MarketVVizard's Market Thoughts

http://comstockfunds.com/files/NLPP00000...

Top 900. Feb 10, 2004 12:25 PM

» Normxxx - Re: Europe G7 and Secular Shifts

In response to message posted by Austrian:

No Austrian, as you can see, "Begger thy Neighbor" is still one or two steps away.

[Sorry all; you will just have to pull it up for yourseves. The preview looks fine, but it just won't "take."]

I missed German Chancellor Gerhard Schroeder's resignation (I bet Bush is happy). Is it for real? He seemed/seems to do it on a regular basis to whip the recalcitrants into line.

Excellent summary.

-- posted by Normxxx

Top 901. Feb 10, 2004 12:49 PM

» Normxxx - Re: Gerhard Schroeder

In response to message posted by Austrian:

Embattled Schroeder resigns as party leader

The Telegraph, London | February 9, 2004

Chancellor Gerhard Schroeder has been forced to resign as leader of his Social Democratic Party in an attempt to dampen furious internal criticism of his government's reforms.

Mr Schroeder stressed that he would not step down as Chancellor, but the resignation raises questions about his political future.

"I don't fear there will be any loss of authority," he said on Friday. "I will concentrate on my job as Chancellor and head of government."

But the opposition leader, Angela Merkel, said his resignation marked a "loss of authority across the board" and the "beginning of the end of this Chancellor".

Mr Schroeder will hand the party leadership to his ally Franz Munterfering, 62, in what he called a "job-share" arrangement. Unlike Mr Schroeder, Mr Munterfering has a good relationship with the left of the party.

Since the Government came to power in 1998 the party has lost tens of thousands of members, most of them in the past few months.

Its popularity has slumped to an all-time low of 24 per cent and party officials are alarmed at the prospect of more than 10 local and regional elections this year.

There are now questions about whether Mr Schroeder still has enough support within the Government to continue with his Agenda 2010 reforms.

His Social Democrats-Green coalition narrowly pushed its first wave of reforms through parliament before Christmas. It included cuts in unemployment benefits and measures to force the long-term jobless to take any work offered to them.

-- posted by Normxxx

Looking For The Next Bubble

Top 902. Feb 10, 2004 1:14 PM

» MarketVVizard - Looking For The Next Bubble

by Jim Puplava

Inflation is Everywhere

In the last 12 months the price of oil has risen from under $24 to as high $35 a barrel. It is currently at $32.47. The price of soybeans has gone up more dramatically from a low of $5.09 a bushel to today’s price of $8.39. Copper prices have gone parabolic, rising from $73 to $118.70. Platinum prices are also rising sharply. They have jumped from $670 to $834. The CRB Index, made up of 17 different commodities from metals, soft goods, grains, energy and livestock is up even more. Having hit a nadir in October of 2001, the index is up 42%. Commodity prices from energy, metals, and grains have been on an upward track for the last two years.

<img border="0" src="http://www.financialsense.com/Market/arc..." align="left" width="360" height="208">On Main Street the average Joe is finding it harder and harder to maintain his current standard of living. More Americans are going deeper into debt each month to pay their bills. They are making use of extraordinary low interest rates on home mortgages to extract equity out of their homes to make ends meet. Households are also using credit cards to supplement spending each month as personal income and job growth has not kept pace with the rise in prices. The public is told that inflation rates are extremely low, but each month they must reconcile the difference between what they are told and the higher billing statements they receive each month.

Grocery prices at the supermarkets are up over 50% over the last three years. Service costs from the local dentist and the family doctor to the local plumber are all up double digits. Medical premiums are starting to skyrocket again and the cost of sending junior to college requires more equity extraction and second mortgages to pay for tuition. On a day-to-day basis, the cost of just about everything the family needs keeps going up. Yet, Washington and Wall Street keep telling households that inflation rates remain low. They are low because government statisticians have removed price increases from the cost of most goods by counting quality improvements as price reductions.

There is no inflation on paper, but it visible everywhere you look on the price of things you need. Unions are striking for higher wages and benefits. Supermarket workers in California have been on strike for over 4 months protesting their having to share in the cost of medical care. Employers are finding it difficult to shoulder the burden of healthcare costs and are forced to require employees to share in part of the costs. The financial press keeps talking about low inflation, but employers and employees face rising prices. At this point it is either cut benefits or start raising prices--prices of things that are never counted in the monthly inflation statistics. There is a growing gap between what the average American has to spend each month in order to live and what is reported in the financial press as inflation. When prices get high enough, politicians will start looking for demons to castigate when the real inflation demon is government.

