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Posted by BradyNet ( Friday, June 4, '04 )

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GLOBAL MARKET HIGHLIGHTS

Britain to Go Ahead With Gas-Tax Increase 06-04-04 (Yahoo) Prime Minister Tony Blair (news - web sites)'s government said Thursday it had no plans to shelve a scheduled hike in fuel taxes despite the threat of disruptive protests.

The Middle-Class Squeeze 06-04-04 (Yahoo) According to the latest argument offered by the political right, we're all doing splendidly – but we just don't realize it. Americans would be celebrating if only Iraq weren't around to distract people, the White House tells us

Productivity Growth Strong But Costs Rise 06-04-04 (Yahoo) U.S. businesses increased their productivity at faster pace than first thought in the first quarter, the government said on Thursday, but labor costs were also revised upward

British Gas Prices Top $5.79 a Gallon 06-03-04 (Yahoo) As rising oil prices pushed gasoline past $5.79 per gallon in Britain, truck drivers threatened strikes and cabbies filling up at the pumps complained about working extra hours to make ends meet.

G-8 Security to Close Ga. Coastal Waters 06-03-04 (Yahoo) Boating restrictions — to be enforced with heavy firepower — take effect in areas along Georgia's coast this weekend in advance of the G-8 summit of world leaders.

LATIN AMERICA

Venezuelas Chavez to face poll 06-04-04 (BBC) Venezuelan President Hugo Chavez says he is ready to face a referendum on his term of office.

Argentinas Offer Insults Its Bondholders 06-04-04 (Yahoo) Argentina didn't do itself any favors with its recent offer to restructure $99.4 billion of its defaulted debt. Bondholders flatly refused to accept what Economy Minister Roberto Lavagna offered, and with good reason.

ASIA

Increased Chinese Demand Pushing Up Oil Prices 06-04-04 (Yahoo) Soaring demand from China is one factor helping to keep crude oil prices at near-record levels. Twenty years of nearly double-digit economic growth have turned China into a major oil importer.

AFRICA

Report: Dismal African Economy Disaster 06-03-04 (Yahoo) A report released Wednesday by the World Economic Forum (news - web sites) called Africa's stagnating growth the worst economic tragedy of the 20th century.

OIL PRICES

Is the Saudi oil industry safe? 06-04-04 (BBC) Oil prices shot up following a militant strike on a key installation in Saudi Arabia at the weekend of 29-30 May - the fifth attack in the kingdom in just over a year.

Why OPEC isnt to blame 06-04-04 (USA Today) Fed Chairman Alan Greenspan does not work for the Organization of Petroleum Exporting Countries (OPEC). Nor does President Bush, Osama bin Laden or any of the main protagonists in the current tension in the Middle East. Yet their policies, or actions, play a critical role in the rollicking oil markets.

Oil prices drop after Opec deal 06-04-04 (BBC) The deal was struck at a meeting in Beirut The decision by the oil producers' cartel Opec to raise output has had the desired effect of cooling high oil prices.

Newest messages appear on top.

06-04-04 ozymiani: <Patient-Trader><My pleasure> your 5 friends never disappoint you, huh?

06-04-04 amigo latino: The ‘Viceroy’ of the empire speaks to El Universo :

<La Embajadora de EE.UU. insistió en que su país apoya la democracia constitucional en Ecuador. La embajadora de Estados Unidos en Ecuador, Kristie Kenney, cree que el presidente Lucio Gutiérrez terminará su mandato, no le da importancia a los rumores sobre inestabilidad política en el país y asegura que el caso del ex ministro de Bienestar Social, Patricio Acosta, no tuvo ninguna connotación política.

P: ¿Cree que Lucio Gutiérrez terminará su mandato? R: A pesar de todo este ruido, creo que el Presidente terminará su mandato y esto es bueno para el país en términos de la estabilidad, de las instituciones y de quienes quieran llegar a la Presidencia..

P: ¿Comentaron los rumores de ese fin de semana, cuando se habló entre otras cosas de la disolución del Congreso? R: Le hemos dicho al Presidente todo el tiempo y él lo sabe perfectamente que apoyamos no solamente el Gobierno democrático constitucional de este país sino también a las instituciones constitucionales, como el Congreso, que juega un papel muy importante. Conozco muchos diputados y tengo respeto por el trabajo que hacen. Hay algunas leyes importantes que se deben tratar como Aviación Civil, Hidrocarburos................> El Universo

06-04-04 moneypenny: For Wally:

http://smh.com.au/articles/2004/06/...

