Not Provided Message: Aaron. I don't know the particular bond funds in which you are invested, but bond funds typically trade bonds and the trading losses can be quite steep in an increasing interest rate environment. There were some heavy loses in June of 2003 when interest rates jumped a full point in a very short time. Just like the stock market bond prices (as opposed to yields) can drop quickly if bond investors get panicky and begin heading for the exits. If, on the other hand, you buy bonds directly from the US Treasury or through a broker and hold to term, then the only losses you might suffer would be to inflation, since yields are presently quite low. Many are buying TIPs which are inflation adjusted government bonds which are better - though they're based on the CPI which I believe is understated. I think yields are headed upward though and may never reach the heady days of the late 70's and early 80's, but could, in the not to distant future, provide reasonable income for retirees - that is if we can hang on to what we have now so we have something left to invest. I bet Emma is a lot more familiar with the bond market and might give some good advice here.

Subject: Bond Funds From: Emma To: Pete Weis Date Posted: Thurs, Jul 22, 2004 at 11:51:38 (EDT) Email Address: Not Provided Message: What is most important in a bond fund is 'duration.' Duration shows the change in price that will occur with a change in interest rates. So, a 2 year duration in a fund means a 2% change in price if rates change 1%. Vanguard has the finest bond funds, with durations that are fairly constant. An interest rate rise of 1% will lower the price of a short term Vanguard bond fund about 2%, because the durations are about 2 years. But, your interest return will climb. So, I find no danger of any significant loss in a Vanguard short term bond fund. A price decline is tax deductible, and the extra interest will quickly make up any share price loss. The funds are easily bought and sold. Short term corporate or GNMA at Vanguard are quite safe. This is not a pleasant market for bonds, but we make the best of it.

Subject: My portfolio so far ... From: David E... To: Pete Weis Date Posted: Wed, Jul 21, 2004 at 22:39:01 (EDT) Email Address: Not Provided Message: It is very tough designing a portfolio that meets the needed criteria. It must withstand Billmon's Whiskey Bar analysis - 1-2 punch. First punch, hyper inflation, second, deflation approaching levels last seen in the 30's. Third, the portfolio must be able to profit from the possibility that Greenspan is doing a good job. Because I am retired, my portfolio plan is focused on capital preservation. My current plan is to use about a 15% total US stock market fund, a medium amount of TIPS, and a medium amount of short term US govt bonds, and some amount of Asia-Pacific stocks and government bonds. The stock market investment is a dual purpose play, it will provide inflation protection and allow me to profit if Greenspan is doing a good job. TIPS to defend against inflation. Thank goodness I bought them in 2001. Short term bonds are my protection against interest rate increases. The Asia-Pacific investments are planned because I think I will find beneficial correlations between the Asia-Pacific and the US markets. The allocation to TIPS, short term bonds, and Asia -Pacific depend on a MVO analysis that I am working on now. I would love to hear if anybody has ideas on implementing my plan. Right now, I am open to ideas about economies that might not be correlated with the US economy. My selection of Asia-Pacific is based on the idea that Asia-Pacific economies will ascend with the ascension of China. Also, if anybody knows mutual funds that will cover the Asia-Pacific area I want to hear about them. Right now, I am working with closed end mutual funds because I had no success with regular mutual funds. I have found a few that look promising. Morningstar covers them, but not very evenly. Some of them have 4 years worth of performance history, some none. It looks like Yahoo might be a source for about 10 years worth of history, but it is hard dirty work mining their data. So if anybody has funds to recommend, or knows a data source that has 10 years of closed end performance, I would welcome the news.

Subject: Re: My portfolio so far ... From: Terri To: David E... Date Posted: Thurs, Jul 22, 2004 at 13:47:47 (EDT) Email Address: Not Provided Message: Why only 15% in an American stock index? This strikes me as too small. Why TIPS and not an intermediate term bonds fund? TIPS are betting the Federal Reserve will not be able to limit inflation. Why not as Emma wrote as short term corporate or tax free bond fund? Why not an Asian index fund?

Subject: Re: My portfolio so far ... From: David E... To: Terri Date Posted: Thurs, Jul 22, 2004 at 15:12:10 (EDT) Email Address: Not Provided Message: I am only willing to accept a standard deviation of max 5% annual loss. A 100% portfolio with american stocks could have a standard deviation of 20% annual loss. Three years of 20% annual losses or a two standard deviation year would ruin my portfolio. I don't have time to recover. It is a trade off, my portfolio will return 8%, and a 100% US stock portfolio could return 20%. The golden mean, not too much, not too little. Dreams of palaces could put me in a hovel. Here is a link to a graph. I used their numbers for my example. http://www.ifa.com/portfolios/bigchart.html (maybe take their risk assesment test - it is good to know your limits before actual experience teaches you)

Subject: Re: My portfolio so far ... From: Terri To: David E... Date Posted: Thurs, Jul 22, 2004 at 15:34:44 (EDT) Email Address: Not Provided Message: David Makes sense to me in terms of protecting against loss, but I can not imagine how you can earn 8% on such a portfolio. The gains are likely to be lower.

Subject: Re: My portfolio so far ... From: David E... To: Terri Date Posted: Thurs, Jul 22, 2004 at 15:42:37 (EDT) Email Address: Not Provided Message: I agree, I will be satisfied if I get 4%. With my 4% withdrawal rate everything will work out fine.

Subject: Re: My portfolio so far ... From: Terri To: Terri Date Posted: Thurs, Jul 22, 2004 at 15:41:02 (EDT) Email Address: Not Provided Message: David To gain 8% with a portfolio of less than 50% in stocks when interest rates are so low, really seems difficult at the best.

Subject: Re: My portfolio so far ... From: Pete Weis To: Terri Date Posted: Thurs, Jul 22, 2004 at 22:58:48 (EDT) Email Address: Not Provided Message: Terri. Here's an idea which may be useful to you. Pick a period of time in past history which most closely resembles our present investment environment, study it, and invest now in a way which would have given you the best outcome during the period you selected. I don't know if you agree, but I personally believe that being a student of the history of the markets and the economic environment they existed in is the single best foundation for investing - the more detailed the knowledge the better. I definitely have a lot more to learn but, IMO, what I have learned has benefited me. My imaginary, ideal investor or investment guru would be immortal, and someone who started investing at the opening of the New York Stock Exchange in 1792 (soon after the start of the industrial revolution) and who was still actively investing now. He or she would have observed all the ups and downs, and mass investor behavior, and learned from mistakes along the way. I believe they would see behavior and events which would repete themselves over and over. And all along the way they would hear people around them who would say 'this time it's different', 'we live in a new age of technology' and a 'new age of investing' and a 'new age of economic awareness', and a new age of productivity. But human behavior has very primitive roots and its the one very, very powerful thing that has not changed. Generational memory is not one of our finer attributes especially when it recedes more than one generation into our past. The chemistry inside us drives us to repete the same mistakes over and over with the same results and for the most part we live in denial. This is worth a discussion of its own. To get back to my original point, an obvious period we could compare to our present situation might be the 70's through the early 80's (perhaps you or others might pick another period). Just as we did then, we now have rising energy costs. Just as we did then, we now have rising interest rates. The 70's followed the bull market of the 50's thru 60's and now we are coming off the biggest bull market in history. In the 70's we began to get some really serious competition from the Japanese (Toyota, Datsun, Honda, Suburu, Sony, etc) and the Europeans in luxury auto's (Mercedes, Jaguar, Volvo, etc). Now were getting it from the Chinese. We had a period of so called 'stagflation' - many think that's what we have once again. I think we have some major differences today from what we had in the 70's - most of them bad - much greater debt, a prolonged and large current account deficit, asset inflation (I know some don't agree), and no Alaska pipeline or North Sea oil to quickly fix our oil problems. But I believe many of the same type of investments which would have served one well then, will work now. If we see deflation creep back into the picture then some adjustments would need to be made. What do you think?

Subject: Re: My portfolio so far ... From: Terri To: Pete Weis Date Posted: Fri, Jul 23, 2004 at 14:31:20 (EDT) Email Address: Not Provided Message: An excellent post. I quite agree with you, with an exception. Valuations after 1974 were extremely attractive and stay ed so till 1987. Price earnings ratios were single digit from the middle 1970s to 1982. The idea from 1974 on was buy the American market. Now valuations are high. There is the rub.

Subject: Women in Lesotho From: Emma To: All Date Posted: Tues, Jul 20, 2004 at 18:47:36 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/20/international/africa/20leso.html?pagewanted=all&position= Women in Lesotho Prove Easy Prey for H.I.V. By MICHAEL WINES MASERU, Lesotho - Boxes of laundry detergent sometimes adorn apartment windows in Ha Thetsane, a rough-and-tumble neighborhood near this city's booming garment district. It has nothing to do with clean clothes - and everything to do with the AIDS pandemic among young women here. Ha Thetsane is home to thousands of women who have fled Lesotho's impoverished countryside to seek jobs as garment workers. But the average wage for such jobs, about 70 cents an hour, is seldom enough to both sustain a worker and allow her to send money to the family she left behind. Thus the detergent boxes in the windows. They signal that the women's husbands or boyfriends are visiting - and that the men who have been supporting them in exchange for sex should lie low. 'One woman will go out with four or five men,' said Bolelwa Falten, a 26-year-old former seamstress. 'One will help with the rent. One, maybe, will drive a taxi and take her to and from work. One will help with food. One will help her pay her installments.' Experts refer to such desperate arrangements by the dry term 'transactional sex.' This is one reason, though hardly the only one, that in Lesotho H.I.V. infects one in four men aged 15 to 24 - and one in two women. The situation in Lesotho (pronounced le-SOO-too), a tiny, mountainous kingdom with the world's fourth highest H.I.V. infection rate, mirrors the catastrophe barreling through sub-Saharan Africa. A confluence of factors - including culture and the destitution that turns sex into currency - has transformed AIDS here from an indiscriminate killer into a plague against women. At the recent international AIDS conference in Bangkok, United Nations officials said young African women are three times as likely as young men to become infected with H.I.V, the virus that causes AIDS. Worldwide, 48 percent of those with H.I.V. are women, up nearly a third in 20 years. But in sub-Saharan Africa, including Lesotho, women are 57 percent of the infected. That has ominous implications. It portends a collapse in African farming, much of it conducted by women. It suggests that millions of AIDS orphans - there are 100,000 in Lesotho, up 32,000 in two years - will have no women to care for them. It has already ravaged the ranks of nurses. 'There's a growing feminization of this epidemic,' Tim Rwabuhemba, the Lesotho coordinator for the United Nations Program on H.I.V./AIDS, said in an interview. 'More and more women are becoming infected at an earlier and earlier age.' In an interview in Bangkok, Stephen Lewis, the United Nations envoy on AIDS in Africa, said he envisioned a southern Africa 20 years from now in which 'you are going to sense and see the loss of women.' 'There will be portions of Africa,' he added, that 'will be depopulated of women. ' Those battling this trend face two intractable forces: biology and African tradition.

Subject: Re: Women in Lesotho From: Jennifer To: Emma Date Posted: Tues, Jul 20, 2004 at 19:18:22 (EDT) Email Address: Not Provided Message: Emma: What a heart breaking article.

Subject: Re: Women in Lesotho From: El Gringo To: Jennifer Date Posted: Tues, Jul 20, 2004 at 19:39:11 (EDT) Email Address: nma@hotmail.com Message: Emma, have you ever had the possibility to visit the African continent?

Subject: Re: Women in Lesotho From: Mik To: El Gringo Date Posted: Wed, Jul 21, 2004 at 13:50:52 (EDT) Email Address: Not Provided Message: El Gringo - have you? Emma, this is truly a heart breaking story. I have been to Ha Thetsane and all through out Lesotho. The Lesotho people are actually wonderful happy people. They are known as the 'Ba Sothos' (pronounced Ba soo too's). I thought I'd take this opportunity to point something out about Lesotho: The country has seen an astonishing 10% GDP growth for a couple years running now. It has a relatively strong manufacture sector due to tax breaks offered to international manufacture companies. Your 'LEE Jeans' will most likely originate from Lesotho. The strange part about Lesotho is that even with a consistent 10% GDP growth, no substantial unemployment reduction has occurred. This is mainly due to the changing method of industrial manufacture requiring less and less labour. Lesotho is probably a shining example that you can do everything right to get an economy going, make it investor friendly, etc. Yet this will not affect the employment rate. Everywhere I would go in Lesotho I would see schools, schools and more schools. The country has no problem educating its people yet education is not the only key to prosperity - jobs are a strong key. How do we change this keeping the Aids issue in mind and keeping in mind that Americans would rather see their factories stay in the US? I have no idea how to answer this question. Lesotho is definately a country worth studying. They have overcome most problems of other countries yet their current problems have, in my mind, no solution. Just a few useless notes about Lesothos - it's capital city Maseru is actually a cool modern city with high rise buildings and Lesotho has snow capped mountains. And a snow ski resort called Tiffendale. Ever thought of skiing in Africa?

Subject: Thanks for Mik From: Emma To: Mik Date Posted: Wed, Jul 21, 2004 at 14:11:48 (EDT) Email Address: Not Provided Message: There is such loveliness such hope through dear Africa. Let us now praise those for whom there is no memorial. Those dear souls who hear the sound of a canary as they walk and are grateful for Africa.

Subject: Re: Thanks for Mik From: Emma To: Emma Date Posted: Wed, Jul 21, 2004 at 17:54:51 (EDT) Email Address: Not Provided Message: How are jobs to be generated in Lesotho without foreign investment, but what is the inducement for enough foreign investment to generate meaningful growth in jobs? Rapid growth in southern Africa still leaves massive unemployment. South Africa shows this clearly, even with a far better developed business base.

Subject: Re: Thanks for Mik From: Mik To: Emma Date Posted: Thurs, Jul 22, 2004 at 11:00:15 (EDT) Email Address: Not Provided Message: Emma, I actually wish that Paul Krugman would give some time to this issue. After the first successes of countries like Malaysia and Singapore, the secret to job creation and prosperity was simple: Make your country attractive to Foreign Direct Investment (FDI). This seemed to be the panacea to all problems. It would force countries to behave properly and usher in a whole new better world of political and fiscal discipline. Well it worked for Malaysia and Singapore because they were among the very first. Soon many countries copied the Malaysia and Singapore strategy ushering a new world where big corporations could pick and choose new attractive sites for their factories. Unfortunately there are not enough corporations out there to enrich all those countries desperate for FDI. So countries have resorted to creating tax havens, tax holidays or export processing zones with special tax status as the latest trend in trying to convince coporations to choose their particular country. However a new movement is gaining tremendous momentum. Factories that are almost fully automated. When the sleepy sea-side town of Saldanha (in South Africa) heard that they had been chosen as the new location for a world class steel mill, the town was celebrating a new economic injection that was greatly needed. The mill incorporated state of the art-technology and could boast that it had among the most competitive cost structures in the world. But when Iscor, the steel company, completed the new steel mill, people were horrified to find out that the entire mill ran on a mere 60 employees. The same company also went about completing a similar mill in Mozambique - also promising great economic growth but instead delivering a disapointing employment result. What we have found is that much growth in the developing countries is actually leaning towards capital lead growth instead of labour lead growth. But I thought companies were moving to developing countries because of cheaper labout costs. Well yes that is partly true, however they are also moving because these countries are offering tax breaks - remember how this posting started? So what we are seeing are government officials who have not really caught onto the automation trend. The officials are desperate to get these large companies to set up factories in the vein hope that there will be mass employment. They offer great tax breaks and instead find factories being set up that employ a far lower amount of people than anticipated. The problem I have is that most of what I have written only comes from the very limited information I have compiled. I don't have anywhere enough data to prove the point. Hence the reason I wish someone like Krugman would research this phenomena.

Subject: Excellent Post Mik From: Emma To: Mik Date Posted: Thurs, Jul 22, 2004 at 12:15:26 (EDT) Email Address: Not Provided Message: Excellent posts. I suggest sending the posts to Paul Krugman, for I too would much like to see him tackle this issue. We will return to this issue often.

Subject: Thanks Emma but... From: Mik To: Emma Date Posted: Thurs, Jul 22, 2004 at 14:07:40 (EDT) Email Address: Not Provided Message: How do I send this to Paul Krugman?... do you have his e-mail address?

Subject: Here it is... From: Emma To: Mik Date Posted: Thurs, Jul 22, 2004 at 14:24:48 (EDT) Email Address: Not Provided Message: krugman@nytimes.com

Subject: Why Buy Stocks Now From: Emma To: All Date Posted: Tues, Jul 20, 2004 at 13:30:39 (EDT) Email Address: Not Provided Message: If dividends were higher I would have no thought about investing no matter the valuations and timing. Dividends are poor by historical standards so I am more cautious. What dividends do is provide income while capital gains are waited for, so since market timing is so tricky why not wait out a difficult market in income paying stocks? My first choice for investing now is a large cap value index fund. At least there are dividends. Still, I am not worried about long term stock market returns. Price to earnings ratios are higher than the historical average but the historical average was likely too low. A price earnings ratio of 20 for the S&P seems aout fair value. If this is so, then a capital gain of only 3% to go along with a 2.5% dividend for stocks in the value index will give a return that beats bonds. Fine with me, this is not asking much. Even if the timers are right, I will catch them in time. If the timers are wrong, I win.

Subject: Re: Why Buy Stocks Now From: Pete Weis To: Emma Date Posted: Tues, Jul 20, 2004 at 23:54:45 (EDT) Email Address: Not Provided Message: 'Price to earnings ratio's are higher than the historical average but the historical average was likely too low.' Emma. Much (especially if dividends are presently poor) of your premise of investing in a stock index hinges on this statement. What is your reasoning behind this statement? Why would historical averages going back nearly 100 years now be invalid or less valid?

Subject: Re: Why Buy Stocks Now From: El Gringo To: Emma Date Posted: Tues, Jul 20, 2004 at 13:49:27 (EDT) Email Address: nma@hotmail.com Message: Why are Dividends poor?

Subject: Re: Why Buy Stocks Now From: Emma To: El Gringo Date Posted: Tues, Jul 20, 2004 at 14:14:59 (EDT) Email Address: Not Provided Message: Dividends made up a large part of stock returns over the past 50 years. About 40%. By 1990 an increasing number of companies began to push the idea that stock buy-backs are as useful to investors as dividends, so dividends were cut back. Also, interest rates have fallen since the beginning of 1982. Companies could get away offering lower or no dividends. The result is near record low dividends in America.

Subject: Re: Why Buy Stocks Now From: El Gringo To: Emma Date Posted: Tues, Jul 20, 2004 at 16:03:52 (EDT) Email Address: nma@hotmail.com Message: Why 'By 1990...'?

Subject: Shrinking Dividends From: Emma To: El Gringo Date Posted: Tues, Jul 20, 2004 at 16:11:30 (EDT) Email Address: Not Provided Message: By 1990, we had entered on the era of astonishing returns to top corporate management. There was every reason to rid a company of the need to pay dividends on the quarter. Rather earnings could be used to bolster the size of the company or support stock option grants either of which can vastly enrich top management. This was the top management era.

Subject: Re: Shrinking Dividends From: El Gringo To: Emma Date Posted: Tues, Jul 20, 2004 at 16:20:51 (EDT) Email Address: nma@hotmail.com Message: 'By 1990, we had entered on the era of astonishing returns to top corporate management'Why?

Subject: Re: Shrinking Dividends From: Emma To: El Gringo Date Posted: Tues, Jul 20, 2004 at 16:48:51 (EDT) Email Address: Not Provided Message: Corporate management became increasingly influential through the 1980s, corporate Directors were increasingly beholden to management. When management and directors are one and owner's [shareholder's] concerns are set increasingly to the side, earning will be used increasingly to reward management.

Subject: Re: Shrinking Dividends From: El Gringo To: Emma Date Posted: Tues, Jul 20, 2004 at 16:57:40 (EDT) Email Address: nma@hotmail.com Message: Dear Emma, it's absolutely not my intention to bother you but:'Corporate management became increasingly influential through the 1980s, corporate Directors were increasingly beholden to management.'...Why?

Subject: Re: Shrinking Dividends From: Emma To: El Gringo Date Posted: Tues, Jul 20, 2004 at 17:29:13 (EDT) Email Address: Not Provided Message: The questions you ask are interesting. Through the 1980s as corporate size grew significantly there was a distincing between ownership and management. Managers were the controllers, and as controllers they were able to seat Directors who would be and were beholden to them. Find me a Disney Director who is not a buddy of Michael Eisner. Roy Disney is gone from the Board. So you have Directors who cater to managers, and to management is where much of earnings my go rather than directly to shareholders.

Subject: El Gringo From: Terri To: Emma Date Posted: Tues, Jul 20, 2004 at 18:08:52 (EDT) Email Address: Not Provided Message: What is your sense? Why buy or hold stocks now?

Subject: Re: El Grin From: El Gringo To: Terri Date Posted: Tues, Jul 20, 2004 at 18:30:00 (EDT) Email Address: nma@hotmail.com Message: Terry, I'm not interested in buying nor holding stocks...

Subject: An Important Issue From: Terri To: El Gringo Date Posted: Tues, Jul 20, 2004 at 18:42:39 (EDT) Email Address: Not Provided Message: Somehow, in America, we have to save for retirement and we generally are on our own in doing so. My interest, given the post, is how at this time, even if the answer is theoretical. The issue is important for most Americans.

Subject: Re: Terri From: El Gringo To: Terri Date Posted: Tues, Jul 20, 2004 at 19:31:15 (EDT) Email Address: nma@hotmail.com Message: Dear Terri:'WordNet Dictionary Noun 1.Pridepride - a feeling of self-respect and personal worth Synonyms: pridefulness Antonyms: humbleness, humility - a humble feeling; 'he was filled with humility at the sight of the Pope' 2.pride - satisfaction with your (or another's) achievements; 'he takes pride in his son's success' 3.pride - the trait of being spurred on by a dislike of falling below your standards Antonyms: humility, humbleness - a disposition to be humble; a lack of false pride; 'not everyone regards humility as a virtue' 4.pride - a group of lions 5.pride - unreasonable and inordinate self-esteem (personified as one of the deadly sins) Synonyms: superbia Verb 1.pride - be proud of; 'He prides himself on making it into law school' Synonyms: plume, congratulate

Subject: Re: Why Buy Stocks Now From: Terri To: Emma Date Posted: Tues, Jul 20, 2004 at 14:29:17 (EDT) Email Address: Not Provided Message: With interest rates still near record lows, bonds offer little competition for decent investment returns

Subject: Re: Why Buy Stocks Now From: Terri To: Terri Date Posted: Tues, Jul 20, 2004 at 16:15:28 (EDT) Email Address: Not Provided Message: What makes most sense to me as well is sitting on a basket of conservative stocks, whether growth or value, and hoping for returns that will beat bonds. That seems highly likely over the coming 5 years, simply because bond yields are so low.

Subject: Re: Why Buy Stocks Now From: brendan To: Terri Date Posted: Wed, Jul 21, 2004 at 07:24:34 (EDT) Email Address: Not Provided Message: a few years ago in ireland we were faced with similar problems with the US, large increase in consumer debt on the back of unprecedented economic growth (the celtictiger era!) and the virtual elimination of foreign debt. in order to stimulate saving (we were really getting carried away with our success and dublin was like rome before its fall) the minister for finance announced a special savings initiative. it required the setting up of an SSAI Account with the 4 main Irish banks and quaranteed 25% interest per annum on top of the bank's interest. I was lucky enough to fix my interest in at 4.5% giving me 29.5% per annum, risk free (government guarantee). at the time (approx 3 years ago) it was estimated to be the highest risk free return in the western world and the uptake was enormous. needless to say a few months later the sept 11th tragedy occured and the resulting worldwide recession hit ireland badly, the rationale for the scheme was called into question considering the conditions that merited the scheme in the first place had dissappeared. economists and financial analysists are now predicting massive inflation 2 years down the line as a quarter of our population suddenly has a cash windfall of approx Eur10k-50k, which the government has to fund. coincidently, the government have decided to call an election then. although there will be a cash windfall for individuals, because the govt has to fund this, its like hitting every bar and club and (if you're into those things)strip club with your credit card. the hangover may last years. the moral is: be careful what you wish for...you just may get it.

Subject: Re: Why Buy Stocks Now From: johnny5 To: brendan Date Posted: Fri, Jul 23, 2004 at 05:26:48 (EDT) Email Address: Not Provided Message: Hey Brendan, so what is considered the highest risk free return in the western world right now? How does an american get in on your 25% rate?

Subject: Interesting Story From: Emma To: brendan Date Posted: Wed, Jul 21, 2004 at 12:40:30 (EDT) Email Address: Not Provided Message: Thank you for the story. Completely new to me.

Subject: 'The Arabian Candidate' From: Pete Weis To: All Date Posted: Tues, Jul 20, 2004 at 11:43:09 (EDT) Email Address: Not Provided Message: Today's Krugman op-ed did a good job of making the point that Bush has danced to Bin Laden's tune.

Subject: TAKE THAT BUSH- WHACK!!! From: Erica To: Pete Weis Date Posted: Fri, Jul 23, 2004 at 09:32:21 (EDT) Email Address: Not Provided Message: I actually thought Mr. Krugman's column was the hugest smackdown of Bush I have seen in a long, long, long time.

Subject: Re: 'The Arabian Candidate' From: El Gringo To: Pete Weis Date Posted: Tues, Jul 20, 2004 at 14:11:36 (EDT) Email Address: nma@hotmail.com Message: 632 1,155 = ?

Subject: Re: 'The Arabian Candidate' From: El Gringo To: El Gringo Date Posted: Tues, Jul 20, 2004 at 17:15:17 (EDT) Email Address: nma@hotmail.com Message: 632 plus 1,155 equals?

Subject: space conspiracy From: raj To: All Date Posted: Sun, Jul 18, 2004 at 20:23:14 (EDT) Email Address: raj@interchange.ubc.ca Message: I think the costs might be inflated, but the message is terrifying gagnon www.dollarsandsense.org/0304gagnon.html

Subject: Market Forecast From: Emma To: All Date Posted: Sun, Jul 18, 2004 at 15:06:26 (EDT) Email Address: Not Provided Message: A Market Forecast Takes a Long View, and a Dismal One It Is By MARK HULBERT - New York Times THE stock market in the summer of 2008 is likely to be only barely higher than it is today. That disheartening prediction comes from a market-timing model with an excellent record of forecasting four-year stock market returns. The model is based on projections from analysts at Value Line for price changes over the next three to five years in the 1,700 stocks they monitor. The median of those projections is published each week in the Value Line Investment Survey. Value Line doesn't advise investors about how to interpret this statistic. But since 1968, when Value Line began publishing it, low readings have generally been followed by mediocre stock market returns over the next four years. Similarly, high readings have typically been followed by above-average returns over similar periods. To be sure, the Value Line numbers haven't been very accurate in forecasting short-term market moves. But they have been quite reliable in predicting the longer term. They have proved particularly useful when the mood of investors reaches extremes of euphoria or despair. Value Line's median projection was last considered in this column on Sept. 30, 2001, less than three weeks after the terrorist attacks. At that writing, the indicator was at 105, its highest in more than a decade. At the time, many investors were unwilling to make any bets on the stock market, but those who relied on that high reading to invest in equities have been rewarded. The Standard & Poor's 500-stock index has produced a cumulative total return of 20 percent since Sept. 21, 2001, the day of the market's post-attack lows. Unfortunately for market bulls, however, the Value Line reading has now sunk to 50, a very low level. Over the last 36 years, in fact, the reading has been lower just 11percent of the time. The indicator has limits, of course. It's hardly foolproof. And because it focuses on median performance, it is not helpful in projecting how large-capitalization stocks will perform relative to small caps. If the large caps lead the market over the next four years, indexes that are dominated by the large caps - like the S.& P. 500 - will do better than the indicator suggests. Credit for realizing the indicator's market-timing power is shared by at least two people, who independently reported on its usefulness in the mid-1980's. The first is Daniel A. Seiver, an economics professor at Miami University in Ohio and the editor of the PAD System Report, an investment newsletter. The second is Peter L. Bernstein, the founding editor of The Journal of Portfolio Management and now the head of a consulting firm that bears his name. Professor Seiver is so confident about the indicator's market-timing powers that he bases his newsletter's market-timing advice on it. He considers any reading of 100 or more to be a buy signal, for example, while he uses a reading of 50 or below as an occasion to build a large cash position in his model portfolio. Based on the current reading of 50, Professor Seiver is recommending being only 50 percent invested in stocks. And he says he will not advocate reinvesting any of that cash in the stock market until Value Line's median projection rises back to at least 100. Professor Seiver says several factors help explain the indicator's usefulness. First, he says he finds that Value Line stock analysts tend to be 'less susceptible to valuation manias' than most other analysts, because Value Line's are independent, immune from the pressures that can be found in research departments associated with investment banks and brokerage firms. A second factor, he said, is that few other firms besides Value Line even bother to focus on what will happen in three to five years, concentrating instead on just the next 12 months. Because so few other analysts are looking so far ahead, Value Line's researchers should find it relatively easy to spot profit opportunities. 'Wall Street is certainly myopic,' he said. 'Anyone who is willing to focus on the longer term should be able to earn a bonus for doing so.' A third factor, Professor Seiver said, is the 'law of large numbers,' which holds that random errors become insignificant when focusing on many observations. He has no doubt that many Value Line projections of individual stocks' three-to-five year returns are wide of the mark. But because the median projection is the distillation of nearly 2,000 separate forecasts, he said, 'the analysts' errors will tend to cancel each other out.' And for now, the overall forecast suggests that investors should not be too optimistic about the stock market.

Subject: Re: Market Forecast From: Pete Weis To: Emma Date Posted: Sun, Jul 18, 2004 at 19:12:54 (EDT) Email Address: Not Provided Message: Buffet sitting on 40 billion in cash seems to be getting it right once again - who woulda thought....? Some times it's best to maintain what you have when everyone around you is losing ground. How many of us wish now that we had done precisely that when the markets started downward in early 2000. Some times you stay ahead of the game by picking the right time to simply maintain.

Subject: Cash From: Terri To: Pete Weis Date Posted: Mon, Jul 19, 2004 at 13:20:00 (EDT) Email Address: Not Provided Message: Still there are different ways to sit on cash. Lokk at all the conservative options for safe bonds positions at Vanguard. There is the gnma bond fund, there is short term corporate....

Subject: Re: Cash From: Emma To: Terri Date Posted: Mon, Jul 19, 2004 at 14:18:36 (EDT) Email Address: Not Provided Message: Cash simply means liquidity, and there is always liquidity in short term bonds. Still, I think you should always be largely invested unless you are a market timer. There is no reason not have a sound position in stocks, bonds and moderate cash reserves. For Berkshire Hathaway 40 billion in liquid assets is reasonable. I see no reason not to own a broad stock index fund right now.

Subject: Re: Cash From: Pete Weis To: Emma Date Posted: Tues, Jul 20, 2004 at 01:21:53 (EDT) Email Address: Not Provided Message: 'I see no reason not to own a broad stock index fund right now.' Emma. I'm interested in your reasons behind this statement. We know that Buffet stated he could find 'few if any stocks at a value worth buying' in his letter to the Berkshire-Hathaway shareholders on March 3 of 2003. Now that we've had a substantial market run-up since, one can only surmise that he feels even more strongly about an over-valued market presently. The Economist recently ran an article suggesting investors should sell out of the market now - in fact that was the title. I read over and over again statements by long time market analysts who say no bear market ever ends until PE's get well below 10. The S&P index ran below a 10 PE for very extended periods of time in the past, including the 30's thru the 40's and throughout the 70's. I might add those PE's were based on actual GAAP earnings and not proforma or PE's based on future 'expected earnings'. Richard Russell, who Barrons calls perhaps the best market analyst in the business, has called the recent rally an echo or bear market rally in what will be a long term bear market with some large drops to come. Buffet has stated - 'unfortunately the bust will be proportional to the boom' (we've had the biggest and longest stock market boom in history). You've just started this thread in regard to a New York Times article which talks about a less than a rosey outlook for stocks. So why should any investor, no matter what their 'time horizon' invest in a broad stock index fund which has little upside potential presently and is likely to drop in value for some period of time to come and has at least some chance of dropping heavily as it did in early 2000? You post about many truely important issues and your posts, IMO, are very, very high quality (much better than mine). I think we agree on most issues. But I have never understood the logic of investing in anything that is more likely to go down in value than up. Market 'timing' is about attempting to ride the smaller ups and downs of markets (very difficult to do). But long term investing is, IMO, recognizing major changes in trends and not fighting that trend or becoming a victom of that trend. Does this make sense?

Subject: Re: Cash From: Emma To: Pete Weis Date Posted: Tues, Jul 20, 2004 at 12:17:07 (EDT) Email Address: Not Provided Message: Pete, thank you. Your posts are interesting and thorough. I partially agree with you and will respond more carefully above. If dividends were higher I would have no thought about investing no matter the valuations and timing. Dividends are poor by historical standards so I am more cautious. What dividends do is provide income while capital gains are waited for, so since market timing is so tricky why not wait out difficult market in income paying stocks? My first choice for investing now is a large cap value index fund. At least there are dividends.... Continued

Subject: Re: Market Forecast From: Terri To: Emma Date Posted: Sun, Jul 18, 2004 at 16:44:48 (EDT) Email Address: Not Provided Message: Emma Suppose high current valuations mean scant market returns over several years, how do you invest? Sitting in cash never makes sense to me. Do you stick with a healthy portion of short term bonds? Bonds surely have little gains in store for investors. What about simply leaning to value stocks? What is your strategy? Terri

Subject: Re: Market Forecast From: johnny5 To: Terri Date Posted: Mon, Jul 19, 2004 at 12:05:59 (EDT) Email Address: johnny5@yahoo.com Message: Buffet said he was getting out of the US dollar, and investing in foreign markets - who am I to argue with the ORACLE. Go buy some chinese companies or indexes or bonds right?

Subject: Re: Market Forecast From: Terri To: johnny5 Date Posted: Mon, Jul 19, 2004 at 13:05:42 (EDT) Email Address: Not Provided Message: Please tell us when and where Warren Buffett made those comment. Interesting, and mentioned elsewhere but with no context given.