What Causes Inflation?

Ask the average person on the street or query financial professionals and you’ll find very little understanding of where inflation comes from or where it originates. Most individuals define inflation as rising prices. They speak about symptoms rather than cause. If inflation is simply rising prices, then what causes it? You’ll find that inflation is attributed to many sources--none of which are accurate. The common misperceptions by policymakers and the public is that inflation has three principal causes:

Cost-push inflation as a result of arbitrary demands of labor unions.
Profit-push inflation resulting from the greed of businesses raising prices.
Crisis-driven inflation resulting from acts of God or weather.

The general belief that inflation is the result of something other than its true cause makes it hard to understand and resolve. Most people believe that inflation is conspiratorial such as OPEC raising prices, businessmen wanting to make higher profits, or greedy unions looking to enhance worker benefits and pay. Somehow inflation has become an evil caused by greedy individuals and businesses. To most people inflation has become a causeless phenomenon inexplicable and born of ill will.

Let's Get This Straight

Definition
However, there is irrefutable evidence that government is the source of all inflation. An undue increase in the quantity of money is what stands behind a rise in prices. The source of all money or credit is government. Thinking of inflation only in terms of rising prices is similar to looking at the symptoms of a disease rather than the disease itself. A more exact definition of inflation would be an increase in the quantity of money and credit relative to available goods resulting in a substantial and continuing rise in the general price level, an increase in the quantity of money caused by government.

You will notice that this definition doesn’t say anything about cost-push, profit-push, or crisis-push inflation. It simply states that the supply of money expands leading to higher prices. It is the expansion of money and not rising prices that leads to inflation. This also points to the real cause behind inflation as government intervention in the economy and financial system by expanding the supply of money and credit in the system.

Formula
When the government increases the supply of money and credit in the economy, it increases demand for goods leading to higher prices. Higher demand or lower supply is the only conceivable cause of higher prices. It can be demonstrated by the formula below:

P = Dc
Sc

This theory states that the general level of consumer prices equals the aggregate demand for goods divided by the aggregate supply of consumer goods. Therefore, the resulting rise in consumer prices is a function of a numerator (demand) divided by a denominator (supply). If there is a resulting change in price, it the result of either a rise or fall in demand or a rise or fall in supply.

Government Variables
When the government or actions by the Fed increase the quantity of money in the economy, the demand for consumer goods is increased through the supply of new money being spent and re-spent within the economy. Since there is greater demand than supply, the price of most goods will go up. In the U.S. the rise in prices has not been commensurate with the supply of money and credit in the system because of imported goods. The trade deficit is a function of increased demand being satisfied by increasing imports. If the U.S. economy was self sustaining and self sufficient and able to meet all consumer demand, prices would have risen more substantially. Goods inflation has been somewhat tame only because excess demand in the U.S. has been satisfied through imported goods. Without the ability to import goods, prices would have been driven dramatically higher.

However, goods inflation eventually surfaces because a country with an expanding trade deficit eventually experiences a declining currency which raises the costs of imported goods. The graphs below of the money supply, budget deficit, trade deficit, and declining dollar are interrelated.

<img alt="Economagic: Economic Chart Dispenser" src="http://www.financialsense.com/Market/archive/2004/m3.gif" width="272" height="145">	<img border="0" src="http://www.financialsense.com/Market/arc..." width="260" height="150">
www.economagic.com	www.stockcharts.com

<img hspace="10" src="http://www.financialsense.com/Market/arc..." align="left" border="0" width="325" height="300">They are all attributable to an expansion of money and credit in the economy and financial system. Inflation and higher interest rates are often associated with government deficits. If these deficits are financed by selling bonds to the public or to institutions, there is no increase in the quantity of money. The existing supply of money stock is simply diverted from private to public consumption. Government budget deficits become inflationary when they are financed through new and additional money. This occurs when the Federal Reserve purchases government debt. In effect this is known as monetization. The full inflationary impact of the U.S.’ growing budget deficit has been mitigated by the purchase of government securities by foreign central banks and foreign financial institutions. The Fed hasn’t had to resort to debt monetization because of direct foreign intervention in the currency markets.

Foreign Variables
As shown in the chart below, foreign intervention in the currency markets through direct purchases of U.S. Treasuries has prevented the full inflationary impact of government deficits from materializing. This enables the U.S. government to export its inflation. Japan and China’s central banks purchased $300 billion in U.S. Treasuries last year.

