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almsot there now. POO at 46.90. (POO=price of oil, of course)
uh oh. komerade ashcroft sez: anarchists in our midst!
FBI Questioning Political Demonstrators Across US - NYT
08/15/2004
Dow Jones News Services
(Copyright © 2004 Dow Jones & Company, Inc.)
NEW YORK (Dow Jones)--The Federal Bureau of Investigation has been questioning political demonstrators across the U.S., and in rare cases even subpoenaing them, in an aggressive effort to forestall what officials say could be violent and disruptive protests at the Republican National Convention in New York, the New York Times reported in its Monday editions.
FBI officials are urging agents to canvass their communities for information about planned disruptions aimed at the convention and other coming political events, and they say they have developed a list of people who they think may have information about possible violence, the report said.
They say the inquiries, which began last month before the Democratic convention in Boston, are focused solely on possible crimes, not dissent, at major political events, the report said.
But some people contacted by the FBI say they are mystified by the bureau's interest and felt harassed by questions about their political plans, the report said.
"The message I took from it," said Sarah Bardwell, 21, an intern at a Denver antiwar group who was visited by six investigators a few weeks ago, "was that they were trying to intimidate us into not going to any protests and to let us know that, 'hey, we're watching you.'," according to the Times.
The unusual initiative comes after the Justice Department, in a previously undisclosed legal opinion, gave its blessing to controversial tactics used last year by the FBI in urging local police departments to report suspicious activity at political and antiwar demonstrations, the report said.
The bulletins that relayed that request detailed tactics used by demonstrators - everything from violent resistance to Internet fund-raising and recruitment, the report said.
In an internal complaint, an FBI employee charged that the bulletins improperly blurred the line between lawfully protected speech and illegal activity, the report said.
But the Justice Department's Office of Legal Policy, in a five-page internal analysis obtained by The New York Times, disagreed, the report said.
The office, which also made headlines in June in an opinion - since disavowed - that authorized the use of torture against terrorism suspects in some circumstances, said any First Amendment impact posed by the FBI's monitoring of the political protests was negligible and constitutional, the report said.
The opinion said: "Given the limited nature of such public monitoring, any possible 'chilling' effect caused by the bulletins would be quite minimal and substantially outweighed by the public interest in maintaining safety and order during large-scale demonstrations."
Those same concerns are now central to the vigorous efforts by the FBI to identify possible disruptions by anarchists, violent demonstrators and others at the Republican National Convention, which begins Aug. 30 and is expected to draw hundreds of thousands of protesters., the report said.
In the last few weeks, beginning before the Democratic convention, FBI counterterrorism agents and other federal and local officers have sought to interview dozens of people in at least six states, including past protesters and their friends and family members, about possible violence at the two conventions, the report said.
FBI officials would not say how many people had been interviewed in recent weeks, how they were identified or what spurred the bureau's interest, the Times reported.
They said the initiative was part of a broader, nationwide effort to follow any leads pointing to possible violence or illegal disruptions in connection with the political conventions, presidential debates or the November election, which come at a time of heightened concern about a possible terrorist attack, the report said.
FBI officials in Washington have urged field offices around the country in recent weeks to redouble their efforts to interview sources and gather information that might help to detect criminal plots, the Times reported. The only lead to emerge publicly resulted in a warning to authorities before the Boston convention that anarchists or other domestic groups might bomb news vans there, the report said. It is not clear whether there was an actual plot, the Times reported.
(END) Dow Jones Newswires
but today is aug 15th
i think they don't update the nikkei as frequently as the other indices.
actually, they should do that with the dow and the nasdaq too. just let the computers do the simulation and post the closing prices. everyone can go home early. yay!
grrrrr. i suppose this is why there are no politics allowed here! grrrr.
"Would you prefer the President taking political advantage of people's hardship or the thoughtful neglect of the other candidate?"
so u better take political advantage of a situation or else u r accused of being callous and unfeeling? sigh.
we need to put both of these guys in a box until the debates. i'm getting tired of seeing both of them and their staged "adoring fans".
