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<<<<And as for those responsible for the WorldCom debacle? "I hope these people go to jail," says Tobias.>>>> Not Prison???? To: Stop Nato <[EMAIL PROTECTED]>, [EMAIL PROTECTED], [EMAIL PROTECTED], Communist Internet News <[EMAIL PROTECTED]> From: Bill Howard <[EMAIL PROTECTED]> Subject: The Empire Whimpers: Corporate Amerika Implodes [WWW.STOPNATO.ORG.UK] Date sent: Fri, 28 Jun 2002 01:24:17 +0100 Send reply to: [EMAIL PROTECTED] > HTTP://WWW.STOPNATO.ORG.UK > --------------------------- > > > . > . > Capitalist Imperialism or Socialist Communism? ... > http://www.egroups.com/group/Communist-Internet ] > > [Subscribe: [EMAIL PROTECTED] ] > . > . > ----- Original Message ----- > From: <[EMAIL PROTECTED]> > To: <[EMAIL PROTECTED]> > Sent: Thursday, June 27, 2002 5:26 AM > Subject: [kominform2] The Empire Whimpers: Corporate Amerika Implodes > > > > > From: [EMAIL PROTECTED] > > Subject: The Empire Whimpers: Corporate Amerika Implodes > > The Empire Whimpers: Corporate Amerika Implodes > > Via NY Transfer News * All the News That Doesn't Fit > > > The Empire Whimpers > > WORLDCOM'S $3.8 BILLION SCANDAL SENDS STOCKS, US DOLLAR INTO THE MUD; > AMTRAK MIGHT LIMP THROUGH SEPTEMBER WITH $200 MILLION FROM FEDS > > [George Bush might just be the US President to preside over the > nationalization of major strategic national industries -- railroads, > telecommunications, airlines... Fidel Castro, who has aptly described > international capitalism as a "giant casino," might be able to give > the po' boy from Texas some lessons on how it's done. > > With the help of his team of thieves who've stolen everything they > can get their hands on (including the 2000 Presidential election), > the half-wit occupying the White House has brought down the Empire -- > he needed no help from Osama bin Laden. Global Crossing's value > evaporated in an overnight bankruptcy; Qwest Communications seems to > be next in the line of collapsing houses of cards; the value of the > yankee dollar is in the toilet while investors flock to gold; despite > three Japanese interventions overnight on June 25-26 to prop up the > dollar, the Euro made gains and is now at near-parity with the yankee > buck. > > The shell game of American Capitalism is folding. The casino is > exposed for what it is. Too bad for investors, too bad for employees > who lose their pensions and their jobs. The corporate directors walk > with billions in loans, bonuses and obscene salaries skimmed off > during the boom years of merger mania. > > It's all such poetic justice -- after all, it was Daddy Bush who > privatized the Internet.] > > * > > Reuters Market News - June 26, 2002 via Yahoo > > US, Amtrak in tentative deal to end crisis > > WASHINGTON, June 26 (Reuters) - The Transportation Department and > Amtrak reached a tentative deal late on Wednesday for a bailout that > would resolve the railroad's immediate financial crisis and avert a > shutdown threatened for as early as next week. > > In a joint statement Transportation Secretary Norman Mineta and > Amtrak Chairman John Robert Smith said the two sides had made > "excellent progress" in bringing the crisis to an end, and were on > track to finalize the deal possibly by Thursday. > > While details were not disclosed by the Transportation Department or > Amtrak, a government source said the two sides agreed to take a > two-stage approach. > > First, the government would directly lend Amtrak $100 million to > cover spending priorities for the first half of the summer. In the > second stage, the Bush administration would work with Congress to > come up with another $100 million at least to keep the trains running > through September. > > Congress, which leaves town on Friday for its July Fourth recess, > could either appropriate the additional funds or agree to a loan > guarantee. That would enable Amtrak to borrow the money it needs from > its banks. > > * > > BBC online - Wednesday, 26 June, 2002 > http://www.bbc.co.uk > > Shares Plunge on WorldCom Scandal > > Shares on Wall Street have plunged in response to news of a massive > accounting fraud at US telecoms firm WorldCom. > > Within half an hour of the opening bell at 1330 GMT, the blue-chip > Dow Jones index was down 133.19 points or about 1.3% to 8,993.63. > > Meanwhile, the Nasdaq index - where WorldCom and the bulk of its > fellow technology stocks are listed - had dropped 3%, or 44.12 points > to 1,379.87, a new low for the year. > > The falls followed a torrid morning on the European exchanges after > WorldCom's announcement that it had overstated its profits. > > By 1400 GMT, London's FTSE 100 blue-chip share index was down 131.6 > points