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Posted by BradyNet ( Thursday, April 29, '04 )

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GLOBAL MARKET HIGHLIGHTS

Remedy to outsourcing: better US jobs 04-29-04 (Yahoo) In truth, the outsourcing of American jobs is one relatively small facet of the larger problem

Greenspan Seeks to Grow Natural Gas Trade 04-28-04 (Yahoo) The United States needs to expand the global trade in natural gas as a way to prevent future sharp price increases from harming its economy,

Psst! Is Powell Bound for the World Bank? 04-28-04 (NY Times) Forget the official pronouncements that Secretary of State Colin L. Powell is staying put at the State Department.

Americas new export boom: Jobs 04-28-04 (Yahoo) As a firm in China buys a U.S. plant, an American worker and his Chinese counterpart see vastly different futures

US consumer confidence index jumps to 92.9 04-28-04 (Yahoo) US consumer confidence rose sharply this month amid optimism about the labour market and business conditions.

White House race turns to economy 04-28-04 (BBC) US President George W Bush and likely Democrat challenger John Kerry have traded barbed comments about the economy at their latest campaign stops.

LATIN AMERICA

Lula throws Brazilians more promises as problems mount 04-29-04 (Yahoo) The Brazilian president, Luiz Inácio "Lula" da Silva, has begun a media offensive to regain the political initiative after the most troubled month of his leadership.

Brazil seeks more spending leeway 04-28-04 (Financial Times) Brazil and the IMF have agreed to investigate how more money can be channelled into infrastructure without weakening commitments to fiscal austerity.

ASIA

Whoever wins, the people will still pay 04-28-04 (Yahoo) The Philippines election is shaping as one of the closest on record, between current President Gloria Arroyo and the actor they dub "Da King". But few believe the outcome will change anything for the better, writes Mark Baker.

OIL PRICES

Fed warns of dramatic rise in oil futures 04-29-04 (Financial Times) Alan Greenspan, chairman of the US Federal Reserve, warned on Tuesday that the "dramatic" rise of oil and gas futures was "an economic event that can significantly affect the long-term path of the US economy".

Tax bill may force Yukos to default 04-28-04 (Yahoo) Banks have warned Russian oil group Yukos that it is at risk of defaulting on a $1bn (Ł560m) loan if it is forced to comply with an order from the tax authorities for $3.5bn.

High Costs to Impact Energy Use-Greenspan 04-28-04 (Yahoo) Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) said on Tuesday the likelihood of persistently high energy prices would help check U.S. energy use and lead businesses to rethink energy-related investment decisions.

Newest messages appear on top.

04-29-04 PILLZ: <the other day you told me, i think it was 200% profit in 1 or 2 years. >

Vic, believe me or not but it vas more, but now, I am in a consevative mode, only 25%/year

04-29-04 carib: Pill: there is no disagreement between us: getting a 25% return instead than 10% is worth a little bit more risk. You are normally an <investment master> so the actual risk you suddenly get 100% wrong is very small. But if someone like me, less masterly than you in the art, tries the same <50% hedging> tactic, I am quite sure sooner or later I would end up with a very bloody nose! :-)

04-29-04 victorn: pilly <you would not believe me> the other day you told me, i think it was 200% profit in 1 or 2 years.

04-29-04 PILLZ: <IMHO, there is no real danger in hedging, besides the obvious danger of amplifying your losses in case you are wrong. >

Carib, if you expecting about 25% return/year, ofcause there are some risk, but I think , a follow up every day make me feel confortable, I need it, it is my pleasure...it would be booooring to invest at 10%/year with no risk...now, I really need to laga Antwerp..see you demain..

04-29-04 carib: I mean <margin call>, not <market call>. Sorry.