Subject: Re-inventing foreign aid? From: El Gringo To: All Date Posted: Sun, Jul 18, 2004 at 06:14:39 (EDT) Email Address: nma@hotmail.com Message: http://www.economist.com/opinion/displayStory.cfm?story_id=693193

Subject: Re: Re-inventing foreign aid? From: Mik To: El Gringo Date Posted: Tues, Jul 20, 2004 at 16:20:40 (EDT) Email Address: Not Provided Message: Here is a little irony in that very story: The story talks about the need for much more aid in the developing but makes the statement, 'During the cold war, the United States and its allies provided the global public good of containment, investing trillions of dollars to stop the spread of communism.' In this very cold war, the communists also invested heavily in the developing world. We had a war of alligience going on and I hate to say it - the communists were winning that war. In turn because of these 'trillions' invested from both sides simply to gain allegience the result was the backing of dictators, casting a blind eye to proper development and allowing whole regions to disintegrate. In essence, from my experience, this war on allegience and more importantly, the influence of the communists (more than the West) has influenced the developing world in so many ways that it has become a tangled mess. Centrally run government departments, accounting principles that do not allow for wear & tear, etc, etc, etc have literally not only resulted in the totall degrading of infrastructure but in the loss in capacity of the local population to run their country from the lowest levels to the highest levels. Soviet lead Communism has been over for more than 10 years now. We have a chance to do things right. But the decisions on how and who should remain in the hands of the Development Banks not any particular government.

Subject: Re: Re-inventing foreign aid? From: El Gringo To: Mik Date Posted: Tues, Jul 20, 2004 at 16:26:16 (EDT) Email Address: nma@hotmail.com Message: 'But the decisions on how and who should remain in the hands of the Development Banks not any particular government.' IMF or WB?

Subject: Re: Re-inventing foreign aid? From: setanta To: El Gringo Date Posted: Wed, Jul 21, 2004 at 07:34:28 (EDT) Email Address: Not Provided Message: does it matter which? either one has more credibility than all the tin pot dictators and their crazy laws put together (see Zimbabwe and the ban on the colour red on TV because it is the colour of the opposition, also Burma and the coin denominations of 9 and 13 because they are the military dictator's lucky numbers)

Subject: Re: Re-inventing foreign aid? From: Mik To: setanta Date Posted: Wed, Jul 21, 2004 at 09:41:06 (EDT) Email Address: Not Provided Message: No my point is that the World Bank, Asian Development Bank, African Development Bank and Inter-American Development are already funded by governments. However, the development Banks have far more balanced policies and less chance of political influence. This is better than funding from Government Aid agancies such as USAID, AFD (French), SIDA, DANIDA, etc, etc. Not to say that the Aid agencies are all bad, just that there is a far stronger chance of political influence on these agencies. Uhmmm just as a further note - although Zimbabwe has been doing plenty stupid things - I think the ban on the colour red is a little hype considering there is bold red colour on the Zimbabwe flag. As for Burma - I just checked and it appears their 'weird' denominations are 15, 45 and 90 Kyat (Dollar) bills. I thought I'd point something out - where I come from a 25 cent coin or quarter is a weird denomination.

Subject: Re: Re-inventing foreign aid? From: setanta To: Mik Date Posted: Wed, Jul 21, 2004 at 12:19:40 (EDT) Email Address: Not Provided Message: i agree with your point on international agencies, especially supra-national ones. think PK once said how, by and large, they are a force for good. i'll attach in the article later. my mistake about burma, should have researched it better. actually, i'm from euroland and our denominations are 1,2,5,10,20,50,100,200 (cents) and 5,10,20,50,100,200,500 euro notes. suppose its better than old imperical denomiations of the english pound (and irish punt)!

Subject: Re: Re-inventing foreign aid? From: Mik To: setanta Date Posted: Wed, Jul 21, 2004 at 13:52:08 (EDT) Email Address: Not Provided Message: ah - so maybe you will understand why I find it weird to see a 25c coin here in North America - I'm used to all of your denominations.

Subject: Wage Rises - Price Rises From: Terri To: All Date Posted: Sat, Jul 17, 2004 at 16:44:54 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/18/business/18WAGES.html?hp Hourly Pay in U.S. Not Keeping Pace With Price Rises By EDUARDO PORTER The amount of money workers receive in their paychecks is failing to keep up with inflation. Though wages should recover if businesses continue to hire, three years of job losses have left a large worker surplus. 'There's too much slack in the labor market to generate any pressure on wage growth,'' said Jared Bernstein, an economist at the Economic Policy Institute, a liberal research institution based in Washington. 'We are going to need a much lower unemployment rate.'' He noted that at 5.6 percent, the national unemployment rate is still back at the same level as at the end of the recession in November 2001. Even though the economy has been adding hundreds of thousands of jobs almost every month this year, stagnant wages could put a dent in the prospects for economic growth, some economists say. If incomes continue to lag behind the increase in prices, it may hinder the ability of ordinary workers to spend money at a healthy clip, undermining one of the pillars of the expansion so far. Declining wages are likely to play a prominent role in the current presidential campaign. Growing employment has lifted President Bush's job approval ratings on the economy of late. According to the latest New York Times/CBS News poll, in mid-July, 42 percent of those polled approved of the president's handling of the economy, up from 38 percent in mid-March. Yet Senator John Kerry, the likely Democratic presidential nominee, is pointing to lackluster wages as a telling weakness in the administration's economic track record. ``Americans feel squeezed between prices that are rising and incomes that are not,'' Mark Mellman, a pollster for the campaign, said in a memorandum last month. On Friday, the Bureau of Labor Statistics reported that hourly earnings of production workers - nonmanagement workers ranging from nurses and teachers to hamburger flippers and assembly-line workers - fell 1.1 percent in June, after accounting for inflation. The June drop, the steepest decline since the depths of recession in mid-1991, came after a 0.8 percent fall in real hourly earnings in May. Coming on top of a 12-minute drop in the average workweek, the decline in the hourly rate last month cut deeply into workers’ pay. In June, production workers took home $525.84 a week, on average. After accounting for inflation, this is about $8 less than they were pocketing last January. And it is the lowest level of weekly pay since October 2001.

Subject: Re: Wage Rises - Price Rises From: Pete Weis To: Terri Date Posted: Sat, Jul 17, 2004 at 23:29:15 (EDT) Email Address: Not Provided Message: This comes after the greatest economic stimulus package in history. 2003 saw over 2 trillion (in a 10 trillion dollar economy)in refinancing alone. By way of comparison, the late 90's (good years for real estate markets) saw around 1 trillion per annum for total mortgage originations and refinancing represented less than 50%. Thirteen Fed rate drops in the 30 months preceding June of 2003 stimulated a furious pace of refinancing which dwarfed any stimulus brought about by tax cuts. And as discussed on this board in the past and explained by Paul Krugman, Warren Buffet, and many others -most of the tax cut package was not targeted at wage earners. So if wages are not improving against a tide of inflation and refinacing has now fallen considerably from its heady days of 2003, what will now keep the US consumer consuming in an economy which is more dependent on the consumer than ever in history?

Subject: Consumption From: Terri To: Pete Weis Date Posted: Sun, Jul 18, 2004 at 13:49:54 (EDT) Email Address: Not Provided Message: We are a wealthy country and we like to consume. What is most likely seems to slowing of consumption however. This slowing of consumption will slow growth, but not in a dramatic fashion.

Subject: Re: Consumption From: Pete Weis To: Terri Date Posted: Sun, Jul 18, 2004 at 18:58:34 (EDT) Email Address: Not Provided Message: Terri. What concerns me - if the truely massive economic stimulus of 2002-2003 did so little to float the economy much above water, what will much less economic stimulus get us between now and the end of 2005, now that interest rates can no longer fall from here? I'd be surprised if consumption didn't fall somewhat dramatically from here. If you remove some 2 trillion in refinancing from a 10 trillion dollar economy, without some really serious wage growth, wouldn't that have a large negative impact? What would replace it?

Subject: Consumption From: Terri To: Pete Weis Date Posted: Mon, Jul 19, 2004 at 17:18:22 (EDT) Email Address: Not Provided Message: The possibility of stagnant domestic demand in the American economy may be one of the significant investment worries right now. I do not see a decline in demand but can easily see a slowing of growth in demand.

Subject: Re: Consumption From: Pete Weis To: Pete Weis Date Posted: Sun, Jul 18, 2004 at 20:01:39 (EDT) Email Address: Not Provided Message: An Atlanta Business Chronical article reprinted on the MSNBC site 4 July 2004 stated the following: 'After breaking records in 2003 at $3.9 trillion, total US mortgage origination is expected to fall to $2.4 trillion this year and slide to $1.7 trillion in 2005, according to forecasts from the Washington, DC - based Mortgage Bankers Association.' This would be a $2.2 trillion drop in total mortgage originations - suspect with even slightly higher interest rates, nearly all the drop would be in refinancing. It's very hard to overstate the importance of a $2.2 trillion loss to the economy.

Subject: Mortgage From: Terri To: Pete Weis Date Posted: Mon, Jul 19, 2004 at 17:21:08 (EDT) Email Address: Not Provided Message: A dramatic decline in mortgage origination could be a more serious problem. My guess is the Federal Reserve will move quite slowly on raising interest rates. Thanks!

Subject: Paul Krugman in London From: Emma To: All Date Posted: Sat, Jul 17, 2004 at 14:20:07 (EDT) Email Address: Not Provided Message: July 17, 2004 THE PERFORMANCE: Don't mention the war By James Harkin Financial Times Paul Krugman's terse opening transparency on the overhead projector looks more like a private aide-memoire than material for a public address: 'Like Basil Fawlty, don't mention the war. Talk instead about political economy.' Krugman has been invited to the London School of Economics, a bastion of liberal Americans abroad, to deliver a lecture entitled, 'Whither America?' A small, bearded man with a glint in his eye, he is dwarfed by the imposing lectern on the stage of the LSE's Old Theatre. In front of him, undergraduates in sweatshirts and trainers sit alongside middle-aged men in pinstriped suits who have just arrived from the office. This 51-year-old former staff economist on Ronald Reagan's Council of Economic Advisers made his name in international trade theory and seemed destined for a remote but rewarding career as an academic economist at Princeton University. But the economist began turning his hand to part-time journalism. After September 11, Krugman's column in The New York Times was one of the first to poke its head above the parapet and lay into the conduct of the Bush administration's 'war on terror'. Since then, the left has elevated Krugman to hero, an eloquent and apparently unimpeachable critic of Bush's tax-cutting and of his stewardship of the American economy. He begins diligently, all graphs and bar charts. The Bush administration's series of tax cuts, he announces, are not a temporary stimulus to the economy, but a 'structural reduction in government revenue'. 'You deprive the government of the revenue,' he says, outlining what he takes to be the strategy of Bush's circle. 'You simply say the revenue is not there.' Since most government spending is 'incompressible', he forecasts the shortfall can only be made good by cutting social insurance programmes in half. Who benefits? 'We can be pretty clear on the math,' says Krugman, pulling up another transparency. This one shows the bottom fifth of American wage earners have been spared a mere 0.4 per cent of their income by Bush's tax cuts, while those in the top 1 per cent have benefited from a 6.1 per cent cut in their taxes. If there was a budget surplus, says Krugman, showing us what a reasonable man he can be, then there would be a case for tax cuts which are proportional to income. 'But we are cutting taxes into a deficit,' he fumes. 'For those in the middle of society, it is like being given a lavish gift, but one which is paid for on your credit card.' This is a wry economist's joke and it gets a muffled laugh from his scholarly audience. The fact that the majority of Americans are prepared to go along with such a state of affairs, he says, is a 'political puzzle' that his graphs and bar charts are at a loss to solve. So Krugman takes a different approach. Scribbling furiously on a blank transparency, he tells a story of three men, one of whom earns more than the others, who are all asked to contribute to a commonly beneficial public project through a tax proportional to their income. If we go on to assume that the income of the highest earner rises and that the tax project is proposed again, he argues, then at some point we find that the highest earner will get less out of the project than he puts in. What emerges from his elementary maths, Krugman reckons, is logical proof that as the economic elite begins to amass more of the national income and becomes remote from the rest of society, it has a diminishing incentive to spend on projects funded through a tax that is proportional to income. 'I am not a Marxist,' he says, to another indulgent laugh from his audience, 'but I do believe that economic interests matter.' Now Krugman the painstaking number cruncher is beginning to jostle for position with Krugman the political agitator. There is a whiff of intrigue in his telling of the story of contemporary American politics, the suggestion of men in the dark plotting strange, millennial occurrences. But he makes no apologies. 'Last year's crazy conspiracy theory,' he says, 'is this year's established wisdom.' Someone asks how the situation can be turned around. The fallout from 'you know where', says Krugman, 'has a chance of undoing the pendulum and causing it to swing in the other direction'. So, it's not about the economy after all, stupid, but about the war. And, as Krugman playfully implies, Bush's mainstream opponents are reserving a tactical silence. A young woman in the audience wonders whether Bush's victory has created an ideological wave that is now washing over the fiscal policy of governments in western Europe. But Krugman cannot see it. What is happening now in Europe, he says, is mild in comparison to anything in the US. 'If I was in Germany,' he says, 'I'd be reviled as a rightwing, laissez-faire economist.' A middle-aged man wants to know why more academics and intellectuals have not spoken out against the Bush administration. 'It is difficult for some academics to grapple with the fact that budget projections are blatantly, sneeringly dishonest,' Krugman admits. 'But actually university professors got a lot noisier recently.' They certainly did.

Subject: Sadness in Africa From: Emma To: All Date Posted: Fri, Jul 16, 2004 at 15:02:28 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/16/international/africa/16afri.html Devastated by AIDS, Africa Sees Life Expectancy Plunge By CELIA W. DUGGER Africa is getting poorer and hungrier as life expectancy continues its steep decline in the countries hardest hit by the AIDS pandemic, according to a United Nations report released Thursday. It said infants born now in seven nations with high rates of H.I.V. infection could expect to live less than 40 years. The report, by the United Nations Development Program, also said the sub-Saharan African region as a whole was getting poorer, with the prospect that rising numbers of Africans will subsist on less than $1 a day in the years to come. Last year, the United Nations Development Program projected that it would take Africa more than 140 years to halve the number of people living in extreme poverty. But this year, as even that slight progress is gone, its annual Human Development Report states that 'no date can be set because the situation in the region is worsening, not improving.' As Africa struggles with the world's heaviest AIDS burden, South Asia and East Asia are making rapid progress in reducing poverty and hunger, driven mainly by the advances of China and India, the two most populous countries, the report found. Africa's setbacks are a break from recent decades of progress. From 1960 to 2000, for example, life expectancy in developing countries rose to 63 years from 46. Africa was part of that progress until the mid-1990's, when AIDS began seriously eroding its gains. The bleak statistical portrait of sub-Saharan Africa, drawn from the 2004 Human Development Report, does not spare South Africa, the region's economic powerhouse, which celebrated a decade of post-apartheid democracy this year. It is a discouraging portrait that the South African government sharply disputed Thursday. The report's summary measure of well-being - gauged by life expectancy, literacy, school enrollment rates and per-capita income - shows that South Africans are worse off today than they were when apartheid ended. That finding is largely driven by falling life expectancy because of AIDS, which the United Nations Development Program set at 48.8 years for South Africa in this year's calculation. Joel Netshitenzhe, a spokesman for the South African government, called the United Nations' life expectancy estimate 'nonsensical.' South Africa's Medical Research Council, a government-financed independent body, estimated that life expectancy in South African had fallen much less severely, to 55 in 2000 from 57 in 1995. According to the South African government's assessment of its people's well-being, based on the higher, national calculations of life expectancy, South Africans are better off than they were a decade ago. 'We have interacted with the U.N.D.P. and demonstrated that some of the data they used to come to their conclusions are inaccurate,' Mr. Netshitenzhe said. Fu Haishan, a statistician with the United Nations Development Program, said the Human Development Report relied on statistics from the World Bank and United Nations agencies that specialize in education, hunger and population 'to ensure minimum and common standards are used.' Mark Malloch Brown, administrator of the program, said in an interview that he had had difficult exchanges with South Africa over the report's findings. He called the life expectancy data for South Africa 'catastrophic,' even as he recognized post-apartheid improvements in education, electricity and water provision. As to what South Africa needs to do, Mr. Malloch Brown said, 'Fix the AIDS problem.' South Africa's president, Thabo Mbeki, has been criticized at home and abroad for being slow to aggressively tackle AIDS. More than five million South Africans are infected with H.I.V. And unlike neighboring Botswana, which started an effort to provide drug treatment to people with AIDS in 2001, South Africa's treatment effort just got under way this year. The South African government spokesman, Mr. Netshitenzhe, defended the government's AIDS effort, saying it had the continent's biggest prevention program and expected to be providing drug treatment to 53,000 people by March.

Subject: Re: Sadness in Africa From: Terri To: Emma Date Posted: Fri, Jul 16, 2004 at 15:52:25 (EDT) Email Address: Not Provided Message: Thank you, Emma. How sad.

Subject: Re: Sadness in Africa From: Emma To: Terri Date Posted: Fri, Jul 16, 2004 at 17:05:29 (EDT) Email Address: Not Provided Message: Southern Africa is unhappily going in an opposite development direction from Asia.

Subject: Re: Let me see what ... From: El Gringo To: Emma Date Posted: Fri, Jul 16, 2004 at 18:16:58 (EDT) Email Address: nma@hotmail.com Message: Emma:http://www.songlyrics4u.com/frank-sinatra/fly-me-to-the-moon.html

Subject: Re: Let me see what ... From: Emma To: El Gringo Date Posted: Fri, Jul 16, 2004 at 19:27:37 (EDT) Email Address: Not Provided Message: Come fly with me, Dear El Gringo. To the moon or elsewhere.

Subject: Re: spring looks like in Angola or Zimbabwe From: El Gringo To: Emma Date Posted: Fri, Jul 16, 2004 at 20:34:06 (EDT) Email Address: nma@hotmail.com Message: 'Ashdown told CNN/Money that, while the Mars proposal could very well be killed -- a 'sacrificial lamb' to appease fiscal conservatives -- the president's budget will also not include the impact of a transportation bill that could cost as much as $375 billion and could be passed this year.'...Africa? (Department of 'Huh', I'm banging my head against the wall..., Emma)

Subject: Re: spring looks like in Angola or Zimbabwe From: WRS To: El Gringo Date Posted: Mon, Jul 19, 2004 at 14:06:24 (EDT) Email Address: Not Provided Message: George Bush visited Africa in July 2003 and is one of the only American presidents (in addition to Bill Clinton) who has been there while in office. Before you bang your head against the wall, you might research more information about Bush's Africa policy: http://www-sul.stanford.edu/depts/ssrg/africa/georgebushafricatrip2003.html

Subject: Re: spring looks like in Angola or Zimbabwe From: El Gringo To: WRS Date Posted: Mon, Jul 19, 2004 at 15:00:02 (EDT) Email Address: nma@hotmail.com Message: 'George Bush visited Africa in July 2003 and is one of the only American presidents (in addition to Bill Clinton) who has been there while in office.' Dear WRS:That gives me a reason to 'somehow' respect him aswell as his daughter.

Subject: America's Response From: Emma To: El Gringo Date Posted: Mon, Jul 19, 2004 at 19:12:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/14/health/14aids.html Early Tests for U.S. in Its Global Fight on AIDS By DEBORAH SONTAG The Bush administration did not consult with Mozambique last year before designating the country as a beneficiary of its emergency AIDS plan. Mozambique was simply informed that it would be one of 12 African nations, and 15 countries overall, awarded substantial financial assistance. The pledge of big money was certainly welcome, said Francisco Songane, the Mozambican health minister; AIDS has lowered life expectancy in Mozambique to 38. But the approach, perceived by many Mozambicans as arrogant and neocolonial, was not. Mozambique, in southeastern Africa, had spent considerable time developing a national strategy to combat its high rate of H.I.V. infection. Other international donors had agreed to pool their contributions and let the Mozambicans control their own health programs. Thus, Mozambican officials recoiled when the Americans said earlier this year, 'We want to move quickly, and we know that your government doesn't have the capacity,' Mr. Songane said. The Bush administration wanted the bulk of its funding to go toward more costly brand-name antiretroviral drugs for treatment programs run by nongovernmental organizations. But Mozambique had already decided to treat its people with 3-in-1 generic pills, which were cheaper and simpler to take. Also, Mozambique did not want an American program dependent on costly foreign consultants, NGO's and the largesse of foreign political leaders, that would run parallel to its own. There were confrontational meetings in Washington and in Maputo, the capital of Mozambique. And in the end, to the surprise of many, the Bush administration agreed to give Mozambique the kind of help it really wanted, by strengthening its laboratories, blood-transfusion centers and the Health Ministry itself - albeit indirectly, through a grant to Columbia University. 'What I witnessed in Mozambique was a disaster averted,' said Dr. Steven Gloyd, an international health specialist at the University of Washington who works with Mozambique. 'So, for countries like Mozambique, this may turn out to be a positive intervention, even though it could be a lot more.' Seventeen months after President Bush announced his five-year, $15 billion emergency AIDS initiative, the program is belatedly getting under way, and surprising some critics of what is seen as its go-it-alone approach. In some cases, the plan is proving to be more adaptive and collaborative than had been expected, especially when countries are strong enough to stand their ground. The plan is already directing considerable money into health clinics, laboratories, testing centers and hospices, AIDS treatment, prevention of H.I.V. and care of orphans. For every Mozambique, however, where Washington has altered its plans to meet local objections, there is a Zambia, where local officials are in the dark. The Zambian health minister, Brian Chituwo, said his government did not have a formal meeting on the program with the American ambassador until May, 15 months after Zambia's role was announced. Further, he said, on everything but blood-transfusion services, which were negotiated, the Americans' plans for Zambia have 'all come from Washington.' The American plan, one senior United Nations official said, 'has created turbulence wherever it has gone.' But another, Michel Sidibe, praised the Americans for making a 'major shift' in May by signing 'a declaration of harmonization' in which they pledged to coordinate their anti-AIDS activities with other donors.

Subject: America's Response From: Emma To: WRS Date Posted: Mon, Jul 19, 2004 at 14:26:44 (EDT) Email Address: Not Provided Message: http://www.furl.net/search?search=cache&id=536934&url=http://www.nytimes.com/2004/07/13/books/13FINK.html 2 Authors Outraged at U.S. Response to Global AIDS By SHERI FINK Deaths from AIDS have plummeted in the United States but are soaring in poor countries, where millions of ill adults and children lack access to life-extending medications available in wealthier countries. Framing the multitude of avoidable AIDS deaths as a monumental crime, two books dust for the fingerprints of politicians and multinational corporations while taking the wider public to task for years of complicit silence. In 'The Invisible People,' Greg Behrman, an AIDS policy coordinator for the Council on Foreign Relations, tracks anemic global AIDS spending through several American administrations, profiling a dizzying array of power brokers. Anne-Christine d'Adesky's 'Moving Mountains' — by turns journalistic, textbook-like and polemical — discusses the myriad obstacles to preventing and treating AIDS in poor countries but highlights successes that prove it is possible. (Many of these issues are being discussed this week at the 15th International Aids Conference in Bangkok.) 'The Invisible People' grew from Mr. Behrman's Oxford University master's degree research on the H.I.V./AIDS pandemic as a threat to American national security. Noting that life expectancy in several African countries had dropped by more than 30 years and that the disease was spreading quickly in Asia and Eastern Europe, he began to wonder, 'What had the United States done to address this crisis?' Mr. Behrman writes that as the disease emerged in the Ronald Reagan years of the 1980's, conservative leaders imposed 'a vituperative, ill-informed brand of moralism on policy, making it clear to the administration that there would be a political price to pay for engaging AIDS.' The opening act in the global AIDS tragedy revealed the government's misguidedly self-interested objective: it banned foreigners with H.I.V. from entering the United States, a policy with little public health merit that remains on the books today. Money is Mr. Behrman's useful but necessarily limited gauge of global AIDS-fighting commitment. From 1990 to 1999, as tens of millions of H.I.V. infections accrued worldwide, the majority in sub-Saharan Africa, American spending on global AIDS inched to $215 million from $100 million during the presidencies of George H. W. Bush and Bill Clinton. By comparison, the United States, with roughly one million citizens infected over the decade, invested up to $10.6 billion a year to combat the domestic epidemic. Well researched and unsparing, 'The Invisible People' presents many of the more maddening and inexcusable reasons for the languishing American response to global AIDS in the 1990's, including Congressional antagonism to foreign aid spending, 'passive racism,' and disarray among United Nations health officials, who failed to offer plausible global figures on H.I.V. prevalence until 1998. Mr. Behrman also points to the early silence of domestic AIDS activists, African-American leaders and heads of countries being ravaged by the disease, although he fails to suggest what types of health programs could have been used to fight global AIDS before effective treatments existed....

Subject: Budget Fakery From: Terri To: El Gringo Date Posted: Sat, Jul 17, 2004 at 13:50:46 (EDT) Email Address: Not Provided Message: The budget sleight of hand - fakery - in this administration is beyond parody.

Subject: What you odn't want to hear From: Mik To: Terri Date Posted: Tues, Jul 20, 2004 at 16:03:35 (EDT) Email Address: Not Provided Message: Interesting story about AIDS in Africa. A disease that is incredibly expensive to 'treat'. Consider that on a 'per capita' income many African countries have masses of people earning less than a Dollar a day. How on earth could they afford the medication? Help from the developed world? South Africa is a unique case - too rich to receive aid money but too poor to look after its AIDS victims. In essence the view expressed by president Mbeki of South Africa was shocking. He has back-tracked from his stupidity but not made any mention in public. BUT why did his view that 'HIV does not lead to AIDS' come from? And why did the government decide not to fund retroviral treatment to its masses? Simple - they did the math. In simple terms for a country who has 30% of the population either un-employed or earning less than US$120 a month (they can't measure the informal sector) how on earth can they afford the treatment? It is believed that 1 million people are HIV in SA. A treatment that can last 10 or more years would financially cripple the South African economy. Many argue that losing 1 million of their work force would also cripple the economy, but at such a high employment level, it appears that Mbeki would rather gamble on letting a huge chunk of the population die, save the medical cost and create employment for the un-employed masses. Is this a disasterous, evil and cruel strategy or a very carefully evaluated decision? I don't know how to answer this question (other than look at the inhumane side). Dare I ask for an opinion from you guys? Is the sacrifice of a mass of people for the greater good of the future of the country a proposition? Spooky thought isn't it?

Subject: Re: What you odn't want to hear From: Emma To: Mik Date Posted: Tues, Jul 20, 2004 at 16:19:10 (EDT) Email Address: Not Provided Message: The denial of the AIDS problem by the government in South Africa is really a tragic mystery, and surely does not include Nelson Mandela.

Subject: Re: What you odn't want to hear From: Mik To: Emma Date Posted: Tues, Jul 20, 2004 at 16:24:30 (EDT) Email Address: Not Provided Message: Nelson Mandela has been one of the most vocal oponents of Mbeki's actions. And Mandela has funded many AIDS patients thorugh his own foundation. I hate to raise this phrase but here goes, 'according to Karl Marx: the death of a few is a tragedy, the death of millions is a statistic.' Is it really a 'tragic' mystery? or a statistic? I'm not arguing with you as I agree with you - but just raising the point and looking for a logical answer rather than a 'humane' answer.

Subject: We Must Treat All From: Emma To: Mik Date Posted: Tues, Jul 20, 2004 at 18:45:20 (EDT) Email Address: Not Provided Message: All AIDS sufferers must be treated by logic and humanness.

Subject: Re: What you odn't want to hear From: The 'Afrikaan' alias El Gringo To: Mik Date Posted: Tues, Jul 20, 2004 at 16:52:20 (EDT) Email Address: nma@hotmail.com Message: What is, in this case, a 'humane' answer?

Subject: The Dollar From: Terri To: All Date Posted: Thurs, Jul 15, 2004 at 17:10:26 (EDT) Email Address: Not Provided Message: A decline in the dollar however gentle over an extended period, means we had better diversify asset holdings with international stocks. But, do you index in Europe when European economies are so sluggish? Do you index in Asia when the market risk is so much higher? How do you allocate a portfolio in a rising interest rate falling dollar setting?

Subject: Re: The Dollar From: Pete Weis To: Terri Date Posted: Thurs, Jul 15, 2004 at 23:03:34 (EDT) Email Address: Not Provided Message: Global income funds which invest in fixed securities of countries which have balanced budgets and balanced trade and who offer higher rates of return than that which is available here in the US. Often these funds have gold and silver bullion as part of their investment strategy but not more than 10%. These funds have done well over the last couple of years minus some short periods where the dollar has rallied. They provide a conservative hedge against the falling dollar. The problem with overseas equity index funds is their sensitivity to what happens to the US equity markets, the US consumer, oil shock, and geopolitical events. European equity markets are generally considered to be of a better value and the Euro stronger, but there's presently more risk there than I'm comfortable with. You can also invest in funds which invest in companies which produce commodities. Increasing demand by growing economies like India and China give these companies pricing power - something which is becoming rarer these days.

Subject: Re: The Dollar From: David E... To: Terri Date Posted: Thurs, Jul 15, 2004 at 22:53:32 (EDT) Email Address: Not Provided Message: http://billmon.org/archives/001510.html#more is a good link. There is a outline there for a bout of hyper-inflation followed by severe deflation. What a one-two punch to a portfolio! Modern Portfolio Theory doesnt try to pick winners. The reason is that the market will be wrong longer than your money will last. A solution is a mix of negatively correlated assets that maxes the return for a given amount of risk. I too had the thought that foreign assets could be advantageous, but like you, have had trouble planning what do do. I went to www.ifa.com. Filled out the risk profile questionaire and they recommended one of their 20 standard portfolios to me. They recommended, ivory, portfolio #05. It was interesting because it was the first portfolio I had seen with 45% foreign investment. 38% of it low duration bonds. This is a direction that I want to investigate. So where I am now is trying to duplicate that portfolio so I can understand the portfolio risks. I have a Morningstar conversation where I am asking for help. http://socialize.morningstar.com/NewSocialize/asp/FullConv.asp?forumId=F100000015&convId=117919

Subject: Re: Terri From: El Gringo To: Terri Date Posted: Thurs, Jul 15, 2004 at 18:28:52 (EDT) Email Address: nma@hotmail.com Message: http://www.j-bradford-delong.net/movable_type/2004_archives/001203.html

Subject: Brad DeLong From: Terri To: El Gringo Date Posted: Thurs, Jul 15, 2004 at 20:08:20 (EDT) Email Address: Not Provided Message: El Gringo, it does look as though economic growth has softened as PK wrote not long ago. A soft economy running a large government deficit is not what I want to have. Time to be defensive in investing. Thanks.

Subject: Re: Think Again: Deficit Coverage... From: El Gringo To: Terri Date Posted: Fri, Jul 16, 2004 at 02:58:49 (EDT) Email Address: nma@hotmail.com Message: Think Again: Deficit Coverage: 'What's Missing'? by Brad DeLong February 5, 2004 '...How will this happen? A deficit means that the government is spending more than it takes in through taxes. A government that spends more than it takes in borrows. Savers – households, banks, and businesses – buy Treasury bonds. Each dollar of savings used to buy these Treasury bonds and thus snarfed up by the Treasury is a dollar that cannot be used to finance the building of a house, the purchase of a machine tool to boost a factory's productivity, or the replacement of an outdated inventory-control system with a cheaper high-tech one. A bigger deficit means less investment in America. And less investment in America means slower economic growth....'

Subject: Deficits Slow Growth From: Terri To: El Gringo Date Posted: Fri, Jul 16, 2004 at 14:23:09 (EDT) Email Address: Not Provided Message: No question, the deficit will slow growth no matter the external financing. This is just what appears to be happening now and is causing such labor market problems.

Subject: Re: Think Again: Deficit Coverage... From: Pete Weis To: El Gringo Date Posted: Fri, Jul 16, 2004 at 10:44:16 (EDT) Email Address: Not Provided Message: The return of the savers. All along, we needed a healthy balance between spending and saving. But we're going from a fairly extreme level of spending to, unfortunately, a fairly extreme level of saving, IMO. When you realize how all that spending has ballooned the money supply and now all the debt accumulated will force a shift to saving, then you begin to understand where the dollar is headed and also where tax revenues are headed.

Subject: Saving From: Terri To: Pete Weis Date Posted: Fri, Jul 16, 2004 at 20:15:49 (EDT) Email Address: Not Provided Message: We surely had better add to savings, but there is little data that tells us we are savng more.

Subject: Re: Think Again: Deficit Coverage... From: Econochick To: El Gringo Date Posted: Fri, Jul 16, 2004 at 10:44:13 (EDT) Email Address: Not Provided Message: ...unless a significant amount of the debt is bought by foreigners (which is what usually happens), which then leads to a different issue. While a small deficit implies that Americans are buying the bonds and the passive income in the form of interest payments is enriching American households, a large deficit means that those interest payments are leaving the country. Obviously, a very large deficit is not good. However, foreign investment does mean that the scenario painted in the excerpt is mititgated - albeit at the cost mentioned above. I'm sure DeLong mentioned foreign investment mitigating the scenario he laid out in the excerpt El Gringo posted somewhere in his article. No?

Subject: Foreign Investment From: Terri To: Econochick Date Posted: Fri, Jul 16, 2004 at 15:51:46 (EDT) Email Address: Not Provided Message: When a country spends more than it saves, foreign investment has to make up the difference. What this does however is put pressure on interest rates, on the dollar, and direct future earnings abroad as more of our assets are foreign owned. A large structural deficit when baby boomers are rapidly nearing retirement age is not pleasing.

Subject: Re: Think Again: Deficit Coverage... From: Pete Weis To: Econochick Date Posted: Fri, Jul 16, 2004 at 10:55:52 (EDT) Email Address: Not Provided Message: The Japanese are now reducing their investment in the US. And with all the central bank intervention by the Chinese and Japanese over the last 2-3 years it hasn't been able to completely stem the tide od a losing dollar. Now the whole 'house of cards' is dependent on the American consumer to keep up his/her borrowing and spending, since it is the only reason for the Japanese and Chinese to intervene is such an otherwise poor investment (low rates, dropping dollar, etc.). But we all know, or should know, that heavy borrowers can not go on indefinitely. Isn't this common sense?

Subject: Re: Think Again: Deficit Coverage... From: Econochick To: Pete Weis Date Posted: Fri, Jul 16, 2004 at 11:17:17 (EDT) Email Address: Not Provided Message: Yes, Pete. However, in the excerpt DeLong was generalizing and in generalizing he also has to mention foreign investment (in government bonds). The next step would be to measure foreign investment relative to domestic investment - which is what you're getting at. If we are going to do that, simply 'reducing' the investment is not enough information. For example, if Japan reduces its investment by 0.05% and accounts for 1% of total foreign investment, the reduction is irrelevant. If Japan accounts for 50% of total foreign investment and reduces its investment by 50%, then Americans are indeed much more encumbered. Now that's an interesting thing to know. I don't have any of these figures. If you happen to have them, Pete, please post them as it would be very very informative. Have a good one!!

