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Mr. Nixon's "System of Constraints" | If imprecision is an unavoidable characteristic of national economic policy-making, President NixonÛªs on-again, off-again ÛÏnational emergency" decisions having to. do with wages and prices in the construction industry might qualify as logical moves in the overall attempt to curb inflation.</br></br>After all, the PresidentÛªs Council of Economic Advisers laid the groundwork earlier this year for an ill-defined but all-out attack on the problem which, with luck and public relations and a few political breaks, was supposed to work. ÛÏWhat is called for,Û said the advisers, ÛÏis a policy of doing what "can effectively be done, wherever it can be done, and not pretending to do more.Û</br></br>Given this solid commitment to unspecified government action, the administration set about exploring ways, short of out-and-out controls, to curb the wage-cost spiral in construction. After some talk about a wage-price freeze, the President decided instead to suspend the Davis-Bacon Act dealing with wages on federal construction projects, a move based on declaration of a ÛÏnational emergency."</br></br>This action lifted provisions requiring government contractors to pay prevailing wages as determined by the Labor Department for geographical areas. The President's argument was that scales under this process frequently had been ÛÏset to match the highest wages paid on private projectsÛ ÛÓthough nobody really explained why the Department did it that way in the first place.</br></br>That was a month ago, when Labor Secretary Janies D, Hodgson said ÛÏwe had to acknowledge that any voluntary action by them (union leaders) to restrict wage increases was not in the cards, certainly not in the immediate future.Û The idea, though it failed to deal with prices and profits in any convincing way, was to ÛÏencourage industry people themselves in their efforts to do something about this problem,Û Mr. Hodgson explained. | no | 0 |
Burns Accepts AEI Post; To Teach at Georgetown | Former Federal Reserve Board Chairman Arthur F. Burns accepted yesterday a $50,000 post at the American Enterprise Institute as a full-time distinguished scholar in residence. He also will teach an undergraduate seminar at Georgetown University this fall, where he will have the title of distinguished professorial' lecturer.</br></br>Burns chose the post with the conservative American Enterprise Institute, it was learned, over an offer from the Brookings Institution, another research organization in Washington generally considered to have a liberal orientation. He will have a staff of assistants, AEI said, and fåÈe free to pursue subjects of his own choice.</br></br>Burns is known to have received numerous offers from universities, ousi-ness corporations and publications to teach, advise or write. Both he and Mrs. Burns were anxious to remain in Washington.</br></br>AEI officials said that Burns would hold a press conference Monday morning to discuss his new role, and to comment on the current economic situation.</br></br>In his final public statements before leaving the Fed, Burns had urged President Carter to be more forceful in protecting the value of the dollar. | no | 0 |
No Late Fees, But Watch Out For Late Rates; New Credit Card Offers Remove Common Penalty | Designed to blunt criticism of ever-higher fees, the new cards - - with names like "Simplicity" and "Clear" -- still can ding late payers. After extolling its new features, Citibank's Simplicity card offer warns that late payments could trigger an increase in the interest rate charged on balances as well as a negative credit report. Such reports often cause other lenders to boost interest rates on a consumer's other outstanding debts.</br></br>American Express Co.'s Clear card will increase a user's interest rate to 28.74 percent if a consumer pays late twice a year.</br></br>David Robertson, president of the Nilson Report, a newsletter that monitors the credit card industry, said he thinks the new cards could be attractive to consumers fed up with punitive fees. However, he warns, the $39 late fees that are currently assessed may add up to far less than the hundreds of dollars in extra interest consumers would have to pay over time if the interest rates on their outstanding balances increase. "It's yet to be proven that consumers read the fine print," he said.</br></br>Pennsylvania attorney Michael J. Bresnahan did read the details when he received his Citibank solicitation last week, and his reaction wasn't positive. "What a deal, no late fee and the interest on the balance goes to somewhere in the 29 percent range," Bresnahan wrote in an e-mail. "Appalling."</br></br>Bresnahan said he has no choice in accepting the card; Citibank said it was sending it to him, whether he wants it or not, to replace an existing card. But, he said, "I'm certainly not going to pay late; that's an invitation to disaster." | yes | 1 |
A Lame Game for Democrats | The other day, Virginia Seri. Chftck Robb, pressed by his challengers during a TV debate to explain what he would do about the federal deficit, blurted out these epic words, "I would take food from the mouths of widows and orphans, if necessary, to begin to solve the, problem of the deficit.Û</br></br>One of RobbÛªs former rivals, former Democratic Gov. Douglas Wilder, termed it "a stupid line,Û Robb's main Republican challenger, Oliver North, responded by organizing ÛÏWidows and Orphans for North."</br></br>If RobbÛªs gaffe reflected one harried candidate momentarily losing His judgment under pressure, it would be bad enough. But in fact, his haploss statement is just the logical conclusion of Democrats trying to play' a, Republican gameÛÓliterally proposing to starve widows and orphans in order to demonstrate fiscal rectitude to satisfy bond traders.</br></br>Unfortunately, a more subtle version of this myopia afflicts not just Robb, but much of the Democratic Party. In Congress dozens of Democrats have embraced budget-balajice fever, to the exclusion of themes that have traditionally rallied voters:</br></br>At the White House, Alice Rivlin, the director of the Office of Management and Budget, is pushing President Clinton to press for deeper budget cuts. The White House staff is also divided on whether to revive the idea of a middle class tax cut, a proposal said to have the sympathy of chief of staff Leon Panetta. | no | 0 |
Stock of American Greetings Plunges On Inventory Plan | American Greetings Corp. unveiled a "productivity initiative" that the company said will exact a heavy toll on near-term revenue and earnings. The news sent shares of the nation's second-largest greeting-card concern down 32%.</br></br>In heavy composite trading on the New York Stock Exchange, American Greetings plunged $11.1875 to $23.875 after falling earlier to a new 52-week low of $23.25.</br></br>The strategy, the company said, is aimed at fattening future profits by allowing American Greetings to equal or better existing retail sales with less inventory. The plan is designed to let the company better exploit recent investments in technology that have shortened the time required to design, produce and ship a new generation of cards. Consumers' tastes in greeting cards are "changing faster than they have in the past," an American Greetings spokesman said.</br></br>But the first phase of the company's plan, which calls for a "sell-through" that will reduce permanently the number of American Greetings cards on retailer's shelves, will slice about $100 million from revenue for the fiscal year beginning Monday.</br></br>In essence, American Greetings will for a time replenish its existing cards on retailers' shelves at a rate lower than full replacement. Once that temporary process has lowered the retail-card inventory to the company's reduced target level, officials expect sales will continue at their current pace, or even strengthen. | no | 0 |
Peru Rebels Threaten U.S. Drug Program | TINGO MARIA, Peru -- Some of the best coca in the world -- the stuff that is refined into cocaine -- comes from Tingo Maria and the surrounding area on the edge of the Amazon jungle.</br></br>But cocaine isn't the reason that Felipe Aponte Ortiz, blindfolded and barefoot, has been hauled into a police interrogation room. Mr. Aponte, 36 years old, is in jail because he is a guerrilla, as his suitcase full of Marxist literature and home-made explosives quickly establishes. He is Comrade Campa, a leading ideologue on the local committee of the Shining Path, Peru's increasingly violent Maoist insurgents.</br></br>The presence of Mr. Aponte and others like him in Peru's coca-growing regions has the government worried. In the past 10 months, the Shining Path has successfully turned local fury over a U.S.-backed coca-eradication program into a campaign of antigovernment violence. They have formed dozens of local Shining Path cells and bombed 10 of the area's 13 civil guard stations. In effect, officials say, the guerrillas have opened a second front 500 miles north of the 13-province emergency zone that until now has been the only center of guerrilla operations.</br></br>The new support for the guerrillas could endanger the already troubled U.S.-aided program to destroy Peru's coca crop, which accounts for about half of the cocaine smuggled into the U.S. And it has shaken President Fernando Belaunde Terry's four-year-old civilian government. Mr. Belaunde, also beset by an economic crisis, has been forced to ask the army to fight the guerrillas -- a politically dangerous move in a country where the army has ruled for 12 of the past 16 years.</br></br>"Call it subversion or what you will, it's a civil war," says Lt. Col. Guillermo Espino, the local police chief. | no | 0 |
Money Supply Expands by $1 Billion | NEW YORK, Oct. 30ÛÓThe measure of the nation's money supply known as Ml-B rose $1 billion in the week ended Oct, 21, and the Federal Reserve gave a dear signal that it intends to restimulate still-sluggish money growth.</br></br>After the market closed the Fed announced it had cut the discount rate it charges banks for loans to 13 percent from 14 percent. It left in place the 2 percent surcharge for large and frequent borrowers.</br></br>Ml-B, which is comprised of cash in circulation, checking accounts and NOW accounts, rose to å¤434.3 billion in the week from $433.3 billion the previous week.</br></br>In normal times, a $1 billion increase in Ml-B would be enough to send interest rates soaring out of fears of further Fed credit-tightening. But despite the latest rise, monetary growth continues to be well below the FedÛªs minimum targets.</br></br>For the latest four weeks, Ml-B averaged $432.3 billion, a 2.9 percent seasonally adjusted rate of gain from 13 weeks ago. | no | 0 |
New York Feels the Pinch From Wall Street Downturn; Governor Vows To Cut Budget as Tax Revenue Falls | Wall Street's woes are mounting. Investment banks are swamped by bad mortgage debt. Profits have fallen. Tens of thousands of jobs are being cut. And those lucrative year-end bonus checks are likely to be the stingiest in more than a decade.</br></br>The city and state economies are inextricably linked to the health of the Street. Those reduced bonuses mean fewer dollars to be taxed -- and fewer dollars to be spent in high-end restaurants, boutiques and bars.</br></br>"You can feel it affecting the regular lunch crowd," said Corrado Goglia, the general manager at Delmonico's, a steakhouse in the financial district. "There's been about a 20 percent decrease in sales at lunch. People are doing away with larger lunches, the $40 to $50 steaks. They're going down to lighter burgers."</br></br>Last Tuesday, Gov. David Paterson (D) made a rare televised address to issue a somber warning that tumbling revenue from the Street means tough times ahead for the state. "The damage on Wall Street is affecting all of our communities," Paterson said, "and the effects on our New York state financing are devastating."</br></br>Paterson used one particular statistic to illustrate the depths of the crisis. In June of last year, the state's 16 largest banks paid about $173 million in taxes into the state treasury. This June, those same banks paid in $5 million -- a 97 percent decrease. | no | 0 |
Gold: Long-term hedge, or bubble near burst? | old, often considered a safe place to invest in a rocky economy, climbed past its all-time high in recent weeks, fueling speculation that the price per ounce could hit $1,500. The rally was clipped last week by concerns that China could raise interest rates, which triggered a retreat. What's an investor to do? Dig deeper into the glittery stuff, or sell and collect on the gains? Here are two views:</br></br>The surge in gold prices to about $1,400 an ounce makes perfect sense. Confidence is waning in paper money, such as the dollar, and for good reason. Our monetary and fiscal policies are remarkably lax, debasing our currency as a store of value and raising the specter of inflation down the road. The Federal Reserve Board continues to pump money into the economy, and we will run huge budget deficits as far as the eye can see, dramatically expanding our financial liabilities. Martin Murenbeeld, an economist at Canada's DundeeWealth Economics, shows that over the past decade, gold prices have moved almost in lock step with the expansion of global liquidity (U.S. money supply plus overseas foreign reserves). Both have multiplied fivefold.</br></br>Our government, like those in Europe and Japan, has made entitlement-benefit promises to voters that it cannot possibly keep. Politicians will fall back on the quick fix of printing money - an easier solution than calling for steep spending cuts and tax increases. Failure to adopt tough, economically sound policies bodes well for gold prices.</br></br>Let's not forget the growing demand for gold abroad. Citizens of China and India are using their rapidly growing incomes to buy gold jewelry and to invest in the metal. Central banks in many emerging nations have become big buyers of gold to diversify their foreign-exchange reserves.</br></br>Gold provides a hedge against inflation, currency weakness and financial turmoil. Gold doesn't move in sync with stocks or bonds, so it's a good diversifier. Everyone should consider owning some. | no | 0 |
European and Asian Markets Rally on News of U.S. Rate Cut | European financial markets stabilized yesterday after the U.S. interest-rate cut, as political leaders sought to calm sell-off fears by assuring Europeans that economic problems were in the United States, not their countries.</br></br>Major Latin American stock exchanges also rose after steep declines Monday, boosted by news of the Federal Reserve's three-quarter-point interest rate cut.</br></br>Asian markets rebounded Wednesday. Japan's Nikkei 225 was up 3.5 percent at the close of morning trading, and Australia's benchmark index was up about 5.1 percent at midday. Hong Kong's Hang Seng surged almost 7.5 percent in early trading and was up about 5.8 percent later in the morning, while China's stocks rose for the first time in three days.</br></br>Those gains came a day after stocks across Asia took precipitous falls for the second day in a row. The drops yesterday were even more severe than Monday's, and several markets hit multiyear lows. The Australian market suffered its worst one-day fall ever. Japan's Nikkei 225 fell to its lowest level since 2005.</br></br>Also yesterday, Indian shares plunged so quickly -- nearly 11 percent -- that its stock markets halted trading within a minute of opening and did not resume for an hour. The Bombay Stock Exchange Sensitive Index closed down 4.97 percent, its seventh successive drop. In South Korea, volatile futures prices prompted the main Kospi market to briefly suspend program-selling orders at midday. | no | 0 |
Pace of Growth In Manufacturing Slowed in April | In the latest sign that U.S. economic activity is moderating, the Institute for Supply Management reported that the manufacturing sector grew in April at the slowest pace in nearly two years.</br></br>The ISM, which polls purchasing managers at more than 400 industrial companies, said its index of manufacturing activity slipped to 53.3 last month, down from 55.2 in March and 55.3 in February. April was the fifth consecutive monthly decline in the index, which peaked at 61.6 last July and has trended lower ever since. A reading above 50 indicates that the manufacturing sector is expanding; a reading below 50 indicates that the sector is contracting.</br></br>While the decline in the ISM index was widely viewed as disappointing news, some economists were quick to note that the reading doesn't mean that the economy is heading for recession. "The current ISM number is down quite a bit, but it's still pretty good and consistent with pretty decent growth in the economy," says Joel Naroff of Naroff Economic Advisors Inc. in Holland, Pa.</br></br>Norbert Ore, chairman of the ISM's survey committee, also down played the recent decline. He said that after 23 consecutive months of expansion in the manufacturing sector, a slowdown was inevitable. "It's important to note it's the longest run of growth in manufacturing in 16 years," he said. "There has to be some expectation that the rate of growth will decline." He attributes the slowdown to a decline in demand for durable goods and to inventory excess in the automotive sector. The new-orders index, for example, fell to 53.7 in April from 57.1 a month earlier.</br></br>The ISM index is closely watched by economists and investors because it provides an early look of economic activity in the preceding period and tends to track changes in the health of the U.S. industrial core. But it isn't clear whether the report will have any influence on members of the Federal Reserve's Open Market Committee, who are scheduled to meet today to map out monetary policy. The central bank is widely expected to raise the target for the federal-funds rate, charged on overnight loans between banks, to 3% from 2.75%. While the economy appears to have softened in recent months, Fed officials seem to be more focused on keeping inflation from accelerating than on keeping the pace of economic growth from slowing. | no | 0 |