CYBER FEARS ON FED'S WEB PLAN
By HILARY KRAMER
August 15, 2004 -- With little fanfare, the Federal Reserve will begin transferring the nation's money supply over an Internet-based system this month — a move critics say could open the U.S.'s banking system to cyber threats.
The Fed moves about $1.8 trillion a day on a closed, stand-alone computer network. But soon it will switch to a system called FedLine Advantage, a Web-based technology.
Proponents say the system is more efficient and flexible. The current system is outdated, using DOS — Microsoft's predecessor to the Windows operating system.
But security experts say the threat of outside access is too big a risk.
"The Fed is now going to be vulnerable in two distinct ways. A hacker could break in to the Fed's network and have full access to the system, or a hacker might not have complete access but enough to cause a denial or disruptions of service," said George Kurtz, co-author of "Hacking Exposed" and CEO of Foundstone, an Internet security company.
"If a security breach strikes the very heart of the financial world and money stops moving around, then our financial system will literally start to collapse and chaos will ensue."
FedLine is expected to move massive amounts of money. Currently, Fedwire transfers large-dollar payments averaging $3.5 million per transaction among Federal Reserve offices, financial institutions and federal government agencies.
Patti Lorenzen, a spokeswoman for the Federal Reserve, said the agency is taking every precaution.
"Of course, we will not discuss the specifics of our security measures for obvious reasons," she said. "We feel confident that this system adheres to the highest standards of security. Without disclosing the specifics, it is important to note that our security controls include authentication, encryption, firewalls, intru sion detection and Federal Reserve conducted reviews."
Ron Gula, president of Tenable Network Security and a specialist in government cyber security, said he's sure the Fed is taking every precaution. But no system is 100 percent foolproof.
"If the motive was to manipulate the money transferring, there are Tom Clancy scenarios where there are ways to subvert underlying technologies," Gula said. "For example, a malicious programmer can put something in the Fed's network to cause the system to self-destruct or to wire them money."
The biggest concern isn't the 13-year-old who hacks into the Fedwire and sends himself some money — it's terrorism.
On July 22, the Department of Homeland Security released an internal report saying a cyber attack could result in "widespread disruption of essential services ... damag(ing) our economy and put(ting) public safety at risk."
But the Fed's undertaking of this massive overhaul is considered a necessity.
"Our strategy is to move to Web-based technology because there are inherent limitations with DOS based technology and our goal is to provide better and robust product offerings to meet our customers' needs," said Laura Hughes, vice president of national marketing at the Chicago Fed, which has spearheaded this program.
now, speak of the devil ....
Bush Asks 'Good Friend' Putin To Calm Storm Around Yukos
Oil Prices Drive U.S. to Appeal for End to Political Turmoil
By Peter Baker
Washington Post Foreign Service
Saturday, August 14, 2004; Page A14
MOSCOW, Aug. 13 -- Alarmed by record-high election-year oil prices, President Bush in recent days has sent repeated appeals through intermediaries to the man he calls "my good friend," President Vladimir Putin, asking him to calm the politically charged crisis surrounding Russia's giant Yukos Oil Co. in the interest of stabilizing world energy markets.
The Putin government's effort to seize control of Yukos, which pumps 2 percent of the world's crude supply, has helped drive international oil prices to record highs in recent weeks, exacerbating economic anxiety in the United States just 80 days before the Nov. 2 presidential election.
Mikhail Khodorkovsky, the jailed head of Yukos, was arrested in October. Many U.S. officials saw the arrest as selective justice against a political rival of the Kremlin and have expressed concerns on how the Yukos case is being conducted. (Alexander Natruskin -- Reuters)
National security adviser Condoleezza Rice telephoned Putin's chief of staff last weekend to express concern over the crisis's impact on international markets. The State Department on Thursday publicly called on Russia to put aside internal "political considerations" in order to resolve the Yukos matter. Energy Secretary Spencer Abraham called his Russian counterpart Friday to reinforce the message and Commerce Secretary Donald L. Evans planned to do the same, officials said.
"Obviously, from our standpoint, the market seems to respond to any kind of bad news and hardly ever to good news," said a senior U.S. administration official, who spoke on condition of anonymity because it is not his job to brief reporters. "So to the extent they can help remedy this situation, that's good for the market."
