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THE WASHINGTON POST, WEDNESDAY, OCTOBER 7, 1981 | The scone was Anwar SadatÛªs palatial retreat, 20 minutes outside of Cairo. The garden gate was guarded by a lone soldier. There was no one else in sight -other than a lanky figure in a dark blue suit, stretched out on a lawn chair some 50 yards away, reading a hook and sipping iced tea.</br></br>* Apart from the brief appearance of a photographer, that was the extent of the ceremony. My first and lasting impression of the president of Egypt, then, was that he was an'Unpretentious man; my second (equally on- ; during) impression, from what he . had to say in a taped interview lasting more than an hour, was that here was a man with a vision that went far beyond the politicianÛªs obligatory protestations of a desire for peace.</br></br>That was in February 1975, when llenry Kissinger was in mid-shuttle, a reconvening of the Genova conference on Middle Fast peace was the commonly accepted goal, and the celebrated visit to Jerusalem was lie-</br></br>Everything that followed, of course, lias confirmed that first impression. making it all the more . tragically ironic that Anwar Sadat . should have died in the pomp and circumstance of a military parade.</br></br>This is not to lay claim to some special insight; the glimpses of what . was to come, at SadatÛªs hands, in the shaping and forming of a ÛÏpeace pro-! cessÛ culminating at Camp David, was in his message six years ago. | no | 0 |
Picture of U.S. Jobs Market Shows Slow but Steady Growth; Payroll Gains in March Were Lackluster as Rate Of Unemployment Fell | WASHINGTON -- Weak payroll growth and declining unemployment suggest that the U.S. job market is growing at a slow but steady pace.</br></br>Employers added a disappointing 110,000 jobs in March, the fewest since July and a big decline from 243,000 in February, the Labor Department reported. Meanwhile, the seasonally adjusted unemployment rate fell to 5.2% in March from 5.4% in February.</br></br>Economists believe that last month's lackluster performance in payroll growth is an indication of businesses turning more cautious in the face of profit pressures and another spike in energy prices.</br></br>Separately, the Commerce Department reported that construction spending increased 0.4% in February to a seasonally adjusted annual rate of $1.05 trillion. In addition, the Institute for Supply Management, which polls purchasing agents at more than 400 industrial companies, said its index of manufacturing activity was relatively unchanged at 55.2 in March. The new-orders index ticked higher to 57.1 from 55.8, while the employment gauge slipped to 53.3 from 57.4.</br></br>Index readings above 50 indicate the sector is expanding. The March number represents the 22nd consecutive month of manufacturing growth. | yes | 1 |
Commerzbank Profit Falls | FRANKFURT--Germany's Commerzbank AG won't reach its targeted net profit of [euro]1.2 billion in the first half of the year, it said Wednesday, after first-quarter net profit shrank by almost two-thirds</br></br>Net profit for the period was [euro]369 million ($480 million), down 63% from [euro]985 million, and operating profit fell by about 50% to [euro]584 million, hit by a charge on its own debt as well as lower interest and commission income.</br></br>However, the bank added that it had already surpassed European capital requirements.</br></br>"Despite challenging markets, we have made a solid start to 2012. We have again made good progress with our strategic goal of consistently de-leveraging the balance sheet and strengthening the capital base," Chief Executive Martin Blessing said.</br></br>Analysts welcomed the news on Commerzbank's equity capital situation, which "offset a weaker operating performance," according to J.P. Morgan analysts. | no | 0 |
The Week Ahead | The American Enterprise Institute's Trade Policy Series discusses the upcoming World Trade Organization ministerial in Mexico.</br></br>Sens. Rick Santorum (R-Pa.) and Charles E. Schumer (D-N.Y), along with former House speaker Newt Gingrich, debate health-care policy at the Capitol.</br></br>Attorney General John D. Ashcroft speaks on the war on terrorism at the American Enterprise Institute.</br></br>Treasury Department and Internal Revenue Service's Taxpayer Advocacy Panel meet to discuss systemic changes to the IRS's approach to small business.</br></br>Economic indicators: July housing starts and new building permits, University of Michigan consumer confidence survey. | no | 0 |
MAY JO, 1982 t | There have been numerous theories proposed to remedy the current recession, but surprisingly none has focused on the historical lesson known as the Song and Laffer curve: The more upbeat the songs of an era, the fewer the economic woes. Songwriters, in other words, are critical to the nationÛªs recovery, although, to be sure, their jobÛªs not easy. In fact, itÛªs downright ditty work.</br></br>One of the most prosperous decades was the 1950s, when the tunes were lively and positive in their titles. Remember ÛÏSh-BoomÛ (not ÛÏSh-BustÛ) and the 1958 album, ÛÏSing Along with Mitch (Miller),Û that eventually got Americans to warble in their homesÛÓand in front of their TVs? Take another example, the 1920s, perhaps the most upward-stroking years of American capitalism and replete with melodies that sparked business people.</br></br>The decade didnÛªt begin that way, however. Immediately after World War I, the songs were neither ample nor bullish, and the economy slid into a two-year recession. ÛÏI. Never KnewÛ and ÛÏWhatÛªll I Do?Û reflected the doldrums. So too did ÛÏSecond Hand RoseÛ and "Look for the Silver Lining.Û</br></br>Some modulation could be discerned after the congressional elections. ÛÏLinger a While,Û advised one song. Another equivocated in ÛÏI WonÛªt Say I Will But I WonÛªt.Û But by 1923 songwriters got their notes and the economy took off. First, they got back to basics: ÛÏMama Love Papa, Papa Love Mama.Û Then they moved to material matters in ÛÏCut Yourself a Piece of CakeÛ and ÛÏYes, We Have No Bananas.Û</br></br>ing stock market, and general prosperity yrere inevitable results of the change of times. There were the speculative songs, with fluctuations ranging from ÛÏDoo Wacka DooÛ to ÛÏDoodle Doo DooÛ to ÛÏDig Diga Doo.Û And there were rhythms pointing investors to new futures: ÛÏCalifornia, Here I ComeÛ and ÛÏFollow the Swallow Back Home.Û Conservative bankers could find collateral meaning in ÛÏTea for Two,Û brokers instructions in odd lots in ÛÏDonÛªt Bring Lulu.Û For average Americans there was the prospectus of holding companies in ÛÏYes, Sir, ThatÛªs My BabyÛ and ÛÏIÛªll See You in My Dreams.Û Glamour stanzas were on the horizon by middecade with ÛÏMy Blue Heaven,Û ÛÏBlue Skies,Û and ÛÏ . . . the Red Red Robin.Û The promise of windfall gains was evident in such songs as ÛÏI Found a Million Dollar BabyÛ and ÛÏReaching for the Moon.Û | no | 0 |
Surprise Boom May Deepen A Recession: An Inflationary Bubble Could Wreck Guidelines | v Industry in the United States is in the middle of a confusing and peculiarly isolated boom thatÛªs causing unexpected inflation headaches.</br></br>All the signs are there. Purchasing agents scrambling to lock up supplies of raw materials by ordering far in advance of when they want delivery, companies beating the bushes for hew workers and prices shooting up in competitive markets. ;</br></br>No one foresaw any of this, least of all the Carter administration economists who early last fall were putting together an anti-inflation planbased on a gradual slowing of economic growth. Now the industrial boomlet has become a major threat to CarterÛªs wage-price standards, and administration officials are uncertain how to deal with it.</br></br>Alfred Kahn, President CarterÛªs chief of the inflation fight, believes that for ÛÏsomething like the last six monthsÛ the U.S. economy has been ÛÏoverheated.Û</br></br>Citing recent large price increases not just for food and energy products, but on everything from iron and steel scrap (up 6.3 percent in February) and cement (up almost 6 percent in two months) to hides and skins (up 12.6 percent in one month), Kahn concluded, ÛÏWhat we obviously are witnessing here is evidence of an overheated economy.Û | no | 0 |
Volcker Plans to Join Wolfensohn Firm As Chairman and to Teach at Princeton | The great Volcker sweepstakes is over.</br></br>Former Federal Reserve Board Chairman Paul A. Volcker ended months of deliberation by announcing that he will become the chairman of James D. Wolfensohn Inc., a New York investment banking firm, and teach part time at Princeton University.</br></br>The choice of a small firm by the 60-year-old Mr. Volcker came as surprise to many on Wall Street, where big investment banks had been vying energetically for his services. "I had lots of discussions and offers from various firms," Mr. Volcker admitted. "I was very close to doing one or two other things."</br></br>The winner in the Volcker sweepstakes was James D. Wolfensohn, 54, who set up the firm in 1981. Though widely known to Wall Street professionals, Mr. Wolfensohn has generally maintained a low profile. Before now, he has been most visible in the roles he played in the federal government's bailout of Chrysler Corp. and on CBS Inc.'s board.</br></br>As an investment banker with Salomon Brothers in the 1970s, he served as a leading strategist in the successful effort to avert a bankruptcy-law filing by Chrysler, helping to engineer a controversial federal loan guarantee that played a crucial role in the rescue. As Fed chairman, Mr. Volcker sat on the Chrysler Loan Guarantee Board. | no | 0 |
- J Cl)c toasljiiujton post | The Bank of Montreal will buy Harris Bankcorp, parent of Harris Bank, for $546.6 million, or $82 a share, according to a definitive merger agreement announced yesterday.</br></br>The move means the Bank of Montreal becomes the biggest Canadian financial institution in the United States and the second larg-est ih Canada in terms of financial assets.</br></br>The price for ChicagoÛªs third largest bank, with assets of $7.6 billion, will be about 1.27 times its expected book value at the time the acquisition is completed later this year, Bank of Montreal Chairman William D. Mulholland said. The purchase rs subject to approval by federal regulators and Harris stockholders.</br></br>Brazil is asking its bank creditors for some $12 billion in new money and rescheduled loans through 1984, a finance ministry source in Brasilia said yesterday.</br></br>The source, asking not to be named, confirmed reports' Brazil is asking the New York-based bankers committee that coordinates debt renegotiation with some 800 individual banks to roll over maturity; debt for nine years and for five-year terms on the new money it is asking through the end of next year. | no | 0 |
Blue Chips Fare Poorly | NEW YORK , March 20 W)ÛÓSelective strength in coppers, drugs and assorted issues highlighted a mixed stock market today.</br></br>Plus signs were in the majority but the blue chip stocks which dominate the market averages didnÛªt do so well with the result that the popular averages were down.</br></br>Among key stocks the general range of gains or losses was fractions to a point or so but some moved about 2 points either way. Special stocks jnade some wider moves.</br></br>The market was higher at the start in a continuation of yesterday's advance. The list was irregular by mid-session and remained that way. Final dealings pared some of the better gains.</br></br>Coppers were boomed by a sharp advance in copper prices at London and also by a rise at the custom smelter level in the United States. Drugs continued their rise on various favorable tidings. | no | 0 |
WorldCom Admits $3.8 Billion Error In Its Accounting --- Firm Ousts Financial Chief And Struggles for Survival; SEC Probe Likely to Widen | NEW YORK -- WorldCom Inc.'s audit committee uncovered what could be one of the largest accounting frauds in history, with the discovery of $3.8 billion in expenses improperly booked as capital expenditures, a gimmick that boosted cash flow and profit over the past five quarters.</br></br>Without the transfers, WorldCom, one of the biggest stock market stars of the past decade, said it would have reported a net loss for 2001, as well as the first quarter of 2002. WorldCom reported a profit of $1.4 billion for 2001 and $130 million for the first quarter of 2002.</br></br>In turn, WorldCom yesterday fired its longtime chief financial officer, Scott Sullivan, and accepted the resignation of David Myers, its senior vice president and controller. Neither Mr. Sullivan nor Mr. Myers could be reached to comment.</br></br>Clearly, WorldCom's survival is in question. WorldCom said it intends to restate its financial statements for the five quarters in what could be among largest restatement in corporate history. The telecommunications firm already has been hobbled by firm already has been hobbled by an industrywide meltdown, a Securities and Exchange Commission probe and $30 billion in debt. WorldCom is one of the world's largest telecom companies, with 20 million consumer customers, thousands of corporate clients and 80,000 employees.</br></br>The company said an irregularity was initially picked up during a routine internal audit conducted soon after the ouster of WorldCom's chief executive, Bernard J. Ebbers, in April. WorldCom officials said they then turned the matter over to the company's audit committee and its auditors, newly hired KPMG LLP, who determined that the issue was serious enough to alert the SEC. The agency already had launched its own investigation into WorldCom in February. | no | 0 |
ECB to Evaluate The Effectiveness Of Inflation Goal --- A Revision to Strict Policy Could Lower Interest Rates, Spur Growth in Euro Zone | FRANKFURT -- After years of criticism for being overly strict, the European Central Bank is planning to reassess its inflation target.</br></br>A possible change could result in lower interest rates and stronger economic growth for the world's second-largest economy, providing firmer support for the U.S. and the world.</br></br>The ECB aims to keep annual rates of inflation below 2%, the most austere goal of any major central bank. Over the past two years, the ambitious objective kept the bank from trimming interest rates as swiftly as the U.S. and the U.K., even as the economy slowed sharply. Despite the effort, inflation overshot the target for three of the four years since the birth of the ECB and the currency it manages, the euro.</br></br>The ECB recently announced it would review during the first half of next year the strategy it uses for setting interest rates. But Lucas Papademos, the ECB's vice president, confirmed in an interview during the weekend that the analysis will also encompass the bank's most sacred tenet: its own definition of price stability.</br></br>Mr. Papademos cautioned that "the assessment that is going to take place need not imply a change." Nor should the study imply the ECB has any doubts about the strategy and goals it has pursued so far, he said. | no | 0 |
U.S. News --- THE OUTLOOK: Economy Poised for 2013 Gain | As 2012 comes to a close, the U.S. economy is also turning a page: The recovery is over. It looks like 2013 will be the start of a more normal, though hardly robust, period of growth.</br></br>For Americans struggling in the still-slow economy, that is both good news and bad. The risk of another recession is diminishing, at least if leaders in Washington can steer clear of the "fiscal cliff." But so are the prospects for a period of rapid growth that brings down the unemployment rate and helps the economy make up the ground lost in the recession.</br></br>Technically, the recovery ended in late 2011 when economic output, adjusted for inflation, returned to its prerecession peak. But on a per-capita basis, gross domestic product still hasn't rebounded to its 2007 high, and by most other measures the economy has remained mired in its postrecession doldrums. For more than three years after the recession ended in June 2009, unemployment remained high, the housing market was depressed, and every economic speed bump brought renewed fears of another recession.</br></br>That is poised to change in 2013. Home prices are finally rising again in much of the country, and construction activity is slowly picking up. Job growth has stabilized at about 150,000 jobs per month, and unemployment, though still elevated, dropped below 8% in September and has continued to fall. If current trends continue, per capita output will surpass its prior peak sometime next year.</br></br>The economy is far from fully healed. The combined net worth of U.S. households remains 12% below its pre-recession peak, after adjusting for inflation. | no | 0 |
India Shares Open Weak | MUMBAI--Indian shares were slightly lower in early trading Monday, with investors cautious ahead of the central bank's key rate-setting meeting later in the day.</br></br>At 0504 GMT, the Bombay Stock Exchange's S&P BSE Sensex was 0.1% lower at 19169.88 points, while the National Stock Exchange's Nifty index was 0.2% lower at 5797.50.</br></br>Asian stocks were mostly higher ahead of the U.S. Federal Reserve's monetary policy meeting later this week, which will provide more clarity on the U.S. central bank's plans for its bonds buyback program.</br></br>The Reserve Bank of India will likely keep its key lending rate unchanged at 7.25% at a mid-quarter review of monetary policy later Monday, according to a majority of analysts polled by Dow Jones Newswires.</br></br>Twelve out of 16 analysts polled expect the RBI to keep rates unchanged, primarily due to a sharp depreciation in the local currency against the U.S. dollar over the last few weeks and its potential adverse impact on inflation. | no | 0 |
Business and Finance | STOCK PRICES plunged amid concern about interest rates and the economy. The Dow Jones industrials fell a record 41.91 points, to 1783.98. Meanwhile, agriculture futures prices soared on speculation that the Soviet nuclear accident would damage an important Russian farming region.</br></br>The dollar rose, partly on speculation that the disaster will boost Soviet purchases of U.S. grain. West Germany signaled plans to intervene further to support the dollar.</br></br>---</br></br>Bond prices tumbled, ending a three-day rally. Prices fell as the Treasury unveiled plans to sell $27 billion of bonds and notes next week, more than analysts had expected.</br></br>--- | yes | 1 |
