Save the Bears
Andy Smith, ace precious metals analyst at Mitsui & Co., Ltd., recently released his Forecast for gold prices for the coming year. Entitled 2003: Geometry Not Geopolitics, the Forecast is brilliant, witty and a delight to read, standard fare for the analyst who is probably the smartest and certainly the most entertaining of the gold establishments house intellectuals. And yet, gold bugs who study Andys output for insights into what the banks are thinking will note something different about this one: acute implausibility. Indeed, the piece strikes us as so tortured that we construe it as a cry for help.
Stone Walls Do Not a Prison Make
The Forecast begins with a Summary that outlines the argument that things cant get any worse in general, hence better for the price of gold in particular, so golds direction has to be down once some follow-through irrationality works its way through the market. The process will last somewhat longer than it should, giving gold a brief gambol in the sun, but then its back to the cave and Bobs your uncle. (The Forecast speaks also to platinum group metals and silver, but allow us to stick to our knitting.) A chart at the bottom of the Summary page sets out Andys bottom line: gold will hit a high of $385, a low of $310, and trade on average at $335.
On the very next page, however, there suddenly appears a segment entitled Technical Analysis by one Amanda Sells. Ms. Sells is identified parenthetically as an independent consultant. Although we do not know Ms. Sells or her work, we take it that she -- unlike Andy -- is not a fixture on the payroll of the bullion bank with the largest net short position in gold on TOCOM, some 56 tonnes as of January 30. This, we make bold to surmise, is key. Ms. Sells addresses gold in one brief paragraph and one small chart, and then is heard no more, but the effect is nonetheless jarring. Her conclusion reads as follows:
On balance, however, the break is a major one and augurs a significant shift and rise in the trading price of gold with a move to and beyond the $403 target feasible (emphasis in the original).
The effect of this little bolus is to impeach the balance of the Forecast, both as summarized on the preceding page, and as developed over the next 18. The Forecast is filled with clever charts and original correlations. But it makes only one mention of Ms. Sells, in a brief aside about mid-way through:
if $340 stays broken the best investment advice is to think geometry not geopolitics (read no further and see Amanda Sellss assessment on this) (emphasis in the original).
The importance of this unassuming passage can be seen in the fact that it provides the title for the entire Forecast. Readers attuned to the way of the bear will note two things happening here.
One, Andy is providing confirmation that $340 is the magic number from the banks perspective. This price level -- not $335, $354.10, $372, or any other number -- marks the Maginot Line. Readers familiar with the Howe Lawsuit, which is to say, probably all six of you, will recall that this was also the level through which the gold price threatened to surge in the wake of the Washington Agreement in September 1999, prompting the oft-quoted, never disclaimed remark by Sir Eddie George, Governor of the Bank of England, which we cant resist requoting here (Howe Complaint at par. 55):
We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K.
As conspiracy theorists everywhere are wont to inquire: Coincidence? Maybe.
Two, Andy seems to be saying that he thinks gold could go a lot higher than he is saying he thinks. Now, those wild things over at GATA may shriek that he is just trying to have it both ways, allowing for an upside breakout while serving up the usual comfort food for the bears. Perhaps. But we think there may be a little more to it. In fact, we think it likely that Amanda Sells is merely a literary device, a messenger, as it were, from a cell block in Frank Venerosos Prison of the Shorts, bearing word of Andys true convictions. In this connection, we note that her initials are the same as Andy's. Coincidence? Maybe.
Calling Doctor Pangloss
Andy quickly introduces us to the fount of wisdom that appears to underpin his entire gold-bearish, paper-bullish weltanschauung. This is none other than Thomas Babington Macaulay, an intellectual spring from which Andy proceeds to drink lustily. In the first of 7 separate citations of Lord Macaulay sprinkled throughout the Forecast, Andy quotes him thus:
We are told that our age has invented atrocities beyond the imagination of our fathers; that society has been brought into a state, compared with which extermination would be a blessing. Thomas Macaulay, 1830
The message to gold bugs and other nattering nabobs of negativism is clear: lighten up. Things will work out O.K., they always have before, and we always end up in a better place. This is vintage Macaulay, who, for those readers burdened with a technical education, is to history what Pollyanna is to philosophy. A brilliant 19th century Englishman, Macaulay wrote the classic Whig History of England, a depiction of history as a steady and linear improvement in the human condition.
