Invest more, and replenish, Wall Street is in trouble. This is your fault.
Posted on 07/18/2002 11:01:35 PM PDT by Uncle Bill
What a magnificent collection of quotes.
I wonder who it was tried to save the seasoned stockbroker?
Donald ... you hear about the plans for the pet mortuary (or crematorium) by some of the old Pinnacle folks?
The Happier Hunting Ground, I guess.
Bankruptcy Crisis Is Worldwide
WEISS COMMENTS - "In just the second quarter of 2002, according to Standard & Poor's, 56 companies worldwide defaulted on $52.1 BILLION in debt. That's the most money ever defaulted on in a single quarter!"
LOL -- I remember a couple of years ago when I was looking for this quote online. I did a search on the words "crouch, lick, chains, posterity." You can imagine what I found -- quite a shock!
Carolyn
We have to have an economic system , so why not the federal reserve ?
People are in business to make profits and as long as they are making profits , some of us will work.
The working class and the poor have been sacrificed for the elites gain , for thousands of years so why is today different?
I was talking with my best friends just last night about Enron , Worldcom , and Halliburton. They pretty much said "Yeah , but would you want to live anywhere else in the world."
Needless to say being humbled by their personal knowledge , I was shocked.
How could these good , knowledgable people accept servitude from crooks. Granted it has been this way since almost forever. With a few working class uprisings and some elite sacrifices.
They agreed that many of us have and will die for the elites betterment , but said it's better to be ruled by our elites than the likes of saddam.
I thought to myself for awhile and could envision that kind of existence , but only if there was no God.
Now what?
I believe in my Heavenly Father and His Son , Jesus Christ so how do I deal with this.
Do I accept these men over my God , no. Therefore I have only one King.
Are these men better than me and therefore deserve my voluntary servitude and acceptance of a lesser degree of life , no. Therefore my life is just as important as theirs.
Do they have the right to destroy Gods' world for their own profit , no , none of us do.
Do they hold a higher claim to the worlds resources and a right to reign over Gods' people , no. And neither did Ceasar.....
So why do we accept the tear down of our country which we are told is based on faith in God , turning it into the same kind of country as the countries around the world that we are glad not to be apart of ?
The answer is "we" have accepted man over God and are going to pay the price , just like the Bible says.
But is that the way it has to be ? No!
We can stand up with Christ and put these puppets and the money changers they work for in their place , just as Christ did to the moneychangers in front of Judah's Temples.
Christ was and is our example of what a Christian is.
Did Christ wait for His Father to do the things He knew He should do ? NO!
And neither should we.
If You are willing to allow the pagans to rule over You , then You shall die as they do.
How brave we are hiding in our state churches , pretending to worship our King. All we do is give God lip service , while we humble ourselves before the elites.
Peter , Peter , where are you Peter.
there is a point in the article worth looking at: the wealth recently lost in the stock market is going to decrease government revenues because there are no capital gains to be taxed. this will definitely hurt bush.
but is bush to blame? i think not. when all is said and done, the clinton administration will be faulted for knowingly let certain corrupt business practices go on in the 1990s. rubin knew of this, i am sure. clinton knew too. he also knew that if he prosecuted like the bush administration is doing, then the stock market would have gone down on his watch -- not good for the democrats trying to retain power. also not good for trying to raise money to implement your socialist programs. carville almost had it right; he should have said, "it's the stock market, stupid."
Investors Pulled $18B From Stock Funds in June
U.S. government to borrow another $76 billion
Trust Shattered, Wall Street Can't Afford Coincidences
Qwest Officials Made Millions in Stock Sales
"Executives at Qwest Communications International made about $500 million selling company stock from 1999 to 2001 while they were releasing profit numbers that the company now says were exaggerated and based on improper accounting."