Social Security Off-Budget: Expensive Idea | One of the more important deficit-reducing events of the 1980s was the Social Security reform of 1983. The Social Security system is now running sizable surpluses that are being used to help meet federal deficit targets under Gramm-Rudman-Hollings. The Social Security surplus thus masks the seriousness of the deficit problem in the rest of government.</br></br>For this reason, many propose that deficit targeting be altered. They would target the rest of the government's deficit and move Social Security completely off-budget. While I am in strong agreement with the goals of the reformers, I worry that they are pursuing their goals with a highly risky mechanism.</br></br>Following such a change, increases in Social Security benefits would no longer count against the official budget deficit. Given the strong political support for Social Security, the removal of budget discipline from the system would create an enormous temptation for politicians to spend some of the accumulated surplus. There is a long list of claimants and many expensive proposals have been made to correct perceived inequities in the system.</br></br>Having allowed Social Security completely off-budget, it would be hard not to extend the same privilege to other trust funds. For example, the Medicare and civil-service pension trust funds would have a particularly strong claim to off-budget status. Both programs have contributed significantly to deficit reduction in the recent past. But if allowed off-budget, they are unlikely to do so in the future.</br></br>More important, the Social Security benefit structure itself should not be allowed to escape budget scrutiny forever. Formidable political forces are now arrayed against any restraint on benefit growth, and Social Security is far from the political bargaining table. But that has not always been true, and there are reasonable options that would save many billions of dollars in the long run. | no | 0 |
Corporate Focus; BUSINESS: Money Is Everywhere, But for How Long? | It may be time to put away the bubbly.</br></br>The New Year's forecasts are so unrelentingly sanguine that you have to wonder whether a tanker of strong, black coffee is in order. The U.S. economy will keep growing. The housing market will recover. The Federal Reserve will cut interest rates. And financial markets will soar.</br></br>The world, it seems, has become intoxicated by the steady flow of what my fellow financial writers call "liquidity." Money flows freely, like the vodka from Dennis Kozlowski's infamous ice-hewn David, filling every dark and desolate crevice of the financial world.</br></br>There is a steady stream of resources to the most perilous of emerging markets, the most hopeless of troubled companies and the most overextended of home buyers.</br></br>That's great fun while it lasts. But does anyone seriously think it will last forever? | no | 0 |
Interest Rates Up Slightly in FNMA Auction | Interest rates rose slightly in the Federal National Mortgage AssociationÛªs (FNMA) latest auction of $200 million in mortgage purchase commitments.</br></br>The average gross yield to! FNMA Tuesday on $45.6 mil-! lion of three-month commitments; was 9.04 per cent, up from 9.01 per cent in the previous auction two weeks ago.</br></br>The average yield on $117 million of six-month commitments was 8.99 per cent, up from 8.97 per cent while the rate of $37.5 million worth of proposed construction commitments was 8.95 per cent, up [from 8.94 per cent. ,</br></br>FNMA said it would issue commitments for between $200 million and $250 million in mortgage purchases of its next auction scheduled Sept. 22.</br></br>The association, a government-spawned private corporation, purchases FHA and VA backed mortgages at a discount to help stabilize the mortgage markets. | no | 0 |
Business and Finance | JAPAN UNVEILED a package of market-opening initiatives intended to persuade the White House to call off its trade offensive, but the plan isn't likely to bring U.S. negotiators back to the table anytime soon. Tokyo's measures are largely a repackaging of proposals made in the framework talks that failed last month.</br></br>Grumman set up a process for Northrop and Martin Marietta to submit final bids for the defense company by Thursday afternoon, but Northrop criticized the new rules as essentially forcing it to "bid against itself."</br></br>---</br></br>Kodak plans to seek alliances with major computer companies and recruit new talent in an effort to restructure its core imaging business to emphasize electronic technology.</br></br>--- | no | 0 |
White House Toughens Tone; Amid Concern About Midterms, Obama Boosts Staff and Emphasizes Jobs | WASHINGTON--Coming off one of the most difficult weeks of his presidency, Barack Obama has beefed up his political staff and is expected to deliver an uncompromising State of the Union address. Aides said Sunday that the White House wasn't making any abrupt policy shifts, even as the message was retooled to focus more sharply on job creation.</br></br>If anything, an unfinished agenda from 2009 will grow larger as, in addition to tackling health care and unemployment, the president presses for a bipartisan commission to tackle the budget deficit against resistance from Republicans.</br></br>White House officials said Obama campaign manager David Plouffe would be brought on as a political consultant as the White House gears up for the midterm elections.</br></br>The president's party is facing a stiff headwind from an electorate angry about high unemployment and what they see as ineffectual government, White House officials said. Republican Scott Brown's capture of the Massachusetts Senate seat Tuesday was a first shot in what Democrats worried would be hard-fought contests in November.</br></br>"People are working harder," White House senior adviser David Axelrod said Sunday on ABC's "This Week," referring to the economy. "If they have a job, they're working harder for less. They're falling behind. That's been true for a decade. They look at a wave of irresponsibility from Wall Street to Washington that led to that. And those were the frustrations that got the president elected in the first place, and they were reflected again on Tuesday" in the Massachusetts election. | no | 0 |
U.S. Treasury Market Goes Off Script; Gap Between Short- and Long-Term Yields Narrows | The crosscurrents roiling the bond market intensified Thursday, as the gap between short- and long-term U.S. Treasury yields narrowed in the latest sign of uncertainty over the pace of U.S. growth.</br></br>Yields on short-term U.S. Treasury debt maturing in two to five years hit the highest level since 2011, reflecting an investor scramble to place bets on an expected Federal Reserve rate increase as soon as next spring. Yields rise when prices fall.</br></br>The selloff in short-term government debt extended a pullback that began following Wednesday's Federal Reserve decision to end its bond purchases later this year.</br></br>At the same time, yields on government debt maturing in 10 or more years have risen only modestly this week and remain well below their levels at the start of 2014, a year that many analysts forecast would include rising long-term interest rates and falling bond prices. The 10-year U.S. Treasury note was 8/32 lower, yielding 2.629%. That is the highest closing level since July 3 but compares with 3% at the end of 2013.</br></br>The softness of longer-term yields highlights concerns shared by many analysts and policy makers about the uneven growth of the U.S. economy and falling expectations for inflation. Investors broadly expect the Fed to raise the fed funds rate next year for the first time since 2006. But many analysts say that even a small uptick in rates could slow the economy and send already-low inflation further below the Fed's target. | no | 0 |
Corporate News: Corner Office Turned Pressure Cooker | Jeffrey Kindler, who stepped down as Pfizer Inc.'s chief executive on Sunday, citing burnout, is the rare CEO to say that the job wore him out.</br></br>In fact, occupying the high-powered cocoon known as the corner office is more stressful than ever, thanks to a greater emphasis on globalization, stiffer competition, heightened government regulation and the weak economic recovery, say former CEOs, corporate directors and management experts.</br></br>Compared with four years ago, pressures on CEOs "are substantially different -- especially in certain industries," said Steve Reinemund, who retired in 2006 as PepsiCo Inc. CEO "It's still pretty tough out there," adds Mr. Reinemund, dean of Wake Forest University's business school.</br></br>As a result, many CEOs now look at the corporate throne "as a position with a limited term of office," said Jeffrey Sonnenfeld, a senior associate dean at Yale University's School of Management. "They rarely seek to stay a minute more than a dignified decade."</br></br>To cope, a few CEOs cut short their tenure. The head of a mid-sized mutual insurance company intended to retire in early 2013 after serving since 1999. But during a board succession-planning session three years ago, this chief announced he felt "frankly burned out" and wanted to leave within a year, said Beverly Behan, a New York corporate-governance consultant. "It was the most emotional board meeting I had ever been in," she added. | no | 0 |
Mortgage Rates, Strangely, Remain Aloft --- Bond-Market Chaos Plays Role in Unusual Divergence | NEW YORK -- Something strange is afoot in the mortgage market -- and it is causing home buyers to fork over more money.</br></br>By all accounts, rates on mortgages should be tumbling. That is because mortgage rates typically track interest rates on long-term bonds, which have been falling since the beginning of the year.</br></br>But mortgage rates have remained essentially flat, causing the gap between mortgage rates and bond yields to widen by the largest measure in years. Unfortunately for home buyers, this trend comes just at the beginning of the spring buying season, when activity in the residential real-estate market peaks.</br></br>Freddie Mac, the mortgage servicer, said yesterday that the rate for a 30-year-fixed-rate mortgage averaged 8.20% this week. While down slightly from 8.23% last week, it isn't much different from three months ago, when the average rate was 8.15%. During the same period, yields on 10-year Treasury notes, most frequently used to set mortgage rates, have fallen to about 5.9% from about 6.5%. (They were quoted at 5.915% late yesterday.)</br></br>On a $200,000 mortgage, the difference between an 8.2% rate and a 7.6% rate is about $84 a month on a 30-year conventional fixed-rate mortgage. | no | 0 |
Builders Face a Desert Reckoning | Author: Robbie Whelan</br></br>Some of the nation's largest home builders might be forced to buy hundreds of acres of desert 10 miles from the Las Vegas Strip at boom-era prices as part of a legal battle with a group of banks led by J.P. Morgan Chase & Co.</br></br>If a judge rules in favor of the banks over builders such as KB Home and Toll Brothers Inc., it could cast a shadow over a popular but controversial form of off-balance-sheet accounting used when buying land. The strategy is used by builders to insulate themselves from debt and other obligations.</br></br>The development, called Inspirada, is another housing-crisis casualty in Nevada, one of the hardest-hit U.S. states. Just 635 homes out of the planned 14,500 were sold before financial problems and fighting erupted.</br></br>When a venture formed by the home builders bought the land in 2004, the companies thought their liability was limited to $370 million, in return for 2,000 acres where they envisioned a sprawling $1.5 billion planned community. | no | 0 |
Tax Incentives May Replace Wage-Price Guides | The White House is considering scrapping its current wage-price guidelines program next year and replacing it with a controversial new plan to give federal tax breaks to workers and firms who hold wage and price increases down.</br></br>The options are now under review by top White House economic advisers, with plans tok draft a formal proposal for the president after the November election. Specifics would be sent to Congress in January if Carter is re-elected.</br></br>Sources said the move may be proffered as part of a broad ÛÏsocial contractÛ between Carter and business and labor leaders that includes a shift away from numerical guidelines and an intensified crackdown on government regulations considered to be inflationary.</br></br>Carter already has proposed, as part of his new industrial policy, a companion AFL-CIO plan for a national committee to monitor the economy, possibly with power to waive environ-</br></br>The White House moved this year to establish a series of tripartite committeesÛÓcomprised of representatives of government, labor and managementÛÓto work out problems in the auto, steel and construction industries. | no | 0 |
Money Supply Rate Soars In January: Money Supply | The money supply measure the Federal Reserve has been watching most closely for setting monetary policy rose at a 291 -ÐÊ> percent annual rate in January, apparently largely because of a huge flow of funds into the new money market deposits ac- _ counts.</br></br>The FedÛªs policymaking group, the Federal Open Market Committee, decided on Jan. 28 not to respond by tightening conditions in financial markets because a staff analysis said the enormous popularity of the money market deposit accounts was to blame.</br></br>Deposits in the new afccounts, which were first available Dec. 14, reached $232.2 billion in the week ended Feb. 2 as the closely watched money measure, M-2, rose $48.1 billion in January. Most of the funds in the new accounts came from other accounts and certificates of deposit already part of M-2. '</br></br>The FOMC also met this week for two days to decide upon money growth targets for 1983, which Fed Chairman Paul A. Volcker will disclose next Wednesday in testimony to the Senate Banking Committee.</br></br>Separately, the Fed announced that it has changed the definition of M-2 slightly and that it has revised figures for 1982 both for that reason and because of a recalculation of seasonal adjustment factors. | no | 0 |
Foreign Investors Boost Purchases of U.S. Securities | Dow Jones Newswires</br></br>Foreign investors increased purchases of U.S. securities in June for the first time in five months, evidence foreign demand is ample to sufficiently finance the U.S. current-account deficit.</br></br>Foreigners bought $71.8 billion in U.S. stocks and bonds in June, up from $65.2 billion in May, according to the Treasury Department. Analysts estimate $45 billion to $50 billion in foreign investment is needed each month to finance the U.S. current-account gap, the broadest gauge of the nation's global trade. It stood at a record $144.9 billion in the first quarter.</br></br>So far this year, foreign net purchases of U.S. securities are averaging around $75 billion a month, up from about $50 billion a month last year, analysts say. "Worries about the ability of the U.S. to finance its twin deficits -- the current-account deficit and budget deficit -- remain overblown," said Tony Crescenzi, chief bond-market strategist at Miller Tabak.</br></br>The June foreign-investment data exceeded financial markets' expectations that net purchases would be between $50 billion and $60 billion. "The dollar had a positive reaction simply because the number was better than most people expected," said Shahab Jalinoos, senior foreign-exchange strategist at ABN-AMRO. | yes | 1 |
Bond Prices Rise as Dealers, Investors Are Cheered by Rate Drop, Fed's Move | NEW YORK -- Bond prices spurted yesterday as dealers and investors were cheered by a decline in short-term interest rates.</br></br>An injection of reserves by the Federal Reserve System into the banking network also encouraged traders. Some analysts were surprised by the move and said it might represent an easing of the Fed's credit hold. But many others insisted that the move was needed for technical reasons and that the Fed hasn't changed policy.</br></br>The interest rate on federal funds hovered between 8 1/8% and 8 3/8% yesterday, down from Monday's average of 8.57%. The funds rate, which is the rate on reserves that banks lend one another overnight, is watched closely for clues to changes in Fed policy. Prices of some actively traded Treasury bonds rose more than 1/2 point, or over $5 for each $1,000 face amount.</br></br>Much of the credit markets' focus yesterday was on the Fed's injection of reserves. The action "could possibly represent an easing move" by the central bank, said Donald E. Maude, chief economist at Refco Partners. He cautioned, however, that it is "premature to attach any definitive policy significance" to the Fed maneuver.</br></br>The economy's apparent sluggishness in recent months has boosted hopes that the Federal Reserve will ease credit conditions, paving the way for lower interest rates, in an attempt to stimulate business activity. This view was bolstered last week when Reserve Board Chairman Paul Volcker expressed concern about the lackluster performance of the nation's manufacturing industries. | no | 0 |
Resurgent Economy Cheers Policymakers; Inflation Index Dropped 0.1 Pct. in August | The latest news about the U.S. economy is so good -- in terms of low unemployment, rebounding growth, falling inflation, declining interest rates and record stock prices -- that private analysts and government policymakers alike are cheering.</br></br>Yesterday, the Labor Department added to the good news by reporting that August producer prices for finished goods fell 0.1 percent after three other similarly good months. Federal Reserve officials said the report indicates that last winter's inflation bubble, which could have derailed the economic expansion had it spread, has now burst.</br></br>Both the stock and bond markets rallied on the inflation news, with the Dow Jones average of 30 industrial stocks rising 42.27 points to close at a record 4747.21.</br></br>Bond prices also jumped, as interest rates on 30-year U.S. government bonds declined by nearly a tenth of a percentage point to 6.50 percent. Except for one day in June, that marks the lowest level for bond yields since early 1994. Short-term rates have also dropped recently, with yields on three-month Treasury bills down to 5.44 percent yesterday.</br></br>Laurence H. Meyer, an economic forecaster based in St. Louis, said the rest of this year and 1996 could be "one of the best, if not the best, late {business} cycle displays in the postwar period. Growth is at trend {2.5 percent}, the economy is near `full employment,' and inflation is modest and stable -- all features of a soft landing." | no | 0 |
