<a href=cbs.marketwatch.com>THOM CALANDRA'S STOCKWATCH By Thom Calandra, CBS.MarketWatch.com Last Update: 10:31 AM ET May 12, 2003

SAN FRANCISCO (CBS.MW) - The dollar is crashing. The dollar is crashing. CBS MARKETWATCH COMMENTARY THOM CALANDRA (WEEKDAYS) How to time the timers TOMI KILGORE (MONDAYS) A convergence of technicals weigh in on IBM BAMBI FRANCISCO (TUESDAYS) The reality behind the 'Matrix' technology MIKE TARSALA (WEDNESDAYS) Microsoft XBox: A game of pitfall? DAVID CALLAWAY (THURSDAYS) Wall Street analysts: the new SARS JON FRIEDMAN (FRIDAYS) N.Y. Times' explanation of reporter fiasco falls short

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The American dollar is now at its lowest point since January 1999, its euro nemesis rising as high as $1.1626 Monday morning. The Australian and New Zealand dollars notched nearly four-year highs against the U.S. dollar as well.

Gold, which benefits from dollar weakness, rose above $350 an ounce for the first time since March 12. See: Euro riding high.

U.S. Treasury Secretary John Snow "has been all over the heartland and now all over talk-TV, saying 'strong dollar, best interests' out of one side of his mouth and 'the market sets rates competitively' out of the other.' This time he is able to add that exports are getting

stronger because the dollar is weak," notes longtime currency strategist Barbara Rockefeller at Rockefeller Treasury Services.

"This is where the administration wanted to be all along and now they can admit it, especially given the Fed's seal of approval last week to devaluation-inspired inflation," says Rockefeller, whose work on currencies is among the best of U.S. strategists. "Now the only issue is how long it takes for the new perspective to reach the majority of interested parties."

Rockefeller says Wall Street issuers of stock and bonds have the most to lose as the dollar slides (more than 20 percent this year alone against the euro). "The stock boys love to scare themselves with panic stories and the crashing dollar offers a good opportunity. Corporate bond issuers can't be too thrilled, either. They have to offer a premium," she says from her Connecticut headquarters. "But before the U.S. says or does anything to rebalance the outlook, we will probably see both Japanese and European intervention."

The dollar's continued slide this year will embolden some currency speculators, says Chuck Butler, chief strategist at Everbank.com. "Liberties are going to be taken with the dollar now, whenever traders feel feisty enough to do so," Butler said about the currency markets. "They don't have the fear of a strong dollar policy as they once did."

Butler, whose Everbank.com in St. Louis allows individuals to shuttle dollars into foreign-denominated certificates of deposit, has been forecasting the dollar's decline for at least the past two years. His thesis is that investors are seeking the higher yields available on cash deposits in currencies other than the dollar. Market yields on U.S. Treasury bonds Monday morning were falling to historic lows, with the 10-year yield below 3.6 percent.

The dollar still has a way to go -- down, says Butler. "I'm still concerned about the speed euro traders are marking up the currency, but until I see any signs of a pullback," he says, "so you just go with the flow."

For now, stock market investors are paying little attention to the dollar's continuing cascade. Most must believe, as the Treasury secretary indicated, that cheaper dollars will help American exporters of goods and services, such as McDonald's (MCD: news, chart, profile) and Gillette (G: news, chart, profile), in their overseas businesses.

The stock market, says Richard Dickson at pioneering analytics firm Lowry's Reports, "has developed a pattern of ignoring signs of short-term weakness, so at this point we would give the benefit of the doubt to the bulls. "Until selling shows definite signs of picking up ... the market is unlikely to suffer anything more than an occasional short-term setback."

One wild card is oil. Higher oil prices could derail any economic recovery that is in the cards for this year. Supply constraints could boost oil prices just as the summer driving season heads our way.

"What's the bottom line? For the oil markets, it means oil in the $25 to $30 per barrel range for the near term," says Joseph Duarte, Dallas fund manager and financial author. "But if circumstances worsen in the Middle East, we could see much higher prices for some time. For investors and traders, it suggests a potential profit opportunity in the energy sector."

Duarte points to "razor-thin storage margins" of oil in U.S. markets, as well as declining oil-rig counts across the world as signs supply troubles may be just ahead. "Oil companies are doing everything that they can to control refinery capacity. And with no chance for any kind of a swing producer appearing (such as Nigeria or Venezuela), any kind of further supply disruption, either intentional or accidental with or without an increase in demand, would send oil prices rising significantly once again," he says.