U.S.: The Economy Looks Solid, but Investors Don't Really Care
Monday, 07/29 Market Wrapup (Pumpin' Up The Financial Sector)
Asia Parties on After Wall Street Bash
Come on Down and Meet Your Maker
The New Pinch From Pensions
Companies must pour billions into retiree plans after betting on stocks
By David Henry in New York, with
David Welch in Detroit,
Michael Arndt in Chicago, and
Amy Barrett in Philadelphia
NEWS: ANALYSIS & COMMENTARY
August 5, 2002
Source
Amid the wreckage of the worst bear market in at least three decades, hemorrhaging corporate pension plans are rapidly becoming Wall Street's biggest new worry. They have lost hundreds of billions of dollars, and now companies face the end of their long-running holiday from writing checks to the plans. Over the next 18 months or so, companies ranging from General Motors to United Technologies face having to pump billions into their plans to comply with federal laws to protect pensioners.
Even if plan investments somehow manage to eke out 5% returns this year, companies in Standard & Poor's 500-stock index will be $40 billion short of their projected pension obligations, according to Morgan Stanley estimates. If plans lose 5%, they'll be $150 billion in the hole. Either way, it is a world away from 1999 when the plans had a $292 billion surplus and a 30% cushion over their commitments. "The squeeze on U.S. pension funds has the potential to be the defining U.S. financial crisis of the 2000s, like the savings and loan squeeze of the 1980s," says Bob Prince, director of research and trading at money manager Bridgewater Associates.
The economic consequences of the squeeze could extend far and wide. Cash that companies earmarked for buying new equipment, expanding markets, hiring employees, buying back stock, or repaying debt will have to be used to shore up pension plans. The shift will be another downer for stock prices, cutting out spending that used to boost growth in earnings per share. And the impact will soon be felt.
Under government rules, some companies must start making up for 2001 shortfalls by the end of this year. For others, the bites will start in 2003 or 2004. "Some companies are going to be contributing for the first time in 10 years," says John Ehrhardt, a principal and consulting actuary at Milliman USA Inc. "In thinking about capital expenditures, there is a new party at the table, the pension plan."
Old-line companies or those with large unionized workforces will be particularly hard hit because they have large defined-benefit plans--ones offering guaranteed payouts to pensioners. The biggest obligations are among auto, telephone, airline, steel, chemical, and pharmaceutical companies. For example, if plans lose 5%, United Technologies (UTX ) could have to cough up $1.4 billion in 2003, Delphi (DPH ) $1 billion, and AMR (AMR ) $415 million, according to the Morgan Stanley estimates. The companies say they're stepping up infusions sharply, but doubt they'll need to put in as much as quickly as some estimates. United Technologies Corp. says it recently contributed $247 million worth of its own stock to its plans. Delphi Corp. says it is putting in at least $200 million a year for the next five years, but concedes that won't be enough if its investments don't appreciate 10% a year. AMR Corp., parent of American Airlines, says it intends to make larger contributions than in the past, but won't say how much. General Motors Corp. (GM ), which has the biggest pension plan of all, with $80 billion in obligations, disclosed July 16 that it expects to put $9 billion into its plans by 2007.
How did companies paint themselves into such a corner? It was more than bad luck. They made a bold bet during the 1990s that stock prices and interest rates would move in opposite directions, as they have nearly every year since the Great Depression. The relationship is crucial to pension funds because when interest rates go down, government rules require the plans to have bigger pools of investments to meet future obligations. That can only happen if stocks rise or companies put more money into the funds.
For years, the tactic worked like a charm as fund assets went up while their liabilities increased. Companies became confident about putting more of their pension assets into stocks than before. The resulting investment gains during the bull market more than covered most of the payouts they made to current retirees, averaging about 7% of the funds' total values. Better yet, accounting rules allowed companies, quite legally, to boost their reported earnings by billions with higher projected investment gains because they were holding more stocks. Some, again quite legally, were able to actually tap the surpluses to help pay retiree medical expenses and even merger consolidation costs.
Lately, however, the bet has turned sour. Stocks--in which a record 60% of fund assets were invested in early 2000--have gone down in the bear market, as have interest rates. The result: Funds' assets have plunged at the same time that their liabilities have soared. The pincer movement has wiped out surpluses racked up during the long-running bull market, and then some.