<img border="0" src="http://www.financialsense.com/Market/arc..." align="right" hspace="10" width="244" height="320">This year that figure could go much higher. Japan’s Ministry of Finance has set aside $575 billion for dollar purchases, while China has allocated $150 billion. The two central banks combined have the ability of buying up to $725 billion in Treasury debt. This could produce a sharp reduction in the outstanding stock of federal government debt in circulation leading to lower interest rates. Intervention of this magnitude could give us a bond rally at a time when everyone is expecting higher interest rates.

In a Nutshell
The point to understand is that the full inflationary impact of excess money and credit in the U.S. has been partially mitigated by foreign intervention. The U.S. consumer increases consumption as a result of taking on more debt. This increase in demand side consumption is made possible through cheap and abundant credit (inflationary). Since the U.S. economy is unable to meet all of consumer demand, excess demand is made up through foreign imports. This also lessens the impact of inflation since foreign goods help meet excess demand, keeping a lid on prices. Foreign goods can also be manufactured at a lower price.

When new money and credit are created, they enter the system through various avenues. The money and credit can actually be spent on domestic goods and services, foreign goods and services or financial assets leading to higher asset prices. Goods inflation and asset inflation are really two different sides of the same coin.

The New Century Inflation in Financial Markets

Unlike the inflationary 70’s when money and credit went into the real economy, since the early 80’s and accelerating into the 90’s, this new century money has been increasingly channeled into financial assets, creating asset inflation. This was visible first in the equity bubble of the late 90’s. New money created by the Fed to fight off a collapsing stock market bubble, recession, and a major terrorist attack led to additional bubbles in the bond market, mortgage and housing market, and finally in excess consumption in this new century. Rising bond, stock and real estate prices are simply another form of inflation that has been created through excess credit and money added to our financial system. All of these related financial bubbles are what is keeping the U.S. economy going. The fact that P/E multiples on the major indexes are now at 96 on the NASDAQ, 23 on the S&P 500, and 21 on the Dow Industrials is another manifestation of inflation. Just as increased demand raises the price of goods, excess demand for securities raises their price. In this case, the price of bonds goes up lowering their yield and the price of stocks goes up leading to higher market multiples.

The U.S. economy has morphed from a manufacturing economy to a service economy and finally to a financial economy consisting of multiple asset bubbles. It has been one reason why job growth in this latest recovery has been so anemic. Money and credit are no longer going into the real economy in the form of new investment in plant and equipment which would create new jobs. Instead credit and money creation is fed into the financial markets leading to multiple asset bubbles in the stock and bond markets and real estate.

There's Only One Way Out

Given this new aspect of America’s economic life and the fact that the Fed and the government have no inclination to live within their means or curtail rampant money creation, new asset bubbles are going to be inevitable. While one asset bubble may deflate as was the case in the NASDAQ and tech stocks from 2000-2002, other asset bubbles in bonds, mortgages, and real estate took its place. The only thing that can force a government to balance its budget or prevent a central bank from issuing endless money is to limit the power to create money. That is possible only when the money unit of a country is backed by gold and silver. With gold and silver backing the monetary unit, the government is totally dependent on the taxpayer for every dime it spends. Tax rates would be far higher in order to support the government’s voracious appetite for spending. It citizens might not be as willing to accept tax rates that border on slavery.

Inflation is nothing more than an extension of tax rates through other means. Inflation then is a hidden tax. Deficits and taxes are really the twin pillars of the welfare state. It gives the appearance that government benefits are free, making government out to be a benevolent Santa Claus.

What We Can Expect

Printing Presses in Overdrive
Since governments are addicted to spending money and central banks exist only to create new money and credit, additional asset bubbles are inevitable. Since the U.S. economy is now a financially-driven economy, we can expect more money and credit to find its way into other asset classes. In a financial economy such as the U.S. where a disproportionate share of capital is invested in the capital markets, additional credit leads to speculative bubbles. Greenspan/Bernanke & Co. have argued that the Fed has unlimited ability to create unlimited amounts of new money (helicopter money) and intervene endlessly in the financial markets to support asset prices of stocks, bonds, or real estate. Therefore as long as this ability isn’t curtailed through constitutional means or through gold and silver backing, the Fed can create sufficient quantities of money to bail out any financial entity be it a bank, hedge fund, or government enterprise such as Fannie and Freddie.