Unemployment: What to Do | T HE RAPID rise in the unemployment rate is an unambiguous warning that public policy now has to move, and forcefully, to push the economy toward growth. Relying on the possibility that a recovery will automatically arrive in due course next summer or fall, or sometime, is perilously inadequate. The recessionÛÓif that is still the word for itÛÓis deepening throughout the world.</br></br>The unemployment rate in this country last month was 10.8 percent. In Europe, the Common Market governments have been meeting gloomily ifi Copenhagen to take stock of their own deteriorating situation. Unemployment rates in Western Europe range as high as 12.8 percent in Britain and 14.8 percent in Belgium. In the past, expanding economies abroad have sometimes pulled the United States out of trouble. It wonÛªt happen this time. Only the United States has the strength to change the course on which events are moving.</br></br>The key to recovery is lower interest rates. The Federal Reserve Board has been nudging the rates down, but it is severely constrained by widespread fears in the financial markets of more inflation ahead. Those fears are fed by the size, and the growth, of the federal budget deficit.</br></br>The Federal ReserveÛªs only instrument to lower interest is to supply more money to the banking system. If the Fed goes too fast, in a time of rising deficits, lenders will conclude that higher inflation is a certainty, and the interest ratesÛÓcontrary to textbook theory and contrary to the FedÛªs purpose ÛÓwill rise instead of fall. ItÛªs happened a couple of times in the past two years and, in the present circumstances, it could very easily happen again.</br></br>To change those circumstances will require vigorous action by President Reagan and Congress. The presidentÛªs original program having collapsed, he is now talking as though he were losing interest in the whole unpleasant subject and saw nothing to be done about it. On the contrary, there are four things that need to be done promptly: made possible the substantial decline in interest rates over the past months, but they wonÛªt go much lower without another one. | no | 0 |
Only Way to Trim Deficit, Report Warns: Cut Spending of Raise Taxes, CEA Says | The annual report of the presidentÛªs Council of Economic Advisers warned yesterday that, if federal spending is not cut sharply, taxes will have to be raised to bring down the budget deficit.</br></br>The report, which accompanied President ReaganÛªs yearly economic report to Congress, indicated that the current strong economic expansion eventually would be undermined if the budget deficits are not trimmed in future years.</br></br>While stressing the need for action on the deficit, William Niskanen, the remaining member of the CEA, also emphasized the cur-</br></br>Federal Reserve Board Chairman Paul A. Volcker, who followed Niskanen at the hearing, warned of the nationÛªs swollen trade deficit as well as budget deficits, noting that the United States ÛÏis in the process of moving from the worldÛªs largest creditor to the worldÛªs largest debtorÛ and no longer can rely on foreign investment to help finance its deficit in international transactions.</br></br>The CEA report predicted that what so far has been the strongest economic expansion in 30 years will continue in 1985: The gross national product will grow 4 percent and See REPORT, DIO, Col. 3 consumer prices will go up 4.2 percent. Beyond this year, the CEA report projects continued healthy growth and declining inflation, interest rates and unemployment. But those projections are conditional on adoption of the proper government policies, including cutting federal spending and a predictable, moderate growth of the money supply. | no | 0 |
Blackstone Reaches Deal To Revamp Hilton's Debt | Blackstone Group reached an agreement to restructure the balance sheet of Hilton Worldwide as it looks to improve the flagging fortunes of its single largest investment.</br></br>Hilton's lenders and Blackstone are finalizing a deal that would cut its $20 billion debt load by about $4 billion, according to two people familiar with the negotiations. The agreement calls for Blackstone's funds to contribute $800 million of new equity, which will be used to buy back debt at a discount. It would also extend the maturity of some debt issues, these people said.</br></br>The restructuring will help shore up Hilton's finances as it struggles through a downturn in the hotel industry. For months, some analysts have said there was a risk that Hilton might not be able to generate enough cash to stay current on its $20 billion of debt. Without a restructuring, Blackstone could have been forced to sell Hilton assets to cover its roughly $900 million in interest payments, according to the analysts.</br></br>A Blackstone spokesman declined to comment.</br></br>A number of large leveraged buyouts -- walloped by the economy and large debt loads -- have managed to stave off default over the past year by restructuring their balance sheets. They've been helped by high-yield markets, which have proven eager to snap up new debt of even the weakest credits. | no | 0 |
Philippines Is Turning Heads; Average Weighting by Fund Managers Rises as Economy Improves | Hong Kong -- THE PHILIPPINES' improved fiscal position is getting international fund managers excited again about a market that has been their least favored during the past seven years.</br></br>International fund managers surveyed by Dow Jones Newswires have raised the Philippines and the U.S. to their most bullish levels in years among several key changes to their recommended portfolio weightings in September. They also have raised their weighting for Indonesianshares but have downgraded markets in China, Malaysia and Australia.</br></br>The bloodless military coup that overthrew Prime Minister Thaksin Shinawatra hasn't affected the consensus "neutral" weighting for Thailand, unchanged for a third straight month.</br></br>In terms of overall asset allocations, fund managers have lifted their stance on stocks, which have regained the confidence lost when investors became preoccupied with concerns about a U.S.-led global economic slowdown at the start of the second quarter.</br></br>Even though fund managers on average suggest a neutral stance in the Philippines within an Asian-Pacific stocks portfolio, that recommendation is the highest since September 1999, when Philippine shares were a "full overweight." Since then, fund managers have recommended varying degrees of being underweight in Philippine shares, mainly because of a fiscal deficit and political concerns. | no | 0 |
Use of stock-options contracts climbs as investors seek hedge | ST. PETERSBURG, Fla. -- Use of stock-options contracts to hedge stock portfolios and speculate in the market is surging, pushing options trading to levels not seen since the 1987 stock-market crash.</br></br>Investor wariness as the Dow Jones Industrial Average continues to set records has helped bring new life to this previously moribund sector of the U.S. financial markets, as has the protracted takeover battle for Paramount Communications Inc.</br></br>"This long, drawn-out tender offer has proven to be very profitable for the options business," said Michael Schwartz, senior vice president at Oppenheimer & Co. "But there also has been a steady turnaround in the business, with an influx of new users and a change of direction from index options to equity options."</br></br>Many participants attending the Chicago Board Options Exchange convention here this weekend are wondering how long the nation's four major options exchanges can maintain their momentum.</br></br>Before last month, when these markets posted their highest daily and monthly volume totals in more than five years, the consensus in the U.S. options industry was that it had never really recovered from the crash. Thousands of overly aggressive investors, who used options contracts in risky, leveraged trading strategies, had been devastated in the 1987 cataclysm. And options trading fell sharply in the years that followed. | yes | 1 |
Overheard | Corrections & Amplifications</br></br>The Federal Reserve Act was amended after Sept. 11, 2001, to allow the Board of Governors to act in "unusual and exigent circumstances" even if fewer than five of its members seats are filled, so long as it has a unanimous vote. The Overheard column in Monday's Heard on the Street incorrectly said that five assertive votes were still needed for any such action.</br></br>(WSJ Sept. 28, 2010)</br></br>[Financial Analysis and Commentary]</br></br>Ben Bernanke is preparing his arsenal to keep the economy from slumping anew. But were another financial crisis to hit, the Fed may find one of its guns out of action -- at least in theory. Section 13(3) of the Federal Reserve Act authorizes the board of governors to intervene in markets during "unusual and exigent circumstances" -- invoked in 2008 to make emergency loans to Bear Stearns and American International Group. But it also requires an affirmative vote "of not less than five members" of the Fed board. | no | 0 |
For Volcker, M1 Is Out, but for Proxmire It's In | In a city that keeps close tabs on what's in and what's out, Federal Reserve Board Chairman Paul Volcker made it official yesterday: M1 is out.</br></br>Volcker told the Senate Banking Committee, which Proxmire chairs, that the Fed will no longer target the growth of M1, a basic measure of the nation's money supply.</br></br>But Proxmire is one of M1's biggest fans. And he told Volcker the 1978 Humphrey-Hawkins law requires the Fed to report to Congress on the rate at which it wants the basic money supply to grow.</br></br>Proxmire questioned the legality of the Fed's refusal to provide an M1 target but said that he would try to use quiet diplomacy to get the central bank to change its position.</br></br>M1 consists of money involved in transactions-currency, checking accounts and travelers checks-and according to some economists is linked to economic growth: If money supply expands, growth increases; if it shrinks, the economy contracts. | no | 0 |
Electronics Spark Modest Gain in Stocks: Trading at Sluggish Pace | NEW YORK, April 4 (AP)ÛÓA late spurt by electronics and selected Issues helped give a sluggish stock market an advance todayÛÓthe first in more than a week.</br></br>A 10-point leap by Texas Instruments, which went to a new high and soared through the 200 level for the first time, helped Inspire others of the ÛÏscienceÛ stocks. ,</br></br>Gains by some of the blue chip chemicals, selected utilities and a scattering of other pivotal stocks firmed the average despite an abundance of losses going from frac-ions to a point or so. Rails edged up on balance. Oils and aircrafts were mostly lower. Other major groups were irregular.</br></br>The Associated Press average of 60 stocks rose .20 to 214.40 with the industrials up .30, and the rails up .30 and the utilities</br></br>Western Union, which had reported lower earnings, was sold heavily and dropped 2VåÈ. Douglas Aircraft, which announced a 10 per cent pay cut for some 13,500 employes on the eve of stepped-up labor negotiations, fell 1%. | no | 0 |
Alexandria | Of the seven Zip codes in the city of Alexandria where more than one house sold last year, the smallest median house price gain came in at just less than 18 percent.</br></br>Overall, house prices soared nearly 26 percent, with a median price of $365,000, the highest in the region, according to a Washington Post analysis based on government sales records. Condominiums were not included.</br></br>"No one's ever seen increases like this." said Cynthia Smith- Page, director of real estate assessments for Alexandria. "Maybe the closest was during the boom in the 1980s."</br></br>The overall assessed value of all existing homes in the city increased 24.48 percent, which might lead one to think that Smith- Page has not been winning any popularity contests since the tax assessment notices were mailed Valentine's Day.</br></br>"We have had no more than average calls [disputing the assessments], if not fewer calls," Smith-Page said. "Most people seem to understand what the real estate market has done. Everyone is well aware just how much more their house is worth these days." | no | 0 |
Divergent Interests Seek Fuel-Economy Compromise | DETROIT -- Even as the auto industry and environmental groups gird for another political fight over fuel economy, private discussions are under way to work out a truce.</br></br>The Big Three auto makers, the United Auto Workers union and environmental activists are negotiating to try to come up with a joint proposal for what they have come to conclude is the most realistic way to improve the fuel economy of the U.S. automotive fleet: a big package of federal subsidies designed to seed a consumer market for vehicles that go farther on a gallon of gas.</br></br>Though the longtime antagonists are far from a deal, the fact that they are negotiating at all marks a big shift, suggesting each of them has decided the political impasse in Washington over fuel economy is contrary to its interests. For the auto industry, an intensifying political battle over the fuel consumption of sport-utility vehicles has become a public-relations nightmare. For the union, the specter of a shift toward newer, more-efficient vehicles raises worries about job losses for its members.</br></br>For environmentalists, the realization is setting in that a severe toughening of the federal government's fuel-economy rule is a political nonstarter. Therefore, some of them are concluding, the only way to get substantial improvement in the fuel economy of the U.S. fleet is to spur market demand for more-efficient vehicles. That is a tough task in a country where gasoline prices, adjusted for inflation, remain at historically low levels. But it is precisely the tactic the auto industry has been endorsing all along.</br></br>"Many of us want to solve the problem and get to a solution," said Ashok Gupta, director of the air and energy program at the Natural Resources Defense Council, one of the environmental groups involved in the discussions. "So you have to think out of the box and try to break the gridlock." | no | 0 |
Investors' Arbitration Awards Hit Record $194 Million in 2004 | Dow Jones Newswires</br></br>Investors won a record $194 million in arbitration against their brokerage firms in 2004, up 20% from 2003, according to statistics released this week by the National Association of Securities Dealers.</br></br>The money awarded, which includes $22 million in punitive damages, beats the previous total record of $163 million set in 1998. But because the number of cases closed in 2004 also reached a record high of 9,209, the actual rate of investor wins remained relatively unchanged, at 55% versus 54% in 2003.</br></br>Investors who say they've been wronged by brokers must submit their complaints to arbitration. The NASD operates the securities industry's largest dispute-resolution forum, in which panels of arbitrators determine whether investors are owed restitution from their brokerage firms.</br></br>While the number of cases closed in 2004 rose 27% from 2003, the number of new cases filed declined 8% to 8,201. The decline in new cases didn't come as much of a surprise to NASD staff, who are used to seeing the caseload ebb and flow depending on how the overall stock market fared in the previous year. Following a recovering market in 2003, fewer cases were expected for 2004, says NASD Dispute Resolution President Linda Fienberg. | no | 0 |
Link Between Dollar, Trade Is Questioned: Link Between Dollar, Trade Is Questioned | The chairman of the International Trade Commission warned yesterday that AmericaÛªs growing merchandise trade deficits are unlikely.j to be turned around by a lowering of interest rates and a decrease Tn the value of the dollar. ZTCZ</br></br>Kckes said other factors are often equally as important as the high value of the dollar in hurting JU.S. sales overseas and encouraging; the heavy flow of foreign goods Hefer ÛÏWe should riot conclude that when the dollar falls, our trade deficit will vanish. In fact, there is. now reason to question the conventional wisdom that exchange rates alone dictate trade flows,Û Eckes told the National Press Club.</br></br>"A decline in the dollar will undoubtedly provide some relief to beleaguered American industry,Û he continued, ÛÏbut a falling doll# will not end the import challenge.Û;</br></br>The dollarÛªs soar since 1981 in relation to other world currencies has been blamed for a large part of > AmericaÛªs trade deficit, especially with Japan, by making foreign goods less expensive here and raising the cost of U.S. products overseas.</br></br>ÛÏExchange-rate movement cannot always be assumed to be the predominant factor which determines changes in trade flows with respect to any individual product,Û the ITC study found. | no | 0 |
In This Market, Maybe Hard Hats Would Be the Appropriate Attire | With stock market confidence already shattered, some floor traders at the New York Stock Exchange are taking drastic measures to ward off further bad luck this Friday the 13th.</br></br>They are wearing hats.</br></br>Today is "Hat Day" on the exchange, and word has gone out that members must cover their pates -- or be prepared to suffer the consequences.</br></br>According to Arthur Cashin, a floor broker for PaineWebber Inc., the logic couldn't be simpler: As everybody knows, it's bad luck to wear a hat indoors; but since today is Friday the 13th, the reverse should hold true. So wear a Stetson, fedora, Yankees cap or bowler. Then, stand back and watch the bull market roar.</br></br>Maybe that'll happen, maybe not. On the most recent previous Hat Day -- it came on Nov. 13, 1987 -- traders showed up sporting everything from football helmets to women's straw hats, the price tags still attached. And with the October crash fresh in their minds, a surprising number of them kept their hats on throughout the day, hoping for one good session in an otherwise unnerving season. | no | 0 |
Rails, Some Steels Lead Stock Recovery: But Sales Volume Dips | NEW YORK, April 17 (AP)ÛÓThe stock market recovered today with some leading steels advancing and rails up on a broad front. Trading was moderate, edging below three million shares.</br></br>Wall Street apparently regained some confidence based on published reports that the Administration was easing pressure on the steel industry now that the Government has won its point by getting the steelmakers to rescind a price increase.</br></br>The proposal of Sen. Hubert Humphrey (D-Minn.) that the President set up a commission to look into steel industry policies and needs, was interpreted by some Wall Streeters as a sign that the Government may get around to weighing the ÛÏprofit squeezeÛ which steelmen say is hampering modernization of plant.</br></br>The advance also included big three motors, oils, rubbers, chemicals and non-ferrous metals. Building materials, farm implements and electrical equipments were mixed and there was some extreme weakness among tobaccos and drugs.</br></br>and a riiarp gain in March housing starts, ending four straight months of decline. Building construction has been one of the questionable areas in the business recovery. | yes | 1 |