The reversal has been fast and furious. As recently as 1999, nearly 78% of the plans at S&P 500 companies had surpluses. But by the end of this year, less than 26% will have one. And workplace demographics are making matters worse. With average lifespans lengthening, more plan beneficiaries are retiring than dying. So cash to pay benefits is draining out of the weakened funds as never before. Besides, the funds are dwindling as new workers are put into defined-contribution plans such as 401(k)s, in which employees, not the company, take all the investment risks.
With impending cash calls, the stock market is getting a double whammy from corporate pension plans. The first battering came late last year when investors realized companies had inflated their reported earnings by exploiting loopholes in accounting rules. By making overly optimistic assumptions about future investment returns, companies were able to puff up earnings by some 10% even though the maneuver generated no new cash. Now, investors are being side-swiped again. This time, reported earnings aren't affected even though real cash exits to the pension plans.
The fear is that nobody but the companies knows exactly how big the cash calls will be. Companies hardly ever disclose anything in their Securities & Exchange Commission filings about the impact of the government pension rules on them. "The specific calculations are impossible to get right with publicly available data," says Trevor S. Harris, accounting analyst at Morgan Stanley. That is important because it means investors can't accurately predict corporate cash flows. Milliman's Ehrhardt, who helps companies navigate funding rules, says many companies know more about the coming cash calls than they have been telling. For investors' sake, "opening up the book on funding strategy is where companies should be going," he says.
Some companies may have reasons for not showing their cards. Ehrhardt says many that have cash on hand are putting more money into their plans even when the government rules don't require it. One big appeal: Executives get to figure the additional assets into their estimated investment returns in their reported earnings. If they are estimating 10% investment returns, a $100 million contribution will boost operating income by $10 million, which is more than many believe they can earn elsewhere right now. Also, they can often get tax deductions for the payments. And thanks to a recent change in tax law, they can sometimes contribute to overfunded plans without suffering penalties.
Meantime, by making estimates based on the numbers companies do report, Harris and other analysts are scoping out the ailment and the most seriously diseased companies. For example, Harris figures that if the Delphi plan's investments end this year with even a 5% loss, its remaining assets will be enough to fund just 65% of its $8.4 billion in obligations. Besides the $600 million Delphi should put in this year, government rules suggest it would need to put in an additional $1 billion next year.
John G. Blahnik, treasurer at Delphi, says the company is being "open and frank" in earnings conference calls about the cash needs of its pension plans. But like most companies, Delphi is presenting its assessments on its own terms, without regularly reporting all the assumptions that go into its estimates. Blahnik says Delphi recently doubled its contributions to the plans, to $400 million this year, to try to get it back on track. Assuming the plan's assets earn 10% a year, he intends to put in at least $200 million, taking advantage of some extra time Delphi earned under government rules for contributions made in the past.
Worries about pension plans sucking cash out of companies are increasingly catching Wall Street's attention. They were a factor in the downgrade of GM's credit rating last fall by Standard & Poor's, and they are in part to blame for its stock falling 34% since mid-May. GM's forecasted $9 billion in makeup payments through 2007 compare with $3.6 billion in cash flow the company is expected to generate this year after dividends, interest, and capital expenditures. To help fund a $2.2 billion payment this year, the company sold convertible debt in April. GM may have to repeat that operation in the future. "We're going to have to put in more cash than we planned," says Vice-Chairman and Chief Financial Officer John M. Devine.
"All companies are going to have to look at their pension plans," warns Patrick D. Campbell, CFO of 3M. His company hasn't decided yet how much cash to pony up, but he doesn't quarrel with Harris' estimates that $378 million will be needed in 2003 if investments lose 5% this year. The company's U.S. and foreign plan assets were 11% short of projected obligations at the end of 2001, according to the company's annual report. And since then, U.S. stocks have fallen another 27%. "Obviously, we're going to have to think this through," says Campbell.
