More Junkmail from Bob!

April 16, 2000
Important Stuff.

The stock market went down! Was it a crash? Is it the beginning of a crash? Is it the end of civilization as we know it? The answers are no, no, and probably. Well, it might be considered a crash.

A "crash" is supposed to be when the market loses 20% of its value. The Nasdaq lost 25% last week, and 34% since its March 10th high. So technically the Nasdaq crashed. How bad is it? Well, the Nasdaq is still 32% above where it was a year ago so it must not be too bad.

The Dow Jones average lost a record 617 points. But since the Dow is so high, that's only the 40th largest percentage drop at 5.7%. By comparison, in the crash of October 1987 the Dow lost 508 points, which was 22.6% at the time.

There are three (at least) new market factors at work here. First, there are some very large companies with very high P/E ratios in the computer and communications industries. When the Japanese Nikkei index was over 35,000 in 1989, the average P/E there was a little over 50. Now, 10 years later, the Nikkei is a little over 20,000. I'm not sure what their P/E is now, but it's got to be lower. I don't think we'll see a crash like that, but climbing P/Es in the U.S. seem like a warning sign to me.

Second, there are lots of highly-valued money-losing internet companies. Some of these companies will start making a profit. The ones who maintain high growth and profitability will get to keep their high stock prices. The others won't be so lucky. Several companies have already started down.

WebVan went from 34 to 5 11/16 in 4 months, went from 38 13/16 to 3 in a year, iVillage went from 130 to 10 5/16 in a year, and Learn2 went from over 9 to 2 13/16 this year. (I would like to point out that most of this decline happened AFTER I left.) I'm guessing that this downward spiral will continue for the non-profitable non-growing internet companies.

The third factor is that everybody can trade stocks on the internet now because it's so easy and so cheap. For some people it's turned into a casino. In gambling, or the more politically correct term "gaming", companies don't make their money on the 1 or 2 percent advantage they get on the bets. They make most of their company because gamblers always have to quit when they're out of money, and they don't have to quit when they're ahead. This is also true in the stock market, which contributes to volatility.

This is amplified with margin in the stock market. People can invest in the stock market and borrow up to half of the money they invest from their brokerage firm. For example, I can buy 100 shares of Microsoft, and buy 100 shares more of Microsoft by pledging the 200 shares as collateral. It's all automatic so I don't have to sign any loan papers or visit a bank or anything.  When the price of Microsoft goes down enough, the brokerage company tells me I need to pay up on my loan. It's called a margin call. So if I have no more money, I have to sell my Microsoft stock to pay off my loan. If this happens a few thousand times across the country, it can drive the price of a stock down.

These factors weren't nearly as big in the market 10 years ago. And I'm not sure of their net effect now. Anyway, I think the stock market will go back up and it's a good time to buy. This means if you're smart, you'll do the opposite.

For equal time, here's what someone with some sense thinks about the stock market:

A lot of people are getting DSL's a lot now. That's a digital phone line that gives you faster access to the internet. When you do that, it's possible to leave your computer open for other people to browse and modify your files. What should you do?

(1) Make sure that if you have file sharing enabled, you have everything password protected.

(2) Go to the Windows Update site occasionally and download the latest security updates.

(3) If you have more than one computer attached, you can consider some firewall software. Wingate is pretty good. With firewall software, one computer is generally "open" to the internet. This may not be necessary IF you have all the sharing set up properly on your computers.

(4) You can use a router firewall, which costs more and is a lot harder to mess with.

The more people get hooked up, the easier it will be to find information on this. Here's an article written to scare people.

Jim Wright used to be Speaker of the House. He amended a law once. That amendment is curiously called the Wright amendment. Coincidence? Maybe. That was (and is) a really stupid rule in my opinion. It says that an airline flying out of Dallas Love Field cannot take people to New Mexico, Oklahoma, Arkansas, Louisiana, Mississippi, or Alabama. Why would they do that? Because American Airlines was operating out of nearby Dallas Fort Worth airport, and they were trying to make sure all the other airlines followed suit and moved to DFW. Southwest stuck to their guns and stayed at Love. They're also cheaper to fly.