Currency Depreciation
What we’ve seen so far is financial asset inflation in the form of rising stock and bond prices. More recently this asset inflation has spilled over into the housing markets. Looking at the rise in commodity prices and the cost of goods and services, it appears that money and credit are feeding into hard goods. Judging the policy decisions of Asian, European, and especially the U.S. central bank to expand the supply of money and credit, further currency depreciation is inevitable globally.

Asset Bubbles in Natural Resources
What I believe that we will see later this year is that the price of gold and silver will begin to appreciate against most major currencies and not just the U.S. dollar. Therefore if one views the current rate of monetary debasement, I believe the next asset bubbles will take place in the natural resource sector. Commodities and especially the precious metals are only in the beginning stages of a new bull market. The charts of the CRB Index, energy and precious metals are tell tale signs of the coming boom in natural resources. We are close to the second phase of the boom when institutions recognize that they have been fooled.

Higher Interest Rates
The bond and currency markets are waking up to the fact that they have been fooled. A downward adjustment in the exchange rate of the dollar is the next big crisis that will shake the financial markets this year. Already, Pimco’s Bill Gross the manager of the world’s largest fixed income fund has indicated he may no longer be as accommodating. In his recent Investment Outlook “The Last Vigilante” states:

”My point is that at some point on this seeming never ending ascent of debt/GDP, someone will say “no mas”. Maybe it’ll be Pimco and Pimco think-alikes; maybe it’ll be foreign holders of bonds grown tired of currency/inflationary erosion of principal; maybe it’ll be risk takers in high yield/ emerging market/ levered hedge funds scared to death from a future LTCM crisis. Hard to tell, but I’m telling you it’ll will happen, helicopter or no helicopter and with it will come an economic slowdown/recession unseen since at least the early 1980s when Volcker began his vigil. High Noon”. [1]

In addition to shortening maturities anticipating higher interest rates, Pimco has also started a commodity fund. Want to know where the next bubble is surfacing, look seriously at “things” or commodities. The bubble has only begun to inflate in what looks like a decade-long or longer bull market.

Today’s Markets

We’re off to the start of what could be another losing week for equities with the possibility of high drama this week on Capital Hill. Mr. Greenspan testifies before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday. Friday the U.S. releases trade deficit figures for the month of December. Experts are forecasting that the trade deficit widened to $40 billion in the month of December.

The financial markets will be dissecting every word the Chairman makes for an elaboration or clue to future Fed intentions. The Fed has indicated that monetary looseness won’t last forever. Just how long it will last is a big question that the financial markets will like answered.

In trading today shares of oil services, integrated oils, gold and biotechnology stocks were the big winners. The shares of the energy sector rose despite downgrades by analysts.

The dollar had meager gains against most currencies. Meanwhile gold futures closed at a 8-session high. The price of gold rose $3.20 to close at $407.40 on ounce on the New York Mercantile Exchange. Silver jumped $.15 to finish at $6.428. Oil prices rose $.35 to close out the session at $32.83.

Volume on the NYSE was 1.3 billion and 1.7 billion on the NASDAQ. Market breath was positive by 18-14 on the Big Board and was negative by 18-14 on the NASDAQ.

-- posted by MarketVVizard

Top 903. Feb 10, 2004 2:52 PM

» Laangaan - Re: GDP/CPI games

In response to message posted by MarketVVizard:

This is an excellent writeup on inflation and TIPS. Investing in TIPS never really made great sense to me for about the same reasons.

I especially applaud this part, not least because it gave a new word, to me atleast:

"Hedonics: 'miracle' tonic for an ailing economy For those of you who don't know, hedonics is the way the government transforms price declines into quality improvements. To wit, you buy a PC with twice as much power, so the government concludes that you really paid only half as much money for it. Hedonics is also the government's way of taking quality improvements and converting them into price declines when calculating the CPI. Sure, that brand-new Chevy you just bought cost 40% more than it used to, but it's a 40%-better car for a variety of reasons. So, the government says, the price didn't really go up. (I have oversimplified these examples, but you get the point.)

The idea behind the first case at least makes some sense, though the government carries it too far by acting as though improvements can be precisely measured. The problem with the second case is that those quality improvements are not voluntary. Since you have to pay the new price, it's sheer silliness to say that the price really didn't go up."