Subject: Re: Think Again: Deficit Coverage... From: Pete Weis To: Econochick Date Posted: Fri, Jul 16, 2004 at 13:25:52 (EDT) Email Address: Not Provided Message: Don't have the exact numbers at my fingertips, but Japan purchased roughly a third of US debt issuance in 2003. China purchased a significant portion of the remainder. Japan increased its purchases to $138 billion in the 1st qtr of 2004, including $67 billion in January alone - this accounts for the 1st qtr resurgence in the dollar. It's interesting to note that despite heavy intervention by the BOJ in 2003 the dollar still managed to drop approximately 12% against the Yen and about 20% vs the Euro.

Subject: Re: Think Again: Deficit Coverage... From: Econochick To: Pete Weis Date Posted: Fri, Jul 16, 2004 at 14:19:00 (EDT) Email Address: Not Provided Message:

Subject: Re: CA From: El Gringo To: Econochick Date Posted: Fri, Jul 16, 2004 at 13:21:19 (EDT) Email Address: nma@hotmail.com Message: http://www.pkarchive.org/trade/WhyHigherSavingsHitDollar.html

Subject: Mongolia From: emma To: All Date Posted: Thurs, Jul 15, 2004 at 16:01:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/15/international/asia/15mong.html Mongols Go From Camels to Jeeps and a Superhighway By JAMES BROOKE NALAIKH, Mongolia - Canada has the Trans-Canada Highway. Brazil has the Trans-Amazon. Germany has the Autobahn, and Russia now has the Trans-Russian. This summer, from westernnmost Tsaganuur to Halhyn Gol in the east, road crews are working to add another to the list, the Mongolian Millennium Highway. Long written off as a buffer state between China and Russia, Mongolia, twice the size of Texas but with 13 percent of the population, is embarking on a classic exercise in modern nation building. 'What I understand from reading books and surfing the Internet is that developed countries, like Canada and the United States, greatly spread development through roads,' said Manduul Baasankhuu, policy director of Mongolia's Road, Transport and Tourism Department. Unrolling a glossy map in his office in Ulan Bator, the capital, he traced a finger over a pink line, the east-west route that is to bind this nation together by the end of the decade. The road is to start in the baking plains of the east, home to thundering herds of Mongolian gazelles. Skirting the Gobi desert landscapes of the new documentary film, 'The Story of the Weeping Camel,' the two-lane asphalt runs west over the steppe to snow-cappped mountains, home to the famed Kazakh eagle hunters on the Russian border. 'Mongolians say that someone who lifts a stone from a road collects good karma,' said Enkhbaatar Dorjkhuu, 40, an engineer working on the road, which will bind together a far-flung population that largely follows Tibetan Buddhism. Pausing a few miles east of here, he said: 'We are doing virtues here. A road is like an artery for human beings. This road we're building will play an important role in transportation, tourism, advancement of our economy.' After four years, one-quarter of its planned 1,650-mile length is paved. But with American and European tourists flocking here this summer, tour operators already are plotting the Mongolian summer road trip, circa 2010. 'It will open up new destinations and decrease the amount of time for people to get to faraway destinations,' said Lee M. Cashell, an American businessman in Ulan Bator, who in the last six months has bought a guest house, opened a resort and started a restaurant, the UB Deli. Oddly, in the steppe, one lone strip of asphalt can help the environment.

Subject: Re: Mongolia From: Pete Weis To: emma Date Posted: Fri, Jul 16, 2004 at 11:00:22 (EDT) Email Address: Not Provided Message: Good post Emma. Mongolia, IMO, will bring very good investment opportunities for those willing to spend the time investigating.

Subject: Re: Mongolia From: Emma To: Pete Weis Date Posted: Fri, Jul 16, 2004 at 17:04:03 (EDT) Email Address: Not Provided Message: Much of developing Asia is increasingly focused on China, as are Korea, Japan and Australia. It appears that the growth path of China could be similar and long lasting as that of America from 1880. This is a most hopeful development turn.

Subject: The Trillion-Barrel Tar Pit From: raj To: All Date Posted: Wed, Jul 14, 2004 at 00:56:06 (EDT) Email Address: raj@interchange.ubc.ca Message: The Trillion-Barrel Tar Pit Who needs 'oil independence' - our friendly neighbor to the north is sitting on a black gold mine! By Brendan I. Koerne Fort McMurray, Alberta, is an unlikely destination for a congressional boondoggle, especially when cold snaps of 40 below make it dangerous to leave any patch of skin uncovered. But here I am in midwinter, 250 miles north of Edmonton, watching a flock of Washington politicians in subzero parkas cling to tour guides like a trail of oversize ducklings. With gas prices approaching $3 a gallon in some states, the US representatives are braving the frigid air not for adventure but to learn about a filthy sort of alchemy, one that turns sludgy, sticky earth into sweet crude oil.Alberta sits atop the biggest petroleum deposit outside the Arabian peninsula - as many as 300 billion recoverable barrels and another trillion-plus barrels that could one day be within reach using new retrieval methods. (By contrast, the entire Middle East holds an estimated 685 billion barrels that are recoverable.) But there's a catch. Alberta's black gold isn't the stuff that geysered up from Jed Clampett's backyard. It's more like a mix of Silly Putty and coffee grounds - think of the tar patties that stick to the bottom of your sandals at the beach - and it's trapped beneath hundreds of feet of clay and rock. This petroleum dreck is known in these parts as heavy oil, and wildcatters are determined to get it out of the ground and into a pipeline. If they succeed, the stereotypical oil zillionaire may be not an Arabian emir but a folksy Albertan fond of ending sentences in a question, eh? Like Jim Carter, president of Canada's largest oil company, Syncrude. A coal-mine foreman by trade, Carter talks as if he just got out of a cut-rate business seminar, spewing jargon like 'going-forward basis' and 'continuous-improvement mindset.' He's the kind of guy who straps a snowplow on his John Deere mower and clears the streets just for fun. But he clawed his way out of the pits to a corner office, and now he has a plan to make Canada's oil reserves pay off. wired www.wired.com/wired/archive/12.07/oil_pr.html

Subject: Yep From: Econochick To: raj Date Posted: Wed, Jul 14, 2004 at 18:44:52 (EDT) Email Address: Not Provided Message: The tar pits have been around for a long time. Actually, the shale rock in the US Rocky Mountains holds more oil than the Middle East - little known fact. One catch - it's INSANELY expensive to get out of the ground because shale is neither very porous nor permiable. Middle-Eastern geology is both highly porous and highly permiable, making deep drilling and fracturing (which is expensive) largely unnecessary and lowering the cost of production. This, of course, lowers the price of the oil. The tar pits are also very expensive to extract oil from - Although I don't remember the price difference between tar pits and shale anymore. When the oil price hits a high enough sustainable price, the pits and the shale will begin to become economical and we will see some production out of them. Unfortunately, when that happens, gas for the car will be at or above roughly 3 bucks in perpetuity. Sigh. Good article. Would have been better if the writer bothered to find out how much it would cost to recovery a barrel of oil.

Subject: Interesting From: Emma To: raj Date Posted: Wed, Jul 14, 2004 at 18:11:54 (EDT) Email Address: Not Provided Message: Canada's resources are staggering. We can always buy a Canadian index fund....

Subject: Chinese Yachts From: Emma To: All Date Posted: Tues, Jul 13, 2004 at 14:34:45 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/13/business/worldbusiness/13yacht.html?pagewanted=all&position= The Ultimate Luxury Item Is Now Made in China By KEITH BRADSHER ZHONGSHAN, China - Among the carp ponds, duck farms and moldering plywood huts that have long lined the bank of a Pearl River estuary here, a most incongruous newcomer has appeared: a long, towering shed for building very large luxury yachts, a product that has no market in mainland China. Lion dancers bobbed and weaved as strings of firecrackers sizzled and boomed on July 3 at the official opening of the yacht factory - an emblem of how China is shifting its sights upmarket. Having mastered the manufacture of many inexpensive goods for mass consumption here and abroad, the country is getting into luxury goods, the kinds coveted by the world's most demanding buyers. China's competitive advantage is that it is doing this at lower cost. Increasingly expensive brands of shoes, clothing and furniture are being made in this country, mostly for domestic consumption but sometimes for export. BMW has begun assembling some of its latest models in China for sale here, and Mercedes and Cadillac are preparing to do the same. With yachts, though, China is braving a market where it has little recent experience or demand at home. The economic boom has certainly created plenty of fortunes big enough to afford yachts. But they have never caught on among rich Chinese, who, unlike the boating set in the West, tend to keep their consumption as inconspicuous as possible. And no wonder, considering how widespread tax evasion and dubious dealings are here: few people want their lifestyles to attract official attention. 'You can gamble away $5 million a night, but don't buy something for $5 million and let people know about it,' said Roger Liang, the Hong Kong hotel and real estate developer who is the owner and managing director of Kingship Marine, the company that built and runs the yacht factory here. Besides, China is no one's idea of a yacht-friendly place. The country imposes tight restrictions on pleasure boating along its seacoast, because of concerns regarding Taiwan, and on its rivers, because of heavy barge traffic. That leaves most boaters confined to lakes inland, which are mostly too small and shallow for large powerboats. Mechanics who are able to repair modern boat engines are scarce. And, in a country once known for its graceful sail-powered junks, so few people now have even a rudimentary knowledge of sailing that selling sailboats in China would be a hopeless exercise, several boating executives said.

Subject: Re: Chinese Yachts From: Carm To: Emma Date Posted: Fri, Jul 30, 2004 at 12:09:45 (EDT) Email Address: Not Provided Message: Dear Emma, Why do you post this article here? You agree with what the article said, or not?

Subject: Re: Chinese Yachts From: El Gringo To: Emma Date Posted: Tues, Jul 13, 2004 at 21:17:02 (EDT) Email Address: nma@hotmail.com Message: Ah, dear Emma, what's the difference between 'lotion' and 'notion'?:China Population Estimate: 1,284,303,705, US Population Estimate: 293,730,771

Subject: Please Explain From: Emma To: El Gringo Date Posted: Wed, Jul 14, 2004 at 16:41:13 (EDT) Email Address: Not Provided Message: Dear El Gringo, Please explain.

Subject: It was a very good year... From: El Gringo To: All Date Posted: Mon, Jul 12, 2004 at 21:04:39 (EDT) Email Address: nma@hotmail.com Message: http://www.lyricsfreak.com/f/frank-sinatra/56372.html

Subject: African Nurses From: Emma To: All Date Posted: Mon, Jul 12, 2004 at 17:39:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/12/international/africa/12MALA.html?pagewanted=all&position= An Exodus of African Nurses Puts Infants and the Ill in Peril By CELIA W. DUGGER LILONGWE, Malawi — Six women suddenly went into the final, agonized minutes of childbirth. Hlalapi Kunkeyani was the only nurse. There were no doctors. Panicky cries rent the fetid air of the ward, a cavernous space jammed with 20 women laboring in beds, on benches, even on the concrete floor. Mrs. Kunkeyani worked with intense concentration, her face glowing with sweat, but she was overwhelmed. Four of the babies arrived in a rush without her to ease their passage into the world. She found one trapped between his mother's legs with the umbilical cord wrapped around his chest. The face of another was smeared with his mother's feces. Yet a third lay still on his mother's breast, desperate to breathe. The nurse swiftly suctioned his tiny mouth until at last he gulped a breath. Mrs. Kunkeyani, 36, is the stalwart nurse in charge of this capital city's main labor ward, where 10 overworked nurse midwives deliver more than 10,000 babies a year. But soon, she will vanish from this impoverished nation, joining thousands of African nurses streaming away from their AIDS-haunted continent for rich countries, primarily Britain. 'My friends are telling me there's work there, there's money there,' said Mrs. Kunkeyani, who will soon make in a day's overtime in Britain what she earns in a month in Malawi. 'They're telling me I'm wasting my time here.' The nursing staffs of public health systems across the poor countries of Africa — grossly insufficient to begin with — are being battered by numerous factors that include attrition and AIDS. But none are creating greater anxiety in Africa than the growing flight of nurses discouraged by low pay and grueling conditions. The result of the nursing crisis — the neglect of the sick — is starkly apparent here on the dilapidated wards of Lilongwe Central Hospital, where a single nurse often looks after 50 or more desperately ill people. What is equally visible is the boon to Britain, where Lilongwe Central's former nurses minister to the elderly in the carpeted lounges of nursing homes and to patients in hushed private hospital rooms.

Subject: Tech Stocks From: Terri To: All Date Posted: Mon, Jul 12, 2004 at 16:04:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/11/business/yourmoney/11watch.html GRETCHEN MORGENSON That High-Tech Balloon Is Going Ssssssssss THE warnings from technology companies came fast and furious last week, cuffing investors who had bought their shares on hopes of super earnings generated in a hot economy. Individual investors and hedge funds alike had piled into tech stocks and enjoyed the ride through 2003, convinced that 2004 results would justify the shares' soaring prices. But with software companies like Siebel Systems and Veritas Software, hardware companies like Unisys and computer resellers like the CDW Corporation and Ingram Micro Inc. cautioning that their businesses softened in the second quarter, the sound of air escaping a balloon is more than detectable. Inquiring investors want to know: Is this a blip, or is the second-quarter slowdown the beginning of a longer-term malaise in tech? Fred Hickey, editor of The High-Tech Strategist in Nashua, N.H., and a technology stock analyst who knows the industry down to its nittiest and grittiest, says the setbacks in the sector are just beginning. Investors may have been lulled into thinking that the second-quarter results at tech companies would be sunny because reports of shortfalls had been relatively rare. Companies typically alert investors to problems late in a quarter, but by June 30, that front was quiet. 'Normally the third month in a quarter belongs to the confessors,' Mr. Hickey said. But at the end of June, he added 'there were more positive preannouncements than negative.' Nevertheless, two signs point to problems ahead for technology stocks, he said. First, semiconductor shares, which often lead the action in tech stocks, have gone into a nose dive. The semiconductor stock index, known as the SOX, is down 11.2 percent this year, and spot prices of computer chips are forecasting further declines. But the biggest trouble spots on Mr. Hickey's horizon are the ballooning inventories on tech companies' balance sheets. Already rising in the first quarter, these inventories will probably show a surge for the second quarter, he said, because few tech companies appear to have cut production in recent months. Investors may not have noticed how inventories have grown at some of their favorite technology concerns. After all, balance sheets are boring; income statements make for much jazzier reading. And comparing balance-sheet items in quarterly reports requires some work: most show only assets and liabilities from the current and previous quarter, not from the same quarter during the previous year. IN the first quarter of 2004, inventories jumped 21 percent to 61 percent, year over year, at such tech stalwarts as Dell, Cisco Systems, Intel and Texas Instruments. And that was when the economy was cooking. So Mr. Hickey expects inventories to show a surge for the second quarter. When inventories rocket, profit margins are hurt. Hefty write-downs are another common result. The sales shortfalls at some technology companies will become most evident in the third quarter, Mr. Hickey said, making for some very ugly earnings comparisons from the same period in 2003. Back then, tax rebates were propelling consumers into the stores and gross domestic product soared 8 percent, annualized. Computer notebook sales in the third quarter of 2003, for example, were up 60 percent. But this year, personal computer sales in the United States are growing at rates in the single digits or low teens. PC and notebook sales are also slowing in Europe and are actually declining in Japan. In addition, the tax rebates, courtesy of the White House, are spent, mortgage refinancings have peaked and rising oil prices are pinching consumers. So it's no wonder that sales of tech gear have slowed. Mr. Hickey said the inventory situation at some of the nation's biggest technology companies reminds him of late 2000, when demand from nascent Internet companies screeched to a halt. Although it became apparent in March 2000 that the Internet boom, created in part by a profligate Wall Street, was over, the impact of this steep decline in demand did not show up in major suppliers' results until much later that year and in early 2001. 'This industry is hopelessly optimistic,' Mr. Hickey said. 'They always overproduce.' None of this would matter if technology shares were cheap. But they are not. The price-to-earnings ratio on both Dell and Cisco is 32. Texas Instruments' is 30, and Intel's is 26. 'On June 30, the bulls were extremely long and vulnerable, even though underneath the surface there was a lot of trouble in a lot of places,' Mr. Hickey said. Perhaps the companies issuing early warnings recently will prove to be in the minority by the time all second-quarter results are out. But technology has had a heck of a run in the past year. As they say, nobody ever went broke taking profits.

Subject: China's Trade From: Emma To: All Date Posted: Mon, Jul 12, 2004 at 15:53:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/12/opinion/12SHAP.html?pagewanted=all&position= China Trades Its Way to Power By JASON T. SHAPLEN and JAMES LANEY North Korea was high on the agenda for the national security adviser, Condoleezza Rice, during her trip to China, South Korea and Japan last week. But while the North's nuclear weapons program presents a difficult test, it masks a broader and far greater challenge for the Bush administration, one with significant implications for the United States, the region and the world. At its heart, the challenge reflects China's emergence as a power broker in the region. The Bush administration can couch Beijing's new role in whatever politically advantageous language it wishes, but, ultimately, it comes down to this: China's influence is rapidly rising and America's is rapidly declining. While this realization may be unpleasant for Washington, the sooner administration officials accept this reality the faster they can deal with it. Unfortunately, they have virtually ignored East Asia, preoccupied as they are with Afghanistan and Iraq. Trade numbers help explain the transformation in Asia. Within six years, China's economy will be double that of Germany's, now the world's third largest. By 2020, it is expected to surpass Japan as the world's second-largest economy. Japan already imports more from China than it does from the United States. And China has become the largest trading partner of South Korea, the world's 12th-largest economy. Clearly, the juggernaut has already begun. Why are these statistics important? Because while Mao once claimed that power grows out of the barrel of a gun, today's leaders in China know it also grows from trade. Tokyo and Seoul know this, too. Aware that China is now vital to their economic well-being, they are no longer as willing as they once were to position themselves opposite Beijing, even if this means going against Washington. Put another way, while the Bush administration still thinks of the United States as the sole superpower in a unipolar world, Tokyo and Seoul do not share this view. To them, the United States and China are both powers to be reckoned with in a bipolar Asia.

Subject: Kerry's New Economic Plan for America. From: johnny5 To: All Date Posted: Sun, Jul 11, 2004 at 00:07:56 (EDT) Email Address: johnny5@yahoo.com Message: 'Made in Mexico'! Check out some of your Heinz products.'Sen. John Kerry keeps talking about U.S.corporations leaving this country and setting up shop in foreign countries, taking thousands of jobs with them. He is right, because that has happened. However, he is trying to blame it on George W. Bush. As far as I know,Bush has not moved one factory out of this country because he is not the owner of a single factory. That cannot be said about Kerry and his wife, Teresa Heinz-Kerry. According to the Wall Street Journal, the Kerrys own 32 factories in Europe and 18 in Asia and the Pacific. In addition, their company, the Heinz Company, leases four factories in Europe and four in Asia. Also, they own 27 factories in North America, some of which are in Mexico and the Caribbean. I wonder how many hundreds of American workers lost their jobs when these plants relocated to foreign countries. I also wonder if the workers in Mexico and Asia are paid the same wages and benefits as workers in the United States. Of course they're not. However, Kerry demands that other companies that relocate should pay the same benefits they did in the U.S. Why does he not demand this of the Heinz Company, since he is married to the owner? If Kerry is elected, will he and his wife close all those foreign factories and bring all those jobs back to America? Of course they won't. They're making millions off that cheap labor. If you can read this, thank a teacher. If you are reading in English, thank a soldier

Subject: Re: Kerry's New Economic Plan for America. From: John To: johnny5 Date Posted: Fri, Jul 30, 2004 at 12:03:02 (EDT) Email Address: johntlx@yahoo.com Message: More right wing BS.. See : http://www.snopes.com/politics/kerry/heinz.asp

Subject: Re: Kerry's New Economic Plan for America. From: chiminea To: johnny5 Date Posted: Mon, Jul 26, 2004 at 20:34:42 (EDT) Email Address: chiminea@hotmail.com Message: Alrighty Now! Wow, this is amazing stuff! All those factories overseas. Who woulda thought it. This message is full of vital innuendo and distortion that you should not question because its on the internet so it must be true, right. (The original message is below). Those rapacious outsourcers at Heinz even have the gall to list the factories they own overseas on their official website! They are obviously ashamed of the factory they 'own' in Mexico because they don't list it (maybe they are 'cooking the books' like Enron). And it seems that they were actually one of the FIRST OUTSOURCERS EVER when they opened up a plant in CARACAS, VENEZUELA in 1959! I wonder how long they have had all those off-shored operations, are they recent or has this been going on for decades under our noses. Venezuela, Costa Rica and Canada, Southern Africa, UK and Ireland, Spain, Italy and even France! They are actually giving American jobs to the French! As a true American you should stop putting Heinz ketchup on your freedom fries immediately, switch to Del Monte. It seems logical to me that if they have a facility in Egypt they must be sympathizers with ANTI-AMERICAN ISLAMIST TERRORISTS! Now granted they do have a few dwindling factories here in the good old USA in places like Atlanta, Georgia; Cedar Rapids, Iowa; Chatsworth, California; Dallas, Texas; Escalon, California; Fremont, Ohio; Holland, Michigan; Irvine, California; Jacksonville, Florida; King of Prussia, Pennsylvania; Mason, Ohio; Muscatine, Iowa; Northbrook, Illinois; Pennsauken, New Jersey; Phoenix, Arizona; Stockton, California; Westburyport, Massachusetts, but I am sure they will be MOVING THESE OFFSHORE just as soon as they can without getting caught. They can probably get some advise on how to accomplish this from Accenture, you know those trustworthy guys who just won that big homeland security deal over the objection of most everybody. They are based down in the Caribbean or Bahamas or such. They used to be based in Chicago but they called themselves something else, Arther Anderson (does that ring a bell?). Hey, look at this! A link to one of my sources of information. Don't even bother to check the facts because you can trust me. http://www.heinz.com/jsp/di/corp_pro2003/corpProfile6.jsp Now according to several sites ( I list one you can google the rest) by 1995, the H.J. Heinz Company's global sales were over 8 billion dollars with almost half coming from its overseas operations and seventy percent from non-Heinz brand products. http://www.pghphotos.org/MAIN/feature.html and also given that currently, 60% of the sales of the H.J. Heinz Company are outside the United States and to accommodate those customers by providing facilities closer to those markets, the company maintains a number of overseas facilities that provide products for consumers in those markets... http://forum.johnkerry.com/lofiversion/index.php/t41305.html (OMG! this must be an outright lie! Look they even have the gall to put it on their own website.) How could this be, an American company generating huge revenues and being successful in overseas markets? That crap about making the products near the local markets must be bogus, we all know that other cultures have bizarre dietary edicts against ketchup. Its unreal. Unreal how someone like johnny5@yahoo.com can post something like this on HotBoards.com http://www.hotboards.com/plus/plus.mirage?who=pkarchive&id=12141.029546435549 and people who are generally thoughtful and analytical will parrot it back because it seems to be in agreement with their own bias. Now I know you are saying that its on HotBoards, it must be accurate! Doh! So in the interest of fair and balanced I ask you to send this out to the same 5 people you e-mailed the original message to. If you let someone else dictate your perception of the facts then your vote doesn't really matter anyway. Think

Subject: Re: Kerry's New Economic Plan for America. From: Pete Weis To: johnny5 Date Posted: Sun, Jul 11, 2004 at 14:20:19 (EDT) Email Address: Not Provided Message: The Heinz Company, like other food product companies such as Coke Cola Corp., has long had plants overseas - since the days of US current account surplus. I think it's fair, though, to point out the hypocracy of politicians who make an issue out of US jobs going overseas, when the reality demonstrates that US companies must and will seek the most important short term method of competing - cheaper labor. The likely short term solution for America will come at the expense of the US blue and white collar workers - probably by a significant lessening of paychecks by a steadily weakened US dollar along with a continued weak job market. If Kerry becomes president, it's likey he will be able to do little about the offshoring problem without doing damage to the competitive position of US corporations. Some of the posters on this site, including myself, have posted about the serious nature of offshoring and the negative effects it will likely have on the US economy in the coming years. It just adds to all the other factors - like record debt, rising current account, rising interest rates and the oil crunch. The truth when it comes to elections, is that both sides make use of issues which they believe will resonate with voters - some are valid and others are not, or at the very least are distorted. The offshoring problem is very real. The solution which is being allowed to materialize - 'benign neglect' - is a steadily dropping US dollar which erodes the purchasing power of American paychecks. The danger, as it did in the late 70's and early 80's, is that the dollar will start to fall at too fast a rate. This will force the Fed to raise rates steeply and suddenly (another 'saturday nite special'). Unlike the 70's, however, consumers have, now, accumulated a massive amount of debt which supports asset bubbles - chief among them residential real estate. Of course, any sudden increase in interest rates would threaten our financial system not only because it would cause real estate equity to go negative but would topple the inverted pyramid of interest rate derivative contracts. It may seem I've drifted away from the subject of your post, but offshoring, current account deficit, shrinking dollar, interest rates, asset inflation, and inverted derivative pyramids are all inextricably related.

Subject: The Problem From: Terri To: Pete Weis Date Posted: Sun, Jul 11, 2004 at 14:35:42 (EDT) Email Address: Not Provided Message: The problem is simply having progressive fiscal policy that will stimulate job creation at home. There is no way short of economic self-destruction to stop some movement of production for America abroad, but that should not be a problem for us with sound domestic policy. Paul Krugman has repeatedly showed this. A rise or fall in the value of the dollar will have little or no effect on Federal Reserve policy.

Subject: Re: The Problem From: Pete Weis To: Terri Date Posted: Sun, Jul 11, 2004 at 18:05:57 (EDT) Email Address: Not Provided Message: 'A rise or fall in the value of the dollar will have little or no effect on Federal Reserve policy.' Terri. I believe we agree on many things - I agree there is probably no way to stop jobs from going overseas that would not come with a lot of damage to US companies. But do you really believe the Federal Reserve has no role with regard to the direction of the dollar or that it wouldn't adjust its policy based on what is happening to the dollar? Clearly, one of the central roles of central bankers around the globe is to be 'caretakers' of there own currency - whether it's to make their nation's labor and products more competitive with the rest of their trading partners or, at the other end of the spectrum, preserve their currency against potential collapse. Obviously a fall in the dollar is interrelated with inflation. Paul Volker took action and raised rates steeply to bring an end to double digit inflation and a freefalling dollar. This caused a considerable amount of pain in the early 80's with the real estate markets. This was after a decade of economic stagflation and generally poor housing markets. Now Alan Greenspan finds himself in a real pickle. If it becomes necessary to stem a steep drop in the dollar and the concurrent inflation that would ensue, he risks crashing a housing market which has seen its greatest run-up in history and which has almost single-handedly kept our economy from falling into recession. Without a doubt, Greenspan spends a lot of time fretting about the value of the dollar and it's a major part of his policy decisions.

Subject: The Dollar From: Terri To: Pete Weis Date Posted: Mon, Jul 12, 2004 at 15:50:10 (EDT) Email Address: Not Provided Message: The attitude of Fed policy makers about the dollar has changed in the last decade. Alan Blinder and other past voting members of the Fed have noted that the dollar was seldom considered at meetings and not considered important enough to subordinate domestic policy goals to. I see no reason this should change soon. Before the Fed acted there would be Treasury purchases of the dollar to stem a decline. No argument Pete, but I am not convinced. I am thinking however.

Subject: Re: The Dollar From: Pete Weis To: Terri Date Posted: Tues, Jul 13, 2004 at 00:35:40 (EDT) Email Address: Not Provided Message: No argument here either Terri. Alan Blinder is an economist I respect. I believe he's been someone who has been expressing concern about serious conflicts of interest between Wall Street and major US financial institutions from early on - especially with the repeal of Glass-Steagall. He has been correct to link Greenspan as a major influence in the repeal of Glass-Steagall. However, Alan Blinder has been gone from the Fed since 1996 I believe. I no longer pay much attention to what Federal Reserve members say - rather, I pay attention to what action the Federal reserve takes. Recent, IMO, ludicrous statements by Greenspan have totally sapped my view of his credibility.

Subject: The Dollar and China From: Terri To: Pete Weis Date Posted: Tues, Jul 13, 2004 at 14:32:12 (EDT) Email Address: Not Provided Message: Pete - As Emma is pointing out the key for us to judge how vulnerable we may be to international pressure may revolve around the trading strength of China. If the dollar is to decline significantly from, it will likely be because China allows its currency to appreciate. I do not see that happening soon, but....

Subject: Re: The Dollar and China From: Pete Weis To: Terri Date Posted: Tues, Jul 13, 2004 at 21:37:45 (EDT) Email Address: Not Provided Message: The US dollar has been falling steadily for over two years now, when measured against a 'basket of currencies' or commodities priced by the world markets. This has happened despite any actions taken or not taken by the Chinese. We had a recent dollar rally in the 1st quarter, which according to the Economist in a Jul 8 article, was caused by 'comfortably the largest-ever act of intervention by a central bank' (BOJ). This article goes on to state - 'then quietly, the dollar started to drop. 'By July 6th, it had fallen by 4.3% from its high.' 'Not surprisingly, perhaps: the dollar's prospects look even worse now than they did last year.' The main reason for the dollar's drop has been our ever increasing current account deficit. We had a recent discussion on this board about what would bring the US current account deficit to an end. I posted that it would come to an end with a steep drop in consumption and attributed the trigger to be the point at which consumers finally found it difficult to service their debt. But a big part of a coming drop in consumption would also be a steadily dropping dollar since increases in wages are too small to offset a yearly 10-20% drop in the dollar. The shrinking dollar is telling us the US economy is really not in a recovery mode. It can't be with such a sizeable current account deficit which has been running for so long and has required record borrowing to replace the 'transfer of America's wealth abroad' (Buffet's description of the current account). A striking representation of a result of the current account deficit is that 100 year long graph of Total-Debt-To-GDP which Bill Gross and others have been featuring. The M-3 money supply has roughly doubled since 1997. Our economy hasn't grown much since then. Perhaps with the loss of jobs it has even contracted a bit. Borrowing is still continuing at high levels, since the home equity loan has substituted somewhat for the heavy refinancing of the last several years. Any significant drop in consumption in the future would leave a huge supply of dollars worldwide with much less demand for them. What do you think?

Subject: Compelling From: Terri To: Pete Weis Date Posted: Wed, Jul 14, 2004 at 16:39:41 (EDT) Email Address: Not Provided Message: The argument you make grows ever more sound. The structural budget deficit will continue to lower the value of the dollar. My last wonder is 'how fast?' A slowly falling dollar value should be readily handled, a rapid fall and your concerns are darn valid. Your case is tightly made.

Subject: Re: The Dollar From: Emma To: Terri Date Posted: Mon, Jul 12, 2004 at 16:44:15 (EDT) Email Address: Not Provided Message: Possible dollar weakness is all the more reason to take advantage of international stocks. Makes for a nice hedge. A global or a European index fund make sense to me.

Subject: Re: The Problem From: RL To: Pete Weis Date Posted: Mon, Jul 12, 2004 at 03:45:06 (EDT) Email Address: rafaelloring@yahoo.es Message: Pete, if the Fed acts raising rates as inflation raises because of a depreciating dollar is one thing if it acts only in the precence of depreciation is another. In the first case the real interest rate may not rise or even could fall and then the debt problem you talk about is not affected. In the second is exactly as you say but this will only happen if the Fed is concern about the dollar value in other currencies which is clearly not the case during Greenspan term. RL

Subject: Re: The Problem From: Pete Weis To: RL Date Posted: Mon, Jul 12, 2004 at 10:29:38 (EDT) Email Address: Not Provided Message: RL. You are right - real interest rates are presently negative and I believe Greenspan will likely attempt to keep them negative for some time. His hand would only be forced in the event of a dollar crash. This is promoting a massive carry trade where individuals and institutions are borrowing heavily at these negative interest rates and investing in many things which are inflating in relation to the dollar (precious metals, other currencies, etc.). This is an additional risky scenario if we see any significant rise in rates - but this is an issue which deserves its own discussion. When you say the debt problem is not effected if 'real interest rates' remain the same or even go more negative, I see atleast two problems with this: (1) For your statement to be true wouldn't wages need to inflate equal-to-or-greater-than real inflation in order for consumers to keep their heads above water regardless of real interest rates? (2)While commodities and products we import would become more expensive as well as nondiscretionary items such as food (due to higher overhead/energy costs) as a dollar loses ground, some entities such as housing could actually deflate, even with real interest rates going negative but monthly payments increasing against wages which are relatively stagnant. This is what happened in the 70's thru early 80's until Paul Volker put an end to it. But this time the situation is markedly different - with asset inflation to go along with traditional inflation, a huge and growing current account deficit, as well as a sizeable and growing budget deficit. Does this make sense?

Subject: Useful Notes From: Terri To: Pete Weis Date Posted: Mon, Jul 12, 2004 at 15:51:59 (EDT) Email Address: Not Provided Message: The notes about interest rates are useful thought tools. Thanks.

Subject: Trade Pacts From: Emma To: All Date Posted: Sat, Jul 10, 2004 at 15:21:19 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/10/opinion/10STIG.html New Trade Pacts Betray the Poorest Partners By JOSEPH E. STIGLITZ The United States and Morocco last month signed a new bilateral trade treaty. The Bush administration has been bragging that it exemplifies the way its economic policies can build new ties and new friendships around the world. This is especially important in the Middle East, where, in other respects, America's foreign policy seems to have left something to be desired. The cooperation with moderate Arab governments is meant to demonstrate our broadmindedness, our willingness to offer a carrot (rather than the proverbial stick) to those who behave reasonably. But regrettably, in negotiating the trade agreements with Morocco, Chile and other countries, the Bush administration has used the same approach that earned us the enmity of so much of the rest of the world. The bilateral agreements reveal an economic policy dictated more by special interests than by a concern for the well-being of our poorer trading partners. In Morocco, prospects of the trade agreement were greeted by protests — an unusual occurrence in a country that is only slowly moving to democracy. The new agreement, many Moroccans fear, will make generic drugs needed in the fight against AIDS even less accessible in their country than they are in the United States. According to Morocco's Association de Lutte contre le SIDA, an AIDS agency, the agreement could increase the effective duration of patent protection from the normal length of 20 years to 30 years. Morocco is not the only country that is worrying about access to life-saving drugs. In all its bilateral agreements, the United States is using its economic muscle to help big drug companies protect their products from generic competitors. For a country like Thailand, which is facing a real AIDS threat, these are issues of more than academic concern.

Subject: one and the same From: kathleen morgan To: All Date Posted: Fri, Jul 09, 2004 at 15:51:27 (EDT) Email Address: actability@sbcglobal.net Message: hey paul...I just realized what everybody's been saying is truly a fact...you are just like the anti=american fat sot michael moore. how does it feel to know how disgusting you are.....every dog has his day

Subject: Re: one and the same From: byron To: kathleen morgan Date Posted: Sat, Jul 10, 2004 at 23:24:33 (EDT) Email Address: bconstl@juno.com Message: Have you seen Farenheit 9/11? If not you should go and learn something,a well made movie and one that solidified my beliefs. Byron

Subject: Re: one and the same From: Jonathan To: kathleen morgan Date Posted: Sat, Jul 10, 2004 at 01:35:56 (EDT) Email Address: jonathan@lyingsocialistweasels.com Message: 'Every dog has his day'... And evidently, today isn't yours. What pathetic excuses for thought inhabit the right wing these days. Dearest Kathleen: calling someone names like 'fat', in lieu of actual argument, belongs in the third grade. Perhaps it's time you grew out of it...