Now Andy is free (Or is he? See above) to choose his own metaphysics of history for inspiration, but we are equally free to observe that his choice is absurd. The problem with reliance on Macaulay is that, brilliant as he was, for him the present day was the middle of the nineteenth century. This was indeed a period of genuine peace and progress running roughly from Waterloo to the First Battle of the Marne, a time, not coincidentally, when the Gold Standard, mankinds greatest achievement in monetary economics, held sway. Lord Macaulay did not live to see the collapse of the world order and the century of barbarism and butchery that was ushered in with the catastrophe of World War I. So his perspective was understandably a bit more smug and upbeat than that of, say, an Oswald Spengler or an Arnold Toynbee, who subsequently authored philosophies of history with a more sophisticated cyclical rather than linear theme. Moreover, Macaulays perspective was Anglo-centric and imperialist, rather than multicultural and civilizational, as in Spengler and Toynbee but also as in the more recent work of Carroll Quigley and Samuel Huntington. Even a generation ago, as we can relate from bitter personal experience, it was not a good thing to have an instructor scribble Whiggish in the margin of a mainstream college history paper. Today, given an ongoing war on Islamist terror and an imminent war against an Arab state, to consult Macaulay for guidance on the contemporary gold market is like looking to Jane Austen to interpret The Sopranos.
It Doesnt Get Any Worse than This
Lord Macaulay, who so far as we know did nothing to deserve such ill use, is cited repeatedly to put an optimistic spin on numerous contemporary phenomena that trouble those of little faith. Iraqi War? Bollocks, well civilize the wogs. Take the starch out of gold, too, by Jove: (A kind of Middle East version of Berlin, 1989, only this time with considerable collateral damage to physical gold demand.) It cant get any worse, after all:
Then merely grant that status quo in the Middle East is untenable; already a worst, unstable case. So change is for the better. As Macaulay reminded us, History is full of the signs of this natural progress of society. We see in almost every part of the annals of mankind how the industry of individuals, struggling up against wars, taxes, famines, conflagrations, mischievous prohibitions, creates faster than government can squander, and repairs whatever invaders can destroy. This time it will be different?
Cut to Ferris Buellers Day Off, where Ben Stein, as a high school history teacher, asks in a bored, deadpan monotone: All right, class. Who can think of something worse than what we have now in the Middle East? Anybody?
Perhaps the Forecasts most insensitive handling of Lord Macaulay is a gratuitous linkage to Fed Chairman Alan Greenspan. This comes in the phrase, Mr. Greenspans Macaulay-like reassurance , which follows a long quote from the Chairman extolling the marvels of the paper standard in the 30 years leading up to 9/11. The Chairmans quote leads in turn to a table that lists on one side all the recent shocks to the monetary system, and on the other, golds muted reactions thereto. The theme, as introduced in the Summary, is that the pace of potentially gold-friendly political and economic shocks hitting the fan since 9/11 cannot possibly be sustained (emphasis in the original). Back to Ben Stein: All right, class. Who can tell us what happens to the pace of events once war breaks out? Anybody?
Lord Macaulay is even cited for the proposition that the Debt Bomb, the gigantic bubble in U.S. debt of all kinds, so termed in a cover story in Barrons the week after the Forecast was released, is really not such a big deal.
There is some discomfort for dollar-and-debt-damning gold bulls in the unconventionally wise observations of Macaulay. Dousing doom-laden predictions of the demise of credit-based economies in the early 19th century he asked: Was there ever, since men emerged from a state of utter barbarism, an age in which there were no debts? Is not a debt, while the solvency of the debtor is undoubted, always reckoned as part of the wealth of the creditor?
Well, we guess so, at least when you put it that way, your Lordship. But tell us, how solvent can the borrowers be of $30 trillion in aggregate indebtedness in a country with a $10 trillion GDP? Anybody?
The Four Horsemen of the Notapocalypse
The Forecast finds yet more creative solace in Lord Macaulay, but you get the point. Turning to its market specific observations, we see the basic argument develop as a discussion of the shortcomings of each of the four categories of investor capable of supporting the gold price: (1) speculators; (2) gold miners; (3) physical buyers; and (4) central banks.