August's Stock Market Turmoil Tests Faith of Corporate Insiders | NEW YORK -- In the days immediately after Iraq's Aug. 2 invasion of Kuwait, with the stock market sinking like a stone, Ken Lay, a director of Compaq Computer Corp., says he decided it was "time to hedge my bets a little bit."</br></br>Mr. Lay lightened his holdings of several stocks -- except for energy issues -- including Compaq Computer, filings with the Securities and Exchange Commission show. He sold 5,000 Compaq shares, which represented 33% of his Compaq holdings, for $270,000.</br></br>"I was concerned about the overall tone of the market, and about the Middle East," Mr. Lay said. While Compaq management is doing "a superb job," he said, "even good companies, in a downdraft like this, get hurt."</br></br>Mr. Lay sold his shares for $54 each on Aug. 10. In New York Stock Exchange trading yesterday, Compaq closed at $47.875, up $1.50. Now, Mr. Lay says, the stock represents a buying opportunity -- and he says he plans to buy some as soon as SEC rules allow.</br></br>For officers, directors and other corporate insiders, the stock-market turmoil resulting from the Middle East crisis has been a test of faith. This is "the most important period for insider filings since October 1987," when the Dow Jones Industrial Average crashed 22.6% in a single day, said Robert Gabele, president of Invest/Net, a North Miami, Fla., company that compiles and analyzes the SEC insider data. In a period of uncertainty such as the present, he said, "insider buys are important as a sign of confidence." | yes | 1 |
IPO Outlook: After a Dull Spell, IPO Action Begins To Heat Up Again | It's not quite IPO Mania again, but . . . .</br></br>With 18 initial public offerings of stock on this week's calendar, coming after several IPOs rallied smartly last week, it is clear that new issues are being sought after by investors again. This is good news for Wall Street investment bankers now sitting on a $45 billion backlog of pending new stock, the vast majority of them IPOs (rather than follow-on deals by already-public companies).</br></br>Shaking off the IPO slowdown caused by April's technology-stock plunge, investors are once again eager to snap up shares in fledgling companies. Most Wall Street firms have spent the past few days brushing the dust off IPOs that have been on the shelf.</br></br>"We're going to see a fairly healthy slug of new product hit the market over the next four to six weeks," predicts Tom Fox, head of equity capital markets at Donaldson, Lufkin & Jenrette Inc. "The window seems to be reopening."</br></br>Yet despite the big crop of new issues on tap for this week-markets permittingthe IPO market isn't as frothy as it once was. For starters, investors, bruised from the spring's stock declines, remain wary of baby-faced companies looking for cash infusions at high valuations. | no | 0 |
Coram Agrees To Buy Lincare For $1 Billion --- Stock Transaction to Add Respiratory Therapy To Home Care Services | Coram Healthcare Corp. agreed to acquire Lincare Holdings Inc. for about $1 billion in stock, further fueling the heated pace of consolidation and competition in the home health-care industry.</br></br>The tax-free transaction would create an entity with projected 1995 revenue of about $1.1 billion. That would put fast-growing Coram neck-and-neck with its nearest industry rival, the combined Abbey Healthcare Group Inc. and Homedco Group Inc., which announced merger plans on March 2.</br></br>At a time when insurers and managed-care networks are demanding lower costs and one-stop shopping from home healthcare providers, the combination would add home respiratory therapy to the service arsenal of Denver-based Coram, which was created last year through the combination of four smaller home-infusion companies.</br></br>Pressure to treat patients outside expensive hospital settings has led to rapid growth in home health care, which offers home delivery of services such as providing oxygen to asthma patients or using intravenous devices to deliver nutrition and medicine.</br></br>Although industry analysts generally praised the strategic value of the Coram acquisition, concerns over its price drove Coram shares down $2, or 8%, to $23 in heavy New York Stock Exchange trading. Lincare shares soared $4.313, or 15%, to $33.625 on the Nasdaq Stock Market. | no | 0 |
Fed Proposes New Rules on Equity Loans | The Federal Reserve Board this week proposed new rules requiring lenders to provide home equity loan borrowers with more information about the cost of such loans.</br></br>In general, lenders would have to provide potential borrowers with a written explanation of the terms and conditions of the loan at the time of loan application and before any nonrefundable fee is collected.</br></br>For applications taken over the telephone, lenders would have three days to supply the required information.</br></br>The disclosures must include a full explanation of how the interest rate and monthly payments might change and the circumstances under which immediate repayment of the loan could be demanded.</br></br>Congress has prohibited lenders from unilaterally changing the terms of the loan after it has been taken out. | yes | 1 |
Lenders, Borrowers Hook Up Over the Web; Prosper.com and Other Sites Provide Forum for Individual Bidders Willing to Offer Small Loans | Special to The Wall Street Journal</br></br>A PRIEST NEAR Orlando, Fla., borrows $9,000 for home repairs at an annual rate of 17.75%. A second-year Harvard Business School student wants $15,000 for foreign travel and gets a loan at 8%. A stepmother in suburban Sacramento needs $4,000 to cover the legal expenses of adopting her stepson and gets a loan at 23.75%.</br></br>These three borrowers have one thing in common. They're part of a loan portfolio that I've built, sitting at my computer in New York, with the help of Prosper.com, a new San Francisco-based Web site that facilitates peer-to-peer microlending -- that is, individuals lending money to one another directly.</br></br>For those needing a small loan, Prosper represents an alternative to credit cards or the credit union. And for those with a few dollars to spare, it can be a more entertaining option than savings accounts and bonds. Though there are a few other sites that provide similar services -- and at least one, Zopa.com, that plans to launch in the U.S. later this year -- Prosper, for now, is the most popular.</br></br>Prosper operates like both an auction site and an online dating service. It provides an eBay-like forum where lenders can evaluate hundreds of prospective borrowers, each seeking loans of $1,000 to $25,000, repayable over three years. The borrowers explain why they want the loan, Prosper provides information on homeownership, credit history and debt-to-income ratio, and the loan gets put up for bid at the maximum interest rate the borrower is willing to pay. | no | 0 |
Wednesday's markets: Stocks fall 74 points on renewed inflation fear | The Dow Jones Industrial Average skidded more than 74 points -- much of it late in the session -- as reeling bond prices shattered the fragile mood in the stock market.</br></br>The catalyst for the stock and bond declines was a rally in commodities prices that stoked fears of rising inflation. The Knight-Ridder Commodity Research Bureau's closely watched index of futures prices rose 3.09 to 258.91, an eight-year high.</br></br>The rise in commodity prices has led investors to once again fear that inflationary pressures are starting to percolate along with a rebounding economy.</br></br>Amid the drooping stock and bond prices, the dollar pushed ahead, hitting a 14-month intraday high against the mark and a 26-month intraday high against the yen.</br></br>The Dow industrials lost 74.43 to 5485.98, extending its four-session loss to 203.76, or 3.6%. With the dollar strengthening, key Dow components with heavy overseas operations felt the brunt of yesterday's selling pressure. Procter & Gamble fell 2 to 81 and Coca-Cola shed 2 7/8 to 78 7/8. Meanwhile, Aluminum Co. of America continued to lead the charge of commodity cyclical stocks, gaining 1 to 65 3/8, a 52-week high. | no | 0 |
Budget Deficit Seen Nearing $40 Billion: Budget Deficit of $40 Billion Is Seen | Under Secretary of the Treasury Paul A. Volcker said yesterday that the federal governmentÛªs budget deficit for the current fiscal year is going to be ÛÏvery substantial,Û and that this may raise anew questions about the dollarÛªs stability in world markets.</br></br>1972 will run just under S40 billion, more than three times.' President Nixon's estimate of, SI 1.6 billion last .January, and. the hipest cl elicit since the; World War H year of 1945, j when it was S45 billion. The! last published estimate by the j \ixon administration, in duly.; was $18.6 billion. ,</br></br>Last September. Treasury > Secretary John B. ConnallyJ gave the Ways and Means! Committee an unofficial guess! that Hie deficit would run between S27 billion and $28 billion.</br></br>The actual budget estimate for Fiscal 1972, which ends June 30. will be sent to Congress next Monday There is the possibility that Mr. Nixon will announce it initially in his State of the Union message on Thursday.</br></br>President Nixon will also announce his budget program for the new fiscal year (19715), and the expectation is that there will be another large deficit, but probably only half the size of the Fiscal 1972 number. | no | 0 |
As Recession Is Declared, Stocks End Five-Day Rally With Severe Slump | The stock market on Monday suffered one of its worst days since the financial meltdown began, slicing 680 points off the Dow Jones industrial average as Wall Street snapped out of its daydream of a rally and once again faced the harsh reality of a recession.</br></br>Not only did stocks end their five-day winning streak, but they erased more than half the gains. The Dow lost 679.95 points to close at 8149.09. There have only been three days in market history with bigger point losses for the Dow -- the Monday after the Sept. 11 attacks, and Sept. 29 and Oct. 15 of this year. The Standard & Poor's 500-stock index, one of the broadest market gauges, lost nearly 9 percent, to close at 816.21.</br></br>Erasing any lingering doubts, there was also a declaration that an economic recession has been in progress in the United States since December 2007, made by the National Bureau of Economic Research, the nonprofit group of economists that classifies business cycles.</br></br>The selling was broad and deep. All 30 of the stocks in the Dow Jones industrial average finished lower. On the New York Stock Exchange, more than seven stocks fell for every one that rose.</br></br>Investors were also nervous after weekend sales figures indicated that many Americans will cut back their trips to the mall this holiday season. Monday brought additional bad news: Manufacturing had dropped to its worst levels in 26 years and construction spending fell by a larger-than-expected amount in October. | yes | 1 |
Canadian Dollar Down Slightly | TORONTO--The Canadian dollar is ending modestly lower Friday after recouping earlier losses instigated by weaker-than-expected manufacturing data.</br></br>The U.S. dollar is trading at C$1.0175 Friday from C$1.0156 late Thursday, according to data provider CQG.</br></br>While trading was relatively volatile, with the U.S. dollar sinking to C$1.0136, its lowest level since May 14, at one point, the net effect was to bring it back near Thursday's close and its levels early in the week.</br></br>"We're kind of stuck here. We're closing the week almost where we started," said Camilla Sutton, chief currency strategist at Scotiabank.</br></br>The Canadian dollar lost ground after it was reported that manufacturing sales were down 2.4% from March, much weaker than expected 0.3% monthly rebound in April. But it recovered and edged higher against the greenback in morning trading before surrendering some of those gains. | no | 0 |
REVIEW & OUTLOOK (Editorial) Cutting the Budget -- X: Cut to What Purpose? | {An Editorial Series}</br></br>Far from being an impregnable fortress of "uncontrollables," the federal budget is a mountain of fat. As this series has detailed, program after program could be cut to the long-term benefit of even their intended beneficiaries. If the Grace Commission recommendations were enacted tomorrow, government services would be delivered more efficiently across the board. If Pentagon cuts pared bloated staffs, we would have a leaner and meaner military. Cutting subsidies would give us a stronger farm sector, better transportation and so on. While we hesitate to mention it when middle-class welfare has scarcely been dented, in many ways the poverty programs have proved a burden on the poor.</br></br>The only "uncontrollable" has been Congress, locked in a mirage of "political reality" and structured into petty fiefdoms guaranteeing indiscipline and inertia. On this front, the 1985 session offers at least a glimmer of hope. Buoyed by the resounding defeat of the last New Deal Democrat, the Republican administration will present a budget that at least offers a menu of budget reductions. In Robert Dole, the Republican Senate has a new activist leader who will go beyond the consensus of his colleagues and try to make his own mark -- a positive development even if we disagree with some of his ideas. On the budget, political will is starting to bud.</br></br>We fear, though, that these tender buds will be nipped in a fit of ignorance and misunderstanding. While there is now an inchoate recognition that the budget needs to be cut, there is no cogent rationale of why. This will both lead to a splintering of the potential political coalition, and focus attention on the least meaningful kind of savings. The problem is that no one actually talks about cutting expenditures. Instead, everyone talks only of cutting the deficit.</br></br>This rhetoric is bound to raise the suspicions of the supply-siders, ourselves included, for it has historically been a code word for raising taxes. As Alan Reynolds records nearby, this is a proven prescription for stagnation of both the economy and the government. (See: "Less Will Get You More" -- WSJ Jan. 23, 1985) It has been fashionable lately to calculate how much economic growth would be needed to eliminate the deficit with no increase in taxes. No one bothers to calculate what it would take to eliminate the deficit by raising taxes with no economic growth, though this clearly would be even more "unrealistic"; nothing produces deficits like recession. In any anti-deficit strategy growth remains the key, and growth is not promoted by higher taxes. | no | 0 |
Follow the Dotted Line: First Up-Then Down | The name is the game on Wall Street these days.</br></br>A growing number of small public companies are finding that adding ".com" to their name can send their stock soaring. For investors, however, these volatile highfliers pose some particular risks. Many have little or no current operations and don't file financial reports with the Securities and Exchange Commission. And often, the trading pop soon at least partly fizzles.</br></br>Take MIS International. Until January, this largely dormant little outfit traded on Nasdaq's OTC Bulletin Board (for stocks that don't qualify for Nasdaq itself) with daily volume as low as 2,000 shares and a price generally well south of 50 cents a share. The company then acquired a new Internet-oriented business plan and a new name, Cosmoz.com.</br></br>Presto! Trading volume rocketed to as much as six million shares a day and the price briefly hit $5, giving Cosmoz.com a market value of $200 million. Its price has since dropped back to about $2.</br></br>Not too shabby for a company that hasn't yet turned a profit, and whose only operating business so far is a recently purchased financial-markets-information Web site that generates about $200,000 a year in revenue. However, Cosmoz.com does have a "hip" and "catchy" name that "definitely contributed" to the recent stock-market interest, says Wilfred Shaw, chairman and chief executive. He adds that Cosmoz.com has plans to acquire "many Internet companies." | no | 0 |
Unequal Opportunity: Losing Ground on the Employment Front --- Losing Ground: In Latest Recession, Only Blacks Suffered Net Employment Loss --- Firms Added Whites, Asians And Hispanics Overall, But They Deny Any Bias --- Effects of Seniority, Location | The last recession seriously eroded equal opportunity for America's black workers.</br></br>Blacks were the only racial group to suffer a net job loss during the 1990-91 economic downturn, at the companies reporting to the Equal Employment Opportunity Commission. Whites, Hispanics and Asians, meanwhile, gained thousands of jobs, according to a Wall Street Journal analysis of EEOC records.</br></br>The computer-aided study shows that some of the nation's largest corporations shed black employees at the most disproportionate rate. At Dial Corp., for instance, blacks lost 43.6% of the jobs cut, even though they represented 26.3% of Dial's work force going into the recession. At W.R. Grace & Co., they held 32.2% of the jobs cut, while they accounted for 13.1% of the company's pre-recession payroll. At BankAmerica Corp. and ITT Corp., blacks lost jobs at more than twice the rate of their companies' overall work-force reductions.</br></br>Companies say the sudden demographic shift is a statistical fluke, the unintentional fallout of corporate cutbacks and reorganizations. But some civil-rights advocates argue that something more insidious is going on.</br></br>"This is subconscious, deep-seated racism," says George Fraser, who publishes directories of black professionals. "People don't even know these patterns and behaviors are being initiated until you begin to see the pieces of the puzzle together and look at the numbers." | yes | 1 |
Old-Line Banks Advance In Bricks-vs.-Clicks Battle | Don't count out the dinosaurs when it comes to Internet banking.</br></br>In the mid-1990s, a host of Internet-only banks began popping up with promises to run circles around the big banks, weighed down by bricks, mortar and costly tellers.</br></br>But now the Internet banks are being swallowed up by traditional banks and other financial-services firms or left behind in the race to sign up online customers. Big banks, despite their own struggles, are attracting far more Internet accounts than are banks with no branches that offer only an online presence.</br></br>One result: Investors have punished Net.Bank, the largest of the pure Internet banks. Shares of the Atlanta online bank have dived 77% from their peak in April on the Nasdaq Stock Market. "Net.Bank has had a hard time getting the kind of brand recognition that a Citibank or Wells Fargo has," Robert Loest, a mutual-fund manager at IPS Advisory, of Knoxville, Tenn., said in a note to investors. He recently dumped his Net.Bank shares.</br></br>It is too early to predict the ultimate winners in the online-banking game, of course. But investors now are betting that the banks that will prevail won't be Net start-ups but the old-line established companies that now have entered the fray. | no | 0 |
Retailers Stock Up on Caution | Consumers aren't stepping up spending at the pace many retailers expected just a few months ago, raising the specter that stores will be stuck with piles of unsold goods later this year.</br></br>This dimming retail picture is part of a larger downshift in growth occurring across the economy. Consumer confidence slumped last month and the job market remains weak. On Thursday, the Federal Reserve reported consumer borrowing fell in May, another sign that they are wary about their finances.</br></br>All this bodes poorly for the kind of snapback in spending many stores anticipated only a few months ago. Last year's holiday sales were strong and many retailers expected robust growth to continue through this year, fueled in part by pent-up demand for washing machines and clothes that weren't bought during the recession.</br></br>The typical retailer has to place orders four months or more in advance of actual sales -- which makes them susceptible in the event that sales fail to materialize or simply grow much more slowly than expected.</br></br>Slower growth could mean stores will be stuck with excess inventory. J. Michael Stanley, managing director of Rosenthal & Rosenthal Inc., a specialty lender in the fashion industry known as a factor, says stores have been much more conservative in the orders they place now compared to a few months ago. | yes | 1 |