Subject: China's Peasants From: Emma To: All Date Posted: Fri, Jul 09, 2004 at 13:18:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/09/international/asia/09peas.html?pagewanted=all&position= Exposé of Peasants' Plight Is Suppressed by China By JOSEPH KAHN HEFEI, China - In their muckraking best seller about abuses against Chinese peasants, the husband-and-wife authors, Chen Guidi and Wu Chuntao, told the stories of farmers who fought the system and lost. The book, 'An Investigation of China's Peasantry,' describes how one farmer's long struggle against illegal taxes ended only when the police beat him to death with a mulberry club. It profiles a village activist who was jailed on a charge of instigating riots after he accused a local Communist Party boss of corruption. Now, Mr. Chen and Ms. Wu say, it is their turn to be silenced. Though their tautly written defense of China's 750 million peasants has become a sensation, their names have stopped appearing in the news media. Their publisher was ordered to cease printing at the peak of the book's popularity this spring, leaving the market to pirates who subsequently churned out millions of copies in violation of the copyright. A ranking official sued sued the authors, accusing them of libel, in his home county court. In a country that does not protect a right to criticize those holding power, it is a case they say they are sure to lose. Top Beijing leaders acknowledge that China's surging urban economy has done relatively little to benefit the two-thirds of the population living in rural areas. They have put forward new programs to reduce the widening gap between urban and rural living standards. But the effort to quiet Mr. Chen and Ms. Wu makes it clear that officials will not tolerate writers who portray China's vast peasantry as an underclass or who assign blame for peasants' enduring poverty.

Subject: China's Reach From: Emma To: Emma Date Posted: Fri, Jul 09, 2004 at 14:22:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/09/business/worldbusiness/09mongolia.html?pagewanted=all&position= Mongolia's Shifting Ties: More China, Less Russia By JAMES BROOKE LAN BATOR, Mongolia - Two weeks ago, China's largest copper company signed a letter of intent to study investing in Mongolia's largest mining project. This week, Mongolia's president, on a state visit to Beijing, invited China to drill for oil. Next month, zinc production is to start at a new $50 million Chinese mine in eastern Mongolia. To link it all together, Chinese aid is paying for Chinese crews this summer to pave major roads across Mongolia's grassy steppes. More may come from a $300 million loan offered by China's president when he stopped here last year. Only 15 years ago, Mongolia, then a Soviet satellite, kept its land borders with China largely closed. Today, in a turnaround that reflects the rapid reorientation of the 13 other countries that have land borders with China, Mongolia now values China as its largest foreign investor and largest trading partner.

Subject: Re: China's Reach From: johnny5 To: Emma Date Posted: Sat, Jul 10, 2004 at 03:34:30 (EDT) Email Address: johnny5@yahoo.com Message: The worlds modern day bond slave negro has turned yellow and grown slant eyes - bill cosby said it best - his people want to buy 200 dollar chinese child salve nike's but then won't use them to walk to the library and read a free krugman article in the new york times. As defenders of freedom we should be ashamed we have contributed to this enslavement through our made in china walmarts and personal consumer choices that hurts children.

Subject: Useful policy ideas from PK From: WRS To: All Date Posted: Fri, Jul 09, 2004 at 10:16:32 (EDT) Email Address: Not Provided Message: PK has done a service by summarizing JK's proposals for health care reform. I don't know enough to comment, but would like to see if others want to elaborate on proposals to 1) raise the maximum income level for Medicaire 2) provide reinsurance for catastrophic health care bills. As an employed person who makes a decent but not spectacular income, I consider myself typical of many Americans and thus a useful benchmark. Is there anything in this proposal for me as I am paying for private and government insurance? While I'm here, I thought I would venture to question some of PK's policy recommendations earlier this week. Specifically, he says Washington should increase aid to state and local governments, extend unemployment insurance and provide tax rebates for lower-and middle-income families. I'm not clear on why it's such a great idea for Washington to write fat checks to state governments, given the degree of pork spending and mismanagement that characterizes my state legislature. Too many state governments are flush with cash during boom times and whine about being broke during economic downturns. How is it smart policy for one bureacracy to transfer tax proceeds to another? Will this not lead to more government bloat and less accountability? Also, I'm unclear how a wealth transfer plan disguised as a tax rebate would strengthen the economy. Maybe this is supply side hooey, but PK's analysis of the cost of tax cuts seems static and fails to consider wealth-creation that occurs when people keep more of their money. Rebates allow people who pay less tax to receive more of other people's money, and it seems to me there's a difference. The idea of extending unemployment benefits seems reasonable on the surface, however. I also concur with JK's plan to raise the minimum wage. Thanks, PK, for shedding light on policy specifics.

Subject: The Tax Cuts From: Emma To: WRS Date Posted: Fri, Jul 09, 2004 at 16:23:47 (EDT) Email Address: Not Provided Message: The problem with the rounds of tax cuts we have had is that they were terribly slanted to the highest earners and wealthiest investors. The stimulus effect could have been much stronger were the tax cuts slated to the middle class or were funds given to the states to spend.

Subject: Re: Useful policy ideas from PK From: Econochick To: WRS Date Posted: Fri, Jul 09, 2004 at 10:48:35 (EDT) Email Address: Not Provided Message: The problem with tax rebates and even tax cuts for the middle class is they don't do much to achieve the goal of economic growth. Looking at it from the supply side: additional disposable income from a tax cut should ideally be divided between spending and saving. Saving is otherwise known as investing and investments generate passive income. The portion spent should work to create more demand. So, theoretically good for the eonomy (more demand) and good for the individuals (passive income). Unfortunately, unlike in the 1950's and 60's the middle class doesn't save anymore. Tax cuts in the 1980's resulted in a decline in tax revenue by the amount of the tax reduction from middle income families because, in aggregate, they didn't invest the surplus inome. Tax revenue from the $200K and above group increased so significantly that they made up not only for their tax cut but also for that of the middle class. Tax revenue grew 3% in 1982, 9% in 1983, and 23% in 1984 (Source: Robert J. Barro, 'Macroeconomics'). By 1989, tax revenue doubled while the marginal income tax rate fell from over 70% to 28%. This means that the higher income folks invested heavily - and got wealthier because of it. Unfortunately (or fortunately), you cannot force people to save. Not saving and foregoing passive income is a new phenomenon in American culture and an unfortunate one. I wish the middle class would learn to delay gratification a bit and invest more - for the sake of evening out the economy and the individuals themselves. Paul G. Brown posted the name of a very good book on the board a few weeks ago with a name like 'The Millionare Next Door' (I think) that talks about the power of saving for middle income folks.

Subject: American Health Care From: Emma To: Econochick Date Posted: Fri, Jul 09, 2004 at 12:41:32 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/08/business/08scene.html Studies Look at Health Care in the U.S. By JEFF MADRICK THERE are no easy answers in reforming health care, but some economists in the field increasingly believe there may indeed be viable solutions to at least some of the nation's health problems. The seemingly intractable issues are well known. Americans spend some 14 percent of gross domestic product on health care, while other advanced nations spend an average of 8 percent. In the United States, the proportion may rise to 18 percent by 2013. Yet in general, judging by life span and infant mortality, most developed nations are healthier than the United States. More detailed studies find similar results. For example, a study recently published by the Commonwealth Fund measured quality of care in specific areas of medicine in five nations. It showed that America was superior in only a few. For example, this country topped the list in survival rates for breast cancer but was at the bottom for kidney transplants. It was typically in the middle in most other areas measured. What may surprise readers, and certainly surprised this writer, is that Americans, by paying so much more, do not have many more services. In fact, according to recent research, they typically have fewer. Consider the number of doctors. In 2001, the United States had 2.7 doctors per 1,000 people, compared with a median of 3.1 in the countries in the Organization for Economic Cooperation and Development. France, accused of having a doctor shortage in last summer's heat wave, had 3.3 per 1,000. Also, consider the number of hospital beds. The United States has only 2.9 hospital beds per 1,000 people, compared with the O.E.C.D. median of 3.9. Germany has 6.3. The United States is also behind in the actual days spent in a hospital and hospital admissions per capita. These are not necessarily bad in themselves, but the question is why we spend so much. The reason for the high level of American spending, argue the researchers - Uwe E. Reinhardt of Princeton and Peter S. Hussey and Gerard F. Anderson of Johns Hopkins - is that American doctors and hospitals charge much more. Americans also usually pay significantly more for drugs, they say, and administration expenses are exorbitant.

Subject: Presidential competency From: Pete Weis To: All Date Posted: Thurs, Jul 08, 2004 at 22:37:28 (EDT) Email Address: Not Provided Message: The Republicans are attempting to make an issue of Edward's competency to be president. Is this an issue the Republicans should pursue? Here's an interesting thought exercise - let's consider the four people involved - Bush, Cheney, Kerry and Edwards. If the public, at large, where to rate these four in the order of their competency to be president, which would get the most votes for being the least competent? Would it really be Edwards?

Subject: Re: Presidential competency From: Terri To: Pete Weis Date Posted: Fri, Jul 09, 2004 at 16:16:28 (EDT) Email Address: Not Provided Message: Republicans like to joke, Pete.

Subject: Seven lessons From: El Gringo To: All Date Posted: Thurs, Jul 08, 2004 at 11:30:28 (EDT) Email Address: nma@hotmail.com Message: Americans must prepare for the crisis by taking on board seven lessons of the Iraq war From Prof Robert O. Keohane. Sir, Though the US has formally handed over nominal sovereignty to the interim Iraqi government, the American invasion of Iraq has not attained most of the objectives sought by its proponents. Significant quantities of weapons of mass destruction have not been found. Saddam Hussein has been captured, but there is no assurance that his supporters will be excluded from future power. Politically, the best that can be hoped for is a set of pacts among influential leaders of various factions in Iraq, many of whom have armed militias to enforce their will on civilians. Democracy remains a distant dream, while civil war becomes a present reality. Failure is painful, but we can learn a lot from it. We should draw seven lessons from the US experience in Iraq, and remember them in the next crisis. 1.Base policy on analysis, not fixed beliefs. The president and the Pentagon believed Saddam was a threat to the US and the transition to a democratic and pro-American Iraqi government would be easy. Troop numbers could therefore be low, and few preparations had to be made for the aftermath of the anticipated military victory. 2.Always have a plan B. The State Department prepared a much more realistic assessment of the problems that would face the US in the aftermath. Secreatry of defence Donald Rumsfeld not only rejected the plan, he sought to prevent anyone associated with it from being involved in postwar planning for Iraq. 3.Rememer that military power is not sufficient to achieve most political objectives. The fact that the US has overwhelming military power enables us to win wars. It does not assure we will win peace. To achieve political objectives, it is essential to be able to persuade people that our values and Interests are consistent with theirs. 4.The first principle of foreign policy is to match goals with resources. About 90 per cent of available American military units are reported to be committed to Iraq. The Nato commander in Afghanistan has complained that he has too few resources to act effectively outside Kabul, the capital. The key goal of US foreign policy-to fight terrorism- has been undermined by the attack on Iraq. 5.Occupations usually generate mobilised opposition. It does not matter who the occupier is. The US in Vietnam, the Soviet Union in Afghanistan, Israel in the West Bank and Russia in Chechnya have had the same experience. Whatever the motivation, and despite overwhelming military power, people resist occupying forces. 6.War is dangerous for democracy. This administration has claimed virtually unlimited authority to arrest and prosecute, without normal guarantees of due process, anyone it accuses of involvement, with terrorism, inside or outside the US.”Eternal vigilance is the price of liberty”, and is especially needed in wartime. 7.Dismissing International law is detrimental to our capacity to lead. The prisoner abuse scandals were pervasive, not isolated, incidents. They were made possible by a climate of disregard for International law, which was clearly fostered by the president, vice-president and secretary of defence. Nothing has done more to discredit the US as a leader, even in the eyes of our usual friends. More generally, we should remember how misleading, indeed deceptive, have been the claims made by the US government about Iraq over the past two years. As a free people, we need to be wary of what our government tells us even- or especially- in time of war. It is crucial for us to support vigorous investigative journalism (Paul Krugman), even when it makes us uncomfortable. We Americans rightly seek to extend the benefits of freedom and democracy to others, although we are often naive about how to do so. But maintaining a vigorous democracy requires continuous activity by citizens. As members of the public, we must think and talk about policy and public affairs. We should be trying to figure out for ourselves the lessons of Iraq, and we should be discussing them with families and friends. Only then will we be ready,as a free people, for the next crisis. Robert O. Keohane, James B. Duke Professor of Political Science, Duke University, Durham, NC 27708, US

Subject: Re: Seven lessons From: Pete Weis To: El Gringo Date Posted: Thurs, Jul 08, 2004 at 22:17:05 (EDT) Email Address: Not Provided Message: We learned these lessons in Vietnam. But, in time, we always forget what we learned. So it is with economic crisis. With time and generational change, we forget the lessons learned by our parents and grandparents.

Subject: Re: Seven lessons From: El Gringo To: Pete Weis Date Posted: Sun, Jul 11, 2004 at 12:51:43 (EDT) Email Address: nma@hotmail.com Message: 'With time and generational change, we forget the lessons learned by our parents and grandparents.' = Pete Weis & Warren Buffet

Subject: Re: Seven lessons From: El Gringo To: El Gringo Date Posted: Thurs, Jul 08, 2004 at 12:01:25 (EDT) Email Address: nma@hotmail.com Message: ...must prepare for the next crisis ..., (not the crisis)

Subject: Important Lessons From: Emma To: El Gringo Date Posted: Fri, Jul 09, 2004 at 13:20:19 (EDT) Email Address: Not Provided Message: Thanks Dear El Gringo

Subject: Econochick !!! oh and Emma too From: Mik To: All Date Posted: Wed, Jul 07, 2004 at 17:56:45 (EDT) Email Address: Not Provided Message: Long time no see guys. Board was getting slightly boring without you guys (no insult intended to the other people here). On the issue of Moore's movie... you have to admit the final scene in that movie where Bush goes about telling the audience, 'There is a saying... you can fool me once but.... er... uhm....' and Bush cannot finish the statement, is absolutely hilarious. It is as if Moore does not have to make a fool of Bush... Bush does a mighty fine job all on his own.

Subject: Hey, Mik! From: Econochick To: Mik Date Posted: Thurs, Jul 08, 2004 at 09:23:09 (EDT) Email Address: Not Provided Message: Nice to 'see' you on the board too. Business has been picking up, so I don't visit often. How's your business going? Bush does pretty well when he has a written, practiced speech. Leave him to his own devices and he is hysterically funny - or painful to listen to. This weekend I was in a store that had a large collection of refrigirator magnets with his 'missayings'. My favourite was 'I know how hard it is to put food on your family'. His facial expressions don't do him any favours either AND he's very very Texas. However, I can't stand Michael Moore. He is a hypocrite and a liar. But then, I don't like extremists of any sort, left or right.

Subject: Re: Hey, Mik! From: Mik To: Econochick Date Posted: Thurs, Jul 08, 2004 at 10:26:35 (EDT) Email Address: Not Provided Message: Hey there Econochick. Nice to hear business has picked up for you. On my side I'm just getting some steady growth. This Monday my new stock shipment arrives and I will be able to start a new marketing campaign. It will still be at least 6 months before any decent results come about. Hhhmm maybe I should ask you this question: Any prediction on the direction of the US Dollar? Right now the currency of the country (I am importing from) is booming making my product less and less price competitive. On the issue of Michael Moore: I was not very impressed with his previous movie Bowling for Columbine. I particulalry did not like the cheesy scenes and cheap shots, but it was clear to me that he is purposely appealing to a blue collar market of people who like this kind of drama (I call it the Jerry Springer factor). Any how in Ferrenheit 9/11 Moore toned down his rhetoric. But I agree with you, again he did bring in an element of 'extremism' and 'implied' some conspiracy theories as Krugman so nicely pointed out. But for all of Moore's weaknesses, I have to agree 100% with the remarks made by Krugman: Moore's movie drove home a few clear points, even if he had to use the Jerry Springer factor to appeal to the Blue Collar population.

Subject: Re: Hey, Mik! From: Econochick To: Mik Date Posted: Thurs, Jul 08, 2004 at 12:22:19 (EDT) Email Address: Not Provided Message: Hey now!! Steady growth is the best kind! the right direction and the right speed - can't beat it. As for the dollar, I have no predictions about anything EVER. I'm against predictions - that's why I got out of the business I was in before. They are useless. Here's a better approach for you: figure out what your risk tolerance is. Can you go 'naked' against a fluctuating currency without significant damage to your developing business? One thing to look at is the floor revenue (derived by way of gross profit) that you would need to cover your fixed costs and debt service. Once you determine that level, you can hedge that amount against currency fluctuations by buying options and/or futures. If you hedge just this 'bare bones' amount, you can protect yourself from going bankrupt (due to currency fluctuations) while maintaining a fairly large upside. Hope that helped. Moore bugs me because he lies and cuts his film so that lies are implied. In 'Bowling' he completely made up an interview and cut the film to look like he just walked in and got a gun for opening a bank account. The gun actually took the legal amount of time to process - one month. In the latest flick, he cuts the film to make it look like Bush authorized the plane-load of Saudis. It was, in fact, Richard Clarke - who said he did it and would do it again in a statement which was made long before the release of the film. Bush wasn't even involved in the Bin Laden plane thing (according to Clarke). Then he made it look like they took off when the air space was closed (Ricky Martin couldn't fly...*gasp*) when, in fact, they flew on the 13th, after air space was reopened. He says no-one was interrogated. In reality 22 of the 26 Bin Ladens were interrogated by the FBI. I didn't enjoy the message he was sending by cutting together unrelated footage to make it look like our soldiers were purposely killing babies and enjoying it. One of the house members he caught in his attempt to sign up their family members showed up on television LIVID. Apparantly, he answered 'no' and went on to tell him the only person who was elligable to join the military in his family (a nephew) was already joined up and in Iraq and he supported that. The part beyond 'no' was cut by Moore. He lied about the Bin Ladens starting up one of Bush's businesses. It was actually a money manager who was managing some of the Bin Laden's fortune who decided that Bush's company may be a good place for a portion of their portfolio. It wasn't the Bin Ladens' direct decision. The list goes on but I'm out of time. His lies just remind me of members of the far right wing discrediting themselves in their ridiculous attempts to bring down Clinton at any cost. According to them, the man had NO redeaming qualities AT ALL. Riiiiight.... Plus, I don't personally like Moore. I don't like his 'minute men' analogy for people like Al-Zarqawi and I don't like him declaring that Americans are the most stupid people on earth to a European audience. I love my adopted country. Unlike Moore, I have lived in several European countries (as well as the former USSR) and I have found America and Americans to be the best in the world - both now and historically. While I support his freedom to speak his mind, I personally find nothing to like about him or his work.

Subject: The Chinese Century From: Emma To: Mik Date Posted: Wed, Jul 07, 2004 at 18:24:00 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/07/04/magazine/04CHINA.html The Chinese Century By TED C. FISHMAN China used to be far away, the country at the bottom of the world. Certainly that must be how it seemed just 20 years ago in a place like Pekin, Ill., a city of 34,000 residents on the Illinois River that took its name from the Chinese capital in the 1820's. According to local legend, Pekin is directly opposite Beijing on the globe. The high-school teams there were still called the Chinks until 1981, when they were renamed the Dragons. A smart and forward-looking decision, it turns out: as is happening throughout the United States, the Pekinese have in their own local ways grown inextricably linked to the Chinese of today. They are now connected not by an imaginary hole through the earth but by the world's shipping lanes, financial markets, telecommunications networks and, above all, the globalization of appetites. Follow the corn, for example. Trade deals struck between the U.S. and China in April will, farmers around Pekin hope, lead China to lower its import barriers and buy half a million metric tons of American corn this year. Illinois corn farmers get higher-than-usual prices for their exports because they have ready access to river transportation and in turn to big ports. Pekin is also home to the plant of Aventine Renewable Energy, the nation's second-largest producer of ethanol, a fuel derived from corn. (Ten percent of the American corn crop is converted to fuel.) China recently passed Japan as the world's second-largest consumer of petroleum, and growing Chinese demand has lately been pushing up oil prices worldwide. That makes ethanol an increasingly attractive alternative. And, indeed, ethanol prices climbed 40 cents a gallon this spring, dragging up U.S. corn prices as a result, a boon to Pekin's farmers and industry. Then there's Excel Foundry and Machine, a local factory that makes parts for machinery used in heavy construction and mining operations. Doug Parsons, the current head of this family-owned business, has already relocated 12 percent of the company's production to China in order to hold onto business that would otherwise be lost to China's huge, cheap foundries; during the next decade he may well have to move much more of his production offshore. Parsons has China on his mind for other reasons too: over the past few months, the prices of copper and iron, like those of oil, have skyrocketed in response to Chinese demand, driving up Excel's costs as a result. At the same time, however, his international mining customers have been buying more Excel products in order to feed that same Chinese appetite for commodities. And Parsons himself recently started a new company that he says will build and service advanced rock-crushing machines -- in part to take advantage of the frenzied construction boom under way in China. (One measure of just how big this boom is: China currently has more than 15,000 highway projects in the works, which will add 162,000 kilometers of road to the country, enough to circle the planet at the equator four times.) Even something as all-American as Pekin's new Wal-Mart Supercenter spreads China's influence around town. Because 12 percent of China's exports to the U.S. end up on Wal-Mart's shelves, and because Wal-Mart's trade with China accounts for 1 percent of that country's gross domestic product, the company exerts tremendous downward pressure on prices. Its buying power enables it to dictate, in effect, what a Chinese manufacturer will get for producing goods that American consumers want. By selling Chinese-made portable DVD players with seven-inch L.C.D. screens for less than $200, for instance, Wal-Mart helped to cut the price of these trendy devices in half over the last year. Competitors have to match the chain's prices or go under. Nearly every shopper in Pekin will therefore save money by shopping at Wal-Mart -- which is to say he or she will profit from the retailer's China connection. Of course, this very connection may also contribute to Wal-Mart's ability to drive other Pekin-area stores out of business. In short, Pekin, Ill., is not so different from lots of American places. China is everywhere these days, influencing our lives as consumers, providers, citizens. It has by far the world's most rapidly changing large economy, and our reactions to it shift just as quickly. China is at one moment our greatest threat, the next our friend. It siphons off American jobs; it is essential to our competitive edge. China is the world's factory floor, and it is the world's greatest market opportunity. China's industrial might steals opportunities from the developing world, even as its booming economy pulls poorer countries up (lately it has been getting credit for helping Japan out of its slump too). China exports deflation; it stokes soaring prices. China will boom; it will bust. Or perhaps the country's economy is feeling its way right now to the soft landing that will prevent another Asian economic crash, and all the recent record numbers on trade, industrial output, consumer spending and debt are simply now in scale with China's size. The truth about China is that, like all big countries, it is full of real contradictions. Another truth is that the current feelings about China do not fully reflect today's reality. The U.S. economy is about eight times the size of China's. Our manufacturing sector is bigger than the entire Chinese economy. Americans, per capita, earn 36 times what the Chinese do. And there is no shortage of potential roadblocks in China's path, either. Its banks may collapse. Its poor and its minorities may rebel. Uppity Taiwan and lunatic North Korea may push China to war. The U.S. could slap taxes on everything China ships to us. Still, barring Mao's resurrection or nuclear cataclysm, nothing is likely to keep China down for long. Since 1978, its gross domestic product has risen fourfold; in straight dollar terms, China's economy is the world's sixth-largest, with a G.D.P. of around $1.4 trillion. It has gone from being virtually absent in international trade to the world's third-most-active trading nation, behind the U.S. and Germany and ahead of Japan. Tom Saler, a financial journalist, has pointed out that 21 recessions, a depression, two stock-market crashes and two world wars were not able to stop the U.S. economy's growth, over the last century, from $18 billion ($367 billion in 2000 dollars) to $10 trillion. In constant dollars, that is a 27-fold increase. China is poised for similar growth in this century. Even if China's people do not, on average, have the wealth Americans do, and even if the United States continues to play a strong economic game and to lead in technology, China will still be an ever more formidable competitor. If any country is going to supplant the U.S. in the world marketplace, China is it....

Subject: Thanks Mik From: Emma To: Emma Date Posted: Wed, Jul 07, 2004 at 18:27:11 (EDT) Email Address: Not Provided Message: I am increasingly wondering whether China and hopefully India are finally on a self-sustaining development course that can drive the world economy for a long period. Thanks for the thought Mik.

Subject: Re: Thanks Mik From: Mike To: Emma Date Posted: Thurs, Jul 08, 2004 at 10:52:27 (EDT) Email Address: Not Provided Message: Emma, Thanks for that mail. In some ways I see this as a very spooky world. Yesterday I saw that a successful sabbotage attack on one pipe line in Iraq sent the oil price up a couple of dollars a barrel. Wow - that much influence from one oil pipe in Iraq? What happens when China becomes seriously oil hungry. I have just finnished a study for the city of Guangzhou and the stats are mind blowing. In essence the city has predominantly moved from a bicycle city to a motor bike city, with now a strong movement towards motor cars. It is predicted that within 10 years, motor cars will dominate the city. This is a common occurance for all the major Chinese cities. In other words, China may well equal or surpass the US in oil consumption within 10 years! On a different note - I believe India is actually going to do better in integrating and influencing the western nations. This is simply because of two factors: India's culture is surprisingly similar to our European cultures (and hence more acceptable) and secondly India has a strong movie industry that will provide alot in the promotion of their culture. But then again, perhaps I'm getting philosophical.

Subject: My Guess From: Emma To: Mike Date Posted: Fri, Jul 09, 2004 at 14:27:25 (EDT) Email Address: Not Provided Message: My guess is that China is going through a growth period like that of America 100 years ago. This can create significant changes in global resource demand for as long as I can see.

Subject: Re: Thanks Mik From: Terri To: Emma Date Posted: Wed, Jul 07, 2004 at 19:09:32 (EDT) Email Address: Not Provided Message: Remember Mik, Paul Krugman had the foresight and courage to understand and write about problem after problem that we are now faced with economically and socially. I love the guy, but at the least this is the sort of thinker to battle with.

Subject: Hey Emma From: Terri To: Terri Date Posted: Wed, Jul 07, 2004 at 19:10:42 (EDT) Email Address: Not Provided Message: Hey there, Girl.

Subject: Bye Bye Bush From: RL To: All Date Posted: Wed, Jul 07, 2004 at 08:49:46 (EDT) Email Address: rafaelloring@yahoo.es Message: Comments on Bye Bye Bush I am incresingly concerned that Krugamn is bending the debate to his political cause. An admirer of him, I always praised his criticism of left and right politicians wich used any economic argument at hand to help his party but... The american economy is doing well and probably will do better in the near future. If Krugman keeps saying it doesn't because Bush has done so wrong he will end up trying to bend the arguments just the way he used to critize. Can't the economy perform in spite of the wrong doings of the administration? Yes. Bush's policies have not done such harm on the CURRENT economic numbers as Krugman claims(and I think he knows) if any he has not done as good as it could. The increasing spendind and tax-cuts has helped to bump up the economy(although most of the credit should go to the Fed). Yes, krugman argues that if the tax cuts had been spent on the middle-low income grops things would be better, well it could. But this is not the catastrofic picture Krugamn portraits. I find some Krugman critics are a bit tendecious. Corporate profits always surge at the beggining of the cicle and later employment follows and then, when the labor markets is tight, wages. We are at the beggining of the process. Corporate profits have grew to historical heights but note that the income tax cut has nothing to do with this. Also Krugman uses to measure economic performance not unemployment owhich is not pretty bad but total employment/population figures. But this he knows are influnced by the extraordinary participation rate and hours of labor levels reached in late 90's and that contributed to the 90's productivity miracle. ps:Bobby I couldn't post this message in the columns post section. due to its lengh?.

Subject: Re: Bye Bye Bush From: RL To: RL Date Posted: Thurs, Jul 08, 2004 at 05:09:58 (EDT) Email Address: rafaelloring@yahoo.es Message: gosh, My post was terribly written! I hope you got the message.

Subject: Re: Bye Bye Bush From: Bobby To: RL Date Posted: Wed, Jul 07, 2004 at 16:50:07 (EDT) Email Address: robert@pkarchive.org Message: Yeah, Haloscan is a piece of shit, isn't it? It puts a word limit on posts since my copy of it is free, and they'll relax it if I pay them some fee. Since I already spend a lot of money on the site and the economy has very adversely affected my family's financial situation (the recovery hasn't reached us yet), I'm not going to pay for Haloscan any time soon. Just post your message as two or maybe three separate messages in haloscan and it should be fine.

Subject: Re: Bye Bye Bush From: Pete Weis To: RL Date Posted: Wed, Jul 07, 2004 at 11:00:16 (EDT) Email Address: Not Provided Message: There is certainly a division of opinion out there with regard to how the economy is going (just not much of one). I said this in the past and no one yet has come up with evidence to the contrary - historically, economists as a group, have never predicted major economic downturns - even at the precipice of such a downturn. Perhaps, the vast majority of economists rely too heavily on the latest, most prevalent economic dogma and are afraid to question what a majority of their own kind accept as the 'bible' on economic thinking. The latest and greatest economic dogma centers around controlling the money supply. IMO this is still unproven. If it gets us through the next 5 to 10 years despite all the massive debt build-up then perhaps it has. We'll see. Milton Friedman, the guru of money supply, appeared on CNBC last year and declared we would definitely not slip back into a recession. Well, IMO, his life's work is now being tested to the nth degree. We shall see. It certainly wouldn't be the first time some prominent economist declared everything was going fine just before real trouble arrived. Robert Shiller at Yale stood apart from the vast majority of his fellow economists in the late 90's and declared there was trouble ahead - few listened to his warnings. Krugman, Shiller, Roach and investment luminaries such as Buffet and Gross are saying now that there is trouble ahead - are we listening? Most of the crowd listen to the siren call of the Luskins and Kudlows who tell the small investor to get into the markets - there's lot's of money to be made. It's no coincidence these same people were predicting ever greater heights for the markets, right up to, and some time after the begining of the downturn in early 2000. You say the economy is 'doing well'. Yet, today and yesterday CNBC is now reporting earnings warnings by increasing numbers of companies. Hardly a day goes by when there isn't a news report about record levels of debt and record personal bankruptcies. The big three auto manufacturers are seeing a sharp drop in sales and are having to increase incentives. The one bright spot still left is the financial divisions of the auto manufacturers and companies like GE. But how long can we live off the increasing debt of the American consumer? The other day, two economists debated the budget deficit on MSNBC. The conservative economist likened our budget deficit to pouring a glass of water into the ocean - saying that it would have no effect on the overall level. At that point I remembered a recent news article stating that the annual interest we pay on our total federal deficit has reached 330 billion (and that's at todays low interest rates). I then thought about the current account deficit, which at last report is approaching 600 billion per annum. It brought to mind a famous line of years ago spoken buy a politician. I modify it here to reflect today's money levels - 'a hundred billion here, a hundred billion there, and before you know it you're talking about some pretty serious money.' In the face of these problems most economic forecasters are saying the economy is doing very well - well, IMO, this is just the same old story, repeted once again.

Subject: Re: Bye Bye Bush From: Mik To: Pete Weis Date Posted: Wed, Jul 07, 2004 at 18:13:11 (EDT) Email Address: Not Provided Message: Deep words there Pete. I still side with the concept that Paul needs to take a break from Bush bashing and concentrate again on being non-partisan. A classic example of the 'Bye Bye Bush' article is Krugman's reference to the 'Clinton era'. I'm actually getting sick of Krugman's references to the 'Clinton era'. Yes yes, the Clinton era shows some mighty fine stats, but it seems like Krugman wants to make the Clinton era the only standard for comparison. Why does Krugman always pick the Clinton era, is it because this is the most recent example of good economic governance, or is it perhaps because Krugman offered advisory services to President Clinton (and feels proud of his involvement)? Also I have quite some reservation about the Clinton era. I believe a lot of what happened during the Clinton era has a lot to do with luck. It was during the Clinton era that the IT industry boomed - it was also IMO a period of great false economic perception as the IT boom was nothing more than an empty bubble of mis-placed faith that popped in time for Bush to arrive and pick up the pieces. Please make no mistake, I don't like Bush and his team of supply-side economists. But I really want Krugman to concentrate on wording his stories to be less partisan. Uhmmm as a side note - I do however think that Krugman's piece of Ferrenheit 911 is excellent.

Subject: Re: Bye Bye Bush From: Pete Weis To: Mik Date Posted: Wed, Jul 07, 2004 at 18:36:03 (EDT) Email Address: Not Provided Message: Mik. I have to agree with pretty much everything you said - including the Clinton era.

Subject: Re: Bye Bye Bush From: Terri To: Pete Weis Date Posted: Wed, Jul 07, 2004 at 19:05:36 (EDT) Email Address: Not Provided Message: The argument is fine, and the is always luck or misfortune to an economic turn during a Presidency, but Robert Rubin and Bill Clinton set the stage for a period of high growth, high productivity growth, good returns to labor and investors, and a lovely surplus. We will miss such results for some time.

Subject: I agree Terri From: Mik To: Terri Date Posted: Thurs, Jul 08, 2004 at 10:55:41 (EDT) Email Address: Not Provided Message: Terris,, thanks. I do agree with you. I too am overly impressed with his knowledge and ability to clearly communicate the truths on economics. I am just don't want to become blinded to his misgivings and am afraid that he may become 'full of himself' and begin to stray from his forte.

Subject: Re: Bye Bye Bush Boom From: El Gringo To: Terri Date Posted: Wed, Jul 07, 2004 at 19:29:43 (EDT) Email Address: nma@hotmail.com Message: ...and high confidence...

Subject: Edwards vs Cheney From: Pete Weis To: All Date Posted: Tues, Jul 06, 2004 at 09:51:42 (EDT) Email Address: Not Provided Message: Inevitably, voters will make subjective comparisons between these two. Was this a good choice for Kerry? Is Cheney a liability for the Republicans?

Subject: Re: Edwards vs Cheney From: Yasmar To: Pete Weis Date Posted: Fri, Jul 30, 2004 at 13:30:42 (EDT) Email Address: anandaband@yahoo.com Message: check out the edwards vs. cheney spot at moveon.org http://www.moveonpac.org/edwards.html

Subject: Re: Edwards vs Cheney From: Walter V. To: Pete Weis Date Posted: Tues, Jul 06, 2004 at 16:52:02 (EDT) Email Address: wverfens@yahoo.com Message: How many times has Dick Cheney been named People Magazine's Sexiest Politician? Merci, John Kerry. Au Revoir, Bush-Cheney!