Speculators get especially short shrift. The little guys are plankton and most may have already been sucked in. The real investment has come from the miners themselves, who have propped up the speculators to date. Things may yet get a little wacky in 2003, and this is where we see the second reference to Amanda Sells, but at the end of the day the speculators will be checked by three factors: (a) The large speculators are overdoing it, selling America short by going long euros and short the S&P, and the crawl to gold quality has already discounted something bordering US meltdown quite soon. (b) Speculative investment by Western investors may eventually be offset by disinvestment by Eastern investors. (c) Sooner or later, Western speculators will figure out that paper hedges work better than gold.
To all of which we would observe, maybe, maybe not. That large speculators are short the S&P and long euros is interesting, and no doubt probative of something, but what, we wonder? Yes, Eastern disinvestment may someday offset Western speculative investment. Or then again, maybe not. That paper hedges -- like shares in the Kroll security company -- have matched shinier, highly geared second bests in these less secure times makes for an interesting chart on relative performance since 9/11. That speculators in their wisdom will embrace such metal-free, designer risk hedges during a major bull market in gold is an interesting -- albeit far fetched -- speculation.
Finally, what the speculator segment omits is almost as interesting as what it covers. It makes no mention of trading activity and trends on the TOCOM, which after the COMEX is the world's most visible gold futures exchange. This is an odd omission in a market analysis issued by the Japanese bank with the biggest net gold short position thereon. Other observers have thought the recent pickup in gold futures activity on the TOCOM potentially quite significant. At the very least, we would expect to see a passing reference to Japan in this segment, albeit with a suitably gold-bearish interpretation. Not a peep.
All in all, pretty thin gruel for the bears.
Gold Miners have done the heavy lifting so far, and de-hedging by producers may dominate gold prospects in 2003. The lack of contango in a low interest rate environment, diminished liquidity in gold forwards and options, and a desire to get on the right side of investor preference for non-hedgers will provide ample motivation. But, and theres always a but, dont look for this to continue for long. Miners will not be able to titillate sharebuyers with de-hedging so easily going forward, and there will be less merger activity, which has been a catalyst for de-hedging. Moreover, if prices stay above the lofty level of $340, new supply will not fall much.
Two bones to pick here. First, de-hedging does not appear to have been as big a factor in golds rise in 2002 as commonly assumed. As Frank Veneroso and Declan Costelloe noted in Gold Derivatives, Gold Lending, Official Management of the Gold Price and the Current State of the Gold Market (www.gata.org/Veneroso1202.html; also www.financialsense.com/editorials/veneroso.htm), while producers short positions in the futures and forwards markets may have been substantially reduced, aggregate gold loans by central banks have not. Moreover, as Reg Howe reminds us in his recent commentary of January 27, despite all the producer hedgebook reductions, total gold derivatives rose by $48 billion in the 1st half of 2002, suggesting that producer hedging is in any event dwarfed by bank derivative activity. Finally, as we have noted previously, at least some producer hedge trimming has come as paper offsets rather than market-affecting deliveries of metal. Second, the notion that $340 marks a level at which a widely projected decline in new mine supply will reverse is, so far as we are aware, a novel theory lacking any empirical support. To the contrary, people we talk to who actually mine the metal are consistent in averring that mine supply will indeed decline even if the banks would wish it otherwise.
Physical Buyers are another Achilles heel in the gold market. Citing Gold Fields Minerals Services/World Gold Council numbers, the Forecast observes, with respect to Indian demand,
While investors outside India (according to GFMS/WGC calculation) bought all of 20 tonnes more in the purportedly perilous Q1-Q3 2002 compared with Q1-Q3 2001, Indian investors bought 40 tonnes fewer bars and Indian consumer investors (too readily swept under a carpet of semantics) bought 167 tonnes fewer high carat havens. This fall in Indian investment jewellery demand (flattered by inclusion of increased scrapping in 2002) is almost as big as the level of investment in the rest of the world in Q1-Q3 2002 (183 tonnes).
And China cuts no ice with Andy:
But what about those headlines about queues at Shanghai gold shops for bars, following liberalization of retail physical investment in December? First, better keep fully abreast of breaking news.