Venezuelans Rain on Hugo | The stunning defeat Sunday of President Hugo Chavez's constitutional reform agenda is more than a setback for Venezuela's messianic strongman. It is a victory for the ideal of liberty across Latin America. What an affirmation of that ideal it would be if the U.S. Congress now did its part to keep it alive by voting to liberalize trade with Venezuela's neighbors. More on that in a moment. The kudos for now go to the people of Venezuela.</br></br>Mr. Chavez had at his disposal an almost limitless supply of petro- dollars to support -- and to impose -- what amounted to a personal coup against that nation's democracy. He tried to bully Venezuelans into voting for one-man rule and a hard model of socialism. They said no. Algimiro Polanco, a 56-year-old bus driver, told the Miami Herald, "I have always voted for Chavez, but he wants a dictatorship like Cuba. I don't want the government to take my small house. It's mine."</br></br>There were reports from Caracas as early as 8:30 p.m. Sunday night that the "No" vote against the Chavez proposals was victorious. Intriguingly, it took the Chavez-controlled National Electoral Council until 1:15 a.m. to announce the results. Apparently, Mr. Chavez was reluctant to accept the final count, but the military knew that the opposition students held the tally sheets from all the polling stations. When it became clear that there was no way to fudge the results, Mr. Chavez conceded defeat, though the margin of his loss is still being debated.</br></br>The Chavez opposition was celebrating its first electoral triumph in nine years yesterday and it must have tasted good. Venezuela's student opposition deserves special mention for the outcome. The fact that the Chavez program went down in flames is due in no small part to the courage of the country's university students, who persisted with few resources against the Chavez machine. For months they have braved tear gas and riot police in cities across the country and responded only with cries for liberty and the open palms that became the symbol of their movement.</br></br>The package of reforms that Mr. Chavez wanted the electorate to approve on Sunday would have eviscerated Venezuela's civil liberties. The reforms were yet another assault on economic rights in a country with few left. Mr. Chavez wanted to officially strip the central bank of its autonomy and to end guarantees of private property. These amendments seem to have most frightened people living at the far end of the spectrum from the country's elite. With inflation on food and non-alcoholic beverages clocking in at 7.1% for November alone, few Venezuelans were ready to hand over to Mr. Chavez the powers he sought over money creation. | no | 0 |
The U.S. economy can't seem to ... | It keeps showing strength and weakness, with fresh data yesterday providing still more mixed signals -- and fueling a debate over whether the housing slump is dragging the nation into a recession.</br></br>The conflicting data could be a sign that the economy is turning, with what was at first a mild growth slowdown about to give way to a harsher downturn, some analysts said. But others echoed the Federal Reserve, countering that the worst news is still coming from businesses involved in housing and automobile production while the rest of the economy is holding up.</br></br>The situation has left many investors confused and queasy; stock prices rose yesterday after falling Friday, as did the dollar.</br></br>"No question, housing is in a recession," said Nariman Behravesh, chief economist for Global Insight, an economic research and forecasting firm. "The big question, and where people part ways, is how much effect is this going to have on consumer spending and business spending? . . . Yes, there are scary parts of the economy, but there are other parts that are doing okay."</br></br>The pessimists could point yesterday to the Commerce Department's report that new orders to U.S. factories fell 4.7 percent in October, the steepest decline in six years. Much of that reflected falling demand for home-building equipment and materials, as well as automakers' production cuts, analysts said. That echoed a report released Friday showing that manufacturing declined in November. | no | 0 |
CBO Disputes Bush Promise To Cut Deficit in Half in 5 Years; Budget Analysis Challenges Administration's Forecasts | President Bush's budget would not cut the budget deficit in half over five years, as the president has promised, and would run up $2.75 trillion in additional debt over the next decade, according to an analysis the Congressional Budget Office issued yesterday.</br></br>The report suggests that the administration has given an overly pessimistic view of the deficit this year but overly optimistic forecasts for later years to back up its assertion that the budget deficit could be cut in half within five years.</br></br>Under Bush's forecasts, the deficit is slated to drop from $521 billion this year to $239 billion in 2009, the last year of his projection. By contrast, the CBO says the deficit under Bush's budget policies would be $478 billion this year, and would then fall to $258 billion in 2009, before climbing to $289 billion by 2014.</br></br>The CBO projections indicate that, by 2014, the president's spending and tax cut policies would push the government into a hole $737 billion deeper than if Congress ignored Bush's policy prescriptions.</br></br>The new forecast comes at a sensitive time for the White House and congressional Republicans, who face mounting criticism that the tax cuts and rising spending have turned record budget surpluses into record deficits. House and Senate budget writers have pledged to tackle the deficit more vigorously than the president has, and plan to draft budgets next month that would cut spending deeper than Bush has recommended. | no | 0 |
Unusual Gamble, Unusual Gain; Rydex Juno Profits From Betting Against Bonds to Limit Risk | In July, U.S. Treasury bonds had their worst month since Jimmy Carter was president. For investors in the $634 million Rydex Juno fund, the market's pain was their gain.</br></br>The fund bets against bonds by "shorting" them, or selling borrowed securities in the expectation that it can buy them back more cheaply. The Rockville-based fund had its best month since opening eight years ago, gaining 12.26 percent. Bonds, as measured by the Lehman Brothers aggregate U.S. Treasury index, lost 4.39 percent, the worst month since February 1980.</br></br>The fund is designed "not so much to take a gamble but to mitigate the risk in a bond portfolio," Chuck Tennes, 50, director of portfolio management at Rydex Global Advisors, said in an interview.</br></br>Bond prices plunged in July on signs the U.S. economy might be gathering enough strength to reignite inflation. That month, Pimco's $72.7 billion Total Return fund, the world's biggest bond mutual fund, managed by Bill Gross, lost 4 percent, its worst month since the fund opened in 1987.</br></br>But the bad bond news boosted the Rydex Juno fund, which was hurt during the bull market; it lost 16.7 percent last year while the 30- year bond's price gained 10.3 percent, according to a Merrill Lynch index. | no | 0 |
Deaths Found Rising Following Recessions | More Americans will die of heart disease, strokes and kid-, ncy failure as a result of thei rising unemployment, a Johns i Hopkins social scientist says. !</br></br>There also will be an in-creajse in the nationÛªs infant mortality rate and more people will be admitted to mental hospitals because of the current recession, says Dr. M. Harvey Brenner, an associate professor in the School of Hy-s giene and Public Health.</br></br>ÛÏThere are few areas of our j livessthat are not intimately! affected by the state of the; economy,Û he says. !</br></br>The cause is simple: a reces-1 sion increases the amount of; stress on an individual, saysj Brenner, who has spent 12 j years studying economic cy-| cles and health statistics cov-: ering the past 127 years. j</br></br>He is one of the few social! scientists inÛªthe country doing this type of research. Last year, during the energy crisis, he was called in as a consultant by the Department of I Health, Education and Wei- ] fare and the White HouseÛªs Office of Management arid Budget. | no | 0 |
Magical Monarchy | Fifty years ago Wednesday, a 25-year-old woman was awakened in a hunting lodge -- a posh treehouse, actually -- in Kenya and told that her father had died. Therefore she was immediately Elizabeth II, sovereign.</br></br>Tony Blair, the 10th prime minister of Elizabeth II's reign, was not yet born when she ascended to the throne. Winston Churchill was then the first among her ministers. How much has changed since her June 1953 coronation? The decision to televise it was deeply controversial. Most television sets were in pubs, where, it was feared, decorum among the lower orders might lapse during the ceremony.</br></br>Since then, the House of Windsor, including some of its much-too- merry wives, has often resembled a soap opera. But, then, sovereignty has never been a shield from life's vicissitudes: The longest- surviving child of Queen Anne's (1702-14) 18 pregnancies died at age 11.</br></br>Elizabeth II's coronation coincided with Edmund Hillary's conquest of Everest (and, almost as inspiriting, with the end of tea rationing, a relic of the war), which stirred hopes of a "New Elizabethan Age." Instead, there was the continuing loss of empire, a diminishing world role, watery socialism and worsening economic anemia. By the mid-1970s Britain was reduced to the status of the sick man of Europe. Then came revival, but the woman who authored it was named not Elizabeth but Margaret -- Thatcher.</br></br>Once upon a time, in mankind's political immaturity, monarchy was the best available answer to the problems of sovereignty and succession as nation-states evolved. And being a monarch was risky. Richard III (1483-85) was the last English king to die in battle and George II (1727-60) was the last to fight alongside British troops. | no | 0 |
Paying for Health Care | Government workers who think they pay a lot now for health insurance will remember 1995 as the good old days.; A change tentatively approved by Congress would raise premiums for workers and retirees, hitting them much harder than another proposal that has gotten all the attention. That proposal would base annuities on an employee's highest five-year average salary, instead of the current system of using the highest three-year average salary.</br></br>Most federal workers can offset the effect of the change from the so-called high-three to high-five simply by working a little longer. The formula would change incrementally, to high-four in January and then to a high-five system for people retiring in 1998 and thereafter. On the other hand, if the insurance formula is changed, there is nothing workers or retirees can do -- except move to a less expensive, less comprehensive plan -- to escape higher premiums.</br></br>Congress is almost certain to approve a formula change that puts a limit on the government's share of health care premiums for employees and retirees. The kicker is that the limit would rise based on the national inflation rate -- which has been running at or less than 3 percent -- while premiums would rise based on medical inflation rates, which have been running at 7 percent to 8 percent a year over the last decade.</br></br>The government now pays about 72 cents of every premium dollar, a little more or a little less depending on the plan and option workers choose. Blue Cross-Blue Shield's popular standard-option plan costs $81.33 biweekly. The government pays $61 toward that premium, and workers pay $20.33. For HealthPlus, a popular health maintenance organization, the government pays $44.94, and the employee pays $14.98 of the $59.92 biweekly premium.</br></br>That cost-sharing mix will change fast. Next year, thegovernment will pay a flat $1,535 toward the single premium and $3,400 for a family plan. Each year after 1996, that dollar amount will be adjusted according to the Consumer Price Index, which measures inflation. The rate was 2.6 percent in 1994, 3 percent in 1993 and 1992, 4.2 percent in 1991 and 5.4 percent in 1990. | no | 0 |
Retail Sales Up Sharply For Month: New Figures Contradict Earlier Estimates | TIip government reported yesterday unusually sharp Increases in retail sales across the nation, both last month and in October ÛÓ prompting economists to question earlier assertions that consumer spending is tapering otf.</br></br>Commerce Department figures showed retail sales up a steep 2 percent m November to a seasonally adjusted $68,58 billion ÛÓ up from a revised 1.3 percent Jump in October that had been reported earlier as a 0.5 percent drop.</br></br>The lobust performance, combined with a record growth in the number of new jobs reported for November, buoyed key administration economists, who have been glumly lowering their forecasts for 1979.</br></br>One key official said that in light of the recent figures, White House economist1, were going back to their drawing boards. Private analysts have been forecasting a mild recession for 1979.</br></br>Particularly encouraging in yesterdayÛªs report was the disclosure that soles of durable goodsÛÓbig-ticket items such as autos and refrigerators ÛÓclimbed 1.6 percent in November following a 2.3 percent rise the previous month. | yes | 1 |
Market Stages Biggest Advance In Three Months, Steels Strong: Gainers ... | NEW YORK, Jan. 5ÛÓIt was a week late in coming, but the big rally stormed into Wall Street today and shot the stock market to its biggest gain in almost three months.</br></br>Traders barrelled into stocks from the opening bell to the close, running the Dow Jones industrial average to a gain of 14.37 points, its biggest jump since a 19.54-point gain on Oct. 12. The closing level of 805.51 once again put the average above the 800 markÛÓ j a spot still considered by some chartists to have technical significance.</br></br>Volume ran ahead of yesterdayÛªs pace throughout the day, finishing at 7.32 million shares, compared with 6.15 million in the previous session.</br></br>Gainers overwhelmed losers by better than five to one, with 1070 stocks advancing on the Jay against 208 that lost ground. New highs only rose to nine from seven and new lows fell to eight from 16.</br></br>Standard & PorÛªs 500-stock composite was up 1.05 points to 81.60 and the NYSE index added 0.56 point to 44.38. | no | 0 |
Market Rises Sharply; Dow Up Another 7.75 | NEW YORK, Oct. 3 ÛÓStock market prices rose sharply again today as investors who had buttoned up their poclcetbooks earlier in the year continued their fall buying spree.</br></br>Analysts said the temporary dip in interest rates had frecdj Wall Street from its preoccupation with inflation, enabling it to concentrate on the good earnings reported by many companies.</br></br>The Dow Jones industrial average advanced 7.75 to 964,55, recording its 12th gain in the last 14 sessions and closing at its highest level since April 11. Standard & PoorÛªs 500-stock index was off 0.01 at 108.78, the average price of a Big Board share rose 2 cents and the NYSE index gained 0.04 to 58.79.</br></br>There were 943 advances and 597 declines among the 1,849 issues traded, and 88 closed at new highs and 12 at new lews for the year.</br></br>Prices on the American Stock Exchange and over-the-counter market continued to move higher in active trading. | no | 0 |
Bond Market Displays Optimism | Federal Reserve this past week for dues to the course I lie monetary authorities will be taking in relation to the PresidentÛªs new economic program.</br></br>The Reserve SystemÛªs policy-setting Open Market Committee met on Tuesday to review its posture. As far as market men could tell in the few days since, little if any change was voted.</br></br>But the lack of evidence of a shift toward easier credit was not discouraging. As the past week went on, optimism among traders and investors gradually increased.</br></br>SOPI11 STIC ATED market observers were not convinced that the "FedÛ would automatically case in any significant way on the mere proclamation of the PresidentÛªs program. They recognize the uncertainties that the monetary authorities faceÛÓthe lack of benchmarks to help determine what a new policy should ; lie.</br></br>To many officials, this seems like a good time to keep a low profile. To judge from the absence of overt moves to case up, they apparently prefer to let the supply and demand for credit and fixed-income securities determine the trend of interest rales at this time. | no | 0 |
A Housing Slowdown Can Put the Brakes on a Job Sector but Open Other Opportunities | MORTGAGE BROKERS, prepare your resumes. And while you are at it, highlight any experience you've had in health care.</br></br>The reason: Housing, the biggest generator of jobs in the current expansion, is running out of steam. As a result, tens of thousands of Americans, from bankers to hardware-store clerks, are likely to find themselves out of work over the next couple of years. For those who can transfer their skills to other industries that are still growing, such as health care, it won't be the end of the world.</br></br>"It's not going to be a big show-stopper, because there are other areas of the economy that are picking up," says Brian Bethune, U.S. economist at consulting firm Global Insight.</br></br>Few sectors can claim to have as much sway over the economy as housing. Housing-related employment has accounted for about 23% of the 4.9 million jobs created since the nation's job market began to grow in late 2003, according to Moody's Economy.com. That includes architects, contractors, real-estate agents, brokers and bankers, as well as the host of others who provide the industry with materials and services.</br></br>"There's never been a housing boom like this one in terms of the reach, in terms of the range of industries affected," says Ethan Harris, chief U.S. economist at Lehman Brothers in New York. "This is clearly unprecedented." | yes | 1 |
