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U.S. Helps France Increase Productivity | PARIS, July 28 (NYHT).ÛÓ For a couple of years now hardly a week has gone by without the announcement by the Economic Cooperation Administration, and latterly by the Mutual Security Administration, that at least one French productivity mission has left for the United States to study American methods of management, manufacture, or distribution.</br></br>Individual cases of success and of failure are on record by the dozen, but no over-all evaluation of the ambitious program can be made except in general terms. Two important things have surely been accomplished. First, the American equipment and techniques introduced have, in the aggregate, made a substantial contribution to the national output per man hour. Second, French employers and, to a less extent, French unions and workers have become productivity conscious.</br></br>For instance, the annual report issued over the weekend by the nationalized Renault Automobile Co. devotes a long section to tfie yearÛªs advances in productivity. It records that the man hours per unit of production, which was 653 in 1947 and 564 in December, 1950, had jbeen brought down by December, 11951, to 550. It also states that during the year, despite strong opposition from the Communist-dominated union in the factory, a branch of the Confederation Generate du Travail, 880 suggestions were received from workers. Of these 119'were put into effect, and 113 were rewarded with sums as high as every cent the French government (with American aid) and French employers are putting into it. But alone it Û÷is 'not going to bridge the gap of about 3-to-1, which still exists between the productivity and standards of living of the American and French worker.</br></br>Georges Lasserre, a financial writer for the independent conservative newspaper Le Monde, comments today that too many French employers and technicians go to America with the idea that they will find some wonder gadget, or some trick technique, which will double their production overnight.</br></br>He majccs the point that it would be much more useful in the long run if they sought to find out why every American employer and every enlightened American labor union is constantly seeking to increase productivity. Why, in short, there is the industrial atmosphere which in the last analysis is responsible for the high standard of American productivity. | no | 0 |
Milton Friedman vs. the Fed; The Nobel laureate would never have endorsed increasing inflation to stimulate the economy. | Author: Allan H. Meltzer</br></br>Would the late Milton Friedman have endorsed the Federal Reserve's plan to make large-scale purchases of long-term Treasury bonds? The idea here is to pump more money into and thus jump-start the economy, reducing unemployment. Some people, including this newspaper's David Wessel in a column last week, believe the great Nobel laureate would favor this inflationary program. I am certain he would not.</br></br>Friedman's main message for central banks was to maintain a monetary rule that kept the growth of the money supply constant. In his Newsweek column, "Inflation and Jobs" (Nov. 12, 1979), for example, Friedman emphasized that "unemployment is . . . a side effect of the cure for inflation," so that if a central bank "cured" unemployment by inflating, it "will have unemployment later." In other words, don't try it.</br></br>Friedman's Newsweek column for July 28, 1980 ("Improving Monetary Policy") came with the unemployment rate rising past 7%. His proposals for improving policy made no mention of using monetary expansion to reduce unemployment. He proposed rules for stable growth to achieve target "dollar levels of monetary aggregates."</br></br>Friedman served on President Reagan's economic policy advisory board. His memos on monetary policy repeat the themes he made familiar to Newsweek readers and others all over the world. There is not a word suggesting that monetary policy should try to raise the inflation rate in order to reduce the unemployment rate. | yes | 1 |
Stocks End Week in Uncertain, Hesitant Action: Trading Slowest in Month | NFW YORK, July 24 (APIÛÓThe stock market ended the week traveling the same uncertain, hesitant path it followed in practically every session. Trading was the slowest in a month.</br></br>Prices milled inconclusively most of the day. Some popular averages showed small gains much of the time. In the final minutes of trading there was a brief flurry up and then back down.</br></br>Net changes of most key issues were small. The final reading on the averages disagreed. Few more stocks declined than advanced but there were far more new highs for 1964 than new lows.</br></br>President JohnsonÛªs news conference disclosure about a high speed reconnaissance plane set the market off on guessing the name ol' the manufacturer. Further details were not readily available. But even this failed to shake the aircraft group from the generally lower mood they had been in all day.</br></br>Lower were the steels, oils, aircrafts, electronics and chemicals. Motors, utilities, rails and metals were mixed while a number of drug issues gained little. | no | 0 |
Market Comrades | Ceremonial gift-giving is an integral part of doing business in China. The value lies not so much in the gift (whose packaging is often more elaborate), but in the possibility of cementing a mutually beneficial relationship.</br></br>And so it was with last week's headline-grabbing announcement that China would revalue the yuan against the U.S. dollar. The modest gesture may make more possible a comprehensive economic dialogue between China and the U.S. in the interest of both nations.</br></br>The announcement on July 21 by the People's Bank of China that it would revalue the yuan, abandoning the 11-year-old peg of 8.28 yuan per U.S. dollar, caught financial markets by surprise. The jolt led market participants to gauge effects of current (and perhaps future) revaluations on currency values and interest rates. And, some U.S. political leaders claimed a victory in the campaign to blame Chinese "market manipulation" for external imbalances facing the U.S.</br></br>---</br></br>But there is a bigger story here. In the first sentence of the People's Bank's July 21 announcement, the bank states: "With a view to establish and improve the socialist market economic system in China, enable the market to fully play its role in resource allocation as well as put in place and further strengthen the managed floating exchange rate regime based on market supply and demand. . . ." [Emphasis added] The inherent conflicts in the phrase ("socialist market economic system," and "market supply and demand" with capital controls and a managed float) highlight both the central economic challenges facing China and the need for a comprehensive U.S. economic policy toward China. | no | 0 |
New York Fed to Barclays: 'Mm hmm'; If Libor-fixing is such a great scandal, why did Geithner and other regulators do so little? | The Federal Reserve Bank of New York released a trove of documents on the Libor scandal Friday, and the official Fed spin is that they show that regulators were "highlight[ing] problems" with Libor in 2007-2008, and "press[ing] for reform."</br></br>Well, let's see. In June 2008, Timothy Geithner, then head of the New York Fed, sent Bank of England Governor Mervyn King two pages of recommendations for "Enhancing the Credibility of LIBOR" and wrote that he would be "grateful if you would give us some sense of what changes are possible."</br></br>This is not exactly the language of a regulator who has just uncovered what we're now told is the financial crime of the century.</br></br>***</br></br>In the wake of Barclays's $450 million settlement with U.S. and U.K. regulators over attempted Libor-fixing, the political and media worlds are aflame with indignation that some banks misreported their borrowing costs during the financial panic of 2008. The U.S. Department of Justice let it out over the weekend that it is preparing criminal cases against individuals and banks in connection with the scandal. However, the evidence and testimony coming from regulators show they were well aware of price-fixing behavior at the time, but were not all that alarmed by it. | no | 0 |
Heard on the street: Money manager pushes 'defensive' stocks, cash as record-breaking continues in markets | AuthorAffiliation Staff Reporter of The Wall Street Journal</br></br>"The bulk of the market gain for 1995 has already been accomplished," warns Mr. Connolly, who has put away his rose-colored glasses now that he is a partner at money-management firm Miller Anderson & Sherrerd. Located in the Philadelphia suburb of West Conshohocken, Miller Anderson manages $31 billion, 40% of it in stocks.</br></br>If investors are looking for a savvy investment in today's apparently over-heated markets, think cash, suggests Mr. Connolly, who is 51 years old.</br></br>His reasoning: The market is already up more than 14% this year. Corporate earnings can't go up much more, he says. His advice is to buy "defensive" stocks such as food, tobacco, utilities, health-care and banks, whose results don't suffer too much in a recession. Buy bonds, he says -- and build up some cash reserves.</br></br>"We have about 10% cash in our portfolio," Mr. Connolly says, referring to Miller Anderson's core stock portfolio of about $9 billion. That's significant because normally the portfolio is fully invested, with zero cash. "Maximum cash would be 20%. So that doesn't signal great fear -- it just signals caution." | no | 0 |
Reports Give Mixed Signs About Condition of Economy | Americans got some mixed news yesterday about the state of the economy, with the government releasing statistics showing that the recession continued during February but with private researchers and the marketplace indicating that the end of the Persian Gulf War may be turning things around now.</br></br>Government reports released yesterday showed that prices for finished goods and the output of the nation's factories continued to fall last month, providing further solid evidence that the U.S. recession was worsening during February.</br></br>In the financial markets, however, attention remained focused on other signs that the economic slump may be coming to an end. As a result, long-term interest rates rose and the value of the surging U.S. dollar strengthened further yesterday.</br></br>Among those signs was an unusual interim report by researchers at the University of Michigan who survey U.S. consumer attitudes each month. While declining to release the exact figures, a survey official said the initial sampling of consumer sentiment this month showed such a sharp improvement that a special report was issued to the survey's clients.</br></br>Many economists believe that plunging consumer sentiment, depressed by soaring energy prices and uncertainty over the Persian Gulf War, caused a large drop in buying that, in turn, was a major factor in the current recession. | yes | 1 |
Quicken Wins Battle of the Upgrades | Personal finance software shows how computing can actually improve your life, not just make it more complicated.</br></br>Sure, an automated checkbook register is handy, but the real value of this software -- pioneered by Intuit's Quicken -- is the perspective it yields on your money. With all the numbers in one place, combined with powerful analytic tools, you can see where you've been earning it and spending it, as well as how much you may have later on. This insight makes it easier to control your finances instead of having them control you. That's pretty powerful stuff.</br></br>This year's versions of Quicken and its main rival, Microsoft Money, go about that goal in different ways, not all of which work.</br></br>Finally, a real upgrade: Intuit's Quicken 2003 (Win95 or newer/ Win2000 or newer, $30 Basic, $60 Deluxe, $80 Premier; Mac OS 9.2.2 or newer/Mac OS X 10.1.4 or newer, $60) represents a major improvement over earlier offerings.</br></br>Quicken's user setup has become friendlier, and the program no longer imitates a Web page so slavishly -- secondary windows open in separate frames, so you can refer from one to the other. The more flexible account bar shows more information and organizes it better, and "My Data" pages deliver convenient one-page reports on your accounts. | no | 0 |
Student Debt Rises by 8% as College Tuitions Climb | Americans are borrowing more to pay for college while reducing other debt as a weak job market prompts more people to go to school and tuition keeps climbing, new Federal Reserve Bank of New York data show.</br></br>Americans owed $904 billion in student loans at the end of March, nearly 8% more than a year ago, the New York Fed said Thursday in a quarterly report on consumer credit. That compares with the $679 billion they owed on credit cards at the end of the first quarter.</br></br>Between the fourth quarter of 2008, when credit-card debt peaked, and the first quarter of 2012, this borrowing fell by $187 billion, or 21.6%, the Fed said. Over the same period, student-loan debt rose by 41.4%, or $264 billion.</br></br>Americans are reducing their overall debt burden, a process known as deleveraging that began with the financial crisis. Total household debt--including mortgage, student, credit-card and auto loans--has fallen by roughly 10% since borrowing peaked in mid-2008. It stood at $11.44 trillion as of March 31, the New York Fed said.</br></br>Mortgage borrowing is down significantly, the consequence of foreclosures, falling home values, tighter lending standards and weak home sales. | no | 0 |
Fear of Growth: Economic Gains Spook Bond Buyers, but Risk Of Inflation Is Low --- In Fact, Some Experts Think Bigger Peril Is Weakness When Tax Rise Kicks In --- Bentsen's Mortgage-Rate Bet | Talk about nervous. The economy merely flexes some long-unused muscles and investors fall all over themselves heading for the exits.</br></br>No doubt about it, the economy is putting on a modest show of strength. Cars and houses are selling better, shoppers are loosening their purse strings and more people are being put to work. If this keeps up, economists predict, the economy will grow at an annual rate of between 3% and 4% in the current quarter, the best since a burst of growth in the last quarter of 1992.</br></br>But with long-term bond prices at lofty levels, interest rates at their lowest since the Treasury began selling 30-year bonds in 1977, and stock prices near record highs, early evidence of renewed growth seemed like the last thing investors wanted to see last week. To some it conjured up visions of tight supplies of goods and services, rising prices, and a Federal Reserve only too willing to fight inflation by raising interest rates to slow an overheating economy.</br></br>The result: a startling weeklong sell-off in the bond market and a two-day plunge in stock prices. Suddenly interest rates were rising and stocks looked as if they were teetering on the edge of a bear market.</br></br>"What is so amazing to me is that market psychology turned so quickly on such a small pickup in growth," marvels Robert Hormats, vice chairman of Goldman Sachs International. | yes | 1 |
Perils of Beryl Sprinkle World With Controversy: Perils of Beryl Provoke Controversy | In Europe, where his firm monetarist convictions are associated with 1982Ûªs devastatingly high interest rates, under secretary of the Treasury Beryl Sprinkel is sometimes referred to as ÛÏBeryl the Peril.Û (His friends point out that</br></br>But however pronounced, BerylÛªs name was mud around Treasury this week for what Treasury Secretary Donald T. Regan considered a free-wheeling indiscretion: While Regan was still in</br></br>Washington, Sprinkel called a press conference in Paris last Sunday, at a meeting of major nationsÛª finance ministers, without letting his boss know about it.</br></br>The press conference made page one last Monday in some newspapers: Unless the United States and its major partners cranked up an economic expansion, the international debt crisis would worsen, Sprinkel was quoted as saying.</br></br>The irrepressible Sprinkel, a dogmatic monetarist, has very strong views on most economic is-See SPRINKEL, C9, Col. 4 sues, expresses them on the record and has often gotten out ahead of the secretary on sensitive policy matters. For example, within a few weeks after taking office in 1981, Sprinkel started to give Paul Volcker public.advice on how to run the Fed and was reined in by Regan. | no | 0 |
How the Market Scares Itself | By every real-world sign, the latest being a plunge in global crude oil prices, there is no significant threat of inflation that would derail the American economic recovery. The consumer price index over the past three months has risen by an annual rate of a mere 1.9 percent. The index for medical care in this period has not moved up at all, a striking difference from the recent past.</br></br>The economy appears to be expanding moderately. A leading private organization, the business-oriented Conference Board, said this week that consumer confidence is at the highest point in nearly four years, promising a "sustained and reasonably vigorous economic expansion."</br></br>Yet, ironically, the stock and bond markets exhibit a bad case of frazzled nerves. The Dow Jones Industrial average closed yesterday at 3,626, off almost 9 percent, or 352 points in a two-month slide from a record 3,978 on Jan. 31. In the perverse spin Wall Street puts on good news, consumer confidence means growing future consumer purchases - and the markets interpret that confidence as a harbinger of inflationary pressures.</br></br>Interest rates, as measured by the yield on the 30-year Treasury bond, jumped to 7.11 percent at the close of business yesterday, the highest level in a year, reflecting a continuing erosion in the value of bonds. The markets not only fear further Federal Reserve Board moves to boost short-term interest rates but no longer have confidence in Chairman Alan Greenspan's assurances that his "preemptive" strike against short-term rates will assuage fears of future inflation, and thus keep long-term interest rates in check.</br></br>Logic doesn't necessarily govern financial markets. Participants are now caught up in the worry that they have set a self-fulfilling prophecy on track, and that having scared themselves to death, there is no way to escape the punishment. But there is much more to explain the collapse of stock and bond prices than the markets' psychosis about future inflation. Behind the slump there exists a phenomenon largely unknown to the public, the existence of huge (and unregulated) speculative funds that made tons of money for their investors - usually, individuals who can gamble amounts in excess of $1 million - during last year's boom. | no | 0 |