It was unclear what, if any, impact the American calls had. Putin has made no comment about Yukos in two months, and his staff has said nothing publicly about the calls by Rice and Abraham.
Russia's oil-dependent economy is enjoying benefits from current prices, which rose Friday to a record $46.58 per barrel, but the country also faces substantial losses if the government's freeze on Yukos bank accounts forces the company to shut down production.
Russia's Federal Energy Agency director, Sergei Oganesyan, told reporters this week that a Yukos shutdown would have drastic consequences and said he was trying to persuade the government leadership to unfreeze the accounts.
U.S. officials said they were not trying to interfere in the legal cases against oil baron Mikhail Khodorkovsky and his company but expressed concern about the way the cases are being conducted.
"In our view, the appearance of a lack of due process and threat to private property rights have resulted in both the Russian and the international business communities being on their guard," State Department spokesman J. Adam Ereli said Thursday.
The concern in Washington underscored the global impact of the battle over Yukos. "It affects everybody in the world now. It's no longer just about [Putin] and Khodorkovsky," said William F. Browder, chief executive of Hermitage Capital Management and one of the leading American investors in Russia.
Other factors are also pushing prices up. Instability in Iraq, soaring demand in China and a national referendum in Venezuela to be held Sunday have all fueled uncertainty. Yukos pumps 1.7 million barrels of oil a day, the same amount Venezuela provides the United States and nearly as much as Iraq produces when its pipelines are operating.
In the Russian case, Bush finds himself at odds with one of his closer overseas allies. Bush has held out his relationship with Putin as a signal achievement of his foreign policy, declaring after their first meeting that he had gotten "a sense of his soul." Their division over the war in Iraq was short-lived, rarely personalized and quickly papered over.
But Khodorkovsky's arrest by masked Russian agents in October troubled many U.S. officials, who saw it as selective justice against a political rival to the Kremlin. The escalating legal attack on Yukos this summer has pushed the matter onto Washington's agenda because of its impact on world oil prices.
"There is an irony and there is a paradox" that Bush's friend Putin would be causing problems for the American president, said Tatyana Parkhalina, director of the Center for European Security Problems, a Moscow research organization. But Parkhalina doubted that Putin would back off just to help Bush. "He will listen, of course, but he will behave as he thinks is right for Russia. Frankly, I don't think Mr. Putin will change his approach toward the Yukos affair."
U.S. involvement could stir resentment in the Kremlin. "All kinds of declarations concerning internal affairs are not welcomed, and from time to time, this creates problems for the image of the United States," said Yevgeny Kozhokin, director of Russia's Institute for Strategic Studies.
Although Democratic presidential nominee John F. Kerry once said many foreign leaders were privately rooting for him, many analysts here feel Putin would not be one of them. He has built a constructive working relationship with Bush, and his advisers say privately that they want to preserve that.
In the view of the Russian political establishment, Republicans have a more pragmatic approach to Moscow than Democrats, unburdened by moralism over human rights abuses, the crackdown on independent media or the war in the southern Russian republic of Chechnya.
"Under the political circumstances now, Republicans are practical to the level of cynicism and take care of geopolitical interests and make more convenient partners than Democrats, who care more about freedom, rights, et cetera," said Sergei Karaganov, chairman of Moscow's Council on Foreign and Defense Policy and an adviser to the Kremlin.
Putin does not express such sentiments publicly, but recently, he has made statements that twice seemed to bolster Bush against Kerry.
During June's annual summit of leaders from the Group of Eight major industrialized nations, held at Sea Island, Ga., the Russian president rose to Bush's defense against Democratic criticism of the war in Iraq, even though Russia had opposed it. The Democrats, Putin said, "don't have any kind of moral right" to criticize Bush since "they conducted exactly the same kind of policy in Yugoslavia," a reference to NATO's 1999 bombing campaign there when Bill Clinton was president.
A few days later, as Bush was being accused of exaggerating the ties between deposed president Saddam Hussein's Iraq and Osama bin Laden's al Qaeda, Putin jumped into the debate again. He told reporters in Kazakhstan that after Sept. 11, 2001, Russian intelligence agencies gave the Americans "information to the effect that the official bodies of Saddam's regime were preparing acts of terrorism" against the United States.
