Q: This is from a morning briefing that goes out to all of the Schwab clients: So it's a near-certainty that more stimulus is coming from Washington. But the details change constantly, as trial balloons are floated and shot down day after day. Some quick highlights: ? In stark contrast to its foreign policy/defense team, the Bush economic brain trust looks inept, unable to coordinate its plans and apparently unwilling to provide much direction to Congress. ? Filling that vacuum are Republicans who want big tax cuts and Democrats who want to spend much more. ? This means the budget surplus in fiscal 2002 is in free fall. It's possible that the budget could go into deficit this year, but our guess is that it will be in the black by a little, probably under $50 billion. But these estimates aren't worth much right now - the big story is that the surplus is melting fast.
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A: Bush Economic Team "Inept"

Q: George, it is probably worth speaking to them about the US assets - probably the smaller Virginia sites which are probably less core and may be great brownfield sites. I'm not sure we would have an interest in UK coal fired assets. I would speak to Sherriff on that one. However, I would caution that real value is created through RAPID brownfield development leveraging on Enron's development, electricity, coal and emissions talents. For ComEd and Homer City, Mission has already paid up for these assets based on gas being on the margin. Now that was before a lot of the run up so it may be worthwhile; however, I think it may be difficult to arb these guys. As well, I think it may be difficult to get the asset out of them - I'm not sure that they can turn their strategy or show a loss this quickly from a Wall Street point of view. We should probably take a shot at the smaller probably less core Virginia assets. Are they in QF, if so there may be upside in the deal from Duran's point of view.. Dave, given the rise in gas prices and gas being on the margin for a larger part of the load curve, coal assets or coal QF's may be great assets for us from a restructuring and power asset (expansion/brownfield) point of view. Have we looked at this? Are there many in the market? Regards
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A: Edison Mission Energy

Q: Kim, Russel Diamond is going to provide to you a complete overview of deals, power and gas, and MTM positions, plus contractual status. You should get a copy of the master documents. ( this will include credit covenants). Also, can I have a summary of LADWP, how they operate, how they are paid.... Russel will have this to you by tommorow. Pls have the consolidated package for me prior to my departure at 1:30 to Las Vegas. BT
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A: LADWP

Q: 1. Be sure to verify that the underlying contracts do not allow cherry picking under any default scenario. If it does, amend the express language. 2. We have made 2 changes to the netting agreement forms on the basis of further review by Leslie Hansen of some provisions in our trading forms. The first change is in paragraph 2(a) to clarify the definition of Default. The second change is in paragraph 14(b) to delete the day limitation on claims of Force Majeure. We feel this should not be included in any physical contract that will be included in a master netting agreement, especially because of the current international situation and security concerns. See attached reline version to read the changes. 3. No changes have been made to the Collateral Annex. 4. Attached below are the new forms. Rather than continue with forms with and without the user notes, I put the user notes in a separate document. They are not at the back of the forms. Simpler. The attached forms are Master Netting & Security Agmnt 10 h a v1 (to use without collateral annex) and Master Netting & Security Agmnt 10 h v1 (to use with collateral annex).
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A:
FORM CHANGES: READ