Sunday, October 24,1982 | A week ago. Outlook invited the White House to respond to an article by Democratic pollster Patrick Cad-dell envisioning a possible Democratic landslide on Nov. 2. The White House provided the following response by Lyn Nofziger, former chief political aide to President Reagan.</br></br>I BELIEVE SOME OF the best responses to Pat CadellÛªs claim in last SundayÛªs Outlook of a massive Democratic gain in the House of Representatives can be found on the front page of the same dayÛªs Post. As Paul Taylor and David Broder wrote, ÛÏThe strength of Republican candidates in many * marginal races, the girth of the GOP bankroll, and the absence of a compelling Democratic alternative to Reaganomics has led professionals in both parties to project Û÷normalÛª Republican losses in the House.Û</br></br>Caddell and other Democratic strategists are predicting they may win as many as 40 seats in the House and possibly retake ,the Senate. Public opinion polls can be interpreted to indicate similar Democratic gains, and economic-historical models, such as the one developed by YaleÛªs Edward Tufte, say the number could range from 40 to 70.</br></br>One of the major reasons I believe Caddell is wrong is because he is looking at the congressional elections on a national level, while it is far more accurate to view them as several hundred local elections. The concept of the Ûª82 mid-term elections as some national referendum on the president and Reaganomics simply doesnÛªt hold water in the American body politic.</br></br>Unlike Europe ÛÓ where the executive and legislature are one and the same and parliamentary elections determine who runs the country ÛÓ elections in this country for president and for Congress have always been separate in the minds of the voters. | no | 0 |
Overheard: Comedian Ben Bernanke | [Financial Analysis and Commentary]</br></br>Faced with a slowing economy, stubbornly high unemployment, volatile markets and a split on the monetary-policy committee, Ben Bernanke still has time for humor.</br></br>Asked after his speech to the Economic Club of Minnesota about disagreements over what the Federal Reserve should do next, Chairman Bernanke joked: "When two people always agree, one is redundant."</br></br>And, while markets fell on disappointment that he offered no new commitments to easing, Mr. Bernanke took full advantage of the final soft-ball question from Steve Sanger, former CEO of General Mills. It avoided addressing the economy and the Fed's response at all. Instead, Mr Bernanke was asked what he thought of actor Paul Giamatti's portrayal of him in the HBO movie "Too Big to Fail." He said he had never seen it: "I saw the original."</br></br>--- | no | 0 |
Argentina's Peso Is Expected to Face Pressure This Week --- Dollar Buying, Untangling Of Bank-Account Rules To Weigh on Currency | Freed from its tether to the U.S. dollar for the first time in more than a decade, the Argentine peso is expected to come under renewed pressure this week as the government works out how to untangle bank-account restrictions and financial institutions become more active in foreign-exchange markets.</br></br>The peso lost about 40% of its value Friday, the first day of trading since the government last week replaced Argentina's one-to-one peg with the dollar with a dual exchange-rate system. Under the new system, trade and some financial transactions will be covered by a fixed exchange rate of 1.40 pesos to the dollar, while Argentines seeking to buy or sell dollars for other transactions will have to do so on the open market where the peso will float freely.</br></br>In Friday's trading, the peso closed around 1.70 pesos to the dollar, but the bulk of activity was at the small exchange houses that had languished during the past decade when the dollar and peso were used side by side. Banks received rules from Argentina's central bank on how the new foreign-exchange market would function about 12 hours before markets opened, and opted to sit out the session. Meanwhile, the financial system has already been struggling to cope with operational complications resulting from the restrictions on cash withdrawals imposed at the start of December and limits on account movements imposed subsequently.</br></br>Demand for dollars, so far, has been muted because people are short of cash in pesos for buying groceries and paying routine bills. Some economists are forecasting the peso will slump this week to 1.8-2.0 to the dollar as banks become more active in the foreign-exchange market and the government considers reversing recent decisions to slowly lift the bank limits. Leaving the limits on too long is likely to exacerbate a recession already in its fourth year and spark greater social unrest; suddenly scrapping them could cause the banking sector to collapse.</br></br>Late Thursday night, residents of several middle-class neighborhoods took to the streets again to protest further banking restrictions introduced by the administration of President Eduardo Duhalde. Over the weekend, Argentine press reports said the government was considering allowing account holders to access frozen funds to make big-ticket items, such as cars or homes, in order to perk up consumption. The government is also considering providing such special access to pay off credit-card debts and other obligations that cannot be postponed, the reports said. | no | 0 |
U.S. Banking Issues Lose Their Popularity In Eurobond Market | LONDON -- U.S. bank issues are losing their luster in the Eurodollar bond market. Worries about the U.S. banking system are prompting international investors to pay more for the traditionally less-coveted debt of European banks than for that of U.S. banks.</br></br>Only a year ago, U.S. banks were widely regarded as benchmark international borrowers and could pay the lowest interest rates in the Eurodollar floating-rate note market. But currently U.S. banks are paying a higher average interest rate on their notes than Austrian, British, Canadian, Japanese and West German banks, according to a report by Jeffrey Hanna and Gioia M. Parente, analysts at Salomon Brothers Inc., a New York investment bank.</br></br>While this reversal is partly the result of a recent heavy supply of new U.S. bank issues in the Euromarket, it also stems from "international concern regarding the soundness of the U.S. banking system," the Salomon analysts say. Moreover, the trend isn't likely to disappear in the near future, they add.</br></br>Several prominent Eurobond specialists agree, noting that international credit markets have been buffeted this year by the collapse of some small U.S. government securities dealers and by the temporary closing of 70 thrift institutions in Ohio.</br></br>"No doubt about it, there's much more skittishness toward U.S. banks in the international capital market," says Hans-Joerg Rudloff, deputy chairman of Credit Suisse First Boston Ltd., the leading underwriter of bonds and floating-rate notes in the Eurobond market. | no | 0 |
Stocks End Mixed in Busy Session; Elections Are Center of Attention | Stock prices ended mixed yesterday in a surprisingly busy session in which the congressional elections dominated traders' attention.</br></br>Takeover speculation and the expectation of a good response to the Treasury's refinancing operation helped the market recover from a sharp morning decline.</br></br>The Dow Jones Industrial Average fell 1.82 to 1892.44, but the broader market indexes did slightly better. The New York Stock Exchange composite index gained 0.23 to 141.60, and Standard & Poor's 500-stock index rose 0.40 to 246.20.</br></br>More than 163 million shares changed hands on the Big Board. Advancers outnumbered decliners about 9 to 7.</br></br>Market analysts said they were impressed by the election day volume and the generally upbeat mood among investors. Investors "showed a lot of courage today in the face of unknown results of the elections and the Treasury refinancing operations," said Alfred Goldman, director of technical market analysis at A.G. Edwards in St. Louis. | yes | 1 |
U.S. Stock Futures Point to Firm Start | U.S. stock futures pared their premarket gains but remained higher, as investors scrutinized an agreement among most European Union members to tighten fiscal coordination and eyed some disappointing U.S. corporate outlooks.</br></br>Less than an hour before Friday's opening bell, Dow Jones Industrial Average futures had risen 43 points, or 0.4%, to 11987. Standard & Poor's 500-stock index futures climbed five points, or 0.4%, to 1235 and Nasdaq 100 futures advanced six points, or 0.2%, to 2287.</br></br>Changes in stock futures don't always accurately predict stock moves after the opening bell.</br></br>The Dow is on pace to finish the week with meager gains. On Thursday, the blue-chip index suffered its biggest point drop in two weeks, falling 199 points to below 12000 for the first time since Nov. 29.</br></br>On Friday, investors grew optimistic after 23 of 27 European Union countries agreed to tougher fiscal rules, which led German Chancellor Angela Merkel and French President Nicolas Sarkozy to push for a separate intergovernmental treaty. | yes | 1 |
Economy's pace loses its spring: Fed survey says weak spending cooled growth | WASHINGTON -- The Federal Reserve's latest survey of regional economic conditions found "modest growth," but at a slower pace than in recent months because of weak consumer spending.</br></br>For retailers, it's beginning to look a lot like a sluggish Christmas, the Fed concluded in a summary of reports collected by the 12 regional Federal Reserve banks in September and October. Sales of fall and back-to-school goods were almost uniformly "disappointing or below expectations," the Fed said.</br></br>Manufacturing picked up in some districts, however. The Philadelphia Fed, for example, found strong demand for electrical machinery, metals and glass products. "It's not a boom, mind you," a steel production representative cautioned the Chicago Fed. Indeed, purchase orders mostly softened in the Dallas and Cleveland districts.</br></br>In keeping with what analysts call a slow but steadily growing economy, construction improved slightly, and there was a "firming" in commercial and industrial leasing activity. Also, inflation remains under control. Wage gains were moderate, despite mostly tight labor markets, and reports of rapidly rising materials costs fell off substantially, the report said.</br></br>But the reluctance of consumers to spend is keeping the slow-rolling economy from shedding its training wheels. In the Boston district, where sales in September and October fell by as much as 20% from the year-earlier period, widespread discounting is "eating away at gross margins and profits," the Boston Fed said. Without any intriguing new fashion offerings, apparel sales continue to fare the worst. But the New York Fed said sales of big-ticket items such as furniture and home electronics also softened. | yes | 1 |
Let traders call the next bubble | So here's a paradox to ponder: By now everyone has heard about traders who saw the housing crash coming -- and made millions betting on it. Yet most economists agree that central bankers won't prevent the next bubble from inflating. One group sides with Alan Greenspan, who argues that regulators can't know when a strong market has crossed into bubble territory. Another sides with Paul Krugman, who thinks that regulators can know -- but that they may choose to shirk their duty. Either way, what's up? Why can't regulators preempt bubbles if the hedge-fund crowd is smart enough to short them?</br></br>The answer tells you something big about the financial reform brewing in Congress. There is a reason private traders beat public servants when it comes to anticipating crashes, and it points to the difference between a good reform package and a missed opportunity.</br></br>The reason boils down to conviction. Hedge-fund traders do not have to know that a bubble will pop in order to bet against it. They may not even need to feel that a crash is more than a 50-50 possibility. All they need to believe is that the odds of a crash are higher than others perceive them to be. The threshold for action is relatively low, so traders can act easily.</br></br>Take the example of John Paulson, whose hedge funds made $15 billion betting against the subprime bubble. When Paulson made his bets in 2006, the market consensus was that a nationally synchronized housing collapse was almost inconceivable. As a result, banks were willing to sell extremely cheap insurance on bundles of mortgages -- Paulson found he could pay $1.4 million for a contract that would pay him $100 million if the mortgage securities defaulted. With that overwhelmingly skewed payout, it made sense to bet against the mortgage bubble even if the odds of it popping were merely even. Paulson was like a roulette player who bets on red vs. black, but with a payout that more closely resembles the reward from betting correctly on a single number.</br></br>Now contrast Paulson's incentives with those of a central banker. As the Fed chairman in February 2000, Greenspan appeared before a Senate committee and explained why he was raising interest rates. Inflation had yet to pick up, but the powerful advance of technology stocks had fueled such strong growth that price pressure seemed likely. Of course, Greenspan could not know that he was right. But whereas Paulson had the prospect of that overwhelmingly skewed payout to compensate him for the risk of being wrong, Greenspan was greeted with a torrent of abuse. Then-Sen. Paul Sarbanes, Democrat of Maryland, charged that the Fed's preoccupation with runaway tech stocks harmed the job prospects of inner-city youths. Sen. Jim Bunning, Republican of Kentucky, railed that higher interest rates threatened the economy more than inflation. "I think people hear what you are saying and conclude that you believe that equities are overvalued," said then-Sen. Phil Gramm, the committee chairman. "I would bet that equity values, given what's going on, are not only not overvalued, but may still be undervalued." | no | 0 |
Inflation Fears Subside And Market Perks Up | Investors cheered by long-awaited good news on inflation pushed stocks higher Tuesday, hoping that a lower-than-expected increase in basic wholesale prices meant the economy will stay on a sound footing. Solid first-quarter earnings also fueled buying.</br></br>Wall Street had feared that the Labor Department's producer price index, which measures wholesale prices, would show inflation taking hold in the economy. But while the PPI rose 0.7 percent for March because of higher energy and food prices, the closely watched core PPI, without those volatile costs, grew just 0.1 percent, less than the 0.2 percent economists expected.</br></br>"We're finally seeing some numbers that point to less inflation in the pipeline," said Lincoln Anderson, chief investment officer at LPL Financial Services in Boston. "Coupled with a pretty strong earnings outlook for the quarter, this hopefully puts a floor on the market and gets things turned around again."</br></br>The Dow Jones industrial average rose 56.16, or 0.6 percent, to 10,127.41, coming off of four straight down sessions and a loss of 436 points. The Standard & Poor's 500-stock index climbed 6.80, or 0.6 percent, to 1152.78, and the Nasdaq composite index gained 19.44, or 1 percent, to 1932.36.</br></br>Worries about U.S. oil-refining capacity pushed crude futures sharply higher, keeping stock gains somewhat in check. In earnings news, an 11 percent hike in sales helped Johnson & Johnson to a strong first-quarter profit. The health care company beat Wall Street's profit expectations by 5 cents per share. Johnson & Johnson edged a penny higher, to $69.05. | no | 0 |
Legislation No Solution to Trade Deficit | America is planning to go protectionist this year, assuaging its conscience and better sense of judgment by calling it something else.</br></br>Trade legislation will pass, and it will be described as nonprotectionist, a "program of action." It will go under the rubric of boosting "competitiveness"-as if the old Yankee trader spirit can be revived by legislative fiat. And some will be comforted by the thought that it could have been worse.</br></br>A new trade bill sponsored by Sen. Lloyd Bentsen (D-Tex.), chairman of the Finance Committee, and Sen. John C. Danforth (R-Mo.)-with wide bipartisan endorsement-has already been inferentially blessed by a senior Reagan administration official as "less offensive" than last year's punitive quota legislation.</br></br>As former Council of Economic Advisers chairman Charles L. Schultze pointed out in a piece for the Los Angeles Times, concentrating on "competitiveness" is better than concentrating on raw protectionism. Those who are pushing the competitiveness theme lump together, with plain old protectionist nostrums, a number of laudable goals, such as remedial education and more spending for research and development. The bitter is coated with the sweet to make it more palatable politically.</br></br>The problem with competitiveness, as a disguise for protectionism, is that it is a phony solution to the problem of America's $170 billion trade deficit. The underlying assumption is that we've run up that much red ink because we can't compete with other countries that don't play by fair trading rules. | no | 0 |
The Big 10 | It's no exaggeration to say that the 1980s were dominated by economics. The politics and psychology of these 10 years have swirled around the central issue of how nations enhance their wealth. Ronald Reagan's economic policies undergirded his popularity. Communism's economic failure triggered political upheavals in the Soviet Bloc and China. Japan's emergence as a great power primarily reflects its stunning economic success.</br></br>Greedy is the glib label stuck onto the '80s. How silly. Greed had never disappeared; it merely became more conspicuous. The decade's significance lies elsewhere. We rediscovered some old truths about economics. Competition works. It generates economic growth by fostering efficiency and innovation. In the '80s, U.S. living standards and productivity rose. But competition can be rough, and the decade seems baffling precisely because its gains often emerged from disruptive changes.</br></br>We endured fierce foreign competition and the worst recession since World War II. Corporate America was no longer invincible. It faced hostile takeovers as well as rising imports. Companies were forced to become more efficient and to hold down costs and prices. But their responses-layoffs, plant shutdowns and streamlining-were often hurtful and unsettling.</br></br>It's been that kind of confusing decade. Looking back, I'd cite 10 major economic trends that will affect the '90s.</br></br>1) The Triumph of Free Markets: Faith in competition replaced the view that government spending and low interest rates spur economic growth. The result has been stingier government, higher "real" (after-inflation) interest rates and more emphasis on free markets. The change is global. From Mexico to France, state-owned companies have been sold ("privatized"). Poland, Hungary, the Soviet Union and China are trying market policies. | no | 0 |
