In yesterday's issue, we reported that Brazil's public debt was $260 million. It is, in fact, $260 billion. We regret the error.

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Hey, what are you laughing at? Haven't you heard, the U.S. consumer is in a funk? The Conference Board, official arbiter of consumer confidence, says so. Yesterday, the Board released survey results indicating that Americans' expectations fell this month to a nine-year low.

Wall Street tried to look put out but couldn't swallow its grin. The Dow, for instance, bowed 170 points before bubbling back up near even. And why not? After all, analysts theorized, a really rotten consumer outlook could be just what's needed to prompt the Federal Reserve Board to shave interest rates again. So if you want a truly spectacular deal on a home loan, be sure to put on your droopy voice the next time the Conference Board calls.

Already, some commentators have voiced suspicion that the 2,500 consumers surveyed had been exaggerating a bit. Or at least, respondents may have expressed more economic hesitation than they intended to demonstrate at the mall. Americans have a habit of fudging to pollsters, said the Financial Times, pointing out that "spending kept growing through earlier drops in confidence measures during the 1997-98 financial crisis and the aftermath of the September 11 attacks." The Wall Street Journal put the matter emphatically: "There is little correlation between these sorts of polls and actual future consumer spending." Point taken. But if the report is irrelevant, what was it doing at the top of both the Journal and Financial Times Web sites?

One of the most interesting aspects of the consumer confidence story is how much it's grown since last Friday, when the University of Michigan, which makes its own study of consumer expectations, announced nearly identical results. The Michigan report was covered, but not as prominently, perhaps because it could not be easily incorporated into a coherent market narrative. In fact, on Friday, major indices had the nerve to rise. TheStreet.com's Aaron L. Task was among those with the unenviable task of trying to explain why. He noted Michigan's gloomy consumer report, along with news that the government would be operating in deficit until at least 2005. And he found other downward indicators, plus a "murky picture" from the Fed's Beige Book. But on the happy hand, there were strong home sales, a drop in weekly jobless claims, and so ...

We think we're getting the hang of this economic horoscope business. How scared are U.S. consumers? Some may take heart that yesterday, the No. 1 maker of U.S. consumer goods, Procter & Gamble, reported strikingly sunny profits with expectations for more of the same. However, in what may prove an ominous sign for consumer confidence, Kimberly-Clark reported last week that it had seen double-digit jumps in sales of its adult undergarment, Depend. That's why if someone asks us which way the economy is headed, we're going to say, "It depends." - Lori Patel

Consumer Confidence at 9-Year Low, a Warning on Economy
http://www.nytimes.com/2002/10/30/business/30ECON.html

Ahead of the Tape: Hooverville
http://online.wsj.com/markets
(Paid subscription required.)

Consumer Confidence Tumbles, Giving Fed Reason to Cut Rates
http://online.wsj.com/article/0,,SB1035903578677098951,00.html
(Paid subscription required.)

US consumer confidence hits nine-year low (Financial Times)
http://tinyurl.com/2ba4

What a Week: Stocks Swim Against Tide
http://www.thestreet.com/_tscs/markets/aarontaskfree/10050462.html

P&G tops 1Q forecasts
http://money.cnn.com/2002/10/29/news/companies/pg/index.htm

Kimberly-Clark Reports Third Quarter 2002 Results
http://investor.kimberly-clark.com/news/20021022-92953.cfm

Whoa, duck -- there's another Vivendi headline hurtling our way. First came word that the company got an extension in its questionable effort to hang on to its prized stake in French telecom operator Cegetel. Its board followed that break by nixing Vodafone's $6.6 billion bid for the stake. Then prosecutors in Paris announced a criminal investigation into Vivendi's accounting during the Jean-Marie Messier era. And that was just Tuesday.

The court extension was a bit of legal good fortune, with a tribunal citing a technical flaw in Vodafone's offer. The board's thumbs-down vote was expected and preceded by much media speculation over how Vivendi will handle Cegetel, its prized possession. Here's why Cegetel is so ardently fought over: For Vodafone, Cegetel, owner of France's second-largest wireless operator, represents the only major European market that it doesn't control. For Vivendi, it's a juicy revenue stream. So does Vivendi reap a few billion by peddling its Cegetel stake, or does it keep it and reap recurring revenue? Vodafone complicated matters for flat-broke Vivendi by offering to buy out owners of Cegetel's remaining shares. If Vivendi wants to keep its Cegetel stake, it has to at least match the offer.

That leaves Vivendi trying to explain to bankers why, even though it owes a mountainous 19 billion euros in debt, it wants to borrow more euros, s'il vous plait. Reuters reported that banks, naturally, are skeptical. But it also elaborated on other factors giving Vivendi execs night sweats. Without Cegetel, there's little French left in Vivendi, and that would leave the company trying to justify French management. And its remaining asset would be the U.S.-based Vivendi Universal. As if that prospect isn't enough to strike fear into Franco execs' hearts, Barry Diller, head of Vivendi Universal, is gleefully nipping at Vivendi's heels and other body parts. As Diller put it to French daily Le Figaro, "No one on earth can claim it is possible to run a business from across the ocean." So why not just eliminate the ocean's distance?

As for the criminal investigation into Messier, the Wall Street Journal's sources say there's no evidence of fraud, just of "overly rosy assessments" from Messier. But Vivendi's long-suffering investors -- not to mention we readers -- are no doubt nodding in solidarity with Forbes.com's sentiment over the company's melodrama: "Will there never be an end to the suffering?" - Deborah Asbrand

Prosecutor's Office OpensProbe of Vivendi Disclosures
http://online.wsj.com/article/0,,SB1035887422559197071,00.html
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Former Vivendi Chief Faces Legal Probe (Financial Times)
http://tinyurl.com/2bbh

Ruling Gives Vivendi Breathing Space (Financial Times)
http://tinyurl.com/2bbl

Vivendi Wins Time For Cegetel Bid (Telegraph)
http://tinyurl.com/2bgi

IBM names Palmisano chairman
http://money.cnn.com/2002/10/29/news/companies/ibm/index.htm

Amazon to Offer Apparel From Retailers on Its Site
http://online.wsj.com/article/0,,SB1035942146449404871,00.html
(Paid subscription required.)

Wall Street Is Near Accord on Research
http://www.nytimes.com/2002/10/30/business/30WALL.html

Microsoft to limit access to Office 11
http://news.com.com/2100-1001-963777.html

Microsoft opposes Bluelight sale
http://news.com.com/2100-1017-963696.html

Copyedited by Jim Duffy (jimduffy86@yahoo.com).

Advertising: Erik Vanderkolk (erikvanderkolk@yahoo.com).

Editor and publisher: Jimmy Guterman (guterman@vineyard.com).

Media Unspun is produced by The Vineyard Group Inc.
Copyright 2002 Media Unspun, Inc., and The Vineyard Group, Inc.
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