Subject: Re: Edwards vs Cheney From: Bobby To: Pete Weis Date Posted: Tues, Jul 06, 2004 at 11:56:52 (EDT) Email Address: robert@pkarchive.org Message: Yes, Edwards was by-far the best choice. Anyone else, especially Gephardt, McCain or Bayh, would have been a disaster I think. If Bush were to drop Cheney for someone else, or Cheney dies of a heart attack or something, that would be bad for our side.

Subject: Re: Edwards vs Cheney From: Jonathan To: Bobby Date Posted: Sat, Jul 10, 2004 at 01:45:21 (EDT) Email Address: jonathan@lyingsocialistweasels.com Message: Yes, Edwards was by-far the best choice. Anyone else, especially Gephardt, McCain or Bayh, would have been a disaster I think. If Bush were to drop Cheney for someone else, or Cheney dies of a heart attack or something, that would be bad for our side. --- Perhaps it would be bad. It might also bring to the fore some uncomfortable questions. This is an administration that has prided itself in never admitting any mistakes or misfortunes. If Cheney ducked out, the media theme might easily become 'did he leave for health reasons, or because the Bush re-election campaign is doing terribly? Why was Cheney a liability? Can Bush run the country himself?' Bush might get a bounce from that sort of thing. Then again, it might look like the Bush campaign were coming apart at the seams (after all the alleged 'Gore re-inventions' in 2000, I think the last thing Bush wants to do is abandon his 'steady leadership no matter what' meme). Like predicting the impact of another terrorist attack on the election, knowing what would happen if Cheney jumped ship is rather difficult.

Subject: Re: Edwards vs Cheney From: Pete Weis To: Bobby Date Posted: Tues, Jul 06, 2004 at 23:46:25 (EDT) Email Address: Not Provided Message: It probably won't happen and it might only happen if, after the conventions, the Bush-Cheney ticket was doing very poorly in the polls. But if Cheney stepped aside (health, spend more time with the family, etc) and Rudy Jiuliani replaced him then that might give the Republican ticket a lot more punch. But I think this gang - Bush, Cheney, Rumsfeld, Wolfy - will hang together until the bitter end.

Subject: Re: Edwards vs Cheney From: Mik To: Pete Weis Date Posted: Wed, Jul 07, 2004 at 18:15:32 (EDT) Email Address: Not Provided Message: Pete, Uhmm isn't Rice part of the gang too?

Subject: a question about mundell-fleming From: Linda To: All Date Posted: Mon, Jul 05, 2004 at 20:10:53 (EDT) Email Address: lindaloyola@hotmail.com Message: does anyone understand very well the Mundell-Fleming model?because i have a doubt.what happens with the domestic equilibrium if there's an increment in the foreign production that also depends directly to its interest rate(i*=nY*). And it has a fixed rate.Uh!the domestic economy has a dolarized partial economy(in a perfect capital mobility).is it better a fixed rate or a flexible rate?. please if anyone knows well this subject,write me at lindaloyola@hotmail.com. I will be very appreciated![/b]

Subject: PK's review of F911 touted as best yet From: Amanda To: All Date Posted: Sun, Jul 04, 2004 at 18:09:32 (EDT) Email Address: Not Provided Message: At various sites, PK's column on F911 is being called the best piece of writing on the documentary to date. PK brings up points that many other commentators have failed to mention. But would I expect anything less from the man? NO! Also, anyone hear any buzz if PK will be in John Kerry's cabinet. Wouldn't that be a kick in the A$$????

Subject: Re:Amanda From: El Gringo To: Amanda Date Posted: Mon, Jul 05, 2004 at 12:36:40 (EDT) Email Address: nma@hotmail.com Message: 'Also, anyone hear any buzz if PK will be in John Kerry's cabinet. Wouldn't that be a kick in the A$$????' I personnally do not think that this would be a good idea.Why? 'If one follows this line of thought one might well be led to some extremely radical ideas about economic policy, ideas that are completely at odds with all current orthodoxies.But I won't try to come to grips with such ideas in this column.(The Accidental Theorist, Beyond the Market)Frankly, I don't have the time.I ('ll) have to get back to my research-otherwise, somebody else might get that Nobel.' That would be a kick in the A$$!!!

Subject: What Radical Ideas From: Terri To: El Gringo Date Posted: Mon, Jul 05, 2004 at 17:04:43 (EDT) Email Address: Not Provided Message: PK is smack in the heart of economic thinking.

Subject: Kerry's Krew From: Econochick To: El Gringo Date Posted: Mon, Jul 05, 2004 at 14:58:01 (EDT) Email Address: Not Provided Message: Kerry has already said that he will name Warren Buffet as chief economist. That must REALLY chap Krugman's ass. He was gunning for the Clinton administration and didn't make it there either. When Clinton made his appointment, Krugman had some very...shall we say...unpleasnt things to say about the appointee. But I guess we'll see what happens with the election. This could be a moot point.

Subject: Re: Kerry's Krew From: Pete Weis To: Econochick Date Posted: Mon, Jul 05, 2004 at 17:03:13 (EDT) Email Address: Not Provided Message: Econochick. Buffet is not an economist. Where did you see or hear any references to whom Kerry might pick as a 'chief economist'? Are you saying he stated he might ask Buffet to participate in an economic advisory position?

Subject: Re: Kerry's Krew From: Econochick To: Pete Weis Date Posted: Mon, Jul 05, 2004 at 21:02:30 (EDT) Email Address: Not Provided Message: Hey, Pete, I was as surprised as you upon hearing the news. Buffet is certainly NOT an economist. I heard it over a month ago and it was on regular news - maybe CNN. I keep rotating the 24 hour news channels all day, so it could have been on any of them. What struck me was the bit about naming him top dog because a.)he's not an economist and b.)I knew Krugman was gunning for the spot.

Subject: Re: Kerry's Krew From: Pete Weis To: Econochick Date Posted: Tues, Jul 06, 2004 at 01:01:05 (EDT) Email Address: Not Provided Message: I did a search in Google and found that both Buffet and Steve Jobs signed on with an advisory role to Kerry in May. There were quite a few news articles regarding this, but no mention of any 'chief economist' roles. Although my own political views tend to probably coincide much more with Kerry's, I realize that all politicians try to get the biggest names out there to support their candidacy before the election. The reality - and I'm sure Paul Krugman knows this - is that Steve Jobs and Warren Buffet are much bigger names when it comes to the general electorate. If you asked the average 'man/woman in the street' who Paul Krugman is it's likely it would draw a blank. Of course if you ask who Warren Buffet is you'd likely get a response. The decision whether or not Paul Krugman would get a role in a Kerry administration if he were to get elected, would likely come after the election. This is not to say that Kerry would not listen to Jobs or Buffet - it's just that Kerry is not likely to do or say anything before the election that does not help him politically. Although Krugman has been very outspoken about his unhappiness with the Bush administration, I have no clue as to whether he has any interest in anything other than an advisory role with a possible Kerry administration. If Kerry is elected, he has, IMO, some monumental economic problems to face which may require some pretty unique and untraditional solutions. Would he seek help from someone like Paul Krugman - I have no idea. If near the end of four years, it doesn't look like he's making much progress, like Bush he'll be gone.

Subject: Re: Kerry's Krew From: Econochick To: Pete Weis Date Posted: Tues, Jul 06, 2004 at 11:51:07 (EDT) Email Address: Not Provided Message: It's not out of the question that the news report I heard was simply wrong. Like I said, I was surprised. I personally think that neither Steve Jobs nor Warren Buffet are good additions to the economic team. While they add celebrity to the committee neither are qualified for the job. Krugman's economics are okay - particularly his position on free markets. But his economics deviate significantly from his political stance (which doesn't, frankly, make a lot of sense). IF Kerry wins and IF Krugman is appointed it will be interesting to see which side of himself he'll put forth.

Subject: Re: Kerry's Krew From: Pete Weis To: Econochick Date Posted: Tues, Jul 06, 2004 at 23:31:08 (EDT) Email Address: Not Provided Message: Econochick. Buffet's advisory contribution to a possible Kerry administration might actually be more related to cleaning up Wall Street in an effort to regain investor confidence. I think he makes a very important point about requiring the expensing of options. IMO, very little of a worthwile nature has been done to clean up corporate accounting. You are more knowledgeable than myself about this issue. What do you think?

Subject: Re: Kerry's Krew From: Emma To: Econochick Date Posted: Tues, Jul 06, 2004 at 15:21:31 (EDT) Email Address: Not Provided Message: There's no worry. PK will be quite content to stay at Princeton and with the NY Times. As for me, I think his economic and political stances merge nicely.

Subject: Re: Kerry's Krew From: Bobby To: Emma Date Posted: Tues, Jul 06, 2004 at 22:35:57 (EDT) Email Address: robert@pkarchive.org Message: I really want him to stay at the Times and keep writing for the public. Economists usually get the third degree from the political staff when they work for politicians. Joe Stiglitz had to do things like help Chelsey with her homework as CEA chairman, and I don't want Krugman time, which he could spend informing the public, to be wasted in a similar way.

Subject: PK Needs to Stay From: Emma To: Bobby Date Posted: Wed, Jul 07, 2004 at 17:37:07 (EDT) Email Address: Not Provided Message: Right Bobby, PK needs to stay at the Times!

Subject: Alan Blinder From: Terri To: Pete Weis Date Posted: Mon, Jul 05, 2004 at 17:06:41 (EDT) Email Address: Not Provided Message: Alan Blinder of Princeton heads the economic advice team for John Kerry.

Subject: Re: Alan Blinder From: El Gringo To: Terri Date Posted: Tues, Jul 06, 2004 at 21:04:51 (EDT) Email Address: nma@hotmail.com Message: 'Princeton's Alan Blinder, who helped carry the liberal torch during the 1980's wrote a regular column for Businessweek and a graceful primer on the U.S. economy.Many academics are incomprehensible, but there is no shortage of economists with fine academic reputations who are quite capable of making simple, relevant policy points. No, the problem that the politicians have with the professors is not one of failure to communicate;it's one of failure to say what politicians want (need) to hear (remember Mankiw about outsourcing?), especially when they are trying to seize power from other politicians.And necessity is the mother of invention:a different group, the policy entrepreneurs, has arisen to fill the gap.'

Subject: Re: Alan Blinder From: Econochick To: El Gringo Date Posted: Wed, Jul 07, 2004 at 08:24:42 (EDT) Email Address: Not Provided Message: You know, El Gringo, I find it interesting that people find academics incomprehensible. There's sort of a fundamental problem with understanding, for example, Economists that stems from the fact that the majority of the population is not as well educated on the subject. In fact, most have never had a single lesson in economics (or whatever the academic's in question discipline). In communicating to the general public, the academic must often dumb down complex issues to make them understandable to those who are missing the basic framework for understanding. Because the public is not an expert in the field, the masses often can't analyze the academic's analysis and accept or reject it on their own. The academic's opinion is then couched in a political context and accepted or rejected by the masses on that basis. Krugman (he's not the only one but I figure it's the PK board, so I'll use him as an example) once committed the 'lump of wealth' fallacy in a NYT Magazine article because he couldn't make his political (not economic, mind) point without it. How many people knew enough economics to catch that? And how many knew that he actually knew he was making it and made it on purpose? As I said, there are plenty of academics in various fields who do the same, so I'm not saying Krugman is evil or anything. Sadly, on the one hand, it's important for the people of this country to be informed because we choose our government. On the other hand, it's inefficient for everyone to become an expert in every field. I think it's an unsolvable problem.

Subject: Re: Emma From: El Gringo To: Econochick Date Posted: Wed, Jul 07, 2004 at 14:15:28 (EDT) Email Address: nma@hotmail.com Message: Dear Emma, there's no freedom for the ignorant one.

Subject: El Gringo From: Emma To: El Gringo Date Posted: Wed, Jul 07, 2004 at 17:39:09 (EDT) Email Address: Not Provided Message: Dear El Gringo, You have a fined honed wit.

Subject: Please.... From: Terri To: Econochick Date Posted: Mon, Jul 05, 2004 at 17:02:44 (EDT) Email Address: Not Provided Message: This is so much nonsense, simply because you enjoy endless griping about Paul Krugman. Please....

Subject: CAPF U.S. Economy incl PK From: Bob Saccamanno To: All Date Posted: Sat, Jul 03, 2004 at 12:07:18 (EDT) Email Address: BobSaccamanno@hotmail.com Message: Topic: Righting the Upside -Down Economy: Creating a Sustainable Recovery Speakers: Eileen Applebaum, Rutgers University; James Galbraith, University of Texas At Austin; Robert Manning, Rochester Institute of Technology; Scott Lilly, Center for American progres; Paul Krugman, New York Times Op-Ed Columnist 7/1/2004: WASHINGTON, DC: 'C:\Program Files\Real\RealPlayer\realplay.exe' /startpos:00:00:00.0 rtsp://video.c-span.org/15days/e070104_economy.rm If that link doesn't work go to this page and then click on the link: CSPAN www.c-span.org/search/basic.asp?ResultStart=1&ResultCount=10&BasicQueryText=krugman

Subject: Crazy From: John Bandele To: All Date Posted: Fri, Jul 02, 2004 at 21:18:38 (EDT) Email Address: Jbandele@hotmail.com Message: I have to believe that Mr. Krugman has certainly lost some brain matter during his stay at MIT. Hopefully he will bury his head in his hole in the toilet in his Princeton home and just go away. His attemp to promote the liberal myth is actually a great help to the conservatives.

Subject: Re: Crazy - Crazy for feelin' this way From: Paul G. Brown To: John Bandele Date Posted: Sat, Jul 03, 2004 at 02:10:32 (EDT) Email Address: Not Provided Message: In your own words, John, what would you say is 'the liberal myth' Krugman is promoting the hardest?

Subject: Tribute to Cheney: Paul Brown is %$#@ funny! From: Amanda To: Paul G. Brown Date Posted: Sun, Jul 04, 2004 at 17:44:34 (EDT) Email Address: Not Provided Message: I'm crazy, Crazy for feeling so blue. I knew, you'd love me as long as you wanted. Then one day, leave me for somebody new. Worry, why should I let myself worry? Wonderin', what in the world could I doooooooo!!! Ahh, you gotta love Patsy. I don't even think those lyrics are right, but when you feel it, don't you just gotta go for it?

Subject: Go Paul and Amanda From: Terri To: Amanda Date Posted: Sun, Jul 04, 2004 at 18:23:16 (EDT) Email Address: Not Provided Message: These cats is so afeared of a little ole economist. Poor dears.

Subject: Funding China's War Machine From: johnny5 To: All Date Posted: Fri, Jul 02, 2004 at 16:56:32 (EDT) Email Address: johnny5@yahoo.com Message: I just watched on CSPAN that china's GDP has grown about 8.7% since 1997 - their military economy has grown 16% since 97 and the smart guys think that number is too low and china is lying to us about it - so it looks like China is growing a War Machine. Here is the info on Cspan about the program and who was involved. Armed Services Duncan Hunter , R-CA Roger Robinson , U.S.-China Econ. and Sec. Review Cmsn. Now a little history for the economists here - I read on mises website that peace is just a time for nations to build military might and become self reliant on thier own resources for waging war. Hitler started making land grabs and resource grabs so he could grow his war Machine and it was reported in this program that China is going to make a grab for Taiwan very soon. http://www.mises.org/mmmp/mmmp9.asp 'The foremost reason for protection and the drive towards self-sufficiency in the world today is the war motive. For the militarist countries the readiness to make war is the primary goal of their policy and war itself the regular means of attaining their objects. They therefore consider peace nothing but the time to prepare the coming war. The economic activities of the country have already in peace time been organized in such a way that they may later serve the interests of war. This scheme includes self-sufficiency for all kinds of produce necessary to a war-making nation.' Also for those of you that have studied history President Bush's grandfather Prescott helped finance and profited from the war machine that arose in Nazi Germany - they grew the monster too big and lots of people had to die to STOP this war machine. http://www.straightdope.com/columns/030214.html Though the Bush family's detractors are legion, one of the most prominent is John Loftus, a former federal prosecutor and past president of the Florida Holocaust Museum in Saint Petersburg. In 1994 Loftus coauthored a book with Mark Aarons entitled The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People. The book alleges various misdeeds by George W.'s father, George H.W., his grandfather, Prescott Bush, and his great-grandfather, George Herbert Walker. Since space is limited we'll focus on the accusations against Prescott Bush, which in my opinion are the most serious. The central charge against Prescott Bush has a basis in fact. In 1942, under the Trading With the Enemy Act, the U.S. government seized several companies in which he had an interest. Prescott at the time was an investment banker with Brown Brothers Harriman (BBH), which had funneled U.S. capital into Germany during the 1920s and '30s. Among the seized companies was the Union Banking Corporation (UBC) of New York, which was controlled by German industrialist Fritz Thyssen. Thyssen had been an early financier of the Nazi party--in fact, in 1941 he published a book entitled I Paid Hitler. Ergo, Prescott helped finance the Nazis. An article by journalist Toby Rogers posted on Loftus's Web site makes an even more explosive charge. Another company in which Prescott and his associates had a stake was the Silesian-American Corporation (SAC), which owned several industrial concerns in Poland. The Auschwitz death camp was established in a district where SAC already had a steel plant. The plant allegedly used forced labor from Auschwitz during World War II. The article asserts that 'a portion of the slave labor force in Poland was 'managed by Prescott Bush,' according to a Dutch intelligence agent.' (See www.john-loftus.com/Thyssen.asp.) Europe is about to lift its 15 year old arms embargo on China. http://www.eubusiness.com/afp/040311091618.j4e2fn3y EU foreign policy chief Javier Solana will visit Beijing next week as debate rages over whether the European Union should lift its 15-year-old arms embargo against China. Announcing the visit Thursday, foreign ministry spokesman Liu Jianchao would not specify what would be discussed, but indicated the embargo could be on the agenda. Now as a concerned american citizen not wanting lots of people to die in this war - why is the world helping to finanace the growth of a war machine so that all our children can die fighting each other?

Subject: Re: Funding China's War Machine From: johnny5 To: johnny5 Date Posted: Fri, Jul 02, 2004 at 17:06:05 (EDT) Email Address: johnny5@yahoo.com Message: Why are we making capital investments in countries under socialist regimes where human rights are trampled? Isn't this how hitler got out of control? We need to start economic warfare against europe and china and anyone else who would grow a war machine in a socialist human rights abusing country - is our greed going to be our downfall again? Did we learn nothing from the Jewish suffering of world war 2?

Subject: How will it end? From: Pete Weis To: All Date Posted: Wed, Jun 30, 2004 at 20:44:36 (EDT) Email Address: Not Provided Message: The current account deficit, that is. Every economist on the planet says it can not go on indefintely. It may be impossible to predict when it will end. But how do posters on this board believe it will end? Does the answer to this question really matter?

Subject: Re: How will it end? From: WRS To: Pete Weis Date Posted: Thurs, Jul 01, 2004 at 09:44:22 (EDT) Email Address: Not Provided Message: Perhaps we see an increase in personal bankruptcies and some sluggish growth in 2006-2007 as payback for our borrowing binge. Life will go on along with the American economy. Those who predict a great unravelling may be disappointed that it does not occur.

Subject: WE can hardly wait!!! From: Amanda To: WRS Date Posted: Sun, Jul 04, 2004 at 17:50:56 (EDT) Email Address: Not Provided Message: Oh yeah W, I am just waiting for the world economy to collapse. In fact, I am giddy with the thought. And I clearly think that's where the original post was going with this. He's not worried as much as he is peeing his pants in anticipation of it. How dare anyone bring up a potential possiblity without someone in the opposition assuming we are all praying for it! I was thinking about even throwing a small party when it happens. Do you think I should have the event catered or should I have a pot luck?

Subject: Re: How will it end? From: Nat To: Pete Weis Date Posted: Thurs, Jul 01, 2004 at 00:16:15 (EDT) Email Address: Not Provided Message: While I'm here, might as well post. This is a bang or whimper question, isn't it? I don't think we will grow our way out of it. For the sake of argument, I bet we shrink our way out of it. As in shrink the value of the dollar. When the value of the US consumer shrinks in comparison to the rest of the world, and Japan and China no longer need us to buy all the consumer goods they are pumping out they will quit buying our treasuries. The dollar will head south. Interest rates will head north. Inflation will head north. Energy prices will go through the roof when OPEC wants its oil paid for in Euros. So, we'll tackle the tough issues like energy independence and health care then pay off the debt with our newly learned frugality... oops. Nope. The Chinese and Japanese beat us to solving the energy question and we end up being the mid-21st century Argentina. But at least we will have a good soccer team.

Subject: Re: How will it end? From: Pete Weis To: Nat Date Posted: Fri, Jul 02, 2004 at 17:56:26 (EDT) Email Address: Not Provided Message: 'As in shrink the value of the dollar.' Our crediters won't be pleased! An effective way to renege on our debt though, as long as (as you infer) we don't end up like Argentina in the process.

Subject: Re: Nat From: El Gringo To: Nat Date Posted: Thurs, Jul 01, 2004 at 19:23:54 (EDT) Email Address: nma@hotmail.com Message: 'When the value of the US consumer shrinks in comparison to the rest of the world, and Japan and China no longer need us to buy all the consumer goods they are pumping out they will quit buying our treasuries.': Nat, why should they?

Subject: consumer engine From: Nat To: El Gringo Date Posted: Fri, Jul 02, 2004 at 11:11:38 (EDT) Email Address: Not Provided Message: First, let me say that I am not an economist, nor do I play one on tv. I read Krugman, Delong, Billmon, Max Sawicky etc since I have grown to believe what I don't know may in fact hurt me. That is the same reason I enjoy this message board. My fairly smart-ass response was driven by several issues I don't really understand that has led me to one very fuzzy conclusion. The far east finances our debt these days, something I just find extraordinary. From what I can see, they are ultimately financing our ability to buy their products by loaning us the dollars swamping them in the trade imbalance caused by us buying their products. (This economic moebius strip hurts my head.) This is a jobs and industrial growth issue in China, and why they won't float their currency against the dollar. It is (among lots of other things) a tax shifting to another generation issue for the US in Delong's analysis. We are the the consumer engine that drives the world. Here is my very fuzzy conclusion: this is the first thing that I think will change, the first domino to fall. As the standard of living in the rest of the world rises and our debt burden and employment situation worsens, our importance as a consuming nation diminishes. If China doesn't need us to buy their dvd players because India (or wherever) is buying them then their motivation to buy our treasuries diminishes since their pool of rupees grows in relation to their pool of dollars. This is especially true if our actual demand drops because more people are out of work, the credit cards are tapped and the pot of money left over from the re-fi on the family split-level is gone. As for the Euro/dollar/oil thing, I will leave that to others (Pete, I think.) I really don't understand how that stuff works. Maybe that is the perfect storm: our importance as the consumer engine that drives the world ends as oil switches to Euros as oil production levels can't keep up with demand. Ouch. As for bang or whimper, I hope whimper, fear bang. I really, really think a lot depends on this next election. And today's jobs numbers were a bit shocking to me. Maybe the consumer engine will run out of gas before the rest of the world can pick up the buying slack.

Subject: Re: consumer engine From: El Gringo To: Nat Date Posted: Fri, Jul 02, 2004 at 18:34:54 (EDT) Email Address: nma@hotmail.com Message: 'First, let me say that I am not an economist, nor do I play one on tv.' Hmmm...,well then I have to admit the fact that I admire the clarity and lucidity of your arguments

Subject: Re: consumer engine From: Pete Weis To: Nat Date Posted: Fri, Jul 02, 2004 at 16:24:12 (EDT) Email Address: Not Provided Message: Nat. Your point about the US consumer driving the world economy is right on the mark. Stephen Roach, chief economist at Morgan Stanley, has been warning about this dangerous imbalance for some time now. As nearly all posters on this board know, the current account deficit is the dollar value difference between goods/services sold outside US borders and goods/services purchased inside by US entities (consumers, corporations, etc.). I restate this simple definition because it is the starting point for a short series of likely truths which leads to a 'logical' conclusion. It's not a rigid exercise in logic as we would get in a mathematical proof, but if you accept some 'likely' truths, then one can reach a probable outcome. The first likely truth is that the current account deficit is not indefinitely sustainable - I'm not an economist but this would seem to be nearly an absolute truth. The second likely truth is that the current account deficit can only come to an end in one of three basic ways - (1) a steep drop in consumption while holding the line (to some degree) on sales of goods and services outside our borders; (2) a steep increase in goods and services sold outside our borders while holding the line on our consumption; (3) some combination of (1) and (2). The third likely truth (this one is where the most disagreement might accrue) is that (with stiff competition from cheaper labor markets) there will be no significant increase in US sales of goods and services in the next five to ten years or for that matter the next 20. Some great technological advancement as we had with the desktop pc in the 80's and 90's or electric power as we had in the early 20th century may yet save the day sometime in our future. But history shows these advances are generally decades apart and there is no guaranty the US will lead the next great technological wave. The likely conclusion, from the preceding, is that the current account deficit will come to an end with a steep drop in consumption. Steep, because any significant drop in in consumption by the US consumer will inevitably have a negative impact on, not only the US economy, but also other economies such as Europe, Japan and China. This will, in turn, reduce their purchases of US goods and services thereby requiring an even steeper reduction in US consumption to where finally the US current account deficit has been extinguished. The trigger that starts this downward spiral of consumption, IMO, is the point at which the US consumer decides his debt level and daily expenses are becoming too difficult to service. Perhaps it could also be triggered by the 'reverse wealth' effect of a dropping stock and/or housing market. Unfortunately, for the US and world economies too much is dependent on the most heavily indebted individual who has ever existed on Earth - the American consumer.

Subject: Re: consumer engine From: Nat To: Pete Weis Date Posted: Sat, Jul 03, 2004 at 00:36:35 (EDT) Email Address: Not Provided Message: Pete, you are a bang sort of guy. And I think you took my fuzzy thinking and gave it a shave and a haircut. Your post inspired some interesting googling. I am mulling over what a whimper would be like... with regards to our little consumer engine that could: in the past week we have had bad news from Walmart, Target, GM and Ford. The jobs number didn't meet the working population growth number. Plus Greenspan raised the rate a quarter of a percent to start to cool things down. So, what's to cool? Perhaps you can explain something that puzzles me. The current account deficit is the difference between what we buy and sell across our borders. Our national debt is the accumulated yearly shortfall (accumulated deficits) of our operational budgets. So, here's the dumb question: I have never seen the account deficit expressed as an accumulation over anything other than a year. The national debt is a whopping big pile of t-bills (5-6 trillion dollars worth or so.) Is the concept of an absolute accumulated (not so current!) account deficit a meaningful figure? If so, what is it?

Subject: net international debt From: Nat To: Nat Date Posted: Sat, Jul 03, 2004 at 01:27:56 (EDT) Email Address: Not Provided Message: Net international debt is the accumulation of current account deficits. The current account is the net over a given period of time of trade and other payments such as interest. My sloppy thinking tended to equate it solely with trade, but there is a bit more to it than dvd players at Fry's. Found it here: http://www.kc.frb.org/PUBLICAT/ECONREV/PDF/1q01holm.pdf Otherwise known as foreign debt, this is an interesting figure that I have never seen referenced before with regards to the US. I have not been paying attention. This article indicates that in 2000 we were a bit below 12% GDP, but it didn't put it in a nice tidy dollar figure. It appears we swung from a creditor to debtor nation in the early 80's. I was shocked to see Australia was running at 60% of GDP and a bit of googling showed it was a serious political issue down under. Exports are falling, interest rates are up.

Subject: Re: net international debt From: Pete Weis To: Nat Date Posted: Sat, Jul 03, 2004 at 23:56:16 (EDT) Email Address: Not Provided Message: A lot of that foreign debt is owed by US consumers, including much of the mortgage money being used to keep our economy afloat since increasing wages has not been able to do the job. The US government can allow the dollar to slide thereby devaluing what it owes its creditors. Japan, through its finance minister has expressed concern about this and recently announced it would be lessening its purchases of US securities, and it appears that they have, in fact, reduced purchases. As you mentioned there has been talk of the dollar being replaced by the Euro with regard to world oil markets. OPEC ministers have been complaining about the falling dollar but for the time being have decided to simply demand more dollars per barrel. Again, unfortunately the US consumer has not benefited (accept in increased housing valuations) from all the increased liquidity when it comes to increases in wages. Much of the increased liquidity and associated wealth, IMO, is filtering its way up the wealth ladder as banking and corporate executives award themselves very lucrative stock options and salaries as they bleed away the real value of their companies. As Mark Cuban says - 'it's dilution by a thousand little cuts'. The masses of consumers are left with monumental debt(in comparative historic proportions), with incomes which can not handle rising interest rates. So much for 'trickle down'. Consumption, IMO, will at some point, have to drop from its furious pace of the last 20 years.

Subject: Interesting Comments From: Emma To: Nat Date Posted: Fri, Jul 02, 2004 at 14:06:59 (EDT) Email Address: Not Provided Message: Nat - you comments are a pleasure to read.

Subject: Re: How will it end? From: Pete Weis To: Nat Date Posted: Thurs, Jul 01, 2004 at 18:45:23 (EDT) Email Address: Not Provided Message: Nat. IMO, your reply makes sense. So what will it be a bang or a whimper?

Subject: Re: How will it end? From: RL To: Nat Date Posted: Thurs, Jul 01, 2004 at 04:26:58 (EDT) Email Address: rafaelloring@yahoo.es Message: :) If by then you also make good food it would be a nice trade-off.

Subject: PK should do his own reporting From: WRS To: All Date Posted: Tues, Jun 29, 2004 at 10:40:04 (EDT) Email Address: Not Provided Message: Today's PK column on 'Who lost Iraq' prompts me to post some unsolicited advice. In my humble view, he would do well to make some phone calls and put some of his own reporting into his columns. He does not build credibility by quoating people third hand, from the Washington Post and other written reports. PK's style is to pick and choose second hand sources to support a preconveived argument. But I would submit that his academic approach leads to an aloof, professorial tone that leaves undecided readers cold. Writing a column is not an academic exercise. It is a matter of building relationships with readers. Notice that Safire and other seasoned columnists on the right or left do much of their own reporting, offering tidbits and even scoops to keep views fresh and original. Yes, it takes work to pick up the phone and talk to someone closer to the action. It also takes humility and a recognition that, no, the almighty columnist is not always the expert. Reporting involves a dialogue that leads to a deeper understand of both sides of the story and ultimately the truth. PK should try it some time.

Subject: WRS should refrain from giving advice From: Amanda To: WRS Date Posted: Sun, Jul 04, 2004 at 18:02:18 (EDT) Email Address: Not Provided Message: WRS, I beleive this has been brought up numerous times here before but PK is NOT, I repeat NOT a journalist. He is a columnist, whose job is not to report but comment on other reports made by people who are, well, PAID TO REPORT. You say, 'writing a column is not an academic excerise.' Ummmm, WRS. YES IT IS!!!!!!!!!!!!!! A columnist uses his expertise, if he has any and the fact that you hold Safire up as your example is laughable, to comment about events. That's exactly what PK does and he does it incredibly well. You write: 'Yes, it takes work to pick up the phone and talk to someone closer to the action.' You are truly missing the whole point of why PK is so successful. HE IS NOT ON THE INSIDE. HE IS NOT A WASHINGTON INSIDER. He doesn't claim to be, he doesn't want to be. He is unsullied by all the BS. And if he were an insider, I can assure you that he certainly wouldn't be so courageous as to write things that crawl under your skin and fester like a huge boil. So I wouldn't go throwing around your unsolicited advice so quickly, especially when it's obvious you don't have a clue what you are talking about.

Subject: Re: PK should do his own reporting From: Nat To: WRS Date Posted: Wed, Jun 30, 2004 at 10:49:24 (EDT) Email Address: Not Provided Message: Safire, Novak, et al are no more investigative reporters than I am. They are journalists who function as mouthpieces for those in politics with a sympathetic political agenda. I consider most of them tools. The fact that Krugman quotes public, confirmable sources instead of the unnamed sources cited by the rest of the pack is a plus, not a negative. Our journalists in the main stream are more concerned with cultivating access than exercising either their critical faculties or their ethics. Check out Brad Delong's blog for his near-daily criticism of our media. If I wanted both sides of a story, a deeper understanding, and the truth, William Safire would be one of the last places I would look. My preference is to read someone who knows something rather than someone who claims to know an anonymous somebody.

Subject: PK does his own thinking.... From: Emma To: Nat Date Posted: Thurs, Jul 01, 2004 at 13:51:42 (EDT) Email Address: Not Provided Message: PK does precisely what a fine columnist should do, analyze selected news and data sources and cogently argue their significance.

Subject: Re: To Nat From: El gringo To: Nat Date Posted: Wed, Jun 30, 2004 at 13:14:24 (EDT) Email Address: nma@hotmail.com Message: How do u know that u're reading someone who knows something rather than someone who claims to know an anonymous somebody?

Subject: Re: To Nat From: Nat To: El gringo Date Posted: Wed, Jun 30, 2004 at 23:23:24 (EDT) Email Address: Not Provided Message: Well, when Novak or Safire (or anyone) writes 'according to unnamed administration sources' they are claiming to know an anonymous somebody. In his latest column which generated the original criticism, Krugman cites the Brookings Institute's Iraq index, a report from a British charity and then quotes a WaPo reporter, Simone Ledeen, and Michael Fleischer. I therefore credit Mr. Krugman for knowing something that I don't. I imagine I could independently verify this information given time and energy. If he is wrong about these sources, for example if the Iraq index indicated things are going great, I am pretty sure someone will point this out. I think Mr. Krugman's column would have been weaker if he followed the the usual cultivated source gambit and said something like: 'unnamed sources in Iraq say things suck.'

Subject: Re: To Nat From: WRS To: Nat Date Posted: Thurs, Jul 01, 2004 at 09:39:53 (EDT) Email Address: Not Provided Message: Has Krugman bothered to verify the accuracy of the Washington Post quote? Since when is it OK for NYTimes writers to rely on rival publication reporters for information? It's OK to cite written sources. But PK relies on text exclusively. People who provide the best insight have relationships with others who are making news; they have sources, and they talk to them regularly. The news business is in essence a people business. Instead, PK relies on his Web connection and surfs, picking and choosing other people's blurbs and data to support his prefabricated arguments. My point is this is a very aloof and impersonal way of writing about the world and I would submit it is intellectually lazy as well.

Subject: Re: To Nat From: El Gringo To: WRS Date Posted: Thurs, Jul 01, 2004 at 19:17:45 (EDT) Email Address: nma@hotmail.com Message: WRS, don't know what to say except that you surely don't like 'Lemons'...