First Dip in 13 Weeks | NEW YORK, May 25 UP)ÛÓThe stock market receded slightly this week in the area of its brand new 1957 highs, first weekly retreat in 13 weeks.</br></br>The Associated Press average of 60 stocks dipped 40 cents to $184.50. This left it still within the zone of the string of new highs for the year established in the last two weeks but 60 cents below the latest high, established on Monday.</br></br>The Monday session was accompanied by a late ticker tape which fell behind buying orders early in the day. As on two occasions in the previous week this was regarded by some market technicians as a symptom of climactic buying in the three months rise. On Monday prices did nudge ahead to a new 1957 high but this proved to be the crest of the prolonged advance, at least for the time being.</br></br>The following three sessions were ones of mild reaction as values were clipped while profits were taken. At the same time, however, oils moved generally forward and there was a wide assortment of specialties which established big gains. Five of the most heavily traded issues of the week were oils.</br></br>On the final trading session prices advanced generally most of the day but precautionary pre-weekend selling near the close pared the rise to the slimmest margin. The day was a | no | 0 |
Yo! A Rapper's Domestic Policy Plan; How Clinton Can Bring Hope to Alienated Black America | Although many Americans are joyfully anticipating your inauguration, I see no reason to celebrate yet. In one sense, I'm glad you won. Unlike many of my generation, who bemoan the uselessness or corruption of the political process, I rejected the easy pessimism of not voting and cast a ballot for you.</br></br>Your campaign, however, placed me and most other blacks in a painful predicament. By claiming you were running against the "special interests" (blacks, labor and feminists) that have supposedly kept the Democrats out of the White House for the last 12 years, you skillfully undermined honest debate about racial justice. And by dissing Sista Souljah and distancing Jesse Jackson at a single stroke, you confirmed the bitter belief among many of us that even well-intentioned whites are unable to play the game of racial politics above board.</br></br>Here's our dilemma: If we speak up, we're special interest whiners, but if we keep quiet, we lose self-respect and reinforce our own invisibility. I, for one, cannot remain silent. Your actions were, in my view, calculating and unprincipled, and they angered me - but not enough to make me believe that you could not redeem yourself.</br></br>Although I hold a degree in economics, I am a radical rapper by profession, an artist whose outrage pushed me to write and record "Bush Killa," which appears on my album, "Sleeping With the Enemy." The song has sparked controversy because it imagines the stalking and slaying of the president, that ready-made symbol of politics and policies that have assaulted black America for nearly half my life. I understood that the language in this violent fantasy would be disturbing to many, but what I hoped to call attention to - the real- life economic violence visited upon millions of African-American people every day of their lives - is more disturbing and more real.</br></br>I am, nonetheless, at least slightly hopeful about what you can achieve with your presidential power. I like your rhetoric about putting people first, and I can't see you being worse than your predecessor. | no | 0 |
Dow Rises 31 oil Hones of Rate Cat | NFVV YORK. April 11ÛÓÛªWall Street investors dashed into the stock market today after news that priors at tlie wholesale level eased in March boosted optimism about a cut in interest rates.</br></br>The Dow Jones industrial average closed up 30.95 points at 2905.45. New York Stock Exchange volume was active at 197 million shares. Advancing issues led declining ones by a ratio of more Ilian 2 to 1.</br></br>The producer price index fell 0.3 percent in March, the fourth monthly decline, the Labor Department said. It said prices moderated on a broad front, led by a sharp fall in energy costs.</br></br>"The market wants to believe that interest rates will be cut again,ÛªÛª said Robert Stovall of Stovall/21st Securities.</br></br>Investors were also betting that if FridayÛªs consumer price index is soft, a cut in interest rates could come before the weekend. | no | 0 |
CORPORATE PERFORMANCE 1999 REVIEW: 2ND QUARTER --- Profits Beat Forecasts In Rebound | Corporate earnings have come roaring back so fast that it would seem the business environment can't get much betteryet some signs suggest profits won't weaken anytime soon.</br></br>Second-quarter earnings of major U.S. companies blew past analysts' estimates. Setting aside the effect of cable-TV provider MediaOne Group's extraordinary gain last year of about $24.5 billion, income at the 654 companies that make up the U.S. part of the Dow Jones Global Indexes rose 37% in the second quarter from a year earlier. MediaOne's gain, from its separation from U S West, skews the year-to-year comparison; including the gain, net income was up 5%.</br></br>Other one-time events, such as writeoffs and gains from the sale of affiliates, and easy comparisons against year-earlier results weakened by restructuring charges boosted the companies' net income. But even operating income, which excludes such items, rose 15% from the second quarter of last year, according to calculations done by First Call/Thomson Financial for The Wall Street Journal.</br></br>In the 1999 first quarter, net income was down 6%, while operating income rose 9.6%. Analysts who wondered early this year if the rebound in first-quarter operating profits was a fluke now know for sure that it wasn't; business is better for a broad swath of corporate America.</br></br>"The bottom line is that business is good and we expect it to continue for a while," says Chuck Hill, director of research at First Call, which tracks corporate earnings. "We're in a period of accelerating earnings growth that will peak out in the third quarter, but we still expect earnings to stay strong." | no | 0 |
Investing in Funds: A Monthly Analysis --- Retirement Planning: Before Buying a Target-Date Fund, here are five key questions to ask; Sure, it's easy to select an all-in-one fund geared to a year you might retire in; But what exactly are you getting? | Target-date funds drew a lot of criticism during the bear market for big losses. Whether or not the criticism was deserved, one thing is clear: Average investors need to better understand the risks and benefits of these popular retirement-savings vehicles.</br></br>Designed as hands-off, long-term holdings, target-date funds typically contain a retirement year in their names and shift to a more conservative asset mix as that year approaches. But as the market tanked in late 2008 and even supposedly conservative funds for people retiring in 2010 took a hit, questions arose about how well people really grasp these products.</br></br>Securities and Exchange Commission Chairman Mary Schapiro has asked her staff to prepare rule recommendations about how target-date funds are marketed, and the Labor Department's Employee Benefits Security Administration plans to require fund providers to give plan participants more information about target-date funds when they are among the default options in retirement-savings programs such as 401(k)s.</br></br>Target-date funds rebounded strongly along with the broad stock market last year. Funds geared to retirement in years between 2000 and 2010, for example, returned an average 22.4% last year after falling an average 22.5% in 2008, according to researcher Morningstar Inc.; this year, they're down a slight 0.7%. The rebound since 2008 "takes some of the immediate pressure off these funds, but there's still a lot of questions out there," says Laura Lutton, editorial director in the mutual-funds research group at Morningstar.</br></br>Here are five questions investors should ask: | no | 0 |
First Executive Growth Slows to Crawl; Tougher Insurance Regulations Cited | LOS ANGELES -- The once-astounding growth of First Executive Corp. has slowed to a crawl, mostly because of tougher regulation by state insurance commissioners.</br></br>In its annual report to the Securities and Exchange Commission, the aggressive life insurance holding company provided its most detailed explanation for last year's drop in premium revenue and indicated its responses to regulatory changes will slow future growth. However, it held out the hope that profit margins may increase.</br></br>In addition, First Executive said the tougher regulation had indirectly caused it to put $345 million in new capital into its California insurance unit last year, financed largely by a $275 million debt placement.</br></br>First Executive said it is de-emphasizing the sale of certain types of single-premium insurance policies and annuities that put a strain on its capital as figured under accounting rules set by insurance regulators. The single-premium products once had been a mainstay of First Executive's business.</br></br>In addition, First Executive said it will consider redesigning some of its products, reducing the interest rates it guarantees to pay, or relying less on investments in high-yield, low-rated "junk bonds." Much of First Executive's success in the past stemmed from the higher rates it offered to pay policyholders, fueled by its investments in junk bonds. | no | 0 |
U.S. Investigates Whether Big Three Charged Blacks More for Car Loans | Corrections & Amplifications</br></br>A FEDERAL INVESTIGATION of whether the Big Three car companies' finance units have discriminated against racial minorities was reported over the weekend by the Bloomberg Business News wire service. An article yesterday said the development was first reported by the Detroit News. (WSJ March 22, 1995)</br></br>DETROIT -- The federal government is investigating whether the finance units of the Big Three U.S. auto companies have discriminated against racial minorities by charging them higher interest rates on car loans than whites.</br></br>Chrysler Corp., Ford Motor Co. and General Motors Corp. said the investigation is being conducted by the Justice Department and the Federal Trade Commission. Ford disclosed the inquiry in documents filed with the Securities and Exchange Commission; the two other car companies acknowledged the investigation in response to questions. All three denied any wrongdoing.</br></br>Last year, African-Americans spent $11.7 billion on new and used cars and trucks, up from $10.2 billion in 1993, according to Target Market News, a Chicago market-research firm. | no | 0 |
Personal Income Slows Its Growth; Spending Is Flat | Dow Jones Newswires</br></br>Americans' personal incomes grew at a much slower pace in May but still eclipsed the month's flat spending rate.</br></br>Personal income rose at a seasonally adjusted annual rate of 0.2%, after rising 0.6% in April, the Commerce Department said. Personal consumption didn't budge in May after climbing 0.6% in April, putting the savings rate for Americans at 0.6% in May, the first time in five months that it increased from the previous month's pace.</br></br>Economists blamed rising energy prices for weak consumer spending. Previous data showed retail sales dropped 0.5% in May, partly because of slumping auto demand.</br></br>But some analysts believe spending bounced back in June. "May was kind of a pause in an otherwise healthy trend," Robert McGee, chief economist at U.S. Trust in New York, said of the unchanged reading on consumer spending. | no | 0 |
Dousing the IMF Fires | As part of their general pre-election cave in, Congressional Republicans are greasing the skids for $18 billion in fresh money for the International Monetary Fund. Having set themselves up in 1995, the Congressional leadership wakes up at night shaking with fear that President Clinton will veto a bill to keep the government open, then blame them for closing the government.</br></br>With Asian economies toppling and the U.S. financial boom topping out, Republicans are particularly worried about getting tagged for an economic crisis unless they give Mr. Clinton anything he asks. The President lectured them again when speaking at the IMF meeting this week: They should pay the $18 billion because "there is no excuse for refusing to supply the fire department with water while the fire is burning."</br></br>Before you pour liquid on a raging fire, we might suggest, make sure it doesn't smell like gasoline. On the record of the past 15 months of crisis, the IMF doesn't look like much of a fireman. More of an arsonist. Back in March 1997, IMF Managing Director Michel Camdessus gave a speech predicting for Asia at worst a "cyclical correction that is not expected to be deep or prolonged." Mr. Camdessus was at that point already urging Thailand to devalue -- apparently clueless about the trouble that would come of it. The IMF went on to urge the devaluations that dragged down South Korea, wrecked Indonesia and set off shock waves that -- amplified by Russia -- now threaten Brazil.</br></br>To combat this, the IMF began by pouring $18 billion into Thailand, and said the worst was over. Then the Fund led a $43 billion bailout for Indonesia and said all would be well. There followed $57 billion for South Korea, $23 billion for Russia. That comes to $141 billion. The fund is now arranging a similar $30 billion experience for Brazil, bringing recent IMF crisis-dousing to $171 billion. Yet clearly the world is in worse shape than when the Fund back in 1994 hopped on its fire engine to put out Mexico.</br></br>Why is Congress buying in to this? Three reasons. | no | 0 |
Lagardere and Daewoo to Buy Thomson --- Sale by French Government Of the Troubled Firm Creates Defense Giant | PARIS -- In a move that creates a new French defense giant and transforms South Korea's Daewoo Group into a global consumer-electronics leader, the French government decided to sell Thomson SA to France's Lagardere Groupe and its ally, Daewoo.</br></br>The deal marks a milestone for Europe's defense business, which is struggling to consolidate, and came as a surprise to those who had bet that Thomson would go to rival bidder Alcatel-Alsthom SA. The merger of Lagardere's Matra defense division with Thomson's defense arm, Thomson-CSF, will more than double its size in the defense sector and create the second-biggest weapon-systems group in the world, behind Lockheed Martin Corp. of the U.S.</br></br>It also has important ramifications in the U.S., where Thomson's consumer-electronics arm, Thomson Multimedia, is the largest single seller of TV sets, with a 20.5% market share, through the RCA and GE brands it controls. As part of the transaction, Daewoo Electronics will buy Thomson Multimedia from Lagardere for an undisclosed price. Thomson Multimedia has bled red ink, and its sale could jeopardize some of its 6,000 jobs in the U.S., although Daewoo said it has no immediate plans to reorganize the operations.</br></br>Daewoo said it will rely on existing management in Paris and outside Indianapolis, where the U.S. operations are based. However, Daewoo Electronics Chairman Bae Soon Hoon said he believes Daewoo's cost-cutting know-how will reverse recent losses at Thomson Multimedia. North America represents 64% of Thomson Multimedia's sales.</br></br>Though the sale of Thomson had set off a furious behind-the-scenes lobbying effort by both Lagardere and Alcatel, the company is by no means a prize. In fact, the government is selling Thomson for a symbolic sum of one French franc and will inject 11 billion francs ($2.1 billion) into the group before its sale to partially wipe out debts of 25 billion francs. Indeed, Thomson is in such dismal shape that shares of Alcatel, France's telecommunications giant, rose 2.4% in Paris stock-market trading on the news that its bid failed. Trading in Lagardere and Thomson-CSF was suspended yesterday. | no | 0 |
It's Time for the Fed To Come to the Rescue | The skeptics about the economy were right, and the optimists - including high Bush administration and some Federal Reserve Board officials - were wrong. Revised gross national product data for the second quarter imply the economy is still in recession, not yet edging its way out of it.</br></br>This is a case where the nation's leading business organizations, including the U.S. Chamber of Commerce and the National Association of Manufacturers, called the shots almost precisely - but were hooted down as naysayers by many leading academics.</br></br>But whatever one wants to say about the chamber's and NAM's often conservative social policies, they base their forecasting not on tea leaves, but on the hard-nosed reports of business executives who must deal with the real world.</br></br>The ongoing debate on the precise timing of recession's end misses a more important point. As Larry Hunter, deputy chief economist for the chamber, said, "The bad news is that we are in a long-run economic decline. The economy is not growing fast enough to get us back to recent growth peaks. That means we have suffered a permanent reduction in our standard of living since 1988."</br></br>The revised second-quarter numbers show that the GNP shrank at an annual rate of 0.1 percent, the third quarterly decline in a row. Preliminary data, cheered by the administration only a month ago, showed an expansion of 0.4 percent. | no | 0 |
Charter School Laboratory | Opponents of education vouchers like to say they prefer "public school choice" known as charters. But even that claim often turns out to be an illusion under pressure from teachers unions. Consider what's happening in Connecticut, where Republican Governor M. Jodi Rell is resisting charter expansion despite their notable success in the state.</br></br>Charter schools -- which are free from many of the union work-rule constraints imposed on regular public schools -- have been allowed in Connecticut since 1997, and there are now 14 of them. A study by Western Michigan University found that the state's charter students "are gaining more on the state assessment tests than students in surrounding traditional public schools."</br></br>If charter middle schools were treated as a single school district, it would lead the state among districts with more than 25% black and Hispanic enrollment. Another WMU study conducted three years ago found similar results, and the authors note that, of the six states they're monitoring, "the results from Connecticut are the most positive and promising for charter schools that we have seen."</br></br>Alas, Connecticut is also one of only two states -- the other is New Jersey -- that artificially cap charter enrollment (at 300 students per school), and thus its schools have an average waiting list of 200 students. Reformers want to expand the number of charter schools, as well as remove the enrollment limit; make charters eligible for the state's school construction program; and raise charter spending by a modest $10 million to bring them in line with what the state spends on other public schools.</br></br>Connecticut currently spends on average about $9,100 per student in regular public schools, though that figure can run to $13,000 in urban districts such as New Haven and Hartford. Teacher salaries are among the highest in the country. By contrast, under current law the state allots charters just $7,250 per student, even though most charters operate in urban districts and, unlike regular public schools, must also cover their own facility costs. | no | 0 |
