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Larry Kudlow of CNBC Reporting of Emergency Federal Reserve Meeting Tonight
CNBC television | 7/23/2002 | Larry Kudlow

Posted on 07/23/2002 5:11:52 PM PDT by rumrunner

Larry Kudlow mentioned that the Federal Reserve may be meeting tonight to discuss the exposure of Citibank and JP Morgan Chase to derivatives and the stock market collapse.

Possible that both banks have billions of derivatives that need to be unwound. Would collapse the banking industry.


TOPICS: Breaking News; Business/Economy; Government
KEYWORDS: cnbc; democratsdream; federalreserve; larrykudlow
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To: Arleigh
HINT: Better LOVE your new house, `cuz you'll be living in it a long, long time.

If you don't lose your job and can keep up the payments.

101 posted on 07/23/2002 6:33:53 PM PDT by Aliska
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To: DeaconBenjamin
All of which was why Hitler's industrial success gave him the power to have it his way. He brought Germany out of the financial pitts and into world markets.
102 posted on 07/23/2002 6:34:05 PM PDT by wingnuts'nbolts
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To: Political Junkie Too
It would be awfully hard for the media to keep Rubin's name out of the story now, won't it?

Yes! It will be fascinating to watch as they successfully DO JUST THAT.

BTW, this is pure tinfoil hat stuff, but if this secret Fed meeting is true, the thought occurs to me, did Cheney go aboard that submarine off Fla in order to have a top secret meeting that would be impossible to electronically overhear, or wiretap? Maybe by foreign sources?

Maybe something big is going on behind the scenes, because the dems/media have W. directly in their sights now, and they WILL drag him down and the GOP also in November unless something BIG comes along to stop them in their tracks.

103 posted on 07/23/2002 6:34:25 PM PDT by berned
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To: Arleigh
Au contraire, mon frere!

Look dude, for personal and historical reasons, I can't stand French. Comprende'?

104 posted on 07/23/2002 6:35:58 PM PDT by jwalsh07
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To: TBall
the smoking gun that has caused the problems we now face in the biz world!

The Private Government of Citigroup

In 1998, Travelers CEO Sandy Weill and Citicorp head John Reed announced plans to merge their two financial powerhouses. There was one problem: U.S. law prohibited the merger of commercial banks with insurance companies and securities firms. The two companies were not deterred. A loophole in the law barring such combinations gave the two companies a two-year window before the merger ban would kick in. That would be plenty of time, they figured, to change a centerpiece of U.S. banking laws that had stood in place for more than 50 years.


There already was momentum in Congress in support of the financial deregulation that proponents supported under the misleading banner of “financial modernization.” But there were also major legislative blocks and hurdles, and no assurance of passage.


Enter Citigroup. Though Citicorp has opposed the deregulation bill, the merged Citigroup became its most important advocate, with Sandy Weill pitching a tent in the halls of Congress to lobby legislators.


Still, the bill remained mired in Congress, thanks to jurisdictional disputes among federal agencies, intra-industry conflicts and consumer group opposition.


Former Clinton Treasury Secretary Robert Rubin sealed the deal. After having left his Treasury Department post, but amidst negotiating his new terms of employment as chair of the management committee at Citicorp, Rubin brokered the final compromise to ensure passage of the financial deregulation bill.


While Citi’s top priority was an after-the-fact legalization of the tainted Citicorp-Travelers merger, much more was at stake — for both the financial industry and consumers. The bill has enabled not just this particular corporate combination, but the intermingling of businesses that were formerly, properly and prudentially, kept apart.

http://multinationalmonitor.org/mm2002/02april/april02editorial.html
105 posted on 07/23/2002 6:36:28 PM PDT by TLBSHOW
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To: TLBSHOW
The feds can't bail them out this is too big

I still want JAIL TIME for Rubin and his buddies

106 posted on 07/23/2002 6:37:29 PM PDT by Mo1
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To: Arleigh
OK, how much you would you like to wager that the US is not in a depression at the end of Bush's term?
107 posted on 07/23/2002 6:37:45 PM PDT by jwalsh07
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To: kcvl
I haven't heard one word about Rubin either. Stupid media makes me so mad.
108 posted on 07/23/2002 6:39:10 PM PDT by terilyn
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To: Arleigh
After CDOs start imploding and the hot money spigot gets turned off, the demand for residential real estate dries up like the Gobi Desert and every sucker who bought a dream house is going to find himself upside down for a decade or more.

