Ground FloorAs far as the market is concerned the conflict in the Gulf is yesterday's news - at least unless the US starts talking about regime change in other countries.
But for now traders have turned back to looking at headlines other than war-related ones as they mulled over jobless claims data - a fall of 38,000 from last week; the size of the trade deficit for February - slightly narrower with exports rising and imports falling, albeit marginally for the second month in a row; and consumer confidence figures.
But the dollar is still trading poorly and regardless of the ups and downs in consumer confidence, I'm not certain that US businesses are ready to plough a lot of money into increased production without a greater belief that there are people ready to spend. So relief rallies might be the order of the day but it'll be a while yet before anything more sustained comes along.
The IMF is cautious too (though it's in the nature of the organisation to look at half-empty glasses rather than half-full ones) but it warns that the economic environment is still one of "great uncertainty and risk". Not words guaranteed to make investors rush to part with their money.
The IMF has revised downward its forecasts for growth in the main industrial countries and it continues to make the point that most of the risks to those forecasts are on the downside. The organisation is still not very optimistic on the US, continuing to look for growth which is slower than last year - worrying enough when it also points out that the world economy depends too much on growth from the States.
Japan, once an economy which embarrassed US officials by its strength and development, is gripped by deflation with prices continuing to fall and no prospect of a change in policy any time soon. Europe, and particularly another once dominant player, Germany, is still a basket-case. German growth has been at less than 1 per cent for the past three years and there doesn't seem to be much scope for change.
There's still a lot of psychological as well as financial damage from the 1990s gnawing at entrepreneurs, traders and investors. And while some of the more highly-publicised malpractice stories now weave their way through the judicial process, there are other illustrations of how far corporations went to delude themselves and their investors.
Ariba, a software company based in Sunnyvale California, announced last week that it was going to restate its financial results back to its public flotation in 1999. Like any software company of the era, its shares traded ever higher - reaching $150 a pop before it all went horribly wrong. You can pick up Ariba shares for about $3 now.
Anyway, it has been looking back over the accounts and, as the press release puts it, has "identified a number of transactions in which the company's accounting policies have not been consistently or appropriately applied". These include a payment of $10 million that a former chief operating officer, Larry Mueller, received (for nothing very much apparently).
Not surprisingly, the result of the accounting investigation and subsequent restatement has meant that Ariba's net loss for 2000 was increased by $9.8 million and 2001 by $14.1 million. (Naturally the company never recorded a profit - it's a technology stock, for heaven's sake.) As it turns out it was able to reduce the 2002 losses by $22.1 million but the first quarter of this year has seen it increase again by another couple of million.
Naturally, the company is on the SEC's investigation list.
I suppose a positive sign is that the company does have customers and orders and a real product to sell. It's still in business. But clearly investors will be reluctant to commit to it, not being sure what else might crawl out of the silicon to affect its value. And that's why, no matter how much we might want to see an improvement in the market, it will be hard come by.
Very few investors trust anything that companies put before them any more. We know that it's easy to produce a glossy brochure full of buzz words and interesting numbers, but we have no idea whether any of them mean anything at all.
Not only do executives have to get their heads around the fact that investors want to see a profit, they have to realise that investors also want to believe that the figures are really and truly correct.
Microsoft, of course, is a company where we know there is a product and a demand for that product. And it consistently makes money. Although not, as yet, on its foray into home entertainment courtesy of the Xbox. At the moment, the company is said to lose about $100 on every gaming console it sells and it is behind its target of selling 9 million of them by the end of June.
Currently, analysts believe that the company has sold around 6.5 million of them. Which is why it has knocked the price of the Xbox yet again to undercut PlayStation and Nintendo. The gaming market is tough and rough and gamers are a lot less likely to shrug their shoulders in acceptance if something doesn't live up to their expectations. Besides, this is personal spending and once you've bought your gaming platform you're not going to rush out and get another just because it's a bit cheaper. According to my nephews, the Xbox is good but they're still PlayStation fans. More titles, better games right now as far as they're concerned - it's still about better value for money.
Value for money! Now there's a blast from the past. From the investors of the future!