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June 25, 2004

The IPO Revival?

In the wishful thinking department there's no grease like easy money when it comes to the skids. So what's the deal? Are we likely to see a revival of IPO's as is being promised by a number of financial journals since Google decided to take the plunge? The answer, of course, is an unequivocal no! It takes the absolute height of a boom for new public companies to appear out of whole cloth.

So that's not the question we are going to deal with here. Let's, instead, examine what it is that makes the IPO market so attractive to ordinary investors and what they really ought to expect. The first thing to understand is that in IPO there are actually two broad markets, one pre-IPO and the other after the event. Needless to say, nearly all the big money is made in the "pre " market and most of the big money lost occurs in the "post" market.

So, what is it good for? Let's start with the positive: in investing high risk needs to be rewarded by high reward. In other words, if the kid down the street invites you over to his garage and gives you a demo of her latest hot idea and then asks you to throw some of your hard earned bucks behind it, well, your real chances of a payback are, let's say, infinitesimal. You're an "angel " in the vernacular and chances are your only reward will occur somewhere in the hereafter. VC's are supposed to be a little smarter, having been around the block a few times, and although they stick their own necks out, often they are mostly playing with other peoples' money.

Still, without them, most start-ups wouldn't ever get off the ground and the most dynamic part of our economy would probably end up like the hairy mammoth. In Europe, where VC's tend to play a much smaller role, it's the government through grants and subsidies that helps float new businesses. Whatever you think of politicians, and perhaps you have a higher opinion than we do, that's no way to seed an economy. A raffle would probably work better. And so, for all their warts and the distortions they often bring into play, let's grant that VC's take big risks and thus, on balance, deserve the rewards they pull out of the system, even if it comes out of the hide of the ordinary investor and often that of the founder(s) and early employees.

Because VC money is often crucial at an early stage and through the long voyage across the chasm, they wield enormous bargaining power. Founders often find themselves giving away much of their stake in order to keep the ship afloat. The VC's understand the game; lousy and mediocre ones often so distort the navigation system and ballast that long odds become impossible. Founders, of course, deserve the big payoff if it ever comes. They often spend years in the desert, scrape and claw, overcome enormous odds even before they have their first employee. Early employees also deserve major payoffs if the company does overcome the odds, and going public is one way this happens. Most start-ups rely heavily on stock option plans to hook and retain technical and managerial talent. There are a lot of problems associated with these plans but even here, on balance, the potential payoff does help early stage companies make it across that difficult period that Geoffrey Moore described as the "chasm ". Without them, it would get a lot harder to succeed.

But even here it's important to note that most employee stock option plans are written by the VC's and law firms who understand the process a lot clearer than your average guy, even in Silicon Valley. Plans commonly tie employees' hands at critical points by requiring long vesting periods and locks on when option holders can finally sell the vested shares they think they own. There are also cash flow, timing issues and tax traps, namely the AMT, that can turn paper profits into humongous tax liabilities. When it comes to stock option plans, they ought to be stamped like cigarette packs with a big caveat emptor.

Most companies never make it to the IPO stage and this may be a good thing for everyone involved. That's because IPO's are extremely expensive and time consuming. A company's management, often at a very critical moment (are there ever any non-critical moments for a new company in a hot, emerging market? you might fairly ask) becomes practically a prisoner of the IPO process for a period that can easily cover a year's time. Instead of worrying about competitors, business, critical research and development, they are thrown into a world of lawyers and bankers whose demands are all consuming. The founder and his chief managers get sucked into every facet, including the authoring of the prospectus. What's sometime worse, is the demands that the underwriters make on the company. Lean companies are required to beef
up their management rolls, often throwing delicately balanced team relationships into turmoil. Where everything was held to together by sweat and blood, now appears a new force, the suit with a resume. What's worse, these resume guys come straight out of central casting and have hefty demands that include big chunks of stock options further throwing delicate internal relations out of whack.