There was a major real estate bubble on Cape Cod in the mid to late 80's. I moved there in 1991 and bought a house for $170K. The previous owner had bought it for over $250K. At the settlement, when the money was passed around I was able to calculate that she lost just about $80K in less than five years.

The market up there is now climbing - in what is probably a precursor to another bursting bubble.

I'm currently sitting on waterfront property in Maryland that has appreciated by about 25% in three years. I'm beginning to wonder if and when I should get out before the local bubble bursts.

109 posted on 07/23/2002 6:40:59 PM PDT by jackbill
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To: Timesink
The feds will bail them out 100% if that's what it takes to keep them from going under.

Why izzit every time we get a One Term Bush in the White House, there's always a "bailout" of the financial institutions? Papa Bush added close to a Trillion dollars to our National Debt with the S&L Bailout. How much is Junion gonna stick us with?

110 posted on 07/23/2002 6:41:32 PM PDT by Willie Green
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To: Miss Marple
Can you just imagine the softballs that Byrd would toss as Rubin? This isn't going to happen. I just know it. Not unless we take back the Senate. They run the committee and they will not take down one of their own.
111 posted on 07/23/2002 6:41:54 PM PDT by terilyn
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To: jwalsh07
This is a hysteria, more people confusing causes and symptoms.It can be remedied, if need be, by massive Fed buying of long bonds, to really, finally, once and for all, end the monetary deflation brought about by....the Fed.
112 posted on 07/23/2002 6:42:12 PM PDT by habs4ever
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To: DeaconBenjamin
Ink stamps that read ',000' were made to mark up the Mark notes as inflation grew.
113 posted on 07/23/2002 6:42:18 PM PDT by Petronski
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To: Timesink
Both Citibank and Chase fall into the "too big to fail" category. The feds will bail them out 100% if that's what it takes to keep them from going under.

Should be read as: "Taxpayers will bail them out 100% if that's what it takes." The public was sold federal guarantees of bank deposits as a means of safety in the depression, but it also obligates them to pay for the bad decisions of the banks. The question we should be asking, is what portion of these bank's assets are actually worth real money today, and what assets are uncollectable, because we are going to have to chip in the difference.

114 posted on 07/23/2002 6:42:49 PM PDT by Vince Ferrer
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To: True Capitalist
secrete meeting

A meeting about secretions sounds like it has Clinton all over it...

what? no one into humor anymore?

115 posted on 07/23/2002 6:42:55 PM PDT by Scott from the Left Coast
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To: Aliska
The only worthwhile author to write too long books. Dostevsky.
116 posted on 07/23/2002 6:43:18 PM PDT by bvw
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To: Aliska
http://www.fallstreet.com/

July 22, 2002
Plunge Protecting Like Its 1929?

Many American's are dumping their mutual funds, financial 'experts' are
(once again) using the phrase 'don't panic', and seemingly everyone is
hoping that the worst will soon be over. Cue the Plunge Protection Team...

"The Federal Reserve is accountable to no one; it has no budget; it is
subject to no audit; and no Congressional committee knows of, or can truly
supervise, its operations. The Federal Reserve, virtually in total control
of the nations vital monetary system, is accountable to nobody - and this
strange situation, if acknowledged at all, is invariably trumpeted as a
virtue"
M. Rothbard. The Case Against the Fed

What the PPT does (in theory)
Since the Federal Reserve Board is accountable to no one there is very
little hard evidence that the PPT exists. Rather, following the formation of
the Working Group on Financial Markets the SEC created a 'red book' to help
it deal with financial crisis's, and there have been instances when rule
changes rig the futures markets. However, whether or not the SEC is ready to
change rules to prop up the markets (as they did following 9/11) or futures
exchanges are prepared to alleviate the squeeze on some key players are
incidental points compared to that of the larger question: does the Fed buy
stocks?

The story goes that the PPT (Fed) funnels money through different channels
(GS, ML) to buy baskets of Dow stocks and/or S&P/Nas futures. Further,
'unquotable' and 'off the record' insiders insist that the actions of the
PPT are sometimes ridiculously obvious - when the markets are collapsing
with seemingly no hope of a turnaround, suddenly huge buy orders appear.

Plunge Protecting Success (common): The PPT buys stocks and helps create an
illusionary market bottom.

Plunge Protecting Failure (rare): The PPT buys stocks and prices continue to
crumble.