The second statement was "probably the best thing an international leader could say to assist Bush without seeming too straightforward," said Boris Makarenko, an analyst at Moscow's Center for Political Technologies, a private study organization.
Putin has been less forthcoming with energy aid. Although he and Bush in 2002 heralded a new "energy dialogue," intended to link the world's largest oil importer with the world's second-largest oil exporter, officials on both sides acknowledge that the dialogue has stalled.
well from that last bush book (bernstein) we already know oil prices are on their mind for election time.
now continuing to fill the strategic reserve at this time could be seen as prudent. however, prudent is generally the last word that comes to mind when i think of the current administration. so my imagination searches for other possibilities. if you pump up demand and speculation to a breaking point, you can possibly get prices to collapse ... i think. can't you? what would happen if prices get over $50, and then they suddenly stop filling the strategic reserve, release oil from it, resolve the yukos problems and get oil flowing freely from iraq? i'd bet all of those are easily accomplished, in fact or in appearance. and with saudia arabia already pumping at its max and all the speculation ... pop!
maybe. i dunno. not a market i follow. just speculating wildly. (but i'd think putin can be persuaded; he did come to the defense of bush earlier this summer on terror warning issues. actually, if i were conspiratorially minded, i might speculate that the handling of yukos is part of a larger plan anyway. but if i were that conspiratorial, i'd start foaming about illuminati and greenspan manipulating the futures market :-P)
not sure. although its possible there is already significant overproduction and speculation, so what would it take? resolution of a few crises? i think they make bandaids in the big presidential size, don't they?
Approaching Bear Market,
Techs May Fall Still Farther
August 14, 2004 7:08 a.m.
Tech investors are feeling the bear's breath on the backs of their necks, but with many on Wall Street saying stocks are cheap -- but not cheap enough -- that breath may only get hotter.
The Nasdaq Composite Index is off 18.4% since its peak in January, nearing the 20% drop that would put it in bear-market territory.
"Valuations are lower than they were but they're not compelling," says UBS technology strategist Pip Coburn, who thinks tech stocks will be able to rally only once investors stop viewing them as a hot commodity and price-earnings ratios become more reasonable.
The Nasdaq ended Friday at 1757.22, down 12.3% for 2004. Where will it end the year? Vote in the Question of the Day.
Go Figure: Technology funds have taken a beating this year. Is it time to reconsider their place in your portfolio?
Here's how he sees it: In 1994, when tech was "nothing special," tech stocks traded in a range of 15-25 times earnings, he says; right now, they stand at about 24 times forward earnings, using the Dow Jones Global Tech Index and UBS's own tech indexes. He predicts price-to-earning ratios for tech stocks will keep falling since investors feel shaky about the decline in growth of future earnings.
"People aren't going to buy tech stocks if they think estimates are going to keep coming down; you don't buy when estimates collapse, because when they collapse they really collapse," he says. "You thought you were paying 24 times earnings, but you were really paying 40 times earnings."
He thinks tech prices will bring those ratios down toward 18 times earnings in the coming year, and sees valuations getting tempting at around 16 times earnings. "I think that's when we'll see Warren Buffett get in the game," he says.
There are still those on Wall Street who thinks techs will fare fine this year. Some expect capital spending to leap in the fourth quarter as the outcome of the election becomes clearer and companies rush to take advantage of special tax breaks regarding tech spending that expire in 2004. Others point out that its unfair -- and unwise -- to look at all tech companies as being equal. Some sectors and firms will weather the downturn more easily, while others will suffer as investors spurn them.
But for now, analysts who crunch the numbers and make the charts on Wall Street also think the rout in the Nasdaq isn't over yet.
"No doubt we're oversold. The problem with oversold markets is they can become more oversold," says Price Headley, technical analyst and president of BigTrends.com in Lexington, Ky. "When you're in a free-falling type of market, you have to wait to see a true extreme of fear before you get a bottom."
See a calendar of earnings reports scheduled for the coming week.
See a calendar of economic reports scheduled for the coming week.