to 4,499.4, not far above the five-year lows hit just after 11 > September. > > Germany's Dax index and the French Cac-40 had fallen even further, > each losing about 4% of their value by the same time. > > The euro, which has been creeping higher against the dollar in recent > weeks, broke through $0.99 for the first time since 1999. > > The legacy of Enron > > In the aftermath of the collapse of US energy company Enron late last > year, investors have become nervous about both the honesty of > accounting practices at big firms, and the fundamental health of > corporate America. > > Now WorldCom, the number two long-distance phone company in the US, > has revealed that its profits between January 2001 and March 2002 > were overstated by $3.8bn (=A32.5bn).=20 > > The result has been a rout in technology, media and telecom stocks - > first in Asia, where Tokyo's Nikkei 225 fell more than 4%, then in > Europe. > > Banks have also taken a pounding as investors scrabbled to avoid > those they suspected might be exposed to WorldCom's debts. > > The next stop is the US, where the blue-chip Dow Jones industrial > average is still smarting from massive falls in recent weeks and a > 155-point tumble on Tuesday, before the news broke. > > Biggest Losers [in Europe]: > > - Alcatel (down 18%) > - France Telecom (down 13.7%) > - Vivendi Universal (down 13%) > - Xansa (down 11%) > - Axa (down 6.9%) > - Zurich Financial (down 6.9%) > - Ericsson (down 6%) > - Friends Provident (down 6.75%) > - Siemens (down 6%) > - Nokia (down 5.8%) > - Vodafone (down 5.75%) > - Prudential (down 5.5%) > - Deutsche Telekom (down 5.5%) > - Royal Sun & Alliance (down 5.5%) > - Abbey National (down 5.25%) > - Lloyds TSB (down 5%) > - British Telecom (down 4.5%) > > Market falls on Wednesday have reflected WorldCom's disgrace as well > more general problems with companies such as Vivendi Universal, > France Telecom and Alcatel. > > "We have convergence of dodgy accounting, plus telecoms and > over-indebtedness," said Robert Kerr, European strategist at Bank of > America. > > "It's the trigger of the beginning of the final wash-out, but I don't > think this is the final wash-out." > > Nomura, the Japanese investment bank, was even more scathing. > > WorldCom, it said, "has delivered the final blow to trust in the US > equity market." > > "There was plenty of other unpleasant news in the background, but > WorldCom is a timely reminder that Enronitis was a systemic problem," > Nomura economist Anais Faraj said. > > "Even though the markets were never going to go onwards and upwards > for ever, the US markets had priced in perpetual growth," he told BBC > News Online. > > "Basically, the US market is dead now." > > Losers > > Vivendi Universal has taken a battering in recent days after a > controversial deal to reduce its stake in its utilities arm, and > criticism of its chief executive Jean-Marie Messier. > > There were also concerns from the French government about France > Telecom's level of debt, while Alcatel was hit after launching a new > restructuring plan and issuing a profit warning. > > The UK insurer Prudential suffered in particular because of its > reported exposure to WorldCom debt. > > Shares in the Pru sank more than 5% in early trading. > > "WorldCom is a good alibi for a bit more flogging of the market," > added Mr Kerr. > > Shock waves around the world > > The WorldCom announcement came after the US markets had closed on > Tuesday and in after-hours trading the company's stock plunged 58% to > 35 cents. > > Stocks in Tokyo fell 4% overnight on the news, with the telecoms > sector hit particularly hard, while shares in South Korea fell 7.4%. > > * > > CNN - June 26, 2002 > http://money.cnn.com/2002/06/26/news/worldcom_shoedrops/index.htm > > > THE DEATH OF CONFIDENCE > > WorldCom's gigantic fraud may send investors to the exits > for a long, long time. > > by Justin Lahart > > > NEW YORK (CNN/Money) - Tuesday night, the other shoe dropped. Ever > since Enron, investors have worried that something big was lurking in > the wings. A steady stream of scandal -- Global Crossing, Qwest > Peregrine, Adelphia -- kept the fear alive. And so it came: WorldCom, > perpetrator of what looks like one of the biggest accounting frauds > in history. If trust in Corporate America was already broken, now > it's in shambles. With that, many investors may decide to exit the > U.S. stock market. And not come back. > > "I think you're going to have people withdraw money for good," says > Todd Clark, managing director of listed trading at Wells Fargo > Securities. "People are going to say, 'I'd rather bet on the New > York Giants because I have a better chance of guessing the