Fannie Mae's Risky Business | We've caught heck from the sages of Wall Street for suggesting over the past year that Fannie Mae was exposed to too much interest-rate risk. Well, all of a sudden a lot of investors seem to agree with us.</br></br>They've been selling off the nation's largest mortgage buyer after Fannie disclosed last week that what it once called its "superior" risk management is coming undone. Fannie shares closed off nearly 3% on Friday, to $64.60, despite a rising overall market and the continuing housing boom, and are now trading at levels not seen in two years. Louisiana's Richard Baker, Congress's leading Fannie overseer, is concerned enough that he's now asked the company's regulator to deliver weekly reports on the mortgage giant's status.</br></br>Specifically, Fannie reported last week that its duration gap -- a measure of how successful its interest-rate risk is hedged -- has been widening beyond its target range of plus-or-minus six months. In July, Fannie's duration gap was a negative nine months; in August it careened to 14 months, the largest ever reported. (A negative number reflects falling interest rates, a positive number reflects rising ones.)</br></br>So what happened?</br></br>The problem is clear: Falling interest rates have encouraged a record number of home refinancings and therefore of mortgage prepayments. In other words, Fannie's assets are being paid off faster than expected by homeowners. | no | 0 |
High Dollar Value Called 'Critical Trade Problem' | Leading specialists in international economics from the Nixon and Carter administrations yesterday singled out the high value of the dollar in relation to other world currencies as AmericaÛªs ÛÏmost critical trade problemÛ and listed it as a major cause of the current recession.</br></br>In testimony before a House Ways and Means subcommittee, Peter G. Peterson, former president NixonÛªs Commerce secretary, blamed an overvaluation of the dollar, especially in relation to the yen, for fueling the United StatesÛª record merchandise trade deficit.</br></br>ÛÏThe deterioration of the trade balance was far greater than the decline in the housing or automobile industries, and has been the single most important cause of the current recession,Û added C. Fred Bergisten, assistant Treasury secretary for international economics in the Carter administration.</br></br>Both menÛÓwho are associated in the Institute for International Economics where Bergsten is the director and Peterson chairman of the boardÛÓpredicted that the merchandise trade deficit could reach $100 billion by next year, far higher than Reagan administration projections. Martin Feldstein, chairman of the presidentÛªs Council of Economic Advisers, said in mid-November that the 1983 trade deficit would be between $60 billion and $70 billion.</br></br>Peterson, board chairman of Lehman Brothers Kuhn Loeb Inc., added that the burgeoning trade gap could account for between 1 billion and 2 billion lost job opportunities and suggested that the administration and Congress should concentrate on trade problems rather than a road and bridge rebuilding program, which would add only 300,000 jobs. | yes | 1 |
Canada's Low Productivity Clouds Competitiveness, Living Standards | MONTREAL -- While Canada enjoys its healthiest economy in years, it faces a worrisome threat: Lagging productivity growth is undercutting its ability to compete in the future.</br></br>Last Friday, the government said Canada's unemployment rate fell to 7.8% in January from 8% in December, hitting its lowest level since June 1990. Employment in January rose 87,400, or 0.6%, its biggest monthly rise since December 1987. The Canadian dollar finished the week at 67.08 U.S. cents, its strongest level since last July.</br></br>But longer term, recent studies conclude, slowing productivity growth threatens to drag down Canada's living standard for decades to come. In different ways, the Canadian dollar's years-long slide, high taxes, skimpy research budgets and heavy regulation are all taking their toll.</br></br>Signs of trouble are spreading. Here in Montreal, BioChem Pharma Inc. became a star of Canada's biotechnology sector by developing the widely used AIDS drug 3TC. But now, the company is moving aggressively to expand its vaccine business -- in Massachusetts. BioChem tried for two years to lure development specialists to Canada from the U.S., but attracted "zero qualified people," says its chief executive officer, Francesco Bellini. "We can compete on salary, but we can't compete on taxes," he says.</br></br>Since 1990, manufacturing productivity has increased less than half as fast in Canada as in the U.S., the Organization for Economic Cooperation and Development reports. It is now only about 70% of the U.S. level. If Canada doesn't change its ways, its per capita gross domestic product will plunge from 10% above the OECD average now to 15% below that level in 20 years, the organization predicts. After taxes and inflation, Canada's per capita personal income has slid since 1990 and now trails that of Mississippi, according to the Bank of Montreal's Nesbitt Burns securities unit. | no | 0 |
Ahead of the Tape | Cooling Productivity Is the Heat Under Jobs</br></br>U.S. workers are getting less productive. Right now, that actually may be good news for the labor market.</br></br>Not that this will be immediately apparent from Friday's employment report. And it may be easy to overlook this release, coming at the end of a week dominated by midterm elections and the Federal Reserve's latest bout of bond buying.</br></br>But the employment figures are as crucial as ever: Given that unemployment barely has budged this year, upping the pace of job creation is precisely what events this week were about.</br></br>Friday's report is expected to show unemployment holding steady for the third month in a row at 9.6% in October. Still, the report's details may offer encouragement. | no | 0 |
Banking Chairman Attacks Carter Plan To Save the Dollar: Dollar Rescue Plan Attacked | The chairman of the House Banking Committee yesterday called for a wholesale re-examination of the Carter AdministrationÛªs dollar-rescue program, charging that high interest rates being promoted by the Administration will actually weaken rather than strengthen the dollar next year.</br></br>And in terms of the depressive domestic impact of ÛÏbudget austerityÛ now at the heart of CarterÛªs announced economic policy. Rep. Henry S. Reuss (D-Wisc.) warned that it could lead to civil strife in financially stricken cities like Cleveland, Newark, and Detroit.</br></br>The Wisconsin Democrat will begin two days of hearings before a Joint Economic Committee subcommittee on these questions today, with Treasury Secretary W. Michael Blumen-thal and Charles L. Schultze chairman of the Council of Economic Advisers, as lead-off witnesses. Federal Reserve Chairman G. William Miller will testify on Friday. Academic and other witnesses will also be heard.</br></br>ReussÛª major policy prescription is not a new one. He suggested in a statement released yesterday that the U.S. should rely less on massive intervention, and more on a ÛÏsubstitution account" at the International Monetary Fund, through which dol-lar-holders could exchange unwanted money for ÛÏenlarged and re-christened special drawing rights.Û</br></br>The ÛÏsubstitution accountÛ idea has been popular among international monetary system reformers, going back to 1972. But it was put aside, when the IMF formally adopted floating exchange rates as the basis for the international monetary system. | no | 0 |
On Slow Day, Traders Take Tesla for a Drive | Corrections & Amplifications</br></br>The expiration of Tesla Motors Inc.'s lock-up period on Monday allowed those who invested in the company prior to its initial public offering to sell their shares. Tuesday's Options Report incorrectly implied that the lock-up applied to the company's IPO investors.</br></br>(WSJ December 31, 2010)</br></br>NEW YORK -- On a sleepy day for the stock market, traders were in high gear on Monday buying options for Tesla Motors Inc. at a key time for its investors.</br></br>An East Coast snowstorm and holiday vacations conspired to keep Wall Street trading light on Monday, but there seemed to be an unusual amount of activity in Tesla Motors Inc. options. Investors appeared to be buying January $25 and January $26 puts for the electric car maker's stock. It isn't a huge leap to think shares of Tesla, which closed down 15% at $25.55, could move up or down slightly by the Jan. 21 expiration date. | no | 0 |
U.S. Housing Starts Fall by 9.9% In June; Building Permits Decline, Too, as Rising Mortgage Rates Pose Threat | WASHINGTON--Construction of new homes fell sharply in June, highlighting risks to the sector's recovery from rising mortgage rates and supply constraints.</br></br>Housing starts declined 9.9% in June from a month earlier to a seasonally adjusted annual rate of 836,000 units, the Commerce Department said Wednesday. Building permits, a key measure of future construction activity, fell by 7.5%. The readings were much worse than expected, with most economists forecasting modest gains in both categories.</br></br>But the decline in housing starts was primarily driven by a 26% drop in multifamily housing, a category that has traditionally been volatile and has lately shown signs of overbuilding. Starts for single-family homes, which account for the largest share of activity, fell by 0.8%. Single-family permits rose 0.1%.</br></br>"The outlook for housing is still bright," said Moody's Analytics economist Celia Chen. She said the June data "is more of a hiccup."</br></br>The housing sector has been strengthening in recent months as low prices and steady employment gains have fueled stronger demand. The rebound has been providing key support to the U.S. economy, helping to offset public-sector budget cuts and a struggling manufacturing sector hit by weak overseas demand. | yes | 1 |
Income Leveling U.S. To Middle-Class Nation | The controversial Harvard professor, John Kenneth Galbraith, made one point in his testimony before the Senate Banking CommitteeÛªs stock market inquiry which nobody quarreled with:</br></br>That the economy is much less vulnerable to a stock mar-keLcollapse today because less I of the income is concentrated in the hands of people who are likely to be playing around in the market.</br></br>Last week the Commerce Department released a remarkable- study of just how evenly income is distributed nowÛÓ-a study which confirms in figures what some sociologists have been saying on Ûªother grounds: that the United States is becoming one vast middle class.</br></br>The figures, arranged in a bewildering array of charts and tables, cover the year 1953, but the department said the patterns were the same in 1954.</br></br>There are about 50,500,000 ÛÏconsumer unitsÛª* in the countryÛÓcounting 35,600,000 nonfarm families, -5,500,000 farm families, and 9,400,000 single individuals. For various reasons, farm families and single individuals have lower cash incomes than the great bulk of us who are in non-farm families ^(without necessarily indicating a lower standard of living). So the crucial figures are those for the non-farm families. And this is what they show: | no | 0 |
Oil-State Banks See Flat Results For 3rd Quarter --- Diversified Economies Mean Higher Prices for Crude Don't End Area's Slump | Contrary to popular belief, Southwestern banks didn't get a boost from soaring oil prices in the third quarter.</br></br>"I think it's too early to see any of the benefits" from the price rise spurred by the Mideast crisis, said Frank Anderson, a banking analyst with Stephens Inc., Little Rock, Ark. "I don't think the Texas economy is going to improve a lot in the near term," he said, although "the psychology is so much better."</br></br>Some analysts say the run-up in oil prices actually could prove detrimental to energy-state economies and therefore to banks in the region. Since the last boom-bust cycle in the oil industry, many of those economies have diversified into industries more closely linked to the general U.S. economy. Thus, the reasoning goes, if higher energy costs cause a recession in the rest of the U.S., states such as Texas would suffer too.</br></br>According to Sandra J. Flannigan, an analyst with Alex. Brown & Sons Inc., Baltimore, oil and gas accounted for only 15% of Texas's economic output in 1989, compared with a peak of 27% in 1981.</br></br>Energy companies, worried that prices could sink again as fast as they rose, are being much more cautious about new investments and exploration this time. And because their extra income isn't being spread around much yet, employment, loan growth and demand for real estate remained depressed in the third quarter, bankers and analysts say. | yes | 1 |
Fairfax Shines In Jobs Report; County Challenges D.C.'s Leadership Of Area Economy | Fairfax County has emerged as a jobs powerhouse that far outpaces Montgomery County and now rivals the District as the region's economic core, according to a new federal report that details a profound shift in the Washington area over the past 15 years.</br></br>The region's lessening reliance on federal employment and the growth of the Northern Virginia economy are well-established trends, but Bureau of Labor Statistics economists who produced the report said they were stunned at how strong the movement has been.</br></br>"Fairfax County has separated itself from the rest of the crowd," said Diane Nilson, a bureau economist. "If you're looking across the board, you'd think that these others are doing fine, and they are. But what jumped out at us is how much Fairfax has separated itself from them."</br></br>The report is based on information that is more detailed and accurate than the agency's routine survey-based updates and that has never been used for in-depth analysis of the region.</br></br>In 1990, the report states, about 16 percent of the region's workers held federal jobs, the same percentage as worked in "professional and business services," the agency's category for most private-sector professional jobs, including lawyers, engineers and computer programmers. | yes | 1 |
Fed Officials Mull Inflation as a Fix | Author: Sudeep Reddy</br></br>The Federal Reserve spent the past three decades getting inflation low and keeping it there. But as the U.S. economy struggles and flirts with the prospect of deflation, some central bank officials are publicly broaching a controversial idea: lifting inflation above the Fed's informal target.</br></br>The rationale is that getting inflation up even temporarily would push "real" interest rates--nominal rates minus inflation--down, encouraging consumers and businesses to save less and to spend or invest more.</br></br>Both inside and outside the Fed, though, such an approach is controversial. It could undermine the anti-inflation credibility the Fed won three decades ago by raising interest rates to double-digits to beat back late-1970s price surges. "It's a big mistake," said Allan Meltzer of Carnegie Mellon University, a central bank historian. "Higher inflation is not going to solve our problem. Any gain from that experience would be temporary," adding that the economy would suffer later.</br></br>Others warn that pushing inflation higher than the target could create public confusion and risk fueling financial bubbles and market instability. They say Fed policy already is weakening the dollar and as a result prompting a gold and commodity boom. "The Fed is treading upon a mine-laden path that has never been tip-toed through in this country," said Andrew Busch, a currency strategist at BMO Capital Markets. | no | 0 |
Ahead of the Tape | Damage Done</br></br>May Require</br></br>Bigger Moves</br></br>So far in this recession, fiscal and monetary policy has been an effective antidepressant. But it may not be an effective stimulant, given the pain consumers have suffered.</br></br>The government is committing trillions of dollars in various bailouts and lending programs. The Federal Reserve has slashed its target interest rate and is buying debt to lower other rates, too. | no | 0 |
Grover Norquist: Washington Enemy No. 1; The man who enforces the no-new-taxes pledge is under fire like never before. Why he still expects Republicans will hold the line. | Washington</br></br>'No one is caving," Grover Norquist says emphatically and repeatedly when we meet this week in his office in the nation's capital. By "no one" he means congressional Republicans, and by "caving" he means surrendering to Barack Obama's call for tax increases. Republicans are facing an avalanche of pressure from the White House, the media and even many on Wall Street to abandon their antitax principles to avoid a "fiscal cliff."</br></br>Mr. Norquist, who runs the influential advocacy group Americans for Tax Reform, finds himself smack in the middle of the political fight in Washington over whether taxes will rise on investors and businesses next year, a move he believes would cripple the Republican Party and could plunge the economy into another recession.</br></br>He rattles off a list of reasons Republicans won't give in. If taxes rise on everyone next year because of a stalemate, he says, "who are you going to believe wants taxes to go up? Obama doesn't have credibility on keeping your taxes down; Republicans do."</br></br>And don't forget: "Nothing has changed on the chess board since Barack Obama agreed to extend all the Bush tax cuts two years ago. Exactly the same players. Republicans still control the House and Democrats still control the White House and the Senate." Then he delivers the clincher: "For 20 years Democrats have tried over and over to trick Republicans into breaking the pledge. It hasn't happened. This isn't my first rodeo." | no | 0 |
Trade Shrinks on Selloff | NEW YORK. Sept. 20 UP).ÛÓThe stock market declined today in a moderate turnaround that followed early strength.</br></br>The market started higher with some vigor. Within a few minutes after the opening, the tape couldnÛªt keep up with floor transactions. That lasted only a short time, however, and the congestion was over.</br></br>In the early afternoon the market started lower and continued on down in a quiet manner to the close with prices near bottom at that time.</br></br>The Associated Press average of 60 stocks lost 80 cents at $134.30. That is exactly the amount it gained on Friday. The industrial component of the average yas down $1.10, the railroads were off 90 cents, and the utilities lost 10 cents.</br></br>Volume came to 2,060,000 shares as compared with 2,250,000 shares traded Friday. At one time during the morning, the pace of trading was at a rate of around two and a half million shares. | no | 0 |