Minute by minute
INDIA - People queuing up to sell gold as prices soar
31 Dec 19:57 The Indian Express - Business
CHINA - Customers Queue for Gold Bullion
31 Dec 19:56 China Internet Information Center
Second, some more numbers and a powerful microscope help place this phenomenon in context. WGC/GFMS managed to calculate all of 0.9 tonnes of retail investment in Q1-Q3 2002, or 0.0008 of a gram per head; against this nano-base, two old men tying their shoe laces within a mile of a jewellery establishment would seem to shop keepers like the first day of the Harrods New Year sale.
In sum, the reason why golds importance is diminishing in India is that India is modernizing. Gold is a badge of backwardness, inversely correlated with cultural and economic development. Advanced societies have graduated to paper. The more progress India makes, the less use it will have for gold.
Well, lets see here. With respect to Indian offtake statistics, we have to say, maybe so, we dont know. GFMS, the source cited for the flows, enjoys a monopoly on crucial gold market data, of which more below. GFMS could publish numbers that are ten times or one-tenth reality, and neither we nor anyone else could challenge them. That we have little confidence in GFMS numbers doesnt mean we can marshal any countervailing data. So the Forecast gets a pass on Indian offtake.
With respect to China, arent we being just a little hasty here? When was it that the retail sector opened up? Anybody? And what period does the Forecast cite, drawing on the ever-useful WGC/GFMS, to show theres nothing there? Anybody? So may we not conclude, in all fairness, that its a little premature to write off China as a market for gold?
With respect to the correlation between civilization and paper money, it seems to us that the correlation is descriptive rather than prescriptive. That is, there are those (at least some of whom know how to use a fork) who would argue that the current preference of Western societies for paper money merely reflects the consequence of the 30-year war on gold waged by Western monetary authorities. It is not surprising that paper is preferred in a dollar-centric monetary system from which gold has been banished. Nor is it surprising that gold continues to be prized in societies on the fringe of that system. But does this tell us anything about the future? Is it not possible that the monetary preferences of Andys primitive East represent our future rather than vice-versa? That once our impudent experiment with fiat money runs its course, we will return to a monetary system in which gold plays its historic role? We think so, and we find support for our view in an historical fact that Macaulay himself might have mentioned had it not been self-evident to any educated Englishman in the 19th century: fiat monetary systems always fail. Always.
Finally, with respect to Japanese physical buying, the Forecast is oddly silent. This prompts us once again to wonder, Wheres Waldo-san?
Central banks get the most ink of all four horsemen. The banks are reluctant owners, anxious to dump but constrained by the queue formalized in the Washington Agreement. This agreement, which is all that prevents the gold price from dropping somewhere below sea level, is referred to as the DoG (disposal of gold) deal -- get it? It came about largely as a result of -- what else -- European central banks envy of their English idol:
Continental signatories were also faced with a fait accompli by the Bank of England -- the May 1999 announcement that the UK would sell over half its gold reserves by auction, so there. Their response was accurately foreseen by JK Galbraith 24 years earlier: the pride of other central banks has been either in their faithful imitation of The Bank of England or in the small variations from its method which were thought to show originality of mind and culture.
All developments in the gold market since the DoG are likely to impel central banks to sell more, sell faster or sell first. That gold has increased in price means that the central banks will be less attentive to special pleading on the part of miners. That miners will be reducing their hedging means there will be more room for the central banks to sell. That the European economies are in recession means it is more likely that the national banks, reduced to the status of asset managers in the wake of the formation of the ECB, will turn to gold as a source of ready cash. That liquidity in the clearing market is shrinking means that the banks are better off selling sooner rather than later.
Not surprisingly, all pronouncements of central bank officials confirm their policy of disdain for gold:
Previous ECB vice president Noyer already struck a more candid chord in April this year: the importance of gold is slowly declining. He has been backed up by a US peer group recently, telling the official attitude to gold like it is: from the General Counsel to the US Treasury in September classifying gold as one of the neanderthal (ie pre-barbarous?) funding conduits still open to Al Qaeda; to Federal Reserve governor Bernanke in November, using a tale of alchemy almost as an Aesop fable; to Federal Reserve chairman Greenspan in December opening his remarks with a once upon a time reminiscence of the Gold Standard. [Tip 1: assume the US will not be a signatory to DoGII].
Net net, were looking at a much bigger sale allowance in the next version of the Washington Agreement:
Above (a considerable) all - greater fiscal need, temporarily greater room, laxer restrictions and a smaller, sub-central banking mandate -- this ineluctable ebb tide in gold argues for a sales quota at least double 400 tonnes pa in any DoG II (emphasis in the original).