World News: Risks Fuel China's Resolve On Yuan | BEIJING -- Economists and politicians from Brussels to Washington say that the Chinese yuan is undervalued. For China's own good and that of the global economy, they say, the currency needs to move up in a big way, and soon.</br></br>So why hasn't China revalued? Part of the answer is Japan.</br></br>The last time the U.S. was faced with a rising Asian export power, the currency also became a big political issue. And in September 1985 the major economies of the time met at the Plaza Hotel in New York to ease those tensions. The accord they reached caused the dollar to fall from roughly 240 Japanese yen to about 160 over two years.</br></br>Today, China's critics are demanding a similarly sweeping move. But Japan soon regretted agreeing to a big surge in the yen: Growth slowed abruptly, which pushed the government to boost spending and lower interest rates. A real-estate bubble and a years-long slump followed. And the issue the Plaza Accord was intended to fix -- Japan's sizable trade surplus -- remains to this day.</br></br>From Japan's example, Chinese thinkers learned that a big exchange-rate move could damage their economy, and won't necessarily help the trade balance. | no | 0 |
RJR Nabisco Seeks to Cut Interest Rates on $6 Billion of Debt | NEW YORK -- RJR Nabisco Inc. is seeking to reduce the interest rates it is paying on some of its $6 billion in bank debt.</br></br>According to individuals with knowledge of the negotiations, RJR approached its banks in recent weeks to try to renegotiate at least a portion of its debt.</br></br>An RJR spokesman said the company regularly talks to its banks and is always looking for ways to reduce the amount and average cost of its debt. A report about the latest negotiations first appeared in Friday's American Banker.</br></br>Recently, RJR reduced its debt outstanding by more than $7 billion, partly by selling more than $2.3 billion of stock and lower-yielding debt to investors.</br></br>RJR's banking group is led by units of Citicorp, Manufacturers Hanover Corp., Chemical Bank and Bankers Trust New York Corp. Spokesmen for each of the banks declined to comment on the talks. | no | 0 |
South Korea Minister Rules Out Imminent Economic Stimulus; South Korea Finance Minister Choi Kyung-hwan's Comment Suggests Central Bank Won't Cut Rates Next Week | South Korea's economy doesn't need any fresh pump-priming for now, the nation's finance minister said, a remark likely to moderate expectations for a central bank rate cut next week.</br></br>"We believe...we will be able to boost consumer and corporate confidence without additional expansionary policies on the monetary or fiscal front," Choi Kyung-hwan said in an interview with The Wall Street Journal in New York on Thursday.</br></br>Mr. Choi's comments come after South Korea's exports, a key economic engine, rebounded sharply in September due to a turnaround in shipments to China and robust demand from the U.S. However, a weak domestic economy remains a worry for policy makers in Seoul.</br></br>While ruling out further imminent stimulus, Mr. Choi said policies aimed at supporting growth would continue for a "considerable time" to underpin the momentum of South Korea's recovery. In July, the government announced a $40 trillion stimulus program, while the central bank in August cut its policy rate to a near four-year low of 2.25%.</br></br>"We need to keep sending the message...that such expansionary policy will continue for the time being," he said. | no | 0 |
Patman Sees Housing Setback: Session Opens Aid for Bankers" | ncp. Wright Patman (D- j Thc chairman of the House Tex.) warned yesterday that Banking and Currency Com-ÛÏvery black cloudsÛÛÓskyrock- mittee declared that many of eting interest rates and a rap- the gains envisioned under idly tightening money supply the 1965 housing laws ÛÏal-ÛÓare hanging over the future'ready have been wiped outÛ</br></br>Because interest is the biggest single cost in housing, Patman said, the Federal Reserve Board has more to say about the success or failure of housing programs than the new Department of Housing and Urban Development.</br></br>ÛÏI say that this is bad public policy,Û Patman emphasized. ÛÏI say that it is policy which should be reversed without delay so we can get on with the job of building a better America.Û</br></br>Patman and Sen. John J. Sparkman, chairman of the Senate Banking CommitteeÛªs Housing Subcommittee, spoke at yesterdayÛªs opening session of the National Housing ConferenceÛªs 35th annual meeting at the Statler Hilton.</br></br>The Conference, made up of non-governmental leaders in the housing and urban development fields, has participated in developing national housing policies since passage of the first Federal housing law in 1932. | no | 0 |
Economic Slide Will Continue, Stein Believes | Economic Council Chairman, Herbert Sfein testified yester-: day that the nationÛªs economic j slide ÛÏwill probably continuej for some months more,Û but j warned that ÛÏpumping up the economyÛ would only bring on a renewal of inflation.</br></br>In hearings before the Congressional Joint Economic Committee, Stein predicted that a forthcoming Federal Reserve Board report would show a sharper drop in industrial production for January than the 0 5 per cent dip in December.</br></br>He also predicted a further rise in unemployment from the January figure of 5.2 per cent, an additional slide in construction activity, lower corporate profits and a contin-j uing decline in automobile j production.</br></br>SteinÛªs colleague on the council, Gary Seevers, painted a bleak outlook for food prices, predicting ÛÏa further substantial rise early this I year,Û followed by a measure of stability ÛÏor at least a rise at a slower rateÛ in the second half of 1974. Seevers saw re-! newed problems in beef prices' and supplies until well into' the year.</br></br>ÛÏThis is the gloomiest statement we nave had before us from any recent CEA report,Û said Sen. William Proxmire (D. Wis.). who charged that the administration had offered j ÛÏno effective prescription" to1 deal with economic problems. | no | 0 |
Clustering Can Diversify a Real-Estate Portfolio | REAL-ESTATE INVESTORS may want to consider "clustering."</br></br>That's one of the ideas being proposed in a new report by Prudential Real Estate Investors, the real-estate investment and advisory business of Prudential Financial Inc. The report aims to provide guidance on how to diversify a commercial real-estate portfolio more effectively.</br></br>Conventional wisdom in the real-estate industry has been that diversification simply means having property in as many markets as possible or in every region. That way, when one market underperforms, it is offset by another market that is doing well.</br></br>Prudential Real Estate Investors offers an alternative way of thinking about diversification -- one that isn't new but is gaining more mainstream acceptance. It proposes grouping the nation's 35 major metropolitan areas into clusters. Economic characteristics, geographic proximity and size all play a role in the clustering, with a strong focus on what the different markets share in common. Markets that have similar industries, for instance, are lumped into clusters rather than regions. The theory is that clustering and limiting investing to a few markets within a cluster reduces risk and redundancy in a portfolio.</br></br>Investors could decide, for instance, that instead of being in Boston, San Francisco, Raleigh, N.C., and Austin, Texas, which are all tech-heavy markets, they can be in just two of those markets and that will be enough tech exposure. | no | 0 |
Other Aim Seen In Intervention In Hong Kong | HONG KONG -- The government's unprecedented intervention in the stock and futures markets here last week came ahead of financial and economic news, all of it expected to be bad, causing market participants to question assertions that the action was aimed only at battling speculators.</br></br>The intervention, a retreat from the city's legendary commitment to free markets, is causing some politicians and investors to ask whether officials were aiding the interests of Hong Kong's corporate barons as the economy heads into deep recession.</br></br>Many of the stocks purchased by the government in Friday's intervention were in companies controlled by big developers, many of them key constituent stocks of the blue-chip Hang Seng index. The government said its stock purchases were meant to reflect the broad market, and were aimed at hurting financial speculators who were selling stocks and futures as a way of pressuring the Hong Kong dollar lower. The Hong Kong currency is linked to the U.S. dollar, but some investors are trying to force Hong Kong to break that peg.</br></br>The government's approach to last week's intervention has raised hackles. The government is led by Tung Chee-hwa, a former shipping magnate who is close to the handful of powerful tycoons who control much of this city's wealth. His cabinet is a virtual plutocracy of senior business leaders, whose popularity has sagged along with the economy this year. Last month the government's public-opinion poll showed that 54% of the population was dissatisfied with its performance, more than twice last year's disapproval rating.</br></br>Because the intervention boosted the stock market sharply Friday, some market participants wondered whether the intervention was meant to distract from gloomy financial news coming this week. The government will release unemployment figures today. | no | 0 |
Fund Has Joined Protestors Of LBJ's Inflation Tactics | YOU CAN ADD the International Monetary Fund to the long list of those who believe that President Johnson botched the job of fighting inflation in 1906.</br></br>The Chief Kxeeutive's big mistake was that lie failed to ask Congress for a quirk tax boost to offset the upsurge in Vietnam spending, lie passed the buck to the Federal Reserve System, instead: and the American people were hit not only by rising prices but by painfully tight money and high interest rales as well.</br></br>The 106-nation l.M.F. voices its criticism of the U.S. in the cautious, diplomatic language that, an international agency is wont to use when talking about its most powerful member but there is no misinterpreting its opinion of Mr. Johnson's 1006 performance.</br></br>The I.M.F.Ûªs strictures arc set out in a report that received I he unanimous approval of its 20 executive directors, including the U.S. delegate. The directors charge that the U.S. and Canada are "major examples of the delayed application of financial restraint."</br></br>The main lesson to be learned from Mr. Johnson's backing and filling is that the U.S. cannot hope to have full employment with stable prices unless the Administration and Congress are willing to lake prompt, effective action on taxes and spending. | no | 0 |
Heard on the Street / Financial Analysis and Commentary | Stars Aligned for Movie Deals</br></br>Is it time for movie-studio executives to get cosier with their colleagues?</br></br>The sharp drop in DVD sales in recent months, heralding the possible exhaustion of a long-running gold mine for film, has prompted studios such as Walt Disney to look for ways to cut costs.</br></br>The fastest way to do that is to team up with another studio.</br></br>Time Warner, for instance, saved $140 million annually by combining New Line and Warner Bros. | no | 0 |
Congress Outlays Top Nixon Ceiling by Billion | Despite pledges to hold down federal spending to combat inflation. Congress so far has voted to boost fiscal 1974 government outlays by at least, $1 billion over the $268.7 bil- j lion budget ceiling proposed by President Nixon, a congres- j sional joint committee reported yesterday.</br></br>The figures, based on legislative actions completed through June 30, could provide ammunition for the White House in its battle with Congress over the budget. The White House has repeatedly j warned that the President will j employ vetoes and impoundments to stay under the ceil-i ing.</br></br>Compiled by the Joint Committee on Reduction of Federal Expenditures, the ÛÏbudget score-keeping reportÛ doesnÛªt give a complete picture, be-1 cause not a single regular appropriations bill has yet reached the White House although numerous supplemental funds bills and legislative-bills with impacts on spending have.</br></br>In passing the regular appropriations, Congress may well make cutfe deep enough to offset the increases already Vo^edÛÓparticularly in defense, where Congress in recent years has regularly been cutting several billion dollars from the request.</br></br>Substantial cuts in defense outlays already appear to be in the works: A Senate Armed Services subcommittee has already recommended cutting $885.4 million out. of the $1.7 billion request for acceleration of the trident missile-firing submarine. This slash will delay completion of the first vessel by two years according to subcommittee chairman Thomas J. McIntyre (D-N.II.) | no | 0 |
Dow Jones director, SEC settle over stock case | A Los Angeles corporate director has acknowledged to federal securities regulators that she failed to report her sales of nearly $17 million of stock in a company on whose board she sits.</br></br>That wouldn't necessarily be noteworthy, except that the woman is Bettina Bancroft, a director since 1982 of Dow Jones & Co., publisher of the Wall Street Journal. She is the great-granddaughter of Clarence Barron, the Boston tycoon who built the Journal, the financial publication Barron's and the Dow Jones ticker, all of which deliver stock market news to millions of people each day.</br></br>Bancroft has signed an order with the Securities and Exchange Commission, in which she neither admits nor denies wrongdoing, and agrees to permanently cease and desist from any securities violations. Although no penalties were assessed against her, there could be fines for any future violations, according to the SEC.</br></br>Under current securities laws, directors of publicly held companies must file forms notifying the SEC when they buy or sell stock in those companies. The rule is designed to deter trading on insider information and to let other shareholders of the company know that directors are buying or selling stock.</br></br>The SEC did not suggest in any way that Bancroft had traded on inside information or deliberately concealed the sales. | no | 0 |
Dollar Eases Against Yen and Euro On Speculation Fed Will Raise Rates | NEW YORK -- The dollar fell against the yen and euro in line with early declines in stocks and bonds, after a stronger-than-expected manufacturing report increased speculation Federal Reserve will raise interest rates to cool the economy.</br></br>While the Dow Jones Industrials Average ended up, it spent most of the day in negative territory. As U.S. assets show weakness, "there are certain concerns by market participants about whether the U.S. is the place to put money," said Jeffrey Yu, vice president at Sanwa Bank in New York. "The idea is, the U.S. can't get any better so it's time to sell some dollars."</br></br>The dollar's recent declines put it more than four yen below its 1999 high of 124.75 yen reached less than two weeks ago.</br></br>But in the view of Alex Beuzelin, market analyst at Ruesch International in Washington, it is still too early to tell whether sentiment on the dollar has shifted. "The U.S. economy continues to grow. Inflation pressures so far remain benign," he said.</br></br>"With the implication of tighter Fed policy, the dollar tends to track stocks and bonds. But over the medium term and longer term, higher interest rates are dollar-supportive," he added. | yes | 1 |
Even 'Safe Money' Can Be Parked in Short-Term Bonds | Cash really is trash. The average taxable money-market fund yields 0.08 percent. The yield of the average tax-free money fund is 0.12 percent. Even a one-year bank certificate of deposit will, on average, pay you less than 1.8 percent, according to Bankrate.com.</br></br>Once in a while, it pays to take a little risk with your "safe" money -- and this is such a time. I'm not talking about taking money you've put aside to buy a car in six months and dumping it into stocks or a high-yield bond fund. But investing that money carefully in the right short-term, high-quality bond fund -- or maybe even an intermediate-term bond fund -- makes a lot of sense.</br></br>Most investors should start, and probably end, their search for such a fund with Vanguard. The firm generally charges the lowest fees on most types of bond funds, and it is conservative to its core. Its bond managers seek out the highest-quality bonds and don't try to get cute.</br></br>My favorite tax-free money-fund alternative is Vanguard Limited-Term Tax-Exempt. The fund yields 1.7 percent. Last year, when most bonds suffered because of credit-quality concerns and lack of liquidity -- rather than rising interest rates, which generally cause bond prices to fall -- the fund held up marvelously. From Jan. 22 to Oct. 30 of last year, the period of maximum stress, the fund lost a paltry 0.3 percent.</br></br>What if you're in a low tax bracket or you're investing in a tax-deferred account, such as an IRA? Vanguard Short-Term Investment-Grade is your ticket. It yields 3.1 percent. If yields on similar bonds rise by one percentage point, it should lose just 2 percent of its value. Average credit quality is single-A. During last year's bond-market meltdown, this fund, which invests almost entirely in corporate bonds, fell 6.5 percent at its worst. | no | 0 |
Magnetic Levitation Train: A Way to Get Baltimore-Washington Area on Track | Consolidated metropolitan statistical area: economic powerhouse, statistical revision of political boundaries or a bureaucratic board game?</br></br>There are those who say it's a little of all of the above, though the term economic powerhouse may hold out too big a promise of something greater than what exists.</br></br>A statistical merger of two or more neighboring urban complexes into a consolidated metropolitan statistical area (CMSA) nevertheless implies that they have developed naturally into an economically potent megalopolis.</br></br>The pending designation, then, of the Washington and Baltimore regions as a CMSA merely affirms what most of us already know. Explosive population growth in the 1970s and 1980s, extensive commuting between the two areas and development of stronger economic ties have drawn the Washington and Baltimore regions together in a common market.</br></br>A recession and feeble advances toward a recovery notwithstanding, the vast area anchored by metropolitan Washington and Baltimore has been, for some time, one of the stronger economic regions in the United States. The combined populations of the two adjoining metropolitan areas, plus those of outlying counties that will be added to the new CMSA, already exceed 6 million, making it the country's fourth largest urban area. Only the New York-Northern New Jersey-Long Island, Los Angeles-Anaheim-Riverside and Chicago-Gary-Lake County CMSAs are larger. | no | 0 |