Well said. The Chevy, meanwhile, does no better than getting you from point a to b, but so does the older heap it replaced ,albeit without the cd dvd gps , built-in massager seat etc. And as you point out there is an involuntarineess
to some of this. I wonder what rate would be assigned inflation if they took this fancypants 'hedonics' out of it?

Gasoline prices, by contrast have remained a bargain over many years, during which time the price of cars soared. Yet which product gets speared by pundits whenever prices go up awhile?
Petrol! Always. The oil companies got accused of price-gouging all those years , while auto prices climbed relentlessly, all the while telling us how much more we were getting, much of which we could have done without. Meanwhile oil prices remained level over a generation. It has been a remarkable misplacement of complaint.

The Templeton comment is a good reminder. And I imagine he wouldn't say that a bit of deflation could not occur along the way to the inflating.

-- posted by Laangaan

http://www.koreaherald.co.kr/SITE/data/h...

Top 904. Feb 10, 2004 4:39 PM

» Austrian - Re: Re: Gerhard Schroeder

In response to message posted by Normxxx:

I think a more insightful article is:

Chancellor Gerhard Schroeder's resignation as chairman of Germany's Social Democratic Party will deeply affect the distribution of forces within the German government and its slim "Red-Green" majority in Parliament. While it seems to be premature to speak, as some in Germany now do, of a "Twilight of the Chancellor" or to call Schroeder's surprising step the beginning of the end of his tenure, it is perfectly correct to describe it as a dramatic loss of power.

The immediate winner is Franz Muentefering, age 64, the SPD's parliamentary floor leader who will succeed Schroeder as party chairman. Both politicians will constitute a tandem, but Schroeder will be more dependent on Muentefering's loyalty than Muentefering depends on Schroeder's success.

Schroeder has been representing a moderately left political platform and agenda, one comparable to British Prime Minister Tony Blair's New Labour philosophy or former U.S. President Bill Clinton's centrism. Muentefering, however, is more attached to traditional Social Democratic (or Old Labour) values. In terms of leadership style, Schroeder is a soloist; Muentefering a team player.

In Germany, the chancellor holds the strongest position among the key political players. However, the main source of any German chancellor's strength is not to be found in the legal powers conferred upon him by the constitution; it is the actual support he holds within his own party.

With one notable exception in the 1950s, none of Germany's two main political parties - the Social Democrats and the moderately conservative Christian Democrats - has ever managed to win an absolute majority in Parliament. As a consequence, German chancellors usually preside over coalition governments and their effective authority is based on the loyalty of the party forces they command within such political alliances.

Although the Social Democrats never really liked Schroeder - they certainly do not love him in the way they did the unforgettable Willy Brandt - they willy-nilly followed him so long as he was perceived as the only guarantor of electoral success after 16 frustrating years (1982-1998) in opposition to Helmut Kohl. But this is no longer the case. Since the end of 2002, Schroeder and the SPD have been facing unusually low public approval ratings and this pattern is not likely to change soon.

In 2003 alone, almost 40,000 Social Democrats left their party, a hemorrhaging previously unheard of. If national elections had, say, been held last Sunday, Feb. 8, a center-right coalition consisting of the Christian Democrats and the Liberals would have won 57 percent of the vote, according to "Infratest dimap," one of Germany's main polling institutes. With no more than 35 percent of the vote, Schroeder's "Red-Green" coalition would have suffered a disaster.

At the beginning of what has been dubbed a super election year in Germany - with 14 elections, one at the European, five at regional and eight at the local levels - this is hideously bad news for the SPD.

Several times before, Schroeder had been thoroughly energized by desperate situations when he stood with his back to the wall. This quality is his greatest strength, and it seems he has now embarked on his riskiest counteroffensive ever.

It is based on the bet that there will be a considerable economic upswing from mid-2004 onwards until the next national elections in autumn 2006 and that voters will attribute the expected recovery to the economic, labor market and welfare state reforms called "Agenda 2010" that Schroeder has made the hallmark of his chancellorship.

For a long time, Schroeder's reformist rhetoric had not been matched by his politics. Only after his reelection in autumn 2002, did he give up his previous populist stance, short-term responses and neo-corporatist ways of trying to talk trade unions and employers' associations into compromise.

In view of Germany's most pressing problems - an accelerating demographic decline, an overregulated labor market and a cloudy and confusing tax system - Schroeder's reform agenda may look far too timid, but many cuts have been perceived as extremely cruel by the SPD's core constituency, especially the powerful labor unions.