Duarte, of River Willow Capital Management, uses shares of oil-services firm Lonestar Technologies (LSS: news, chart, profile) as his leading indicator for where oil prices are headed. Lonestar shares are up almost 30 percent since April 1. "The pieces for another round of supply squeezing are certainly in place, and the oil stocks are clearly forecasting that the dynamics of the marketplace have been altered significantly," Duarte says about the flow of oil through Middle East ports. "Lonestar Technologies is predicting higher prices for oil, just as the oil market fundamentals are dramatically pointing the same way."

As for gold, Wall Street and Main Street strategists increasingly see the metal eclipsing its $389 an ounce high from earlier this year as the dollar declines. "The world is dangerously awash with U.S. dollars. More than three quarters of global central bank reserves are in U.S. dollars," notes Frank Giustra of Endeavour Capital, a Canadian merchant banker. "The downward trend in the dollar began two years ago and is very much intact. Although it has fallen approximately 25 percent against the U.S. dollar index, the dollar is still overvalued and will most likely fall a further 15 percent in the next two years alone."

Giustra, former president of mining financier Yorkton Securities, says gold investors will benefit. "As gold is priced in U.S. dollars, the dollar's decline will make it cheaper to purchase in other currency terms and less attractive for non-U.S. gold producers to produce," says Giustra, writing for International Speculator. "More importantly, if its imperial status is severely challenged and no other currency emerges as a viable alternative, then gold will regain its historical status as the currency of last resort and the ultimate store of wealth."

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Thom Calandra's StockWatch is CBS MarketWatch's flagship column. The regular report is in its eighth year at CBS.MarketWatch.com. Thom Calandra is also author of subscription service The Calandra Report.

<a href=www.helsinki-hs.net>Helsengin Sanomat Metro - Thursday 24.4.2003

Vantaa family drives over one hundred kilometres daily to take children to school and day-care

By Jaana Savolainen

It says "Guarderia española" on the door of a yellow wooden house on Toinen linja in Helsinki's Kallio district. Inside, three Cuban teachers guide the merry group of children to the table with their colouring books.

"What is the capital of Venezuela?" Rayza Reguera asks. 
"Caracas!" the children yell out in unison. 
"How many stars are there on the Venezuelan flag?" 
"Seven!" the children answer in Spanish, without a moment's hesitation. 

Nearly half of the children who spend their days at the Mi Casita day-care centre have at least a part of their roots in Spain or in Latin America. A group of parents established the private day-care centre nine years ago, when there was no Spanish-language day-care available in Helsinki.

A part of the 22 children come from entirely Finnish families. Some of them have wound up at Mi Casita purely by coincidence. The reputation of the day-care centre is so good that children even from Vantaa and Kerava have been driven over daily. 

"A warm day-care place, we are very thankful", says Vantaa resident Marita Asplund, whose three children have all gone to Mi Casita. 

Teacher Magalys Marin lifts the youngest children into her lap every so often, gives them hugs and kisses. One-year-old Disa Dahlström squeezes her tightly around the neck. 

The Asplund family heard about the Spanish-language day-care alternative by chance on the radio at the time when they were seeking a place for their oldest child. "We did not receive a day-care place from Vantaa at the time."

Since then, the family has driven from the Vantaanlaakso district to Kallio every weekday morning, with the parents then driving back to Vantaa's Heikinlaakso for work. Now, in addition, they drop the two older children off at the Taivallahti school in Helsinki's Töölö district, where the children are taught in Spanish for a few hours a week. 

In the afternoon, they first pick up 11-year-old Dan and 8-year-old Maximilian from school, and later pick up 6-year-old Cecil from the day-care centre. All the driving amounts to over 100 kilometres each day. 

"It is not a problem", Asplund assures. "Entrepreneurs can manage this." 

The parents in the family had not studied Spanish before, but now they have learned a bit as well. The family has also vacationed twice in Cuba, to take advantage of the children's language skills. 

Pernaja resident Marjo Vartiainen had received a Mi Casita brochure from a colleague, and decided to place her two children there. The family lived in Kerava at the time, but Kallio was along the way to work for the mother.

"Even from Pernaja, it only takes 45 minutes to drive here along the freeway." 

She is very pleased with the language skills of her children, who are now both in school. "Spanish is easy to pronounce for Finns." 

When son Hugo, then aged three, was asked what he wanted to be when he grew up, the answer was a matador, a bullfighter. Wiliina, who still goes to Mi Casita for a while in the afternoons, is now excited about the rhythms in Latin music. 