04-29-04 carib: Pill: you are normally making the right choices, and it is obvious that if you make mostly right choices and differenciate, by hedging you increase your returns. No doubt about that. If most of your investments are hedged by sort of "contrary counterbets"...so that no matter what happens, if most of your assumptions suddenly become incorrect...then you still do not lose money...then I see little risk in hedging 50%. But if such "counterbets" are not sufficiently present, or well though in any possible set of circumstances...extraordinare market conditions could play havoc on a hedged position, IMHO. As long as you have sufficient assets to cover any possible market call without the need to liquidate any asset under duress, IMHO, there is no real danger in hedging, besides the obvious danger of amplifying your losses in case you are wrong.

04-29-04 PILLZ: Tica <Tel Aviv to host collectors of rare stamps at `Telabul 2004` world philately exhibition next month (Itim)>

04-29-04 PILLZ: <what happens if everything you own collapses at the same time? >

Vic, before I go to laga Antverp, how it can collapse in the same time ? If you have a schwein in crude oil a schwein in gas,a schwein in delta, a shwein in Evergreen, a schwein in hylsa, a schwein in bally, a schwein in level 3, etc.. and hedged by selling calls on their schtocks ? it is a pure no blainer portfolio, objective is about 20 to 25% clip /year for the future, but I will not tell you what I made the last 2 years, you would not believe me...

04-29-04 carib: Savo: correct...I was mostly teasing Amigo on the number of <refrigerators> that CESP financed. I am not sure I have any particular merit in this matter, BTW.

04-29-04 carib: Wally: I have very little CESP 11 left. The 14% yield is nice, but the 100% cap gain (in a year) was much more important. Cashing the cap gain was the actual main point for me. I am not sure the default risk for CESP is bigger than the one for guano. I do not share Amigo's opinion that either CESP defaults in April 05 or does not for a decade. the money due in Apr 05 (120 mill) is a very small % of CESP total debt.

04-29-04 savonarola: thanks wizzard...

04-29-04 savonarola: amigo.. carib.. how many more times will you guys post that Cesp have doubled in price, that you bought at 50 one year ago, that it went to 100 one year latter and so on ...?

It was obviously a great trade, one in which many of us did not believe, and for which you have all the credit, particularly because it was a complex one ... but isn't it already all story?

Just asking.. please do not feel offended.........

04-29-04 amigo latino: Ecu 12 vs CESP 11:

Wally, if I have to decide today, I probably would favor buying Ecu 12 (assuming that one does not have already many Ecu bonds and diversification is not a consideration)

04-29-04 victorn: pilly <by leveraging a max. or about 50% you reduce the risk of your portfolio and not the other way round> what happens if everything you own collapses at the same time?

04-29-04 victorn: according to bradynet veni 18 old is @ 111. is this correct?

04-29-04 wally: <carib / amigo>

<I love CESP, the 14% coupon!> what seems too good to be true most probably is (in the long run). for me C€SP was just a short play which was never meant to last more than a year. that it lasted a only a couple of months was a mere coincidence triggered by the present EM debt environment.

my question to both of you is: "how do you compare a corporate (C€SP) yielding 14% with a sovereign (Guanita12) yielding slightly more AND possesses a shorter maturity?"

04-29-04 amigo latino: Later I bought some CESP 05, which I considered cheaper, but I think you did not share my enthusiasm Later I bought some CESP 05, which I considered cheaper, but I think you did not share my enthusiasm. Those have returned about 50%, because they were available @78. ………..>

Carib, at that time Cesp 04 was selling at 70-72. My argument was that chances of CESP going into default after April 2005 were slim(which you were concerned about) and hence CESP 04 offered a better value Now CESP 05 could represent a bettter value if can be bought at a much lower price than CESP 11. In any case both CESPs turned out to be good investments.

04-29-04 carib: Amigo: CESP 04 recovery value, until now, is above 120, calculating the coupon. We both bought at the same time around 56, if my memory is right, at least according to the discussions on Color. so money invested then has been more than doubled. Later I bought some CESP 05, which I considered cheaper, but I think you did not share my enthusiasm. Those have returned about 50%, because they were available @78. In both cases, they produced "many refrigerators and laptops"... :-) Now I think CESP 11 could drp some as victim of general contagion...but dentist are still bidding 100 for the stuff...