Dollar Strength Stifles Gold's Rally | NEW YORK--Gold inched higher, as a rally in the dollar, a competing safe-haven asset, counterbalanced investors' flight to safety on a selloff in equities and commodities.</br></br>The dollar soared to a three-week high against the euro as European officials remain at an impasse on another rescue of Greece, forging fresh worries of a default. Investors shed the single European currency and riskier assets like stocks and commodities, seeking out safer bets like gold.</br></br>"It's a tossup between people fleeing from equities and putting their money into gold, and people fleeing from gold because of the dollar rally," said Jimmy Tintle, market analyst at Transworld Futures.</br></br>Gold is considered a store of value and benefits from greater investment demand when other asset classes, like equities and commodities, are doing poorly. However, demand for dollar-denominated gold eases when the dollar rallies, as it appears more expensive for holders of foreign currencies.</br></br>The contract for June delivery settled $1.80, or 0.1%, higher at $1,525.60 a troy ounce on the Comex division of the New York Mercantile Exchange. | no | 0 |
Sunday, June 21, 1981 | HE POTOMAC LOOKS different down in Virginia near where Popes Creek joins the river. More serene, wider of course, tree-fringed and offering vistas that stretch the eye. It must have looked much the same when Thomas Lee, planter, burgess and acting governor of Virginia, built Stratford Hall in the 1720s and Augustine Washington built the house, upriver a bit, where George was bom.</br></br>Û¢ Tucked away off the beaten track in Westmoreland County, these two famous plantations are ohly a little more than a couple of horns from Washington and a nice excursion into the rural countryside. Both afford a glimpse into domestic life in the early 18th century that surprises us 20th-century voyeurs. Drive onto the roads that, lead to these houses from Rte. 3E and you drive clean out of our era ÛÓ not because of the oxen and the costumed employes, but because this land was part of the beginning of America.</br></br>The Lees, of course, are as close as we come in this country to aristocracy, and the ancestral home .ia as impressive in its setting as any English castle. Stratford has had no majt.Ûª- changes since 1730. It was occupied until L822 by members of the Lee family, that remarkable line that produced two signers of the Declaration of Independence and a general of the Annies of the Confederacy. The lineage is all set forth in the re- ception center through which you pass before entering the house, and itÛªs worth a quick look; the generations do confuse. You may, however, get sidetracked looking at the family christening dress and some of the Lee jewelry, like the mourning locket, in the adjacent cases.</br></br>There are only a few actual Lee pieces among the furniture in Stratford, but everything is authentic to the period, 1630-1810. The costumed hostesses, steeped in the Lee genealogy and each wearing a necklace featuring the squirrel so prominent in the Lee coat of arms, are full of wonderful stories about life in the old house.</br></br>Surely the most touching is the one about Robert E. Lee, not yet 4, who had to leave home with his mother and younger brothers when his half-brother inherited the house. With the coach waiting in the courtyard to take them to a new home, Robert turned up missing. After an extensive search, the child was discovered crouching in the nursery, whispering goodbye to the angels embossed against the back of the fireplace. Get down on your knees and look at the angels or you will regret it. | no | 0 |
It Would Take a Lot For Fed to Raise Rates | WASHINGTON -- The U.S. economy is expanding at better than a 3% clip. The pool of workers sitting on the sidelines is evaporating. Unions finally are showing signs of life. Wage and benefit costs may be turning up. Boeing Co. can't make planes fast enough. The nation's railroads can't make timely deliveries. Business executives appear dangerously euphoric and, at least until last week, so did stock-market investors. What more will it take for Alan Greenspan to pull the interest-rate trigger?</br></br>A lot, apparently.</br></br>There is little doubt Federal Reserve officials would fall in line if Mr. Greenspan opened their Nov. 12 meeting by calling for higher rates, a step he hasn't taken since March. The published summary of the Fed's August meeting, the most recent available, is full of fretting about "the risks of rising inflation."</br></br>Other Fed officials caution that when things look too good to be true, they probably are. "The economy's performance over the last year or so-the extraordinary combination of above-trend growth, exceptionally tight labor markets, but continued low inflation-has been much more favorable than I and many others expected," Alfred Broaddus, president of the Federal Reserve Bank of Richmond, Va., said the other day. "Speaking strictly for myself, I am doubtful it can continue indefinitely."</br></br>All this is irrelevant if the stock market crashes. The Fed flooded the economy with credit after the 1987 crash and surely would do so again. | yes | 1 |
Moving the Market | Stocks fell as an initial burst of buying after the Federal Reserve's interest-rate cut wilted amid fears about the potential damage to banks such as Merrill Lynch, Citigroup and UBS from exposure to troubled bond insurers.</br></br>The turnaround was due to a combination of technical resistance and rising fears about downgrades for bond insurers, said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund. Downgrades "would be devastating" for banks, Mr. Di Mattia said.</br></br>Fitch Ratings cut its credit ratings on one closely held bond guarantor, FGIC, a major player in municipal-bond insurance. Oppenheimer warned that credit-rating downgrades at major bond insurers could generate $40 billion in write-downs at banks in 2008. Oppenheimer said the write-downs would be concentrated at Merrill, which fell $1.38, or 2.4%, to $56.09; Citigroup, which shed three cents to 27.88; and UBS, which declined 79 cents, or 1.8%, to 42.26.</br></br>Usually, shares of banks and lenders lead "rate-cut rallies," because the more favorable borrowing rates allow them to turn a greater profit when lending out those borrowings. Not this time.</br></br>Even shares of Lehman Brothers Holdings, which increased its quarterly dividend in what some saw as a show of strength as its rivals seek capital to shore up balance sheets, gained six cents to 62.59. | yes | 1 |
The Morning Brief: A Host of Issues Made in China | The Wall Street Journal Online</br></br>The Morning Brief, a look at the day's biggest news, is emailed to subscribers by 7 a.m. every business day. Sign up for the e-mail here.</br></br>Iraq may be the uber-issue of world affairs for a globe-trotting President Bush, but the U.S. relationship with China could nonetheless prove the dominant media topic at the Asia Pacific Economic Cooperation summit this week in Australia.</br></br>A host of trade and political issues were already on the bilateral agenda for two of APEC's most powerful members, but reports of an alleged Chinese cyber attack on Pentagon computers this week provided a concrete focus for the simmering tension. The Pentagon hasn't confirmed or denied reports that it suspects the Chinese military was behind the breach, but President Bush was asked in Sydney if he would bring it up with Chinese President Hu Jintao. "In terms of whether or not I'll bring this up to countries that we suspect may -- from which there may have been an attack, I may," he replied, adding that "in this instance, I don't have the intelligence at my fingertips right now." As Mr. Bush went on to say, the Sino-American relationship is complex. "Whether it be this issue, or issues like intellectual property rights, I mean, if you have a relationship with a country, then you've got to respect the country's systems and knowledge base," he said. "And that's what we expect from people with whom we trade."</br></br>From Beijing, Washington wants more consumption of American goods, more social support for a middle class, and looser currency restrictions that could help reduce the huge U.S. trade deficit, as Mr. Bush reiterated. The president said that, as usual, he'd express concerns over imprisoned political dissidents, the Chinese treatment of Tibet and Beijing's support for Sudan over Darfur. "It's best to be able to discuss these issues in an environment that is frank and open and friendly, as opposed to one in which there's tension and suspicion," Mr. Bush said. "And so when I say we've got great relations, I will sit down with the President and have a good honest, candid discussion, and he's going to tell me what's on his mind and I'm darned sure going to tell him what's on my mind." | no | 0 |
Year's Surprising Rise Runs To 6th Week: Profit Taking Causes Entry of New Leaders | NEW YORK, March 14 (AP)ÛÓThe amazing 1964 stock' market rise strung out its list of weekly advances to six straight this week. ---------------------</br></br>But the advance, again, was irregular. As profits were taken on previously strong groups, other sections of the list moved in to the spotlight.</br></br>Û¢Analysts who.expected the market to sell off when the Dow-Jones Industrial average reached the ÛÏmagicÛ 800 level] saw the indicator rise 10.19 this week to a new closing peak of 816.22.</br></br>It was a substantial gain but the over-all market showed only a moderate margin of gainers over losers, the score being 778 to 562 among the 1509 issues traded.</br></br>Volume swelled to 28,204,421 shares from 26,048,470 the previous week. It was the largest since the week ended Jan. 18 when 30.6 million shares changed hands. | yes | 1 |
Brimmer: Empnusis on Money Supply Dangerous | (The (nlloicinci is enrolled from 'I'\ dcral Reset no Governor Brimmer's speech Pec. 27 to the American Economic Association at New Orleans)</br></br>I conclude that, the years of debate over the best way to conduct monetary policy in the United States have been productive. The Federal Reserve has learned a great deal about monetary management, and it is in a much better position to perform its duties.</br></br>There remains the question of my own attitude to the issues in the controversy. Of course, let me say immediately that 1 recognize that an excessive growth of bank credit .and the money supply does facilitate the propagation of inflation.</br></br>Rut 1 am convinced that it would bo a disastrous error for the Fcdcrnl Reserve to try to conduct monetary pol- icy on the basis of a fow simple rules governing the rate of expansion of the money supply. In the first place, 1 find serious deficiencies in the theoretical and empirical analysis on the basis of which the monetarists reach their conclusions and policy recommendations.</br></br>Put quite simply, they have not demonstrated convincingly that the relationship between the money supply and economic activity is especially close. Or, more importantly, they have not convincingly shown that money is more a cause than it is an effect of economic activity. While fluctuations in monetary conditions have undoubtedly contributed to economic instability on some occasions in the past, non-financial factors (such as wars, variations in the rate of business investment, and changes in consumer spend-ing/savings behnvior) have also been a principal source of fluctuations in output and employment. | no | 0 |
Nobels and National Greatness | In its proud and storied history, Hungary has produced a dozen winners of the Nobel Prize: four for chemistry; three for physics; three for medicine; one for economics; and one for literature. Not bad for a little country of not quite 10 million people.</br></br>But one curious fact: All of Hungary's laureates ultimately left, or fled, the country. If you are brilliant, ambitious and Hungarian, better get out while you can.</br></br>I've spent the past week reading up on the Nobels, mostly to relieve the gloom emanating from Congress, the White House, the State Department, the GOP caucus. It's paralysis time in D.C., and America-in-Decline time on the op-ed pages. Reflecting the global mood, Xinhua, the Chinese news agency, editorialized last week that, with a possible U.S. default on the horizon, "it is perhaps a good time for the befuddled world to start considering building a de-Americanized world."</br></br>But then there is the Nobel Prize, and the fact that Americans, both native-born and immigrants, took home nine of them this year alone. Note to Xinhua: China, with 1.3 billion people, has produced a grand total of nine winners in its entire history. Of those nine, seven live abroad, including three in the U.S. Another, Liu Xiaobo, sits in a Chinese prison.</br></br>How is national greatness best judged? The typical view is that what matters is size: Size of the economy, population, landmass, navy, nuclear arsenal. Hence the hysteria that China may overtake the U.S. in terms of GDP sometime in the next decade. Hence the treatment of middling powers such as Russia (with a GDP roughly that of Italy's) as great powers. | no | 0 |
Rails Attempt Late Rally | NEW YORK, March 21 wnÛÓThe stock market was depressed today by profit-taking in the recently strong blue chips.</br></br>The general decline took prices down 1 to around 3 points. There werenÛªt many good gainers. Most sizable rises were accounted for by corporate news or Wall Street rumors.</br></br>The market started lower and continued down throughout the session. Steels, coppers and aircrafts faced early selling which eventually took in just about every segment of the list.</br></br>Near the close, the railroads tried for a rally based on some excellent earnings reports for individual roads. The move didnÛªt get very far, but the rails as a group-were down only a shade.</br></br>The market has been making one new record high after another, and today's backward step was looked upon as a natural breather in the climb upward. | no | 0 |
Article 1 ÛÓ No Title | The House Banking Coni' mittee yesterday approved a 251-million-doIlar program for Federal loans and grants to help out economically de pressed areas with serious un employment.</br></br>The bill, called a> fraud and a boondoggle by committee Republicans, was approved 13-6 with six members not voting. It was explained that the six abstainers felt the bill did not measure up to their ideas.</br></br>The House measure it less than the 38ftmillion-dollar program voted by the Senate, but it far exceeds the 53-million-dollar loan aid program advocated by President Eisenhower.</br></br>Rep. Brent Spence (D-Ky.l, chairman of the Banking Committee, said he would seek prompt action by the House</br></br>The program is certain, however, to run into trouble with the Rules group, which already is sitting on housing legislation. Republicans and conservative Southern Democrats on the Rules group are openly opposed to further large-scale spending. | no | 0 |
July Home Sales Set Record; But Some Experts Say Surge Marks Boom's 'Last Hurrah' | Sales of existing homes around the country soared to a new record in July as buyers rushed to take advantage of historically low interest rates. But some economists said the frenzy signaled the peak of the bull housing market.</br></br>"This is the last hurrah for housing," said David A. Lereah, chief economist of the National Association of Realtors, a trade group that compiles the monthly home resale numbers that were released yesterday. "When we look back to this July, we'll say, 'Housing peaked then.' "</br></br>The Realtor group said sales of existing homes shot up 5 percent in July to an annualized 6.12 million units -- an all-time high -- from 5.83 million units in June. The national median existing home price -- $182,000 -- was up 12.1 percent in July from the same month of 2002.</br></br>The July sales reflect the steep drop in interest rates on mortgages in June -- when rates were at their lowest levels in decades -- because the sale of an existing home is recorded only when a property has gone to settlement. Buyers settling in July would typically have entered into a purchase contract in May or June.</br></br>And the fact that interest rates have jumped more than a percentage point since their June lows is what's prompting economists to warn that a softening in the housing market may be inevitable. | no | 0 |
Businesswoman Sentenced; Founder of Chinese Conglomerate Gets One-Month Prison Term in Tax Case | WASHINGTON--Loretta Fredy Bush, once an American success story in China, was sentenced Monday to one month in prison for a U.S. tax violation after her lawyer cited health problems in pleading for lenience.</br></br>Ms. Bush, a founder and former chief executive of Chinese financial-information conglomerate Xinhua Finance, had sought to avoid prison time and appeared visibly upset when leaving the courtroom.</br></br>Two associates were each sentenced Monday to nine months in prison. Prosecutors had been seeking sentences of between six and 12 months for each of the defendants. All three were fined $20,000 each.</br></br>"This kind of behavior is not who I am," Ms. Bush told U.S. District Judge Royce Lamberth.</br></br>Judge Lamberth suggested that letting Ms. Bush and the others go without prison sentences would send the wrong public message about the consequences of violating U.S. tax laws. "It's a serious problem," he said. Court submissions from Ms. Bush's defense team portray a woman who has largely withdrawn from the business world since mid-2010. At that time, Ms. Bush had a grandson born with "daunting medical problems" and she provides daily care for the child, lawyers said. They said Ms. Bush, who now lives in the San Francisco Bay Area, also had encountered serious vision problems that impaired her ability to read and travel. | no | 0 |
Market Is Pounded; Dow Plunges 16.85 | NEW YORK, Fob. 14 fAP) ÛÓ Stock market prices took a pounding today as investors apparently lost their enthusiasm over efforts to resolve international monetary troubles.</br></br>The Dow Jones average of 30 industrial stocks plunged 1685 points, declining steadily throughout the day to a 979.91 close. Declining issues far outpaced gainers, 1.202 to 306. among the 1.807 issues traded on the New York Stock Exchange.</br></br>The Amex price-change index fell .14 to 25 47, while losers topped winners by 646 to 263 among the 1.185 Amex issues traded. Volume sank to 2.96 million shares, versus 4.45 million Tuesday.</br></br>In Over-the-Counter trading, the NASDAQ composite index fell 1.77 to 125.42, while the industrial index dropped 1.56 to 124.41.</br></br>CN'A Financial was the Big BoardÛªs volume leader today, losing 54 to 16% after a giant 911.400-share block changed hands at 16Vi. It was the 15th-largest block transaction ever recorded at the exchange. | yes | 1 |