Then there's always the temptation to start the PR wars. Companies that once bargained hard for business cash flow considerations now abort the process so they can announce another deal, another strategic partner that looks good on paper. There is, in fact, nothing more contorting to the workings of a young company than the IPO process, as glamorous as it sounds.

Another longer term downer is the transparency that being traded publiclybrings to a company. Aftermarket stockholders have been given unrealistic expectations, and, as we will get to see, have almost by definition, terribly overpaid for those expectations. Now the company is expected to show its results for all to see on a quarterly basis. This usually means goodbye to strategic thinking, long term planning and hello to the world of gimmicks and skirting the law.

Let's remember that all of the pre-market players up to the underwriters and their friends do not require an IPO to get their rewards, a buyer with a good offer can come along and often do. Big companies are usually failures at creating really new business units and the smart ones know it. What they have is market power, management skills and resources. For them, the equation is a simple one. Sit around, wait and see who emerges and then scoop up the tiny percentage of winners at what seems like a premium price. Investors and unromantic prospective employees should be aware that companies where the founder is a major stockholder are not likely to get sold until it's too late and the premium has long been taken off the table. It's a matter of ego. This gal or guy has come up with the idea and pushed it along against all odds. Now, just when things are finally starting to take off the chances are that this same personality is going to imagine him or herself to be the next Bill Gates. Sell?, lose control?, not likely no matter how sweet the offer.

So who really benefits, the post market guy who buys the shares in the public market? Not likely. The sweet spot occurs right at the intersection
with Wall Street with the investment bankers. These guys get paid just for showing up and doing the work of launching the IPO. Further, they are the only ones to get to buy a lot of "unrestricted shares " still at the pre-market price, which, even in a hot market is equal to having the keys to the government printing presses. They get to reward friends and punish enemies and leverage this sure money to establish their power over the market. So, it's no accident that this is where all the shenanigans occurred in the late lamented last hot IPO market. A few companies like Morgan Stanley and CSFB got the lion's share of the market and they are, by the way, the same ones that are still in negotiations with the government as what the fines they are going to pay are going to amount to.

So if you are one of these investors who can't wait for the next IPO, take the word "laddering " and role it around the cobwebs of your brain. One of the things these companies are being fined for is the practice of "laddering ". What this means is that in order for a pre-public market investor to get his quota of shares, he had to promise to come into the public market on the first day and make a purchase at post market prices. Now why, you might ask, would anyone who got his shares at, say $15, want to buy more at say, $30. Well imagine what it does to the market to have a whole bunch of people coming in and boosting up the price right at this critical market when Mr. ordinary investor is beginning to lick his chops. Prices soar the first day, the headlines scream and lo and behold here come a whole other bunch of suckers in the second day. Now you got a Ponzi scheme.

Now if you've also got the megaphone of the press and the cheerleading of supposed analysts into the mix, you've got a bubble, baby! Are we anywhere close to an IPO revival? We don't think so. First, there's no next big thing. But that's a story for another day.

Posted by dymaxion at 06:16 PM

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June 18, 2004

Big Daddy

It appears that the late playwright Tennessee Williams is a big favorite here in Dymaxia. Several times we've echoed Bill Bonner of the Daily Reckoning intoning on the "kindness of strangers' when talking about the massive US foreign debt, which by the way, in case you didn't notice, bumped up a bit last month to a rate that is close to $600 billion on an annual basis. Those dollars go for things like Arabian oil, IT outsourcing and the mass of manufactured goods that flow into the nation's malls. We've warned that if ever the holders of those dollars lose confidence in our capacity to borrow and spend, there will serious consequences.

But where Tennessee Williams comes in today, is in his deftness in putting the word "mendacity' into the railing mouth of Big Daddy in perhaps his most famous play, "Cat on a Hot Tin Roof". We have to admit we were pretty naive back in those days and that play, actually the movie version, with Elizabeth Taylor and Paul Newman, was the first time we had perhaps ever heard the word "mendacity". And so we learned from this master that there are lies and damned lies and, most importantly, that glossy surfaces can be highly deceptive.