04-29-04 Wizzard1: For Savo: The opposition in Venezuela has decided to go to the process of repairing their signatures the way the National Electoral Committe, dominated by Chavez said. Nevertheless, some opposition groups disagree. Others disagree but are going along with the majority. On the other hand, according to a sound survey, 70 per cent of voters have expressed their will to attend the so called "signatures repairment" that were formerly rejected. This is a good percentage because one million were rejected and the opposition needs to validate 500 thous. signatures. Carter and Gaviria will be in Venezuela since May 29 observing the event that will take place in three days or so. The bond market probably has reacted to these news

04-29-04 amigo latino: .<carib: ….even if I like the CESP kind even more... ……..> carib, I wanted to buy more of CESP 04 at the time I bought CESP 04. My bank was informing me of offerings at 52-54 in April 03. But I did not buy since JPM prices were in the forties (which were apparently unreal). When I started buying, paying the real world prices(54-56), the prices shot up into sixties before I accumulated the target quantity. I love CESP, the 14% coupon!

04-29-04 carib: Amigo: those who refused the last Ecu restructuring got paid in full... I like those sort of <restructurings>...even if I like the CESP kind even more... :-)

04-29-04 PILLZ: Interesting exchange flom Yahooo boaard over ablax, this is the exact reason, why i hold 5% of their debt, we are in an ideal schweinkram-blond-situation, where the C° work for the debtholders and can't work for the schtockholders:

<I think you hit on a very important issue. In recent weeks, natural gas stocks have been strong, ABP weak. Higher NG prices should permit improved cash flow for ABP. However, the benefit from this falls to the debtholders, as the company is restricted to $10mm for capital expenditures, therefore higher bond and lower stock price. It is unable to exploit its asset base at a time of high ng prices. The financing agreement is a disaster, although perhaps the best that Watson could get under the circumstances. I also do not see any reason for debtholders to loosen the pursestrings without being given something in return. I am not sure what this could be. My feeling is without a takeover by a credit worthy e&p company, this stock is dead. Since Watson and friends have made and continue to make a nice living running ABP, I'm not sure they would work hard to be acquired. Any thoughts on how restrictive financing issue could be resolved without shareholders being hurt would be appreciated.

<I happen to hold the bonds only. And what you state is correct. IMHO the only thing the co can do is keep improving on it's revenue growth, free cashflow, profitability, and it's proven reserves so that at a given moment (when I don't know) the bondholders will be satisfied enough to get the restrictions off. I hope it will be soon.

04-29-04 Merlino: eletrico <don't think Lula is doing a decent job. Actually, he is doing NO job at all> Yes, I share your view

04-29-04 Merlino: Have also bought some IRF, KLIC & AC stock today, slightly market long now

04-29-04 amigo latino: <carib: Pill: guano 30,……. IMHO the question is Argy: if they can restructure halving the debt and cutting the cost 75%...only idiots would keep current...) ! >

carib, I agree with you ! However, Ecu already (hair) cut the bond value to 25% as a result of two restructurings! Next hair cut? It has to be a close shave to the scalp!

04-29-04 victorn: amigo, just consider that juan carlos is the first borbón without syphilis and halitosis (unlike his grandfather). :-)

04-29-04 victorn: amigo i am not and don't want to be. being a spanish borbon means you have a serious genetic problem somewhere. :-)

04-29-04 PILLZ: Rogue, how are the PackWest blonds reacting, maby I buy them back at ?

04-29-04 carib: El ministro ecuatoriano de Economía y Finanzas, Mauricio Pozo, calificó este jueves de "muy productiva" la reunión que mantuvo esta semana con el Fondo Monetario Internacional (FMI) para negociar un nuevo acuerdo stand by que podría alcanzarse dentro "de dos meses". "Fue una reunión muy productiva y muy positiva", declaró a la AFP el ministro, quien dijo haber notado "una gran apertura por parte del FMI".