Now, Legend Airlines has started scheduled flights out of Love Field. They're getting around the Wright amendment by only seating 50 people on their DC-9s. The Wright amendment only applies to planes that hold 56 or more people. The DC-9 normally holds about 100 people. That should make for comfortable flying! I checked the price, and it's reasonable, $262 from Dallas to Washington and back with the prepurchase limitations.

Here's their web site.

Here's how the Wright amendment affects Southwest.

I think it should be repealed. It's outlived its usefulness, if it ever was useful.

I was going to write something about a 60% ozone loss in the Arctic, but it turns out that they were just joking. The loss is only 15% more than pre-1976 levels, and it's less than that at altitudes other than 11 miles high. It's kind of boring anyway.

But I did notice that NASA has some wind tunnels at their Ames Research Center. This one is 120x80 feet!

Four people (3 from Italy and 1 from France) decided they'd like to fly a small plane to Baghdad. They didn't make a secret about it, and they didn't get shot down. They landed in Baghdad on April 3, a couple of days after the more appropriate date. These guys were "important" people, like a European parliament member, a priest and filmmaker, and a journalist. They were protesting UN sanctions against Iraq.

After they left Baghdad, they went to Jordan and were promptly arrested. They let the important three go but kept the pilot in jail for a few days. The let him go on the 8th or 9th, but kept the plane. Here's what they flew, an Italian light twin:


I don't think I'll be doing that soon. But I would like to visit Cuba sometime...

Maybe the four people in the P68 should heed the wisdom of Roger Bacon, 13th-century philosopher:

"It is not necessarily impossible for human beings to fly, but it so happens that God didn't give them the knowledge of how to do it. It follows therefore, that anyone who claims he can fly must have sought the aid of the devil. To attempt to fly is therefore sinful."

I'm guessing that Mr. Bacon wouldn't think much of the internet either.

I would like to reiterate, whine, AND complain that I'm tired of hearing about the 6-year old Cuban kid. Politicians and the press people are taking us for a ride on this one. Don't they care about a 6-year boy in Cincinnati with Leukemia?

Richard and John work at the U.S. Postal Service in Washington. They do financial stuff. They were paid $142,000 and $105,000 in moving expenses to move across town, even though they kept working in the same place. So THAT's why stamps are going up! That's enough to BUY the houses, not move furniture. The Postmaster General Bill, not to be confused with President Bill or Microsoft Bill, said that it was a good decision and that's the way things should work at the Post Office. The USPS board of directors may disagree with him, especially after the amount of publicity this has gotten.

In the meantime, the dot-coms were complaining that the U.S. Postal Service is planning to get into the internet business. It's now, not It seems like they won't be much competition with this kind of thing going on.

Nick Timbers is in the uranium business. He's the head of USEC, formerly known as U.S. Enrichment Corporation.

The U.S. Enrichment Corporation started manufacturing enriched uranium for nuclear weapons and submarines in the 1950's. In 1994, they started buying weapons-grade uranium from Russia and processing it for use in power plants. It was owned by the U.S. government. In 1998, Clinton and others decided to privatize the company, so they sold stock on the public market (USU).

Now the company is still profitable, according to their financials, but they say they need $200 million from the government to keep going. They also say they might stop buying Russian uranium.

This is making some people in Congress pretty mad, especially since Nick is personally taking home over a million dollars a year. It looks like they'll postpone doing anything until closer to the election, though, because the Republicans want to get more bang for their political buck. Nick will bring home a few hundred thousand more in the mean time.

NPR Quote: "62% of Americans are in favor of economic globalization." It may have been sixty-something-else, but it was in that neighborhood. I contend that 98% of Americans don't know or couldn't agree on what economic globalization IS, let along make a decision on it. That's such a broad, meaningless term that I don't think anybody could come up with a precise definition. It is a good term for an election year, however, because politicians can change its meaning and their stance with a mere redefinition.

Some people from Montenegro, Serbia, and Albania have been stealing domain names -- the names for web sites like "" The largest registrar of domain names, Network Solutions, has a security weakness that allowed some hackers to redirect dozens of popular web sites to their own locations.