Has The PPT Been Buying?
Even though the markets have dropped during the last 2 months it is unlikely
that the PPT has been overly active. Why? Because the drop has been
methodical and orderly. The last thing the PPT wants is to haphazardly buy
futures only to be 'hung' in a few weeks time.

With this in mind, what The Team tries to do, in theory, is ensure that
panic selling is undertaken in an orderly fashion (as absurd as this
contradiction may sound). As such, last Friday's bout of semi-panic selling
could have been the wake up call for napping PPT members who last helped
orchestrate a bottom in the markets following 9/11.


The 1929 'Protectors'
"In the very midst of the collapse five of the country's most influential
bankers hurried to the office of J.P. Morgan & Co., and, after a brief
conference, gave out word that they believed the foundations of the market
to be sound, and the market smash has been caused by technical, rather than
fundamental considerations, and that many sound stocks are selling too low."
October 24, 1929. New York Times

As the markets crumbled in October 1929 J.P. Morgan and others began to meet
in secret quarters and make daily announcements that stocks were cheap and
that they were buying. One could argue that J.P. Morgan, the so-called
'lender of the last resort' before the Fed was created, was the ringleader
of the 1929 version of the PPT:

"So confident were leading bankers that prices were reaching bottom that
they reduced margin requirements for demand loans to brokers from 40 to 25
percent. Members of the banking pool formed last Thursday, when the selling
movement reached alarming proportions, again met at the offices of J.P.
Morgan & Company, and it was learned that huge buying orders were thrown
into the market to absorb selling on the way down and keep the decline
orderly."
October 30, 1929. New York Times.

Realizing that the stock market fallout lasted through 1932 the investor is
reminded of one truism: no team of Plunge Protectors is infallible. For
certain, there comes a point when intelligent and powerful would be
'protectors' begin buying stocks based upon the notion that falling stock
prices represent an unacceptable risk to the financial system -- not
necessarily because current market prices reflect immediate
'undervaluation'. It is at such a point when the delusion takes full hold -
or when the protectors become active investors in falling stock markets.

"Neither assets nor earnings, large as the earnings have been in many
instances, warrant the market valuations of hundreds of stock issues. There
has been an inflation not free from the charge of criminality, and which has
been brought about by misrepresentation, and in many instances dishonest
salesmanship. Many corporations have responded to the hysteria and
inflationary spirit, and have increased their stocks issues without reason
and without justification, expecting to unload them, as unfortunately has
been done, upon a credulous, hysterical, if not intoxicated public. It was
inevitable that a day of reckoning would come.
.brokers and some bankers and credit organizations have joined in the credit
"joy ride" of speculation. They and others must beware lest the catastrophe
continue and the limits of the graveyard require enlargement."
Senator King, October 25, 1929, New York Times

The above quote sums up the dangers the PPT faces when they decide it is
time to stop stock prices from falling. Indeed, there comes a point when
saving a stock market for the sake of saving the stock market is the wrong
choice to make. Rather, the more prudent alternative for protectors is to
sometimes allow supposedly free markets to fall free of intervention, and to
force stockholders who hold nothing more than blind faith to exit
ungraciously. After all, the PPT's mandate is to help create an illusionary
market bottom - the illusion only becomes real if others join in and buy.

Conclusion
If the Dow crashes the PPT will try to brace the fall. If they are
successful life will go on and a new near term bear market 'bottom' will be
formed. However, if they fail the PPT will have only have prolonged, in
Senator King's words, 'the inevitable'.

Will the PPT be buried alive? To be continued...

"Plunge Protectors must beware lest the catastrophe continue and the limits
of the graveyard require enlargement."
117 posted on 07/23/2002 6:43:32 PM PDT by BillyJack
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To: BillyJack
Any more details on the Meeting from Cnbc?
118 posted on 07/23/2002 6:44:41 PM PDT by newsperson999
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To: jwalsh07
Look dude, for personal and historical reasons, I can't stand French. Comprende'?

Mais pourquoi, mon ami?

119 posted on 07/23/2002 6:44:47 PM PDT by Petronski
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To: Miss Marple
Is this why Drudge is reporting that the NYT will be reporting that conservative Christians are p****d at Ashcroft? Starting to discredit the DOJ and get in on the internecine fighting going on in in our Party?