In Washington last week, among the plethora of cliches that flew around regarding the great imperial funeral procession (for more, see the Holy Teflon Emperor) was this nugget: " Washington rises to the occasion when it comes to pulling off big events". This is of course the same city that failed to tell its residents that their drinking water was full of lead, that has by nearly every standard one of the worst school systems in the country, the highest per capita murder rate of major cities and list of firsts in poor health statistics that covers an entire page. Yes, Washington loves big events.

For some reason we couldn't keep Big Daddy's admonitions from ringing in our ears all week long. Yesterday, it was ADM, the guys who feed a starving world, Archer Daniels Midland `copping a plea that they had conspired to fix the sweet syrup market. They didn't admit guilt but agreed to pay what amounted to the largest antitrust fine in history, $100 million. In the Business Section of the Washington Post today there was a story that two of the largest newspaper companies in the country, Tribune Co. and the Chicago Sun Times have both admitted that they have been lying about their circulation figures and, of course, thereby overcharging their advertisers. On the same front page in the lower right hand corner there is a story about IBM lobbyists secretly altering a Treasury report on pension plans. That's what they call thinking ahead, these days, it seems.

A couple of weeks ago it was Boeing being penalized for massive government fraud regarding military contracts. Actually, this kind of mendacity is so common that we hardly blink as it rolls in one eyeball and out the other.

But events aside, what Washington actually does best is spin. We were glued to our TV's this week watching the hearings of the 911 Commission. It was just the kind of fascinating stuff that makes our wonky weeks. Here was the rare occasion when someone was actually checking the facts and doing the hard work of looking and comparing the numerous pieces of a story with the precision and fearlessness of a master stone sculptor tapping on a massive piece of Carrara marble. And so we heard pretty much everything the Committee's staff had to say about the famous Bin Laden, Saddam Hussein connection.

Here, in our minds, at least, was one of the major rationales for the invasion of Iraq: It went like this: Osama Bin Laden is clearly bent on attacking the US with whatever he can get his hands on. He, and his organization, al Qaeda are patient, adequately funded planners who have proved what they are capable of in spades. On the other hand, Saddam Hussein hates the US --who has him in a box-- is oil rich, has weapons of mass destruction and just might supply them to OBL and company.

There was even an oft-stated report that Mohammed Atta, the leader of the 911 attack, met secretly with Iraqi intelligence in Prague at a certain point leading up to the main event. What the Commission staff report stated went something like this: there was no meeting between Atta and Iraqi intelligence in Prague on the day it was reported. There was substantial evidence placing Atta in the US within a time span that would have made it impossible for him to have traveled back and forth to Prague. Further, the Commission reported that Bin Laden and Hussein were known ideological enemies who may or may not have negotiated a truce in a few scattered meetings during the 90's.

Sensing the criticality of this link, the Administration put up a major "it depends on what the meaning of is, is" campaign. On Wednesday and Thursday we heard both the President and Vice President say that they had never claimed that Saddam Hussein was directly linked to 911, only that the emissaries of the two parties had met on more than one occasion over the last decade and a half. By that logic, it could have been argued that the Soviet Union and the US were busy conspiring, given the number of summit meetings that occurred during the Cold War.

The other major twist of the week came from Alan Greenspan in his testimony before Congress. According to Greenspan, who apparently doesn't buy food, pay for his own fuel and utilities or for healthcare, send anyone to college but spends a lot of time buying cheap computers (yes, CPU for the buck is part of the way inflation is measured), inflation is under control; that despite the fact that producer prices (the costs producers pass on to wholesalers) rose .8% in May. "The PPI rose 5 percent in the 12 months that ended May 31, the fastest such rise since 1990" according to the same Washington Post of June 18.

