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Depression
Watch #6: Catching the ENRON Flu
February
6, 2002
by Jerald Cumbus (JCMach1)
Just as it appeared that the economy might have bottomed
out, the economy has taken and Wall Street in particular has
been struck down with the ENRON
flu. Like the flu, the only way to stop it is prevention;
something which Arthur Anderson neglected in their auditing practices.
Oversight of accounting practices are now plaguing such Wall
Street darlings as
Tyco, GE, and the de
funct Global Crossing. Investors were also spooked
by the seemingly impotent testimony by SEC Chair
Harvey Pitt in testimony on Monday. The current
administration seems unable and ultimately unwilling to truly
oversee American Securities. All of this undermines
confidence in America's markets and eats at the hear of our
economy.
Recent
statistics (GDP, unemployment, consumer confidence) on
the surface seem to be positive. However, they
may turn out to be so much phlegm.
For example, it appears that the lowering of the unemployment
rate to 5.6% may be only a statistical
mirage: a mathematical dry
cough.
With deficits for the forseeable future, President
Bush's budget also served to undermine confidence on Wall
Street and on Main street. While it lavishes largesse
on a few Defense contractors, there was little cheer the heart
of investors in flag-wrapped tome.
ENRONomics in its purest form, Bush's budget would perpetuate
the incestuous crony-Capitalism of Ken
Lay and his ilk leaving the American taxpayers with a
multi-billion dollar tax boondoggle that rapes social security
and medicare. The flu is
spreading. You might want to cover your noses.
This weeks Depression
Watch Economic Depression Indicator stands at:
60.70 (+0.31)
Stock Market woes, and some weakening in U.S. currency have
caused a rise in week's EDI despite improvements in GDP and
unemployment.
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