Subject: Re: PK should do his own reporting From: Rupert Berlusconi To: WRS Date Posted: Tues, Jun 29, 2004 at 13:28:19 (EDT) Email Address: mediolanum@hotmail.com Message: Give me Cnn or NBCnews and I'll do it.

Subject: China attracts more FDI than US From: Mik To: All Date Posted: Mon, Jun 28, 2004 at 13:59:39 (EDT) Email Address: Not Provided Message: By Hugh Dent PARIS - China overtook the United States in attracting foreign investment in 2003, the OECD reported on Monday, adding that for the second year in a row the US had invested more abroad than it had attracted from foreign companies. France remained a top location in Europe for foreign direct investment and attracted more funds last year than the United States Overall, investment from the rest of the world in the OECD area fell sharply but OECD investment elsewhere rose 'resulting in the biggest net flow to developing countries and emerging markets on record', the OECD said. The Organisation for Economic Cooperation and Development calculated that foreign direct investment in its member countries, had fallen in 2003 for the the third year in a row. The report, called 'Trends and recent developments in foreign direct investment', explained: 'The weak global economic recovery, concerns about international security, and a preference on the part of many firms to consolidate acquisitions rather than make new ones all contributed to the decline of foreign direct investment'. This measure of investment covers transfers for such investments as mergers and acquisitions, the construction of new factories and transfers to foreign-owned businesses. Investment into OECD countries fell by 28% in 2003 to 384 billion dollars (317.35 billion euros), the OECD estimated, from 535 billion dollars in 2002 and 662 billion dollars in 2001. In 2000, such investment into OECD countries had peaked at 1.2 trillion dollars. However investment flowing out of the 30 industrialised countries belonging to the OECD rose slightly to 576 billion dollars from 567 billion dollars in 2002 but down from 662 billion dollars in 2001 and 1.2 trillion dollars in 2000. This meant that overall the net amount of investment by OECD countries in the rest of the world rose six-fold in 2003 to 192 billion dollars from 31.7 billion dollars in 2002. The OECD commented: 'China overtook the United States in 2003 as the biggest recipient of foreign direct investment, attracting 53 billion dollars from OECD countries and elsewhere.' 'The size of domestic markets in big developing emerging economies, particularly China, is attracting foreign firms.' 'This contrasts somewhat with earlier decades when OECD companies were primarily investing in developing countries to benefit from lower wages and production costs.' However, Russia attracted only one billion dollars of foreign direct investment in 2003, one quarter of the amount received by India from OECD companies. The OECD observed: 'Foreign direct investment in Russia still goes mainly to the energy sector and Russia could attract more FDI if it reformed the regulations affecting business in other sectors of the economy.' The OECD provided figures showing a sharp fall in investment in the United States that are likely to be studied by analysts of the US balance of payments deficit. Conventional thinking argues that the United States must attract substantial amounts of foreign capital to fund its economy and make good a shortfall of domestic savings, and that a substantial fall in the inflow of investment in US business could cause long-term problems for policymakers. 'The US suffered the biggest fall among OECD countries in inward FDI but other major economies such as Canada, Germany and Britain were also hit.' 'In the United States, FDI fell to 40 billion dollars in 2003 from 72 billion dollars in 2002 and 167 billion dollars in 2001. This is the second consecutive year that the US has been a net provider of foreign direct investment - investing more abroad than it attracts from foreign companies.' Investment into Europe fell by 23% in 2003, but there were big variations between countries. In remarks which belay a negative climate sometimes signalled in France, the OECD gave figures showing that France attracted more investment than the US last year. It said: 'France remained a favourite for FDI in 2003, with inflows totalling 47 billion dollars, only marginally less than in 2002 and three times the amounts invested in Germany and the United Kingdom.' The OECD went on to suggest that this was 'partly because it is easier for foreign firms to buy French companies than it is to buy companies in many other European countries'. Investment flows into Germany fell by 64% to 12 billion dollars last year and flows into Britain almost halved to 14.6 billion dollars.

Subject: Re: China attracts more FDI than US From: kiefer ulrich To: Mik Date Posted: Tues, Jul 27, 2004 at 12:41:00 (EDT) Email Address: kieferulrich@gmx.net Message:

Subject: China's Growth From: Emma To: Mik Date Posted: Mon, Jun 28, 2004 at 17:31:57 (EDT) Email Address: Not Provided Message: This is likely to continue. China is a tremendous growth story, a story that can continue for several more decades of catching up.

Subject: Re: China's Growth From: El Gringo To: Emma Date Posted: Mon, Jun 28, 2004 at 17:34:12 (EDT) Email Address: nma@hotmail.com Message: labour supply >> demand technology transfer (Solow)

Subject: Re: China's Growth From: El Gringo To: El Gringo Date Posted: Mon, Jun 28, 2004 at 17:53:10 (EDT) Email Address: nma@hotmail.com Message: Please, apologize for the mistake: 'labour supply >>> demand and technology transfer (Solow)'

Subject: Re: China's Growth From: El Gringo To: El Gringo Date Posted: Mon, Jun 28, 2004 at 17:47:32 (EDT) Email Address: nma@hotmail.com Message: Neoliberalism 'theory As described by Berkeley economic historian and defender of neoliberalism Professor Bradford DeLong (http://www.j-bradford-delong.net/), this 'ism' has two main tenets: 'The first is that close economic contact between the industrial core [of the capitalist world economy] and the developing periphery is the best way to accelerate the transfer of technology which is the sine qua non for making poor economies rich (hence all barriers to international trade should be eliminated as fast as possible). The second is that governments in general lack the capacity to run large industrial and commercial enterprises. Hence, [except] for core missions of income distribution, public-good infrastructure, administration of justice, and a few others, governments should shrink and privatize).' These two principles represent versions of the trickle-down theory, i.e., that under free-market capitalism, economic growth and technological change benefit even the poorest countries and people, even if that process is dominated by multinational corporations, rich domestic elites, and organizations such as the IMF dominated by rich countries' financiers. In the tradition of laissez faire theory, the state is seen as normally incompetent and/or corrupt, though it may play a positive role with technocratic 'expert' guidance. The concept of neoliberalism became popular among economists not only as the balance of political power changed (as discussed above), but as many decided that post-World War II national development strategies for poor countries were not having the intended effects. In particular, funding for mega-projects left poor countries with high debts but little growth to show for it. It is also a reaction to the perceived failures populist and modern liberal economic policies, such as import-subsituting industrialization. Failures of the East-Asian ( Taiwanese, South Korean) policies of state-guided export-led economic growth and of the centrally-planned or 'communist' economies also were interpreted as requiring neoliberal medicine. The export-led economies were criticized as involving 'crony capitalism,' while most of the centrally-plane countries fell apart economically and politically in late 1980s and early 1990s. As noted, the neoliberal doctrine is linked to the so-called 'Washington consensus,' a set of specific policy goals designed for Latin American countries. In addition to the tenets of neoliberalism noted by Professor deLong, the Washington consensus stipulated that a country should have stable exchange rates and a government budget in balance. '

Subject: France attracts more FDI than US n/m From: David E... To: Mik Date Posted: Mon, Jun 28, 2004 at 16:22:59 (EDT) Email Address: Not Provided Message: n/m

Subject: Re: France attracts more FDI than US n/m From: El Gringo To: David E... Date Posted: Mon, Jun 28, 2004 at 17:23:24 (EDT) Email Address: nma@hotmail.com Message: Chapter 4:Political Effects (within a nowadays massively intertwined global economy) (FDI in the US by Ed Graham and Paul Krugman)

Subject: Delong on source of poor media reporting From: Jim To: All Date Posted: Sun, Jun 27, 2004 at 15:39:03 (EDT) Email Address: jzmarg@aol.com Message: Why Oh Why Can't We Have a Better Press Corps? (Structural Flaws Edition) I've been trying to think about why so much of America's elite press corps is so flawed--does such a lousy and incompetent job so much of the time. I don't have answers. I do have observations and, perhaps, a theory or two. Consider the passage below from the Washington Post. It's one of a hundred or so examples I've filed away over the past year or so--examples of egregiously bad political-economic reporting from elite journalistic institutions. It's not the worst such example, but it is selected from a set of howlers. The reporter (Jonathan Weisman) is not the worst example, but I certainly wouldn't employ him to cover American economics and politics. But structural patterns and pressures are more important here than individuals, and I want to focus on them. Let's roll the tape: Economy Provides No Boost For Bush: The nation's economy is growing smartly, wages have begun to rise, and employers have added more than 1.4 million jobs to their payrolls in the past nine months. Yet voters continue to give President Bush poor ratings on his handling of the economy.... [...] Bush is not the first president to suffer from a disconnect between objective economic indicators and voter perceptions on the economy. The economy began growing steadily in March 1991, when President George H.W. Bush registered a 49 percent approval rating on his handling of the economy. But by July of 1992, those approval ratings had slid to an abysmal 25 percent, presaging his electoral defeat three months later... Ask any economist not bought and paid for by the Bush campaign why there is currently a 'disconnect' between 'objective economic indicators' and 'voter perceptions', and the first answer you will get back is that the question is simply badly posed. Recent economic news has been good. But the current economic situation is not good--the current situation is mixed. The productivity picture is amazingly good. The level and rate of growth of production are both more than satisfactory. But on the labor side, employment is still well below what it was three and a half years ago (and with our growing population we would have needed employment to grow by 4 or 5 million to keep the employment-to-population ratio steady), and wage and salary incomes have been essentially flat since the last business cycle peak. While the productivity situation is excellent, and the production situation is good, the labor-side situation--and that's what the overwhelming bulk of voters see: they aren't coupon clippers--is quite bad. There is a similar flaw in the reporter's historical example: production began growing after March 1991, yes, but the unemployment rate peaked more than a full percentage point higher in the summer of 1992. Is it any wonder that George H.W. Bush's approval ratings fell? Thus here we have an example of a Washington Post reporter writing on page A1 about American economics and politics who: Doesn't understand the current economic situation. Doesn't understand the economy history of the Bush I administration. Poses a false problem--i.e., why the 'disconnect' between the good economy and the grouchy voters. Fails to listen or understand when the potential sources he talks to tell him that he has posed a false problem. It gets worse. Later on in the story our reporter then finds a 'public opinion expert' at--surprise--the American Enterprise Institute, who says that 'Americans are a show-me people,. They need to be shown that things have actually been changed, and I think in an economic recovery, this means seeing the guy down the street getting his job back rather than good jobs numbers.' The reporter doesn't think to wonder: if there are good jobs numbers, doesn't that mean that the guy down the street is getting his job back? What could good jobs numbers possibly be other than the guy down the street getting his job back? With a straight face, our reporter then writes that: For Republicans, frustration is beginning to show. Last week, when the Labor Department announced that an additional 248,000 jobs had been created in May, House Ways and Means Committee Republicans e-mailed reporters, blaring, 'It's a Booming Economy, Stupid.' The reporter doesn't seem to wonder about the bona fides of the Republicans on the Ways and Means Committee. Is an economy in which unemployment is above its natural rate and in which there are few if any inflationary pressures an economy in a boom? Nobody but a bunch of congresscreatures seeking to fuzz the issues and muddy the waters would ever say so. The nadir, however, is reached with the reporter's statement that voters 'may have considerably sharper antennae than economists. In the fall of 2000, when most economic indicators continued to surge, anxiety among voters began to take a toll on Democrat Al Gore's White House bid.... That anxiety proved to be prescient: By the spring of 2001, the economy had slipped into recession.' I can assure him that voter anxiety in the fall of 2000 was much less than economist--and Federal Reserve--anxiety: economists and monetary policies feared and feared greatly what the effect of the falling NASDAQ would be on aggregate demand. Overall, Weisman's article is like... it's like... it's like somebody totally drunk staggering around the neighborhood in the middle of the night, mistaking lampposts for trees, bushes for people, and busses for elephants. Someone who knows next to nothing about the issue area--and who seems incapable of learning--is turned loose on page A1 to try to interpret the state of the economy and how that is affecting current American politics. 'How in God's name,' I ask myself, over and over again, 'did we ever get such lousy reporters* like this ensconced in the center of our elite press corps?' I have no answers. I do, however, have a theory. Suppose you want to become a member of America's elite press corps. You may--may--succeed if you have at least two of the following three talents: You need to be able to write incredibly large amounts of coherent prose incredibly quickly under tight deadlines. You need to be incredibly persuasive at convincing your current source that--even though it is incredibly unlikely--you are his or her friend, and will not print anything they will find embarrassing. You need to be incredibly good at persuading yourself that the camera is another human you are interacting with, rather than a large and bizarre electro-mechanical device, so that you don't look shifty-eyed and nervous whenever you are on TV. If you have at least two of these three talents--and you need to have them to a truly extraordinary degree--you may be able to find and hold your place in America's elite press corps. And if you don't have these talents to a truly extraordinary degree, you certainly will not be able to do so. But what happens next once you have gained entry? You find yourself, day after day, depending on what set of issues you cover, running up against people who know much much more than you do about diplomacy, war, health, science, technology, economics, commerce, finance, bureaucracy and organization, social welfare, and a host of other topics. Moreover, many of the people who know more than you do are trying to snow you: either that is what their corporate or ideological masters pay them for, or they are themselves driven toward some political goal and regard fooling you as not a cost worth considering. You thus find yourself (a) knowing a lot less about the substance of the issues than most people you talk to, and also (b) knowing that many of the people you talk to are not telling you the straight story. So what do you do? You could effectively go back to school for a couple of years: use the fact that your press badge gives you access to induce people to teach you about diplomacy,w ar, science, health, technology, economics, commerce, et cetera, or whatever subject area is your beat. The problem here is that, because you are a reporter, about half of your potential teachers will be lying to you--trying to influence your coverage by feeding you various brands of b***s***t. Moreover, you're a grownup: it's not terribly pleasant to be lectured at when you're a grownup. In addition, it's immensely time-consuming to build up your substantive expertise--and you already have a fulltime job writing ridiculous amounts of prose under deadlines, hypnotizing sources into believing that you are their friend, and staring into cameras. So one road reporters take--reporters who could, if we had a better system of molding them, turn out to be quite excellent--is one of Agnosticism: 'I am a camera, and I simply report what people tell me, and I give greater authority to people who quickly return my phone calls and give me interesting quotes. I don't care about what's 'really going on' because that's a matter of opinion, and who knows anyway.' For example, consider the New York Times's Elizabeth Bumiller, who told me with a straight face that whether Richard Clarke was 'out of the loop' in 2001 on counterterrorism matters was 'a matter of opinion,' and that she was a news reporter. It was a fact, Ms. Bumiller said, that Cheney had said that Clarke was out of the loop. For her to have used her story to say that Cheney's claim was false, she said, would have been to illegitimately inject opinion into a news story. When I tell this story to anybody who knows anything about the bureaucracy and organization of the Bush White House, they laugh: the National Security Council that Clarke was part of is the organization that cuts others out of the loop.** Deliberate ignorance of the substantive matters one is covering thus becomes a reporterial strategy: a way of (a) making your job easier, and (b) not getting any of your sources really mad at you. And by the end of the process of reporter-molding our reporter finds it bizarre and inexplicable that anybody actually cares about the substance of the issues. As one sentence from what Weisman wrote to me put it: 'for someone who got the longest quote in my [Glenn] Hubbard profile, you mercilessly slammed me really good...' For Weisman, my annoyance at the fact that Weisman's Glenn Hubbard profile was substantively wrong is inexplicable and bizarre. I should, Weisman thinks, be friendly and grateful to him, for I 'got the longest quote' in his article. And what sources really want is to be quoted at length in the Washington Post, right? The idea that I would want the story to inform Americans about economic policy is simply not on his screen at all. Now these structural pressures don't ruin the work of the entire elite press corps, but they do significantly degrade the quality of American journalism. Some institutions, however, appear largely immune from them: the Wall Street Journal (news pages only), the Economist, and the Financial Times are very impressive substance-oriented journalistic institutions. And I am now trying to think about why these three are so different, and so successful... --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- -- *Let me hasten to add that there are a very large number of very good reporters out there. It is the fact that distressingly often it is the bad ones whose writing appears on page A1 of newspapers like the Washington Post that distresses me. **You can't cut the NSC out of the loop and run a separate foreign policy via the State Department: State cannot draw on Pentagon and CIA resources. You can't cut the NSC out of the loop and run a separate foreign policy via the CIA--at least, not if you want to talk to foreign governments. You can run a separate foreign policy out of the Pentagon if you use your four-star generals as proconsuls: have the head of Central Command also be your link to Middle Eastern governments, but there are no signs that that was the case in the Bush administration. It's worth noting that the two great loop-cuttings in foreign policy over the past forty years were both done by the NSC--Kissinger's China policy, and the Poindexter-North Iran-Contra disaster.

Subject: Re: Delong on source of poor media reporting From: The Dude To: Jim Date Posted: Sun, Jun 27, 2004 at 20:35:08 (EDT) Email Address: nma@hotmail.com Message: Jim, Brad is simply untouchable! Adj.1.untouchable - beyond the reach of criticism or attack or impeachment; 'for the first time criticism was directed at a hitherto untouchable target'- Newsweek 2.untouchable - impossible to assail Synonyms: unassailable 3.untouchable - forbidden to the touch; 'in most museums such articles are untouchable' 4.untouchable - defiling to the touch; especially used in traditional Hindu belief of the lowest caste or castes 5.untouchable - not capable of being obtained; 'a rare work, today almost inaccessible'; 'timber is virtually unobtainable in the islands'; 'untouchable resources buried deep within the earth' Synonyms: unobtainable, unprocurable, inaccessibl

Subject: Re: Delong on source of poor media reporting From: Paul G. Brown To: The Dude Date Posted: Sun, Jun 27, 2004 at 23:59:00 (EDT) Email Address: Not Provided Message: Damn straight. He just posted a David Hume essay from 1748 in HTML. Made me read it. All of it. And it was good.

Subject: Fahrenheit 9/11 From: Piranha To: All Date Posted: Fri, Jun 25, 2004 at 23:59:27 (EDT) Email Address: Not Provided Message: Any way of knowing whether PK has watched the film? BTW I thought that the film, regardless of its political merits, was very well made. Theatrically brilliant!

Subject: Re: Fahrenheit 9/11 From: Mik To: Piranha Date Posted: Mon, Jun 28, 2004 at 14:07:48 (EDT) Email Address: Not Provided Message: The film was a masterpiece. Moore openly states that he portrayed the movie with a sense of bias, however he laid out a series of facts that simply cannot be contested. I can imagine the rightwingers attacking Moore but not attacking the issues he put forward, because they simply can't get around the facts.

Subject: Re: Fahrenheit 9/11 From: byron To: Mik Date Posted: Mon, Jun 28, 2004 at 23:19:14 (EDT) Email Address: bconstl@juno.com Message: Excellent, I saw the movie today and was very impressed. A lot of it i already knew and the movie just solidified my beliefs. I also learned about some things i did not know beforehand. It is an eye opener and even Republicans ought to see it and get the real info.

Subject: Prince de Asturias prize From: César Lanza To: All Date Posted: Fri, Jun 25, 2004 at 09:35:30 (EDT) Email Address: clanza@tecnova.es Message: Dear Dr. Krugman, As a long-time follower of your work either as an academician and a press columnist, let me express my congratulations for being awarded the Principe de Asturias prize. Even thought I can not consider myself being a liberal but rather somewhat a libertarian, I recognize the stature of your economic thinking. Very truly yours, César Lanza

Subject: Re: Prince de Asturias prize From: Anne To: César Lanza Date Posted: Fri, Jun 25, 2004 at 16:55:18 (EDT) Email Address: Not Provided Message: We Love You Paul Krugman

Subject: Way to go Mr. K From: Amanda To: Anne Date Posted: Sun, Jul 04, 2004 at 18:04:47 (EDT) Email Address: Not Provided Message: Congrats Mr. Krugman. You deserve it! Well done!

Subject: Desmontando las mentiras... From: El Gringo To: All Date Posted: Thurs, Jun 24, 2004 at 19:52:11 (EDT) Email Address: nma@hotmail.com Message: El Pais: 'Algunos miembros del jurado del Premio Principe de Asturias de Ciencas Sociales(Social Science) habrán tenida la dificultad, por ejempio, entre dar su voto al intelectual búlgaro asentado en París Tzvetan Todorov (Memoria del mal, tentación del bien) o al economista estadounidense Paul Krugman.Resulta muy discutibile escoger entre la lucidez filosófica del primero o la lucidez del último, que en ambos casos son lucidez política:compromiso.' El Mundo: 'La decisión del jurado, presidido por Manuel Fraga, valora así'la alta personalidad cientifica y social' de Krugman y 'la fecundidad de su obra investigadora, que ha contribuido de manera muy notable a sentar las bases de la nuevo teoria del comercio international y del del desarrollo económico'

Subject: krugman, luskin and inflation cont. From: Alex To: All Date Posted: Thurs, Jun 24, 2004 at 13:10:02 (EDT) Email Address: sztuden@yahoo.com Message: To Paul: A good primer is Foundations of Supply-Side Theory by Canto, Joines and Laffer. To RL: Thanks for the hayek cite In the early 80's, most liberal economists (i.e. Keynesian), including Krugman, Summers, a former economic chairman in Carter's administration, etc. ALL assumed that Reagan's tax cuts, coupled with loosening monetary policy, would ignite inflation. The conclusion flows from standard textbook theory. Supply-siders, on the other hand, were convinced this wasn't so. Carter's economic team, all Keynesians, wanted to fight inflation by raising taxes. Supply-siders thought this wouldnt work because of the distortions to incentive involved in high tax rates. The more Carter raised taxes, the lower output would be. Lower output meant continuing high prices...Carter's policy was doomed to failure. On the flip side, Carter wanted to combat high unemployment by loosening monetary policy. But the supply-siders reasoned that this wouldn't work either because at such high tax rates then in place, the additional money being pumped into the economy would NOT go into more output (thus lowering unemployment), but into higher prices. In other words, staglation was a disease Keynesians couldnt understand and couldnt cure. There should have been an inflation/unemployment tradeoff but there wasn't! The supply-isders reasoned that high tax rates were the culprit. Lower taxes, and you will be greater supply (thus lowering inflationary pressure). In addition, contrary to keynesians, they felt that lower taxes would increase the after-tax rate of return on dollar-denominated assets, thereby making dollar asset purchases attractive. In toehr words, their theory predicted the subsequent rise in the dollar!, a prediction no Keynesian could have foreseen using standard theories. Now of course the Keynesians are engaged in thoroughly revisionist history, saying that inflation was licked by Volcker's tight money policies and by that alone... Lindsey has argued that if you look at the actual constricting of the money supply, (which wasnt much- the velocity, or the rate at which moeny circulated, is actually what slowed down), there is no way you can account for such a large drop in the infaltion rate. other factors must have been at work... But what is important is that Keynesian theories at the time led econimists down a blind alley, while supply siders got it right, at elast with respect to inflation and the dollar's rise... Subsequent to Reagan's tax cuts, according to Lindsey, ALMOST ALL MAJOR INDUSTRIALIZED COUNTRIES SLASHED THEIR TOP MARGINAL RATES WHERE MOST OF THE INCENTIVE DISTROTIONS LAY. That kerry and Bush and Clinton are now arguing about whether the top rate should be 40% or 30% is a testament to reagan's continuing legacy - no one thinks 70% tax rates are a good idea anymore. Why? So the supply-siders reasoned: cut taxes to fight inflation. Lower Alex

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: Alex Date Posted: Thurs, Jun 24, 2004 at 13:17:29 (EDT) Email Address: sztuden@yahoo.com Message: Please read this version, my previous one is full of typos To Paul: A good primer is Foundations of Supply-Side Theory by Canto, Joines and Laffer. To RL: Thanks for the hayek cite In the early 80's, most liberal economists (i.e. Keynesian), including Krugman, Summers, and a former economic chairman in Carter's administration ALL assumed that Reagan's tax cuts, coupled with loosening monetary policy, would ignite inflation. The conclusion flows from standard textbook theory. Supply-siders, on the other hand, were convinced this wasn't so. Carter's economic team, all Keynesians, wanted to fight inflation by raising taxes. Supply-siders thought this wouldnt work because of the distortions to incentives involved in high tax rates. The more Carter raised taxes, the lower output would be. Lower output meant continuing high prices...Carter's policy was doomed to failure. On the flip side, Carter wanted to combat high unemployment by loosening monetary policy. But the supply-siders reasoned that this wouldn't work either because at such high tax rates then in place, the additional money being pumped into the economy would NOT go into more output (thus lowering unemployment), but into higher prices. In other words, stagflation was a disease Keynesians couldnt understand and couldnt cure. There should have been an inflation/unemployment tradeoff but there wasn't! The supply-siders reasoned that high tax rates were the culprit. Lower taxes, and you will get greater supply (thus lowering inflationary pressure). In addition, contrary to Keynesians, they felt that lower taxes would increase the after-tax rate of return on dollar-denominated assets, thereby making dollar asset purchases more attractive. In other words, their theory predicted the subsequent rise in the dollar!, a prediction no Keynesian could have foreseen using standard theories. Now of course the Keynesians are engaged in thoroughly revisionist history, saying that inflation was licked by Volcker's tight money policies and by that alone... but that's not what they were saying at the time... Lindsey has argued that if you look at the actual constricting of the money supply, (which wasnt much; the velocity, or the rate at which money circulated, is actually what slowed down), there is no way you can account for such a large drop in the inflation rate by the fed's actions alone. other factors must have been at work... But what is important is that Keynesian theories at the time of staglation led economists down a blind alley, while supply siders got it right, at least with respect to inflation and the dollar's rise... Subsequent to Reagan's tax cuts, according to Lindsey, ALMOST ALL MAJOR INDUSTRIALIZED COUNTRIES SLASHED THEIR TOP MARGINAL RATES WHERE MOST OF THE INCENTIVE DISTORTIONS LAY. That kerry and Bush and Clinton are now arguing about whether the top rate should be 40% or 30% is a testament to Reagan's continuing legacy - no one thinks 70% tax rates are a good idea anymore. Why not?

Subject: Re: REVISED: krugman, luskin and inflation cont. From: RL To: Alex Date Posted: Fri, Jun 25, 2004 at 04:43:50 (EDT) Email Address: rafaelloring@yahoo.es Message: the tax cuts broght down inflation, my god is really inexplicable how this non-sense theories got to convince so many people... ey!, so what Bush has been trying to do with his tax cut is combat inflation I see...

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: RL Date Posted: Fri, Jun 25, 2004 at 09:09:53 (EDT) Email Address: sztuden@yahoo.com Message: thank you for your substantive response. I see that your understanding of economics is reduced to silly name-calling...I would appreciate a substantive alternative Keyensian account of stagflation (both high unemployment and high inflation). I would also appreciate a response as to why no major industrialized country has stratosphericly high tax rates anymore and I would appreciate a response as to why supply-siders were able to predict the dollar's rise and inflation's drop while Keynesians were not. I wrote my email with a genuine desire to engage in substantive discussion.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: Alex Date Posted: Mon, Jun 28, 2004 at 14:08:23 (EDT) Email Address: sztuden@yahoo.com Message: RL: I asked three questions and you responded to none of them. I reprint them below (substitute 'mainstream' for Keynesian) 1. I would appreciate a substantive alternative Keynesian account of stagflation (both high unemployment and high inflation). 2. I would also appreciate a response as to why no major industrialized country has stratosphericly high tax rates anymore and 3. I would appreciate a response as to why supply-siders were able to predict the dollar's rise and inflation's drop while Keynesians were not, '(added) especially since they felt tax cuts were inflationary.' I wrote my email with a genuine desire to engage in substantive discussion.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: RL To: Alex Date Posted: Mon, Jun 28, 2004 at 06:12:56 (EDT) Email Address: rafaelloring@yahoo.es Message: My problem is lack of time and patience. First, you see econonomics as a fight between Keynesyans and Supply siders, that is of course how the so called supply siders like to see things. But the reality is a bit different. In the history of economics thare has been many schools and indepentedt thinkers, all of them have made contributions to modern economics. Keynes is one important school of thought but its contributions have been included in modern text books with many oders (by the way search for the supply side school in http://cepa.newschool.edu/het/thought.htm). Economist may have differnent views on some subjects but have today a great consensus on most of them and normaly they don't identify them selfs as Keynesyans or something else, others do it in a effort to classify aouthors but is of little use when debating economics. So I can't hardly give you the official 'alternative Keynesyan explanation' to stagflation because I don't belive it exists. What exists is the accepted explanation by most: that it was monetary policy that brought down inflation(in fact that is the only practical way to bring down inflation). Plase go to economagic.com and check the steady rise on interest rates from 1977 to 1983 that broght down inflation ( if you put in the graph inflation data you'll see the correlation). Also check the rise in unemployment that reached 10,4% in february 1983. With this level of unemployment and the decend on oil prices there is no need to invent absurd theories on taxes to explain how inflation behaved in the 80's. RL

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: RL Date Posted: Mon, Jun 28, 2004 at 12:27:15 (EDT) Email Address: sztuden@yahoo.com Message: you do not at all explain stagflation. why was there no tradeoff in the 70's between inflation and unemployment. why did we have both high inflation and high unemployment? why did it take over 6 years to bring down the inflation rate with high interest rates? during the carter administration, increased interest rates did not dampen inflationary pressures. Your snobbiness would be justified if you actually understood the problem, but thank you for taking time out of your busy schedule to answer me.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Bobby To: Alex Date Posted: Mon, Jun 28, 2004 at 18:55:08 (EDT) Email Address: robert@pkarchive.org Message: In textbook theory the speed at which inflation decreases under high unemployment (induced by high interest rates) is determined by the degree to which inflationary expectations are adaptive and the degree to which they are rational. With adaptive expectations, it occurs slowly, that is expected inflation today decreases each year to the degree that actual inflation has been decreasing in the recent past. With rational expectations, inflationary expectations adjust quickly to whatever the public sees as the Fed's target inflation rate that occurs at the NAIRU, adjusting instantly in the extreme case. The actual case is somewhere between those two. Since there is a large adaptive component in inflationary expectations, it can still take years of high unemployment to get a small decrease of expected inflation. You should really read Mankiw Macroeconomics Ch. 13

Subject: Re: REVISED: krugman, luskin and inflation cont. From: alex To: Bobby Date Posted: Mon, Jun 28, 2004 at 19:16:34 (EDT) Email Address: sztuden@yahoo.com Message: my comment was directed at RL's response

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Bobby To: alex Date Posted: Mon, Jun 28, 2004 at 20:15:59 (EDT) Email Address: robert@pkarchive.org Message: You asked a what is a very basic question and I answered it. The only reason why people on this board are getting so annoyed at you is that standard textbook macro has answers to all of the questions you've asked about stagflation, inflation's decrease, and dollar's rise. Hence your questions appear to people on this board as 'stupid questions.' So-called 'Keynesian' answers to your question have been outlined here as a courtesy to you. More importantly, they are available in any undergrad macro text. If you read them, you will find the answers to your very elementary questions about whether 'Keynesian' theory explains this and that. Also the idea of tax cuts causing inflation depends on whether the Fed offsets it with contractionary monetary policy. Whatever economist, 'Keynesian' or otherwise, didn't realize this in the early 1980s was saying something quite different from the modern theory [who knows why this is -- maybe theoretical beliefs back then were different from the modern approach]. Anyway, regardless of 'Keynesian' economists were saying back then, modern textbook theory accounts for all of the historical economic occurrences you have described thus far.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: Bobby Date Posted: Tues, Jun 29, 2004 at 00:19:31 (EDT) Email Address: sztuden@yahoo.com Message: Krugman's prediction was made after Volcker began expanding the money supply so we're talking about the time after the contraction when there were BOTH tax cuts AND expansionary monetary policy(after 1983) and standard theory says that that should have led to inflation at some point, which is what Krugman and Walter Heller and Larry Summers and all the mainstream liberal economists were saying and all got wrong because they didnt see the increased supply coming from tax cuts. The only ones who correctly called inflation's continuing demise throughout the 80's (and no one has touched on Lindsey's argument that if you look at money supply figures alone, it wasnt that contractionary) were the supply siders. Underlying the entire premise of course is that tax rate cuts increase supply, and no one has bothered to address why every single major industrialzed country cut its top marginal rates in the 80's and 90's and no one is preaching we go back to the 70% rates, unless all economys are now run by supply siders...

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Bobby To: Alex Date Posted: Tues, Jun 29, 2004 at 03:43:19 (EDT) Email Address: robert@pkarchive.org Message: 'Krugman's prediction was made after Volcker began expanding the money supply so we're talking about the time after the contraction when there were BOTH tax cuts AND expansionary monetary policy(after 1983) and standard theory says that that should have led to inflation at some point' Your characterization of what modern theory says is misleading, though it is not clear whether this is intentional or due to not having learned the theory. Let's say unemployment is decreasing due to Fed monetary easing and due to tax cuts that also stimulate aggregate demand, but the entire time unemployment is still above the NAIRU. Our simple Phillips curve model with somewhat adaptive expectations predicts, as long as unemployment is above the NAIRU, decreasing inflation although unemployment is also decreasing due to easy money and demand-stimulating tax cuts. This is the ingredient you left out in your above mischaractization. Only when unemployment gets to the NAIRU or below, do expansionary monetary and fiscal policy, which decrease unemployment further, make inflation increase. It is very difficult to argue that unemployment was at or below the NAIRU until 1987. Again, the theory accounts for the failure inflation to reemerge in the face of tax cuts and expansionary monetary policy. Again, I can't account for Krugman, Summers, etc.'s predictions, since I don't know their theoretical beliefs back then. There are two major problems with Lindsey's methodology. First, what is the appropriate monetary aggregate to use when discussing how the Fed affects inflation? Second, if the money market clears, inflation equals the difference between nominal money supply growth and real money demand growth. Just looking at the first one is not sufficient to draw conclusions about the degree to which monetary policy is expansionary or contractionary. Your question about countries not having high tax rates, as phrased, is really more of a political economy question, which I don't know, except the obvious arguments about the influence of the wealthy on the political process. But I think the answer you're actually looking for is something like this: No one here denies the existence of the Laffer curve or that taxes retard growth after some threshold. For Sweden, they were at some point on the wrong side of the Laffer curve according to Labor Economics by Borjas. Therefore, it makes sense and is a good thing that they got on the left side of that threshold. However, this case likely does not hold for the U.S. There is scant evidence of any 'increase of supply' from those tax cuts anyway, so the alternative supply-side rational that you give are incorrect. This makes sense since the after-tax interest rate elasticities of saving and after-tax wage elasticities of labor supply are near zero.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: johnny5 To: Bobby Date Posted: Fri, Jul 02, 2004 at 13:15:28 (EDT) Email Address: johnny5@yahoo.com Message: I walk into walmart and there are far more products in there than I will ever need or buy. Mises said any taxation was bad for when you started wanting equilibrium you go down the road to socialism and how do you really determine how rich is too rich at the government level? http://www.mosler.org/wwwboard/messages/1309.shtml Economists once argued inflation would not only rise, but also accelerate in a destructive spiral leading to hyperinflation -- if the unemployment rate fell below a threshold level called the Non-Accelerating Inflation Rate of Unemployment, or NAIRU. But where was that threshold? Six percent, as many argued 10 years ago? Five and a half? Five? We ran the experiment in the late 1990s, with unemployment below 4 1/2 percent for 2 1/2 years. Inflation numbers didn`t budge. If the NAIRU exists -- which we doubt -- it isn`t anywhere close to today`s 5.6 percent unemployment rate.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: Alex Date Posted: Tues, Jun 29, 2004 at 00:27:47 (EDT) Email Address: sztuden@yahoo.com Message: correction, prediction was made in late 1982.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: El Gringo To: Alex Date Posted: Tues, Jun 29, 2004 at 19:15:22 (EDT) Email Address: nma@hotmail.com Message: Look Alex:PK is good, terribly good!(P.S.: Read ALL his books!)