Greenspan needs to start raising interest rates. Here's his dilemma: if he raises them in any serious way he risks taking the sugar out of the diet, so to speak. This is the most stimulated recovery in US history with the printing presses running day and night. Greenspan knows that Bush needs the illusion of "solid growth" if he is to stand any chance of winning the upcoming election. The chance that anything but images of bloodshed and chaos will come out of Iraq in the summer and autumn are pretty much null. And as we noted above any credible rationale for the war other than oil has also pretty much washed out of the picture.

But Greenspan also knows that the only reasonable tool the Fed has to influence the economy, it's hold on short-term interest rates, is presently running on empty. In other words, come next Spring, if economic conditions begin to sink back to where they were or if the economy is hit by another major attack, the Fed will be powerless to play the only stimulus it knows it can truly manage, the interest rate card. There just isn't any way down from 1% and the speculators and hedge funds know it. Meantime we are beginning to see the signs of price rises throughout the economy.

If the Fed can't use interest rates to restimulate, it will have to start pushing down on the value of the dollar. But even there, the dollar is trading at 1.20 to a Euro, a rate that is probably at the outer band of what is sustainable for the major trading partners in the West. Petroleum prices also threaten to throw a further monkey wrench into the mix.

And so the next time you see your favorite pundits touting the strength of the present recovery, wish them Godspeed and hope they know what they are talking about. On the other hand, if that character that Burl Ives played so well keeps intoning "mendacity" into your mind's ear, well, think shelter and safe harbor and whatever you do, don't bet on continuing low interest rates.

Posted by dymaxion at 04:12 PM

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June 11, 2004

The Holy Teflon Emperor

The BS meters were flying off the charts all week long here in Washington and across Mediaworld. For those of us, with low tolerance levels for mind manipulation, it was a tough time. But there were a number of lessons to be learned and, if you turn off the tube and close your eyes, it is easy to also imagine the founders of this great republic rolling in their graves as Washington, the concept, put on one of its most imperial spectacles ever.

The lies were flying around so fast and furious --all in the name of feel-good, they say-- that it's hard to know where to start. But let's begin with the event itself: it was said that we haven't had a presidential funeral since Lyndon Johnson's 18 years ago and that the big deal we made over Reagan was somehow just another turn of a long wheel. They knew that few around could remember that far back and that, in fact, there were marked differences. Importantly, the caisson march down Pennsylvania Avenue was evocative of Abraham Lincoln and John F. Kennedy, both of whom were assassinated while in office. For those deaths the nation was in trauma and the healing power of great mourning and procession had a truly profound state function.

The Reagan funeral was orchestrated for wholly different purposes. It was meant to erase memories and to bolster what had been the rising tide of conservatism in America, of which Reagan played an important role, and which most recently has been brought to decline by his ideological successors. The script for the funeral was meticulously developed by people in concert with Nancy Reagan, who has been determined to do her best to redeem herself and burnish the reputation of her late husband, a man who has virtually been off the public stage for over 10 years as he suffered from a progressive mental and physical affliction that held no way back.

As to the major myths: It is absurd to insist that Ronald Reagan single-handedly won the Cold War. As Mikhail Gorbachev said in an interview to the Washington Post this week, we all lost the Cold War for its great material costs and for the apocalyptical destruction it almost brought down on all our heads. In many ways, Gorbachev's policy changes from within and without as the Stalinist model collapsed, forced Reagan's hand and in that light, we can be thankful that Reagan was wise enough not to snatch defeat from the hands of victory as might have been had he been a more stubborn and insensitive man insistent on waging war at all costs.

For those who wish to give Reagan and all former presidents for that matter, their due respect in passing, it is perfectly reasonable to provide the trappings of state mourning, from lying in state in the Capitol Rotunda to a funeral in the National Cathedral. But the enormity of the expense that has been lavished on the Reagan affair is obscene. Will anybody add up just how much has been spent on military and police honor guards, the shutting down of the federal government for a day, the cost of flying Air Force 1 back and forth the country, etc... all for this amazing display of imperial power?