Bernanke Cements His Changes to the Fed | In his six years as chairman of the Federal Reserve, Ben Bernanke has stretched the central bank in once-unthinkable ways--pushing short-term interest rates to near zero and keeping them there for years, more than tripling the size of its securities and loan portfolio, rescuing financial firms that the Fed doesn't even regulate.</br></br>Lost in the glare of these radical actions is how much he has changed the institution itself. Under his leadership, the Fed has become more open about its plans for the economy and its own sometimes-divisive internal debates. Mr. Bernanke also has made the institution more consensus-oriented even as he assertively pushed the Fed into uncomfortable places. Last week's moves by the Fed were vintage Bernanke in all of these respects and will have long-lasting effects on how the central bank operates.</br></br>The Fed took two steps. First, it published detailed interest-rate projections of each of the 17 officials who participate in policy meetings, without identifying the officials by name. Second, it spelled out its goals for inflation and unemployment more explicitly than it has before.</br></br>The first step--publicizing the wide-ranging views inside the Fed of where people believe interest rates should go--effectively gives voice to the larger committee in which the Fed chairman operates. It was another example of the chairman trying to show he leads by consensus.</br></br>Mr. Bernanke is a believer in research by Alan Blinder, a Princeton professor and former Fed vice chairman, which has shown that groups are often more effective at decision making than individuals. Mr. Bernanke's predecessors--Alan Greenspan, Paul Volcker and Arthur Burns--ruled more by individual force. Mr. Bernanke took over the Fed in 2006 wanting to change that. | no | 0 |
Stocks Record Further Price Gains; Bulk of Summer Losses Recovered | NEW YORK, Oct. 24 iff).ÛÓ'The stock market took on a somewhat tired look at times this week, but it nevertheless scored its fifth straight weekly advance.</br></br>, ThatÛªs a record for consecutive weekly advances this year. The recovery follows an unbroken six-week I decline that ended with the market at the lowest point of the year in mid-September.</br></br>| The big fall started with the cease fire in Korea. It was sharp. Û¢ Before it ended, Wall Street had convinced I itself that stocks were in a bear mar-1 ketÛÓa market that pointed down.</br></br>! that fall has retraced around three-1 fourths of the previous decline as i measured by the Associated Press ; average of 60 stocks at the present ; Position of $106.80. But the market has retraced less than half the distance back to the peak of the year | reached early in January.</br></br>Of course, nobody ÛÏbuys the av-! erages.Û They buy or sell individual | stocks. And that was very apparent | yes | 1 |
White House's Medicare Plan Expands Focus on Drug Benefit | WASHINGTON -- The White House is putting final touches on a framework for overhauling Medicare that would make a prescription-drug benefit much more widely available than first envisioned.</br></br>The plan, outlined in a private meeting on Capitol Hill by Health and Human Services Secretary Tommy Thompson, is designed to be the starting point for House and Senate deliberations on the issue.</br></br>The administration is leaving many of the specific details to Congress, including how to structure the politically sensitive proposal. But it appears to have backed away from an earlier plan that would have required beneficiaries of Medicare, the federal health-care insurance program for people aged 65 and over and the disabled, to switch to private insurance if they wanted to receive a drug benefit.</br></br>Mr. Bush is expected to unveil the White House framework soon, perhaps as early as next week when he is scheduled to address the American Medical Association. The plan, beyond establishing the principles for a drug benefit, calls for changes that would increase the role of private health plans in the federal insurance program for the elderly and disabled. Mr. Bush anticipates the combined changes would cost about $400 billion during the next decade.</br></br>The decision to focus on a broad framework, and not details, reflects a major shift in strategy by the White House. In early January, Bush aides had hoped to write a comprehensive plan and let the president drive the debate on an issue that has split Republicans and Democrats in the past two elections. | no | 0 |
Bond Prices End Higher as Investors Speculate That Fed Policy Panel Won't Lift Rates Today | NEW YORK -- Bond prices rose as investors, betting the Federal Open Market Committee will refrain from raising rates when it meets today, took advantage of beaten-down prices to scoop up Treasurys. Strength in the dollar, and weakness among some key commodities, also helped the market's tone.</br></br>In late trading, the bellwether 30-year Treasury bond was up 19/32, or $5.9375 for a bond with a $1,000 face value, at 100 14/32. The bond's yield, which moves in the opposite direction of its price, fell to 6.083% from 6.127%.</br></br>Medium-term bonds also rose. Ten-year Treasurys, for example, climbed 8/32 to yield 5.927%.</br></br>Bonds tumbled on Friday, after the release of stronger-than-expected economic data. But yesterday some investors saw value in Treasurys.</br></br>"The market was a little bit oversold, and while a small minority of people expect rates to be raised [today], it's still a minority," said Bill Kirby, Prudential Securities' co-head of government trading. | no | 0 |
Profit-Taking Mixes Trend After Upsurge | NEW YORK, April 30 UP).ÛÓ The stock Û÷market launched a . great buying spree today with vigor, and then it stumbled over'profit-taking arid closed in a ragged manner;</br></br>The rapid fire opening of the market marked the third straight day of advancing prices and the second time that the market on average probed into new high ground for the past 24 years.</br></br>Buyers came tumbling into the market a; the start. Great blocks of blue chips dotted the tape at higher prices. Other stocks followed right along.</br></br>By early afternoon, there was evidence of profit-taking. That, expanded until it engulfed most areas of the list. Prices were thoroughly mixed at the close with many of the former leaders on the downside.</br></br>Most major divisions we're mixed. Railroads and coppers were down on balance. The oils did quite well and many motion picture issues were ahead. | no | 0 |
Clinton to Press Major Deficit Cut: Short-Term Stimulus, Tax Reduction Fade | President-elect Clinton said in an interview released yesterday he is determined to make a major reduction in the federal deficit during his term in office but said to meet his campaign pledge of halving the deficit by 1996 he will have to make deeper spending cuts than he contemplated last summer.</br></br>His choice for budget chief, Rep. Leon E. Panetta (D-Calif.), also said yesterday that cutting the federal deficit is the administrationÛªs top priority and indicated that as a result, administration officials no longer have much interest in shortterm spending to boost the economy and have deemphasized a middle-class tax cut.</br></br>Clinton, in an interview with the Public Broadcasting System, said that by the end of his term he still hopes to cut the deficit by at least $145 billion from this year's level. The $145 billion would have been about half the 1993 deficit that was projected when he made the pledge.</br></br>But according to Clinton, since he first said he would halve the deficit, tax and spending projections have worsened and that to meet his goal he will have to be harsher than he anticipated.</br></br>"WeÛªre going to have to cut more in other places ... than we would have thought ... because the deficit's gotten bigger. And weÛªre going to have to move more aggressively on the health care front," he said in tile PBS interview conducted last weekend. But he said the country must still pursue an "investment program" to foster long-term economic growth. | no | 0 |
REVIEW & OUTLOOK (Editorial): Budget Cutting Made Easy | Congress finally has figured out a way to cut the federal deficit. It's called paralysis. As long as Congress fails to boost the federal debt ceiling it will have the best of all possible worlds. It can appropriate funds to its heart's content, to subsidize farmers, Amtrak riders, subway builders, merchant seamen, doctors, lawyers, beggarmen, chiefs. But if the president can't borrow, he can spend only what the government takes in. So, in a process called "deferral" he simply tells a lot of constituencies, "We'll send you the money when we get it."</br></br>Compared with what we've had, it's not a bad way to run the government. In the process of deferring, the president must make economic choices, deciding, for example, whether it is more important to build a shopping center in Des Moines or protect the U.S. from nuclear attack. Any process that forces such choices represents progress -- a kind of shotgun item veto.</br></br>Congress has demonstrated once again this year that it cannot make economic choices on its own. The separate House and Senate "deficit-reduction" bills to be reconciled this week were properly described to the Associated Press by an anonymous OMB official as mostly phony, except of course for the new taxes. Appropriations bills currently under consideration by the two bodies, for agriculture, transportation, labor, health and education, are billions of dollars over budget. In forecasting federal spending, it is appropriations bills, not budget resolutions, that count.</br></br>So what "deficit reduction" really distills down to is an effort to wangle some new taxes. The Senate wants to introduce the equivalent of a European-style value added (VAT) tax into the American tax system, under the guise of a special levy to clean up "toxic wastes." It also wants to add a new import duty to finance "worker retraining" in the U.S.; since there has never been a huge demand for retraining under existing programs, it must be assumed that the main objectives are revenues and a little discreet protectionism.</br></br>As always, revenue enhancers have some guileful arguments. They say, for example, that just-released budget figures for fiscal 1985 demonstrate that the federal deficit expanded even in a time of economic recovery. The deficit did expand, to $211.9 billion from $185.3 billion the preceding year, and even though the recovery slowed sharply this year there was indeed a recovery of sorts. | no | 0 |
A Special News Report on People And Their Jobs in Offices, Fields and Factories | HEALTH-CARE COSTS can drop because of corporate "wellness" programs.</br></br>Tenneco Inc. reports that insurance claims for exercising women workers in 1983 averaged less than half those of women who didn't exercise. The same was generally true about male workers. Absenteeism for men and women who exercised was far less than for those who didn't, Tenneco adds. Besides a drop in health-care costs, the company says, productivity rose. In Houston, Tenneco has a fitness center.</br></br>Shell Oil says its programs are "cost effective" for the company. USAA, an insurance company, says its exercise programs have significantly cut health-care costs. But some others say the saving is difficult to figure. "I don't know if companies will ever be able to do that," says a Rockwell International Corp. official.</br></br>Xerox Corp. says the benefits from its health programs are so "apparent," but proving it would be costly.</br></br>LAID-OFF WORKERS get career advice, stress counseling and other aid. | no | 0 |
When Betting on Yo-Yoing Share Prices, Remember There Are Strings Attached | What goes up must come down. What goes down must bounce back.</br></br>As stock prices move higher and lower, many investors cling to the belief that any stock-market suffering will ultimately be rewarded. That's why they hang on to losing stocks and buy on market dips. More important, this belief gives investors the tenacity to invest for the long haul.</br></br>"There's a tendency to believe that good times will follow bad and bad times will follow good," says Steven Thorley, a finance professor at Brigham Young University's Marriott School of Management. "It's a notion of fairness."</br></br>But does the stock market really work this way? At issue is "mean reversion," the idea that there is a some sort of average to which share prices tend to return. Just as trees don't grow to the sky and the meek are supposed to inherit the earth, so there's a conviction that neither good markets nor bad markets can go on for too long.</br></br>It's not surprising that investors want to believe in reversion to the mean, because it makes the stock market seem less fickle. But it also means we could be in for some rough times. | no | 0 |
SEC Reviewing Municipalities' Disclosures; Review Is Targeting Defaulted, Distressed Municipalities | Regulators have opened investigations into municipalities that may have misled investors about their financial condition, the top official at the Securities and Exchange Commission's municipal-bond enforcement unit said Thursday.</br></br>The unit launched a wide-ranging review of past disclosures by financially stressed states and local governments a little over a year ago, signaling regulators have stepped up scrutiny of municipal-bond sales amid mounting investor anxiety. That review has resulted in an unspecified number of investigations of issuers, said LeeAnn Gaunt, the chief of the municipal securities and public pensions unit at the SEC.</br></br>The unit is looking for instances where there is "tension between the disclosures and the subsequent announcements" of financial stress by municipal bond issuers, Ms. Gaunt said at a National Association of Bond Lawyers conference in Boston.</br></br>She didn't specify which issuers are under investigation.</br></br>The review underscores officials' interest in ensuring proper sales and trading practices in the $3.7 trillion municipal-bond market. The market has long been seen by many mom-and-pop investors as a reliable source of tax-exempt income and a vehicle for retirement savings. | no | 0 |
Broad Decline Ends MarketÛªs Dismal 1st Half | NEW YORK, June 28 (AP)ÛÓThe stock market <le-cined broadly again today, putting the last touches on a generally dismal first half of 1974.</br></br>The Dow Jones average of 30 industrial blue chips drifted down 1.41 *.o 802.17, winding up with a net loss of 48.47 for the first six months of the year.</br></br>The Dow had another of its periodic skirmishes at the 800 level, falling briefly below that point in early trading and then bobbing up again.</br></br>Analysts said the blue-chip Dow average got some support from institutional investors shifting into big-name issues as they rearranged their portfolios for their quarterly reports, which will reflect their holdings as of todayÛªs close.</br></br>Brokers traced the declines to the same worry that has dogged the market for some time nowÛÓhigh interest rates. | no | 0 |
Stocks Slump Again In Moderate Trade: Trading Moderate Fight... | NEW YORK, July 9ÛÓStock market prices tumbled to new lows for the year today amid continuing concern over the fate of the income tax surcharge and the even stronger anti-inflation steps that might be taken if the surtax is permitted to expire.</br></br>Without any rush of trading ÛÓbrokers said there were no signs of panicky sellingÛÓprices fell steadily from the opening bell. Major market indicators were near their lowest levels of the day at the close.</br></br>The Dow Jones Industrial Average finished with a loss of 8.75 points at 561.62, well below the previous bottom of 869.76 touched on June 27. It was the DowÛªs lowest close since April 1, 1968, when it finished at 861.25. Only one of the 30 stocks in the average was able to gain ground, one was unchanged and 28 fell. At that, it was better than on Tuesday, when all 30 stocks dropped.</br></br>Standard and PoorÛªs 500-stock composite was down 0.75 point to 968 and the New York Stock Exchange index lost 0.42 point to 53,70.</br></br>For the second day in a row, the ExchangeÛªs ticker tape was able to keep pace with trading throughout the day. At the close, 9.32 million shares had changed hands, exactly the same total as on Tuesday. Brokers were mixed in reaction to the relatively low turnover. Some saw it as a sign that the selling may be running out, while others are hoping for a technical ÛÏselling climaxÛ to clear the way for a rebound. | no | 0 |
Proposed Change in Global Trading Rule Raises Risks | The Securities and Exchange Commission has proposed a new rule that might have passed you by. I'm alerting you here because it speaks volumes about where trading is going in the United States. For many, it offers new opportunities. We'll also be importing new risks, in the future, that we may regret.</br></br>The proposal allows overseas broker-dealers to solicit business directly from U.S. clients -- individuals as well as institutions -- with $25 million or more to invest. That's down from $100 million under the current rule.</br></br>Any broker-dealer will be able to join the fray as long as it's regulated by a securities administrator in its home country. The broker-dealers won't have to register with the SEC and won't be regulated for net capital and other requirements under U.S. rules. They will be able to pitch any debt, equity and derivative security listed on their home exchanges, even though those securities aren't registered with the SEC.</br></br>Before you say, "That has nothing to do with me" and scroll on, note the implications: The door is opening to more direct global trading. This first step simplifies cross-border selling and reduces costs for large investors who are already trading abroad. Smaller U.S. broker-dealers will be able to open electronic windows to world investing for larger clients.</br></br>In the background, however, something is happening that we need to think about. We're injecting other countries' accounting, disclosure and regulatory standards into our system, on the theory that they are good enough, although generally not as rigorous as our own. It's an unstated form of financial deregulation that Wall Street has been pushing for some time and has strong support in the SEC. | no | 0 |