U.S. News: Opinions Are Split on Fed Policy Move | The Federal Reserve's move to print money to begin a new round of bond-buying, expected to be announced Wednesday, is aimed at lowering long-term interest rates to give the economy a lift. But inside and outside the Fed, there is an unusual divergence of opinions on how much good it will do -- if any.</br></br>Proponents say buying hundreds of billions of dollars more in Treasury bonds will provide only modest support for the economy.</br></br>Foes warn that it could backfire by pushing up commodity prices, sowing seeds of unwelcome inflation in the future, or by undermining confidence in the Fed's ability to manage -- and eventually reduce -- its holdings.</br></br>Opponents stretch across the ideological spectrum, from John Taylor, a Stanford University economist and former Bush Treasury official, to Joseph Stiglitz, the Columbia University Nobel laureate and former Clinton White House official. Mr. Taylor has said the effort, known as quantitative easing, or QE, won't work, and that the government instead should avoid raising taxes and stop imposing new regulations. Mr. Stiglitz has said QE won't work and that the economy needs a big dose of spending increases and tax cuts.</br></br>Economists don't even agree on what another round of QE would do. Bank of America Merrill Lynch expects it should help push the 10-year Treasury yield to around 2% late this year from 2.63% today. Mizuho Securities says the effect of any new asset purchases "will be limited." | no | 0 |
Fed Action Resolution Advances | The Senate Banking Committee yesterday approved a measure suggesting that the Federal Reserve system expand the money supply and regularly report to Congress on its plans for doing so Û¢ The measure is similar to a ÛÏsense of CongressÛ reso-luton already approved by the House. The resolution next goes to the full Senate. Tt would not have the force of law.</br></br>The resolution suggests that the Federal Reserve ÛÏpursue policies in the first half of 1975 so as to encourage expansion in the monetary and credit agregates appropriate to facilitating prompt economic recovery -and maintain long-run growth of the monetary and credit agregates commensurate with the economyÛªs long-rim potential to increase production, so' as to promote effectively the goals of maximum employment and stable prices and moderate long-term interest rates.Û</br></br>However, at the request of Fed chairman Arthur Burns, the committee included in the resolution a new section freeing the Fed from complying with the goals of the resolution ÛÏif the Board of Governors and the Open Market Committee determine they cannot or should not be achieved because of changing conditions.Û</br></br>Chairman William Prox-mire (D-Wis.) called the resolution ÛÏvery significantÛ in that it provides procedures to better inform Congress and the public about the importance of monetary policy on the economy as a whole.</br></br>Proxmire said he believes that even though the federal government has a very stimulative tax policy, interest rates will rise and recovery will be aborted if the Federal Reserve system does pot substantially increase the money supply. | no | 0 |
Only Two Securities Houses Accept Invitation Many Had Sought to Enter Taiwan's Markets | HONG KONG -- After years of gradually increased pressure from foreign brokerage houses, Taiwan in June invited a few of the world's biggest securities companies to compete for the chance to participate in its booming local financial markets.</br></br>The invitation list was so exclusive that the three spots open to foreigners were limited to the top seven U.S. and top four Japanese securities companies.</br></br>When the application period ended this week, only two companies had applied: Merrill Lynch & Co. and Shearson Lehman Hutton Inc.</br></br>None of the "Big Four" Japanese securities companies applied because Japanese government officials made it clear that they didn't want to risk further damage to their relationship with Taiwan's archenemy, China, company executives say.</br></br>About 10 U.S. and European securities companies, including Merrill Lynch and Shearson, already have advisory offices in Taiwan, although no foreigners are currently allowed to participate in the stock market. The other U.S. firms invited by Taiwan weren't prepared to immediately make the kind of commitment the Taiwanese government wanted, according to brokers in Taipei. | no | 0 |
Banking Is Still a Wonderful Life | Most of the big banks are out with their first-quarter profits this week, and once again they are at record levels, as they were for much of last year. (Wachovia's net is up 30 percent, Suntrust's 36 percent and Bank of America's 75 percent from the comparable period last year.) Deposits are up, as are consumer lending and fees from investment banking, while most of the scandals are behind them. Bank stocks are on the rise, as are the annual pay packages of big bank chief executives, which now routinely top $15 million.</br></br>Much of the credit for this improvement in bank economics goes to consolidation and new technology, which have allowed banks to cut a huge chunk of their operating costs. It turns out there were significant scale efficiencies to be gained by combining back offices and branch networks. In addition, ATMs, automatic deposits, online bill paying and computerized loan approvals have allowed banks to shrink payrolls even as they grow their businesses.</br></br>So far, however, there is little evidence that all this new efficiency has benefited consumers in the form of lower fees and higher interest rates on deposits. Whereas in the past, banks were happy with net interest spreads -- roughly speaking, the interest rate difference between what banks pay depositors and what they charge borrowers -- of 2 percentage points, spreads now routinely top 3 percentage points. And fees for things like ATM withdrawals or bounced checks are higher in both absolute terms and as a share of bank profits.</br></br>The numbers for all this are surprisingly difficult to tease out from financial statements and regulatory filings. They bounce around from year to year and bank to bank, complicated by the effect of mergers. But it seems clear from conversations with local bankers that, rather than compete for depositors on the basis of price, banks have decided they are better off competing on the basis of service.</br></br>There are several possible explanations. As in any industry dominated by a handful of major players, price wars are not a very attractive strategy. Any bank that makes the first move to cut fees or raise deposit rates knows all too well that other banks have the wherewithal to match its offer. The resulting stalemate won't change anyone's market share, but it will lower everyone's profits. | no | 0 |
Tech Sector in Hiring Drive; Google, Intel Add Workers as Profits Snap Back; Start-Ups Also Fight for Talent | The technology industry, an engine of innovation and U.S. prosperity for more than half a century, is accelerating its recovery from the recession with surging earnings that have spurred companies to sharply ramp up their hiring.</br></br>The latest evidence for the rebound came Thursday, when Internet giant Google Inc. posted a 37% profit jump for the first quarter and chip maker Advanced Micro Devices Inc. reported a 34% revenue increase to record levels. The results follow the strong showing of bellwether Intel Corp., which Tuesday announced quarterly profit that nearly quadrupled on a 44% jump in sales.</br></br>The trio of results kicks off what is likely to be a strong earnings streak as tech spending by companies and consumers picks up. Next week, Apple Inc., Amazon.com Inc. and Microsoft Corp., among others, are slated to report quarterly results. Tech-research firm ISI Group projects that overall revenues from such companies will rise more than 10% for the first quarter, compared with a 16% decline a year earlier. Meanwhile, Standard & Poor's forecasts a 79% increase in tech earnings for the quarter from year-ago levels.</br></br>The growth has reached a level where tech companies are pushing to hire again, in some cases engaging in heated competition for talent. That's a turnabout for the industry, which had a series of layoffs last year, when some tech giants, notably Microsoft Corp., had mass layoffs for the first time.</br></br>The hiring ramp-up began late last year, with demand for tech goods and services stabilizing after months of declines. At the time, Google Chief Executive Eric Schmidt said the Mountain View, Calif., company was ready to spend again, including on new recruits. On Thursday, Google said it hired 786 new employees in the first quarter and was just getting started. | yes | 1 |
Germany Feels Derivatives' Sting Too; Firms Hurt by Risky Trades Say Investments Weren't Fully Explained | When the chief financial officer of one of Germany's largest insurance companies began dealing in complex derivatives with U.S. banks two years ago, his superiors thought nothing of it.</br></br>The officer had managed simple interest rate swaps to hedge the company's vast investments, even reaping a few million dollars in profit.</br></br>What's more, his company, Gothaer Life Insurance, had stood on the sidelines as Anglo-American banks pioneered the use of complex derivatives in other countries, showing that they were useful in protecting large investments.</br></br>But within a year, things had turned ugly at Gothaer. The derivatives -- contracts pinned to the performances of other investments, such as stocks, bonds, currencies and commodities -- overwhelmed the 61-year-old CFO, and losses climbed to $36 million in 1994.</br></br>"We thought we had a cat in our books, but we really had a tiger," said Reinhard Blei, the company's treasurer, who took control of the funds after the CFO resigned. | no | 0 |
Letters to the Editor: A Balanced Approach to the Budget | The Oct. 9 editorial-page article "Growth-Tamed Deficit Needn't Be an Illusion" by A. Gary Shilling illustrates why we need a balanced approach to the deficit issue, instead of simply relying on some combination of economic growth and unspecified spending restraint. Aside from a host of very "iffy" but crucial assumptions regarding revenue growth, interest rates and inflation, Mr. Shilling's "simple projections" assume a great deal when he supposes that federal expenditures could be held to a 3% nominal rate of growth. On this, Mr. Shilling is presuming nothing short of a miracle.</br></br>Last August, the Office of Management and Budget projected government outlays to support current obligations growing at about a 7 1/2% annual compound rate over the next five years. At the same time, the Congressional Budget Office put the rate at 9%. For the increase in nominal outlays to be held to 3% a year over the last half of this decade as Mr. Shilling suggests, roughly $100 billion would have to be pruned from the FY 1989 OMB spending figure (the year before Mr. Shilling's budget would balance!) and a more imposing figure close to $175 billion would have to be lopped off the CBO expenditure projection, even after allowing for his lower inflation rate.</br></br>Although Mr. Shilling proposed "not requiring any cuts in spending," the net result of his expenditure scenario has to be very substantial reductions in spending for current services and commitments. Unless this were to occur, the revenue stream could not come anywhere near the spending track in his time frame. Simply holding the dollar level of the budget at a constant and modest rate of increase ignores the fact that there are many commitments already in the budget, especially for defense, which would force Congress to cut other spending.</br></br>Congress would find the depth and breadth of such reductions unacceptable politically. The only viable course for gaining control of the budget's bottom line is through a thoughtful combination of cutting defense spending, cutting domestic spending, raising revenues and encouraging economic growth. Only if all these are involved in reasonably equal proportions will it be possible to forge the needed political consensus.</br></br>I am afraid that without a greater understanding and lobbying effort on the part of an informed public, the deficit problem may soon become the economy-endangering crisis that has so long been predicted. | no | 0 |
Fed Felt Hamstrung By 2005 Housing Bubble | Author: Sudeep Reddy</br></br>WASHINGTON--Federal Reserve officials acknowledged a housing-market bubble more than a year before U.S. house prices peaked, but they showed little inclination to address it, according to transcripts of their 2005 meetings released Friday.</br></br>During 2005, the Fed raised interest rates a quarter-percentage point at every meeting, unwinding the ultra-loose policy it pursued earlier in the decade to address deflation worries after the 2001 recession. The economy at the time was growing at a healthy pace with few signs of overheating. But with reports across the U.S. indicating a bubble in the housing market, the Federal Open Market Committee spent time assessing the appreciation in home prices and what, if anything, the Fed could do about it. Fed staff economists had found that housing might be overvalued by as much as 20%, based on the historical relationship between prices and rents.</br></br>But Fed officials appeared hamstrung because they believed their most important tool--interest rates--could not address frothy housing markets alone without influencing the broader economy.</br></br>"I get very irritated when I see columns suggesting that we are trying to inspire or should be trying to prick a housing bubble," said Fed Governor Edward Gramlich, who died in 2007. "There is no way to do that and still maximize the inflation/unemployment outcome. Monetary policy is broad and has broad effects." | yes | 1 |
DIGEST | Cosco, a maker of children's furniture, settled two Consumer Product Safety Commission lawsuits alleging that it failed to report dozens of incidents of children becoming trapped in the headboards or footboards of its toddler beds. The company said it paid a $725,000 civil penalty "to avoid protracted and expensive litigation." Beds involved in one lawsuit were recalled in April 1992. Guard rails in the second suit were recalled in June 1994.</br></br>The National Association of Securities Dealers was sued for $10 million by a former examiner who alleged that she was harassed as she investigated accusations against municipal bond dealers. Theresa Carr "refused to go along with the NASD corporate culture to look the other way," said her lawyer, Jacob H. Zamansky, whose New York firm has filed other successful challenges to the NASD, Wall Street's biggest self-policing body and the parent of the Nasdaq Stock Market. NASD said it believes the allegations are meritless and that it will defend itself in court.</br></br>Mortgage rates rose this week. The interest rate on 30-year fixed-rate mortgages jumped to 8.34 percent this week from 8.09 percent the previous week, according to a national survey by Freddie Mac. Rates on 15-year fixed mortgages averaged 7.88 percent, up from 7.60 percent; and the average initial rate on adjustable-rate loans increased to 5.85 percent from 5.75 percent.</br></br>The U.S. thrift industry earned a record $1.89 billion in the second quarter, which saw the industry's best profit margin in 37 years, the Office of Thrift Supervision said. Bank regulators credited the strong performance of the U.S. economy for the record earnings.</br></br>Jobless benefits claims fell by 15,000 last week, the Labor Department said, an unexpectedly large decline that provided further evidence of the economy's strength. Labor said new applications for unemployment benefits totaled 316,000 last week, pushing the claims level to its lowest point since early August. | no | 0 |
Barclays Again Chosen to Manage Main TSP Index Funds | Barclays Global Investors, one of the world's largest money managers, has been selected for the fifth time to manage the four primary stock and bond index funds at the Thrift Savings Plan, the 401(k)-type program for more than 3.6 million government employees and retirees, officials announced yesterday.</br></br>The San Francisco company, owned by the British banking giant Barclays PLC, has held the contract for the TSP index funds since Congress opened up the first fund for federal employee retirement savings in 1988. The new contract is for three years and can be extended for up to five years.</br></br>The bidding process to manage a majority of the TSP's $186 billion in assets has been underway for six months. The Federal Retirement Thrift Investment Board, which oversees the TSP, requested contract proposals for each of the four funds, hoping to encourage competition by allowing firms to bid for the right to manage one, some or all of the funds.</br></br>In a statement, Gary A. Amelio, the board's executive director, said he was "most impressed and gratified by the strong competition for this business by many very qualified vendors."</br></br>Kathy Taylor, managing director at BGI, said: "It was a very competitive and rigorous bidding process. We're privileged to be the manager selected and to be given the opportunity to continue our successful relationship with the TSP." | no | 0 |
Disappearing Defense Billions | AT LEAST two billion dollars out of every ten billion appropriated for the defense of the United States since the Korean aggression have gone up in inflationary smoke. This simple fact, which should send shivers up the spine of any sensible man, provides the right background for understanding the vitally important issues in dispute between Marriner Eccles of the Federal Reserve Board and Treasury Secretary John Snyder.</br></br>A big bazooka, a recoilless gun or a heavy mortar all now cost well over 50 percent more than, before Korea. A pair of combat boots for an infantryman or a flight jacket for a flier cost upwards of 60 percent more. It costs 16 percent more to feed troopsÛÓand the expense is increasing rapidly. Army ordnanceÛÓthe ÛÏhardwareÛ which provides the Army with the means to fightÛÓis up 40 percent overall, and ÛÏhardwareÛ for the other three services has increased comparably.</br></br>Largely because of this sort of thing, the services will shortly go back to Congress for a third supplemental appropriation in this fiscal year. Thus the process continues, with no end in sight: Congress appropriates dollars; the dollars do not buy what they were supposed to buy; and the services return to Congress for more dollars.</br></br>THE SAME PROCESS is at work everywhere in the economy. Eccles and his numerous supporters, including many reputable economists, are convinced that this inflation is essentially a money inflation; deriving from the fiscal policies of the Government itself. Rearmament has not yet taken a really serious bite out of the whole economy. In the last seven months, moreover, the Government has actually been collecting more in cash than it has been spending. Plain human greed no doubt accounts for part of the inflation, but greed cannot possibly account for all of it.</br></br>The real explanation, according to Eccles and his supporters, lies elsewhere. The basic facts in the Eccles-Snyder dispute, the most important domestic economic issue in many years, are simple enough. | no | 0 |