Here are the myths: Reagan was a simple man of the people who wished to bring back the virtues of the Republic in a time of seeming decline by lowering taxes and diminishing the power of the federal government. His simple but clear vision would bring us forth from the quagmire of Vietnam to a straightforward policy based on traditional American ideals of strength and freedom.

Most media-raised Americans today would be amazed by a visit to the Congressional Cemetery on Capitol Hill, a nearly forgotten place that is mainly used today by intrepid Capitol Hill inhabitants to exercise their dogs. Outside of J. Edgar Hoover and his longtime live-in companion, Clyde Tolson, very few dignitaries choose to be buried in the cemetery anymore. What's interesting about the place for the purposes of this discussion are the cenotaphs that were used as burial markers. This most democratic of concepts was that no one should have a more grandiose burial marker than anyone else; so a standard gravestone, designed by the same man, Benjamin Latrobe, who architected the Capitol, the
was dedicated to each of the dignitaries and even bore a standard inscription for senator and congressman alike.

We throw around the terms man of the people and frugality today the way the ancient Romans pined for the simpler days of their Republic. It's not hard on this funeral day to be reminded of the emperor Augustus whose burial was also manipulated by his wife Livia and those closest to the seat of power. Augustus, who brought a degree of calm to a government that had been rocked by assassination (Julius Caesar) and civil wars, always spoke of returning the government back to the senate and people. He was, he said, a kind of benign emperor in a temporary situation. Augustus was known to laugh at the inhabitants of his Eastern empire who had worshipped their kings as gods on earth. He also liked to play the role of simple farmer tending his own fruit trees up on that glittering hill above Rome, the Palatine, where his palace nestled.

But by the time he had died, he had lost all contact with the outside world and his second wife Livia had managed to get her son Tiberius, a man detested by Augustus, named successor. In gratitude, Livia had an immense temple built in the Forum below dedicated to a new god, the recently passed Augustus. And so the wheel turned and there would never be a republic in Rome again. After Tiberius came Caligula, who showed his disdain by naming a horse high priest and Senator. Caligula also waged a war in which he marched his army north towards the Germans and when he found the going rough --too much rain-- returned home in declared triumph bringing with him trunks filled with seashells; booty, he told his subjects won by his resolute victory over the sea god, Neptune. No longer would Romans have to wait for their emperors to die before they became gods. In this way the wheel turned.

Reagan, the anti tax and spender, the man who took government off the backs of the people, has two major federal buildings named after him in Washington, the international trade center and the airport. Both edifices are the most ornate and expensive in the city's history. Reagan didn't control the budgets but he saw no problem allowing his name to be placed upon them.

Reagan, a straight shooter, of course, took ultimate blame for the illegal trading of arms for hostages and the transfer of funds from that deal over the head of Congress to the hands of fighters battling leftist governments in Central America. It was a tawdry story that might have led to the impeachment of a lesser Teflon man. He said: "A few months ago, I told the American people I did not trade arms for hostages".... "my heart and my best intentions still tell me thatís true, but the facts and the evidence tell me it is not." He went on to say "mistakes have been made."

There is now a move afoot among those propagating the Reagan myth that his portrait should be put on a piece of money. The 40th President, as we have said, was the leader of a movement that would shrink government. He brought down tax levels for wealthy Americans while agreeing to allow payroll taxes --that are supposed to cover Social Security and Medicare-- to rise. Payroll taxes, on a percentage basis, unfortunately, take a much greater toll on lower and middle income Americans. As the instigator of a great military build-up, he tripled the budget during his two terms of office and left with the largest budget deficit in American history, a deficit that was erased by Clinton and then surpassed by George W. Bush in his first four years.