Ehrlich's gamble in Montgomery | To win back his old job, the former Republican governor of Maryland has set his sights on an unlikely target: the Democratic bastion of Montgomery County.</br></br>Despite lackluster performances there in his previous two bids, Robert L. Ehrlich Jr. is betting that anxiety about the faltering economic recovery and discontent with the status quo will penetrate even a left-leaning jurisdiction that is home to more federal workers than any other in the state.</br></br>Ehrlich, who plans to campaign again in Montgomery on Tuesday, has mapped a strategy that in part seeks to win votes in the western and northern parts of the county, which are more conservative than the communities that hug the Capital Beltway. He hopes a message of lower taxes and a friendlier business climate will sell in a county that has an increasingly diversified private sector.</br></br>"This is the type of election cycle where Democrats are more willing to cross party lines," Ehrlich said as he took a break recently from greeting seniors arriving at the county fair in Gaithersburg. "We think the low 40s is doable here."</br></br>That might not sound terribly ambitious, but in Maryland's largest county even a modest uptick in Ehrlich's support could add thousands of votes to his statewide total in what is shaping up as a competitive rematch against Gov. Martin O'Malley (D). | yes | 1 |
Stocks Up In Quiet Trading | NEW YORK, Aug 22 (AP)~ The stock market chalked up its first gain in a week with a modest technical rally in quiet trading today.</br></br>Glamor issues led the way as the market bounced back from some early losses on a midafternoon round Of buying.</br></br>The Dow Jones average of 30 industrials, down about 4 points at mid-day, closed with a 3.81-point advance at 867.29.</br></br>The average had dropped more than 10 points in the past four sessions and nearly 60 points in the last four weeks.</br></br>Gainers just barely outnumbered losers on the New York Stock Exchange, and the exchangeÛªs composite index roso 0.11 point to 53.49. | no | 0 |
Reserve Aide Hints More Credit Easing | Alfred Hayes, president of the Federal Reserve Bank of New York, hinted yesterday that the Government may undertake new moves soon to ease credit and give the economy a shot in the arm.</br></br>He said the economy might remain prosperous for the nex year or two or economic activity "might go down.Û | ÛÏWe , would be less thanj frank if we did not state that there is some -risk, even though we trust it is of low) probability, that the economy! may continue downward for a' time,Û he said. j</br></br>Chairman Wright Patman (D-Tex.) asked whether the Federal Reserve BoardÛªs recent decision to cut interest rates on money loaned to commercial banks would be followed by other moves to ease) credit. . j</br></br>Hayes replied that such action ÛÏusually is related" to action by the Federal Reserve1 SystemÛªs open market committee. The committee, by buying or selling Government bonds, can expand or contract reserve j funds available for lending by banks. j</br></br>ÛÏnot freeÛ to give a specific: reply, however, because of the| practice of monetary authorities to refrain from talking about current actions, ÛÏparticularly when they are on the [ire so to speak.Û Û¢ate from 2Vz to 3 per cent ast Thursday was the first re-axation of the AdministrationÛªs controversial tight noney policy. | no | 0 |
Full Senate to vote on Bernanke; PANEL ADVANCES RENOMINATION Sharp debate hints at difficult confirmation | Ben S. Bernanke cleared a key hurdle Thursday to being confirmed for a second term as Federal Reserve chairman, but the discussion and vote by a Senate committee suggested that confirmation is not a foregone conclusion.</br></br>The banking committee voted 16 to 7 to send Bernanke's nomination for another four-year term to the full Senate when his current one expires Jan. 31. While it still appears likely that Bernanke will be confirmed, the tense debate foreshadowed what could be the most controversial confirmation of a Fed chairman since at least the early 1980s, when Paul Volcker was reappointed during a deep recession.</br></br>The majority of senators argued that Bernanke deserves reappointment for his aggressive actions to contain the financial crisis and prevent an even deeper economic downturn.</br></br>But many of the votes in Bernanke's favor -- which came from four of 10 Republicans and 12 of 13 Democrats -- were accompanied by significant misgivings about the weak economy and failures by the Fed that contributed to the financial crisis. Some senators who voted to move the nomination forward did not commit to voting for his confirmation on the Senate floor.</br></br>Time could be Bernanke's enemy. The Senate is scheduled to reconvene after a holiday recess on Jan. 19, and banking committee Chairman Christopher J. Dodd (D-Conn.) expects the body will only then take up Bernanke's confirmation. That will leave just nine business days for the Senate to act before Bernanke's term expires. Sen. Bernard Sanders (I-Vt.) has said he will put a hold on the nomination, a procedural step that could delay a vote and means that Bernanke would need 60 votes to remain chairman. | no | 0 |
The New Nixon | George Bush is the new Nixon. Like Nixon, he entered the White House with vast experience. Like Nixon, he prefers foreign to domestic policy. Like Nixon, he is an awkward campaigner. But what he shares most with Nixon is the overpowering obsession to remain president - and like Nixon, he could be destroyed by it.</br></br>Watergate flowed from Nixon's leave-nothing-to-chance passion to cling to power. Similarly, Bush wants to be president so badly that, in many ways, he has refused to be president. Excluding Desert Storm, his presidency has been the most risk-averse in memory. He has courted popularity by skirting controversy. It has been a losing strategy. He seems to stand for nothing and, thereby, offends almost everyone who cares deeply about anything.</br></br>Somehow, Bush has created the impression that he doesn't deserve to be president. Had 1992 been a year of faster economic recovery, the president - enjoying the triumph of Desert Storm - might still have coasted to an easy victory. A contented electorate is uncritical. But a faltering economy makes people nervous and fault-finding. What Bush intended to be cautious governance has instead become remote indifference.</br></br>The paradox for Bush (as it was for Nixon) is that the calculated effort to minimize political risk has done just the opposite. Watergate wouldn't have happened if Nixon had been more confident. He created the climate that inspired the burglary and subsequent coverup. Likewise, Bush has undermined his own popularity by his preoccupation with staying popular. He may have avoided offending this or that interest group, but the slavish devotion to public opinion has lost him a broader respect.</br></br>Now, I would not stretch the Nixon parallel too far. Bush doesn't have Nixon's acute paranoia. Personally, Bush is far more straightforward. He has a "genuinely easy and outgoing manner" and "dislikes confrontation," write Michael Duffy and Dan Goodgame, Time's White House correspondents, in a new book ("Marching In Place, The Status Quo Presidency of George Bush"). | no | 0 |
Abreast of the market: Jitters over profits could upset stock market | Here they go again.</br></br>In what has become a quarterly ritual of public self-flagellation, companies are taking whacks at their own profit prospects. Known as earnings pre-announcements, these warnings about imminent disappointments tend to roil the stock market in the last few weeks of each quarter.</br></br>The leading edge of the current wave hit last week. Digital Equipment knocked technology stocks for a loop with its pronouncement that weak personal-computer sales are dragging its earnings below what analysts had expected for this quarter. Trucking company Ryder System followed Friday by saying winter storms and the General Motors strike would make its first-quarter results disappointing. Other companies also announced GM-related hits.</br></br>More bad news is sure to follow this week as companies prepare investors for the worst. "There is a strong possibility that a lot of earnings estimates are still too high, not only in terms of technology companies, but the entire cyclical sector of the economy," says Charles Pardillo, chief strategist at Cowen & Co, which joined several other brokerage firms in lowering its investment rating and earnings estimates for Digital last week.</br></br>"These tech stocks are acting as if there may be further problems down the road," Mr. Pardillo says. "When you look at demand, we're seeing some abatement and disappointment. It seems, across the board, many analysts have been over-enthusiastic." | no | 0 |
Regan Says U.S. Will Adhere To Tough Monetary Policy: Regan Says Tight Money Will Continue | Treasury Secretary Donald T. Regan, acknowledging that most European countries are disturbed about high U.S. interest rates, said yesterday that this country will continue to pursue a tough monetary policy because ÛÏyou cannot get inflation under control without having high interest rates." But he did offer the hope that ÛÏthis is a temporary phenomenon, it will pass.Û</br></br>In general, he sought to assure Europe that the United States is sensitive to the impact its economic policies have on Europe. ÛÏAfter all,Û he said, ÛÏwe know that the dollar is a reserve currency, and we know that we have to be responsible in the way</br></br>At a news conference following a meeting with Gaston Thom, president of the European Communities Commission, Regan said that the high level of interest rates here is the ÛÏmost obviousÛ of ÛÏtrouble spotsÛ to be discussed at a seven-nation economic summit in Ottawa beginning next Sunday.</br></br>But in direct response to European complaints about American policy ÛÓ including those voiced by Thom in Brussels last week ÛÓ Regan pointed to insistence by the Europeans themselves at the Venice summit in 1980 that the United States bring inflation under control. ÛÏWe are determined to get infla-See SUMMIT, E2, Col. 1 tion under control,Û Regan said. ÛÏThis is one of the main features of President ReaganÛªs economic package. You cannot get inflation under control without having high interest rates. This is one of the side-effects.</br></br>In saying that, I hope you notice that IÛªm not saying that high interest rates are a weapon that the United States is using against its partners or anything else. ItÛªs a result of supply and demand for money.Û | no | 0 |
No Favors From the Fed | Embedded in Alan GreenspanÛªs central-banker rhetoric to Congress last week was terrible news for President Clinton: The Federal Reserve will not run an inflationary policy to soften the havoc wrought by higher taxes.</br></br>Federal Reserve Chairman Greenspan's circumlocutions obscured the hard reality. Present low short-term interest rates are insupportable and will be raised by the Fed; the question is not if. but when. Thus, there are limits to how far the central bank will go in pumping out money to soften the harsh effects of ClintonÛªs tax-raising binge.</br></br>This is agonizing for Clinton economic strategists because of the dirty little secret that his program will contractÛÓnot expandÛÓthe economy. If the central bank will not accommodate that contraction with easy money. whatÛªs the president to do? Unleash the dogs of Capitol Hill to wreak vengeance on the Fed?</br></br>Tension has built through the administrationÛªs first six months. The White House persuaded congressional Fed-bashers to hold their fire while Clinton charmed GreenspanÛÓincluding a cozy dinner at the executive mansion a few* weeks ago. Senate Finance Committee Chairman Pat Moynihan is one Democrat who bluntly admits Clinton would shrink the economy but has called easy money GreenspanÛªs ÛÏend of the bargain."</br></br>To Greenspan and his colleagues at the Fed, there is no bargain. The chairman has never endorsed the Clinton package and certainly has not promised to never raise interest rates. | no | 0 |
Recession Helps Russians Narrow Production Gap | While industrial output in the United States has been dropping rapidly during the current recession, the in-, dustrial output of the Soviet Union has been surging) ; upward at an equally rapid pace.</br></br>; sians are swiftly narrowing [ 'the big gap between industrial i production of the Soviet' Union and that of the United I States. Û¢</br></br>American industrial output 'in January and February 1958 |was approximately 10 percent! lower than it was in the same, two months of 1957, according to the Federal Reserve Index.</br></br>An official communique of' the Central Statistical Administration of the Soviet Gov-! eminent placed Soviet indus--trial production in January, and February 1958 at 11 per cent highter than in the same period of 1957. !</br></br>This figure of 10 or 11 per ( cent animal increase is typical of the rate at which Russian industrial production-is being, increased each year currently. | no | 0 |
Asean Chief Paints Region as Safe Haven | JAKARTA--Investors and companies should look to Southeast Asia as they seek shelter from the world-wide markets meltdown, said the secretary general of the 10-member Association of Southeast Asian Nations.</br></br>Surin Pitsuwan noted that Southeast Asia is growing, it is nestled between India and China and it dealt with its own scary debt problems over a decade ago, making it an attractive alternative amid the global volatility triggered by concerns about how the U.S. and Europe will deal with their debt, as well as whether the U.S. economy will slide into recession again.</br></br>"If they are looking for a safer haven, this is it," he told The Wall Street Journal in an interview. "The Chinese and the Japanese that are worried will want to look around for better prospects for their investments and this is one of the hopeful regions."</br></br>Foreign direct investment into the region jumped 38% to $75.8 billion last year, he said, much of it into the service sector as international corporations are rushing into the region to target its growing middle class.</br></br>Asean's economic ministers are meeting this week in Indonesia in a scheduled summit to discuss further economic integration of the 10 members: Singapore, Indonesia, Myanmar, Cambodia, Malaysia, Laos, The Philippines, Thailand, Vietnam and Brunei. | no | 0 |
Housing Starts, Permits Sag; Schumer Warns 'Worst Is Still Yet to Come' | Housing starts fell to their lowest level in 12 years last month, while permits for new construction also declined, pointing to a further weakening of an already battered housing market.</br></br>Those numbers, as well as a report showing that builder confidence is at a record low, prompted Sen. Charles E. Schumer (D-N.Y.), chairman of the Joint Economic Committee, to declare during a hearing yesterday that the "worst is still yet to come." The number of foreclosures has jumped in some parts of the country, as interest rates increase on adjustable-rate mortgages made to risky borrowers during the now long-over housing boom.</br></br>Lawmakers and economists warned that problems in the subprime mortgage market could drag down the entire economy, despite the Federal Reserve's decision Tuesday to cut a key interest rate to decrease borrowing costs.</br></br>"For the first time in years, the 'R word' -- recession -- is being discussed far and wide as a real possibility," Schumer said.</br></br>Robert J. Shiller, an economics professor at Yale University known for his study of investment bubbles, submitted written testimony saying that "the collapse of home prices might turn out to be the most severe since the Great Depression." | no | 0 |
Crude-Oil Prices Retreat After Spanish Debt Downgrade | Crude-oil prices fell, as the dollar strengthened following a credit rater's downgrade of Spain's sovereign debt.</br></br>In early afternoon trading in New York, the price of the light, sweet crude-oil futures contract for July delivery dropped 84 cents or 1.1% to $73.71 a barrel on the New York Mercantile Exchange as news broke that Fitch Ratings downgraded Spain's debt rating to AA+ from AAA. North Sea Brent crude on London's ICE futures exchange shed 88 cents, or 1.2%, to $73.82.</br></br>The euro weakened to $1.2324 against the dollar from $1.2370 before the Fitch downgrade was announced. A stronger dollar puts pressure on oil prices, as it makes oil more expensive for holders of other currencies and could thus crimp demand.</br></br>Oil's decline demonstrates how the energy markets remain sensitive to swings in the currency markets caused by Europe's debt problems. Signs of stabilization in Europe and strong economic data from the U.S. and China helped crude stage a strong recovery this week from a sell-off that had brought prices to as low as $64.24 a barrel.</br></br>On Thursday, oil prices posted the strongest advance of the year, rising $3.04 a barrel, or 4.3%, as Spain agreed to budget cuts and China reiterated its commitment to European bond investments. Stock markets and other commodities posted sharp price increases as investors regained an appetite for risk following a three-week sell-off sparked by concerns over Europe's debt situation and the pace of economic recovery in the U.S. and China. Those fears were lessened this week as economic data showed continued recovery in the U.S. and strong growth from China. | yes | 1 |
Get Your Credit Scores -- and Then Sit Down to Talk | You need to get your credit reports from the three credit bureaus -- Equifax, TransUnion and Experian. Why all three? You need all three reports because each may contain different information. Each credit bureau keeps a file on you with information supplied by your creditors. Some creditors don't report consumer credit information to all three bureaus, so it's possible that what's on one report may not be on another.</br></br>The good news is that under the Fair and Accurate Credit Transactions Act of 2003, you are entitled to a free credit report from each credit bureau. Under the law, you can obtain a free copy of your credit report once every 12 months upon request. There are several ways to get your free credit reports:</br></br>By phone. Call 877-322-8228. You will go through a verification process over the phone. Your reports will be mailed to you.</br></br>By mail. You can request your credit report by mail by filling out a request form (which you can find online) and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Ga. 30348-5281.</br></br>When ordering your credit reports, also request your credit scores (which are not free). You need all three scores because, just as with your credit report, each bureau generates a different score. You can go to the Web site of each bureau to pay for your score. | no | 0 |