Fear of Interest-Rate Rise Deflates Recent Market Rally | NEW YORK. June 7 (LTpDopel United Brands into lh< ÛÓRenewed concern over ri&coml most active spot. It ing interest rates followingeaised 't to 15' i on 218,1)1)0 boost in muriatic rates by isahares, includititi a block of Francisco's Bank of AmorjtWl.aOO shares rrnssetl al la. turned the stock inarpcbhtrol Data, in third posi-mixed today alter five euiisiHrm. dropped d -1 tolitl'i on utive advances. Turnover wudoyioo shares, i moderate. other suit spots included</br></br>NEW YORK. June 7 (LTpDopel United Brands into lh< ÛÓRenewed concern over ri&coml most active spot. It ing interest rates followingeaised 't to 15' i on 218,1)1)0 boost in muriatic rates by isahares, includititi a block of Francisco's Bank of AmorjtWl.aOO shares rrnssetl al la. turned the stock inarpcbhtrol Data, in third posi-mixed today alter five euiisiHrm. dropped d -1 tolitl'i on utive advances. Turnover wudoyioo shares, i moderate. other suit spots included ;Jones industrial nvernljflusch & Bomb 7::s and Walt jedged in 0.1)1 ;it 022.0(1. HiMi-sncy 2-V Down a point or ever, the average price ol'sm were Southern IÛªacific. ! New York Stock KxchanTvans-U'orid Airlines. Hur-conimon share fell six cenisniuhs. Honeywell, Motorola, and Standard N- Poor's Mcmorex.</br></br>stock index showed a loss ol'l'lowrver, Heavily traded IK! 0.2L at 101.os). & (; jIu. spurted 2"åÇ. An KG</br></br>Declines topped advaiuitfcsjG official said he didn't 704 to (IPS among the I.h'TO ksunv of any reason for the sues crossing the tape. A vwlork's advance lime of IJ.1100,000 shares was down Horn 14.400.000 shares traded last Friday.</br></br>.Monte Gordon, senior vice president of Bache <.V Co., said Û¢'the market has run into a series of small rocks as the ecoiÛª-| omy begins to recover." lie I cited recent gains in short I term interest rates, disappointment over the increase in iwholesale prices, and the rise, | no | 0 |
Mayor Takes Wilder to Task for Wary Remarks on Statehood | D.C. Council member Hilda H.M. Mason's political affiliation ws incorrectly stated yesterday. She represents the D.C. Statehood Party in an at-large seat on the council. (Published 3/24/90)</br></br>Virginia Gov. L. Douglas Wilder's skepticism about statehood for the District of Columbia has drawn the ire of Mayor Marion Barry, who sent Wilder a letter today urging him not to "join others who are engaged in rather careless and thoughtless stereotyping of the District."</br></br>In the letter, which the mayor's office released, Barry said he was writing to "express my deep disappointment" with Wilder's comments Monday at the National Press Club in Washington. Wilder said that he would be reluctant to support statehood until the city "showed that it has its fiscal house in order."</br></br>Barry's letter, sent by facsimile machine to Wilder, offers a vigorous defense of the city's budgets, which Barry said were balanced eight of the last nine years during his administration. (The city ended fiscal 1988 with a deficit.) Barry also took a shot at members of Congress who criticize the District for being irresponsible while allowing the federal deficit to balloon.</br></br>Wilder's press secretary, Laura Dillard, said the governor had read Barry's letter but declined to characterize his reaction. The letter "doesn't require any comment," Dillard said. | no | 0 |
Futures Markets: Rate Contracts Fall As Concern Grows About Inflation | Major interest-rate futures prices tumbled as the recent weakening of the U.S. dollar fostered rising fears of inflation.</br></br>After the futures markets closed, prices for U.S. government notes and bonds continued to decline on cash markets in response to a report of a larger-than-expected rise in the nation's basic money supply during the week ended July 1. The report, released after futures-trading ended, dispelled hopes of any easing of credit by the Federal Reserve System.</br></br>Futures traders and analysts viewed yesterday's declines in Treasury bond, Treasury bill and Eurodollar contracts as a potentially significant reversal.</br></br>"It was a day of carnage," said Norman Frey, an analyst at Northern Futures Corp., Chicago. "The market has turned distinctly bearish."</br></br>Economic crosscurrents swept the futures markets yesterday, however. Although foreign-currency futures mostly continued to rise for the seventh consecutive trading session, nonfinancial commodity futures generally declined, according to an index compiled by the Commodity Research Bureau, which fell to 226.4 from 228 the previous day. Theoretically, a dollar decline would tend to bolster commodity prices by increasing demand for commodities priced in dollars and discouraging competing imports. | no | 0 |
Truth-Len ding Act Effective Tuesday: Waiting Period Explained | may provide evidence that, despite todayÛªs high mortgage in-' terest rates, the cost of home financing is a credit bargain.</br></br>ÛÏIt "will show that on an annual percentage basis, home loans cost substantially less than most other forms of credit available to American consumers,Û said Norman Strunk, executive vice president of the U.S. Savings and Loan League.</br></br>Savings associations are the Nation's biggest mortgage lenders. The League, nationwide trade group for the business, has been busy preparing materials on the ActÛªs application to real estate loans for itsÛ÷ member institutions.</br></br>The Act takes effect Tuesday. Under the Federal Reserve BoardÛªs Regulation Z which implements the law, all consumer credit transactions are covered, including home mortgages to individuals, except those where loan proceeds are used for business or commercial purposes. It does not cover loans to organizations, including corporations, trusts, estates, partnerships and cooperatives.</br></br>Strunk said ail information required under Truth-dn-Lend-ing will be included on one additional form to be used when a mortgage loan is obtained. He noted that much of this information had already ing lenders to state the loanÛªs total financing charges but this must be provided in all other loans made by thrift institutions under the Act. | no | 0 |
Trade Deficit Worsened in June --- Widening of U.S. Gap Comes as a Surprise To Private Analysts | WASHINGTON -- The U.S. trade deficit swelled to $11.31 billion in June, surprising some analysts, as export growth eased off. But Clinton administration officials stressed that the long-term prospects for U.S. sales abroad remained strong.</br></br>The Commerce Department reported that the trade deficit widened from a revised $11.05 billion in May. Private analysts had expected the June deficit to be somewhat narrower than May's, based on earlier economic reports. Imports in June slowed to a seasonally adjusted $75.79 billion from $76.29 billion in May, but exports also fell, to $64.48 billion from $65.24 billion.</br></br>"This caught us a little bit by surprise. It was a little bit worse than expected," said Brian Horrigan, senior economist at Loomis Sayles & Co. in Boston. He added that the trade deficit would have been wider, had it not been for a decline in crude-oil prices in June.</br></br>For the first half, the trade deficit in goods and services mushroomed to $63.80 billion from $49.94 billion in the year-earlier period.</br></br>Administration officials put the best gloss on the figures, insisting that the important development was the surge in export growth in the first half. Some private analysts agreed, noting that the export trend is at record levels and that continued strength of U.S. imports reflects the strength of the U.S. economy. | yes | 1 |
Stocks Stage Late Recovery, Close Higher | A late-day rally gave stocks a moderate advance Tuesday as a second day of sharply lower oil prices calmed investors uncertain about the direction of interest rates.</br></br>Better-than-expected earnings from Coca-Cola and United Technologies propped up the Dow Jones industrial average, while mild wholesale inflation data also lent some support to the market. But concerns about conflict in the Middle East made investors uneasy about buying: Stocks spent most of the session lower before recovering late in the day.</br></br>The Dow climbed 51.87, or 0.5 percent, to 10,799.23, after sinking as much as 63 points earlier. The Standard & Poor's 500- stock index gained 2.37, or 0.2 percent, to 1236.86, and the Nasdaq composite index rose 5.50, or 0.3 percent, to 2043.22.</br></br>While a modest rise in the core producer price index helped the inflation picture, analysts said the stronger-than-forecast gain in overall PPI raised the possibility of more rate hikes from the Federal Reserve and also unnerved the bond market. Downbeat housing data renewed fears about an economic slowdown.</br></br>Wednesday's appearance by Fed Chairman Ben S. Bernanke before Congress and the latest reading of the Labor Department's consumer price index could lead stocks sharply in either direction. | no | 0 |
Trading Active on Rise | NEW YORK, Sept. 20 UP)ÛÓThe stock market sagged quietly today until the final hour when a modest buying flurry pepped up prices.</br></br>The net result was a lot of improvement all around but a mixed close that had a slightly lower look about it.</br></br>The market started lower with the aircrafts higher. They later turned mixed and then closed higher. ThatÛªs the way a lot of major divisions acted.</br></br>Steels performed in an irregular manner, but the final buying rally favored a few steel stocks, especially Youngstown Sheet & Tube, up VA at 99V2, and Wheeling Steel, up 2M> at 59. The steel division as a whole, however, was mixed at the close.</br></br>Distillers Corp, up 1% at 45%, pulled that division ahead. A lot of small gainers boosted the railroads. On the lower level were many of the oils, airlines, chemicals, and utilities. | no | 0 |
Idle Total Cut 735,000 In April: Employment Hits 65,012,000, Sets Record for Month 3,627,000 | Unemployment fell sharply last month as the number of Americans at work reached a record high for April.</br></br>1,184,000 from March to April took 735,000 off the unemployment rolls. Administration leaders say the gains are double the normal seasonal expectation.</br></br>For the first time since the late 1930s. Cuyahoga County. Ohio, will hand out food supplies today to persons on relief.</br></br>Mitchell and Secretary of Commerce Lewis L. Strauss, who jointly announced the monthly employment figures yesterday, said they demonstrate accelerating job recovery from the recession that began in 1957. ' -------</br></br>Total employment Is now ! 63,012,000, more than 2 million higher than in April of last year. Although it is a record for April, the record for any single month remains the 67,- | no | 0 |
Ford Names COO, Revamps Regional Chiefs | Ford Motor Co. on Thursday named the head of its North and South American business, Mark Fields, as its chief operating officer, and moved several other senior executives to new positions, setting the stage for the retirement of Chief Executive Alan Mulally.</br></br>Mr. Fields, 51 years old, who has been widely seen as the likely successor to Mr. Mulally, takes on his new duties Dec. 1. Mr. Fields led the company's North American downsizing, which closed 16 plants and cut more than 39,000 employees, and is credited with helping the company avoid the bankruptcy restructurings that befell its U.S. rivals in 2009.</br></br>The executive shuffle comes as Ford's board seeks to reward key executives and to set a management course ahead of Mr. Mulally's retirement after 2014.</br></br>In his new role, Mr. Fields now must deal with another downsizing. Ford last month said it would close three plants to stem losses in Europe that are expected to reach about $3 billion over two years. The restructuring aims to return Ford's European operations to profitability by mid-decade amid a sharp decline in new-car sales across Europe that isn't expected to be reversed soon. The moves will reduce its operating costs by $500 million in the next two years.</br></br>Several other executives were appointed to new jobs. Joe Hinrichs, current chief of its Asia and Africa operations, was named president of the Americas, replacing Mr. Fields. Mr. Hinrichs also has been considered a possible CEO candidate. | no | 0 |
All-Star Analysts 1993 Survey: Life Insurance | Life insurance stocks have enjoyed a nice rally, with falling interest rates getting much of the credit. Insurers typically own huge bond portfolios, and falling rates enhance the value of the bonds they hold.</br></br>"My one concern is rising rates," says First Boston analyst Charles Gates, the No. 1 stock picker in the life insurance group last year. He fears that the White House will decide the economy needs more stimulus, and that efforts to get the economy going ahead will push rates in an unpleasant direction.</br></br>Mr. Gates had a big gain last year in Conseco; he also made money in American Bankers, American General and a couple of other stocks. Today, American General heads his list of buys. The Houston-based life insurer contains a strong consumer finance company and a strong annuity company that specializes in selling to teachers, he says. It pays a better-than-average dividend and offers a high-quality balance sheet.</br></br>Mr. Gates also likes another company that sells to teachers, Horace Mann Educators in Springfield, Ill. The company, which writes car and homeowners insurance as well as life insurance, has a first-rate sales force and competitive pricing, he says.</br></br>Norman L. Rosenthal of Morgan Stanley earned the number-two slot by dint of a big gain in Torchmark. He is a bull on the industry, which he says will benefit from the aging of the baby boomers and from the new tax law. By raising tax rates, the new law makes the tax advantages of investment-oriented life insurance products more important. | no | 0 |
The Low-Down on Moderate Mortgages | If you want to buy a house, mortgages rarely have been so accessible. After a 14-month run-up, interest rates have edged down during the past three months and down payments are at historic lows. Buyers of moderate means can get a house for as little as 3 percent of the purchase price.</br></br>These new ÛÏlow down" loans aren't for everyone. TheyÛªre generally limited to people with middle incomes or who are buying medium-priced homes. TheyÛªre for buyers, not for people who want to refinance. And, in a new development, you will have to buy more mortgage insurance, to cover the risk that you might default. So monthly payments will be a little higher..</br></br>Different lenders offer loans with slightly different twists. But in general, hereÛªs how the middle-income programs shape up: ÐÊ Loans for 3 percent down. About 1,000 lenders offer this new program, backed by Fannie Mae. In general, itÛªs for borrowers with household incomes at or below the median income for their area. In Nashville, that means incomes up to $41,000; in Hartford, itÛªs $51,900. Some lenders, however, such as GE Capital Mortgage Corp., go to 115 percent of median incomes.</br></br>The down payment has to come from money you saved yourself and borrowers have to attend courses In home buyer education. For a free list of Fannie Mae lenders in your area, call 800-7-FANNIEÛÓbut wait until April to call. Then, the list will note which lenders allow 3 percent down and which still want 5 percent down.</br></br>ÐÊ Loans for 5 percent down, To qualify for middle-income programs that are privately insured, you have to save 3 percent of the down payment yourself. The other 2 percent can come from gifts, grants or loans. Conventional loans for higher-income people also are available at 5 percent down, although 10 percent is more common. | no | 0 |
Global GDP Must Climb Capitol Hill | [Financial Analysis and Commentary]</br></br>Taper talk served up an unpleasant reminder for many emerging markets: Their fates are often hostage to the whim of the U.S. Federal Reserve.</br></br>While the Fed's focus is on the U.S., its actions reverberate globally. That is due in large part to the role of the U.S. dollar as the world's reserve currency and emerging-market economies' dependence on it.</br></br>So the Fed's talk in May of scaling back bond purchases pushed long-term interest rates higher and sucked funds out of emerging markets. That helped reduce the growth outlook for many, as shown Tuesday by the International Monetary Fund's latest World Economic Outlook.</br></br>The IMF cut its global growth forecast for 2013 by 0.3 percentage point to 2.9%, and for the following year by 0.2 percentage point to 3.6%. This was driven in part by reduced expectations for emerging markets, in particular, India. | no | 0 |
Stock Market Quarterly Review --- Led by U.S. Tribulations, Third Quarter Held More Pain for World Markets --- European Shares Tumbled, Japan Gave Up Some Gains And Emerging Stocks Varied | Global markets ended the third quarter much the same way they began: marked by confusion and volatility that left investors searching for a bottom.</br></br>As ever, the U.S. was on the minds of traders around the world, as global investors followed the stream of accounting restatements, Wall Street gyrations and geopolitical maneuverings that shaped market action abroad.</br></br>Yet even by post-bubble standards, the period stood out for its painful mood swings. It began with near panic about the state of corporate governance and the quality of U.S. earnings. These concerns pounded stock prices globally, climaxing with new lows for the bear market near the end of July. A sharp rally followed and many investors predicted that the long-awaited bottom had at last arrived.</br></br>Then last month fresh evidence that a world-wide recession could be looming drove many foreign markets back through their July lows. Despite a dose of encouraging U.S. economic news last week, investor spirits remained glum.</br></br>"There was a capitulation of hope, really," said Andrew Parry, chief investment officer for Northern Trust Global Investment (Europe) Ltd. "The world economic outlook is a lot more hostile and less easy to rebuild than people first realized, and the third quarter was when markets caught up with this reality." | yes | 1 |
Fed to Allow Foreign Currency Bank Accounts | A year from now, you'll be able to walk into a local bank and open a savings account in Japanese yen, West German marks or British pounds.</br></br>If you're a manufacturer doing business abroad or an investor who likes to speculate in foreign currency, the new foreign currency accounts should make these activities easier.</br></br>The Federal Reserve Board recently gave banks permission to offer these accounts, but the board delayed the effective date to Dec. 31, 1989. This will give the Fed time to work out currency deposit ground rules.</br></br>For many years, the Fed discouraged banks from opening foreign currency accounts. In 1973, then-Fed chairman Arthur Burns turned down a request from the Bank of America, and the policy had been restated over the years.</br></br>However, Fed Chairman Alan Greenspan and the present members of the board apparently feel differently, and they voted Dec. 23 to allow banks to go ahead. | no | 0 |