At Raytheon Co. (RTN ), CFO Franklyn A. Caine says he is preparing contingency plans for its funds. He had expected pension assets to earn 9.5% this year. Now, he figures that even if the fund suffers no losses, Raytheon will have to pump in an extra $85 million in 2004. If the fund loses 9.5%, he will have to find an extra $189 million in 2004.
Last year, Maytag Corp. (MYG ) made its first payment in years to its plans, some $65 million, says CFO Steven H. Wood. This year and again next, it will put in $115 million as it tries to make up for the poor markets and for an increase in benefits won by its labor unions. "We think it is prudent to contribute to the plan," says Wood. But he concedes the money would be well spent paying down debt, Maytag's other priority. During the bull market, available money went toward stock buybacks even though the plans were slightly underfunded.
Investors will probably wish for a long time that Maytag and other companies still had the luxury of not tending to their pension plans. The complexity of funding rules, filled with various triggers, allowances, and accelerated payment requirements, will add uncertainty to corporate cash flows for years to come. More complexity and greater uncertainty are the last things that battered investors want.
Dow — Down 30 percent
Nasdaq — Down 75 percent
S&P 500 — Down 44 percent
THE MOB ON WALL STREET
Come on in, lay your bets down
WILLOW CREEK... HEGELIAN DIALECTIC & THE NEW WORLD ORDER - excerpt:
"... For the benefit of those who have not yet heard of the Hegelian Dialectic, let me briefly run through it as taught by Authority Research Center president, Dean Gotcher. The Hegelian Dialectic or "Consensus Process" is a 200 year-old, three-step process of "thesis, antithesis and synthesis", developed in the late 1700's by a german named Georg William Friedreich Hegel that results in what we now know as "group-think". It is a system Dean calls "Praxis" that Socialists have used for centuries to seduce, seize and control mass populations without warfare. It is also in full operation here in the United States under such names as: "Outcome Based Education", "Goals 2000", "Sustainable Development", "School To Work", "DARE" and many more. It's all about embracing "tolerance, diversity and unity" for The New World Order. To put it in layman's terms, it's brainwashing.
Here's how it works: A group gathers, and has agreed beforehand that each in attendance will ultimately surrender his or her own personal position on any given issue to the will or "consensus" of the group after *processing to consensus* through dialog. In a Christian setting, the presupposition is that the group's will determines "the will of God". The group's "facilitator", whoever that may be, mediates between sides, be they "good and evil", "for and against", "republican and democrat", "liberal and conservative", etc., whatever the case may be, often instigating heated confrontations between the opposing sides for the purpose of suggesting compromise as the perfect solution to restore and maintain the peace and the relationships of everyone involved.
The resulting outcome or *consensus* is then re-introduced if necessary, at the next meeting for more "Praxis", more dialog and more compromise until another "consensus" is reached. Then the "process" repeats all over again...and again...and again until the facilitator's desired outcome is achieved. Over time, the convictions and concerns anyone may have had originally are processed away beyond recognition or relevance leaving one and all to accept the facilitator's pre-determined outcome as the consensus of the group. It's no longer a question of what is right or wrong, good or bad, lawful or unlawful, but rather HOW WE ALL FEEL ABOUT IT...no absolutes, no conscience, no convictions, no laws, no Constitution, no Bible and NO GOD!!!...only consensus....and a contrived consensus at that. Pretty slick huh? That's the Hegelian Dialectic.
...
One of the most damning aspects of Willow Creek and the whole Church Growth Movement is the hypocrisy that makes up its very foundation and operation. Having its members sign covenants, (which is expressly forbidden by Holy Scripture), saying they will not criticize or complain about the church or its leadership is not just socialism ("tyranny with a smile"), but a coup de tat of the church and its Divine mission. Willow Creek was formed, as are its member churches by surveying the lost and unchurched in each of their respective communities to gather a consensus of what those specific people DO NOT LIKE ABOUT CHURCH that one may be built and/or designed to suit them. So, the Children of God are to essentially shut up while the inmates run the asylum for the hierarchy! I think the appropriate word here would be subterfuge.