Mr. Headley once thought that point came earlier this month, when the broader market saw a big selloff following a much weaker-than-expected jobs report. The CBOE equity options put/call ratio rose to 1.27, which he called a "high fear reading."
High put/call ratios -- the volume of puts divided by the number of calls -- indicate that many investors are either hedging current investments against a decline in prices or speculating that a particular stock will decline. Puts give investors the right to sell at a certain price, while calls give them the right to buy.
"It's a sign of panic -- you're getting a rush of people realizing how bad the market looks, speculating and buying puts or hedging portfolios against the down markets," says Mr. Headley. "By the time everyone realizes that it's usually an inflection point where the market is seeing a washout phase as long as the lows hold there. Which they didn't."
Instead, tech stocks kept dropping last week, hitting new lows for the year. The Nasdaq ended the week down 1.1%. Mr. Headley thinks a realistic target for a short-term bottom in the Nasdaq is around 1640 to 1600 -- another 6.7% to 8.9% drop from current levels. That would leave it down 24% to nearly 26% from its January peak.
Though earnings outlooks for the sector for the remainder of the year are promising, they're probably not promising enough. According to Thomson First Call, earnings growth in the third and fourth quarters for tech stocks is expected to hit 35% and 20%. While double-digit increases are no small potatoes, they're no match for the estimated 66% profits growth techs racked up in the second quarter. "Deceleration" has become a buzzword among tech analysts, and it's one of the concerns that plagues investors, especially when they're eyeing valuations that are nowhere near bargain basement.
Queasiness over deceleration in earnings growth was a repeated theme during earnings season, leaving technology stocks vulnerable. Though some outfits, like Dell and IBM, for example, have reported continued growth, Cisco Systems warned that it is taking a cautious view of tech spending, given tepid feedback on hopes for the economy from CEOs of other tech companies. Thursday, Hewlett-Packard said its current quarter would fall short of Wall Street expectations, further disappointing investors.
But the real surprise has been that things aren't getting better going into the second half. Summer is seasonally weak for tech sales, but the expectation was that things would pick up later in the year. Some expect this more modest growth will be the norm for awhile.
Steve Milunovich, Merrill Lynch's global technology strategist, says that typically there are three stages in the recovery from a bubble. The first wave is the bust, when stocks tumble. In the second wave, stocks recover a portion of those losses, though not all – that happened last year. And during the third wave, which some theorize we're in, stocks get into a two-steps forward, one-step back pattern (or depending on the year, the other way around.)
"In the third wave, you can test the lows, but you go into a long-term trading range, which can be multi-year," he says. "Looking out three years, I start to get bullish on technology, but our view is that we're in that transition after the bubble."
Write to Erin Schulte at erin.schulte@wsj.com
"Perhaps with the oil "crisis" you documented, the president will unleash the Oil Protection Reserve ... "
um, you're talking about the man who doesn't change his mind, right? he's backed himself into a corner here: he'd have to argue why $46 is now a crisis that $40 wasn't. (the last time that he was challenged to do so, by kerry.) oh, and why we haven't stopped filling the reserve yet ...
perhaps an oil price crash with sudden oversupply will be an october surprise.
"The last employment report was strange since the household survey indicated growth of more than 600,000 jobs while the employment rate as derived from business reports was up only some 32,000. These two numbers surely don't jive ..."
i thought these discrepencies were resolve (to all minds but larry kudlow's) ... see e.g.
http://bigpicture.typepad.com/comments/2004/03/bls_on_payroll_.html
and its links. but overall, why the bls numbers are trustworthy at all is beyond me. here, re birth/death adjustment for example:
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=34986
"imo that late ramp was short covering on spec of Chavez(Venezuela) remaining in power resulting in Ven. oil supply stability and price drop Monday."
susan on lee's board mentioned that it looked like shorts on the snp futures weren't given a dip during the day to cover and were force to cover at end of day. that's consistent with the continuation of the ramp on the qqq's a.h. for about 20 mins and then their falling back ...
when is there ever a bottom in the last 2 hours of trading on a friday?