Futures Markets: Foreign Currencies Fall as Traders Take Profit on Dollar Decline | Foreign-currency futures plunged as traders took profits on last week's steep decline in the dollar.</br></br>The anticipation of higher U.S. interest rates encouraged selling in foreign currencies. Yesterday the Federal Reserve Board released a report indicating that it plans to keep a tight rein on credit this year. Rising interest rates tend to strengthen the dollar.</br></br>The same news pushed interest-rate futures sharply lower. The strengthening dollar depressed precious metals futures and sent prices for grains and soybeans lower, in anticipation that a strong dollar would continue to hamper farm exports.</br></br>Political unrest in Lebanon, where the resignation of the Lebanese cabinet Sunday seemed to threaten the government of Lebanese President Amin Gemayel, also encouraged a retreat from foreign currencies to the dollar as a safe-haven investment, an analyst said.</br></br>Many traders still think the dollar is overvalued. But it may not be clear for several days whether last week's plunge in the dollar was a signal of a continuing dollar decline, or merely a technical correction, analysts said. | yes | 1 |
Canadian Firms, Hard Hit by Recession, Post 61% Decline in First-Quarter Profit | TORONTO -- Canadian corporate profits were skimpy again in the first quarter, but most economists believe their long decline will bottom out later this year.</br></br>It's about time. The latest period was the seventh consecutive quarter in which profits of early-reporting Canadian companies have slid below year-earlier levels. They were pushed down by a recession that started earlier and hit harder than the slowdown in the U.S.</br></br>First-quarter net income of 162 companies surveyed by The Wall Street Journal fell 61% to 803 million Canadian dollars (US$699 million) from C$2.07 billion a year earlier. More than a third of the companies reported losses. Declines were spread across most industries. Canadian Pacific Ltd., the big holding company that's often seen as a proxy for the Canadian economy, reported its worst quarter since 1986. It lost C$5.3 million against a year-earlier profit of C$76.2 million.</br></br>Combined results for the period were better than in the preceding quarter, when the same 162 companies reported a C$56 million loss. But the losses were inflated by a round of year-end write-offs. Steel maker Dofasco Inc., for instance, wrote off C$713 million in last year's fourth quarter.</br></br>The Canadian recession began in the second quarter of 1990. Since then, the unemployment rate has risen to 10.5%. Bankruptcies in this year's first quarter were up 63% from a year earlier. Along with weak domestic demand, business has been burdened by higher-than-U.S. interest rates and exporters by a strong Canadian dollar. | no | 0 |
GM May End Pension Deficit | General Motors, whose $19.3 billion pension deficit was the biggest in the United States last year, may eliminate the shortfall by the end of the year because of rising stock markets, higher contributions and an asset sale, a company spokeswoman said. The Detroit-based carmaker contributed $14.4 billion to its pension funds in 2003 and will add $4 billion more if the sale of its stake in Hughes Electronics to News Corp. is completed this year, the spokeswoman said.</br></br>Scott H. Miller, the former senior vice president of finance at Las Vegas software firm PurchasePro, was sentenced in federal court in Alexandria to 10 days in prison, three years of probation and 150 hours of community service. Miller, who pleaded guilty in September to impeding a federal criminal probe into deals involving PurchasePro and America Online, is cooperating with the ongoing investigation of AOL.</br></br>The Brotherhood of Locomotive Engineers, representing 36,000 engineers at Union Pacific and other North American railroads, approved a merger with the Teamsters. The engineers join a 1.4 million-member, Washington-based union that also includes truck drivers, dockworkers and airline employees.</br></br>U.S. consumer debt increased in October at its slowest pace in four months, restrained by a decline in borrowing for vehicle purchases, Federal Reserve statistics showed. Borrowing through credit cards, auto loans and other non-mortgage personal debt increased $941 million, or 0.6 percent, to $1.977 trillion, the Fed said. In September, consumer credit rose a revised $17 billion, the largest increase since January.</br></br>Smithfield Foods, the nation's largest hog producer and pork processor, is being sued for fraud and breach of contract by a company it took over earlier this year. Pennexx Foods is seeking $226 million in compensatory damages and other unspecified punitive damages for Virginia-based Smithfield's actions leading up to the June takeover. Smithfield, which previously owned 41 percent of Pennexx, seized Pennexx's assets after it could not pay back $11.9 million in loans. | no | 0 |
Indicators Signal Start Of Upturn: 3.6 Percent Surge In Month Biggest... | The index of leading economic indicators shot up 3.6 percent in January, the largest increase since 1950, unmistakably signaling that a recovery from the recession is under way.</br></br>President Reagan said the indicators, which usually foreshadow changes in the economy, ÛÏflashed a bright green light for recovery.Û</br></br>Most economic forecasters saw the large gain as validating their increasingly optimistic predictions of how fast the recoveryÛªs pace will be this year. With the prospect of further large declines in oil prices, many forecasters have raised their estimates of real growth this year by about a percentage point while lowering their inflation predictions by a similar amount.</br></br>Martin S. Feldstein, chairman of the presidentÛªs Council of Economic Advisers, said recent economic statistics have convinced him that the recession hit bottom in December and that January was the first month of the recovery.</br></br>Nevertheless, he noted that part of the big jump in the leading indicators was due to a large increase in the nationÛªs money supply in January, which was related more to the advent of the popular money market deposit accounts than to any change in monetary policy. | no | 0 |
Mortgage Loan Rates Fall to 7.4: 18-Month Low for Region Likely to Spur Refinances | 7.4 percent in the Washington area this week, their lowest level in 18 months, and lending experts said they expect rates to remain at or below 8 percent for the rest of the year.</br></br>ÛÏMortgage applications are running pretty high now, which tells me we'll continue to have a healthy mortgage market through the summer and into the fall," said David Lereah, chief economist at the Mortgage Bankers Association of America, a trade group.</br></br>ÛÏMy near-term forecast [nationally] is for rates to range between 7.25 and 7.75 in August and September," he said. ?My longterm forecast is to expect rates to move between 7.75 and 8 from October through December."</br></br>Because of competition among lenders here, rates traditionally have been slightly lower in the Washington area. They have reached the lowest level since February 1996, when the average was 7.17 percent, according to HSH Associates of Butler, N.J., which conducts weekly surveys of 2,500 lenders throughout the United States. During the past 18 months, rates here have hugged 8 percent, with a peak at 8.33 percent in June 1996.</br></br>Across the nation the average rate is 7.6 percent, generated by a wave of bright economic news, strong housing sales and vibrant consumer confidence, HSH said. This also is the lowest rate since February 1996, when it reached 7.33 percent. | no | 0 |
Market Gains Wipe Out Previous Week's Loss | NEW YORK (AP)ÛÓThe stock market posted a solid gain yesterday responding to news on the money-supply that suggested a possible improvement in the outlook for interest rates and inflation.</br></br>The Dow Jones average of 30 industrials rose 6.84 to 847.54. stretching its gain for the week to 15.85 points.</br></br>The pace of trading picked up as the market moved ahead. The dayÛªs volume on the New York Stock Exchange came to 31.86 million shares, against 28.75 million in the previous session.</br></br>The Fed has been attempting to curb inflation by pushing up shortterm interest rates in order to discourage rapid monetary growth.</br></br>Brokers said the latest figures heightened hopes that the effort was succeeding, and that the Fed might not feel the need to push interest rates much higher. | no | 0 |
Profit Survey...Job Creation The Boss's Pay...R&D Work | THERE'S NO SHORTAGE of surveys that regularly ask small-business owners everything from their opinions of the government to the state of their inventories. A recently released poll comes from the Small Business Service Bureau Inc., which calls itself a "hybrid" organization. Based in Worcester, Mass., with a national membership of 35,000, it sells consulting and other services to small companies but also lobbies and conducts surveys.</br></br>Its latest report is upbeat. Of about 1,600 companies responding to a survey in the first quarter this year, about 29% reported an increase in earnings from the year before. That compares favorably with 17% reporting a profit rise a year earlier and only 5.5% the year before that.</br></br>The other side is that fewer businesses reported earnings declines this year. About 38% reported a profit drop in the first quarter this year, compared with 49% in 1983.</br></br>In each of the past four years, taxes have been at the top of the list of the owners' worst problems. However, payroll taxes have been the No. 1 problem the past two years, having pushed business-income taxes down to No. 2. Unemployment compensation levies have been listed as the third most-troubling tax mentioned in all four years.</br></br>--- | yes | 1 |
Options Traders Take Wait-and-See Approach Ahead of Several Events Set for This Week | NEW YORK -- A mild sense of optimism emerged in the options market as the stock market rallied.</br></br>But traders didn't make any major commitments ahead of this week's reports that will help Wall Street gauge the health of the U.S. economy, Federal Reserve Board Chairman Alan Greenspan's testimony before a congressional committee, and expiration of September options contracts on Friday.</br></br>What activity there was in the options market was premised on trading options in anticipation that the underlying stocks would move in a specific direction, a senior trader at a major New York securities firm said.</br></br>Bargain hunters, which have maintained a constant presence in the options market, were active in sectors that have been ravaged, including technology, oil, bank and financial companies.</br></br>"People are getting back in the market in all different ways. People are re-establishing their general patterns of behavior," said Leon Gross, Salomon Smith Barney's institutional options strategist. | yes | 1 |
The Market's Frame of Mind | To the market's surprise the most recent Federal Open Market Committee statement didn't even hint at the threats implicit in the rise in commodity prices, especially oil, or the dollar's fall. These events have lowered the threat of deflation to virtually zero, but the Fed insists that deflation is still a slightly higher risk than inflation. Is the Fed keeping its head in the sand? Is Alan Greenspan bowing to George Bush and the upcoming election? Even before the Fed meeting, an increasing number of commentators insisted the Fed is too easy. Now such criticism has reached a crescendo.</br></br>On the surface, the censure seems justified. Commodity prices are rapidly increasing; the Commodity Research Bureau index of actively traded commodities is now at a level not seen since the inflation bubble of 1980. Oil stays stubbornly high, near $40 per barrel, and the Journal of Commerce Index of lightly processed commodities, once a favorite Greenspan indicator, has soared to an all-time high. And although the dollar has stabilized, it is down 25% against a basket of currencies since early 2002. Finally, the real Fed funds rate has been negative for two years and relative to real economic growth, the most negative since the inflationary '70s.</br></br>But there are good responses to these points. The rising commodity prices are due to China, which is churning out lower priced goods that keep inflation in check. The dollar has indeed dropped, but two years ago economists were saying it was too high. Today it's at, or just below, its purchasing power parity level, consistent with the persistent current account deficit. Furthermore, the smart money in the oil futures market says that the price is coming down sharply. And there is also a good response to the low real rates, a key variable in the critics' argument. Inflation hawks have maintained that by keeping the after-inflation cost of money negative, the Fed is feeding the fires of future inflation.</br></br>But if monetary policy were really too accommodating, wouldn't we see rising interest rates in the bond market? Yet with the 10-year bond yield under 4%, we see no such concern. Are those calling for higher rates saying that the bond vigilantes -- who have kept government and the Fed honest by pushing bond prices lower when the Fed's action has been inflationary -- are flat out wrong? That would be a sharp reversal from the past when the bond market was routinely praised for warning errant governments of monetary and fiscal profligacy.</br></br>With the 10-year indexed bond yielding a record-low 1.4%, a zero or even negative real Fed funds rate -- what we have now -- looks about right. If the Fed raised short-term rates, it would risk flattening or inverting the yield curve, something very dangerous early in a recovery. | yes | 1 |
Supply-Sider Roberts Hits Congress | Paul Craig Roberts, assistant secretary of the Treasury for economic policy and a leading ÛÏsupply sidorÛ in the Reagan administration, yesterday blamed Congress for creating the current recession.</br></br>ÛÏCongress, panicked by the press, delayed the tax cut and produced a recession,Û Roberts said in an interview.</br></br>If the House and Senate ÛÏgo out and raise taxes now, thereÛªs not going to lie any recoveryÛ from the recession, he said.</br></br>Roberts was referring to the fact that the original Reagan, administration plan for cutting taxes has been modified twice since the administration took office. First the White House agreed to postpone a sought-for LO percent across-the-board tax decrease from Jan. I to July 1 of this year, and later to reduce it to 5 percent effective Oct. L. Though ail these</br></br>As for additional tax increases in the future to close anticipated budget deficits, Roberts said ÛÏright now probably every economist in the country is on our sideÛ in opposing tax increases for fiscal 1982 or 1983. ÛÏI donÛªt know an economist who wants to raise taxes,Û he added. | yes | 1 |
Corporate Scandals Taking Toll On Markets | A major accounting firm convicted of obstructing justice. A leading brokerage caught misleading its clients. Imperious chief executives falling like flies. Huge corporations tumbling into bankruptcy. Business pages that read like the crime blotter.</br></br>Now, according to economists and market analysts, these still- unfolding corporate and accounting scandals have begun to weigh heavily on the stock market, the dollar and the U.S. economy. And the effects are likely to linger at least through the end of the year.</br></br>Just last night, WorldCom Inc. fired two executives and announced that it had mischaracterized expenses for more than a year, wiping out at least $1.6 billion in reported profits. Its shares, already below $1, plunged as low as 26 cents in after-hours trading.</br></br>"The economy and markets right now are in the midst of a full- blown corporate governance shock," said Stephen Roach, chief economist and resident pessimist at Morgan Stanley. "To presume somehow that it's over or the worst is behind us is naive."</br></br>Yesterday, the tech-laden Nasdaq composite and the much broader Standard & Poor's 500-stock indexes closed the day just a whisker above their low points after the Sept. 11 terrorist attacks, effectively wiping out the gains from last winter's rally. Analysts said the reversal reflects a growing skepticism among investors about the accuracy of corporate financial reports. | no | 0 |
SB A Counsel Hopes To Ease Tax Impact: The Small Business Tax Impact | Inflation, taxes and government regulation are the biggest problems faced by small businessmen, according to Milton Stewart, who will be sworn in today as the first chief counsel for advocacy of the Small Business Administration.</br></br>In his role as advocate for the nationÛªs small businessmen, Stewart hopes to make the tax structure more favorable to investment in small business, he said in an interview yesterday.</br></br>The ÛÏcumulative impactÛ of all taxes on a small business puts them at an ÛÏinequitable disadvantage. Very serious questions can be properly raised, and we intend to raise them, as to whether (existing tax laws) leave people enough incentives ... to enter small business,Û he added.</br></br>the new SBA post was endorsed by hi ore than 100 small business groups but he came under fire for alleged technical violations of federal securities laws while president of Creative Capital Corp.</br></br>Both the Securities and Exchange Commission and SBA found StewartÛªs firm had violated laws and, in 1974, Stewart signed a SEC consent agreement to end staff charges of violations without admitting or denying the allegations. | no | 0 |
Yasuda U.S. Accord Is Aimed at Gaining Finance Technology --- Pact for PaineWebber Stake Arose From Effort to Trap High End of the Business | TOKYO -- Yasuda Mutual Life Insurance Co.'s agreement to purchase an 18% voting stake in PaineWebber Group Inc. marks an effort by the big Japanese insurance company to tap the high end of the financial business.</br></br>The $300 million accord, announced Monday, will give Yasuda access to the "financial high technology" that so many Japanese financial companies are obsessed with these days. "We need their technology," said Kyosaku Sorimachi, managing director of Yasuda. "We need to train our people through PaineWebber, to get their know-how." Mr. Sorimachi said that the accord allows Yasuda to send as many as 150 people through the PaineWebber organization for various kinds of instruction.</br></br>The Yasuda official said that "global asset management" is very high on the list of things PaineWebber can teach. Yasuda is the fifth-largest Japanese life insurer, with $22 billion in assets. About 17% of those assets are invested abroad, in bonds, stocks, real estate and loans to non-Japanese.</br></br>PaineWebber hopes, for its part, that the association with Yasuda will help the U.S. firm's presence in Tokyo. Yasuda is an old-line, well-connected and very large organization. Yasuda could introduce PaineWebber to potential clients, steer business its way and provide insight into the working of the Tokyo markets, especially the Tokyo stock market.</br></br>Yasuda is being somewhat coy about how helpful it will be to PaineWebber beyond supplying the firm with $300 million and putting two of its own people on PaineWebber's board. (Yasuda also agreed to purchase warrants that could eventually be converted to give the Japanese company 25% ownership of the U.S. firm.) | no | 0 |