But, given Germany's economic distress which looks likely to worsen due to the country's demographic problems, the Social Democrats are now condemned to give wealth creation priority over redistribution. Germany cannot afford to slow down or, worse yet, stop the reform process.

In the best case scenario, Schroeder will therefore stick to the "Agenda 2010" philosophy and Muentefering will patiently explain to a reluctant SPD that you have to cross the desert in order to make it to the Promised Land. In the worst case, Schroeder will lapse back into populism for the sake of short-term electoral success, and Muentefering will confirm that method so as to save the wounded Social Democratic soul from total despair.

Schroeder's tragedy is that his power may further erode whatever way he chooses. At the end of this current "super election year," we will know the answer.

-- posted by Austrian

Top 905. Feb 10, 2004 7:28 PM

» MarketVVizard - 5 HOT Startups

OK, it was originally 12 but 7 of them were stupid.

NitroCision
IDAHO FALLS, ID

BIG IDEA: Mop up radioactive and industrial waste without chemicals. Ever watch a pressure washer strip a deck down to bare wood in a few minutes? Now imagine a jet of supercooled liquid nitrogen shooting out of that hose at up to 60,000 psi. It could blast the paint off sheet metal or scour burnt fuel from a shuttle booster rocket -- and afterward the nitrogen would simply evaporate. Such is the explosive efficiency of NitroCision's NitroJet, a breakthrough technology with applications ranging from industrial cleanup to precision cutting. The key advantage: NitroJets create none of the secondary sludge or costs associated with conventional corrosive agents.
Founder: Ron Warnecke, formerly a manager of regulatory compliance at Westinghouse Electric.
Funders: Warnecke and another private backer, for a total of $3.5 million.
Reason to believe: NASA already uses NitroJets to clean shuttle boosters, and several high-profile nuclear power plants have placed orders. Warnecke says he'll triple his clientele this year, push sales up to $10 million, and announce his first profit by spring.

Satiety
REDWOOD CITY, CA

BIG IDEA: Replace risky stomach-stapling surgery with a safe outpatient procedure. Shrinking the stomach is the only permanently effective weight-loss method, yet the surgery comes at an excruciating cost -- three out of a thousand patients die as a result of the operation. Satiety gives doctors an alternative: Instead of slicing open the abdomen, they send a long, flexible device down the throat. It grabs opposite sides of the stomach lining, holds them together, and inserts a line of staples to partition and shrink the active portion of the stomach down to the size of a golf ball. The procedure takes 30 minutes.
Founders: The company emerged from medical-device incubators Fogarty Research and the Foundry in 2001.
Funders: ABS Ventures, Morgenthaler Ventures, Three Arch Partners, and Venrock Associates; $17 million in two rounds.
Reason to believe: Satiety's outpatient procedure will cost about 75 percent less than the current $28,000 tab for stomach stapling. The lower price and reduced risks could open up the procedure to a bigger market than just the morbidly obese. The company hopes to start clinical trials this year.

Postini
REDWOOD CITY, CA

Seventy-five percent of all e-mail aimed for corporate computers today is spam -- up from 50 percent just a year ago. Anti-spam software sales, which topped $650 million in 2003, are expected to nearly double by 2005. No wonder more than 10 venture-backed software startups have joined the resistance.
But Postini holds an edge over rivals in both its effectiveness and its business model. Instead of selling yet another application for the IT department to install, Postini operates an outsourced service: It routes inbound e-mail traffic to its own army of servers, which, in a few milliseconds, scan for spam DNA. Just as important, Network World rates Postini as 94 percent successful in blocking spam -- a wide margin over the estimated industry average of 80 percent.
Founder Scott Petry and CEO Shinya Akamine were among the earliest to jump into the market, leaving positions at Cygnus Solutions, an open-source software firm, to launch the company in 1999. Since then, Bessemer Venture Partners and August Capital have served up over $36 million in funding, and the company continues to attract blue-chip clients: Circuit City (CC) and Merrill Lynch are among the more than 2,000 customers for whom Postini handles over 1 billion e-mail messages per week.