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Bobby To: Alex Date Posted: Fri, Jun 25, 2004 at 14:45:24 (EDT) Email Address: robert@pkarchive.org Message: The problem is that I don't know the specific theoretical views of a typical 'Keynesian' economist in the early 1980s. I only know what modern textbooks teach, which could be quite different for all I know. Anyway, here are some modern explanations of stagflation and 1980s real exchange rate appreciation, which I think are generally held by modern 'Keynesians.' Two textbook explanations of stagflation: Stagflation can happen due to, say, an oil shock where production costs increase businesses produce less, and hence employment decreases. Since goods become scarce there is inflation. And this is inflation as well as unemployment. During this kind of stagflation there isn't much you can do. If you increase interest rates you will make unemployment worse though you will curb the inflation. By decreasing interest rates, you accomplish nothing since stagflation is a supply problem and not a demand one, and likely worsen inflation. Another explanation is: let's say that you are initially iat the NAIRU except that inflation is 14%. Let's see the expectations-augmented Phillips Curve and assume that expected inflation is semi-adaptive, implying that EXPECTEDINFLATION decreases if inflation yesterday is less than expected inflation yesterday. INFLATION=EXPECTEDINFLATION-B(UNEMPLOYMENT-NAIRU) Now, let's also say that the Fed wants to get rid of this inflation and decrease it to 2%. Let's say, in the first year of the Fed's program, expected inflation goes from 14% to 10%, and then it goes from 10% to 6% in the second year, and 6% to 2% in the third year. When it reaches 2% the Fed brings UNEMPLOYMENT back to the NAIRU. Let's say that each year the deviation of actual from expected inflation is -4%. This means that that high unemployment accompanies high inflation in the first year, then moderate inflation in the second, then eventually deflation in the third. Notice that there is high unemployment along with high inflation in the first year although the inflation is decreasing. This is technically stagflation in the first year, which is inflation and great unemployment, although disinflation is occurring. Appreciating dollar: In Mundel Fleming an increase of future marginal product of capital and hence greater investment and an outward IS shift and real exchange rate appreciation. Increased present output causes real depreciation in the model. One could also get that outward IS shift and real exchange rate appreciation from an increase of the government deficit due to tax cuts and increased spending. All of these could be included in a 'Keynesian' of the dollar's real appreciation in the 1980s, and whichever is right, is an empirical question.

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: Bobby Date Posted: Fri, Jun 25, 2004 at 19:02:11 (EDT) Email Address: sztuden@yahoo.com Message: ignore my last comment re: NAIRU

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: Bobby Date Posted: Fri, Jun 25, 2004 at 19:01:41 (EDT) Email Address: sztuden@yahoo.com Message: ignore my last comment re: NAIRU

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Alex To: Bobby Date Posted: Fri, Jun 25, 2004 at 18:58:51 (EDT) Email Address: sztuden@yahoo.com Message: I do not think the data for the late 70's will support either explanation of stagflation. In both explanations, increased interest rates would eventually lead to lower inflation. I don't think this is what happened, and unemployment didnt reach NAIRU...

Subject: Re: REVISED: krugman, luskin and inflation cont. From: Bobby To: Alex Date Posted: Sat, Jun 26, 2004 at 01:08:02 (EDT) Email Address: robert@pkarchive.org Message: You'll have to elaborate regarding late 1970s data. Moreover I don't see how one could use such data to say that increased interest rates, that is a slowing of money supply growth, wouldn't lower inflation eventually. One must remember that there are 'long and variable lags' between the implementation of any monetary policy and its effects. So you might have to look at a longer period to determine the effects of monetary policy. Also, a word of caution: At some point, my own lack of econometric knowledge, empirical knowledge, and knowledge of theory beyond the intermediate undergrad level reaches a limit, where I can't counter-argue against many of your statements, but they can be demonstrated as wrong nonetheless by a real economist, who knows his theory and data. At this point, I can only appeal to the authority of qualified economists, and you can only gain better insight into the validity of your ideas by asking one of them.

Subject: Krugman - Economic or Political writer? From: Mik To: All Date Posted: Wed, Jun 23, 2004 at 13:19:12 (EDT) Email Address: Not Provided Message: Here we go again. A full article by Krugman with absolutely no bearing on economics. I can understand Krugman wanting to pass a well founded statement of political argument but Economics is Krugman's forte and that is where I have the greatest respect for his words. Also in this recent article Krugman makes the following statement, 'The discovery of the Texas cyanide bomb should have served as a wake-up call: 9/11 has focused our attention on the threat from Islamic radicals, but murderous right-wing fanatics are still out there.' That's a bit of an arrogant statement. He is making reference to the FBI's intelligence. The statement even gives the sense that there is little to no focus on any other forms of urban terrorism. How does he know that it has focused on Islamic radicals and not Right-wing radicals? Is one case example of Aschcroft's political standing enough as proof, across the board, that no attention is focused on right wing radicals? I would imagine that the FBI investigates all terrorism related leads - after all they did capture the those right-wing radicals. Comments?

Subject: Re: Krugman - Economic or Political writer? From: Mike To: Mik Date Posted: Thurs, Jun 24, 2004 at 18:05:36 (EDT) Email Address: mransel@snsc.com Message: He's a political hack, and his economic theories are questionable, also. His political spoutings are devoid of truth and lean so far left, one has to finish the NYT to feel more centered...if that's possible.

Subject: Re: Krugman - Economic or Political writer? From: Mik To: Mike Date Posted: Fri, Jun 25, 2004 at 10:20:05 (EDT) Email Address: Not Provided Message: His economic theories are questionable? Hey I will criticise his politics but definately not his economics. Most of the time he corrects right wingers' economic principles using references to basic economics 101. Paul Krugman doesn't mince words, he is a master of economics and can spot bull from a mile away. The problem is that he is out spoken enough to humiliate the right wingers.

Subject: Re: Krugman - Economic or Political writer? From: Anders To: Mik Date Posted: Sat, Jun 26, 2004 at 12:21:19 (EDT) Email Address: arkiv88@hotmail.com Message: Who is not a political writer? And why is it problem that 'he is out spoken enough to humiliate the right wingers.'? There is so much cooking and bending of facts by this administration that it is healthy for our democracy to have somebody take a closer look. After 9/11 the administration thought they could get away with almost anything so its great to have somebody like Paul Krugman point out some of the many inconsistencies.

Subject: Re: Krugman - Economic or Political writer? From: Mik To: Anders Date Posted: Mon, Jun 28, 2004 at 14:04:04 (EDT) Email Address: Not Provided Message: The problem I have is that once he dips into the realm of politics, he is also dipping into the realm of subjectivity. I gave a clear example of his subjectivity. My biggest issue here is that in economics he is able to be objective with clear facts. Once he enters the realm of subjectivity he is even more exposed to being caught out and losing his integrity. There are more than enough political writers voicing their opinions, Krugman should not join those ranks, but rather remain a cut above the rest through his economic pieces.... but then again, that is just my opinion.

Subject: bobby's response to luskin From: Alex To: All Date Posted: Wed, Jun 23, 2004 at 10:57:08 (EDT) Email Address: sztuden@yahoo.com Message: Bobby: Your response to Luskin's attack on Krugman's inflation prediction makes no sense. 1. You claim that academic economists are notoriously bad predictors, that is to say, they are notoriously bad at really figuring out how all the variables play themselves out in the real world and affect one another. if this is the case, then why are they helping to set policy? If they cannot foresee how complex variables actually play themselves out, on what basis can they help to set national policy? Economists in the raal world are like stockbrokers in an effiecient market. Throwing darts to figure out the inflation rate would do just as well as using models devoid of real-life application... 2. You rhetorically ask Luskin: What would you have done instead of using the Krugman model , have blind faith in the Gipper? This sophistic rhetorical device lays out a false dichotomy. You very well know that there were other predictive models in use at the time, namely supply-side models that predicted a drop in the inflation rate even after tax cuts and easy monetary policies. Yes, its true, the supply-side predictions may have just coincided with what happened to the inflation rate, but the shoe is on your foot. We had a keynesian (Krugman) and a supply-sider (Laffer) predict the inflation rate in the 80's. The supply side prediction was much more accurate. Predictions should count for something right? After all, liberals constantly assail the Bush administration for failing to predict that there were no WMDs in Iraq, that resistance would be ferocious, that we would be bogged down in guerilla warfare, and that we would be seen as occupiers, not liberators. In the real world, your capacity to envision how complex scenarios play themsleves out is the the mark of a true statesman. Insofar as statesmen rely for the their predictions on the advice of ivory tower economists who fiddle with their widly-inaccurate models, we are much the worse off... Alex

Subject: Re: bobby's response to luskin From: Bobby To: Alex Date Posted: Wed, Jun 23, 2004 at 19:16:08 (EDT) Email Address: robert@pkarchive.org Message: I said that they are bad at forecasting. I'm in NYC now and away from my books, but, if I remember correctly Abel and Bernanke Ch 1. give a justification of why the advice of macroeconomics/macroeconomists are still useful although their forecasting abilities are poor. Check it out at the local library (I can't find it on the internet right now but it might be somewhere). I'll leave it for you to check out. Paul Brown's point about qualitative suggestions of economic theory versus quantitative is also a good one. Moreover, my main point in the third section of my reply to Luskin was merely that the failure of the ex ante prediction does not imply that the underlying textbook theory has failed. One must distinguish between the theory and the model designed to test it. There are at least two ingredients for testing a theory properly. First the model must be designed correctly. Second, if you are going to test the theory with that that model, you must at least use the actual exogenous variable values, or something close to them, in the model. Since the predicted exogenous variable values of Summers and Krugman were way off, their ex ante prediction is not a proper test of the theory. The bad ex ante forecast says nothing about whether the theory would survive a proper test. Therefore Luskin's suggestion that this is an example of "failed theories" is not right. That was my main point of the third section of my criticism of Luskin. 'You rhetorically ask Luskin: What would you have done instead of using the Krugman model , have blind faith in the Gipper? This sophistic rhetorical device lays out a false dichotomy. You very well know that there were other predictive models in use at the time, . . . ' My question was not merely rhetorical. What I was trying to do with my question was get Luskin to explain how (that is, with what models, or more realistically he could explain the alternative theory behind such models) he would have gotten in 1982 better predictions than Krugman and Summers of future real exchange rate and oil and commodities prices. I wanted to learn it first out of curiousity and a desire to debate its merits (because I actually don't know the 'supply-side' models) and second to see if Luskin was competant enough to give a coherent explanation. I was literally asking a question, and Luskin didn't bother to answer it, which is consistent with my beliefs about his competence. I included the last part about trusting the Gipper for snark and since I have serious doubts that Luskin's implicit claim that Krugman and Summers could have done better is grounded in any kind of economic reasoning as opposed to pure political bias.

Subject: Re: bobby's response to luskin From: Paul G. Brown To: Alex Date Posted: Wed, Jun 23, 2004 at 12:47:20 (EDT) Email Address: Not Provided Message: While you make a couple of good points--I'm equally convinced that predictions in economics is so inexact as to be useful only as a qualitative tool--I'm puzzled by one of your assertions. (I'd also not that you ignore several of Bobby's points, such as Luskin's confusion about wage-push and demand-pull inflation, but let's step back and look at the bigger picture.) I have yet to read a rigorous treatment of the 'supply-side' economic model that was anything more sophisticated than a recycling of some discredited 19th century notions (such as supply creating its own demand). If you have a pointer to a mathematical treatment of such a model, one that might be used to make any kind of prediction, I am all eyes. Something close to real-time (ie. from the 1981-1984 period) would add weight to the argument, too.

Subject: OT From: Bobby To: Paul G. Brown Date Posted: Thurs, Jun 24, 2004 at 02:12:00 (EDT) Email Address: robert@pkarchive.org Message: Paul G. Brown, have you seen this? Isn't there some kind of web decorum against bloggers attacking on their blog (well, it *was* only the letters section) message board posters, who aren't bloggers/public figures from other sites' the message boards? Maybe not, but I think it is definitely (intentionally) intimidating to air posters' names in such public attacks. God, Luskin's an asshole. http://www.poorandstupid.com/2004_05_30_lettersArchive.asp#108633647642134871

Subject: Re: OT From: Paul G. Brown To: Bobby Date Posted: Thurs, Jun 24, 2004 at 12:42:25 (EDT) Email Address: Not Provided Message: > God, Luskin's an asshole. A wise man of my acquaintance (Hi Dad!) once casually noted that a man's character can be judged as much by the quality of his enemies the quality of his friends. You should keep that in mind, Bobby. You've incurred more of the L-man's emnity than me. But in this case, the reference is to correspondence from one Thomas O. Miller, and not Luskin himself, so the letter of netiquitte is being observed. Besides, it's not as if it's a particularly good letter. I think Thomas O. is a bit mixed up (or else he's being ironic and Luskin can't figure that out). I mean, on the one hand I'm 'one of Krugman's fiercest apologists', yet in the very commentary quoted I'm saying that Krugman 'sometimes ... fails'. If I'm among the man's fiercest apologists then he doesn't have many friends! And if anyone's confused about what I meant by the summation, I'll let Pierre Abelard's maxim that 'Doubt is the begining of wisdom.' speak for me. Absence of doubt and confusion is the hallmark of Luskin's writing and approach.

Subject: Re: OT From: RL To: Paul G. Brown Date Posted: Fri, Jun 25, 2004 at 04:17:48 (EDT) Email Address: rafaelloring@yahoo.es Message: yes, I think this web has already given too much undeserved attention to Lusking, Paul G's dad would probably agree with me on this ;) RL

Subject: Re: OT From: Econochick To: Paul G. Brown Date Posted: Thurs, Jun 24, 2004 at 14:35:42 (EDT) Email Address: Not Provided Message: Hey, Paul G. Brown, you're famous now!!! Way to go! LOL!!

Subject: Re: bobby's response to luskin From: Alex To: Paul G. Brown Date Posted: Wed, Jun 23, 2004 at 13:11:27 (EDT) Email Address: sztuden@yahoo.com Message: I will get you good cites shortly. Follow-up to my previous post: Imagine if Rumsfeld, when questioned about his inability to predict the heavy 'post-war' casualties, responded: The possibility of guerilla resistance is exogenous to the model that we used to predict the consequences of an invasion. Therefore, our model is still valid.' What would Krugman say to this response?

Subject: Re: bobby's response to luskin From: Bobby To: Alex Date Posted: Thurs, Jun 24, 2004 at 00:45:47 (EDT) Email Address: robert@pkarchive.org Message: I should have put the sentences 'However, why is this such a sin? . . . Gipper.' in a fourth section about why the assumption of increasing or nondecreasing oil and commodities prices and real exchange rate depreciation weren't bad considering the information available to Krugman and Summers in 1982. This is a separate argument from that where I say that the failure of the ex ante forecast does not imply a proper test of or failure of the underlying theory. Unfortunately, I didn't think my argument on them being good assumptions was sufficiently well-developed. Therefore I included them as an aside in section 3, which should instead have focused entirely on why the failure of the ex ante prediction does not imply failure of the underlying thoery. Again they are separate arguments, one about why the underlying theory was tested incorrectly and one about why the assumed values of exogenous weren't bad given 1982 information. My putting them together is responsible for the reader not realizing this. In light of the above comment, one answers Rumsfeld, 'Okay, I wasn't disputing the validity of your model or of its underlying theory. The model and theory itself are not the issue, and, for all I know, your military models and theory are fine' [Unlike us versus Rumsfeld, Luskin *was* attacking the underlying economic theory behind Summers and Krugman, so I tried to address this in section 3]. Continuing to answer Rumsfeld, one says, 'What concerns me is your assumption that there would be little or no Iraqi resistance, which is an irresponsible and stupid assumption.' And this brings me back to the argument that I should have put alone in a fourth section, that Krugman and Summers' assumptions weren't bad. Anyway, Krugman and Summers' assumptions about the aforementioned prices with their information available in 1982 are nowhere in the stupidity ballpark near Rumsfeld's assumption of very little Iraqi resistance.

Subject: Re: bobby's response to luskin From: RL To: Bobby Date Posted: Thurs, Jun 24, 2004 at 04:59:57 (EDT) Email Address: rafaelloring@yahoo.es Message: I would like to post the last part of Hayek's Prize Lecture Lecture to the memory of Alfred Nobel, December 11, 1974 that I think answers Alex question on the utility of economics but thhat also Bobby should carefully read(sorry for the paternalist tone) because I see he has a too great confidence in models. As Paul G. says economists should stay in the qualitative aproach because models are too partial to be aplied in other way. In that memo Krugman alerts of the posibility of the inflation coming back, if Volcker have thoght otherwise maybe he had reversed monetary policy sooner and we would have seen inflation closer to Krugman's prediction. Any way here comes the post: ...The chief point we must remember is that the great and rapid advance of the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomena as functions of comparatively few variables - either particular facts or relative frequencies of events. This may even be the ultimate reason why we single out these realms as 'physical' in contrast to those more highly organized structures which I have here called essentially complex phenomena. There is no reason why the position must be the same in the latter as in the former fields. The difficulties which we encounter in the latter are not, as one might at first suspect, difficulties about formulating theories for the explanation of the observed events - although they cause also special difficulties about testing proposed explanations and therefore about eliminating bad theories. They are due to the chief problem which arises when we apply our theories to any particular situation in the real world. A theory of essentially complex phenomena must refer to a large number of particular facts; and to derive a prediction from it, or to test it, we have to ascertain all these particular facts. Once we succeeded in this there should be no particular difficulty about deriving testable predictions - with the help of modern computers it should be easy enough to insert these data into the appropriate blanks of the theoretical formulae and to derive a prediction. The real difficulty, to the solution of which science has little to contribute, and which is sometimes indeed insoluble, consists in the ascertainment of the particular facts. A simple example will show the nature of this difficulty. Consider some ball game played by a few people of approximately equal skill. If we knew a few particular facts in addition to our general knowledge of the ability of the individual players, such as their state of attention, their perceptions and the state of their hearts, lungs, muscles etc. at each moment of the game, we could probably predict the outcome. Indeed, if we were familiar both with the game and the teams we should probably have a fairly shrewd idea on what the outcome will depend. But we shall of course not be able to ascertain those facts and in consequence the result of the game will be outside the range of the scientifically predictable, however well we may know what effects particular events would have on the result of the game. This does not mean that we can make no predictions at all about the course of such a game. If we know the rules of the different games we shall, in watching one, very soon know which game is being played and what kinds of actions we can expect and what kind not. But our capacity to predict will be confined to such general characteristics of the events to be expected and not include the capacity of predicting particular individual events. This corresponds to what I have called earlier the mere pattern predictions to which we are increasingly confined as we penetrate from the realm in which relatively simple laws prevail into the range of phenomena where organized complexity rules. As we advance we find more and more frequently that we can in fact ascertain only some but not all the particular circumstances which determine the outcome of a given process; and in consequence we are able to predict only some but not all the properties of the result we have to expect. Often all that we shall be able to predict will be some abstract characteristic of the pattern that will appear - relations between kinds of elements about which individually we know very little. Yet, as I am anxious to repeat, we will still achieve predictions which can be falsified and which therefore are of empirical significance. Of course, compared with the precise predictions we have learnt to expect in the physical sciences, this sort of mere pattern predictions is a second best with which one does not like to have to be content. Yet the danger of which I want to warn is precisely the belief that in order to have a claim to be accepted as scientific it is necessary to achieve more. This way lies charlatanism and worse. To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm. In the physical sciences there may be little objection to trying to do the impossible; one might even feel that one ought not to discourage the over-confident because their experiments may after all produce some new insights. But in the social field the erroneous belief that the exercise of some power would have beneficial consequences is likely to lead to a new power to coerce other men being conferred on some authority. Even if such power is not in itself bad, its exercise is likely to impede the functioning of those spontaneous ordering forces by which, without understanding them, man is in fact so largely assisted in the pursuit of his aims. We are only beginning to understand on how subtle a communication system the functioning of an advanced industrial society is based - a communications system which we call the market and which turns out to be a more efficient mechanism for digesting dispersed information than any that man has deliberately designed. If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, 'dizzy with success', to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society - a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

Subject: Methods, models, metrics and Mr Hayek From: Paul G. Brown To: RL Date Posted: Thurs, Jun 24, 2004 at 13:38:59 (EDT) Email Address: Not Provided Message: [ extended lecture notes snip ] Well now, that was a bucket of cold water flung on the fornicating dogs of scientism. But as a math geek, jus' lemma have me a corner of the soap-box to defend some high ground. Qualitative predictions might be all we can reasonably aspire to, but that doesn't mean we should abandon math completely. (I note that Hayek, as is his style, laces an otherwise useful and well argued case with concluding phrases like 'tyrant over his fellows' and 'destroyer of a civilization'. His goal is to infect the ideas he is arguing against with an incurable stigma. That tactic sticks in my craw.) You can't reason about what you can't measure, and what you can measure you can model and apply math to. Your basic IS/LM model or your basic supply/demand curves are all examples of 'continuous functions', and thinking about the underlying system through this model is really useful. If you run the numbers and your model indicates an 'increase in CPI of 5.21 percentage points over a 5 month period', this means that a reasonable prediction is something like 'given the current policy mix and in the absence of external shocks, we can expect significant inflationary pressure'. But if the model instead says '0.3 percentage points' you can use it to support a different conclusion. Hayek's approach, taken to its logical extreme, (and amping up the rhetoric for effect) means abandonning the field to the brutal legions of chaos and unreason. Hayek's ideal is a world where human discourse is characterized by the savage, wholesale murder of ideas by personality. (spits to erase bad taste of own words from mouth)

Subject: Re: Methods, models, metrics and Mr Hayek From: RL To: Paul G. Brown Date Posted: Fri, Jun 25, 2004 at 03:57:42 (EDT) Email Address: rafaelloring@yahoo.es Message: nice post. Well Paul don't be so susceptible I also feel a bit in disconfort with the last part of Hayek's dicourse but I really liked the basketball game metaphor. It is pretty much in accordance with what you say about models. Anyway I feel models are very often used to give respectability to ideas. For example your 'given the current policy mix and in the absence of external shocks, we can expect significant inflationary pressure' type conclusion can very much be argued without models, the model in fact is of use to clarify the arguments and to cuantify an unrealible prediction. I think is important to bear in mind that ideas very rarely(probably never) come from models, models sometimes help to structure ideas but often are a complety after-product of them. So when thinking about economics you only think on IS-LM or so like terms as I don't think you do but I have seen many students do in college your are bound to make mistakes from time to time and will never be able to produce good economic thinking on your own. RL

Subject: Congratulations From: Javier Soriano To: All Date Posted: Wed, Jun 23, 2004 at 06:23:54 (EDT) Email Address: jagris@ono.com Message: It's just been announced that Mr. Krugman has been awarded the prestigious Spanish Award 'Principe de Asturias'. The awards ceremony will be held in Spain this autumn. It's a well deserved recognition. Congratulations from Spain!

Subject: Re: Congratulations From: El Gringo To: Javier Soriano Date Posted: Wed, Jun 23, 2004 at 13:39:33 (EDT) Email Address: nma@hotmail.com Message: Congratulación al Maestro

Subject: Re: Congratulations From: Emma To: El Gringo Date Posted: Fri, Jun 25, 2004 at 16:54:43 (EDT) Email Address: Not Provided Message: Congratulations Dear Professor

Subject: Dale Jorgensen's Sales Tax Research From: Ibn Ozn To: All Date Posted: Tues, Jun 22, 2004 at 12:57:39 (EDT) Email Address: max.media@excite.com Message: From the Fair Tax (National Sales Tax Advocates) website ...Did you know that hidden income taxes currently make up 20% to 30% of all retail prices? It's true. According to Dr. Dale Jorgenson of Harvard, hidden income taxes are passed on to the consumer in the form of higher prices, from 20% to 30% higher than they would otherwise be for everything you buy. Therefore, when the FairTax Act of 2001 abolishes the federal income tax system, prices will drop 20% to 30%... I'm discussing this with someone and when I asked if he was ok w/ a $57k tax bill on a $25k car this came up. Is this possible? The price drop? Does Jorgensen's research not take into account that manufacturers won't just keep the cost savings as profit? I haven't seen Jorgensen's research... Any ideas? Fairtax Website Source www.fairtaxvolunteer.org/smart/sketch.html

Subject: Re: Dale Jorgensen's Sales Tax Research From: Ibn Ozn To: Ibn Ozn Date Posted: Tues, Jun 22, 2004 at 13:07:39 (EDT) Email Address: Not Provided Message: Thinking about this further, would this even apply to imported goods?

Subject: Gassed His Own People From: John Tully To: All Date Posted: Tues, Jun 22, 2004 at 01:27:44 (EDT) Email Address: johntully@comcast.net Message: John Tully WWW.LASUN.NET GASSED HIS OWN PEOPLE By John Tully The Los Angeles Sun 20 June 2004 One of the unfortunate things about doing things completely different from the Clinton administration is that you're bound to trip all over yourself and skin your shins doing just that. Richard Clarke, the counterterror chief for President Clinton, kept on by the Bush administration and whom Vice President Cheney claimed was 'out of the loop', repeatedly warned of planes being used as a weapon, probably by al Qaeda, in as late as summer of 2001 to anyone on the new team who would listen. In fact, on 31 January of 2001, The United States Commission on National Security concludes that we are not only unprepared for an attack on American soil but specifically mentions the phrase 'weapon of mass destruction in a high-rise building'. The report basically concludes that there is a real lack of coordination between our intelligence agencies and a fragmented system to deal with threats. The White House, disregarding even their own master of hand moves, Donald Rumsfeld, stifles the call for hearings and sets up a task force that meets a total of once, on September the fourth. It's not surprising then that the memo in July of that summer from FBI agent Kenneth Williams about Middle Eastern men attending flight schools and German and Russian intelligence that Arabic terrorists were training to fly airplanes as weapons against the U.S. and Israel are also ignored or not coordinated. Scarry with two R's. Think of the 9/11 commission and it's sordid history as the perfect metaphor for this administration and the sheer chutzpah of it's officials. Having thwarted the very creation of such a commission, they've monkey wrenched every single aspect of it from the start. The families of the deceased have entire web sites set up that document the complete unwillingness of the Bush administration to hand over even the simplest of file requests. But will one ever, in their lifetime, forget the brilliant appointment of Henry Kissinger as the Commission's first Chairman? Certainly the honorable Tom Kean, former governor of New Jersey and general good guy would be perfect for the job. Unfortunately, Mr. Kean is a director of Amerada-Hess, a partner with an outfit called Delta Oil Ltd. of Saudi Arabia. Delta is partly owned by Osama Bin laden's brother-in-law: financier Khalid bin Mahfouz, formerly of that whole messy BCCI bank scandal. His partner in Delta is Mohammed Hussein al Amoudi and both are thought to have funnelled many millions to al-Qaeda and it's network. Ouch. Co- chairmen Lee Hamilton is widely known to have looked the other way when confronted with the evidence that former Presidents Reagan and Bush were very much 'in the loop' during the secret Iran-Contra covert arms transactions. One would assume that this Trilateral Commission member would give this kid the same free pass as he also sits on the President's Homeland Security Advisory Council. The rest of the commission doesn't instill in one the feeling of impartiality. Democrat Richard Ben-Veniste, the scourge of the Right, is a former lawyer for one of the drug runners during Iran-Contra. He still represents United Airlines. Fred Fielding is a former Nixon crony who vetted cabinet members on the Bush transition team and works for the law firm that lobbies for United Airlines. Commission member Jamie Gorelick is a former lawyer for two of the American men, Clark Clifford and Robert Altman, most responsible when the Bank of Commerce and Credit International robbed depositors of $10 billion. It was an early nineties transcontinental giant ponzi scheme of a bank scandal. While she was the second in command at the Justice Department in the Clinton administration she was responsible for a memo suggesting a separation of counterintelligence and criminal investigations and their record on infiltrating and weakening al-Quaeda that can only be described as less than stellar. Her law firm is representing Muhammed al-Faisal, the Saudi prince who allegedly financed Osama bin laden. The plaintiffs are 9/11 family members. Former Senator Slade Gorton has ties to Boeing who built all the planes that crashed on 9/11 and his law firm represents Delta Airlines. Two days after the attack The Seattle Times reported that he said to a public television audience that there was 'nothing government intelligence officials could have done to thwart the attack.' By far though, the most interesting of appointees to the National Commission on Terrorist Attacks Upon the United States; the 9/11 commission's official name, is it's executive director, Mr. Philip Zelicow. He served on the President’s Foreign Intelligence Advisory Board and as a member of the Bush administration's transition team, often briefed incoming security staff on Iraq and al-Qaeda. Of course his well known personal friendship with the President's National Security Advisor Condoleeza Rice, with whom he wrote a book, is widely known. He's a member of the controversial Council on Foreign Relations and The Aspen Strategy Group, a foreign policy think-tank that counts Dick Cheney, Paul Wolfowitz and Ms. Rice as members.Mr. Zelicow allegedly made the claim at UVA in the fall of 2002 that the real Iraqi threat was not to America: 'Why would Iraq attack America or use nuclear weapons against us? I'll tell you what I think the real threat [is] and actually has been since 1990 -- it's the threat against Israel.' Mr. Zelicow is also executive director of the National Commission on Federal Election Reform and general editor of the University of Virginia's Miller Center for Presidential Recordings Program that, among other things, transcribes presidential telephone conversations and meetings recorded during the fifties, sixties and seventies. Unfortunately the transcriptions have been found to contain at least a hundred key mistakes that ironically have been attributed by Zelikow to his work on the 9/11 commission and have still not been corrected. This week the commission issued it's preliminary report, read by Mr. Zelicow. Among other findings was the statement: 'We have no credible evidence that Iraq and Al Qaeda cooperated on attacks against the United States' While Bin Laden was in the Sudan he reportedly met with a senior Iraqi official after the man's third attempt. This was apparently at the behest of the Sudanese who wanted him to cease his support of anti-Saddam Islamists in the Kurdish north. In case there might still be some confusion, the commission's report goes further and reads: 'There have been reports that contacts between Iraq and al Qaeda also occurred after bin Laden had returned to Afghanistan, but they do not appear to have resulted in a collaborative relationship' The next morning the President immediately chimed in, saying: 'The reason I keep insisting that there was a relationship between Iraq and Saddam and al Qaeda' is 'because there was a relationship between Iraq and al Qaeda.' The Vice President was outraged by the outrage and blamed the New York Times and it's headlines as the culprit. He also derided the media in general for the confusion. But there was Mr. Cheney just this past Monday crowing that Saddam 'had long-established ties with al Qaeda.' and last fall when he said that Iraq was: 'the geographic base of the terrorists who have had us under assault now for many years, but most especially on 9/11.' Most impressively though was the Vice President's outright insistence Thursday night that the old battle ax herself, the 'Prague meeting', wherein Mohammed Atta, one of the nineteen highjackers, meets with Iraqi officials, actually took place. 'It's never been refuted.' he weakly snorted. The Commission's Staff Report 15 clearly states: 'We do not believe that such a meeting occurred.' Various intelligence has placed Atta in Florida at the time and Commissioner Hamilton claimed Sunday morning that that the Iraqi spy wasn't there either. Newsweek is now reporting that Commission staff members were 'astonished' that the Vice President still clings to this story. Now that's what you call Chuztpah. Welcome to Dick Cheney's America. ©2004 LOS ANGELES SUN Los Angeles Sun lasun.net

Subject: Regan tax rerceipts? From: Jerry Parlee To: All Date Posted: Mon, Jun 21, 2004 at 09:14:14 (EDT) Email Address: parlee@psy.utexas.edu Message: I've seen this idea proposed by the right recently. I suspect it is at least a tiny part of the story, or an outright lie. Here's a quote from a letter to the editor in the Austin American Statesman. Anyone have the full story? 'Why does Sargent (cartoonist Ben Sargent) ignore the fact that the Treasury Department took in almost double the revenue after the tax cut than it did before, when the economy had double-digit inflation and interest rates that rivaled those of credit cards?' Thanks, Jerry

Subject: taxes From: Nat To: Jerry Parlee Date Posted: Mon, Jun 21, 2004 at 09:58:35 (EDT) Email Address: Not Provided Message: Nut cases are everywhere. And the Statesman is not the sort of paper to actually check this sort of thing (I live in Austin, too.) The Congressional Budget Office site (cbo.gov) has the facts. Click on history. The initial tax cut was viewed as excessive and was followed immediately by tax increases (discussed many places lately due to Reagan's death.) The very significant Social Security tax increase in '83 turned a slight yearly SS deficit to a still increasing surplus. Needed, of course, for those of us who are boomers. While there, check out the current mess. Of course, remember that SS surplus revenues are added to the general revenue kitty which masks how poorly the actual budget looks. All revenues are down.