Manager's Journal: Sniffing Out Drug Abusers Is No Quick Fix | The statistics on the enormous costs of employee drug abuse are well known (at least $70 billion per year, according to December 1985 testimony before the House Labor Subcommittee on Health and Safety). Management is under pressure to reduce productivity losses, turnover, insurance costs and the risk of lawsuits for personal and property damage caused by drug-impaired workers. Management also is under sales pressure from a growing cadre of laboratories, test-kit manufacturers and consultants who extol the virtues of testing. A common argument is the following: "Your competitors are starting to require drug tests. If you don't, their work force will be clean and you will end up with all the junkies."</br></br>Many companies that have implemented widespread drug-testing programs, however, have learned that there is a downside to testing. They have experienced the protests of employees and civil libertarians and have watched the proliferation of lawsuits alleging invasion of privacy, defamation and other legal theories. A Texas railroad employee was awarded $200,000 in damages when his employer misreported the results of a drug test. Numerous other cases are pending.</br></br>Is there a middle ground? Can safety and efficiency be protected without invading the privacy of applicants and employees?</br></br>A growing number of companies have concluded that drug testing should be the least important part of a comprehensive drug-abuse program. The starting point is a drug-awareness program to educate managers, supervisors and employees about the dangers and signs of drug abuse. The second part of the program is an effective employee-assistance program (EAP). Rehabilitation is preferable to punishment or dismissal (at least for initial or nonserious offenses) because it encourages employees to seek help voluntarily, improves labor relations and is cost-effective by restoring valuable employees to productive status. More than one company that heedlessly adopted a "screen and fire" policy on drugs had second thoughts after discovering traces of drugs in some of their most productive employees.</br></br>There may be a place for drug testing in a company's drug-abuse program, but there are limits to the effectiveness of testing. To begin with, the accuracy of some drug tests varies widely, and the test results are often unacceptable even when performed by professional laboratories. Last year the Centers for Disease Control published the results of a 10-year study of laboratory testing for amphetamines, barbiturates, cocaine, codeine, methadone and morphine. Virtually all of the laboratories in the study had unacceptably high error rates. | no | 0 |
Pricey Jeans Give Hanmi CEO Leg-Up to the Top Rank of Forecasters | Sung Won Sohn can thank a pair of $250 denim jeans for his top place in The Wall Street Journal's annual U.S. economic-forecasting rankings.</br></br>Earlier in the year Mr. Sohn, economist and chief executive of Hanmi Financial Corp. in Los Angeles, was visiting a California jeans producer whose executives told him they couldn't keep up with demand for high-priced clothing. He figured "there must be money out there if people are willing to pay that much" for bluejeans. The insight -- along with reports from other clients that costs were rising -- led Mr. Sohn, 61 years old, to increase his 2005 projection for inflation and to stick with his call for healthy economic growth in the U.S.</br></br>The resulting prediction of growth of about 3.8% for the first three quarters and above-trend inflation of about 3.6% left him ahead of the pack when the results were tabulated. U.S. gross domestic product expanded, on average, at a 3.7% annual rate during the first nine months, and, as of November, the consumer-price index was up 3.5% from a year earlier. Most other economists had forecast lower inflation and a little less growth in 2005. (Preliminary estimates of fourth-quarter growth are slated for later in January.)</br></br>Also among the most accurate were J. Dewey Daane, a retired professor at Vanderbilt University in Nashville, Tennessee; Mickey Levy, chief economist at Bank of America in New York; Gail Fosler, chief economist with the Conference Board in New York; and Maria Fiorini Ramirez of MFR Inc., an economic-consulting firm in New York. All five had above-average inflation forecasts, and three of the five had above-average growth forecasts.</br></br>Many forecasters rely on econometric models to come up with forecasts for economic growth, inflation, interest rates and exchange rates. Mr. Sohn finds a little intuition comes in handy, too. "I talk to people on the ground," he says. | yes | 1 |
Bids & Offers | [Inside the World of Corporate Finance & Wall Street]</br></br>Plus ca Change</br></br>The odd man out at the Chicago Board of Trade this week is someone quite familiar.</br></br>In the futures exchange's board elections Wednesday, longtime member George P. Hanley lost a three-man race to fill two director seats. In the weeks leading up to the balloting, Mr. Hanley had become embroiled in controversy over unspecified trading incentives that his firm, Infinium Capital Management, receives from a CBOT competitor, the all- electronic Eurex US market.</br></br>Speaking after losing the board race, Mr. Hanley said he believed most voters recognized exchange incentives and trading in multiple venues as standard practices in the futures industry. Still, his chances were hurt by many members' generalized fear of the rapid evolution of futures markets, especially electronic trading platforms that rival CBOT's trading floor, he added. | no | 0 |
H4 . Sunday, January 4, 1981 THE WASHINGTON POST | slowest states are judged by their expected future, growth- BEA predicts the slowest 10 states will grow about $69 billion more in constant 1972 dollars than the 10 fastest growers. The 10 slow growers will account for 28 percent of the nationÛªs projected growth.</br></br>The slow group will grow more than the fast group because the slow states are bigger. Compare the total personal incomes of each group. In 1978 the slow 10 earned $432 billion compared to $173 billion for the fast 10. By the year 2000 the difference is supposed to jump to $772 billion for the. plodding tortoises versus $439 billion for the hares.</br></br>If BEA data is correct, most other northern industrial states will parallel the growth of the tortoises. The Frostbelt is not expected to grow as fast as the Sunbelt, but that is precisely because most northern states are larger, and they are growing larger still. Apparently reports of the FrostbeltÛªs imminent demise have been grossly exaggerated.</br></br>Similarly, the rise of the New South has been exaggerated. The Sunbelt is growing at a rapid rate that makes it appear to be growing more than it actually is. With two important exceptions, southern states have generally smaller total personal incomes, and consequently faster growth rates.</br></br>great gains in absolute growth as well as fast growth rates. Together they will account for 60 percent of the anticipated growth among the 10 fastest-growing states. They also rank second and third, just behind California, among the nationÛªs top 10 growers. | no | 0 |
Eije fttosljingtmt post | Treasury Secretary G. William Miller last night urged Congress to approve funding for several international financial organizations, including the World Bank and International Monetary Fund, because it ÛÏis in our basic self-interest.Û</br></br>Treasury Secretary G. William Miller last night urged Congress to approve funding for several international financial organizations, including the World Bank and International Monetary Fund, because it ÛÏis in our basic self-interest.Û ÛÏThese institutions are the center-piece of our efforts to restore stability and growth to a troubled world economy, strengthening the foundations for broad political cooperation,Û Miller said in a speech to the Chicago Council of Foreign Relations. A text of the speech was releasedÛª here.</br></br>ÛÏIn hard times, such as we are experiencing iiow, there is always a temptation to retrench, to cut back on our ^bpport for international organiza-ÐÊjadns that seem to have no domestic constituency,Û he declared.</br></br>A congressional conference committee is expected to meet today to try to find a way out of an impasse over funds for the International Development Association, the part of the World Bank that lends to the poorest nations charging little or no interest.</br></br>The House of Representatives twice 1 has rejected an administration-backed bill that would authorize a $3.24 billion increase in U.S. commitments to IDA. However, only 27 percent of that amount would actually be paid out over an 8-to-10-year period, a high Treasury official noted. The remainder would be ÛÏcallable capitalÛ and be used only in the remote event of massive defaults on loans. | no | 0 |
APPOINTMENTS | The Computer and Business Equipment Manufacturers Association recently elected several new board members. Howard G. Figueroa, a vice president with International Business Machines Corp., was named chairman of the Washington-based organization. Albert E. Mullin Jr., a vice president of Digital Equipment Corp., was named vice chairman, and Donald E. Riley, a Xerox Corp. executive, will serve as chairman of CBEMA's plans and programs committee.</br></br>The Association of American Medical Colleges in Washington appointed Joan Hartman Moore to the newly created position of director of education.</br></br>The Washington-based National Association of Federal Credit Unions named Steven A. Skonberg director of legislative affairs and Lisa E. Lotter director of regulatory affairs.</br></br>Lucien Capone Jr. has been elected chairman of the Washington-based National Association for Uniformed Services.</br></br>Joseph R. Lagomarcino, Julie S. Miller and J. David Richardson have been promoted to group vice presidents in the corporate banking division of First American Bank of Washington. | no | 0 |
Market Dips 2.26 After Early Drop Of Nearly 7 Points | NEW YORK, Jan. 19 (AP)ÛÓ Stock market prices edged lower today after erasing most of a sharp earlier loss.</br></br>The Dow Jones average of 30 industrials closed down 2.26 at 914.96. Around midsession, the blue-chip indicator had been off nearly 7 points.</br></br>Analysts said the mild sell-off was almost entirely the result of profit taking. This dried up towards the end of the day, though, showing the marketÛªs strong bullish undertone, they declared.</br></br>There was little in the immediate news background to stimulate the market in one direction or the other, brokers noted, and the governing Influences were technical. Since late November the market has risen sharply, with no major downward adjustment.</br></br>I Jim Walter fell V.i to 39%, ;with trading paced by a 146,-; 000 share block at 39, down %. I General Electric gained Va to 64. A 100,000-share block I changed hands at this price .late in the day. | no | 0 |
Inflation and Housing | OF THE BASIC necessities of lifeÛÓfood, fuel, [housing ÛÓit is in 'housing that the current inflation is having its most destructive effects. The enormous increases in food prices at least seem to he expanding food production. The increases in fuel prices at least are enforcing a certain healthy degree of conservation, and push us to develop stable and secure new sources of energy. But the inflationÛªs effect on our housing supply is pure and unrelieved damage.</br></br>The administration is relying on unprecedentedly high interest rates as its chief weapon against inflation. The high rates in turn make the housing inflation worse, because they force down the rate at which new houses are built. The administration is aware of this danger, and that is why it announced 10 days ago a series of measures that might put as much as $10 billion into the mortgage . market. But while that gesture will be modestly helpful, it will have no very dramatic impact at a time when inter-; est rates are the highest in our history and still climbing. The administration often talks as if housing construction were important mainly to keep up the Gross National Product and employment. To the contrary, it is important mainly because it determines the degree of crowding in which our children will be living for many years into the future.</br></br>Keep in mind that this is the decade when the postwar baby boom enters adulthood. How much new housing is enough? Through the 1960s new homes were built at a rate of about 1.4 million a year. Construction rose to 2.4 million homes in the record year of 1972, and was over 2 million last year. Currently it is down to a rate of about 1.6 million a year. That is more than the average for the 1960s, but it is not nearly enough for the 1970s. In the 1960s, the number of Americans turning 21 averaged about 2.8 million a year. In the 1970s, it will be about 3.8 million a yearÛÓa full million a year more.</br></br>In the Washington metropolitan area, there is a special factor at work that makes housing costs here climb even faster than in most other parts of the country. The three big suburban counties ÛÓ Montgomery, Prince GeorgeÛªs -and FairfaxÛÓare all deliberately cutting back the rate at y-which new housing can be built for our growing popula-Û¢ tion. In Montgomery and Prince GeorgeÛªs, the state of [Maryland has imposed sewer moratoriums that the local ^authorities seem in no great hurry to overcome. Fairfax tisi explicitly trying to work out a low-growth planning policy.</br></br>-ÐÊ The number of building permits issued in the metropolitan area, in the first three months of this year, was less than half as many as a year ago. This formidable drop is, so far, chiefly the result of the high interest .rates. But as time goes on and the backlogs of approved building projects decline, the moratoriums and other legal curbs will 'hold construction levels do\vn regardless of mortgage costs. The politics of low growth is, at the moment, popular among suburban voters, most of whom own their homes. Low growth, they assume, means lower tax rates and faster appreciation of the value of existing houses. Perhaps that is true, but there are other consequences as well. | no | 0 |
Shepherd Park: Activism Working Within Tradition | When some real estate speculators were cashing in on racial fears in the late 1950s, some Shepherd Park residents took the lead in fighting block-busting tactics and tried to make fair housing the rule.</br></br>Recently, when Wendy's proposed putting one of its fast-food outlet in the area's business district, Shepherd Park residents convinced it to think again, and prevailed on the D.C. Council to build a library there instead.</br></br>And after bars with nude dancers began to proliferate on upper Georgia Avenue, Shepherd Park residents pressured the city's liquor board to crack down and helped push through a liquor licensing law that gives voters a say over who sells alcohol. "I think it's fair to say that the Shepherd Park community is one that defends its own rights to live in a safe and culturally enriched environment," said D.C. Council member</br></br>Charlene Drew Jarvis (D-At Large), who lives in the nearby neighborhood of Portal Estates. If Shepherd Park residents occasionally seem to have their dander up, it's because they are protective of their cohesive</br></br>sense of traditional, and some not-so-traditional, values. Behind the facades of brick colonial-style houses, most of which were built before World War II, lives a largely integrated community of some of the city's most highly educated and civically active people. Marriage, family, education, racial equality-these are no mere buzzwords in Shepherd Park. They shape a collective point of view that does not treat lightly intrusions from the outside. "Everyone does what he can to keep the community the way it has been for a number of years," said longtime resident Juanita Thornton. | no | 0 |
BMW Officer Seeks `Concrete Results' At Ailing Rover | FRANKFURT -- Bayerische Motoren Werke AG "must reach concrete results this spring" in efforts to restructure its ailing Rover unit, BMW's new chairman, Joachim Milberg, said.</br></br>BMW's turnaround team already recommended to the board measures to integrate and improve Rover's business, Mr. Milberg said in an interview with "Die BMW Zeitung," an internal BMW publication. Steps are being taken to "bring Rover to the necessary efficiency and productivity level," he said. "As said before, all these steps can't be discussed furtherthey need urgently to be implemented."</br></br>Mr. Milberg said investment and workflexibility programs under way at Rover "are just the start of a row of measures," adding that BMW will "do everything" to deliver the Rover 75 model "at a BMW-quality level."</br></br>Speculation surfaced last week that details of additional restructuring at Rover, of Britain, would come at the group's annual shareholders' meeting May 18. BMW's supervisory board is set to meet March 18.</br></br>Less than two weeks ago, Mr. Milberg succeeded as chairman Bernd Pischetsrieder, who stepped down from the post amid sharp criticism of problems and financial losses at Rover. Mr. Milberg previously was BMW's board member in charge of engineering and production. | no | 0 |
Small-Stock Focus: Nasdaq Posts Steepest Gains of Major Indexes; Vivus Sees Its Share Price More Than Double | Corrections & Amplifications</br></br>O'SULLIVAN INDUSTRIES HOLDINGS Inc. said it expects earnings for the fiscal third quarter ending March 31 will be up more than 70% from a year earlier. Yesterday's Small Stock Focus incorrectly stated that the company expects earnings to be up 24%. (WSJ Mar. 10, 1999)</br></br>NEW YORK -- Small-capitalization stocks rose moderately, outpacing most broad-market and blue-chip measures.</br></br>A notable exception, however, was the overall Nasdaq market, which was sharply higher and posted the steepest gains of the major stock-market indexes.</br></br>The overall Nasdaq market outperformed the small-cap market, as measured by the Russell 2000 index, largely because of the strength of Nasdaq's large-cap technology components. | yes | 1 |
Stocks Slip in Cautious Sell-Off Ahead of Unemployment Report | NEW YORK -- Apprehension about the impact of the unemployment report for February helped to push down share prices.</br></br>Stocks were sold off late yesterday after a directionless trading session, with the Dow Jones Industrial Average slipping 9.90 to 2963.37. The sell-off was led by program trades and cautious professionals who wanted to clear the decks before the report, due to be released early today by the Labor Department.</br></br>The jobless statistics will be scrutinized for clues about whether the Federal Reserve will lower interest rates further anytime soon. Now that the Middle East is no longer distracting investors from the domestic economy, such reports are likely again to become a focus for the market.</br></br>"In the coming weeks, more attention will be paid to government statistics as investors begin looking for signs that an economic turnaround has been made," said Trude Latimer, chief market strategist at Jesup Josephthal.</br></br>Broader market averages also eased yesterday, with Standard & Poor's 500-Stock Index down 0.26 to 375.91 and the New York Stock Exchange Composite Index off 0.17 to 205.36. | no | 0 |