The Forecasts central bank segment prompts two quibbles and a cavil.
First, we cant resist pointing out that while it is no doubt true that the Bank of England remains the cynosure among the lesser central banks, perhaps their admiration is tempered today by the realization that the Old Lady of Threadneedle Street picked the absolute bottom of the market to unload 395 tonnes, in the process chalking up a cool $1 billion loss for Her Majestys hapless taxpayers, calculated at recent prices. See Gethin Chamberlain, Browns sale of the century cost Britain $1 bn in lost reserves (www.thescotsman.co.uk/business.cfm?id=108312003).
Second, the spin placed on Governor Bernankes famous printing press speech and Chairman Greenspans gold standard observations is clearly just that, spin. No serious commentary has to our knowledge interpreted either of those remarks to be other than wildly gold bullish. And last time we looked, the United States was not a signatory to DoG I. So why the bold prediction that it wont be a signatory to DoG II?
Our cavil is this. We accept that all the factors cited may at the very least tend to provide additional pretexts for further central bank selling. (Bundesbank President Welteke doesnt even need new pretexts; hes been announcing his intention to sell the same reserves for months on end.) The central banks have, after all, shown themselves, on balance, to be singularly inept stewards of their monetary reserves. They loudly proclaim their contempt for gold, they work relentlessly to demonetize it, yet they refuse to relinquish control over the gold market, preferring instead to undermine it, overtly and covertly, in order to protect their competing paper product. But even given all that, we wonder whether their flesh is up to the demands placed on it by their spirit. Take Portugal, which is cited as a most likely to sell candidate. Now, we understand the insiders view was that the 15 tonne sale Portugal announced on January 14 (the day after the Forecast) represented deliveries on options written a few years ago. As noted in Reg Howe's January 27 commentary, a footnote in Portugals 2001 annual report shows that in fact it has leased out 52 tonnes and swapped out 381 tonnes out of its total 606 tonne reserve, leaving it with a mere 173 tonnes. So wont any further sales by Portugal likely consist merely of journal entries simply acknowledging the fact that their leased/swapped gold is not coming home? And were supposed to view all this as gold bearish?
Indeed, the main problem with the Forecasts central bank analysis is that it rests on two premises that students of the gold market not employed by large shorts increasingly recognize as fallacies. One is the notion that despite the Western central banks acknowledged disdain for gold, and despite the fact that gold represents the only real challenge to their power and sovereignty under a paper standard, nevertheless they have chosen gold, of all the assets on the planet, as the exclusive beneficiary of a laissez-faire policy, subject to occasional intervention to support the price. Their only interest in gold is the desire to sell as much as they can in as orderly a process as possible because they dont want to own it anymore. The other premise is that of the roughly 32 thousand total tonnes of gold reportedly held by the central banks, only 5 to 7 thousand tonnes have been loaned to bullion banks and resold into the market. The first premise is preposterous on its face, unless one is willing, which we are not, to ascribe utter imbecility to the brotherhood of bankers. The second is more discerning. If it is correct, then the Forecasts focus on the central banks intentions and the prospects for and terms of a second Washington Agreement makes sense. But if Frank Venerosos estimate, supported by Reg Howes recent analysis, that the amounts that have been loaned out and resold are actually in the range of 10,000 to 15,000 tonnes, then a bearish spin is a bit of a stretch. In that case, the notion that the gold price is artificially supported by the banks agreement to restrain further sales would not be credible, just as even now it is not credible to identify Portugal as a likely seller when its own public reports show it is a spent force. In such a world, the central banks would be seen as having shot their bolt, their ability to continue their control of the market would be exposed as a myth, and analysis that supported that myth would be revealed as disinformation.
A Brain for a Scarecrow, a New Lair for a Bear
The Forecast is clearly dependent on a series of subjective judgments that underlie its argument and conclusions. Not all of those judgments are self-evidently correct, and not all of those arguments and conclusions are even plausible, as we take some pains to point out in the foregoing exercise.