Many of the children speak no Spanish when they first start at Mi Casita, but especially the more talkative children learn the language fast. "In four months, they begin to understand, and in six months, they are already quite fluent", explains Rayza Reguera.

Among themselves the children speak Finnish. 

Lilian Snellman's daughter Rosalia started going to Mi Casita when she was slightly under two years old, and the next time Christmas came around, she sung all the Christmas songs in Spanish. "There is no need for any intensive teaching, children have the capacity to learn", observes Snellman, who teaches Spanish for a living herself. 

It takes some effort to maintain the acquired language skills. At school, the children have only two extra hours of Spanish classes a week. In fact, Magalys Marin has already formed a group with six former day-care children who are now in school, and she teaches them Spanish for a couple of hours every Saturday. 

FACTFILE: Nineteen foreign-language day-care centres

There are nineteen private, foreign-language day-care centres in Helsinki: eleven in English, two in French, two in Russian, one in German, one in Arabic, and one in Spanish.

In addition to Helsinki, there is a Spanish-language day-care centre in Espoo.

Full-day care at Mi Casita costs 500 euros per month for one child, and 430 euros per month for siblings. The Social Insurance Institution of Finland (KELA) assists private day-care expenses with 117.3 euros per month. Additional grants can be received depending on the municipality of residence, and the parents' income level.

Helsingin Sanomat / First published in print 17.4.2003

Published by the International Institute for Sustainable Development (IISD) Vol. 05 No. 193 Monday, 12 May 2003 SUMMARY OF THE ELEVENTH SESSION OF THE COMMISSION ON SUSTAINABLE DEVELOPMENT: 28 APRIL – 9 MAY 2003

Changing unsustainable patterns of consumption and production: In this dialogue held on Monday afternoon, 28 April, Morocco highlighted its plans to host an international expert meeting in June 2003 on a 10-year framework of programmes for sustainable production and consumption. Sweden noted that this issue has been on the sustainable development agenda for a long time, and stressed the need for implementation. Venezuela said developed countries have a high degree of responsibility in changing their patterns of consumption and production, and stressed the importance of an ethical approach for achieving sustainable development. Canada said patterns of consumption and production are universal, and are not a North-South issue. He stressed the need for full life-cycle product design, greater consumer information, and addressing the consumption attitudes of the affluent. Japan urged the international community to consider establishing a common recycling target, and to engage in international research on this matter. Indonesia underscored the need for investment in cleaner production. Youth called for an increased focus on education for sustainable consumption and production.

Several speakers noted the importance of energy. Brazil highlighted its proposal for a global initiative for a 10% renewable energy target by 2010. Norway stressed the need for renewable energy targets and environmental considerations in the use of hydroelectricity. Pakistan underscored the need to increase the use of renewable energy and energy efficiency measures.

Ireland stressed the need for adequate resources and financing, and called on developed countries to meet their ODA commitments. Switzerland and Trade Unions called for the ratification and implementation of the Stockholm and Rotterdam Conventions (persistent organic pollutants (POPs) and prior informed consent (PIC), respectively.)

Protecting and managing the natural resource base of economic and social development: Speakers raised a variety of issues in this round table held on Tuesday, 29 April, including those relating to biodiversity and the Convention on Biological Diversity (CBD), water, chemicals management, and education and public awareness.

CBD COP President Hans Hoogeveen (the Netherlands) suggested that ministers address how the CBD and other conventions could contribute to the implementation process and proposed that CSD-11 provide a clear mechanism on how the conventions can report to it. Kenya underscored the need for financial support to implement national biodiversity plans and strategies in developing countries. NGOs said the CSD should assist governments in valuing natural resources. Linking biodiversity and poverty, Norway said biodiversity loss cannot be addressed in the CBD alone, and requires a broader approach. He said CSD should monitor implementation of the pledges made at the WSSD.

On water issues, FAO stressed the importance of linking water resources, sustainable agriculture and food security. Noting the transboundary nature of water and ecosystems, Croatia proposed the development of regional strategies for sustainable development. South Africa drew attention to the 2005 target for establishing national plans on integrated water resource management and water efficiency, and said the UN and CSD should contribute to meeting this target. Venezuela noted that the indiscriminate use of pesticides and agro-chemicals has a major impact on the contamination of water resources and on human health.

Regarding education and awareness-raising, Youth maintained that their involvement is critical to the implementation of JPOI, and stressed the importance of education in supporting such involvement. Portugal called for policy coherence, emphasizing that effective natural resource protection should occur against a background of increased knowledge and information dissemination. Trade Unions highlighted the benefits of education and awareness-raising in the workplace, and noted the value of workplace assessments. On capacity building, Lesotho and Pakistan stressed the importance of building the capacity of rural people to manage natural resources.