Low Marks for Back-to-School Sales | It's a good thing the back-to-school shopping season isn't graded. Teen retailers would be embarrassed to show their scores to Mom and Dad.</br></br>The segment was among the worst-performing last month, depressing growth across the industry. Nearly all of the teen apparel retailers yesterday reported sales at stores open at least a year, known as same-store sales, declined during July when weighed against the same month last year.</br></br>Abercrombie & Fitch, which also owns Hollister & Ruehl, was down 4 percent. American Eagle Outfitters dropped 6 percent. Aeropostale plummeted 12 percent.</br></br>"Very weak," said Michael P. Niemira, chief economist for the International Council of Shopping Centers, a trade group. "The question then is, 'What's going on beneath the surface?' "</br></br>Niemira estimated that same-store sales at teen retailers fell 6 percent last month compared with the same period last year. Meanwhile, retailers overall posted a 2.6 percent gain in same-store sales, continuing the slow but steady growth that Niemira said has characterized much of the year. | no | 0 |
å£tjc Utosljingtoti JJost | NEW YORK, Jan. 2 ÛÓThe nationÛªs two biggest banks today officially ratified the first serious decline in bank lending rates since last July.</br></br>Both Bank of America in San Francisco and Citibank of New York-today lowered their prime lending rate from 2lVz percent to 20 Vz percent. The move was followed by a host of smaller banks.</br></br>The 21 Vz percent rate was the highest that key lending charge had ever reached, surpassing the 20 percent record it touched last spring, just before a sharp decline in interest rates that continued into the summer. The prime rate fell to 10% percent last July.</br></br>Chase Manhattan, the countryÛªs third-biggest ÛÓ reduced their prime rate to 20 Vz percent before Christmas to reflect substantial declines in open-market interest rates. Several more big banks, including New YorkÛªs-Chemical and Morgan Guaranty, did' so earlier this week. The prime rate is the interest banks charge their best corporate customers for a short-term loan and is the rate on which many other borrowing charges are based.</br></br>Analysts say that the steady decline in interest rates in the open market, where banks borrow many of the funds they then lend to their business customers, presage further prime rate declines in the next few weeks, air though no one expects rates to decline as quickly as they did last spring. | no | 0 |
Treasurys Lose Early Gains; Investors Anxious Ahead of Fed Decision, Auctions | U.S. Treasury bonds pulled back after an early price gain, underscoring some uneasiness among traders and investors ahead of the Federal Reserve's next decision on its monetary stimulus for the economy.</br></br>The Federal Open Market Committee is scheduled to start a two-day monetary policy meeting Tuesday with an interest-rate statement due at about 2 p.m. EST Wednesday.</br></br>Market participants will zero in on whether the Fed will announce plans to dial back, or "taper," its bond purchases. The central bank's $85 billion-a-month purchases in Treasurys and mortgage-backed securities have been a major factor holding Treasury yields near historic lows.</br></br>Traders, investors and analysts believe an improving economy would allow the Fed to start winding down its monetary stimulus. The Fed could act this week or wait until early January to cut bond buying, they said, though they believe the central bank would wind down its monetary stimulus on a gradual basis, which is likely to prevent a sharp rise in bond yields.</br></br>"We do think the odds of a December taper have gone up," said Russ Koesterich, global chief investment strategist at BlackRock Inc. "That said, the more likely time frame is early 2014, a view supported by the fact that inflation continues to remain low, allowing the Fed more latitude." | no | 0 |
Market Slightly Lower On Increased Volume: Chrysler Declines Ten Top Losers | ÛÏDisinterestedÛ was the wa$Fhe overall box score show-one brokerage firm descr ^declining stocks extending the stock market today, 4hgir lead over advances. The distinterested it was, at Ie&SP1 tally was 750 issues until a closing rallyÛÓwit! Attvn.anc* 533 ahead, compar-increase ip volumeÛÓnesfi%rwitb 7å¡1 losers and 6008 wiped out the drifting the list had taken earlier.</br></br>At the close, the pop indicators had the ma rW. f brokers were offer slightly below MondayÛªs cl J 7h?y SJerS-8</br></br>Average fell to a loss of <åÇg r a d u a 1Û disinflation than 2 points soon after ^hficies 0f the Nixon Admini-opening and stayed rifafoLon became clearer and the; around there until the iliptfdspects of peace in Vietnam! hour of trading. The clogngw more definite. In Tfiel rebound almost brought Ahaapwhile, they said, average back to the upiidadersÛÓwith the conspicuÛª only to give out just beBandusion of institutional h the bell and settle for a OeTOÛÓare sitting on the point loss at 931.94. money.</br></br>St: points to 47%, City Inkling was off Vt to 28%, Kidde slipped ÐÊ% to 43, and Gulf and Western lost half a point to 30%.</br></br>Vnrir qtnrir Pvchanr<e ir JKå£jl reflected in the autfeÛÏe llst or is most active lost^0.03 point to 56.72. 1^ocks- Chrysler reported aStS$ks held its downside tone, per cent drop in first quaW&h ten losers, four winners profits. Another report ofa8$ one issue unchanged, lfper cent increase in spl^nion Pacific Railroad led over the first ten days thaf parade after turning over April, compared with the samdL70,400-share block at 48. period last year, was Thfe weight of the trade cost enough to counteract the eftha- stock 2Vs points to a close ings decline and the stock ielfc8%. | no | 0 |
College Degree No Shield As More Jobs Are Slashed; In Far-Reaching Recession, Few Are Immune | When Nena Razmara was laid off in November from her $70,000-a-year job with a high-end residential building supplier, she thought she would be working again by Christmas.</br></br>Having worked in residential construction for 20 years, she was used to finding work by flipping through her Rolodex.</br></br>The 45-year-old Woodbridge resident made her three phone calls. Then three more. But she still had no leads. For the first time since she graduated from college in the 1980s, she scoured help-wanted ads. She sent out more than 150 resumes and posted one on Craigslist under the heading, "I desperately need a job."</br></br>In ordinary times, a college degree goes a long way toward securing employment, even during a recession. It also offers some measure of job security: Workers with at least a college diploma are less likely to lose their jobs in down times. But college grads such as Razmara are now finding that a postsecondary education isn't necessarily enough.</br></br>In fact, labor economists say the unemployment rate for workers with a bachelor's degree or higher is poised to hit a record high. This recession is so far-reaching, they contend, few are immune from the consequences. | no | 0 |
Bonds Plunge as Drop in Dollar Renews Fear of Reduction in Foreign Buying | NEW YORK -- A sharp drop in the dollar yesterday created fresh turmoil in the bond markets.</br></br>The dollar's slump aroused renewed concern that foreign investors may cut back on their purchases of dollar-denominated investments at a time when the U.S. is addicted to massive infusions of foreign funds. In addition, traders fear the falling dollar, which makes imported goods more expensive, will intensify pressures for higher inflation and increased interest rates.</br></br>If the dollar continues to fall sharply, the Federal Reserve might react by tightening credit slightly, raising short-term interest rates, analysts say. But most agree that a credit-tightening move isn't likely anytime soon because that could damage the economy and place additional strains on the banking system. The Fed's policy committee meets today in Washington to review strategy.</br></br>In the largest one-day slump since March 4, prices of actively traded Treasury bonds fell about 1 3/4 points, or $17.50 for each $1,000 face amount. Corporate and municipal bond prices also fell, although not as sharply as Treasury bonds.</br></br>The yield on the most actively traded 30-year Treasury bonds rose to 8.84% from 8.67% last Friday. Late last month, the yield on these bonds stood at about 8 3/8%. | yes | 1 |
What Big Economies Got Right, or Wrong, After Crisis; Why the U.S. and U.K. Have Fared Better Than Japan and Europe | The divergent policy paths taken by the world's advanced economies provide lessons for global leaders navigating difficult post-crisis environments.</br></br>The U.S. and U.K. appear to have gotten something right, while the eurozone and Japan have fumbled. Unemployment rates after the crisis peaked at 10% in the U.S. and 8.5% in the U.K., and are down to 5.8% and 6%, respectively. The eurozone rate has climbed in the past few years to 11.5%, while Japan's economy has fallen back into recession.</br></br>The American and British central banks embraced aggressive easy-money policies early on. Japan lurched toward consumption-tax increases to restrain budget deficits, while Europe moved slowly in addressing weaknesses in banks and stuck to a course of fiscal austerity.</br></br>Here are three lessons from this inadvertent experiment in post-crisis policy-making:</br></br>Quantitative easing helps address a long-standing economic riddle. What can central banks do to help the economy after short-term rates hit the "zero lower bound?" When rates are near zero, central banks lose a tool typically employed when the economy is weak: short-term interest-rate cuts. Rate cuts spur borrowing, spending and investment, helping to smooth out the economic cycle by bringing forward activity from a more optimistic future during depressed times. | yes | 1 |
Precious Little to Halt Rising Fear Factor | It's not the price of gold that's going up. It's the price of fear.</br></br>And fear has just passed $1,900 an ounce. Gold prices have already risen 46% since the start of the year and a whopping 19% this month alone.</br></br>Behind these gains lies an intensifying fear that the monetary and fiscal authorities can get nothing right and everything wrong in their attempts to fix the fiscal problems in the world's ailing economies. "The fear component [of gold buying] is driven by the negative real interest rates, the excessive government debt, and the rising fear of a collapse of the system," reckoned Austrian-based Erste Group's Ronald-Peter Stoferle. "Gold remains an excellent hedge against worst-case scenarios," he added.</br></br>There's nothing new here. Ancient kings got buried with their gold because they feared the afterlife and thought bringing some gold could help them with scenarios far worse than the inflation feared by modern-day fund managers.</br></br>The question is: when does the fear stop and the price of gold start going into reverse? | yes | 1 |
Kennedy-Johnson Economists Blast Nixon's 'Sorry' Record | tions fTayetTlHie Nixon regime yesterdayÛªfor its ÛÏsorry economic record,Û national output that has been ÛÏvirtually stagnantÛ since the President took office, continuing inflation and failure to institute voluntary price and wage restraints.</br></br>The lengthy position paper by the Committee on Economic Affairs of the Democratic : Policy Council chided Mr. NixonÛªs spokesmen for expressing "smug satisfaction with the Û÷successÛª of the administration Û÷game planÛª Û when inflation is still rampant.</br></br>ÛÏThe administration has repeatedly claimed that a slowing down of price increases was finally under way, only to have later data contradict the claim,Û it said.</br></br>While noting general agreement that price increases have at least stopped accelerating, the statement complained that Americans "have paidÛÓand are still payingÛÓa heavy price in jobs, production and incomes for what is still only the promise that inflation will ease.Û</br></br>Prof. R. M. Solo fiat such reports w all' the potential fo: ton cf a notice from Among other mem|b&taft!ir Bureau saying th; | no | 0 |
Dollar Expected To Remain Firm In Coming Week | The U.S. dollar should remain strong this week, barring a major intervention by the West German central bank, analysts said.</br></br>Despite declining interest rates, which normally make the dollar less attractive, and indicators that point to a weakening U.S. economy, the dollar rose last week against major foreign currencies. Traders ignored the Federal Reserve Board's 0.5 percentage point cut, to 8.5%, Wednesday in its discount rate, the widely watched charge for loans to financial institutions. "The divergence between the foreign-exchange and credit markets continues," said Leslie Puth, assistant secretary at Irving Trust Co.</br></br>"The credit markets have been trading on immediate news, while currency markets are focusing on the federal budget deficit and its future implications," Ms. Puth said. She added that, though the economy in the current quarter looks weak, most currency traders expect economic growth to rebound during the first quarter of next year.</br></br>Although trading was curtailed by holidays last week, traders said there was persistent demand for dollars. "Major corporate customers in both the U.S. and Europe, who had sold dollars earlier in the week, were buying them back up," said Ronald H. Holzer, assistant vice president and chief dealer for Harris Trust & Savings Bank in Chicago. "In the face of a weakening economy, many had sold anticipating the dollar to fall."</br></br>But the dollar continued to firm last week, withstanding even repeated interventions by the West German central bank on behalf of the mark. On Friday, the dollar stood at 3.0363 marks, up from 2.9710 marks a week earlier. | yes | 1 |
The Washington Post Retail Sales | Retail sales slipped 0.1 percent in February as car sales tumbled following the end of another round of cut-rate financing offers, the government said yesterday.</br></br>Although sales also had dipped in January, many private analysts dismissed the significance of the back-to-back declines on grounds that a variety of factors point to stronger economic growth and rising consumer demand in the months ahead.</br></br>Without a big drop in auto sales, retail sales would have posted a 0.3 percent increase last month, and analysts said that figure was more reflective of consumer sentiment.</br></br>The Commerce Department said sales totaled $117.3 billion last month, $90 million below the January level. Sales had fallen 0.2 percent in January after posting a solid 1.9 percent December increase.</br></br>Sales had not declined for two consecutive months since May and June. Normally, weakness in retail sales is cause for concern, since consumer spending accounts for two-thirds of all economic activity. | yes | 1 |
Greenspan Backs Panel to Rule On Inflation Levels; Index Change Could Make Balancing Budget Easier | Federal Reserve Chairman Alan Greenspan yesterday strongly supported creation of a presidentially appointed commission to set the size of annual cost-of-living adjustments in Social Security, other federal benefits and income taxes, an idea that appears to be gaining political momentum.</br></br>Greenspan, testifying before the House Budget Committee, said there is "almost a 100 percent probability that we are overcompensating the average Social Security recipient for increases in the cost of living." That's happening, he said, because the consumer price index, which is used to determine the size of the annual adjustment, overstates increases in "the true cost of living."</br></br>President Clinton, acting on the advice of his top economic advisers, who met Monday to discuss the issue, directed them to explore the concept of an independent commission with congressional leaders. The president could make a decision by the end of the week on whether to move forward on the politically charged idea, which would reduce future increases in Social Security and many other benefit programs, as well as make taxes higher than they otherwise would be.</br></br>Senate Majority Leader Trent Lott (R-Miss.) called last week for an independent commission, and White House budget director Franklin D. Raines has expressed support for a panel to improve the accuracy of federal cost-of-living adjustments.</br></br>Greenspan's backing, along with research by Fed economists that supports the finding that the CPI overstates inflation, gives added credibility to the commission concept and might make it easier for lawmakers to support a change in the way in which federal programs are indexed for inflation. | no | 0 |
Fed Is Seen Keeping Tight-Credit Policy Despite New Evidence of Low Inflation | NEW YORK -- Despite additional evidence of low inflation, Federal Reserve System officials still fear that the economy is growing too rapidly and that inflation could surge by early next year.</br></br>As a result, the Fed, whose policy-making arm meets today and tomorrow, probably will try to keep short-term interest rates in the next few weeks close to their current lofty levels, or slightly higher, according to bankers, economists and sources close to the Fed.</br></br>Some congressional critics contend that such a policy could lead to economic disaster. Rep. Jack Kemp (R., N.Y.) argues that the Fed's credit policy already is much too tight and has intensified international financial strains. He also insists that Wall Street fears about inflation are wildly exaggerated, especially in view of continued continued declines in commodity prices as well as a government report Friday showing the producer price index remained unchanged in June for the third consecutive month.</br></br>Nevertheless, many analysts predict that the Fed this week will decide to keep a firm grip on credit conditions, and possibly even tighten its clamp slightly, in an effort to cool off the economy and keep inflation subdued. "If the Fed wants to make sure that inflation isn't going to worsen, then it must slow the growth of the economy," says Robert G. Dederick, executive vice president of Northern Trust Co. in Chicago. Mr. Dederick, who was a Commerce undersecretary for economic affairs in the Reagan administration, adds: "I still think it's likely that the Fed will tighten slightly further."</br></br>Some analysts insist that the Fed committee won't make any change in credit conditions at this week's meeting. They argue that the economy already is slowing enough on its own and that any additional credit-tightening moves by the Fed would represent overkill. Also, they point out that two of the three money-supply measures that the Fed monitors remain within its targets for this year. | no | 0 |