Capital and Marks-ism | Capitalism, n Formerly, a system in which money was invested in the future production of goods. Increasingly a system in which money is invested in the future of money.</br></br>The most revealing aspect of last week's currency chaos is the entirely reasonable assumption by the media that nobody understood it. Primers and Q&A's festooned front-pages of papers that claim the nation's most sophisticated readership, not only to analyze the consequences of the strong German mark and determine their implications, but to explain-or try to-what in the world was happening.</br></br>Today, men everywhere praise capitalism-at least those men surrounded by material goods. But last week's crisis suggests that, just as few people in the country seems to know much history, science or culture, the mechanisms of modern capitalism are widely misunderstood and that this is a field much dependent on faith: You put money in the bank, and after that, all is currency transubstantiation.</br></br>And why not? Capital activity now threatens to attain the unknowable. ECUS, ERMs, shorts, leveraged bets, "one-lots," "lining up," "front-running," hedges and futures seem less the language of business than the stuff of exchange eschatology. One account of the week's money mess actually included the language: "The central bankers propose, the markets dispose." No one tried to comfort the losers in last week's debacle by reminding them that the market works in mysterious ways, at least not in so many words.</br></br>Cows, n. Friendly beasts with a suggestive set of associations: At once the symbol of wealth (when fattened), of false faith (when golden) and of bovine stupidity. | yes | 1 |
U.S. and South Korea Bicker Over Trade | SEOUL, South Korea -- A South Korean economic official, talking about U.S.-South Korean trade friction, is called away from his desk. "More bad news," he says at his return. The Reagan administration, he informs, filed yet another unfair-trade-practice case against Seoul.</br></br>In it, South Korea was accused of not adequately protecting "intellectual property," such as copyrights on books and patents on pharmaceuticals and agricultural chemicals. In an earlier case, the U.S. accused South Korea of unfairly erecting barriers to foreign participation in its insurance industry.</br></br>That is the flavor of an escalating spat between the U.S. and South Korea, its seventh-largest trading partner. The Reagan administration is losing patience with what it sees as South Korea's slow pace in opening home markets. And Korean officials, who regard their relationship with Washington as special, are bristling at the unfair-trade actions -- particularly because they believe the U.S. is itself turning increasingly protectionist.</br></br>"It's very much like an interfamily squabble," says an American lawyer in Seoul.</br></br>One symbol of the problem is a trade surplus that South Korea began to achieve with the U.S. in 1982, even though Seoul has been running an overall trade deficit. For the first eight months of this year, Seoul sold $2.5 billion more to the U.S. than it bought, compared with a $2.3 billion surplus in the year-earlier period, the South Korean Economic Planning Board says. U.S. statistics, which are calculated differently, show a somewhat higher surplus for South Korea, $4.05 billion for all of 1984. | no | 0 |
Gold Prices End Down for Second Year in a Row; Metal Weighed Down by Expectations of Higher U.S. Interest Rates, Tame Global Inflation | Gold prices ended down for second year in a row, weighed down by investors' expectations of higher U.S. interest rates and tame inflation around the world.</br></br>Gold for February delivery, the most actively traded contract, closed down $16.30, at $1,184.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices fell 1.5% for the year.</br></br>A stronger dollar weighed on gold Wednesday, making the metal more expensive for buyers holding other currencies. The WSJ Dollar Index, which gauges the dollar against other major currencies, was recently up 0.4%, at 83.00.</br></br>"The way things stand, I would be looking to sell into any rallies from here," said Bob Haberkorn, a broker at RJO Futures. "Gold will continue to be weak because of rate expectations."</br></br>An improving U.S. economy has sparked expectations that the Federal Reserve will raise interest rates in 2015, a move that would hurt gold, which struggles to compete with yield-bearing investments in times of tighter monetary policy. At the same time, inflation has been elusive in the world's major economies, reducing gold's attractiveness as a hedge against rising consumer prices. | no | 0 |
Rise of a Scoundrel | Jonathan Coe's new novel, The Closed Circle, is an immensely satisfying sequel to The Rotter's Club (2001). That book -- frequently funny, occasionally harrowing -- followed a group of anxious teenagers in Birmingham, England, through the 1970s. The world around them was torn by labor strikes, race riots and acts of terrorism, but those calamities could only occasionally break through their real worries: forgetting a bathing suit, passing a physics exam or getting a pretty girl into bed.</br></br>The Closed Circle picks up more than 20 years later, on the eve of the new millennium, when these friends and the world are all grown up. They dress better, listen to more sophisticated music and feel more concerned about wrinkles than acne, but they're still anxious, still worried about making the grade, still trying to figure out with whom they should sleep. Most of them have no better idea of who they are than they did in high school, but now they're afflicted with an aching sense of nostalgia, too. "There were some feelings that never faded," one of them realizes, "no matter how many years intervened, no matter how many friendships and marriages and relationships came and went in between."</br></br>This is, in many ways, a book about the function of nostalgia, about what's remembered and misremembered, which makes it a particularly easy sequel to enter. The characters constantly remind each other (and us) of events from their past, and at the back is a brief summary of The Rotter's Club "for those who have not read it, or who perhaps -- having read it -- have inexplicably forgotten it."</br></br>Coe is a witty writer with a talent for social satire that singes characters without burning away their humanity. He's particularly interested in the way people manage their personal lives in relation to the political climate, and so the plot of The Closed Circle constantly runs beyond its fictional edges into the pages of contemporary history. Too many novelists avoid this kind of topicality, as though they're creating sitcoms and desperate to avoid dating themselves in syndication. But Coe writes his characters right up to the moment, providing critical commentary -- on globalization and the war in Iraq, for instance -- that sounds almost as current as this week's op-ed pages.</br></br>The novel opens with Claire Newman's return home after six years in Italy and a failed relationship that makes her feel as if she's made no progress in her life at all. The time away has also given her a fresh perspective on Birmingham, and it's not reassuring: "My first impression," she writes to her dead sister in a long-running journal, "is that there are vast numbers of people who don't work in this city any more, in the sense of making things or selling things. All that seems to be considered rather old-fashioned. Instead, people meet, and they talk. And when they're not meeting or talking in person, they're usually talking on their phones, and what they're usually talking about is an arrangement to meet." What's more alarming to her, though, is the mental climate: "Underneath is something else altogether -- a terrible, seething frustration." | no | 0 |
Will Clinton Plans Help Or Hurt?: Markets, Analysts Unsure of Impact | And is ClintonÛªs parallel plan for an economic stimulus still needed to fix what administration officials call a "jobless recovery"?</br></br>Confused by ClintonÛªs plan to slash the deficit with big tax increases and boost the economy with new spending and tax breaks, stock markets and financial analysts have been torn between gloom and boom.</br></br>The tax question is the one that most worries economists. On one hand, higher taxes could slow down the economy by taking money out of the pockets of consumers. On the other hand, the prospect of smaller federal budget deficits has already driven down interest rates and made it cheaper for ordinary people and corporations to borrow and spend.</br></br>"The Clinton plan for the economy raises many questions,Û said Martin Feldstein, a Harvard University economics professor and chairman of former president Ronald ReaganÛªs Council of Economic Advisers. "Among them is whether the current expansion is strong enough to continue despite the fiscal drag from a huge and permanent hike in taxes.Û</br></br>According to the Blue Chip survey of 29 leading economists, concern about the im-See IMPACT, A6, Col. 4 pact of the Clinton plan prompted the economists to cut their 1994 growth forecasts by an average of two-tenths of a percentage point, to | yes | 1 |
Job, Wage Growth Robust in March; Unemployment at 5.2%; Inflation Fears Deepen | The strong U.S. economy kept churning out jobs and lifting wages last month, pushing the nation's unemployment rate down to 5.2 percent, the Labor Department reported yesterday.</br></br>While workers obviously are benefiting from all the added jobs and higher wages, the report only heightened concerns among some investors, analysts and government policymakers that the pace of economic growth may be spurring inflation.</br></br>On that basis, Wall Street initially interpreted the economic numbers negatively, sending the most widely watched measure of stocks down nearly 72 points early in the day. But the market rallied later, with small company stocks and those of many technology companies showing particular strength. The widely watched Dow Jones industrial average of 30 blue-chip stocks closed at 6526.07, up almost 49 points from Thursday {Details on Page H2}. It had shed about 400 points in the previous five sessions.</br></br>Some analysts said yesterday's wage figures suggest that inflation already may be accelerating -- although the numbers themselves so far give no hint of it.</br></br>The Federal Reserve raised short-term interest rates last week by a quarter-percentage point in an effort to head off a rise in inflation. Rising interest rates slow economic growth by making it more expensive for businesses and consumers to borrow money. A number of analysts said yesterday's report suggests the Fed is likely to increase rates again at its next policymaking session May 20. | no | 0 |
Panama Is Coasting Along, but Not Fast Enough | PANAMA CITY -- Fifteen months after U.S. military intervention and the establishment of a new democratic government, Panama is like the half-full, half-empty glass. There is economic recovery, but not enough to have regained the 22% of gross national product lost since early 1988. Nor is there enough to provide sufficient employment or social improvement. The private economy is making an increasingly significant contribution and the public sector has made some solid gains, yet not enough given the needs and expectations of the people.</br></br>The new democratic government was welcomed with unrealistically high expectations. The announcement of a massive infusion of U.S. aid to rebuild the heavily damaged economy added regional and international optimism. The business community, invigorated by the taste of freedom and the establishment of law and order, responded enthusiastically from the beginning. The men and women in the street felt that a quick recovery of "normal" (pre-1987) economic life and employment would soon be achieved. Foreigners viewed Panama with renewed hope, stimulated by the fresh democracy and a U.S. call for international support.</br></br>Today, expectations are no longer so optimistic. Impressive gains are tempered by unsatisfied needs and aspirations:</br></br>-- GNP increased by more than 4.5% in 1990, generating perhaps 30,000 new jobs. But this is equivalent to the annual increase in the labor force, leaving the unemployment rate intact.</br></br>-- Banking deposits, previously frozen, were freed smoothly and the system has regained more than $3 billion of deposits. But local credit is only now beginning to increase. | no | 0 |
President's New Life Has an International Focus | WASHINGTON -- President Bush was up around 5:30 a.m. as usual on Tuesday, the two-week anniversary of the terrorist attacks. He walked his dogs Barney and Spot, thumbed through the morning papers and -- unwilling to wait an hour for breakfast with congressional leaders -- ate a bowl of cereal.</br></br>Even in the tumult of these times, it is a point of pride for this control-conscious president to maintain an ordinary schedule: early to bed, early to rise. But as the rest of his day shows, the president and his presidency have been forever changed.</br></br>The president often appears more serious, more stern and more conscious of the image he projects, here and abroad, according to lawmakers and aides who have spent time with him. A unilateralist for much of his first eight months in office, he has found himself relying on numerous foreign leaders, phoning them from the Oval Office in the morning, and from his residence after sundown.</br></br>Remarkably, for a man who came to office unschooled in foreign affairs and with scant experience abroad, Mr. Bush has embraced the foreign-policy imperative and, aides say, shows far less interest in the domestic matters that had preoccupied him up to now. He has winnowed his agenda to "bipartisan-only" legislation. In the conduct of domestic and international affairs, he has formed the kind of alliance with Democrats in Congress that he talked about in his 2000 campaign, but hadn't forged in office.</br></br>"The terrorist attacks impacted him personally [and] impacted his agenda," says Dan Bartlett, a top aide. "His days have changed." | no | 0 |
A Pause to Honor Sept. 11 Victims, Then Bulls Lead | NEW YORK -- There were commemorative speeches, moments of silence and a song. Then 93-year-old Michael Pascuma, the American Stock Exchange's oldest trader, stepped up to the podium overlooking the exchange floor.</br></br>Raising a gavel, Mr. Pascuma struck the opening bell 10 times, once for every Amex member lost during the Sept. 11 terrorist attacks -- including his son.</br></br>Then Mr. Pascuma, a trader since 1927, and his colleagues got to work, as the nation's stock and options exchanges began trading after an opening delayed by ceremonies marking the anniversary of the Sept. 11 attacks. Two blocks north at Ground Zero, a memorial service worked its way through a reading of victims' names. On the exchange floor, it was the start of another trading day.</br></br>"I think it's important for us to stay open today, to come to work," said Joseph Stefanelli, Amex's executive vice president for derivatives. An Amex options trader said, "It's just September but I almost feel like it's the beginning of a new year after today."</br></br>Some investors seemed to agree, as bullish calls traded actively on hopes of a rally, as well as the covering of short positions ahead of economic addresses from President Bush and Federal Reserve Chairman Alan Greenspan. At the Chicago Board Options Exchange, the ratio of equity puts traded to calls fell to 0.49, compared with 0.57 Tuesday and 0.67 Monday. A put is an option to sell a security at a specified price, and a call is an option to buy a security at a specific price. | no | 0 |
Balancing Act for Montgomery | Montgomery's Annual Growth Policy evolved during the 1980s when the major threat to the public interest was overdevelopment. The 1990s are different. Amendments to federal tax laws, the recession and changes in lending practices have combined to alter the real estate development environment dramatically. Montgomery County has lost approximately 20,000 jobs since 1990.</br></br>Business leaders and developers want certainty and stability. They want to know what they can do and when they can do it. They are upset that Montgomery's growth management policies make it difficult for them to compete in the regional marketplace.</br></br>Civic activists and environmentalists want to protect our quality of life, preserve neighborhoods and make sure growth does not outpace public facilities. They are concerned about sprawl development and say development does not pay for the costs of growth.</br></br>The Construction Excise Tax I sponsored to ensure a contribution by developers to pay for the costs of growth is widely disliked in the business community. Civic leaders who supported passage of this tax are upset that, because of the lingering recession, the council has delayed imposition of the tax.</br></br>This leaves the government with the worst of both worlds - we lose quality development projects, and we don't collect development taxes to fund needed transportation facilities. The answer is to allow planned growth where it serves our strategic goals - on the condition that the development tax is paid. | no | 0 |
Growing Respect and Need in Personnel Area | The relationship of employees to corporate productivity has become of increasing concern to American executives in recent years. Books like Re-Inventing the Corporation and In Search of Excellence provide illustrations of the bottom line benefits accruing to those companies that provide satisfying, challenging and flexible careers for their staff members.</br></br>Flex-time, job sharing and telecommuting are just three of the new work options under exploration. Intrapreneurship and employee owned companies are two other approaches being tested with success. All are focused on maximizing America's human resources.</br></br>Accompanying this growing interest in "people and productivity" has been a growing respect and demand for those who design and manage the human resource function. Pre- implement and coordinate key human resource procedures. Were seeing this particularly in the high tech arena. We re also anticipating this type of need in other growth areas including hospitality, financial services and retail."</br></br>The relocation of many industries to the Southwest, West, and South for lower labor and utility costs and tax incentives is another reason Pilenzo offers as fueling the demand for human resource professionals. New plant and office facilities always require additional personnel staff to recruit and train new employees to implement and manage new human resource systems.</br></br>Pilenzo says certain functional specialties within the general human resource field are expected to have even greater potential in coming years. With the percentage of unionized personnel declining, companies | no | 0 |