Vice President Cheney was able to say recently that Ronald Reagan proved that deficits don't count. Our advice to the camp that advocates this kind of claptrap in the name of Ronald Reagan: Put his picture on the $1,000 bill, it may not get much circulation now but there was also a time when 1,000 lire seemed like a lot of denaro in Italy.

Reagan was a charming, genial man who served this country in some ways well and in others, not so well at all. He deserves our respect for his service but watch out for the myth makers. It's not Reagan's real legacy they have in mind but their own.

Posted by dymaxion at 05:04 PM

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June 07, 2004

A Wealthy Dose of Skepticism

Yes, you guessed it. That really does look like a leathery Alfred Hitchcock.

In fact, it's his death mask. Hitchcock was a man of many talents and always had that bemused air of a man who knew just how foolish the human drama can be, particularly when the actors begin to imagine they somehow know what the author has in mind for them. Hitchcock actually had a knack for building up the suspense; by layering in quick cuts, focusing the audiences attention on seemingly key details and fogging things with a trail of red herrings, the master of suspense was able to lead us towards the climax without letting on to the real secret, his secret.... things were not going to turn out quite the way we thought.

Hitchcock created a kind of Daliesque clockwork universe. He used to say that the actual shooting of the film was a kind of bore. He had already imagined every scene in his mind's storyboard-eye.

At the dymaxionweb we have the habit of following the news every day. It rolls past us hourly like the pieces of a mosaic settling back into the atmosphere after having been scattered by an immense cataclysm. The suspense builds: deficits grow, people starve or get killed, the money printing presses roll at an ever quicker pace (M3 in the US up 20% in the last three months) jobs are created, oil prices go up and down, house prices bubble, stocks dip, the dollar bumps up.....

This past week we were "entertained" by tapes of Enron energy traders joyfully manipulating millions of Californians as they worked the levers that drove the prices of energy to obscene heights. The rolling blackouts they caused resulted in accidents, deaths, company shutdowns and millions of hours and dollars wasted for the benefit of a few inside pockets. So much the worse, we say, and move on to the next scene projected by the news machine.

Some people will pretend they have it all figured out. They'll gladly sell you their formula. Instead, we think of folks like Ivan Boesky, the highly successful arbitrageur. No seasoned trader would need to rely on illegally obtained inside information if the markets worked in predictable ways nor would all those same experts with fool-proof investing schemes sell their secrets so cheaply if those secrets really could beat the markets like clockwork. No, dear reader, it doesn't work that way. So the next time you get a hankering about a sure thing and decide to roll the whole wad, think about our Hitch perhaps sitting not too far from the shoulder of the market Gods.

And for all those investors who are planning on a long-term income of 20% a year from the stock market (don't laugh, a recent poll of ordinary investors revealed that as their reasonable expectation), or from any other market they are not manipulating, we acknowledge our admiration and wish them the best of luck.

Posted by dymaxion at 02:07 PM

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June 03, 2004

Last Updated

In the narrow, gray bar right above the BLOWBACK, WEAK FIELDS, DEEPTHROAT columns you can read the last updated notice meant to tell readers when new material has been added to DW. It's our way of letting you know that the various feeds we are monitoring and reblogging have new entries. For the moment, the Weak Fields column is the one most likely to be updated on a daily basis. In the future we expect ever more information to flow in and out of the web as we learn more about the outer and inner reaches of the blogosphere.

Even though we have been live only for several days, the number of visitors has been increasing on a regular basis. To those new visitors: Welcome! please come back again. For those of you wishing to follow us on a regular basis we are supporting RSS and Atom feeds and email notification via the Bloglet system.

Thanks for your interest.