By Barbara Kollmeyer, <a href=cbs.marketwatch.com>CBS MarketWatch Last Update: 12:02 AM ET May 12, 2003

LOS ANGELES (CBS.MW) - For most U.S. investors, international bonds can be too complicated to bother with, especially when measured against the comfort of good old Treasury bonds. But international bonds could be just the diversifier your portfolio has been looking for, even if you have to dust off that world atlas.

Investors have been dipping deeper into the international bond market waters in search of higher yields. Emerging market bond funds took in $1.81 billion year-to-date, nearly three times all of last year's inflows, according to EmergingPortfolio.com, which tracks foreign bond investment. And international bond funds have taken in $1.69 billion year to date, well up from the $9.47 million of net inflows last year.

Fueling this attention is a growing perception that the three-year U.S. T-bond rally is losing steam because of an increasingly weaker dollar and the possibility of rising U.S. interest rates, both downward drivers for bond prices.

"We don't think Treasury yields have lower to go," said David Rolley, senior portfolio manager at bond mutual-fund powerhouse Loomis Sayles. "If you lend money to the government today, they'll pay you 3.72 percent. That's not a lot."

Indeed, especially when compared to returns such as these: the MSCI Emerging Market Sovereign Index has gained 15 percent year-to-date, on the heels of a 45.5 percent gain in 2002, while J.P Morgan's Emerging Market Bond Index Plus is up 24.9 percent year-to-date.

Tasty returns don't come without risk, of course. Outside of most developed markets, investors need to remember that they're loaning their money to a country or company and a default risk, while remote in the case of a sovereign borrower, is still possible.

But looking beyond T-bonds can bring rewards. "Go into it for diversification," said Andrew Clark, senior research analyst at mutual fund research firm Lipper. "To hold some portion of your bond investment overseas makes a whole lot of sense."

Exploring emerging markets

International bond funds tend to hold either government or corporate bonds or both, and usually include a variety of countries. Emerging market debt has captured the spotlight lately, though the landscape is constantly changing and investors need pay close attention to individual countries, rather than regions or indexes.

"With emerging market debt, you can get nasty surprises. If you want to play that market great, you can get nice returns. Just make sure you're reviewing your holdings once a quarter to ensure you're comfortable with your exposure," Clark said.

Mohamed El-Erian, portfolio manager of the $1 billion Pimco Emerging Market Bond Fund (PEBIX: news, chart, profile), says Brazil, along with Peru, Columbia and Ecuador are "return engines," with more volatility, but better rewards. "The driver is good fundamentals," he added.

He also likes investment grade countries that are relatively stable, which promise yields of 6 to 8 percent. His picks in this category include Mexico, Panama, Poland, Hungary, Malaysia and Russia, the latter a favorite for many fund managers.

"Russia's credit has benefited from high energy prices, reflected in record level of international reserves -- they've benefited from the impact of the crisis of 1998," El-Erian said. "They have strong fiscal accounts and their credit worthiness has been enhanced significantly in the last few years."

One factor that has drawn in more investors to emerging market bonds is a long-term, favorable re-pricing of the emerging market asset class -- helped by improved fundamentals and credit quality of countries, said El Erian. "Whether you look at the amount of upgrades, downgrades or average quality or investment grade credits, now over 40 percent of credits are investment grades," he explained.

Ultimately, though, those playing the emerging market debt game should view it on a three-year cycle, said El-Erian, whose fund concentrates mostly on sovereign debt rather than corporate. And some countries just don't compensate enough for the risk. He cites patients in his "intensive care unit" such as Venezuela, Turkey and the Philippines, where even the short-term fiscal outlook is questionable.

A window on the developed world

The three-year U.S. bond rally has benefited Europe and Great Britain as well. Of course, flattering returns for debt in some funds have stemmed from the euro's appreciation against the U.S. dollar rather than high yields.

"People need to keep in mind that these funds tend not to be fully hedged from a currency standpoint," said Lipper's Clark. "As long as the dollar continues to weaken, they'll get a nice kick." But if the euro flattens out or reverses course, international bond fund investors could be hurt.

European bonds also have seen benefits from the view that interest rates on the Continent can go lower, while U.S. rates are believed to be bottoming.

Loomis Sayles' Rolley says non-dollar denominated debt could outperform over the next 12 months, particularly the euro. "When the dollar goes down, something has to go up. The euro is the most likely candidate. There's not much inflation in the U.S. and even less in Europe.