06-04-04 victorn: mp <Pinky would go to El Barbudo's funeral in an instant. But can the same be said of Fidel?> yes he would, fidel is an expansionist.

06-04-04 Patient-Trader: Pilly, <thanks for the compliment> My pleasure.

06-04-04 PILLZ: Carib, ***LEVI STRAUSS & CO EXCH Rate 11.625 Maturity Date 01/15/2008 at 92.5, you wanna to buy 100K, I send you immediatly the blonds

06-04-04 PILLZ: <Hope NOT new higher ranking debt! > they have a acredit line (first lien), but still they are restricted by the bondholders till a certain amount, I repeat it , Ablax blonds are a no blainer, there is asset collateral that cover all the debts, at 86, you can even go down with 50% on gas price..

06-04-04 manya: The employment trend has run above 300,000 in the last three months. This should be more than enough to convince the Fed that the recovery is truly sustainable and keeps the Fed on course for a June 30 rate hike. However, unless the CPI data suggest a further strong rise in core inflation in May, we believe the Fed will stick to its gradualist agenda and raise rates by only 25 basis points on that day. Fed funds futures, which are pricing in a 2¼% fed funds rate for yearend, look aggressively priced to us and we expect the funds rate to end the year at 1¾% or 2%.

06-04-04 carib: Pill: what Levi Euro you want to sell, and what price?

06-04-04 PILLZ: <Amateur 290, Discount at 74=17.74 YTM, 9.125=14.84 YTM (schweikram monkeys) and by the way , I see par in the discount blond in 9 months, when cp start , no more discount, only my opinion.. > more intriging is the Level Euro monkey tree, still at 20% YTM :-)

I am trying to sell my Levis Euro blond to buy Euro Level blond, but total illiquid :-(

06-04-04 Amateur: Pillz, I hope you are right! <I see par in the discount blond in 9 months, when cp start> If i take some profit I'll sell the 9.125, but not while it yields more than 12%.

In Abraxas, where are they going to finance their new investments from? Do they hold enough cash? New equity? Hope NOT new higher ranking debt!

06-04-04 PILLZ: <L3, the 9.125/08 @ 83.5 yields 300bp less than the 12.25/10 @ 74, the discount should be worth 83 for equal YTM, you agree? >

Amateur 290, Discount at 74=17.74 YTM, 9.125=14.84 YTM (schweikram monkeys) and by the way , I see par in the discount blond in 9 months, when cp start , no more discount, only my opinion..

06-04-04 PILLZ: For your info , from another booard, I take only some, that I know, they understand vely good Level 3:

<Longleaf: Something is up

On March 31, 2004, the Longleaf Small-Cap Fund held corporate bonds in an amount equivalent to 6.2% of the portfolio. They were Level 3 bonds:

$130,650,000 (face amount) Level 3 Communications, Inc., 9.125% Senior Notes due 5-1-08 with a market value of $ 106,479,750

$72,580,000 (face amount) Level 3 Communications, Inc., 6% Convertible Subordinated Notes due 9-15-09 with a market value of $44,455,250

Total Corporate Bonds (Cost $115,108,697) with a market value of $150,935,000

See: http://www.longleafpartners.com/pdf...

Longleaf has just released its May 31, 2004, portfolio statistics. Individual holdings are not specified, but the Small-Cap Fund has reduced bonds from 6.2% to 0.5% of the portfolio.

Longleaf could have sold the Level 3 bonds and gone to cash, but I don't think so. On March 31, 2004, Longleaf held 67.8% of the portfolio in common stocks, with 11% in foreign stock holdings (56.8% in domestic common stocks). On May 31, 2004, Longleaf domestic common stock holdings jumped to 64.3% of the portfolio, and foreign stock holdings held steady at 11.2% of the portfolio.

I don't know which domestic common stocks Longleaf has bought with the Level 3 bond sale proceeds, but I can guess.

On March 31, LVLT was at 4. On May 31, LVLT was at 3.84. That would change the 4.5% of the Small-Cap Fund held in LVLT as of March 31 to 4.32% on May 31. If Longleaf traded its Level 3 bonds for more LVLT in a private equity for bonds swap, the amount of the portfoilio invested in LVLT would jump to a mutual fund industry maximum of 10% and domestic equity would rise to 62.5% (the differce to 64.3% can be explained by market action).