Some of the hijacked web sites are,,,,,,,,,,, and

They're getting thinks back in order now. The funny thing is that some of the victims don't even know they're victims -- they haven't noticed that their web traffic is gone.

avid Stanley is the son of a Baptist preacher. He swindled some elderly people out of a million dollars or so in the 1990's. (I don't think those are necessarily cause and effect.) He got caught, but he disappeared when he was out on bail.

While he was away he changed his name and started a company -- a dot-com company. Last October he threw a party. It was, according to Craig Bicknell, "the most extravagant net start-up bash in the short, self-indulgent history of decadent dot-com shindigs."

He rented the MGM Grand in Las Vegas and hired some rock bands:  Kiss, The Dixie Chicks, Sugar Ray, and Brian Setzer. He even paid for a reunion performance by the Who. In this one party he blew over $12 million dollars. Or invested it, I suppose, if you ask him. He had collected a total of $35 million in venture capital, so he spent 1/3 of it on this party.

This past winter the company's venture capitalists and board directors replaced him as CEO. Then last Tuesday, Captain Terry from the Virginia State Police Bureau of Investigation called him at home in San Bernardino and told him he was really in trouble.

Stanley's company is called Pixelon. They are still around, claiming the "Best Video on the Web:"

Pixelon doesn't think that Stanley stole anything, but they're going to have an audit just for good luck. gave $10,000,000 to Lee Huu Truong yesterday. At least they got a lot of publicity for it, and it was a little cheaper than Stanley's party. In addition, has collected $200 million in financing instead of the mere $35 million that Pixelon raised. gives away a million dollars a month, $10 million on April 15th "Tax Day", and the paltry sum of $10,000 every day. People go to their web site and get an entry every time they do a search (or something like that.)

Let's see... how long can they keep this up?

Since February there have been 3 or 4 "most distant object in the universe" records broken. The latest one, if it is verified, will blow the others away. The universe was already a lot bigger than I can comprehend, just like the U.S. federal budget. And it keeps growing, just like the U.S. federal budget.

The latest potential record:

Two of the other records:

Some people at Microsoft did a no-no. Someone who was working on Internet Information Server added a "back door" so that you can enter a secret password (something like "Netscape engineers are weenies") and gain access to anybody's web server. This is on IIS with Front Page Extensions, in the file dvwssr.dll. If you have that file on your web server, maybe you should delete it. It doesn't apply to Windows 2000 systems. Microsoft is coming up with a solution "real soon now."

Also this week, a back door was discovered in the Dansie Shopping Cart. This is a system that web sites can use for their online stores. There are about 200 web stores that use this system. Any of the servers it resides on can be accessed freely by Craig Dansie or anyone else who has the 9-character password. But don't worry... your credit cards are safe on the internet. Maybe not, but at least they'll give you a refund if someone borrows your number. Dansie has not responded to this problem yet.

Dansie Shopping Cart


Patrick and Chad are 19 and 20 years old. They're in trouble. They defaced web sites at the White House and the Army. Chad pleaded guilty to defacing the U.S. Army web site and making it look like the Chinese government did it. He was sentenced to six months "in custody" and fined $8054. Patrick will be sentenced right away.

The Motion Picture Association of America had their web site "DoS'd" last week. A Denial of Service attack, probably by DeCSS supporters, pretty much put their web site out of business on Thursday.

Not to be outdone, Napster fans defaced the rock band Metallica web site after Metallica filed a lawsuit against Napster. Here's what the Metallica site looked like earlier today:

Here are details on the lawsuit:,1283,35670,00.html

Some of the dot-com people are doing good things. Here's an interesting article about some new philanthropists:

The picture of the day is Supernova Remnant E0102-72, after one huge explosion. This picture was formed using red for radio waves, green for optical light, and blue for x-rays. It's 40 light years across.

Here are some pictures from Sun-n-Fun, the airplane show:


Here are some Spring pictures from behind my house:


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(?) 2000, No rights allowed. Any part of this fine piece of art can be copied, duplicated, shredded, modified, distributed, contributed, alluded to, and deleted without fear of legal action by me. However, you could be liable without limitation for exhaling less oxygen than you inhale. This work may not be protected by the USPTO, the USPS, or the USSR.

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