Dollar to Benefit From Brightening U.S. Economy | The dollar is expected to advance against the yen but struggle against the euro this week after encouraging U.S. jobs data renewed investors' confidence in the global economic recovery.</br></br>The main beneficiaries of the more positive outlook for growth are likely to be higher-yielding currencies such as the Australian and New Zealand dollar, which already Friday posted solid gains as investors, emboldened by the better-than-expected reading on the U.S. labor market, returned in strength to growth-sensitive assets.</br></br>The euro could also benefit--at least against the dollar and the yen--though much will depend on further developments in Greece, with investors still concerned over the debt-laden nation's ability to significantly shrink its budget deficit as demanded by the European Union. The yen, the classic refuge in times of trouble, is set to decline further against the dollar.</br></br>"I think the [U.S.] dollar is going to stay pretty heavy against the euro," said Daniel Katzive, foreign-exchange strategist at Credit Suisse in New York. But against the yen, after the jobs report, "it's going to be pretty well supported," he said.</br></br>With prospects looking better for global recovery, but the U.S. data calendar rather light this week, attention will continue to focus on the resolution of Greece's fiscal woes. Analysts see the single currency moving between $1.35 and $1.37, while the dollar holds between 89 yen and 92 yen. | yes | 1 |
Nasdaq's System Outage This Week Highlights Limitations of Technology Amid Heavy Volume | NEW YORK -- The Nasdaq Stock Market, by some measures, is having a great year. Day after day, trading volume and indexes tracking the market's technology stocks have hit records.</br></br>But for Nasdaq itself, which likes to bill itself as the tech market for tech companies, all that volume and the technology needed to keep up with it have been double-edged swords.</br></br>The 17-minute outage of key Nasdaq trade-reporting and order-routing systems Tuesday not only crippled the market in the half-hour leading up to the 4 p.m. EST close -- it also resulted in incorrect day-end values for the Nasdaq Composite Index and for certain individual stocks, including six of the vigorously traded Nasdaq 100-index tech stocks.</br></br>The Nasdaq Composite's actual finish Tuesday was 3295.52, not 3293.05 as reported in many news outlets, including The Wall Street Journal. The index ended yesterday at 3269.39, down 26.13, on record volume of 1.65 billion shares. There were delays in morning trading, but they were less severe than Tuesday's problems.</br></br>While Wall Street traders said Tuesday's shutdown was the worst of the recent problems, they also said it wasn't the first problem they'd experienced with Nasdaq's technology and in particular with SelectNet, the heavily trafficked e-mail system used to send orders and report trades. SelectNet problems, they say, have gone on for months and are particularly pronounced on days like Tuesday when volumes surge. | yes | 1 |
The Economy: New Index Shows Why Americans Keep Spending | Even though wavering U.S. stock and job markets gave consumers the jitters during the summer, they kept spending freely on cars and housing, and a new consumer-spending index produced by Deloitte Research helps to explain why.</br></br>Carl Steidtmann, Deloitte's chief economist, says economists spend too much time watching wiggles in monthly consumer-confidence measures -- which have recently slipped -- to try to gauge the outlook for spending. The more important indicator of the outlook for spending, he says, is long-term trends in the actual cash going into and out of people's pocketbooks. His index of cash flow is pointing up -- thanks to factors such as tax cuts, wage gains and increases in home prices -- suggesting that spending could strengthen, at least for the next few months.</br></br>"Consumers are wallowing in cash," says Mr. Steidtmann. Deloitte Research is a unit of Deloitte Touche Tohmatsu, an accounting and consulting partnership.</br></br>Data released by the government Friday underscored this argument. The University of Michigan said its monthly index of consumer confidence fell in August to 87.6 from 88.1 in July. A separate measure of confidence produced by the Conference Board was also down in August.</br></br>But consumer spending picked up after slowing down during the spring. In July, consumption rose 1% from the previous month, the Commerce Department said, largely because of a new outburst of spending on cars backed by 0% financing deals. Spending in July grew at a 6.7% annual rate from the second quarter, according to calculations by UBS Warburg. | no | 0 |
U.S. Funds for Iraq Are Largely Unspent | PUBLISHED CORRECTIONS: A July 4 article misstated the number of reconstruction projects underway in Iraq that are being funded by an $18.4 billion U.S. aid package. Approximately 500 projects are underway, according to the U.S. Project and Contracting Office in Baghdad. (Published 7/9/04)</br></br>The U.S. government has spent 2 percent of an $18.4 billion aid package that Congress approved in October last year after the Bush administration called for a quick infusion of cash into Iraq to finance reconstruction, according to figures released Friday by the White House.</br></br>The U.S.-led occupation authorities were much quicker to channel Iraq's own money, expending or earmarking nearly all of $20 billion in a special development fund fed by the country's oil sales, a congressional investigator said.</br></br>Only $366 million of the $18.4 billion U.S. aid package had been spent as of June 22, the White House budget office told Congress in a report that offers the first detailed accounting of the massive reconstruction package.</br></br>Thus far, according to the report, nothing from the package has been spent on construction, health care, sanitation and water projects. More money has been spent on administration than all projects related to education, human rights, democracy and governance. | no | 0 |
1.3% COLA Not as Bad as It Sounds | The 1.3 percent raise that federal and military retirees will get in January will be the lowest cost-of-living adjustment they've received since 1986, when they also got a 1.3 percent COLA. The increase is official and will first show up in checks received in January.</br></br>People getting Social Security benefits -- and that includes many federal retirees, too -- will also get the 1.3 percent raise. It reflects the rise in living costs, as measured by the consumer price index between the third quarter of this year (July, August and September) and the third quarter of 1997. In other words, inflation for that 12-month period rose only 1.3 percent.</br></br>While many retirees are disappointed with a COLA of only 1.3 percent, most experts say it is a good thing because it means inflation is low and prices are stable. Retirees longing for the good old days of double-digit COLAs forget what double-digit inflation can do to prices on everything from food to cars. In 1979, retirees got a 10.8 percent COLA. In 1980, the COLA was 13.7 percent. And in 1981 (the last time retirees got two raises in one year), they got 13.1 percent. That was a period of double-digit inflation. It also was before Congress voted to eliminate the twice-a-year COLAs that some feared would eventually push the cost of civil service retirement higher than payroll costs.</br></br>Since that time, federal retirees have had to fight regularly (and usually with success) to get one full COLA a year. There was no COLA adjustment in 1985, and Congress and the White House delayed COLAs for three months (paying them in April instead of January) in 1994, 1995 and 1996.</br></br>Workers who retire under the old Civil Service Retirement System get a full COLA each year. Workers who retire under the newer Federal Employees Retirement System are under a "diet COLA" system. They get a full COLA on the CSRS portion of their annuity. But the FERS portion of their annuity is subject to different rules. For example, if living costs (as measured by the CPI) are up 2 percent or less, both groups get the same increase. But if the rise in living costs is between 2 and 3 percent, CSRS benefits go up by the full amount, while payments on the FERS portion rise by only 2 percent. If the CPI goes up 3 percent or more, FERS benefits equal the CPI minus 1 percent. | no | 0 |
Welfare's Limits | I have lost count of the number of welfare-reform proposals under consideration by Congress or being urged on it by one expert group or another. What sticks in my mind, aside from the fact that virtually all of them have some provision for "workfare," is that none of them can work.</br></br>I don't suggest that there is no reason why particular "reformers" might not prefer one proposal to the others, or even that requiring some work in exchange for a welfare check (provided there is adequate day-care, health insurance, protection against coerced drudgery, etc., etc.) is bad.</br></br>When I say that none of the proposals can work, I have in mind the one thing that all the reformers would like to accomplish: a system that gives money to those families that desperately need it while encouraging the able-bodied to work.</br></br>The dilemma is familiar enough. Make the welfare grant large enough to permit a family to live in decency and you make it foolish for potential grantees to take low-paying jobs. Make it small enough to render bottom-of-the-barrel jobs attractive, and you guarantee that the jobless will live in squalor. Subsidize the lowest-paid jobs and you have to subsidize the jobs at the next higher level; how can you pay the assistant janitor and the janitor the same salary?</br></br>How do you get out of that conundrum? The short answer is: You can't. No amount of tinkering with welfare rules will solve the fundamental dilemma. If you are comparing the current welfare grant with wages from the currently available bottom-rung job, the grant (taking into account automatic eligibility for free medical care) will either be big enough to make the job seem a bad bargain or too small to afford a decent existence for those unable to land even a bad job. | no | 0 |
Big Steel, Bad Gridlock | Washingtonians headed south this month, beware. The long, hot season of traffic congestion around Colonial Williamsburg and Busch Gardens is in full swing. This year's tie-up has an interesting twist. A new Busch Gardens exit, including a bridge over Interstate 64, was supposed to open this summer but the project is a full year behind schedule. The exit will benefit tourists and residents by redirecting traffic from clogged roads. The Virginia Department of Transportation explains that its contractor faces a severe shortage of U.S.-made steel for the project.</br></br>Federal "Buy American" laws forbid interstate highway projects with federal financing from using imported steel, even if there is no domestic steel available. The restrictions apply equally to the raw material (rolled beam) or the fabricated product (finished girders). A Northern Virginia contractor with whom I spoke said his supplier could use imported rolled beam for the contractor's private projects, but for federal roads projects such as the Interstate 95 exchange at Springfield, the domestic raw material costing 15 to 30 percent more was required. By expensively micromanaging his projects, his firm has steel. Others are scrambling. Guess who ultimately pays the extra cost.</br></br>Buy American policies are nothing new, and they have a patriotic plausibility to most people. Who could be against saving American jobs? In many circumstances they are also innocuous. On the other hand, if they squeeze out imports as intended, they maintain higher prices to American steel users or cause them production delays waiting for backlogged orders to clear. This may save some jobs in favored industries like steel, but at a cost of sales and jobs in American industries that use steel. The benefits this policy provides to the protected steel workers and shareholders come directly out of the pockets of other Americans. This is income redistribution of the worst sort--from average folks to a group that earns substantially more than the manufacturing mean wage. In times of high unemployment, Buy American provisions conceivably can raise domestic demand, thus cushioning a cyclical downturn. But these discriminatory policies are hopelessly inefficient compared with Alan Greenspan's well-oiled monetary policy machine. By the way, has anyone checked the unemployment rate lately?</br></br>What many people do not realize is that the most intense competition American firms face is not with foreign firms but with other American firms in markets for talented labor and scarce capital. Any policy that favors one set of American industries disfavors others. The most important possible exception to this is for policies that are designed to enhance innovation in ways that spill over to other American firms. Buy American policies are not directed toward research and development, and the steel industry is not at the cutting edge of technical progress.</br></br>Highway construction contractors happily use Komatsu earth-moving equipment and a host of other imported products. So why is USX favored and Caterpillar not? The answer, of course, is lobbying power. A large industry spread across a number of important states often gets its way. Alas for the steel industry, its influence isn't what it used to be. The industry employs more than 400,000 fewer workers than it did in 1960. Small, modern mini-mills now provide almost half of domestic output. They have production costs substantially lower than the remaining large-scale integrated mills for which steel protectionism was designed. | no | 0 |
U.S. News: Economists Split On Growth Recipe | One of the most buzzed about figures at the annual meetings of the American Economic Association in Philadelphia this weekend was Alvin Hansen, an economist who has been dead for nearly 40 years.</br></br>Mr. Hansen posited in December 1938 that the U.S. was stuck in a period of profoundly slow economic growth he called secular stagnation, driven by slowing population growth and insufficient technological progress. He turned out to be wrong, but top U.S. economists are now hotly debating whether his ideas apply today, and if so what to do about it.</br></br>The self-appointed heir to Mr. Hansen's theory is Lawrence Summers, the former top economic adviser to President Barack Obama, who points to nagging sluggish U.S. growth since the bursting of the tech bubble in 2000 and proposes more aggressive government spending.</br></br>Mr. Summers first raised the secular stagnation idea in November and pressed his argument during three days of meetings this past weekend.</br></br>"Expansionary fiscal policy is the right primary response to our current woes, one that offers more potential than is generally imagined," Mr. Summers said on a panel at the conference Saturday. | yes | 1 |
`All These People . . . Can Affect My Reputation . . . '; `They Can Do Nothing . . . to Affect My Character' | Before I take your questions, I'd like to make a few comments on a couple of matters that I believe are essential to the strength of America in the 21st century. Five years ago, we started a new economic course for a new economy, a combined strategy of fiscal discipline, expanded trade, increased investment in education, science, technology and our people. Today, we received more good news that that strategy is working.</br></br>The latest economic report shows that in the first quarter of 1998, our economy grew at 4.2 percent. Wages are rising, while inflation remains low. This expansion is not fueled by big government deficits, but by booming business investment.</br></br>In the first quarter, unemployment was the lowest in 28 years, inflation the lowest in 30 years, consumer confidence at its highest level in 30 years.</br></br>For five years in a row now, our economy has been rated the most competitive in the world. We are living in an American economic renaissance in which opportunity is abundant. Communities are getting stronger. Families are more secure and more prosperous.</br></br>But we cannot allow the hum of our growing prosperity to lull us into complacency. As estimates of the possible budget surplus expand, so too do suggestions that we immediately commit to spending that surplus on tax cuts and new spending. | no | 0 |
A Dollar Warning | President Bush has let everyone know he intends to pursue an ambitious second-term agenda. But if he wants to know what could spoil his plans even before his second Inaugural, he might consider the market reaction to his Administration's weak dollar complacency.</br></br>Stocks and bonds both tanked on Friday, as the dollar fell again and oil and gold jumped, the latter to its highest level ($449 an ounce yesterday) since 1987. Investors may recall that was the last time we had a dollar crisis, as well as a little stock-market episode known as Black Monday. The markets rallied yesterday, as the dollar firmed and oil dropped. But we hope the point has been driven home that investors don't bet on countries that debase their currencies.</br></br>All the more so when the nation's leading policy makers seem blase, not to say clueless, about the matter. Treasury Secretary John Snow has been roaming the world saying that he favors a "strong dollar" policy even as he lobbies for a weaker dollar against Asian currencies. Investors who observe what Mr. Snow does tend to discount what he says.</br></br>Mr. Snow is also fond of repeating the nonsense that exchange rates should be set by "market" forces. However, a currency isn't just another commodity, like wheat or copper; it is a store of value. And unlike other commodities, its supply is determined by a central bank, in the U.S. by the Federal Reserve, which has a monopoly on dollar creation. The global currency markets are dominated by a cartel of central banks, and currency values are a function of their relative monetary policies. Isn't a Treasury Secretary supposed to know that?</br></br>The larger worry is that the Bush Treasury, and perhaps Mr. Bush himself, seem to have fallen for the notion that a country can devalue its way to prosperity. This is the patent medicine of the manufacturers' lobby, as well as the kind of economist who has done so much for Argentina, Mexico and other nations over the years. Britain tried this in the 1970s, and had to call in Margaret Thatcher to save the country from sinking to Third World status. The Carter Administration also tried talking down the dollar and ended up inspiring a global run on U.S. assets. | no | 0 |
