Denys asks: > Need we say more. No. Those were pretty much the facts as I reported them. "For the first three months of the year, AOL posted a jaw-dropping net loss of $54 billion." The fact that investors knew that the loss was coming certainly didn't change the size of the loss. The reason for the accounting rule changes that forced this enormous loss onto the books in one quarter was, as you might guess: Enron. The pro-forma accounting procedures that everyone was beginning to employ were essentially falsifying the actual worths of the various companies stock. The SEC has been under tremendous pressure of late to bring it to a halt. Qwest, our telephone/internet/web host/email supplier, is approaching true bankruptcy, in great part because it too participated in this nonsense. Enron was actually teaching classes on how to employ this form of accounting for a while. Although AT&T declined Enron's offer to teach its classes at AT&T, Qwest bought it -- and bought into it. As I've mentioned before, there is enormous overcapacity in broadband capabilities at the moment, and both Enron and Qwest had sunk an enormous amount of money into broadband infrastructure in the 1990's. Faced with this massive overcapacity and thus truly substantial losses in these divisions, Enron and Qwest devised a scheme to swap overcapacity orders with each other. Qwest bought millions of dollars worth of bandwidth from Enron, and Enron did the same from Qwest, and they both then reported millions of dollars on their books as orders rather than the losses that they really were. The fact that these companies were "making money" in a down market significantly -- and completely falsely -- affected their stock prices. In the same manner, Xerox has been reporting future income from equipment leases -- such as the FreeColorPrinter program -- as current sales, thus similarly affecting their current balance sheets. The SEC has politely asked everyone to stop doing this or they would start launching criminal prosecutions. As a consequence, you're going to see a lot of comparable losses in the next little bit, but the losses are not just paper money. They're genuine. The reason that they're appearing now is that they're no longer being covered up by the creative "killer app" accounting methods that Enron was peddling, and which became surprisingly fashionable in the last few years. Wirt Atmar * To join/leave the list, search archives, change list settings, * * etc., please visit http://raven.utc.edu/archives/hp3000-l.html *