The fact that Longleaf retained a 0.5% sliver of its Level 3 bond position on May 31 is consistent with the hypothesis that it converted its Level 3 bonds to LVLT equity because Longleaf cannot take more than a 10% position in the common stock of any publicly-traded company.

See:

http://www.longleafpartners.com/sta... >

Re: Longleaf: Something is up
by: wcrimi 06/04/04 09:42 am
Msg: 400799 of 400809

What does everyone think about this?

Is this a good thing (we are reducing debt and interest costs and getting closer to FCFBE)?

Is this a bad thing (we are getting diluted further at a stock price that is not all that high)?

From the "watch what they do" perspective does this mean LVLT doesn't have a lot of confidence in the revenues?

Personally, this reinforces my view that the one and only mistake this company made with the balance sheet and finances was NOT doing swaps earlier in the year and just prior when the stock was in the 6s (assuming they didn't try - maybe they did). I like this move.

06-04-04 PILLZ: <L3, the 9.125/08 @ 83.5 yields 300bp less than the 12.25/10 @ 74, the discount should be worth 83 for equal YTM, you agree? > give me a few min, I go to my yield machine :-)

06-04-04 danni: lvlt level 3 comms 3.57 +2.0%
hlsh.pk healthsouth cp 5.02 +1.8% dal delta air lines 5.84 +2.3% ggal gp fin galicia 5.59 +1.5%

06-04-04 PILLZ: <Pillz, Abraxas I'll folllow your lead, should we tender right away or wait (expires June 14)?>

Yes, because, if they have 50.1%, they will stop the tender earlier..

06-04-04 carib: Davide: unless an event of default is announced, one should not worry if the coupon is credited a few days later than due (within grace period) in some cases, it can be two weeks late.

06-04-04 Amateur: Pillz, Abraxas I'll folllow your lead, should we tender right away or wait (expires June 14)?

L3, the 9.125/08 @ 83.5 yields 300bp less than the 12.25/10 @ 74, the discount should be worth 83 for equal YTM, you agree?

06-04-04 PILLZ: <Pillz, shall we tender Abraxas consent or not? > in my opinion , yes (you still have strong guaranties)and the bonds could go up, if they can prove more reserves..

(btw, Level 3 blonds , over the past few days, pricing on the 9 1/8 for May 2008 has moved from the 70's to 83.50 )

06-04-04 Glutt: If seriously Vene bonds remain in surprisingly subdued mood and drift more or less in tandem with other market, no major shift. Does this mean people are still skeptical that referendum will achieve the goal? or I miss something?

06-04-04 Amateur: Pillz, shall we tender Abraxas consent or not?

06-04-04 Glutt: Vene bonds are warming up to the idea of referendum?

Bond Bid Ask Chg SSP Chg

VE DCB 94 94.5 -0.5 451 8

VE Par 88.5 89.5 0.75 862 -44

VE Rep 10 79 81 1.5 533 -41

VE Rep 13 99 99.65 0.15 633 -5

VE Rep 18N 73.5 76.5 1.75 521 -32

VE Rep 18 111.5 112.5 0.5 705 -10

VE Rep 27 85.4 86 0.75 588 -14

VE Rep 34 85.25 85.65 0.65 596 -13

06-04-04 danni: PILLY your toy lvlt10 @ 74/75

06-04-04 danni: jut loaded my last load of DAL29 1ton in all, i will of load 0n the 29/12/2029

06-04-04 Glutt: MP, thanks for your interesting comment on Bush and elections. it was far much better than some of your W/E comments. :-)))

06-04-04 Glutt: Pillz, you are indeed childish but does it mean you also sleep like a child (wake up and cry)? :-)))

06-04-04 Glutt: manya <The headline number printed ahead of consensus at 248k, but the big story was in last month's revision to 346k (from a previously reported 288k). Treasury markets are flat for now, but stocks should get a boost.> that is damn interesting, btw I do not know if you agree but on UST curve I see a bit of arbitrage opportunity between bit more expensive 20y+ & slightly cheaper 7-10y, may it pay back on bear market if it comes again?