"I'm playing for a bounce here at 1750's...that's 250 points from 2000 where Da Boys really want to sucker more people in."
hmm. so if i buy that scenario, what is it that makes you think it likely that they're going to try this sucker play in august/september? unless we get back to the january top, won't mutual funds be selling their losers going into september/october?
or in other words, if that's their plan, wouldn't seasonality say that its more likely in an oct/nov timeframe than in aug/sept?
"TJ, I don't care,but I was just wondering the definition of sainthood, in fact, seems many think GWB is the devil,so how is that sainthood?"
hmm. i think that those with such opinions wouldn't actually say he's the devil, cuz that's the top of the evil pantheon, and thus leaves no role for cheney. :-P
but i think all he really meant was that we look too much at candidates' personal lives to see if they can do a particular job. its not like we're voting to marry them, after all, we want to fill various offices with capable people.
politics sucks. it would be nice if campaigning were limited to fixed set of speeches and in depth debates, and we got rid of all these commercials. but of course, can't do that without stepping on the first amendment. i suppose that's where journalists need to do their job ... if only ...
Now Fred, am I living in a different time or do we have a differing opinion of sainthood. How many cigars do you think Bill smoked?
the question is: why does it matter? or if he wants to have sex with jeri ryan in a sex club in france. (heck, who wouldn't!)
that, and the candidates should be held responsible for "truth in advertising". if in any other profession, i recast my peers' comments and actions in such obviously false and misleading and self-serving ways, i'd be shunned. well, except selling used cars and tech stocks.
(speaking of tech stocks: did i really hear a woman on ruckheyser tonight recommend yahoo as a good value here? yikes.)
hey, today was friday the 13th!
i didn't even realize it. i wonder if larry and sergey noticed.
"you think you just made somebody's list?"
nah, probably happened long ago when from various replies to op-eds in the wsj. or even earlier, if they mine the sewers of the yahoo message boards. (i've been a regular on kopn since sept '01 ... my little atm ... and nothing keeping me from being political there too
no, i think we're all safe individually. its just a high profile assassination, right?
well didn't the dept of fatherland security tell us that bin laden will give us a heads up before his next surprise attack?
that's odd. i'm seeing intc trading at 21.55 but i show it closing at 21.3
"And I was born yesterday."
belated happy birthday!
dunno, just watching it for the last few months, dell seems like one of the most "managed" stocks ...
wow, that was a quick about-face on dell. so i guess they just wanted to get the puts at 35 ....
"if the buzz on George B. tapping the petroleum reserves gets legs"
uh oh. then the flip flops will be on the other feet.
dunno. i still see the trin/trinq rise as the tick rises. feels like they're all just waiting for the pumps to sell into them.
first sell signal on sbux since may. drawing a nice straight line down ...
yhoo volume looks pretty substantial here ...
"I can't be the only one thinking DELL would power this thing up to 1790s-1800."
is there ANY surprise factor at all coming from dell? the meet expectations, they preannounced that they'd meet expectations quite a while ago ... and heck, these other companies just TOLD us what they're seeing.
so was that 27.5 on yhoo just options related? google related? ... seems to be losing it fast and slipping back below its previous breakdown point. (anyone else see a crooked head and shoulders there?
well i'm still waiting to see a rise in the tick not accompanied by rising trin/trinq. till then ... i'm still short ... (hehe. even dell.)
"there's about 10 things that are bothering me about this low."
and the trin and trinq remained high all day, and were both climing, even as they ramped the tick into the close ...
the leading indicators are leading the way down, just as they led the way up last spring.
http://www.businesscycle.com/
(of course, not entirely independent: the dow is a component)
agreed again. he's still my #1 guru.
to come up with a neo-classical trading strategy: ... "A bird in the hand makes blowing your nose difficult."
sigh, but this is true only if you're a bit squeemish. birds are nice big balls of fluff, perfect for nose blowing. well, kittens are perfect, but birds are good too.
"I have high hopes for cold fussion long term"
heck, i'd settle for hot fusion.
interesting comparison.
kopn is my "atm stock" (on the short side), since fall '01. what's the relation to cien? other than charts ...
http://finance.yahoo.com/q/bc?s=CIEN&t=1y&l=on&z=m&q=l&c=kopn
looking long, under the market.
they hide bids there? kinda like my sister hiding cookies under the sofa cushions during her binge diet days ...