Once again, you supply the missing dots: W was also bipartisan enough to bring Rubin in after the attacks to help stabilize the market. The SEC hires info could mean that they were on this prior to today? Is that how you read it?
120 posted on 07/23/2002 6:45:02 PM PDT by reformedliberal
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To: Arleigh
Debt sucks. Derivatives that make the system teeter due to overleverage suck.
121 posted on 07/23/2002 6:45:29 PM PDT by tomahawk
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To: habs4ever
This is a hysteria, more people confusing causes and symptoms.It can be remedied, if need be, by massive Fed buying of long bonds, to really, finally, once and for all, end the monetary deflation brought about by....the Fed.

Yeah, I know. Another favorite conabulation? is the market and the economy.

122 posted on 07/23/2002 6:46:01 PM PDT by jwalsh07
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To: NativeNewYorker
Well, one can hope. Maybe their going easy on Rubin is what will finally destroy the credibility of the NY Times and the other mainstream media. The Literary Digest could never get over all its polls in '36 predicting the victory of Landon.
123 posted on 07/23/2002 6:46:20 PM PDT by aristeides
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To: shrinkermd
If this is true and it was successfully kept secret from the markets until they closed today, tomorrow should be quite a ride.
124 posted on 07/23/2002 6:48:09 PM PDT by aristeides
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To: Mo1
You're welcome, and it doesn't look so good to me either.

Rubin will never go to jail. He's made of teflon, just like Clinton. Stuff just slides off him.

We can thank the media for that.
125 posted on 07/23/2002 6:48:47 PM PDT by terilyn
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To: rumrunner
If I were Terry McAuliffe or James Carville I might want to leave this country post haste and head to someplace that doesn't have extradition laws with the USA.

I have this feeling that McAuliffe, Carville, and the Clintons worked closely with George Soros' Quantum Fund and the investment firm of Goldman Sachs to raid Wall Street of a lot of money and put in an economic nuclear bomb "poison pill" that will destroy the American equity markets so the Democrats will walk in and do what amounts to a socialist takeover of the US economy.

Far fetched? Given that Soros' heavy dealings with foreign currencies caused the Asian economic crisis of 1997-2000, you really openly wonder....

126 posted on 07/23/2002 6:49:03 PM PDT by RayChuang88
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To: BillyJack
Were the leaders of these companies so arrogant to think that they could get away with these financial machinations and that the house of cards would never fall?

You've got to be arrogant to get to the positions these guys have.

127 posted on 07/23/2002 6:49:38 PM PDT by aristeides
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To: BillyJack

"Plunge Protectors must beware lest the catastrophe continue and the limits of the graveyard require enlargement."


128 posted on 07/23/2002 6:49:53 PM PDT by crypt2k
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To: Petronski
Mais pourquoi, mon ami?

You may.

They attempt to cheat me when I travel to St Marteen, they gave the American, that's me, the half empty tank on a 130 foot dive and they roll over every time the Germans visit.

Aside from their not letting us fly in their airspace when we want to kill terrorists and busting Bush's balls every step of the way, they're AOK for assholes.

129 posted on 07/23/2002 6:50:08 PM PDT by jwalsh07
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To: tomahawk
Debt only sucks in a deflation, when no one has pricing power.Derivatives work if used to hedge.When they are used to speculate by treasurers and CFO's and idiots like the former CFO of Orange Country, to trade various points along the yield curve, then they are a problem.

When it goes beyond simple cash management to a profit source, well, ask Dell and Proctor and Gamble what's likely to happen.
130 posted on 07/23/2002 6:53:11 PM PDT by habs4ever
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To: OldFriend
DAMN............GREAT point!

APPLAUSE!!!!!
131 posted on 07/23/2002 6:53:11 PM PDT by justshe
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To: Petronski
Parce qu'il n'est pas votre ami?
132 posted on 07/23/2002 6:54:06 PM PDT by Aliska
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To: OldFriend
Unless the media figures a way to move Bush and Cheney from being oil men to being bank owners

Republicans = bank owners.

133 posted on 07/23/2002 6:54:50 PM PDT by berned
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To: Arleigh
Remember, Hoover's depression also discredited Coolidge. Coolidge in this case is Clinton.

So, is this Nader's opportunity? Or can the Democrats still save themselves by dumping Clinton and the Clintonistas?

134 posted on 07/23/2002 6:55:01 PM PDT by aristeides
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To: rumrunner
Emergency Meeting, Eh?