Corporate News -- The Week Ahead: Retailers Suit Up for Holiday Results | From Wal-Mart Stores Inc. to Kohl's Corp. and Gap Inc., almost every major retailer reports fiscal fourth-quarter earnings this week, and the results will be the final word on whether holiday shoppers were naughty or nice to the country's chain stores.</br></br>Despite cold, snowy weather that walloped major swaths of the country in January, and uneven sales throughout the sector in December, the early consensus is that retailers for the most part posted solid earnings growth for the quarter. That's due in part to a robust November that lured shoppers with discounts galore as well as the retailers' ability to keep inventories and expenses in line after having tough lessons learned during the recession.</br></br>That's the good news. With mounting prices on everything from fuel and food to cotton, retailers still are expected to offer muted full-year earnings guidance for 2011. Broad inflation hasn't beset clothing makers and sellers in almost two decades and rising costs will pose a quandary for stores: Do they pass those higher costs onto still-strapped consumers, who may in turn buy less? Or do they absorb some of the cost and take a hit to their gross profit margins?</br></br>The first half of the year poses additional challenges, particularly for department stores and discounter Target Corp. They will be lapping their toughest sales comparisons from a year ago.</br></br>"Most companies will provide conservative, cautiously optimistic guidance due to increasingly tough comparisons, erratic consumer spending trends (with a growing divide between wealthy and poor) and perhaps most importantly, apparel inflation," Bill Dreher, retail analyst at Deutsche Bank, wrote in a recent report. | yes | 1 |
Industrial Output Set New Top in November | Industrial production, buoyed by soaring automobile output, climbed to a record rate in November, the Federal Reserve Board reported yesterday.</br></br>reported that ÛÏeconomic activity was at advanced levels in the closing months of the year.Û Building activity was close to the midyear high and both incomes and retail salse were on the rise.</br></br>The boardÛªs index of industrial production reached 147 per cent of the 194749 average in November, up one point from October after an adjustment1 for seasonal variation.</br></br>The index is a measure of actual output from the nationÛªs mines, mills and factories. It has been watched closely by. economists, because it failed to rise in the early months of the year and actually declined' during the summer. It rallied to; cent above a year ago. By contrast the gross national product! ÛÓa dollar measure of all goods and services produced ÛÓ has1 risen steadily and stands atj least 5' per cent higher than a year ago, partly because of! price increases.</br></br>The board said automobile production rose sharply in November, and, after seasonal adjustment, was up one-fourth from the October level. In early December the assembly lines speeded up further and reached a production close to the record levels of 1955. | no | 0 |
Some Say Now Is Time to Buy Munis Despite Surging Supply | Surging supply and static demand usually don't bode well for bond prices. So why are many analysts pounding the table for muni bonds?</br></br>Falling interest rates and the economy's impressive growth have cleared the way for a torrent of new municipal bonds in the past year. Through Monday, $59.3 billion of new muni bonds were sold this year, up 62% from the $36.7 billion peddled during the year-earlier period, according to Securities Data Co. The amounts exclude securities maturing in less than one year. Issuance last year was $221.4 billion, up from $185 billion in 1996. Both new issues and refundings of previous deals have climbed, and volume should top $240 billion this year. In short, "the supply has been massive," says George Friedlander, Salomon Smith Barney's municipal-bond strategist.</br></br>Meanwhile, the inexorable climb of the stock market and super-slim bond yields have reduced demand from individual investors for muni bonds despite their tax-free status. Although interest has picked up in recent weeks, prices of muni bonds remain low compared with comparable Treasury issues.</br></br>"Munis have certainly done lousy this month, though short- and intermediatebonds have held up OK," says William Stevens of Montgomery Asset Management.</br></br>Still, many market participants say munis could represent the best bargains in the bond market. They say new bond issuance should begin to slow in the coming months, due to limitations on how many times issuers can replace outstanding bonds with new bonds. New bond issuance also should slow because many issuers have already come to market in recent months and won't be back again for some time. | no | 0 |
THURSDAY, JULY Cl | When President Nixon determined in early February 1973 that the U.S. dollar had to be devalued for the second time in 14 months, he sent his under secretary of Treasury, Paul A. Volcker, on a secret mission to Tokyo and Bonn to get the agreement of the nationÛªs two most important trading partners.</br></br>Volcker, who had played a key role since 1969 in patching up a series of gold and dollar crises, tucked his 6 foot 7 frame and everpresent cigar into an Air Force plane and headed for Tokyo.</br></br>There, he left a hat with his name at the Ministry of Finance, but the thoughtful Japanese got it back to him in time. In Bonn, however, his gangling frame almost blew the cover when a German reporter spotted him.</br></br>But with the dollar deal in his pocket, he telephoned the details to Treasury Secretary George Shultz. Nixon announced it Feb. 12, 1973, and a new era of fluctuating exchange rates was formally launched.</br></br>But the hopes of Volcker and others then that the leading nations of the world could work themselves back to a greater sense of monetary stability havenÛªt been fulfilled, primarily because of the upheaval caused by oil price increases and worldwide inflation. | yes | 1 |
Stocks Dip Again; Trading at Languid Pace: January Lows Are Tested | .View YOJfK. Fcl). 26 (APIÛÓThe stock market slumped again today on the lightest trading in two weeks. Û÷</br></br>Volume fell to 2 91 million shares from 3.23 million Friday. It was the smallest since 2.62 ihillion shares were traded under semi-holiday conditions on Feb. 12.</br></br>The news background was not very stimulating and, on top of that, Wall Street experts believed that the list was again making a test of the January lows.</br></br>Demand for steel was reported showing additional signs of softening and the latest report of steel production showed a decline from the prior week. Further publication of news about du Font's proposed plan for lidding itself of its 63 million shares of Genera! .Motors Stock in three years appeared to have something to do with a decline in G.M stock which registered the first impact of the news on Friday.</br></br>Of 1285 issues traded, 680 declined and 352 advanced. New highs for 1961-'6'2 totaled 22 and new lows 20. | no | 0 |
International Finance: Hong Kong Taps Brakes On Property | HONG KONG -- John Tsang, Hong Kong's financial secretary, warning against an "increased risk of a bubble forming in the property market," raised taxes on luxury-home transactions and announced plans to loosen its land-auction policies.</br></br>The measures elicited mixed reactions, with some critics saying they didn't go far enough in addressing a growing problem. Stock investors shrugged off the comments Wednesday, pushing shares of property developers higher even as the broader market weakened.</br></br>Residential property prices soared nearly 30% last year due to an influx of foreign funds and ultra-low interest rates. Hong Kong, with its freely convertible currency, has become a magnet for foreign investors looking to capitalize on growth in mainland China, which maintains strict foreign-exchange controls.</br></br>Mr. Tsang said Wednesday that the government will raise the transaction tax on luxury apartments valued at more than HK$20 million, or US$2.6 million, to 4.25%, from 3.75%, warning that officials would extend the tax to the mass market "if there is excessive speculation in the trading of these properties." He also said the government would tinker with its land-auction system to increase land supply for residential development.</br></br>Lau Kwok-yu, a professor at the City University of Hong Kong specializing in housing policy, said that the housing policy measures announced Wednesday were very "modest" and "limited." "The only thing I can say for certain is that the measures aren't going to meet the needs of the mid-to-low end of the market," Mr. Lau said. | no | 0 |
Stocks Ignore Bad News and Rally 2d Time | NEW YORK, July 16 (AP) ÛÓTossing aside news that would have killed rallies on other days, the stock market bulled ahead today in moderate trading, raising hopes among analysts for a second strong rally in as many weeks.</br></br>The Dow Jones average of 30 industrials closed ahead 11.59 at 597.58. In doing so, it nearly wiped out FridayÛªs drop of 15.95 and more than equaled last MondayÛªs jump of 7.15, which began the three-day rally.</br></br>Advancing issues crushed declining stocks. 994 to 432. among 1,775 traded on the Big Board. Volume rested at 12.92 million shares, up from FridayÛªs 11.39 million.</br></br>Analysts said with guarded optimism that it might show a trend away from the most recent bear market. But they were taking a wait-and-see attitude.</br></br>The Amex price-change index was down .13 at 22.77, while the NASDAQ composite index of Over-the-Counter stocks was up. | no | 0 |
30-Year Rates Fall to Four-Year Low | Rates on 30-year mortgages dropped this week to their lowest level in more than four years, effects of a startling November unemployment report and a government plan to buoy the housing market.</br></br>Freddie Mac reported Thursday that average rates on 30-year, fixed-rate mortgages dropped to 5.47 percent from 5.53 percent last week.</br></br>The rate is slightly below this year's previous low of 5.48 percent, reached in January, and the lowest since March 25, 2004.</br></br>Mortgage rates started falling after the Federal Reserve launched a sweeping new effort in late November to aid the housing market by buying up to $600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.</br></br>Fannie Mae and Freddie Mac own or guarantee about half of the $11.5 trillion in outstanding debt on U.S. home loans. | no | 0 |
Drab News Depresses Market: News Helped Averages Down Amex Declines | I NEW YORK, Nov. 22 lAlÛªli The stock market retreated again today under the continued barrage of drab economic news but perked up and cut its losses late tn the day In hope that President Johnson might succeed In avoiding a tax boost.</br></br>The Dow Jones industrial average ended with a loss of 3.18 at 794.98, having recovered from a loss of 7.90 at 790.20. At that level, the Dow was at the top of what chartists believed would be a support zone running from 780 to 790.</br></br>Brokers said It was news I rather than a theoretical chart] support which wiped out many losses. They cited news from Austin, Texas, that Johnson had gone into an agency-by-agcncy study of what programs he can cut hack to save at least $3 billion.</br></br>Since the Johnson Administration lias been reported in the throes of deciding whether or not to raise taxes. Wall Street interpreted the latest news story as meaning that the President was making efforts to save money so that a tax increase would not be needed. Stocks began to cut losses immediately. A number of previous losers emerged with gains.</br></br>Although most over-all statistics remained on the downside, the most actively traded stocks had 11 winners, three losers and one unchanged, Ford. | yes | 1 |
4 Executives At UBS Quit After Internal Fund Probe | The chairman of UBS AG stepped down today after an internal investigation by the Swiss banking giant revealed "shortcomings in risk management" in the company's dealings with Long-Term Capital Management L.P., the massive speculative fund that nearly collapsed last week.</br></br>Mathis Cabiallavetta and three top executives were the first casualties in the upper echelons of the bevy of blue-chip financial firms that lent hundreds of millions of dollars to Long-Term Capital -- and then wound up rescuing the fund. But many on Wall Street are bracing for similar shake-ups, particularly amid public scoldings about a lack of lending controls at many institutions by Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert E. Rubin.</br></br>"There have got to be sacrificial lambs," said a senior Wall Street executive. "We're all waiting to see who is going to take the blame."</br></br>Executives of some firms speculated that lower-level managers may take the fall, particularly in cases where their own chiefs were unaware of the extent of the risk their companies were taking.</br></br>Indeed, Bank of Italy Governor Antonio Fazio today said he was unaware until this week of the involvement of Italy's Foreign Exchange Office UIC in Long-Term Capital -- even though he chairs UIC, which manages Italy's foreign-exchange reserves on the central bank's behalf. | yes | 1 |
Housing Recovery l ied To Economy: Klaman | Real help for housing will not be forthcoming until soaring prices and interest rates are whipped. Dr. Saul B. Klaman, vice president and chief economist of the National Association of Mutual Savings Banks, said recently in Rochester, N.'ST.</br></br>ÛÏThe hard fact is that hope for housing is tied directly to hope for the economy,Û the NAMSB economist emphasized to the Rochester Real Estate Board.</br></br>ÛÏIn this respect, one can begin to detect some signs of recovery from the many months of economic malaise,Û Klaman continued. The past few weeks may in retrospect prove to have been the turning point in the nearly uninterrupted upward sweep of interest rates, he, said, and as evidence that "there is more than wishful thinking in this view.Û Klaman cited the following: Û¢ Progress, however limited, on the inflation front, with cooling off in the fuel and food sectors; and</br></br>"If evidence of an improved economic climate continues to accumulate, the momentum for favorable change could accelerate,Û said Klaman, suggesting the prospect of some decline in short-term interest rates. program to aid housing is at best a temporary stopgap measux*e which can provide only marginal assistance to the nationÛªs depressed housing market, Klaman commented.</br></br>ÐÊ"Forty per cent of these housing aid dollars consist of proposed Federal Home Loan Bank advances to savings and loans, many of whom may not wish to borrow further, even at below, market interest rates," he pointed out. | no | 0 |
Growth-Stock Investors Stand Pat despite Recent Surge for Cyclicals | NEW YORK -- The long-anticipated rally in cyclical stocks arrived last week in a rip-roaring market advance that lifted the Dow Jones Industrial Average 3.9% to a record 3027.50.</br></br>Money managers, returned from their Memorial Day weekend, began sorting through scraps of economic news and spotted a pattern suggesting the recession was ending, or about to. Not wanting to be caught arriving late to a rally, the money managers quickly bid up shares of companies whose fortunes are tied to the economic cycle.</br></br>On Friday, cyclical stocks led the Dow Jones industrials to a record. Caterpillar gained 2 5/8 to 51 3/4; International Paper rose 2 to 70 5/8; and United Technologies rose 2 1/2 to 46 7/8. Together, these three stocks accounted for almost half of the average's 27-point gain. Meanwhile, big noncyclical growth stocks slumped: Merck fell 1 5/8 and McDonald's dropped 1/4 to 35.</br></br>But even as cyclical issues race ahead, many growth stock investors are standing pat on their portfolios. Cyclicals could well outperform growth stocks for the next several weeks, these investors say. But in the longer-term -- for the next year or two -- stocks of companies that grow earnings steadily 15% or better each year could maintain their leadership. And even in the next few weeks, the investors say, growth issues will keep pace or lag behind just a little.</br></br>"Growth stock managers shouldn't abandon their strategy for a minute," says Stefan Abrams, chief strategist for Kidder, Peabody & Co. Growth companies "will still perform quite respectably," he predicts. | yes | 1 |
Deals & Deal Makers: Archipelago to Set Up New Stock Market | The New York Stock Exchange, already facing pressure to modernize its trading operations, is about to get a major, fully electronic competitor.</br></br>The Archipelago trading system and the Pacific Exchange announced they are creating a new stock market. The alliance marks the first time one of the new alternative trading systems, known as ECNs, will effectively share a membership card as a traditional stock exchange.</br></br>By joining with the Pacific, Archipelago would instantly acquire the status necessary to compete with the NYSE on a level playing field.</br></br>Under the alliance, Archipelago Holdings LLC, which operates the Archipelago electronic communications network, will acquire the Pacific Exchange's struggling stock-trading business. In return, the Pacific Exchange, based in San Francisco, will become a minority shareholder in Archipelago and provide regulatory and exchange-management services to the new entity.</br></br>The plan is subject to regulatory approvals. Archipelago is one of the fast-growing screen-based trading systems that have grabbed almost a third of the Nasdaq Stock Market's volume. They have taken very little share of NYSE-listed volume, however, partly because they are technically brokers, and only stock exchanges have full access to the linkages between the venues that trade NYSE stocks. | no | 0 |
Volcker Sees Rocky Path for Many Banks | Federal Reserve Chairman Paul JA. Volcker this week described the ^Continental Illinois bank situation as ^unique for a large bank/Ûª but acknowledged that some smaller institutions are in trouble and that the Jentire financial system is under Strain.</br></br>ÐÊ% Many institutions, big and little, Jjhave loans on their books that borrowers canÛªt repay, and not all of %hem have enough capital to absorb fall the resulting losses.</br></br>Larger banks able to acquire ^funds in the money marketsÛÓas 'opposed to getting them from regular depositorsÛÓare vulnerable to ^ny loss of confidence because it ^could close those markets to them, leaving such a bank unable to finance the loans it has already made. t Volcker told the Senate Banking ^Committee that no other large bank Jwas so dependent upon these so-called purchased funds as Continental. Nevertheless, if Continental had $>een allowed to fail, other major vbanks could have followed.</br></br>The massive federally financed fescue of Continental underscored 'the determination of the Federal ^Reserve, the Federal Deposit Insurance Corp. and the Comptroller vOf the Currency not to let its troubles jeopardize the safety of other ^institutions or, conceiveably, the financial system itself.</br></br>ber of other banks or thrifts and none at all for the total system. Almost any small bank or thrift could go under leaving only a few local ripples, and numerous ones have failed or been merged out of existence this year. | no | 0 |
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