Politics & Economics: IMF Fuels Critics of Globalization; Report Finds Technology And Foreign Investment Boost Income Inequality | WASHINGTON -- Technology and foreign investment are making income inequality worse around the world, the International Monetary Fund said in a new report, handing critics of globalization a powerful argument to use in their political battles.</br></br>The IMF's findings, published in the fund's semiannual economic review, the World Economic Outlook, confirm the work of other economists, who have been trying to figure out why income inequality has widened in both rich and poor countries in the past two decades. The report is an unusual admission by the IMF of the downsides of globalization.</br></br>Since at least the 1980s, the IMF has pressed countries to open their borders to foreign investment, technology and trade as a path to economic growth -- and has channeled loans to countries that took its advice.</br></br>An anti-IMF and antiglobalization backlash developed in many parts of the world, especially Latin America and Africa, when the economies that followed the fund's prescription didn't grow as rapidly as anticipated. Now, that antiglobalization movement, which has spread to the U.S., Europe and parts of Asia, has become a political barrier to further liberalization of trade, investment and the migration of workers.</br></br>Subir Lall, the IMF's deputy chief for research, said the report had no political agenda. He said it found that, overall, wealth increased through globalization. In the great majority of countries, the income of lower-income workers has risen in the past two decades, but at a slower pace than for higher-skilled workers. As a result, the gap between haves and have-nots has widened. | no | 0 |
Monti Says Europe Growth Policy Crucial | ROME--Italian Prime Minister Mario Monti, who is putting his country through tough spending cuts to escape Europe's debt crisis, warned that European leaders must take concrete steps to fuel the Continent's economic growth or risk threatening its long-term future.</br></br>"Europe will not be a nice place to be in five years from now if we haven't solved the problem of how to grow," Mr. Monti said in an interview before heading to the U.S. for talks with President Barack Obama.</br></br>"We have to say what growth will look like in a fiscally compacted union," said Mr. Monti, referring to the new "fiscal compact" Europe's leaders agreed to last month to ensure greater budget discipline in the euro zone.</br></br>The comments by Mr. Monti, a 68-year-old economics professor who heads a government of national unity aimed at steering Italy out of the euro-zone crisis, underscore a growing belief among policy makers here that the Continent needs to slowly start moving beyond austerity packages and figure out how to prevent the Continent from falling into years of stagnation.</br></br>Europe still has big fires to put out, namely coming up with a fresh bailout for Greece and ensuring that Italy and Spain take credible steps to rein in their public spending. But economists say structural economic changes across the Continent are just as important to Europe's long-term prosperity as is fiscal discipline. Euro-zone gross domestic product is expected to fall by 0.5% this year and to rise by a meager 0.8% next year, according to the International Monetary Fund. | no | 0 |
Market Loses Again As Dow Dips 17.76 | NEW YORK, Nov. 20 ÛÓ The energy crunch terrorized Wall Street again today and sent the stock market to another sharp loss in heavy trading.</br></br>The Dow-Jones industrial average, which lost nearly 29 points on Monday, tumbled another 17.76 points today, placing the bellwether indicator at 844.90, or more than 150 points below its late October peak.</br></br>The sellers arrived early and stayed until just before the close today. The New York Stock ExchangeÛªs ticker tape could not keep up with the floor pace on three separate occasions in the morning and again ÛÓ when the list staged a mild rally ÛÓat the close.</br></br>Nearly 80 per cent of all stock traded on the NYSE lost ground, the widest margin of losers over gainers within memory.</br></br>Analysts were hard put to explain the continuing stream of selling. They said the market appears "oversoldÛ ÛÓ prices have gone down too rapidly, without significant intervening recoveriesÛÓbut, they added, the steady stream of reports of plans to cope with the fuel shortage appears to be pounding investor psychology. | no | 0 |
Speculating on Recession A Pastime for Politicians: Carter ... | THEREÛªS ONLY ONE one sure thing you can say about recessions: Once they get started, no one knows how deep they will go, nor how long they will last. Thus, when President Carter said during his April 17 news conference that an economic recession is now under way, but it will be ÛÏmild and short,Ûª* thatÛÓlike everything else coming out of the White House these daysÛÓshould be chalked off as pure politics.</br></br>Moreover, the president promised ÛÏa sizable dropÛ in the inflation rate, implying that lesser oil price increases and flattening of mortgage interest rates could cut the 18 per-' cent inflation rate to around 10 percent. He'failed to mention that other elements in the (CPI could work in the other direction.</br></br>The president could be lucky, and "rightÛÓwith a ÛÏmild and shortÛ recession and a big drop in the inflation rate. But evidence is beginning to accumulate that the recession will be more acute than the administration is saying publicly. A decline as severe as 1973-75 (the worst since the Depression) canÛªt be ruled out.</br></br>Housing starts in March dropped 22 percent to barely over the one million annual rate, while industrial production was off 0.8 percent, with declines virtually across the board.</br></br>There are less tangible, but probably just as meaningful, signs of trouble ahead, such as empty seats on the once-crOwded airlines. | yes | 1 |
Business and Finance | Retail sales rose a strong 1.9% in December, further evidence the economy ended 1985 on solid footing. Much of the rise was due to a 5.7% gain in auto sales, aided by new incentive programs. Even without autos, retail sales rose 0.9%.</br></br>New-car sales slipped 8.3% in early January, leading some analysts to speculate that some sales that normally would have been recorded in January were counted in December.</br></br>---</br></br>Bond prices rose strongly despite the robust retail sales report, snapping out of a four-day slump. Treasury bond futures prices closed higher for the first time since Jan. 7. The stock market was little changed.</br></br>--- | yes | 1 |
Economic Summit Takes On Anacostia | In three months as chairman of the Federal Reserve Board, Ben S. Bernanke has learned how his words can affect global markets. Yesterday, he turned his attention closer to home.</br></br>Bernanke gave his take on how to ease poverty in neighborhoods east of the Anacostia River in the District. So did World Bank President Paul D. Wolfowitz, a half-dozen Bush administration officials, and top leaders of several banks and other financial groups. It happened at the Anacostia Economic Summit, an event that aimed to engage some of the nation's financial leaders in discussing how to improve the lot of residents in the District's poorest neighborhoods and similar parts of other big cities.</br></br>Their message: Improve residents' access to banks, financial advice and homeownership, and broader prosperity will ensue.</br></br>Participants did not announce any specific new plans in that area. Mayor Anthony A. Williams (D) said he hoped the event would help more residents of wards 7 and 8 to feel connected to growing prosperity in the city and to improve their financial literacy. An aide to the mayor said that the event helped build connections between small businesses in Ward 8 and growth around the city and that having speakers such as Bernanke and Wolfowitz can signal to the world that Anacostia and surrounding neighborhoods are on the upswing.</br></br>"I'm hopeful that this reinvigorated a community of small local businesses," said Stanley Jackson, deputy mayor for planning and economic development. "They may have felt disconnected when the first wave of billions of dollars of opportunity began to swirl, but this might help them realize there's still an opportunity to play a role." | no | 0 |
Carlyle to Buy Rexnord | Carlyle Group, the Washington merchant banking company, agreed to acquire Milwaukee-based auto parts manufacturer Rexnord Corp. in a deal worth $913 million. Carlyle will pay $880 million for the company and invest $33 million in working capital, according to Rexnord's parent company, Invensys. Rexnord, whose primary products are clutches, brakes and chains, employs 5,000 people at 30 plants worldwide and had sales of about $765 million last year. To pay for it, Carlyle planned to spend about $300 million from its buyout funds and borrow the rest from banks, people familiar with the sale said last week. Carlyle officials could not be reached for comment.</br></br>MeriStar Hospitality, a hotel real estate investment trust, said its third-quarter results would be lower than expected because of the decline in business travel and the lack of travelers around the Sept. 11 anniversary. MeriStar lowered its third-quarter guidance for revenue per available room and its funds from operations. Revenue per available room would decline 4.5 percent to 5 percent from the third quarter of last year, compared with previous guidance of no change to a 2 percent decline. The forecast for funds from operations per share was lowered to 10 cents to 12 cents, compared with earlier guidance of 20 cents to 25 cents.</br></br>BB&T, a North Carolina banking company, said Friday that it would buy Equitable Bank, a Wheaton thrift, for $52.6 million in stock. The small Montgomery County bank, founded in 1879, focuses mostly on consumer deposit services and home loans. It has five branches in suburban Maryland, all of which will become BB&T branches. BB&T operates more than 1,100 banks in the Southeast and in recent years has bought a half-dozen banks in Washington, Maryland and Virginia, giving it about $3 billion in assets and more than 60 branches in the region. BB&T is to exchange one share of BB&T for each share of Equitable. That values Equitable at $36.18 a share, a 34 percent premium over its most recent trading price before the deal was announced. Shares of Equitable rose more than $7 Friday to close at $34.47 on the Nasdaq Stock Market. The acquisition, which must be approved by regulators and Equitable shareholders, is to be completed in the first quarter of next year.</br></br>Legg Mason, a Baltimore brokerage firm and money manager, filed with the Securities and Exchange Commission to sell up to $500 million in various securities. Legg Mason, which has bought three money management firms with $3.7 billion of assets in the past 18 months, said it would use proceeds of future securities sales for general corporate purposes, including repayment of debt and acquisitions. Legg Mason filed what is known as a "shelf" offering, used to register securities in advance so companies can sell them quickly when market conditions are favorable or financing needs arise. Terms of the securities are not usually available until the sale period begins.</br></br>Northrop Grumman said Friday that its Electronic Systems division is laying off about 230 employees at its operations in Maryland, Alabama, New York and Connecticut. About 215 of the layoffs would occur at the division's plants in Linthicum, Annapolis and Sykesville, the Baltimore Sun reported. Some of the Annapolis cuts, its Oceanic and Naval Systems business unit, are because of delays in financing on projects for the Defense Department, said Northrop Grumman, which is based in El Segundo, Calif. Northrop Grumman is Maryland's largest manufacturing employer. Its Electronic Systems division employs 9,000 people at operations in Linthicum, Annapolis, Sykesville, Belcamp, Hagerstown, Gaithersburg and Lanham. | yes | 1 |
Jobs, Jobs, Jobs (Fibs, Fibs, Fibs) | The maudlin creepiness of John Edwards's stump speech has been accepted with little complaint by the media. Routinely, he paints America as place where fathers come home, look in their daughter's eyes, and confess what apparently is the greatest insult/failure that can befall a dad: He's lost his job!</br></br>Mr. Edwards has spent his life as a lawyer, a sector of the economy that never experiences a recession, so perhaps he's unaware that it's quite routine for people to lose jobs. Census data show that job destruction in manufacturing has been remarkably stable over several decades, averaging about 10% a year. The normal toll in the service sector is even higher. That's a lot of devastated fathers and daughters.</br></br>You can also look at it on the basis of business failures: Of the 9,000 companies big enough to list themselves on a stock exchange, some 200-300 fail every year. Small employers fail at an even higher rate, about 8% a year. In fact, of the million or so small businesses started every year, most will have failed in ten years.</br></br>Of course, such "normal" job destruction is accompanied by even greater job creation. The ever-churning U.S. labor market manages not just to absorb natural population growth and immigration, but a massive movement of married women into the workforce. This is a healthy economy at work, not a crime against humanity.</br></br>Mr. Edwards obviously has spent too much time in front of gullible juries. In New York the other day, he bleated that his free-trade critique is a "moral" stance, asserting that children overseas are dragooned to do the jobs being stolen from American fathers. Get it? Just stop trade and all children everywhere will be happy and smiling! | no | 0 |
IN THE FOOTSTEPS OF MR. KURTZ ... | The British journalist Michela Wrong takes the title of this chillingly amusing cautionary tale from Joseph Conrad's Heart of Darkness, near the end of which the dying white station manager, Mr. Kurtz, cries out against "the horror, the horror." It is, as Wrong says, "one of the great misquotations of all time," commonly misinterpreted as a protest against black Africa's "supposed predisposition to violence." Wrong gets it right:</br></br>The British journalist Michela Wrong takes the title of this chillingly amusing cautionary tale from Joseph Conrad's Heart of Darkness, near the end of which the dying white station manager, Mr. Kurtz, cries out against "the horror, the horror." It is, as Wrong says, "one of the great misquotations of all time," commonly misinterpreted as a protest against black Africa's "supposed predisposition to violence." Wrong gets it right: "When Kurtz raves against 'the horror, the horror,' he is . . . registering in a final lucid moment just how far he has fallen from grace. The 'darkness' of the book's title refers to the monstrous passions at the core of the human soul, lying ready to emerge when man's better instincts are suspended. . . . Conrad was more preoccupied with rotten Western values, the white man's inhumanity to the black man, than, as is almost always assumed today, black savagery."</br></br>Wrong uses Conrad's theme in her study of the calamitous three- decade reign of Mobutu Sese Seko in Congo -- which Mobutu renamed Zaire -- to say that "no man is a caricature, no individual can alone bear responsibility for a nation's collapse." What happened in Zaire "had its roots in a history of extraordinary outside interference, as basic in motivation as it was elevated in rhetoric." She is wholly unsentimental about Mobutu, whom she calls "brutal, ruthless and greedy," a "neighborhood thug," but she also insists that "if Mobutu traced a Kurtz-like trajectory from high ideals to febrile corruption, he did not pursue that itinerary alone, or unaided."</br></br>The story of Congo between Mobutu's rise to power in 1965 and his involuntary departure 32 years later is at once simple and familiar, yet unimaginably complicated, ambiguous and mysterious. On the one hand, it is a tale of a charming, stylish, intelligent, manipulative man who rose from unlikely origins, gained control of his government by unscrupulous means and bled its treasury dry; it is a tale that has been told many times, in many settings and with many casts of characters, and it gets no prettier with each retelling. On the other hand, it is a hugely intricate tapestry in which past and present are woven together in patterns that sometimes prove impenetrable; a tale involving so many people, organizations and acronyms that sheer bewilderment is the only honest way to respond; and a tale upon which it is impossible, in most respects if not all, to pronounce final and confident moral judgment.</br></br>The legacy of Mobutu and his accomplices is stunning: "Congo's economy has shrunk to the level of 1958, while the population has tripled. Average life expectancy is fifty-two, 80 per cent of the population is employed in 'subsistence activities'; illiteracy is growing; AIDS is rife and such diseases as bubonic plague and sleeping sickness are enjoying a vibrant comeback. By the end of the century the government's annual operating budget for what is potentially one of Africa's richest states was dipping below the daily takings of the US superstore Wal-Mart." There are many reasons, but it all comes down to this: Mobutu stole Congo blind. | no | 0 |
Three Scenarios: How the Election Will Shape Policy On the Economy --- GOP Would Push Tax Cuts; Democrats, More Spending On Schools, Health Care --- Social Security Is Off the Menu | WASHINGTON -- If Republicans gain control of both houses of Congress in tomorrow's elections, get ready for more tax cuts, a prescription-drug plan for seniors that is favored by the pharmaceutical industry and a renewed push for oil drilling in a pristine Alaskan reserve.</br></br>If Democrats grab the reins on Capitol Hill, look for more spending on education and health care, a higher minimum wage and tax cuts aimed at moderate-income workers.</br></br>This is a rare election in which control of Congress could shift depending on only a dozen races. The outcome could have a huge effect on the economy and business. Republicans now hold a six-vote margin in the House, while Democrats have a one-vote edge in the Senate. A shift in control to one party would allow it to dominate the economic agenda in the next two years and set the terms of debate for the 2004 presidential election.</br></br>Given how few congressional races are still considered toss-ups, Election Day could well produce a continuation of the status quo. That would likely mean the federal deficit would continue to balloon, as lawmakers reach accommodation by approving spending increases and tax cuts dear to both parties.</br></br>Even if one party does win both houses of Congress, and with it the chairmanship of all committees, its narrow margin of control would limit its power. Senate rules allow 40 out of the 100 members to block almost anything in the Senate, and neither party is likely to end up with fewer than 40 seats. But a crisis, such as a severely faltering economy or an Iraqi war that goes badly, could limit partisan bickering and unite Congress behind the president. | no | 0 |
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