135 posted on 07/23/2002 6:55:24 PM PDT by NormsRevenge
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To: terilyn
I know Clinton won't go because this country won't put an XPresident in jail

But Rubin is a whole other story .. I WANT HIM IN JAIL

If they could put the Nixon boys in jail .. they can put the Clinton boys in jail
136 posted on 07/23/2002 6:55:53 PM PDT by Mo1
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To: jwalsh07
They attempt to cheat me when I travel to St Marteen, they gave the American, that's me, the half empty tank on a 130 foot dive and they roll over every time the Germans visit.

Aside from their not letting us fly in their airspace when we want to kill terrorists and busting Bush's balls every step of the way, they're AOK for assholes.

That did it. Milk out of the nostrils laughing here.


Tony

137 posted on 07/23/2002 6:56:44 PM PDT by TonyInOhio
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To: Petronski
I have an "Eintausend Mark" note (issued by the Reichsbankdirectorium in Berlin) counterstamped as an Eine Milliarden Mark (1 billion mark) note.
138 posted on 07/23/2002 6:57:06 PM PDT by DeaconBenjamin
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To: BillyJack
Thanks for the post. I don't know if that is a reliable site or not, but it sounds reasonable to me. They have been artificially propping everything up for a long time. It seems to work but I have little trust in such a bloated system as we find ourselves in. We should have kept our manufacturing base.

139 posted on 07/23/2002 6:57:17 PM PDT by Aliska
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To: Mo1
There's a slight difference. Nixon's boys were Republicans. Clinton's boys are dems.

I want Rubin in jail too. I'm just not going to hold my breath :)
140 posted on 07/23/2002 6:59:44 PM PDT by terilyn
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To: BillyJack; Poohbah; Lazamataz
No one knows what the bank's derivative risks are other than that they have $23.4 trillion in derivatives against equity of around $40 billion

$23.4 trillion. Uh oh.

141 posted on 07/23/2002 7:00:01 PM PDT by #3Fan
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To: d4now
you're gonna be rich.
142 posted on 07/23/2002 7:00:59 PM PDT by monkeyshine
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To: DeaconBenjamin
Make that eine milliarde.
143 posted on 07/23/2002 7:01:14 PM PDT by DeaconBenjamin
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To: Timesink
ROFL...........The Big Unit? I have always thought of him as The Nasty Crooked Squirt!
144 posted on 07/23/2002 7:01:22 PM PDT by justshe
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To: terilyn
Why can't the House run a hearing?
145 posted on 07/23/2002 7:01:22 PM PDT by aristeides
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To: Arleigh
"Yeah, "dream" is right! Rubin and Clinton will be fingered for ruining our financial system right after the American media and university academics issue a joint apology to the late Joe McCarthy for ever having doubted his assertions that the federal government was full of Soviet spies!"

Like you, my hopes have been dashed too many times to count on a Clinton or anyone they're connected with being brought to justice. Call me cynical, but unless God provides a miracle, I just don't see it happening.

Unless I'm greatly underestimating Bush & Co, the blood in the water is theirs. I'd love to be wrong.
146 posted on 07/23/2002 7:02:27 PM PDT by demkicker
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To: #3Fan
Looks like Clinton was successful in his destruction of America if 23 trillion gets wiped of the books. He'll be the great socialist hero of the rest of the world, able to bring the last capitalistic country (America) down in just 8 years.
147 posted on 07/23/2002 7:04:17 PM PDT by #3Fan
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To: Endeavor
because they'd have to know that these were not only shady, but also that Enron had no real way to pay them back.

how's that? When the loans were made Enron was on top of the world. Sounds like just usual gamesmanship with accounting. Rules are just games to be played with - that's what Clinton taught us, right?
148 posted on 07/23/2002 7:04:26 PM PDT by plain talk
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To: Arleigh
Oh, puhleeeeze! Like a previous poster stated, unless they can move Bush and Cheney from being oil men to bankers, this dog don't fight.
149 posted on 07/23/2002 7:04:28 PM PDT by justshe
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To: RayChuang88; Betty Jo; My Favorite Headache
If I were Terry McAuliffe or James Carville I might want to leave this country post haste and head to someplace that doesn't have extradition laws with the USA.

As we just learned (in connection with that Saudi UN official accused of rape on Marco Island,) Saudi Arabia does not have an extradition treaty with the U.S. I wonder how they would like living there.

150 posted on 07/23/2002 7:05:48 PM PDT by aristeides
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