Yet so far as we are aware, the Forecast has to date gone unchallenged. As in all analysis relating to the gold market, there is no real debate, just a lopsided guerrilla conflict. There cant be a debate, in other than a theological sense, because there are no commonly accepted assumptions, no shared premises, regarding even the most basic facts of the market. This gulf is the result of two things: one, deliberate policy on the part of the central banks and their flocks, and two, abdication of responsibility by the producer community. The central banks position is an easy call. Were it in their interest to do so, they could easily make a few disclosures and create a transparent market in which all the jiggery-pokery of analysts and commentators would be rendered moot. It is most assuredly not in their interest, so dont hold your breath.
The producers position is more complex. Traditionally, the mining sector has been a beast of burden for the banks. In the period before August 15, 1971, when gold was official money, a division of responsibility which left the miners with a technical focus -- find ore-bearing rocks and break them -- and left all thinking to the banks, made perfect sense. Since then, however, continuation of that division of labor has made no sense at all, and recently has in fact proved hazardous to the health of the producers and their shareholders. The industry and its institutions are still entirely dominated by the banks. At the macro level, sales and distribution are still handled by the banks, and prices are still set by the banks through the primary physical and futures markets. At the micro level, individual producers are still the bankers playthings, tricked into self-destructive derivative positions during a vicious bear market, and bribed or swindled into hugely dilutive share offerings at the outset of a massive bull market.
Given this long-standing predatory relationship, it comes as no surprise that in the area of market analysis as well, a weak and fragmented industry still defers to the banks. This is what accounts for the residual influence of specious reasoning predicated on bogus assumptions that so often masquerades as gold market analysis: the producers accept it without complaint. This can be seen in the conduct of their existing trade association, the World Gold Council.
Organized and still dominated by producers with close ties to the banks, the WGC has pursued as its principal mission the promotion of gold as a non-monetary, non-investment commodity. The WGCs gold-as-jewelry approach is expected to become more balanced under the chairmanship of Chris Thompson, a talented executive from a gold miners gold miner. However, a long awaited gold-as-investment initiative will apparently come at the cost of a complete surrender to the banks in the field of market intelligence and analysis. This is ironic, because it was Chris Thompson who noted in his remarks at the Denver Mining Investment Forum 2001 that the role of the industrys trade association should be:
- To manage existing and create new markets for gold
- To develop new products
- Custodianship and promotion of the image
- A source of accurate information
And it was Chris Thompson who observed, in that same presentation, that GFMS, the orthodox source of information on the gold market, is inadequate and unreliable. Yet under Mr. Thompsons leadership the WGC has abdicated its responsibility to provide a source of accurate information, choosing instead to outsource market analysis to none other than GFMS. What is GFMS, anyway? Its website (www.gfms.co.uk/Company_Profile_History.asp) identifies it as a London-based precious metals consultancy, the leading source of information on the precious metals markets. Who owns it? Three individuals, two of whom are the current directors. They completed a management buyout of the firm from Gold Fields (the miners) in August 1998. Who put up the money for the MBO? We dont know. All we really know about GFMS is that it is not owned by producers. In hiring GFMS to do its market analysis, the WGC has compromised its own credibility, strengthened the GFMS monopoly and conferred legitimacy on analyses like the Forecast by enabling them to cite GFMS/WGC market statistics.
The question before the industry is whether it will remain content to allow the banks to do its thinking for it. In the latter stages of the war on gold, producers have gotten a free pass. An amateur samizdat has sprouted in the institutional vacuum, raising hell and investor consciousness in equal measure. For all its extraordinary success, this grass roots movement lacks institutional credibility and in any event is principally focused on ending the ongoing manipulation of the gold market. Accordingly, to the great relief of the gold establishment, it probably wont last forever. But the industry faces issues other than market manipulation, many of which will be with it long after sanity is restored to the market. These issues importantly include the role of gold in the new monetary order following the collapse of the managed currency system. What reply will the producers have to the predictable effort by banks and politicians to scam them (and us) again in some lame replay of Bretton Woods? Will producers even be represented at the table?
Flush with cash for a change, producers now have an opportunity to look to their future by creating an entity tasked to think through market and policy issues from their perspective, not the banks perspective. Such an entity, call it a think tank, could participate in the monetary debates that lie ahead. But producers need not go that far for a rationale. They can look simply to their own immediate interests, and act to counter the disinformation now dogging the industry. Create an entity with some institutional stature. Provide a credible alternative to the bankers spin. Offer respectable habitat to some talented but misdirected bears now languishing in captivity. By taking a few simple steps, they can save Andy. Or, they can turn the page.
February 5, 2003
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