06-04-04 PILLZ: ABP is soliciting consents from the holders of its 11.5% Notes due 2007 to modify the covenant that currently limits the company to $10 million per year in capex. The payment to be paid for each consent properly delivered prior to the expiration of the consent solicitation, will be $10 in cash for each $1,000 principal amount of notes. The consent solicitation will be open until 5:00 pm, EST on Monday, June 14, 2004, unless terminated or extended by ABP. As of May 3, 2004, the record date for the consent solicitation, there was approximately $128.0 million aggregate principal amount of the notes outstanding. ABP stated that assuming holders of a majority of the principal amount of the notes consent, capital expenditures will instead be limited so that the ratio of the company’s consolidated EBITDA (as determined under the Indenture to the sum of the company’s consolidated cash interest expense, plus its capital expenditures, minus the net proceeds the company receives from certain qualifying equity security or subordinated debt offerings,) must not be less than 1.0 to 1.0 for any fiscal year beginning with the fiscal year ending December 31, 2004.

06-04-04 PILLZ: <You are getting increasingly childish> thanks for the compliment , last time it was my wife who said it, and I was happy about it, as I lost a lot of naivity the last few years..

06-04-04 manya: NFP surprised this morning, but not in the way the market expected .The headline number printed ahead of consensus at 248k, but the big story was in last month's revision to 346k (from a previously reported 288k). Treasury markets are flat for now, but stocks should get a boost.

06-04-04 manya: Market very quiet ahead of NFP. Brzc 88.88 89.13 BRZ40 89.55 - 90
Venny 27 84.50 -85.50

06-04-04 moneypenny: Advice: <Who is going to win USA elections? Any colores opinion on that?> I think Bush, but it will be close. Bush has more money, the strength of incumbency, and a good economy and rising stock market, also, to the GNoEcci mind, he projects warmth and friendliness. Kerry has offered very little in the way of an alternative, gives GNoEcci no reason to vote for him other than disliking Bush, has not warmed voters up to him very much, comes across as cold, arrogant, elitist and entitled, stumbles and makes more gaffes, and has many opponents in his own party. Any big terror attack on GNoE soil ahead of the vote will drive voters more to Bush, who is perceived as more resolute than Kerry on the terror war, too. Same deal if an antagonistic country like France says anything pro-Kerry. Trouble abroad may have a different effect, however, particularly if it is low-budget, steady and hard to stop, like sniper shootings or kidnapping, but thus far, Bush's support seems to be holding, even with this stuff already going on. I think Bush will win, but it will be close.

06-04-04 danni: Glutt: Advice55: <Who is going to win USA elections? Any colores opinion on that?> Osama? + K = <KOS AMAK> that in arbik & that what arb will say on next winr

06-04-04 davidetre: <carib: Davide: you were correct. Hipo 13 pays on june 1st. sometimes this kind of coupons get credited a few days late.> Thanks, Carib. I called again my bank. There isn't coupon. To day is 4 of June. Normally?

06-04-04 danni: Advice55: Who is going to win USA elections?........ <ADDVVVIIIICCCCCEEEEEE> what we pay you for @ colores ?? dont warry a but the USelection & do your job, take lulabond down&down that we can load .

06-04-04 Alexander: <<<<Merlino:Now..do you see German RE prices recovering even in contradance to the rest of Europe, assuming there will be a slump over there ? >>>>>

hi Merlino, the slump will not be over for a very long time, there are billions of writeoffs for the mortgage banks still in the pipeline and RE lending is close to standstill (except 1 family dwellings for own use)

all the result to the RE boom of the 90s

rgds.

06-04-04 Patient-Trader: Pillyboy, <PT, viel not like it :-)> You are getting increasingly childish.

06-04-04 Patient-Trader: Merlino, <Now..do you see German RE prices recovering even in contradance to the rest of Europe, assuming there will be a slump over there ? > Most likely not. The question is what is your strategy over a longer run. Given the low prices one has to assume that the downside is limited since people are not so geared up as elsewhere. IMVHO, for those who employ leverage there wont be a better time to take up debt in the next few years. The ideal scenario would be to lock in now low long/term interest rates and buy later, however few are in a position to do that.

06-04-04 Glutt: Advice55: <Who is going to win USA elections? Any colores opinion on that?> Osama? :-)))

06-04-04 Advice55: Who is going to win USA elections? Any colores opinion on that?

06-04-04 Advice55: carib reais at 3,50 in august here we go....

spx looks like hanging on a cliff again, like wourld stocks and EMB...

Not good time for risk takers ahead IMHO...

Charts look ready to ploft! What will the market do with the last rally? The question of the weekend is still open... the money is leaving, slowly taking each and every improvment to leave risk....

CASH and Dolars stil look good this year...

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