Movaz Networks
NORCROSS, GA

BIG IDEA: Build networking equipment that will let phone and cable companies go completely optical, and sell it for less than established vendors. Carriers are in a race to build optical networks within metro or rural areas. Optical networks allow them to unify their disparate voice, video, and data networks and charge more for new and enhanced services. While Movaz has plenty of competitors, the startup's equipment has a crucial advantage: It is designed to work on any type of network.
Founders: CEO Bijan Khosravi, who co-founded phone network equipment maker Siara Networks, and chief development officer Farr Farhan, who was vice president for engineering at Scientific-Atlanta.
Funders: Anschutz Investment, Menlo Ventures, Meritech Capital, and Oak Investment Partners, among others; $130 million in three rounds.
Reason to believe: Rapid growth is already occurring. Sales more than tripled last year to over $40 million, as Movaz snatched deals away from its more established rivals. It now sells to 40 customers, including America Online, Nippon Telegraph & Telephone, and Taiwan's Chunghwa Telecom.

Five Prime Therapeutics
SOUTH SAN FRANCISCO, CA

BIG IDEA: Accelerate the development of hit drugs. Of the 30,000 proteins produced by the human body, only a few thousand have the potential to be marketable drugs -- but first they must be isolated and their precise functions uncovered. Until now, scientists have screened proteins one at a time -- a process that takes millions of dollars and years of research. Five Prime Therapeutics's proprietary process can test hundreds of proteins at once, allowing the company to generate new drug leads "on a scale and in a time frame that's unprecedented," claims CEO Gail Maderis.
Founder: Lewis T. "Rusty" Williams, former R&D chief at Chiron and founder of Cor Therapeutics, which was acquired by Millennium Pharmaceuticals for $1.8 billion in 2002.
Funders: Kleiner Perkins, Versant Ventures, and other VCs put in $30 million.
Reason to believe: The startup put its drug-screening system to work on a large scale for the first time in November, targeting proteins related to cancer, Type 2 diabetes, and autoimmune diseases such as rheumatoid arthritis. With Williams's track record, the drug industry will be paying close attention. And Five Prime won't lack for rich business partners when the time comes to license its drug leads.

-- posted by MarketVVizard

Top 906. Feb 10, 2004 7:38 PM

» Normxxx - Re: Looking For The Next Bubble

In response to message posted by MarketVVizard:

Yes, Wiz. There is probably in excess of 5% inflation in the system-- in domestic products (RE, Healthcare, Education, Other Services, International Commodities, etc.) But there is also in excess of 5% deflation in manufactured products from Asia, whose currency is pegged to the dollar.

That's what makes this "near 0% (net) inflation" so dangerous. It is a balance of nearly equal forces, which at any moment can explode into inflation or deflation. So far, the world is opting for inflation as the lesser evil (especially in our profoundly indebted societies), but we don't always get what we want. If OBL decides to take out the Saudi oil fields tomorrow-- and oil shoots to over $100 a barrel, the resulting deflationary (or inflationary) depression will be like nothing that ever happened before. History may rhyme, but it doesn't repeat.

-- posted by Normxxx

Top 907. Feb 10, 2004 7:40 PM

» MarketVVizard - Saddam Supporters Received Lucrative Oil Contracts

WOW - I don't know HOW this story went unnoticed considering it broke almost 2 weeks ago (must be an election year?) Apparently we have a highly sensitive list that NAMES NAMES of the recipients of Saddam's bribes. Most on the list come as no surprise as this is also the "who's who of Saddam supporters" before/during/after the war. The no war for oil crowd in the US got JIPPED, they could have been making good money.

Saddam’s Gifts

Document: Saddam Supporters Received Lucrative Oil Contracts

By Brian Ross

Jan. 29 — ABCNEWS has obtained an extraordinary list that contains the names of prominent people around the world who supported Saddam Hussein's regime and were given oil contracts as a result.

All of the contracts were awarded from late 1997 until the U.S.-led war in March 2003. They were conducted under the aegis of the United Nations' oil-for-food program, which was designed to allow Iraq to sell oil in exchange for humanitarian goods.

The document was discovered several weeks ago in the files of the Iraqi Oil Ministry in Baghdad.

According to a copy obtained by ABCNEWS, some 270 prominent individuals, political parties or corporations in 47 countries were on a list of those given Iraq oil contracts instantly worth millions of dollars.

Today, the U.S.Treasury Department said that any American citizens found to be illegally involved could face prosecution.

"You are looking at a political slush fund that was buying political support for the regime of Saddam Hussein for the last six or seven years," said financial investigator John Fawcett.

Investigators say none of the people involved would have actually taken possession of oil, but rather just the right to buy the oil at a discounted price, which could be resold to a legitimate broker or oil company, at an average profit of about 50 cents a barrel.