Posted by dymaxion at 01:56 PM

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June 01, 2004

Lifting the Veils

In his speech the other night, the president used the term "full sovereignty" several times as he sought to describe the transition of power in Iraq come the end of June. However, in subsequent paragraphs he went on to say that Iraqi sovereignty, full as it might be, would not include jurisdiction over the troops that occupy the country nor the conduct of foreign nationals working for the occupying force. Now, if that's sovereignty, DeGaulle never would have made his way to London to duke it out with Churchill and Eisenhower while he might have led his fight against Hitler in the pleasant clime of the south of France in Petain's Vichy state.

If you do not control the army that controls your streets, you do not have sovereignty, period! You are at best a transitional entity and at worst, no better than a Quisling or a Petain. So how did the media treat the president's words spoken just the other night? Not so curiously, they pretty much gave him yet another pass. Even when Tony Blair the next day declared that Great Britain would accept having its troops under Iraqi control, there was very little stir in the newsmedia world.

Just the week before, Colin Powell had made something close to a major gaffe while speaking on the same subject to a group of Arab leaders gathered in Jordan. Powell was forced the next day to go back on his earlier statement to get back in line with the sovereignty: now-you-see-it-now-you-don't camp. The flap even played out on Washington's premier insider Sunday morning program, Meet the Press, when Powell appeared to be whisked out of camera range by his press secretary. Still, the media, appeared once again to be nearly brain-dead on the subject.

For the DymaxionWeb central, we monitor the news using a number of automated search engines. It can be quite disturbing to see a perfectly similar story repeated from newspaper to newspaper across the country. Of course, there is such a thing as news syndication through the AP, UPI, etc. but what is most striking is that on stories of major importance, these newspapers have basically decided to leave the reporting to others. And we are not talking about international news here but on the basic economy.

And so it turns out that it is really not only the Jason Blairs of the world that bring discredit on the standard press; they do a pretty good job of it themselves even when they are checking their sources. The New York Times is now, just maybe, sort of doing a much more important mea culpa, in our estimation, than the one they did for Jason, in reacting to questions coming out of the blogging world regarding their coverage of the run-up to the war. To remind those who might have forgotten, both the Washington Post and the New York Times supported the inexorable march to war in Iraq with very little hemming and hawing. But the Times, in all its gray respectability, served to provide the most vociferous cover to the argument by running a string of stories authored and co-authored by Judith Miller. Judith was, after all, something of an expert on scary stuff like nerve gas and bio nightmares not to mention aluminum tubes used for nuclear bombmaking. For pure resonance, her creds had been further enhanced by the weight given her testimony by "independent" programs like PBS's "Frontline".

She had covered the dismantling of Russian WMD programs and built a reputation as a tough, not easily daunted reporter with a deep knowledge base on the subject. And yet, it now turns out that according to her own writing, she mainly sourced her stories through the same defectors that Ahmed Chalabi had supplied to the Pentagon, according to an article written in the Washington Post by Howard Kurtz, the Post's media critic: see article.

Judy, it seems even got into a heated email dispute with John Burns, the gray-bearded Times man through thick and thin in Baghdad, when he questioned internally her commitment to the cause of WMD. Later on, during the postwar search period, Judith's zeal turned out to be no less than that of the elusive Vice President. Perhaps the Times ought to assign Judy to find out where our Scarlet Pimpernel is hiding out these days?

Our point is not to single out Judy or the Times for their role, important in terms of credibility in getting public support for the war.... and as bad as the implications of that are and have been on the lives of so many-- but instead to burnish our own particular point of view on the role of the official media and of its ultimate credibility on things that really matter.

It's been our notion for a long time that the press can't help but act as a cheerleader for Wall Street and the present administration's spin on the economy. Only when there is already blood on the ground do they get themselves worked up like a pack of jackals nosing around the body of a near-dead lion.

There's an object lesson here somewhere and it has to do with what we hope to accomplish at our new central node: We've got some test streams up now and will be working on populating our columns with those of you writing from behind the scenes and in a position to help peel back the veils. Please take a look and get in touch!

Posted by dymaxion at 02:21 PM

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