result > than of knowing what some management team is up to.'" > > With the market whipping lower before a late-day recovery took it > back to the flatline, Clark's worry was echoing all over Wall Street. > > "We're seeing basically complete distrust in financial accounting in > the Western Hemisphere," says Phil Ruffat of Mizuho Securities USA's > futures division. "People are going to pack it up and go." > > Of particular concern is global investors who, to judge from the > recent declines in the dollar, had already been pulling money from > our fair shores. Ruffat, who works closely with Japanese clients, > says that foreign confidence in U.S. assets has fallen to a new low. > > If that's what it's come to, one of the main drivers of the 1990s > bull market has been turned on its head. Stringent accounting > standards and active shareholder participation were supposed to make > companies here more transparent than they had been in the past. This > meant the risk of owning U.S. stocks was low both historically and > compared to places like Japan. > > And so both here and abroad investors ploughed money into our stock > market. Paul Kasriel, chief U.S. economist at Northern Trust, points > out that by the end of 2000 foreigners owned financial assets close > to 25 percent of the U.S. capital stock, up from 11 percent in 1990. > It is hard, he thinks, to imagine foreigners keeping up that level of > investment given what's going on. > > "Even without the fraud," says Kasriel, "return on capital has been > plumbing the depths, the United States is at war, government spending > exploding to the upside and we're imposing tariffs on steel and > lumber. What's to like?" > > And of course it's not just foreign investors who might be asking > that question. U.S. investors have been just as burned, and have just > as much reason for disgust at the shenanigans companies have played, > as their foreign counterparts. There are plenty of places to put > money besides stocks (bonds, money markets, gold, under the mattress) > and plenty of people may opt to do just that. > > While many market watchers, attuned to the big market bouncebacks > from 1987, 1997 and 1998 talk of "capitulation" -- a period of blind > selling that puts a firm bottom on stocks and marks the new bull > phase -- the WorldCom debacle could just as easily mark the beginning > of a long period of disinterest, where the stock market ends up being > no better than a mugs game. > > "We're taking a lot of the people out of the market permanently," > says Bollinger Capital head John Bollinger. "We're losing a whole > generation of investors." > > What Bollinger expects is not the V-shaped rebound so many investors > hope for but something like the long grind the U.S. saw in the 1970s > and that Japan has been seeing for the past 13 years. After topping > out at 1,050 in 1973, the Dow Jones Industrial Average wasn't able to > pull clear of the 1,000 level until 1982. Tokyo's Nikkei hit its high > back in 1989 and has ground steadily lower ever since then. > > Maybe the prognosis for U.S. stocks isn't so dire as that but one > thing seems certain: investors who think WorldCom is the end of the > accounting imbroglio are in for disappointments. What's so > disappointing about WorldCom is that it proves the cockroach theory > -- where there was Enron, there was more. > > "Telecom is where people thought the next Enron was going to be, and > they weren't disappointed," says David Hawkins, a Harvard Business > School professor who acts as an advisor to Merrill Lynch on > accounting issues. Hawkins suspects that the breed of fraud that > happened at WorldCom -- treating expenses as capital expenditures -- > probably happened elsewhere in the telecom arena. > > With that kind of backdrop, some investors suspect that any rallies > in the weeks to come will be short-lived. "The feeling is that > confidence in corporate America has deteriorated so much that maybe > you're going to see the typical step up, followed by multiple steps > down," said Seth Tobias of the New York-based hedge fund Circle T. > > And as for those responsible for the WorldCom debacle? > > "I hope these people go to jail," says Tobias. > > > ================================================================= > NY Transfer News Collective * A Service of Blythe Systems > Since 1985 - Information for the Rest of Us > 339 Lafayette St., New York, NY 10012 > http://www.blythe.org e-mail: [EMAIL PROTECTED] > ================================================================= > > nytcari-06.27.02-00:12:02-26987 > > > _________________________________________________ > > KOMINFORM > P.O. 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