ROUNDUP: REGULATION COMPANIES ACQUISITIONS INTERNATIONAL EARNINGS CONTI | A gasoline tax increase drew opposition from four former chiefs of the Federal Highway Administration, who said it would fall unfairly on the poor, worsen inflation, deprive states of revenue and delay improvement of the nationÛªs deteriorating highways and bridges. The four are Ray A. Barnhart, Frank C. Turner, Norbert Tiemann and John Hassell.</br></br>Robert A. Rough, a former director of the New York Federal Reserve Bank indicted on insider trading charges, pleaded not guilty and was released on a $150,000 personal recognizance bond. A hearing on pretrial motions was set for Feb. 14. and the trial for Feb. 21.</br></br>Smith Barney has decided to save money the old fashioned wayÛÓthrough layoffs. Yesterday, the venerable brokerage firm welcomed in the Christmas season by announcing it would cuts its staff by 120 because of changes in the business climate. The firm was recently bought by Commercial Credit Group Inc. of Baltimore.</br></br>Du Pont workers at 11 fiber plants will participate in an innovative plan that ties pay to the companyÛªs performance. Under the plan, employees will get only their base pay if earnings are less than 80 percent of Du PontÛªs goal; if the</br></br>Teimeco said it will appeal a $600 million judgment against one of its subsidiaries, which a jury found had broken a contract to buy natural gas from the owner of tiny Red Hill Oil of Dover. Ohio. | no | 0 |
Your money matters: Weekend report: New medical plans for small businesses carry investment options, but also risks | They're here.</br></br>After years of debate, tax-free "medical savings accounts" for the self-employed and people who work for small businesses finally arrived on New Year's Day.</br></br>Under a four-year pilot program, more than one million people could use MSAs to pay for routine health-care expenses in connection with special, high-deductible health-insurance policies. Money contributed to the accounts by workers or their employers would be used to pay for medical expenses until the deductible has been met and the insurance policies begin to pay.</br></br>MSAs also offer a potential new way for some people to boost their savings because money that isn't used for medical expenses can continue to grow tax-deferred.</br></br>Some insurers and banks are already pitching the accounts as a vehicle for long-term investing. In addition to supersafe cash or money-market accounts, they are offering mutual funds and, in some cases, individual stocks and bonds. The companies say they want to offer people investments with competitive returns in a tax-sheltered environment similar to an individual retirement account. | no | 0 |
Lucas, American Economist, Wins Nobel --- `Rational Expectations' Idea Focuses on Consumers Over Central Planners | Robert E. Lucas Jr., a professor at the University of Chicago whose economic theories give the common man much more influence on economic policy than central planners once had, won this year's Nobel Memorial Prize in Economic Science.</br></br>The Royal Swedish Academy of Sciences said yesterday that they awarded the prize to the 58-year-old economist for his "insights into the difficulties of using economic policy to control the economy." The Academy called Prof. Lucas "the economist who has had the greatest influence on macroeconomic research since 1970." Macroeconomics is the study of the economy as a whole.</br></br>Building on ideas first developed by another economist in the 1960s, Prof. Lucas formed what came to be called a theory of "rational expectations." Today, his theories underlie economic and business planning throughout much of the modern world.</br></br>In essence, the "rational expectations" theory shows how expectations about the future influence the economic decisions made by individuals, households and companies.</br></br>Using complex mathematical models, Prof. Lucas showed statistically that the average individual would anticipate -- and thus could easily undermine -- the impact of a government's economic policy. | no | 0 |
New Economy Hurting People in the Middle the Most | The last several years have been marked by low unemployment, strong economic growth, robust productivity gains and record corporate profits. Normally, you'd expect most Americans to be doing pretty well. As it happens, however, inflation-adjusted income for all but a tiny fraction of the wealthiest households hasn't increased at all.</br></br>So what gives? Why is there such a disconnect between economic growth and household income? What happened to all the money?</br></br>Anyone who offers a simple answer to those questions -- that it's all the fault of the Bush tax cuts, or it can be solved by sending everyone to college -- is blowing smoke.</br></br>There is also a plethora of data sets that can be used to show that, in reality, we're all still better off than we were 10, 20 or 30 years ago, or, if you wish, that the American Dream is dead and the economy is now run by and for the super-rich.</br></br>What is almost certain, however, is that fundamental changes in the structure of the labor, product and capital markets are accelerating a long-term trend toward income inequality. And this is happening not only here in the United States, but other places as well. | no | 0 |
No Peace Dividend? | If there is to be no peace dividend, as Defense Secretary Richard Cheney keeps telling us, why not? If the Pentagon budgets are being cut, as Cheney also keeps telling us, where is the money going? Somebody must be pulling our leg.</br></br>The first lesson to be drawn from the apparent contradiction between Cheney's promise of a big reduction in defense spending and the prospect of no peace dividend, is this: Cheney isn't really offering a major cut in defense spending. On the contrary, he is proposing only to keep defense spending from rising as rapidly in the next five years as it otherwise would have. Moreover, the average Pentagon spending level in the five-year period, 1996-2000, would jump to $365 billion annually from an average of $304 billion in 1991-95. Hence, no apparent defense cut, no apparent peace dividend.</br></br>But if defense spending were to be reduced enough to reflect political reality-namely, that the West is in less danger of attack from the Soviet Union than it was before-there must be a peace dividend.</br></br>It would be one thing if Cheney were to say that some part of the peace dividend has already been spoken for: the savings-and-loan debacle alone will chew up $200 billion in the decade of the '90s that could have been better spent elsewhere. And the probability is that taxpayers will have to fork over billions to make good on some other government-insured or -sponsored programs. But those unfortunate costs would be there even if there had been no dramatic prodemocracy developments within Eastern Europe and a better understanding with the Soviet Union.</br></br>The problem is how to assess all of the bills facing the nation in changed circumstances, and to determine how to allocate our total resources. And the first task is to cut through all of the gobbledygook of Cheney's numbers. He projected a "$180 billion reduction" in defense spending over five years. That, first of all, refers to budget authority, not outlays, which would be down $120 billion. But that is a bit of fantasy-a cut from earlier, projected levels of expenditures that have not yet been reached, not from current levels. | no | 0 |
Fed Officials Deny Money Policy Tightened | The recent surge in interest rates is not the result of any tightening of Federal Reserve monetary policy, according to senior Fed officials.</br></br>"We didn't stir this up deliberately," one senior official said yesterday, indicating there has been no Fed action to make cash less readily available to the nation's banking system.</br></br>Instead, the official said, financial markets are "having a minicrisis of confidence" brought on by the persistent weakness of the dollar in foreign exchange markets, which has revived fears of higher inflation in the future. The dollar's weakness in turn is related to the continuing large federal budget deficit and the U.S. trade deficit, he said.</br></br>Meanwhile, Fed Governor H. Robert Heller said yesterday weak economic growth in other major industrial nations makes it inappropriate for the Federal Reserve to raise interest rates.</br></br>In an interview with Dow Jones, Heller said there is "little or no growth" occurring in Japan and West Germany. "For us to raise interest rates in that situation would not be very appropriate," he said. | no | 0 |
When Ford Was in the White House | A rather important anniversary slipped by last month, while I was on vacation - the 20th anniversary of Richard Nixon's resignation and Gerald Ford's succession to the presidency. I was feeling guilty about the fact that the occasion had passed without comment, here or almost anyplace else, until I put in a call to Jerry Ford last week.</br></br>"Betty and I decided to downplay it ourselves," he said. "We had a quiet dinner with some friends here at Beaver Creek {Colo.} and agreed we'd have a bigger gathering when we reach the 25th."</br></br>That low-keyed approach is typical of Ford, who has never been much for fuss and ceremony. But, as I mentioned to him, part of my vacation reading was a book published earlier this year, "Time and Chance: Gerald Ford's Appointment with History." Written by James Cannon, a longtime Newsweek reporter and editor who later worked on the staffs of Ford, Nelson Rockefeller and Howard H. Baker Jr., it is a vivid reminder of the critical role the quiet man from Grand Rapids, Mich., played in the greatest constitutional crisis this Republic has faced since the Civil War.</br></br>"Now," Ford said on the phone, "people in their twenties have no recollection of it at all. They have no way to recognize the trauma of Watergate, the Vietnam War. Those were major crises. Jim's book brings out the tension that was in the atmosphere."</br></br>Tension does not begin to describe it. In the space of 10 months, from October of 1973 to August of 1974, these things happened: The vice president of the United States, Spiro T. Agnew, was forced to resign rather than face criminal charges of accepting payoffs for political favors; a new vice president, Ford, was selected by Nixon (after Nixon was persuaded that his first choice, John B. Connally, was not politically viable) and, in a never-before-utilized procedure, Ford went through confirmation hearings in both the House and Senate and was confirmed by overwhelming votes of both bodies. | no | 0 |
Things Paulson Can Do To Boost U.S. Markets | It is disappointing to read that someone as highly regarded as U.S. Treasury Secretary Henry Paulson has chosen to lend his good name to the opportunistic campaign to repeal essential investor protections adopted in the wake of recent massive accounting frauds ("Paulson Pulls for U.S. Markets," Money & Investing, Oct. 23). Make no mistake about it, these efforts are designed to do far more than "tweak" the rules. If that were all the Financial Services Forum, the U.S. Chamber of Commerce and their allies had in mind, they would simply congratulate the Securities and Exchange Commission and the Public Company Accounting Oversight Board for having the job well in hand and move on to other issues.</br></br>Backers of these efforts repeatedly cite the declining number of major foreign initial public offerings on U.S. markets as evidence that investor protections must be scaled back. As they surely understand, however, the decline in foreign listings on U.S. exchanges long predates the passage of Sarbanes-Oxley. A variety of factors contributed to the trend, not least U.S. economic policy over the past quarter century that actively encouraged globalization, technological advances that made globalization possible and investment-banking fees that are nearly twice as high for U.S. IPOs as they are on major European exchanges. In fact, foreign listings on U.S. exchanges bottomed out earlier this decade following the bursting of the tech- stock bubble, 9/11 and the massive accounting scandals that led to the passage of SOX. Since the implementation of SOX, the number of foreign companies listing in the U.S., the amount of money they have raised here and the U.S. share of the global IPO market have all grown.</br></br>If Secretary Paulson is looking to boost U.S. competitiveness, there are several pressing problems that are well within the purview of the Treasury secretary. Chief among them are the government's lack of fiscal discipline and burgeoning budget and trade deficits, factors the World Economic Forum identifies as central to a decline in U.S. economic competitiveness. Efforts to tackle these problems are far more deserving of Secretary Paulson's support than the poorly cloaked special interest attack on investor protections he has unaccountably chosen to back.</br></br>Barbara Roper</br></br>Director of Investor Protection | no | 0 |
Bonds Rally, Pushing Up Stock Prices --- But Late Selloff Costs Shares Some of Gain; Dollar Finishes Mixed | A bond market rally spread to stocks, pushing prices sharply higher in heavy trading before a late selloff cost the stock market much of its gains. But small stocks set a record. The dollar ended mixed.</br></br>The Dow Jones Industrial Average gained 7.38 points to 3008.72 after rising as much as 30 points earlier in the day to just shy of its record 3035.33. The Standard & Poor's 500-stock index hit an all-time high of 392.08 in intraday trading before ending up 1.60 to 389.62, a little more than one point off its closing record. But small stocks burst decisively higher, driving the Nasdaq Composite Index up 4.40 to 514.40. That eclipsed the previous record of 511.31.</br></br>Traders said the stock market rally was prompted by rising bond prices that drove long-term interest rates sharply lower. The Treasury's benchmark 30-year bond, for example, gained more than a half a point, or more than $5 for each $1,000 face amount, driving the yield on the issue down to 8.16%.</br></br>The trading day started with the Commerce Department reporting that July retail sales rose 0.5%, considerably stronger than the 0.2% that many traders had expected. Bond prices dropped on the news, which implied that the economic recovery remains intact and could eventually spawn higher inflation. Stock prices followed bonds lower.</br></br>But traders said that at midmorning, one or more big institutions began aggressively buying longer-term government securities, seeking to grab the significantly higher yields available on seven, 10 and 30-year notes and bonds. The demand for longer-term notes and bonds drove prices up. And as bond prices rose, stocks followed, spurred on by computer-guided buy programs. While bond prices held their gains, late in the day many stock traders took profits, costing the market much of its earlier gains. | yes | 1 |
Business World: Cards Leave an Imprint and Consumers Are Indebted | Correction</br></br>James Smith, although active in earlier efforts at Sears to develop a credit card, left the company prior to the introduction of the Discover card and didn't oversee its rollout. This information was misstated in Tuesday's Business World column.</br></br>(Aug. 24, 1990)</br></br>The 1980s were a bull market in consumer plastic -- credit, charge, debit and automated-teller cards -- that changed the way Americans bank and spend. They brought convenience that is one of the rather invisible gains in quality of life enjoyed by most of us in a period that is too casually written off as a gilded era.</br></br>Some equate plastic with phony, contending in this case that expenditures-made-easy represent a false prosperity for which we must soon pay dearly. Doubtless, some recklessness in consumer finance was part of the debt pollution that now is being cleaned up. But those voices on the political periphery calling for restrictions on credit cards as part of a return to solvency have it wrong. The fact that banks, now the predominant card issuers, are generally pushing these loans while they tighten up in other sectors is evidence these purchase plates grease the economy but do not bloat it. | no | 0 |
U.S. Profit Streak Hit By Global Weakness | Bid adieu to growing profits.</br></br>Slowing economies from the U.S. to China, increasingly wary shoppers, recession in much of Europe and a stronger dollar could bring to an end at least 10 continuous quarters of profit growth for America's biggest companies.</br></br>Until Friday, the outlook had been for further growth in earnings. But forecasts are now turning negative amid a number of profit warnings from companies like Starbucks Corp. and Illinois Tool Works Inc. In the third quarter, earnings by companies in the S&P 500 are expected to shrink for the first time since just after the recession ended, according to Thomson Reuters, which surveys Wall Street analysts.</br></br>And with that, one of the few bright spots of the struggling U.S. recovery gets dimmer. Strong earnings had been fueling corporate investment in technology and machinery, if not much hiring. Now, however, the pressure on profit is prompting firms including United Technologies Corp. and Dow Chemical to cut more costs.</br></br>Coffee chain Starbucks last week warned that customer traffic in U.S. cafes began slowing in June. The softness continued in July, so the company cut its earnings guidance for the third quarter. "This is not a Starbucks issue," said Howard Schultz, chief executive. "This is a macro problem of weak consumer confidence." | no | 0 |
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