04-29-04 carib: EFE- Una misión del Fondo Monetario Internacional (FMI) se desplazará a Ecuador en mayo para tratar con las autoridades de ese país un posible acuerdo de contingencia de un ańo. Según informó hoy el portavoz de la institución multilateral de crédito, Thomas Dawson, el viaje de la delegación se produce tras una reunión mantenida esta semana en Washington entre el ministro de Economía ecuatoriano, Mauricio Pozo, y las autoridades del Fondo.

04-29-04 PILLZ: <IMHO the question is Argy: if they can restructure halving the debt and cutting the cost 75%...only idiots would keep current... >

therefore, my max investment in EM country blonds is at 3 %

another no-blainer, buy the blond, short the schtock

Bond investors sweat over Bally Total Fitness

http://biz.yahoo.com/rf/040429/leis...

04-29-04 amigo latino: <victorn: amigo dr will not be under control until <YOU> become president!………>

Victor, I will consider entering politics if you come here and endorse my candidacy publicly. Domincans love Spanish royalty(persons related or connected to the Spanish royalty

04-29-04 carib: Pill: on Level 3, you are the teacher and I the pupil. Basically, I do not see them defaulting in the next 13 months. In that case, I clip 10,5, and reduce my cost to 62. If they keep current 19 months, I reduce my cost to 57. If reasonable recovery is about 66 or better, the downside is limited, but the upside is very large if CH11 is avoided. IMVHO.

04-29-04 carib: Pill: guano 30, in 2002, was at 34...and the situation was not much different from now. Of course, pricing Guano 30 @35 was utterly mistaken, but such are markets... IMHO the question is Argy: if they can restructure halving the debt and cutting the cost 75%...only idiots would keep current...

04-29-04 PILLZ: Carib, I don't know if it is your first Level blond, but in my opinion your timing is good, look, even with a 3$ schtok, the shareholders value it at 2B$ above the 5B$ in debt and 1.1B$ in cash, Level beats the street with their numbers today and the schtock go down, why ?, because they need another year to beat the street to be a 1B$ capitalisation C°, and in the meantime we clip 20% and they loose 50%..

04-29-04 amigo latino: < Merugo:……….Throw away the debt ……. A true temptation for many politicians. A true temptation for many politicians.>

Merugo. already about 75-80% was thrown away! ………as a result of two restructurings.

04-29-04 PILLZ: Guty, pozo or zoro, guano 30 is a buy at 70, even with an eventual restructuring you can't loose, or am i mischtoken again ??

04-29-04 amigo latino: <Savo:……Of course at the time, I was insulted, denigrated and almost banned from the <Color>>

Your timing was excellent and I have a great admiration for your investment abilities. Morever, I made some money( almost enough to buy a refrigerator, a new laptop and possibly some spare batteries) following your advice in Mendoza(I still have the bonds ) and PBA bonds(sold them).

However, I consider it too harsh a judgement for the Savo rating agency to lower by several notches Ecu bond ratings(from AA to SD) solely based the political support to Guti and Pozo. To my knowledge, Guti and Pozo are not paying the coupons from their pockets!

04-29-04 Cheetah: I shorted 10 k of EVERYTHING !!!

04-29-04 PILLZ: On leveraging, in my opinion, by leveraging a max. or about 50% you reduce the risk of your portfolio and not the other way round, you have more $ to divercifire, in a lot of sectors, you can hedge etc..for me it is a win-win play, ofcause only in schweinkrams and EM debts, there are different trends inside the sectors, but on the end of the day you always clip, and clip big time :-)

04-29-04 merugo: < victorn: savo <might even turn into an SD if Guti and Bozo are kicked out> why are you so certain that only these two are willing to pay ecuador's external debt? and that everybody else who comes to power doesn't have the willingness?> Imho savo may be right. A possible explanation? The majority of ecuadorenos hates dollarization, and the related debt. Presently they need dollars for everyday's life. Throw away the debt , dollarization will seem more bearable also for the man of the street (and of the forest). A true temptation for many politicians.

04-29-04 victorn: i would consider myself rather ignorant on blazil, but i would say that the ploblem there is that you have this european influence, which implies being bureaucratic. but you don't have the $ europe has to make up for this bureaucracy.

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