Think of where oil prices could go if is he's re-elected.
wow. u really think he wants to go down in history as the guy who made jimmy carter look good?
yay sbux! i have a bet in place that 47.50 was a near-term top. similarly for the "double top" at 40 on jcp.
"I'm wondering if something like this could be in the offing and an impetus for a sustained rally..."
heck, you think that first he'd stop *filling* them, which (as headlines today indicate) is still happening.
re Google IPO
and not only that. blodgett (surprisingly) makes a very good point (in a slate essay):
the goal of the the google boys is to get the stock trading with a minimal pop when it hits the market. so then, what's the incentive to buy at the ipo, where you have to guess the price? if the price isn't going to move substantially, you wait until you have more information and bid later.
so actually the very goal of the auction itself is a disincentive to participate in the ipo ...
http://slate.msn.com/id/2104656/
Google IPO 'hangs in the balance'
By Andrew Orlowski
Published Monday 9th August 2004 10:43 GMT
http://www.theregister.co.uk
Google's public floatation is only "50/50" likely to proceed as scheduled this week, with US papers reporting that it will be delayed for "logistical reasons".
This follows a week in which Wall Street's finest piled into the company, criticizing the Dutch Auction-style IPO and warning small investors from participating. It didn't help that Google had to acknowledge that its notoriously chaotic internal organization was to blame for failing to register shares and options granted to over 1,000 employees and contractors with the regulatory authorities, prompting investigations from California and Connecticut states. What Bill Joy realized last year, we all now know. The Sun co-founder turned down a job at Google after seeing the out-of-control internal corporate culture.
But is Wall Street's criticism fair?
On the one hand, the spectacle of disgraced dot.com hypester Henry Blodget weighing in with advice for small investors at Slate magazine may generate nothing but sympathy for the tech company. Blodget became an emblem of bubble era dishonesty by maintaining "Buy" recommendations for stocks he privately described as "worthless" or "PoS" (for "piece of shit"). If Blodget is considered worthy enough to advise small investors now, perhaps the magazine should hire Mark Chapman as a Pop Columnist. Forgive and forget, why not?
Google decided to shun the traditional IPO route to market by choosing a complicated "Dutch auction" method, and some have called Wall Street's criticism sour grapes. But Google hasn't bypassed the institutions at all: 29 are taking part and only Merrill Lynch, Blodget's alma mater, has been turned away. A closer look at the criticism shows it to be sober and well-grounded.
"Can you say fiasco?" asked The Street's James Cramer. " In six months, Google's gone from a company everyone wants a share of to perhaps the single-most scorned entity I can recall."
"You set the price at a level that is the most forbidding to the most people: north of $100. What the heck does that prove? That you intend to be the next Berkshire Hathaway?" he wrote.
"You talk about shareholder democracy but then you do the single most anti-democratic thing possible: issue two classes of stock," echoing criticism of accountability. "Start the Dutch revolution without me," he concludes.
Scott Harshbarger, a former attorney general of Massachusetts, criticized Google's contemptuous attitude to accountability. Chairman Eric Schmidt - the nominal grown-up - fulfils the two roles of chairman of the board and CEO, effectively auditing himself. "It's a classic, pre-scandal, non-independent board," he said.
Investors on boards were even harsher. "Do you think that selling the public class "B" shares with no voting power is fair," wrote one, "this is the biggest scam since snake oil"; while another compared it to Enron. That's hardly fair, as Google is a profitable advertising broker that makes real money, not funny money. But both Google and Enron were immensely secretive, put great faith in clever algorithms, and both IPO'd with passionate ideologically-committed fanbases. But the fact that comparison has even been made shows how far its reputation for trust has fallen in a short space of time. If millions walk away winners from the Google IPO, the criticism is likely to be muted. We'll see soon enough. ®
When was the last time the Street walked away from hot money? Ever?
hmm. when some upstart company tried changing the rules and cutting their percentage?
dunno, but its not just "hot money" here. after all, aren't the underwriters all assuming quite a bit of risk here? (and that, without having anything to say about the price ...)