The Willow Creek Association through its member churches have in effect silenced the Body Of Christ and provided pagans, new-agers, atheists, socialists, communists, Marxists, humanists, homosexuals, feminists and liberals in general thousands of sterilized venues where they can come and present their "felt needs" to those with open arms and open minds.
By creating a politically correct environment for them to work in the UN can now steer Christians and their new church of tolerance, diversity and unity right into global governance. (Just like socialists have already done with the federal government, public education, the media, military, law enforcement and business community.) This is just another of the many shrewd ways the UN is successfully conquering our country through attrition. It's the Gramsci strategy at work.
By meeting the so-called "felt needs" of the godless, THEIR voices are heard, THEIR philosophies are made known, THEIR music is played, THEIR religion is taught, THEIR ideologies are discussed and THEIR agenda is carried out virtually unopposed in the corridors, classrooms and worship centers of every "seeker sensitive" church in America. Bottom line is; the REAL students here are the silent, submissive, ignorant, gullible, compromised and compliant Christians who are held at bay by global socialists surreptitiously destroying our religious heritage through the church growth movement.
But its OK cause we're having a GREAT TIME at a GREAT CHURCH, with GREAT PROGRAMS and GREAT MUSIC, in a GREAT WORSHIP CENTER, with a GREAT PASTOR, that tells GREAT STORIES and GREAT JOKES, to a GREAT CROWD before a GREAT GOD! Consequently, the only sinner in a "seeker-sensitive" church is the party-pooper who disrupts the "unity" of the "unequally yoked" by criticizing the UN's doctrine of "tolerance and diversity"." ... Source
Now go back up in this thread and read the quote by Professor Carroll Quigley in #66. See also:
THE HEGELIAN DIALECTIC AND THE NEW WORLD ORDER -- by Joan Veon
Toward the Total State by William Norman Grigg re Gramsci
Who is Antonio Gramsci? You Better Learn!!!
"The dialectical method of Georg Wilhelm Friedrich Hegel (1770-1831) consists of two main steps: the invention of artificial extremes (``thesis'' and ``antithesis'') which superficially conflict with each other, and the synthesis from that conflict of a goal, which is made to appear to be the product of consensus. The artificial extremes are chosen and propagandized (marginalizing the population) in such a way that the goal is naturally synthesized from them. It is, essentially, a trick - a fraud. It is a strategy of ideological divide-and-conquer. The dialectic ruse dissipates the energy and coherency of its targets - unless they recognize the ruse as such.
Hegel was a fountain of awful ideas, liberally cribbed by Marx and Engels, by the sickly and neurologically defective Mary Baker Eddy (founder of the Church of Christ, Scientist, which - as evidenced by its concept of "Malicious Animal Magnetism" - is in fact similar to Scientology), and by the Unitarians (who are historical proponents of universal government schooling in pursuit of socialist
indoctrination). Hegel was an influence on famed phenomenologist Martin Heidegger (1889-1978) (NSDAP#3125894, 1933-May-1) (author of Being and Time (1927) and a critic of Hegel's methods), on French existentialist phenomenologist and Marxist Jean-Paul Sartre (1905-1980) (author of The Transcendence of the Ego (1937) and Being and Nothingness (1943)), and on "spiritualist" utopian
Marxist philosopher Ernst Bloch (Das Prinzip Hoffnung (The Principle of Hope)).
A central precept of the Hegelian ethic is that people are principally motivated by the desire to receive the approval and recognition of others, and to avoid their disapproval. Since this motivation is not predicated on the reasonableness of that approval or disapproval, the principle is a mechanism by which an individual delegates arbitrary control to others. This is, obviously, an enabling principle of collectivism. By encouraging people to embrace this tendency, and amplify it into a preeminent mechanism of decision making, Hegelianism works directly to subvert the individual." ... Source
Mt 24:5 For many shall come in my name, saying, I am Christ;*** and shall deceive many.
Mt 24:11 And many false prophets shall rise, and shall deceive many.
*** or "I am a Christian..."
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