Rolley also likes Australia, New Zealand and Canadian bond markets, which all have higher yields than the U.S. and appreciating currencies. His group does dip into corporate bonds, but he says investors need to build a broad portfolio of companies rather than focus on a few.

Get the mix right

Just how much to devote? Peter Needham, a financial planner with American Economic Planning, prefers Europe to the more speculative emerging markets. He uses funds such as Julius Baer Global Income (BJBGX: news, chart, profile), which has 20 percent of assets in foreign bonds. He also likes PIMCO Foreign Bond (PFRAX: news, chart, profile), which has some exposure to Mexico and Canada.

Bridget Hughes, senior analyst at Morningstar Inc., points to another couple of top performers -- American Century International Bond (BEGBX: news, chart, profile) and Federated International (FTIIX: news, chart, profile).T. Rowe Price International Bond (RPIBX: news, chart, profile) is also inexpensive with a good manager and track record, she said.

Adds Rolley, the Loomis Sayles manager, "Global bonds as an asset class has been almost a perfect diversifier for a portfolio that includes equities." But watch this market carefully. If a worldwide bull market in stocks ever returns, international bond investors could be left without a ticket home.

North America's Source for Oil and Gas News May 2003 Vol. 8, No. 19 Week of May 11, 2003 Allen Baker Petroleum News Contributing Writer

ChevronTexaco, the second-largest U.S. oil company, posted earnings of $1.92 billion for the first quarter. That was a 165 percent gain over the $725 million the company posted in the same quarter a year ago. And it was more than double the profits of $904 million for the fourth quarter.

The hefty profit numbers did overshadow a substantial decline in production, however — about 5 percent in oil-equivalent numbers. The company blamed some of that on political problems in Nigeria and Venezuela, but noted that natural field declines were the main factor in reducing U.S. volumes by the equivalent of 66,000 barrels a day.

Liquids flow down 8 percent

Looking at liquids alone, the worldwide decline was a substantial 8 percent, or 152,000 barrels daily, as total oil and condensate flows dwindled to 1,823,000 barrels each day from 1,975,000 in the same quarter a year ago. The drop from the fourth quarter amounted to 19,000 barrels daily. Still, collecting an extra $11 (internationally) or $12 (domestically) for each barrel of liquids, compared with the year-ago quarter, can cover a lot of decline in production. Liquids brought just over $29 in the quarter. U.S. gas yielded $5.85 per thousand cubic feet, a 150 percent increase, while international gas prices rose 20 percent to an average of $2.64.

On the gas side, a gain in international operations nearly made up for a 6 percent drop in the United States, but the worldwide production figure still slide 1 percent to 4,506 million cubic feet daily. That was up from 4,336 million cubic feet in the fourth quarter, however.

Capital spending down

The San Ramon, Calif., company isn’t accelerating its exploration spending to stem the decline, but instead cut $600 million off its investment in the future. Companywide, capital spending was down by 28 percent in the first quarter to $1.54 billion. The company indicated that $600 million, the bulk of that, was due to additional investment in an affiliate, presumably troubled Dynegy, in 2002, along with buying assets that were previously leased in that quarter.

But nevertheless, U.S. E&P spending dropped to $347 million from $375 million. Internationally, the E&P decline was steeper, a 27 percent drop to $845 billion from $1.16 billion in the same quarter a year ago. Downstream and chemicals spending were about flat, with the “other” category in the United States was the other big loser, dropping more than a quarter of a billion dollars to $69 million. Figure Dynegy is in that category.

U.S. upstream income more than doubled to $666 million, and it would have been over $1 billion except for an accounting change that cut the number by a $350 million.

International operations showed a profit of $1.1 billion, after subtracting $145 million for the accounting change. That was a 32 percent rise compared with the same quarter a year ago.

Total E&P profits were $1.77 billion, up from $1.14 billion in 2002’s first quarter. It was also a nice bump from E&P’s fourth quarter earnings of $1.25 billion.

Downstream rebounds

Refining and marketing came back into the black in the quarter, with a profit of $315 million against a loss of $61 million in 2002’s first quarter and a loss of $166 million in the fourth quarter. That came despite a 6 percent decline in refinery inputs to 1,913,000 barrels daily from 2,035,000. Chemicals earned $3 million, down from $15 million a year ago and from $13 million in the fourth quarter. The company owns half of Chevron Phillips Chemical Co.

Revenues reached $30.65 billion, a 47 percent gain from $20.84 billion a year ago. ChevronTexaco took in $27.06 billion in the fourth quarter.