List Includes Prominent Names

Among those named: Indonesia President Megawati Sukarnoputri, an outspoken opponent of U.S.-Iraq policy, who received a contract for 10 million barrels of oil — about a $5 million profit.

The son of the Syrian defense minister received 6 million barrels, according to the document, worth about $3 million.

George Galloway, a British member of Parliament, was also on the list to receive 19 million barrels of oil, a $9.5 million profit. A vocal critic of the Iraq war, Galloway denied any involvement to ABCNEWS earlier this year.

"I've never seen a bottle of oil, owned one or bought one," Galloway said in a previous interview with ABCNEWS.

According to the document, France was the second-largest beneficiary, with tens of millions of barrels awarded to Patrick Maugein, a close political associate and financial backer of French President Jacques Chirac.

Maugein, individually and through companies connected to him, received contracts for some 36 million barrels. Chirac's office said it was unaware of Maugein's deals, which Maugein told ABCNEWS are perfectly legal.

The single biggest set of contracts were given to the Russian government and Russian political figures, more than 1.3 billion barrels in all — including 92 million barrels to individual officials in the office of President Vladimir Putin.

Another 1 million barrels were contracted to the Russian ambassador to Baghdad, 137 million barrels of oil were given to the Russian Communist Party, and 5 million barrels were contracted to the Russian Orthodox Church.

Also on the list are the names of prominent journalists, two Iraqi-Americans, and a French priest who organized a meeting between the pope and Tariq Aziz, Saddam's deputy prime minister.

The following are the names of some of those who, according to the document, received Iraqi oil contracts (amounts are in millions of barrels of oil):

Russia
The Companies of the Russian Communist Party: 137 million
The Companies of the Liberal Democratic Party: 79.8 million
The Russian Committee for Solidarity with Iraq: 6.5 million and 12.5 million (2 separate contracts)
Head of the Russian Presidential Cabinet: 90 million
The Russian Orthodox Church: 5 million

France
Charles Pasqua, former minister of interior: 12 million
Trafigura (Patrick Maugein), businessman: 25 million
Ibex: 47.2 million
Bernard Merimee, former French ambassador to the United Nations: 3 million
Michel Grimard, founder of the French-Iraqi Export Club: 17.1 million

Syria
Firas Mostafa Tlass, son of Syria's defense minister: 6 million

Turkey
Zeynel Abidin Erdem: more than 27 million
Lotfy Doghan: more than 11 million

Indonesia
Megawati Sukarnoputri: 11 million

Spain
Ali Ballout, Lebanese journalist: 8.8 million

Yugoslavia
The Socialist Party: 22 million
Kostunica's Party: 6 million

Canada
Arthur Millholland, president and CEO of Oilexco: 9.5 million

Italy
Father Benjamin, a French Catholic priest who arranged a meeting between the pope and Tariq Aziz: 4.5 million
Roberto Frimigoni: 24.5 million

United States
Samir Vincent: 7 million
Shakir Alkhalaji: 10.5 million

United Kingdom
George Galloway, member of Parliament: 19 million
Mujaheddin Khalq: 36.5 million

South Africa
Tokyo Saxwale: 4 million

Jordan
Shaker bin Zaid: 6.5 million
The Jordanian Ministry of Energy: 5 million
Fawaz Zureikat: 6 million
Toujan Al Faisal, former member of Parliament: 3 million

Lebanon
The son of President Lahoud: 5.5 million

Egypt
Khaled Abdel Nasser: 16.5 million
Emad Al Galda, businessman and Parliament member: 14 million

Palestinian Territories
The Palestinian Liberation Organization: 4 million
Abu Al Abbas: 11.5 million

Qatar
Hamad bin Ali Al Thany: 14 million

Libya
Prime Minister Shukri Ghanem: 1 million

Chad
Foreign minister of Chad: 3 million

Brazil
The October 8th Movement: 4.5 million

Myanmar (Burma)
The minister of the Forests of Myanmar: 5 million

Ukraine
The Social Democratic Party: 8.5 million
The Communist Party: 6 million
The Socialist Party: 2 million
The FTD oil company: 2 million

-- posted by MarketVVizard

Top 908. Feb 10, 2004 9:13 PM

» F111Star - Re: Saddam Supporters Received Lucrative Oil Contracts

In response to message posted by MarketVVizard:

Wait! Wasn't the UN supposed to ensure that all of Iraq's oil profits were used to purchase food and medicine? Your list suggests that Kofi Anus has again been derelict in his duty.....

-- posted by F111Star