Subject: Re: taxes From: Nat To: Nat Date Posted: Mon, Jun 21, 2004 at 10:06:54 (EDT) Email Address: Not Provided Message: Here's a link that explains a few details: http://www.cbpp.org/4-19-01tax.htm

Subject: A viewpoint From: Yann To: All Date Posted: Mon, Jun 21, 2004 at 04:06:20 (EDT) Email Address: Not Provided Message: The Lawless Sheriff (by Joseph E. STIGLITZ) I usually limit myself in my newspaper commentaries to my area of expertise, economics. But as an American, I am so horrified by what has happened in my country - and what my country has done to others over the past two years - that I feel I must speak out. I believe American abuses of human rights and the canons of civilized peoples that have come to light in Iraq, Afghanistan, and Guantanamo Bay, and the more horrendous abuses that almost surely will come to light later, are not merely the act of aberrant individuals. They are the result of a Bush administration that has trampled on human rights and international law, including the Geneva conventions, and tried to undermine basic democratic protections, ever since it took office. Sadly, torture and other atrocities do happen in war - and the Iraq war is certainly not the only time torture has been used - but I believe that the Bush administration is responsible for creating a climate in which international law and democratic processes have been disregarded. When Vice President Dick Cheney spoke at the last World Economic Forum in Davos, Switzerland, he was asked how the administration could justify what was taking place in Guatanamo Bay, where prisoners are being kept without being charged and without counsel. Cheney's answer was jarring: he said that because the detainees were captured in Afghanistan where they had been trying to kill US troops, the rules regarding prisoners of war did not apply. Many in the audience were shocked by his remarks, but Cheney seemingly failed to grasp how appalled his audience was. They were not concerned with legalisms, about whether, technically, the Geneva conventions did or did not apply. They were concerned about basic canons of human rights. Among the most appalled were those who had recently struggled to achieve democracy, and were continuing to fight for human rights. The Bush administration has also trampled on citizens' basic right to know what their government is doing, refusing, for example, to disclose who was on the task force that shaped its energy policy - though one really doesn't need that information to see that it was shaped by the oil industry and for the oil industry. When abuses occur in one area, they can quickly spread to others. For weeks the Bush administration kept the report on abuses in Iraqi prisons from the American people by pressuring CBS not to air the photographs in its possession. Similarly, it was only through the use of the Freedom of Information Act that the dramatic photographs of the coffins of US soldiers coming home were finally made public. The American media have not emerged unscathed. Why did CBS refuse to release information of vital concern to the public? The abuses should have been covered months ago. Amnesty International held a press conference on the topic in Baghdad in July 2003. And while the pictures and the story of Abu Ghraib ran on front pages in Europe and elsewhere, it was at first buried in many American newspapers, including leaders like The New York Times. Were they worried about offending the Bush administration? Defenders of President Bush, Secretary of Defense Donald Rumsfeld, and the military emphasize the difficulty of the task they face in Iraq, human frailty and fallibility, and the fact that there are always a few 'rotten apples.' America's system of government, however, recognizes all of this, and attempts to guard against it. Had the letter and spirit of these safeguards been followed, we would not have been in this war at all, or at least not alone. Yes, it is conceivable that Bush did not have accurate information about whether Iraq possessed weapons of mass destruction. But under the international rules that America is supposed to follow, wars should not be undertaken based on the judgment of one individual and his cabal. The judgment of the world was that the evidence was not there - and the world was right. Had Bush only gone along with the democratic processes enshrined in the UN Charter, the trauma of Iraq need not have occurred. We know that individuals and institutions make mistakes. Such mistakes are all the more likely in times of stress. We have to put in place rules and procedures, safeguards, a system of due process, to make it more likely that justice is done; and in times of stress it is all the more important that we respect these safeguards. It is clear that the checks needed to prevent abuse in the Iraqi and Afghan prisons were not in place, and that the Bush Administration had created a climate that made such abuses more likely, if not inevitable. More fundamentally, something has gone wrong with the system of checks and balances in America's democracy. Congress and the press should have checked the president. The international community tried. Unfortunately, the global system of international law and governance remains too weak to prevent the determined misbehavior of the president of the world's most powerful country if he is hell bent on starting a war on his own. It is at moments such as these that we realize how thin a veneer our civilization may be. As statements of shared values and principles, the UN Charter, the Declaration of Human Rights, and the Geneva conventions are great achievements. Whether they have the force of law is not the point; they provide guidance for civilized behavior. Each of them was motivated by the horrific lessons of the past. Let us hope that, emerging out of today's scandals, there will be a renewed commitment to live up to these ideals and to strengthen the institutions that were designed to enforce them. Joseph E. Stiglitz is Professor of Economics at Columbia University and a member of the Commission on the Social Dimensions of Globalization. He received the Nobel Prize in Economics in 2001. Copyright: Project Syndicate, June 2004. http://www.project-syndicate.org/commentaries/commentary_text.php4?id=1587&m=series

Subject: Re: Yet another wacky economist From: Amanda To: Yann Date Posted: Mon, Jun 21, 2004 at 07:42:03 (EDT) Email Address: Not Provided Message: I guess Mr. Krugman isn't the only economist who is appalled by what is happening in this country and finds it necessary to speak out. Another economist compelled to write about the scariness that is the Bush administration: Brad DeLong. What is wrong with these economists??? One guess: There are all really, really smart and love their country so much they must speak out.

Subject: marginal utility From: Jack To: All Date Posted: Mon, Jun 21, 2004 at 03:51:38 (EDT) Email Address: jjlwmd@yahoo.com Message: I am somewhat familiar with the concept of marginal utility as a mechanism for explaining pricing and demand curves, but I have read recently in some philosophical papers (I'm trained in philosophy, not economics) that this principle can be used to justify--on a utilitarian basis--at least limited resource/income re-allocation. For example, someone with no money will appreciate a thousand additional bucks much more than a millionaire, so overall utility (something we want to maximize within certain restraints) is increased more by giving to the poor than the rich. This seems utterly plausible and accords well with my (unashamedly admitted) liberal sentiments. What do you guys think of this? Is there some economic literature on it accessible to the armchair economist? Thanks for indulging me.

Subject: Re: marginal utility From: Bobby To: Jack Date Posted: Mon, Jun 21, 2004 at 16:48:49 (EDT) Email Address: robert@pkarchive.org Message: This is an argument was used by my public finance prof. The main criticism is that there is no way to compare interpersonal utility. However, common sense says that in the case of the millionaire and pauper this must be true for a good objective measure of happiness if it existed.

Subject: Re: marginal utility From: Mik To: Jack Date Posted: Mon, Jun 21, 2004 at 14:25:14 (EDT) Email Address: Not Provided Message: For starters - I think you are stating the obvious - that a poor person appreciates a thousand dollars more than a rich person. And I think you can do a series of utility curves to proves this. However I think what you are referring to can probably be better explained through the economic theory of Giffin Goods. This revolves around a product (which could be money) that is so appealing to the poor that a slight increase in the cost of the product will result in an increase in sales. Almost like having an upward sloping supply curve. The full explanation of Giffin good requires charts etc. Perhaps consider doing a google search.

Subject: Re: marginal utility From: Bobby To: Mik Date Posted: Mon, Jun 21, 2004 at 14:48:52 (EDT) Email Address: robert@pkarchive.org Message: A Giffen good has an upward sloping demand curve. Remember that goods can be either normal, where people demand greater quantities when their income increases, or inferior, where people demand less when their income increases. With a Giffen good, it is super-inferior. That is, when when th4e price decreases, there is an income effect (greater income) which makes people demand less and a substitutionn effect that makes people demand greater quantities (since the price is less relative to other goods). If the substitution effect is greater, we still have a downward sloping demand curve. However if the income effect is greater, the demand curve slopes upward. This is a Giffin good. Apparently this is considered only a theoretical proposition that does not occur, except maybe for potatoes in the Irish Potato Famine (I don't understand why this is).

Subject: Re: marginal utility From: RL To: Bobby Date Posted: Tues, Jun 22, 2004 at 07:04:27 (EDT) Email Address: rafaelloring@yahoo.es Message: Well explained Bobby, let me add some information. The theory of Giffin goods comes from, yes, the potato market in Ireland in the XIX century. Giffin was a 'statistician' that surprisingly saw a negative corelation between the price of potatos and its demand. The reason behind it was that Irish income depended very much on potatos so when the price of potatos went down so did demand and vice versa. Anyway it has nothing to do with Jack's question. Jack, in traditional economics utility can not be compared between individuals because obviously is not an objective valoration (see the Pareto principle). But Amartya Sen (economic nobel laureate) has made some advances on this concept in the dirrection you point at. By the way if you are interested in philisophy type economics book Scitovsky's Joyless economy is a must. RL

Subject: Pareto Efficiency From: Paul G. Brown To: RL Date Posted: Tues, Jun 22, 2004 at 10:34:12 (EDT) Email Address: Not Provided Message: Yeah, as the resident Math geek, I was going to bring up Bill Pareto and his efficient frontier. I think that the Hicks quote on that last page pretty much sums it up.

Subject: Re: marginal utility From: RL To: RL Date Posted: Tues, Jun 22, 2004 at 07:27:53 (EDT) Email Address: rafaelloring@yahoo.es Message: Ah, see also Kalder who stablished the compansation criteria for welfare comparisons. RL

Subject: Bush-Lay 2004 From: Kosh To: All Date Posted: Fri, Jun 18, 2004 at 18:25:12 (EDT) Email Address: jrgallag@earthlink.net Message: Kerry needs to make 'Kenny Boy' Lay Bush's running mate the same way that Karl Rove made Willie Horton Dukakis's running mate. The Federal Energy Regulatory Commission head was appointed by Bush at the urging of one Kenneth Lay. http://releases.usnewswire.com/GetRelease.asp?id=151-06162004 Earlier FERC had ruled that California was not entitled to refunds from Enron. http://www.onlinejournal.com/Special_Reports/101503Leopold/101503leopold.html Now FERC has gone a step further and said Enron is entitled to refunds from California. http://feinstein.senate.gov/04Releases/r-ferc-enron-ltr.htm And why is it that Kenny Boy hasn't been indited yet? Inquiring minds want to know.

Subject: Re: Bush-Lay 2004 From: raj To: Kosh Date Posted: Sat, Jun 19, 2004 at 22:09:43 (EDT) Email Address: raj@interchange.ubc.ca Message: He will be indicted by July 4th for Fraud. (Or so was reported on TV).

Subject: Re: Bush-Lay 2004 From: Kosh To: raj Date Posted: Sun, Jun 20, 2004 at 01:31:17 (EDT) Email Address: jrgallag@earthlink.net Message: Yep, here's the link. I wonder if Bush will pardon his good friend 'Kenny Boy' if convicted. http://www.chron.com/cs/CDA/printstory.mpl/front/2635540 Federal prosecutors plan to ask a grand jury to indict Ken Lay on charges relating to the last few months he was at the helm of Enron as the company spiralled into its stunning 2001 collapse. The indictments are expected within two weeks, according to lawyers close to the case. For the past 2 1/2 years, the Justice Department's Enron Task Force has been investigating Lay -- the company's former chairman -- and recently the probe has picked up steam. Over the past few weeks, witnesses about Lay have appeared before the Enron grand jury in increasing numbers. At the same time, prosecutors have been separately interviewing other witnesses and shoring up details about Lay. Government lawyers have been playing their cards close to their vests, and lawyers for witnesses acknowledge that prosecutors could postpone the final presentation of the case. Prosecutors are barred from speaking publicly about grand jury business, and Enron Task Force Director Andrew Weissmann would not comment for this story.

Subject: IGNORANT GENIUSES SAY STUPID THINGS From: Joe Blow To: All Date Posted: Fri, Jun 18, 2004 at 16:09:33 (EDT) Email Address: rockthrowjoe3@yahoo.com Message: This is a quote from John Seater, economist at North Carolina State University, about the 1982 Krugman 'Inflation Time Bomb' memo: ...[T]he real problem with the memo is not simply that facts later showed the forecast to be wrong (every forecaster makes lots of big mistakes). But their forecast had to be wrong because their economic reasoning was nonsense. The stuff in the memo would earn a grade of F in any undergraduate intermediate macro course. Commodity prices, an adjustment in the exchange rate, and so on cause once-and-for-all changes in the price level -- they do not permanently change the growth rate of prices (a.k.a. the inflation rate). The one thing that historically and theoretically causes permanent changes in the inflation is a permanent change in the money growth rate, the very thing that Krugman and Summers brush aside as irrelevant and temporary. I keep hearing what geniuses these two guys are. Unfortunately, this memo makes it seem as though they are ignorant of elementary monetary economics. Ignorant geniuses say stupid things. This memo is an example. Actually, I am sure both Krugman and Summers are quite familiar with monetary theory. Their problem, typical of politically left-leaning economists, is that they routinely abandon economics whenever they find it inconvenient. That's why Card and Krueger published that ridiculous conclusion a few years ago that the minimum wage law raises employment. Demand curves simply do not slope up. Saying they do is as silly as arguing that one-time exchange rate adjustments cause inflation but changes in the trend growth rate of the money supply have no more than temporary effects. Left-leaning economists generally don't believe what their field of study tells them, principally because what it tells them contradicts what they wish were true. They don't like what economics has to say about how the world works, and they don't condition their policy recommendations on it. Except for publishing articles in scholarly journals, they don't behave like economists. Even some Nobel winners (several, actually) behave that way. I don't understand why such people call themselves economists. But whatever the reason, they are an embarrassment to the profession. Link to quote www.poorandstupid.com/2004_06_13_chronArchive.asp#108756648352623193

Subject: Re: IGNORANT GENIUSES SAY STUPID THINGS From: Heya To: Joe Blow Date Posted: Mon, Jun 21, 2004 at 11:13:39 (EDT) Email Address: spam@nospam.net Message: Krugman = Pwned!

Subject: Re: IGNORANT GENIUSES SAY STUPID THINGS From: The Dude To: Joe Blow Date Posted: Sun, Jun 20, 2004 at 06:31:03 (EDT) Email Address: nma@hotmail.com Message: '...Bartley reports that Laffer educated him on the importance of Say's Law, an eighteenth-century dictum that says that supply creates its own demand- that is, since people have to spend their income on something, there is no possibility of a general failure of demand....Unfortunately, the principle is wrong:try telling the unhappy members of the baby-sitting co-op described in Chapter 1(Peddling Prosperity) that a general demand is impossible.... Again, economists from Keynes to Lucas had spent a lot of time trying to explain just why it is that the monetary instruments controlled by the FED exert a profound influence on the economy; but over dinner this work was found to be obviously wrong. If recessions are not the result of inadequate demand, and if money in particular doesn't have real effects, how then are we to explain booms and slumps, prosperity and depression?As we will see in Chapter 8, the academic critics of Keynes eventually took refuge in the concept of 'real business cycles':a recession is a rational response to a bad technological draw....

Subject: Re: IGNORANT GENIUSES SAY STUPID THINGS From: Paul G. Brown To: Joe Blow Date Posted: Fri, Jun 18, 2004 at 16:38:09 (EDT) Email Address: Not Provided Message: Having actually read economics memorandum like this, I will reserve judgement on its merits until I have read the whole thing. Typically, these arguments build on about two pages of assumptions, and are written in response to a particular policy proposal. It seems entirely reasonable to me that what the note advocates is a perfectly ordinary position like, 'We should not urge the Reserve to lower rates yet.' I am not surprised that Luskin and those of like mind have come to their conclusions, however. And I find it reveals more about John Seater than Krugman that he should chide K for abandonning reason and scholarhip based on a one page fragment of a (presumably longer) note (Was this a draft? I mean, the spelling mistakes!) writen 22 years ago.

Subject: Re: IGNORANT GENIUSES SAY STUPID THINGS From: Chef Ragout To: Paul G. Brown Date Posted: Sat, Jun 19, 2004 at 13:49:23 (EDT) Email Address: ragoutchef@yahoo.com Message: It's also strange that Seator would bash Krugman and Summers for liberal bias, when they were working for Ronald Reagan at the time! I'be posted a rebuttal of Luskin on my blog: http://ragout.blogspot.com/2004_06_01_ragout_archive.html#108762359806916587

Subject: stupid people From: RL To: Chef Ragout Date Posted: Mon, Jun 21, 2004 at 05:07:58 (EDT) Email Address: rafaelloring@yahoo.es Message: This difference between a one time change in prices and inflation is ridicoulus. No body speaks like that. In any case a big depreciation creates a presion in prices that last for one or two years at least and during those years inflation is higher. This can last longer as is often the case if monetary aothorities addapt to higher inflation and expectations of higher inflation set in. The same happens with commoditie prices. The oil shock of the 70's is a nice example of it. The problem with Krugman prediction in that memo is that he took past prices as equilibrium prices something economist usually do, but I don't see mistakes in the reasoning. Yes, geniuses are often wrong but intelectual light weights like Seater and Lusking rarely say anything that contributes to understanding economic fenomena instead they feel happy making silly corrections on relevant figures. This is a quote from John Seater, economist at North Carolina State University, about the 1982 Krugman 'Inflation Time Bomb' memo: ...[T]he real problem with the memo is not simply that facts later showed the forecast to be wrong (every forecaster makes lots of big mistakes). But their forecast had to be wrong because their economic reasoning was nonsense. The stuff in the memo would earn a grade of F in any undergraduate intermediate macro course. Commodity prices, an adjustment in the exchange rate, and so on cause once-and-for-all changes in the price level -- they do not permanently change the growth rate of prices (a.k.a. the inflation rate). The one thing that historically and theoretically causes permanent changes in the inflation is a permanent change in the money growth rate, the very thing that Krugman and Summers brush aside as irrelevant and temporary. I keep hearing what geniuses these two guys are. Unfortunately, this memo makes it seem as though they are ignorant of elementary monetary economics. Ignorant geniuses say stupid things. This memo is an example. Actually, I am sure both Krugman and Summers are quite familiar with monetary theory. Their problem, typical of politically left-leaning economists, is that they routinely abandon economics whenever they find it inconvenient. That's why Card and Krueger published that ridiculous conclusion a few years ago that the minimum wage law raises employment. Demand curves simply do not slope up. Saying they do is as silly as arguing that one-time exchange rate adjustments cause inflation but changes in the trend growth rate of the money supply have no more than temporary effects. Left-leaning economists generally don't believe what their field of study tells them, principally because what it tells them contradicts what they wish were true. They don't like what economics has to say about how the world works, and they don't condition their policy recommendations on it. Except for publishing articles in scholarly journals, they don't behave like economists. Even some Nobel winners (several, actually) behave that way. I don't understand why such people call themselves economists. But whatever the reason, they are an embarrassment to the profession.

Subject: stupid people sy stupid things From: RL To: Chef Ragout Date Posted: Mon, Jun 21, 2004 at 04:41:31 (EDT) Email Address: rafaelloring@yahoo.es Message: This is a quote from John Seater, economist at North Carolina State University, about the 1982 Krugman 'Inflation Time Bomb' memo: ...[T]he real problem with the memo is not simply that facts later showed the forecast to be wrong (every forecaster makes lots of big mistakes). But their forecast had to be wrong because their economic reasoning was nonsense. The stuff in the memo would earn a grade of F in any undergraduate intermediate macro course. Commodity prices, an adjustment in the exchange rate, and so on cause once-and-for-all changes in the price level -- they do not permanently change the growth rate of prices (a.k.a. the inflation rate). The one thing that historically and theoretically causes permanent changes in the inflation is a permanent change in the money growth rate, the very thing that Krugman and Summers brush aside as irrelevant and temporary. I keep hearing what geniuses these two guys are. Unfortunately, this memo makes it seem as though they are ignorant of elementary monetary economics. Ignorant geniuses say stupid things. This memo is an example. Actually, I am sure both Krugman and Summers are quite familiar with monetary theory. Their problem, typical of politically left-leaning economists, is that they routinely abandon economics whenever they find it inconvenient. That's why Card and Krueger published that ridiculous conclusion a few years ago that the minimum wage law raises employment. Demand curves simply do not slope up. Saying they do is as silly as arguing that one-time exchange rate adjustments cause inflation but changes in the trend growth rate of the money supply have no more than temporary effects. Left-leaning economists generally don't believe what their field of study tells them, principally because what it tells them contradicts what they wish were true. They don't like what economics has to say about how the world works, and they don't condition their policy recommendations on it. Except for publishing articles in scholarly journals, they don't behave like economists. Even some Nobel winners (several, actually) behave that way. I don't understand why such people call themselves economists. But whatever the reason, they are an embarrassment to the profession.

Subject: questions on the Ashcroft column From: SusanG To: All Date Posted: Thurs, Jun 17, 2004 at 00:21:59 (EDT) Email Address: susangra47@hotmail.com Message: I received this (see below) from one of my Bush-lover friends (yes, he's still a friend). I use Krugman's column all the time to bolster my discussions with him, but he's calling Paul a liar on this issue and my own memory seems to corroborate his list. I wondered what anyone's response might be. (I need help!) Thanks. --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- -- From: Yair Alan Griver Sent: Tuesday, June 15, 2004 11:26 AM To: Susan Graham Subject: Krugman... Some nice lies in today’s article: He says there have been *no* convictions of terrorist suspects. I spent a few minutes and here’s my list to date: Richard Reid John Walker Lindh 6 people near Buffalo, NY (Yahya Goba, Yasein Taher, Shafal Mosed, Mukhtar al-Bakri, Taysal Galab, Sahim Alwan) 6 people in Portland, OR (Patrice Ford, Jeffrey Battle, Habis Al Saoub, October Lewis, Ahmed and Muhammad Bilal) 3 people from Washington, DC (Sefullah Chapman, Hammad Abdur-Raheem, Masoud Ahmad Khan) James Ujaama who worked at Intel ...and that’s from me remembering basics and hitting google. Note that any *one* of these shows Krugman to be wrong. He’s gone over the bend…

Subject: Re: questions on the Ashcroft From: EZ To: SusanG Date Posted: Thurs, Jun 17, 2004 at 17:10:39 (EDT) Email Address: ejz23@yahoo.com Message: Below is the link to a very good program about the supposed sleeper cell in Buffalo that I think you should go to so you can debunk your friend. http://www.pbs.org/wgbh/pages/frontline/shows/sleeper/

Subject: Re: questions on the Ashcroft column From: Paul G. Brown To: SusanG Date Posted: Thurs, Jun 17, 2004 at 14:41:09 (EDT) Email Address: Not Provided Message: OK. Found the Michele Malkin Column: http://michellemalkin.com/archives/000033.htm I've commented on her first response, already. Now, what about the Krugman May 11 column? She has a slight point. Richard Reid was certainly a terrorist. An imcompetent terrorist, but a terrorist never-the-less. But it's scarcely evidence of vigorous investigation and prosecution to have snapped up someone with shoes packed out with plastic, though. What about the others? Well, most of them have been convicted of crimes related to supporting terrorism. They raised money, visited camps, and were (at worst) scouting out targets. Bad dudes, but 'actual terrorists'? I mean, compared with Sheikh Abdel-Rahman's little group, or the the millenium bombers? An 'actual terrorist' would have suitable weapons, concrete plans, and so on. The only weaponry possessed by the accused in the cases she cites were shotguns. So what are the facts? Has Ashcroft convicted any 'actual terrorists'? Well, one. The mad bomber. Any 'major successful prosecutions'. Not yet. But one that is falling apart. Remember:the point is to question his competence, so how does his record look? (Maybe getting convictions is hard?) Not well, when compared to the previous administration(s). And for goodness sake, let's debate this sort of thing in good faith! What's point, the evidence, and so on. Malkin has picked on a single point that turns on a question of semantics ('actual terrorist', rather than 'supported and fellow traveller'). If we are to prevent attacks, the competence of the individuals leading the investigation ought to be very, very important.

Subject: Re: questions on the Ashcroft column From: SusanG To: Paul G. Brown Date Posted: Thurs, Jun 17, 2004 at 17:07:06 (EDT) Email Address: susangra47@hotmail.com Message: Thanks for your reply. But if you can help me - I am still not clear about the ones mentioned in my friend's email (he didn't mention the column you pointed me to, btw). The following don't count as terrorist convictions? John Walker Lindh 6 people near Buffalo, NY (Yahya Goba, Yasein Taher, Shafal Mosed, Mukhtar al-Bakri, Taysal Galab, Sahim Alwan) 6 people in Portland, OR (Patrice Ford, Jeffrey Battle, Habis Al Saoub, October Lewis, Ahmed and Muhammad Bilal) 3 people from Washington, DC (Sefullah Chapman, Hammad Abdur-Raheem, Masoud Ahmad Khan) James Ujaama who worked at Intel Susan

Subject: Re: questions on the Ashcroft column From: Paul G. Brown To: SusanG Date Posted: Thurs, Jun 17, 2004 at 20:42:45 (EDT) Email Address: Not Provided Message: Terrorism: 'the calculated use of violence (or threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature; this is done through intimindation or coercion or instilling fear' Terrorist: one who engages in terrorism. Let's use it in the same sense as 'soldier', and draw the distinction (which the terrorists themselves do not draw, but we're better than them) between a soldiers and civilians (who might support the terrorist's goals, but not their methods). And before there is a pile on, I ain't defending any of these people or claiming that they're not guilty of the crimes they plead guilty to. They did stupid, bad things. I am pointing out that their crimes don't meet the disctionary or the legal definitions of 'terrorism', unless we want to start to apply that term much more broadly. I mean, look at the languages in the Justice Department press releases: they don't call 'em terrorists. They say they 'engaged in terrorism-related activities', which is a bad thing, but it's a different thing from being a 'terrorist'. John Walker Lindh? 'On July 15, 2002, Walker pled guilty to two charges — serving in the Taliban army and carrying weapons.' He was convicted of fighting for the Taliban. That doesn't make him guilty of terrorism. Goba, Yasein, Mosed et al (The Lackawanna 6) 'with providing material support or resources to a foreign terrorist organization, based on their attendance at an al Qaeda-affiliated training camp.' There was evidence of a conspiracy, and they visited a camp for training, they provided money. Did they plan to blow anything up? Not according to the Justice Department. Ford, Battle, Saoub et al? '...admit that the purpose of the conspiracy was to travel to Afghanistan to fight alongside al Qaeda and the Taliban against American and allied forces.' They also gave money. Did they engage in terrorism, or have a conspiracy to engage in terrorism? Not according to the Justice Dept. indictment or the terms of the plea. Chapman, Abdur-Raheem, Ahman etc went to a camp in Pakistan, heard that there was going to be something big on Sept 11, 2001, and didn't tell anyone. Terrorist? Planning to put anthrax in the water supply? No. Also: look at what the Justice Department is crowing about. Web jockeys with attitude problems, small time drug dealers, a gun-runner buying bang-bangs to re-sell in Pakistan. There was a rectruiter, but apparently he didn't recruit anyone, or they would have been up on charges as a real, live terrorist. I mean, bad people, all of 'em. They ought to be locked up. But none of them had the means or the opportunity to do what the Sept 11 folk (or the blind sheik, or the millenium bombers) were up to. Krugman's point is that for all the scare mongering, Ashcroft doesn't yet have a conviction for planning to blow anyone up, or release anything, or hijack anything. But there have been terrorist attacks in this country: the anthrax mail dude is one we know about.

Subject: Re: questions on the Ashcroft column From: Paul G. Brown To: Paul G. Brown Date Posted: Thurs, Jun 17, 2004 at 21:03:20 (EDT) Email Address: Not Provided Message: And while I'm on the topic: The Whitehouse has a list of its 'successes' on the legal front. Richard Reid gets top billing. Contrast with the millenium plotters (who had bombs, timers etc), or another anthrax terrorist (who was convicted on Ashcroft's watch, but doesn't get the same billing as a half-wit with a shotgun and an inflated sense of his own importance).

Subject: Re: questions on the Ashcroft column From: SusanG To: Paul G. Brown Date Posted: Thurs, Jun 17, 2004 at 22:49:20 (EDT) Email Address: susangra47@hotmail.com Message: thanks for your help!

Subject: Re: questions on the Ashcroft column From: Paul G. Brown To: SusanG Date Posted: Thurs, Jun 17, 2004 at 12:37:59 (EDT) Email Address: Not Provided Message: (*sigh*) Your friend should read the column, and not the commentary on the column. Have a look at the comments in the Haloscan commentary on the column pages.

Subject: Redefining your way to success. From: David E.. To: All Date Posted: Wed, Jun 16, 2004 at 13:29:46 (EDT) Email Address: Not Provided Message: Reading about the core inflation rate was a wake-up call for me. The consensus was that inflation is under control because there was no pricing presssure from labor. Food, energy, and housing, essential to life are also not part of core inflation. It seems that the human part of economics is less important now. I think the trend started when government economists decided that the last recession was over despite the fact that jobs had not turned around. I fervently hope that additional data points, after these two in hand, do not confirm this trend.

Subject: Re: Redefining your way to success. From: El Dude To: David E.. Date Posted: Wed, Jun 16, 2004 at 19:46:38 (EDT) Email Address: nma@hotmail.com Message: There's no inflation without demand.

Subject: Re: Redefining your way to success. From: Pete Weis To: El Dude Date Posted: Wed, Jun 16, 2004 at 21:09:01 (EDT) Email Address: Not Provided Message: Aren't there a number of factors that can lead to inflation - demand being one of them. Do government deficits (especially big ones) lead to inflation? For instance, a government runs up its debt than prints the needed money to service its debt. Would this lead to a devaluing of currency and hence inflation? Additionally, what has held up demand? Is it increasing wages and strong job growth? Or is it low interest rates, loosening lending practices and consumers will to go deeper into debt? If it's the latter, how much longer can this go on? Could we possibly ever get decreasing consumer demand going hand and hand with increasing inflation? What if big foreign purchasers of US treasuries (such as Japan or China)decided they either wanted to reduce their funding of the US current account and budget deficits? Could a lower demand for US dollar denominated assets by foreign entities cause problems in the US markets and economy, thereby decreasing US consumer demand, but at the same time bring about a fall in the dollar - a severe case of 'stagflation'?

Subject: Just what I need.. Whimsey. Thx 4 Smile :) n/m From: David E... To: El Dude Date Posted: Wed, Jun 16, 2004 at 20:34:39 (EDT) Email Address: Not Provided Message: n/m

Subject: Response to Mik on Argentina From: RL To: All Date Posted: Tues, Jun 15, 2004 at 07:22:19 (EDT) Email Address: rafaelloring@yahoo.es Message: Mik i think you are confused. The case in Malasya was for capital controls not fixed currency. In any case I am completly surprised by the that awfull forbes article...It is astonishing the little sense Mr Hanke makes according to basic macroeconomics and further more to common sense. His statement that the explanation of Argentina’s crisis based on the currency board is a misconception is awfully augmented. His biggest mistake it to say that the traditional explanation of argentina’s cris (“received ideas”) is based on the effect of the dolar-peso peg on competitiveness. Not at all, if he had really read Krugman on Argentina he would have noted that Krugman as many others point out the problem wasn’t the trade deficit but the monetary contraction that implied the currency board due to loss of reserves. Hankes explains that in reality the central bank aggressively used its discretionary powers. Well, The Central Bank might have tried but where did that go?. In the period 1999-2001 GDP contracted and deflation was set in and this was the main reason of the deterioration of public finances (although they were never in very good shape) that resulted in default. Hanke suggest that the central Bank should have been more strict?… “The central bank’s hands were anything but tied, allowing it to practice a hyperactive monetary policy. That was the system fatal flaw.” I am petrified by this statement. More deflation and more contraction was needed on the monetary base is Hanke’s post argentina’s crisis conclusion?. I don’t know when or where Hanke recieved this ideas but I believe probably in the same place where they told him Wellington whipped Napoleon at Waterloo. No serious history book I have read says anything like that, just as no well respected economist says anything like Hanke.

Subject: Re: Response to Mik on Argentina From: Mik To: RL Date Posted: Tues, Jun 15, 2004 at 17:15:25 (EDT) Email Address: Not Provided Message: Thanks RL. I couldn't quite remember the entire story. With reference to Malaysia though - again my memory may be wrong, but didn't Malaysia stop money trades on the Ringet to avoid further devaluation? I am impressed that you have picked up so many mistakes made by Hanke. Dare I ask the question - do you think any of these mistakes are intentional or just part of a paradigm that includes bashing Krugman where they find it appropriate?

Subject: Labor Unions (in reply to Jack's question) From: Bobby To: All Date Posted: Tues, Jun 15, 2004 at 01:09:12 (EDT) Email Address: robert@pkarchive.org Message: If I remember labor economics correctly, there are two models of their effect on employment. There is one model called the 'monopoly union' model where the union has a monopoly on the sale of labor, the unions choose the wage, and then firms choose the level of employment on their labor demand curves that is consistent with that wage. Since firm labor demand slopes downward, if the union chooses a wage greater than the competitive wage, this decreases employment and loss of social surplus. This is the usually case that people implicitly are talking about when they say that unions cause unemployment. [The monopoly union's choice can be modelled this way: firm labor demand is the budget constraint and unions have a utility function increasing in employment and wages. Unions simply maximize that utility s.t. that budget constraint holds, and that is the (employment, wage) bundle that occurs under unions]. However, for industries with very steep labor demand curves, this unemployment/efficiency loss problem is smaller. The second model is called the 'efficient contract' model, where firms and unions negotiate over wages and employment. As usual unions want greater wages and employment which yield greater utility while firms want less wages greater employment which yield greater profits. There is a set of (employment, wage) bundles called the contact curve [in a model the contract curve is a set of (wage, employment) bundles called the contact curve at which the the firm's isoprofit and union's isoutility curves are tangent to each other], at negotiations determine which point on the contract curve they choose. The shape of the contract curve is determined by the specification of the firm's profit function and union's utility function. In the lucky case where the contract curve is vertical they always choose the bundle that keeps employment at its free market level it is efficient since all resources are allocated as they would be in perfect competition and no resources are being drawn from or to other markets. If this bundle has a greater wage level than under the free market, the unions have just made a lump-sum transfer of income from employer to workers. If the contract curve is upward sloping negotiation can only increase wages and employment. However, this causes inefficiency in a competitive general equilibrium economy, since scarce resources (labor) are being drawn from other markets and it would yeild greater aggregate social welfare if they were employment in those other markets instead. If the contract curve is downward sloping negotiation can increase wages but only at the price of decreased employment. This causes inefficiency in a competitive general equilibrium economy since scarce resources (labor) are being sent to other markets and it would yield greater aggregate social welfare if they were employed in this market instead. Which model is better? Likely the second one,and a sketch of the reasoning is that empirical evidence shows that unionized firms generally do not have (employment, wage) bundles that are on their labor demand curves. It is controversial whether the contract curve is vertical. On the no verticality side, some studies show that employment in unionized firms is sensitive to the union wage. The strongest evidence in favor of verticality is that if there is a $1 unexpected increase of the share of rents going to union workers the value of the wealth of the shareholders of the unionized firm decreases by exactly $1. See Ch 11 of Labor Economics by Borjas on this topic

Subject: Board Cleaning From: Bobby To: All Date Posted: Tues, Jun 15, 2004 at 01:07:15 (EDT) Email Address: robert@pkarchive.org Message: I had to put everyone's past messages in the message board archive (link above). When the message board gets to 700 messages it begins to eat the oldest messages that are on it, and I didn't want that to happen. So, when it gets close to 700, I clean out the message board and put all the past messages in the archive. As always, I'm really sorry for any interruption in conversations or inconvenience this has caused anybody. All your past messages and conversations on this board are here: http://www.pkarchive.org/MBArchive.html http://www.pkarchive.org/MBArchive.html www.pkarchive.org/MBArchive.html